European competition law and practice gets a new journal

Many readers of the Journal of Intellectual Property Law and Practice are

acutely aware of the uncomfortable manner in which intellectual property law and competition rules jostle for the same space in those areas in which European economic policy is forged. JIPLP has covered many instances of conflict or co-existence of the two bodies of law within Europe, but it remains firmly an intellectual property law publication.

Now competition law and practice within Europe has its own journal, newly launched by Oxford University Press -- the Journal of European Competition Law & Practice, the details of which you can read on its website here. JIPLP wishes this new publication the best of luck and will watch closely for signs of its approach to the IP/competition law interface.

New year, new issue, new cover colour

The contents of issue 1 of the Journal of Intellectual Property Law and Practice for 2010 are now available in full online (click here for details). We hope that you will like this year's smart new cover colour, a rather fetching silvery grey. A further 13 articles, notes and reviews which are due to be published in future issues can be read by subscribers now through JIPLP's Advance Access facility.

The Editorial (which we reproduce in full below) asks questions about the role of evidence -- which is increasingly demanded by those who ask whether IP systems actually work.

Where's the evidence?

The importance of evidence in IP law has never been doubted. In patent law, a bare unsubstantiated allegation that an alleged invention has been anticipated by a prior disclosure or that its obvious in the light of earlier knowledge will not succeed unless it is supported by evidence as to what was in the prior art, from what date, and to whom it was accessible. In trade mark law, even such speculative notions as the likelihood that a consumer, faced with a branded product, will confuse it with another must be based on evidential principles, not mere surmise. That evidence is needed is not unique to IP law; however, it is part of the common heritage that is reflected in almost all laws in every jurisdiction.

A second tier of evidence concerns IP law at the point at which its efficacy is questioned in the light of its accepted aims: if you want to prove that the law is inadequate to achieve those aims, bare assertion is again unacceptable. Thus, when owners of copyright in sound recordings and the works incorporated in them complain that their financial investment and economic wellbeing has been damaged by piracy or unauthorized downloading or file-sharing, when pharmaceutical companies object that the delicate balance of their R&D ecosystem is threatened by compulsory licensing or competition from manufacturers of generics, or when brand owners demand security from the depredations of lookalike and now smell-alike products, both national and now international bodies ask: show us the proof. Wild guesstimates by victims of infringements are no longer uncritically welcomed. The world demands something more than that.

Most recently, a third tier of evidence has been called for. This relates to fundamental questions such as proof of whether the various IP rights, and particularly the patent system, actually work. Calls for proof have been made recently in the UK, where the government is determined to re-think many areas that have previously been taken for granted, and beyond.

The first problem to be faced is that you have to know what you're proving before you can prove it. If you believe that the patent system's objective is (i) to incentivise invention, (ii) to protect innovative investment, (iii) to encourage the disclosure of new scientific data or anything else, you will need different evidence.

The second problem is the level of proof which is required. Most registered patents, trade marks, and designs would appear not to be exploited profitably and successfully by their owners. Clearly, if every such right resulted in a commercial jackpot we would feel that the system was working while, if no registered right ever did, we might be forgiven for thinking that protection systems based in registration were a waste of time. But what is the ‘right’ level of success that justifies the system: 90%? 60%? 30%?

The third problem is that, when compiling evidence, some subject-matter is more amenable of quantification and, when we talk of IP rights that are exercised in the market place, that quantification is generally economic. While the economic analysis of the role played by individual IP rights, and by the system as a whole, gives some evidence as to economic performance, it gives little clue as to the system's moral worth. Yet moral notions such as the fact that it is wrong to steal or to copy can be found at the heart of both the rights themselves and the way the courts deal with them. In copyright, some rights are specifically described as ‘moral rights’ because there is no economic basis for them: the right to be acknowledged as the author of one's work, the right to object to its mutilation by others, and so on. How does one show that rights such as these are ‘working’?

The fourth (but probably not final) problem is that any yardstick by which economic performance measures IP rights is likely to inherently inimical to them insofar as the accepted economic wisdom of the day is not warmly receptive to the sort of control that those rights can impose upon the markets in which they are used.

