Next JIPLP-GRUR seminar: save the date!
The third London-based JIPLP-GRUR Int seminar, "Evidence and Procedure in IP Litigation", will be held on Wednesday 28 January 2015. The venue has been kindly offered by Taylor Wessing LLP, a law firm with impeccable British and German IP litigation credentials. Further details will be published in due course. Meanwhile, if you are hoping to attend, please mark your diary and save the date.
JIPLP-GRUR Int cooperation to continue
Among the fruits of cooperation are the jointly hosted events, of which there have so far been two in London and two in Munich, at which speakers who in general represent essentially common law and civil law perspectives address IP topics of mutual interest from their respective standpoints, contrasting their approaches and sharing thoughts about their respective strengths and weaknesses. The next joint event takes place in January 2015. This will focus on evidence and procedure in IP litigation. Watch this space for further details.
Try bombed—rugby league injunction application fails
Author: Stephanie Essey (Lawyer, Allens)
Sports Data Pty Ltd v Prozone Sports Australia Pty Ltd [2014] FCA 595, Federal Court of Australia, 6 June 2014
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu143, first published online: August 11, 2014
Sports Data, the former statistics supplier to the National Rugby League (the NRL), sought and failed to secure an interlocutory injunction against what it saw as the misuse of copyright in its database and the confidential information in it by Prozone, the NRL's new statistics supplier.
Legal context
Sports Data v Prozone builds on recent case law addressing copyright in databases—most notably, IceTV Pty Limited v Nine Network Australia Pty Limited (2009) 80 IPR 451 and Telstra Corporation Ltd v Phone Directories Company Pty Ltd (2010) 90 IPR 1. Against that backdrop, the decision emphasizes the importance of proving reproduction of a substantial part and causation, both of which can be influenced by the way the work is identified.
In determining whether to grant an interlocutory injunction, Wigney J applied the principles recently expounded by the Full Federal Court in Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238 (Apple v Samsung).
Facts
Sports Data served for several years as the official supplier of statistics to the National Rugby League (NRL), but its contract was terminated by the NRL and Prozone was appointed to the role. While collecting and providing statistics to the NRL, Sports Data had developed a database populated with fields which set out events in NRL games that were to be recorded. Sports Data alleged that Prozone copied confidential input criteria from the Sports Data database without consent in the process of creating its own event template. Sports Data also claimed that Prozone infringed its copyright in the input criteria by reproducing a substantial part of its copyright work in the Rugby League Definitions Guide 2014.
Analysis
Weak confidentiality case
The facts showed that Sports Data had failed to adequately particularize the information it claimed to be confidential. Sports Data asserted that the entire compilation of events in the database constituted confidential information, but Wigney J found that it was not possible to infer that Prozone had used the whole compilation rather than particular items contained within it.
Further, Sports Data did not succeed in proving that the information had the necessary quality of confidentiality. While the database contained a notice asserting confidentiality, it could be accessed by customers (including NRL clubs) without their viewing that notice. Although Wigney J drew the prima facie inference that Prozone had indeed received some information about Sports Data's input criteria, the circumstances in which Prozone received the information remained unclear to the court—most importantly, whether those circumstances identified an obligation of confidence. A purported notice of confidentiality provided by letter to Prozone was ineffective as it merely asserted copyright and did so at least a month after Prozone had received the information.
Weak copyright case
Wigney J found that Sports Data had, at best, demonstrated a very weak prima facie case of copyright infringement.
Wigney J emphasized the ambiguity in Sports Data's definition of the alleged copyright work; it was unclear whether the work comprised the input criteria (simply a list of rugby league event descriptions) or particular tables or fields from the database. Ultimately, Wigney J determined that the work constituted four tables drawn from the 50 tables comprising the database and that Sports Data employees had authored those tables, and there was enough mental effort and originality in the compilation such that the work may have been eligible for copyright protection.
However, Wigney J held that Sports Data had not established a prima facie case that Prozone had reproduced a substantial part of the copyright work. The absence of a substantial objective similarity between Sports Data's compilation and Prozone's Guide (whether considered with respect to quality or quantity) was instrumental. While some event descriptions had been reproduced, Sports Data had failed to demonstrate that the selection, structure and arrangement (which are critical when the work is simply a list of factual material) were substantially identical. Wigney J was also unpersuaded by Sports Data's evidence regarding causation, due to the lack of evidence that Prozone had actually obtained and copied all or a substantial part of the copyright work.
Wigney J briefly considered whether extracts from a much larger work (here, four tables from among 50) could legitimately comprise a copyright work. In particular, Wigney J expressed concern that allowing applicants to assert copyright in certain sections of a larger work might allow them to sidestep the substantiality requirement in an infringement claim. Wigney J found that it was not necessary to reach a conclusion on the question, but expressed the preliminary view that defining a copyright work in this manner might well prove impermissible at trial.
Balance of convenience not in Sports Data's favour
While it was strictly unnecessary to consider the balance of convenience, Wigney J addressed the arguments the parties had raised. He found that the balance of convenience did not fall in Sports Data's favour and that interlocutory relief would not have been awarded even if Sports Data had made out a prima facie case with regard to either of the causes of action (Apple v Samsung). The evidence led by Sports Data regarding its financial and business position was incomplete and therefore inconclusive, and Wigney J reasoned that its position would be unlikely to be improved by the grant of the injunctions it sought. For instance, there was no evidence that the NRL clubs would seek to engage Sports Data's services again. For that reason, Wigney J was not satisfied that damages would be an inadequate remedy for Sports Data or that Sports Data would suffer irreparable harm if interlocutory relief was not granted.