It would be pleasant to say that the unparalleled rate of technological advance in every sphere, the upsurge in consumer choice, the ever-widening range of products and services to match every need and the explosion of available knowledge, understanding, and opinion are all the fruits of the IP system as we have it today, but no appeal to the self-evident truth will withstand the demands of legislators today.

US v Diallo: how to ‘use’ when counterfeiting

Author: Peter Jabaly (Rutgers Law School)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp206

U.S. v Diallo, 575 F.3d 252 (3rd Cir. 2009)

In a case that attempts to extrapolate the meaning of ‘use’ used in an anti-counterfeiting statute, the Third Circuit decided that ‘to use’ counterfeit goods as contemplated by the Pennsylvania statute simply required the defendant to place the good in the ‘stream of commerce’. In other words, a sales transaction is not necessary to complete the criminal act. This decision broadens the scope of behaviour deemed criminal in counterfeiting and more strenuously protects the IP rights of trade mark holders.

Legal context

The criminal defendant was charged and convicted for violating 18 USC s 2320(a), which makes it a crime to ‘intentionally traffic ... in goods or services and knowingly use a counterfeit mark on or in connection with such goods or services ... ' [18 USC s 2320(a) (2005)]. Congress failed to define a key term, use. ‘On appeal, the defendant made the argument that he did not use the counterfeit goods in a manner prohibited by the aforementioned statute. The defendant argued that the statute's purpose is to proscribe the actual sale of the counterfeit goods and not merely the transport of them. "After all," the defendant surely reasoned, "I was not in fact using them in the conventional etymological sense"’. Many would accuse the defendant of making a specious argument, but Congress has a duty to make laws that are not overbroad. Congress does this by proscribing the exact action or actions that would constitute the crime.

The Court of Appeals for the Third Circuit (‘CATC’) was faced with the difficult task of harmonizing the literal meaning of ‘use’ with the congressional intent behind the counterfeit statute. Following the spirit of the law, the CATC determined that using a counterfeit good as pertains to the statute merely requires placing the good into the ‘stream of commerce’, not necessarily having sold the good to a retail buyer. The CATC deftly manoeuvres a victory for those in favour of increased government involvement in IP enforcement.

Facts

Pennsylvania State Trooper Timothy Callahan noticed the defendant's van on Interstate Highway 80 because its licence plate was not illuminated as mandated by the Pennsylvania traffic laws. During a traffic stop, Trooper Callahan observed numerous sealed plastic bags in the van. Asked what was in the bags, the defendant said they contained clothes. After the traffic stop had concluded, the trooper asked for the defendant's consent to search the vehicle, which the defendant willingly gave. Moving to the rear of the van, the defendant opened the bags to reveal the contents: Louis Vuitton handbags bearing the ‘LV’ mark. The trooper was aware that the Louis Vuitton handbags were an exclusive item, sold only in Louis Vuitton stores, so he investigated further. He asked the defendant to whom did the bags belong and, when the defendant was unable to produce anything but a business licence from Indianapolis, he was arrested. The defendant was subsequently indicted and convicted of trafficking in counterfeit goods by a jury. At the conclusion of the trial, the jury was charged with instructions that lacked any mention of the term ‘use’. The jury then asked the court to elaborate on the term. The court found it ‘the prudent course of action’ to provide the jury with two dictionary definitions of the word, one being a legal dictionary. Thereafter, the jury found the defendant guilty of the charges.

On appeal, the defendant maintained that the jury instructions were improper and that the district court should have granted the defendant a judgment as a matter of law based on the insufficiency of the evidence on the element of ‘use’.

Analysis

In the absence of a mis-statement of the law, an appellate court will defer to the district court and review the lower court's decisions for an abuse of discretion—a high standard, but not insurmountable. Essentially, the appellate court will review the sufficiency of the evidence in the light most favourable to the government, and will uphold the verdict if any reasonable trier-of-fact could have found the essential elements of the crime beyond a reasonable doubt [US v Pritchard, 346 F.3d at 470 n. 1].

The CATC, after stating the standard of review, proceeded to give a lesson in statutory interpretation. It made it clear that, in determining congressional intent, one must begin with the plain language of the statute. After reciting the statute, the CATC surmised that the statute requires both trafficking in goods and ‘use’ of the counterfeit mark on or in connection with goods for a crime to have been committed. In the absence of a definition provided by Congress, the court explained, the word at issue should be given its plain meaning.

In support of his position for a narrower definition of ‘use’, the defendant cited US v Bailey [516 US 143] in which the district court had erred when it found that the defendant had used a firearm when he had simply possessed it. The United States Supreme Court cautioned that ‘the Government must show active employment of the firearm’ [id. at 143, 144]. The CATC does away with this argument by extrapolating the rationale from Bailey: the ‘meaning of statutory language, plain or not, depends on context ... ’ [id. at 144–145]. Aware that the statute treats ‘use’ and ‘carry’ differently and mindful that ‘Congress intended each of the statutes's terms to have meaning’, the Supreme Court reasoned that the term had a narrow connotation. In a subsequent Supreme Court case involving an exchange of drugs for a weapon, that Court similarly reasoned that a word's ‘everyday meaning’ should prevail in the absence of congressional direction and that ‘the ordinary meaning and the conventions of English’ meant a person did not use a firearm when he exchanged the weapon for drugs [US v Watson, 128 S. Ct. 579, 586].

Applying these rules of construction to the present case, the CATC opined that, were it to interpret ‘use’ as meaning a sales transaction, it would render the broader term ‘traffick’ superfluous, thus rewriting the text as the Supreme Court has already warned courts not to do. An ‘ordinary and natural reading’, says the CATC, gives effect to Congress's intent to combat commercial counterfeiting by reaching a stream of commerce and not simply its point of sale [Diallo at 18]. On this point, the jury instructions were upheld. Diallo, the court concluded, was able to communicate falsely that he was the lawful owner of genuine items simply by being in possession of them. He did not require a sale in order to misrepresent that fact. A number of other cases provided support for the CATC's holding.

Practical significance

The statute was amended in March of 2006 to address the growth of counterfeiting in component parts. The statute presented this problem in the instant case because Diallo was arrested before the amendment, in 2005. However, the significance of this case is not diminished. ‘Use’ in the context of counterfeiting is defined in both the statute and the common law. In a larger sense, the case represents the intersection of different dimensions of the law: statutory interpretation, overbroad laws, sensitivity of jury instructions, and the intersection of IP and criminality. So, much of IP theft is never prosecuted. It is exactly this brand of IP infringement, small retail, that is criminally sanctioned. Nonetheless, this is still a victory for those in favour of greater IP rights.

Davidoff criteria for exhaustion apply also if goods were first marketed within the EEA

Author: Maarten Schut (Kennedy Van der Laan, Amsterdam)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp209

Makro Zelfbedieningsgroothandel CV and others v Diesel SpA, Case C-324/08, Court of Justice of the European Communities (ECJ), 15 October 2009

The ECJ rejected a suggestion put forward by the Dutch Supreme Court (Hoge Raad) that with respect to goods originating within the European Economic Area, the trade mark owner's implicit consent (leading to exhaustion) should not be tested under the strict criteria set out in the Davidoff decision but under more lenient criteria to be found in case law predating the Trade Mark Directive.

Legal context

A trade mark confers on the owner the right to prevent others from using the mark in the course of trade, such as by offering goods for sale or importing them under that trade mark. In the early days of the European Community, it was recognized that companies could use national trade marks in various Member States to partition the market, thus hindering the free movement of goods. A balance between the free movement of goods and the protection of IP rights was struck by the ECJ: a trade mark owner would not be allowed to prevent importation of goods which had been marketed in the Member State of origin either by himself or with his consent.

Such a principle of exhaustion would not affect the ‘specific subject matter’ of the trade mark right as the owner would still be the first to market the goods under the trade mark, nor would it affect the main function of the trade mark of guaranteeing to consumers the origin of the goods, in that they have been manufactured under the control of a single undertaking which is responsible for their quality. In several decisions (summarized in IHT Danzinger v Ideal-Standard, Case C-9/93), the ECJ ruled that the exhaustion principle would not only apply to a single owner holding various trade marks, but also to situations where separate entities were economically linked, for example, by belonging to the same group or being under a licensing arrangement.

The principle of exhaustion was codified in the Trade Mark Directive (Article 7), which specified that it applied to goods marketed within the Community (and later, the EEA). Several references called upon the ECJ to clarify this article and a consistent case law was developed. In Davidoff (Case C-414/99), the ECJ ruled that the trade mark owner's consent, having serious effect in extinguishing his exclusive rights, must be so expressed that an intention to renounce those rights is unequivocally demonstrated. Such intention will normally be gathered from an express statement of consent, but may also ‘be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside the EEA’. The ECJ made it clear that such implicit consent would be very difficult to prove in practice, by listing numerous circumstances (such as the trade mark owner being silent on the issue) which would not suffice.

Facts

Diesel SpA, known for its fashionable clothes and shoes, had the Spanish company Difsa as its distributor in Spain, Portugal, and Andorra. Difsa granted Flexi Casual exclusive selling rights in this territory for several goods including shoes with the DIESEL word mark, and a not very clearly formulated right to conduct ‘market tests’ with shoes of its own design under that mark. A manager of Flexi Casual then granted yet another company (Cosmos) a broader right to manufacture shoes under the DIESEL trade mark, which it started to do. Cosmos sold some of its shoes to other Spanish companies, which resold them to Makro, a wholesaler selling through its own supermarkets, in the Netherlands. Diesel relied on its Benelux word mark DIESEL to request an injunction in the Dutch courts, which was granted and upheld on appeal.

Analysis

The key question in the Makro/Diesel litigation was whether Diesel had given its implicit consent to putting the shoes manufactured by Cosmos on the market in Spain. The Dutch Court of Appeal applied the criteria set out in Davidoff, analysed the various contracts, and concluded that Diesel had not given such consent. Makro then argued before the Hoge Raad that the criteria developed in Davidoff should only apply to goods which had first been put on the market outside the EEA, but not to goods first marketed within the EEA. The Hoge Raad was sufficiently persuaded for it to make a reference to the ECJ, while carefully explaining the underlying reasoning. This may be summarized as follows.

At the time of introduction of the Trade Mark Directive, there was a certain acquis communautaire regarding exhaustion which (i) grew out of cases regarding trade between member states and (ii) related its criteria mainly to realizing the main function of trade marks, ie an indication of origin and guarantee of quality. With the introduction of Article 7 of the Trade Mark Directive, a new situation arose, in that a trade mark owner could first put his goods on the market outside the EEA and still prohibit importation into the EEA. New criteria were developed in Davidoff and other case law which were stricter than before, to ensure enjoyment of this right to control the first marketing within the EEA. But should the Davidoff criteria for (implicit) consent also apply to goods first marketed within the EEA and, if not, could the relevant criteria be found in the older acquis communautaire (as set out in IHT Danzinger)? Such criteria would, according to the Hoge Raad, without a doubt be more lenient or, put differently, would more readily lead to exhaustion.

The ECJ rejected this suggestion with, essentially, three arguments:

* The intention of the trade mark owner to renounce his rights must be unequivocally demonstrated and will normally be gathered from an express statement of his consent. However, ‘the requirements deriving from the protection of the free movement of goods have led the court to hold that such a rule can be qualified’. First, exhaustion can occur when the goods are put on the market by an operator with economic links to the trade mark owner. Secondly, even if the goods were first put on the market by a person having no economic link to the trade mark owner and without his express consent, the intention to renounce his rights may result from the trade mark owner's implied consent, which can be inferred on the basis of the Davidoff criteria. Thus the ECJ explicitly unites the old and new case law in one conceptual framework. Express consent is the norm; involvement of an entity linked to the trade mark owner (IHT Danzinger) and implicit consent (Davidoff) are both qualifications in the interest of the free movement of goods.

* Nothing in the Davidoff judgment leads to the conclusion that the criteria set out there would apply only in the factual context of that case.

* The distinction suggested by the Hoge Raad would run counter to the system established by the Directive. The Community rule of exhaustion applies only to goods which have been put on the market in the EEA with the trade mark owner's consent. Marketing outside the EEA does not have an exhaustive effect, so what is important is only the fact that the goods in question have been marketed in the EEA.

Thus the ECJ chose to adopt a straightforward approach and to neutralize the differences a careful reader might find between the case law developed before and after the introduction of the Trade Mark Directive. It is a pity the ECJ did not really address the main point raised by the Hoge Raad, ie that the high bar set for implicit consent by Davidoff seems legitimate if one wants to allow the trade mark owner to control the first marketing of his goods in the EEA even if he has already marketed them elsewhere, but less so if the goods originated in the EEA.
The answer of the ECJ is that the consent of a trade mark owner to the marketing of goods bearing his mark carried out directly in the EEA by a third party may be implied,

in so far as such consent is to be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market in that area which, in the view of the national court, unequivocally demonstrate that the proprietor has renounced his exclusive rights.

Practical significance

This decision clarifies the ECJ's conceptual framework when dealing with exhaustion, in particular in the grounds for the decision numbered 22–25. It confirms that the Davidoff criteria for implied consent apply to all goods, regardless where they were first put on the market.

"Product" in SPC law

Back in October 2008, before this blog was set up, Oxford University Press kindly made freely available a Journal of Intellectual Property Law & Practice article by Catherine Katzka, "Interpretation of the Term 'Product' in EU Council Regulations 1768/92 and 1610/96 on Supplementary Protection Certificates", for the benefit of readers of The SPC Blog.

Even now I still regularly get requests to access this article from readers of The SPC Blog, and it seemed a little anomalous that this article should be accessible to readers of another weblog but not to those who read this one. Accordingly, if you want to read it, you can find it here.

Court of Appeal upholds patent on aircraft seating systems

Author: Bratin Roy (formerly McDermott Will & Emery UK LLP, now with Bristows)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp214

Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd [2009] EWCA Civ 1062, 22 October 2009

The Court of Appeal has upheld a patent relating to aircraft seating systems, giving useful guidance on the expected level of knowledge of patent law of the notional skilled reader.

Legal context

Patents are drafted in a particular manner, using various conventions which may not be readily apparent to the lay reader. This decision confirms that the notional skilled reader (the hypothetical addressee of a patent) is deemed not only to have knowledge of the technical field covered by a patent but also of patent drafting conventions, and of the concept of parent and divisional patent applications.

Facts and analysis

Virgin commissioned Contour to manufacture seats for its Upper Class cabins. Subsequently, Virgin alleged that the seats made by Contour for other clients infringed Virgin's patent and unregistered design rights in the seats made for it by Contour.

The patent, a divisional, sought to optimize and utilize space behind the seat, referred to as ‘lost space’. Virgin contended that, on their proper construction, the words of claim 1 of the patent simply required that, as well as having elements that could form a seat, each seat unit also had elements which could form a substantially flat bed, and that there was no requirement that the elements forming the bed should be completely distinct from the elements forming the seat.

Contour responded that claim 1 was limited to ‘flip-over’ seats, in which the rear part of the seat back forms part of the bed, which Contour referred to as the ‘true bed meaning’. Contour's design was such that the seat reclined to form part of the bed, ie the passenger sits and sleeps on the same side of the seat back. It was common ground that on Contour's interpretation of claim 1 there was no infringement.

Patents Court decision

Mr Justice Lewison concluded that the patent was valid, but was limited to the ‘true bed meaning’ and therefore was not infringed by Contour's designs. He also held that, as Contour's seats had been independently designed without copying those made for Virgin, there was no infringement of Virgin's unregistered design rights. He added that, if the patent were to be construed in the manner which Virgin contended, which would encompass Contour's design, the patent would be invalid for added matter. He rejected all other attacks on the patent.

Virgin appealed against the finding of non-infringement of the patent, and Contour cross-appealed on the contingent basis that, if the patent was infringed, it was invalid.

Court of Appeal decision

The Court of Appeal reversed the Patents Court's decision that the patent was not infringed, and affirmed its validity.

The Court of Appeal agreed with Virgin that the focus of the claim was on maximizing length by using lost space behind the seat, regardless of whether the seat flipped, as there was nothing in the claim limiting it in that way. Accordingly, the claim was not limited to flip-over seating and was infringed by Contour's design.

The judge had also erred in his analysis of the parent application. By holding that the skilled reader would regard the invention to be limited to flip-over seats, the judge was unduly influenced by the fact that all of the specific embodiments in the parent application showed flip-over seats. The skilled reader would in fact understand the claim in the parent application to have the same scope as claim 1 of the patent, and the wording of the two was essentially the same. Accordingly, the matter disclosed in the specification of the patent did not extend beyond that in the parent application, and the added matter objection identified by the judge therefore failed. The Court of Appeal agreed with the judge that the other invalidity objections failed, so the patent was valid and infringed.

The Court of Appeal also gave guidance on what a skilled reader of a patent might be expected to know about patent law and drafting conventions. As well as the contention of added matter in a divisional application over the parent application, the arguments on validity included points about reference numerals in claims, and also on the use of two-part patent claims, including pre-characterizing and characterizing parts.

Applying the House of Lords decision in Kirin-Amgen Inc. v Transkaryotic Therapies Inc. (No. 2) [2004] UKHL 46, the Court of Appeal stated that it would be unrealistic to expect that the notional skilled reader would not know and take into account the explicit drafting conventions by which a patent and its claims were framed. Thus the skilled reader would know of Rule 29(7) of the Implementing Regulations to the EPC, which states that reference numerals shall not be construed as limiting the claim, and of Rule 29(1), which sets out the convention for two-part claims and under which the skilled reader would recognize the pre-characterizing part of a claim as denoting those matters which the patentee considers to be old. Likewise, when there is a reference to a patent being a divisional application, it would be perverse to work on the basis that the skilled reader would not know what that meant. A real skilled reader who was not familiar with such concepts would take steps to find out their significance.

Practical significance

The comments made by the Court of Appeal on the level of knowledge of patent law and drafting conventions ascribed to the notional skilled reader are a useful guide to the interpretation of patent claims, as they reinforce the notion that the skilled reader is deemed to be familiar with patents themselves as well as the relevant technical knowledge. The Court of Appeal decision includes the following quote from Lord Hoffmann in Kirin-Amgen: ‘ ... The words [in a patent claim] will usually have been chosen on skilled advice.’ The judgment reinforces the fact that such skilled advice is not to be ignored when interpreting patent claims.

World Cup trade mark dispute: 1-0 says the German Federal Supreme Court

Author: Birgit Clark (Boult Wade Tennant)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp205

German Federal Supreme Court (Bundesgerichtshof), advance press release No. 232/2009, 13 November 2009 concerning case I ZR 183/07 (‘WM-Marken’), 12 November 2009

The German Federal Supreme Court had decided that FIFA, the organiser of the football World Cup, cannot prevent the economic exploitation of its sporting events through third party trade mark registrations relating to the World Cup or the third party use of these marks.

Legal context

The ‘general clause’ of section 3 of the German Act of Unfair Competition (UWG) prohibits unfair acts of competition which are liable to have more than an insubstantial impact on competition to the detriment of competitors, consumers, or other market participants. Section 4 No. 10 UWG renders it unlawful systematically to obstruct an individual competitor's freedom to act within the market.

‘Work titles’ (Werktitel) are any distinctive designation of an intangible result of work, such as the title of a book, and are protected under the German Trade Mark Act, mainly under the same terms as trade names and other business identifiers. In contrast to trade marks, work titles are protected without registration as soon as they are used in trade, subject only to the condition that they are inherently distinctive.

Facts

The International Federation of Association Football (FIFA), based in Switzerland, organizes the football World Cup and owns numerous (German) trade mark registrations relating to the football World Cup 2006, which was held in Germany, as well as trade marks relating to the upcoming World Cup to be held in South Africa later this year.

During past World Cup tournaments the defendant, sweets maker Ferrero GmbH had distributed free collectible stickers with its chocolate wafers that showed each member of the German national team together with a logo that combined a depiction of a football with a reference to the tournament, including the year it was held. In 2004 and 2005, the defendant registered eight word and device marks which referred to the World Cup and covered a broad range of classes. These marks included ‘WM 2010’, ‘WM’, and ‘2010’. The abbreviation WM was short for ‘Weltmeisterschaft’, the German word for World Cup. The defendant also applied to register three additional marks, including the mark ‘Südafrika 2010’ in reference to the 2010 World Cup in South Africa.

With its court action, FIFA sought to cancel Ferrero GmbH's World Cup trade mark registrations and to secure its agreement to a withdrawal of its pending applications arguing that the confectionery company had no rights to register the marks. FIFA, which controlled its World Cup franchise via its own collection company, claimed that Ferrero's trade mark registrations and applications infringed their earlier rights and constituted an infringement of German unfair competition law.

Analysis

The Court of First Instance, the Regional Court of Hamburg (case reference: 312 O 353/05 of 25 October 2005) decided in FIFA's favour and ruled that the defendant's actions had unfairly obstructed the claimant's freedom to operate on the market under section 4 No. 10 UWG. The court of appeal, the Higher Regional Court of Hamburg (case reference: 3 U 240/05 of 13 September 2007), dismissed the claim and held that FIFA could base its claim neither on its earlier trade mark registrations nor on the protection of ‘work titles’. The Higher Regional Court disagreed with the Court of First Instance and emphasized that it could not be established that the defendant's trade mark registration aimed to obstruct the claimant in the market. The defendant's trade mark registrations predominantly served to safeguard its established business practices. Even though the specifications of the defendant's trade marks were wider than its actual business activities, a certain level of expansion was permissible.

In its decision of 12 November 2009, the German Federal Supreme Court agreed with the Higher Regional Court's reasoning. The Federal judges found that there was no likelihood of confusion between the parties' trade marks under section 14, German Trade Mark Act; nor could FIFA successfully base its claim on the ‘work title rights’ it owned for ‘WM 2010’, ‘GERMANY 2006’, and ‘SOUTH AFRICA’. FIFA was also barred from making claims under unfair competition law, including the so-called ‘general clause’ of section 3 UWG.

The Federal Supreme Court based its decision on the following reasoning: Ferrero's trade marks did not influence the relevant trade circles to assume that it was an official sponsor of the World Cup tournaments, nor did the defendant unfairly block FIFA's efforts to market the World Cup events via licensing through third party sponsors. The court emphasized that FIFA's basic constitutional right to exploit its World Cup tournaments commercially did not extend to the point that it could prevent all types of third party exploitation of the sport event.

Practical significance

The Federal Supreme Court clarified that FIFA, as the organiser of the World Cup tournament, did not own the exclusive right to every kind of financial exploitation of the sporting events it organized. Neither Ferrero's trade mark registrations nor its practice of including collectible stickers with its confectionery products unfairly and uncompetitively affect FIFA's economic exploitation of the events or lead to confusion on the market.

However, while this decision could have far-reaching consequences for organisers of sport (and other events) that seek to financially exploit their respective events, it is unlikely to be last ‘match’ between both sides, who have been involved in various disputes before.

More peer reviewers needed

JIPLP has recently received for possible publication an article on interim injunctive relief for trade mark infringement in Tanzania. This sort of submission reflects several aspects of IP publishing and the role of JIPLP itself:

* The majority of countries in the world have too few IP practitioners, owners and administrators to support the commercial publication of a law journal devoted to developments within those countries. This means that writers on those developments must rely on international journals such as JIPLP as vehicles for the dissemination of peer-reviewed IP literature;

* JIPLP -- which, in keeping with its publisher's charitable objectives, has been made available to educational institutions in many developing countries -- receives a sizeable number of articles submitted from such jurisdictions;

* While the journal's current panel of peer reviewers works hard to assess the legal content of articles submitted for review, they sometimes lack a sufficient degree of appreciation of the relevant legal and commercial culture which would enable them with confidence to recommend publication, amendment or rejection of submissions.

JIPLP is always willing to enlarge its panel of peer reviewers. While the task of review is unpaid and sometimes onerous, it can be rewarding too, when a referee's helpful guidance and suggestions shapes an unpublishable manuscript into a publishable form or turns a good article into an excellent one.

A short word on personal privacy is appropriate here. The identity of peer reviewers is never disclosed to authors, but the identity of authors is made known to the reviewers, so that they can where necessary compare the submitted work with earlier works of the same author when considering issues such as originality and the extent to which the submitted work adds to the current debate.

If you'd like to volunteer for service as a peer reviewer, please email me here and give me some idea of your experience within intellectual property law and practice.

December 2009 issue now online

A little late but no less appreciated, the December 2009 issue of JIPLP is now available online to its subscribers. You can see the full contents of the current issue here.

The Editorial "What Price Loyalty?", which is available free of charge to subscribers and non-subscribers alike here, asks what parallels may be drawn between Apple's iPod and Google's web-based services, in terms of their respective attitude towards brand loyalty.