Further, Wigney J considered it possible that Prozone and its employees would suffer harm if an injunction rendered it unable to perform its obligations under its contract with the NRL. The NRL would also be inconvenienced, as it would need to retain an alternative statistics provider.
Three final factors cited by Wigney J in refusing to grant the injunctions were Sports Data's very weak prima facie case, its delay in seeking interlocutory relief and the fact that it sought unjustifiably broad injunctions without time limitations.
Practical significance
Sports Data v Prozone serves as a reminder to define carefully and specifically the literary work in a copyright infringement claim and highlights the complexities of proving reproduction of a substantial part and causation in the database context. It raises a broader question about whether copyright can justifiably be asserted over specific components of a larger work without compromising the substantiality threshold.
With respect to confidential information, the decision signals that it is crucial to flag confidentiality at the earliest possible opportunity (ideally before, or when, the information is imparted). It is strongly advisable to seek interlocutory relief in a timely manner and to ensure that proposed injunctions are framed with precision.
The author thanks Tim Golder and Lester Miller of Allens for their assistance with this article.
Sports Data Pty Ltd v Prozone Sports Australia Pty Ltd [2014] FCA 595, Federal Court of Australia, 6 June 2014
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu143, first published online: August 11, 2014
Sports Data, the former statistics supplier to the National Rugby League (the NRL), sought and failed to secure an interlocutory injunction against what it saw as the misuse of copyright in its database and the confidential information in it by Prozone, the NRL's new statistics supplier.
Legal context
In determining whether to grant an interlocutory injunction, Wigney J applied the principles recently expounded by the Full Federal Court in Samsung Electronics Co Ltd v Apple Inc (2011) 217 FCR 238 (Apple v Samsung).
Facts
Sports Data served for several years as the official supplier of statistics to the National Rugby League (NRL), but its contract was terminated by the NRL and Prozone was appointed to the role. While collecting and providing statistics to the NRL, Sports Data had developed a database populated with fields which set out events in NRL games that were to be recorded. Sports Data alleged that Prozone copied confidential input criteria from the Sports Data database without consent in the process of creating its own event template. Sports Data also claimed that Prozone infringed its copyright in the input criteria by reproducing a substantial part of its copyright work in the Rugby League Definitions Guide 2014.
Analysis
Weak confidentiality case
The facts showed that Sports Data had failed to adequately particularize the information it claimed to be confidential. Sports Data asserted that the entire compilation of events in the database constituted confidential information, but Wigney J found that it was not possible to infer that Prozone had used the whole compilation rather than particular items contained within it.
Weak copyright case
Wigney J found that Sports Data had, at best, demonstrated a very weak prima facie case of copyright infringement.
Wigney J emphasized the ambiguity in Sports Data's definition of the alleged copyright work; it was unclear whether the work comprised the input criteria (simply a list of rugby league event descriptions) or particular tables or fields from the database. Ultimately, Wigney J determined that the work constituted four tables drawn from the 50 tables comprising the database and that Sports Data employees had authored those tables, and there was enough mental effort and originality in the compilation such that the work may have been eligible for copyright protection.
However, Wigney J held that Sports Data had not established a prima facie case that Prozone had reproduced a substantial part of the copyright work. The absence of a substantial objective similarity between Sports Data's compilation and Prozone's Guide (whether considered with respect to quality or quantity) was instrumental. While some event descriptions had been reproduced, Sports Data had failed to demonstrate that the selection, structure and arrangement (which are critical when the work is simply a list of factual material) were substantially identical. Wigney J was also unpersuaded by Sports Data's evidence regarding causation, due to the lack of evidence that Prozone had actually obtained and copied all or a substantial part of the copyright work.
Wigney J briefly considered whether extracts from a much larger work (here, four tables from among 50) could legitimately comprise a copyright work. In particular, Wigney J expressed concern that allowing applicants to assert copyright in certain sections of a larger work might allow them to sidestep the substantiality requirement in an infringement claim. Wigney J found that it was not necessary to reach a conclusion on the question, but expressed the preliminary view that defining a copyright work in this manner might well prove impermissible at trial.
Balance of convenience not in Sports Data's favour
While it was strictly unnecessary to consider the balance of convenience, Wigney J addressed the arguments the parties had raised. He found that the balance of convenience did not fall in Sports Data's favour and that interlocutory relief would not have been awarded even if Sports Data had made out a prima facie case with regard to either of the causes of action (Apple v Samsung). The evidence led by Sports Data regarding its financial and business position was incomplete and therefore inconclusive, and Wigney J reasoned that its position would be unlikely to be improved by the grant of the injunctions it sought. For instance, there was no evidence that the NRL clubs would seek to engage Sports Data's services again. For that reason, Wigney J was not satisfied that damages would be an inadequate remedy for Sports Data or that Sports Data would suffer irreparable harm if interlocutory relief was not granted.
Further, Wigney J considered it possible that Prozone and its employees would suffer harm if an injunction rendered it unable to perform its obligations under its contract with the NRL. The NRL would also be inconvenienced, as it would need to retain an alternative statistics provider.
Three final factors cited by Wigney J in refusing to grant the injunctions were Sports Data's very weak prima facie case, its delay in seeking interlocutory relief and the fact that it sought unjustifiably broad injunctions without time limitations.
Practical significance
Sports Data v Prozone serves as a reminder to define carefully and specifically the literary work in a copyright infringement claim and highlights the complexities of proving reproduction of a substantial part and causation in the database context. It raises a broader question about whether copyright can justifiably be asserted over specific components of a larger work without compromising the substantiality threshold.
With respect to confidential information, the decision signals that it is crucial to flag confidentiality at the earliest possible opportunity (ideally before, or when, the information is imparted). It is strongly advisable to seek interlocutory relief in a timely manner and to ensure that proposed injunctions are framed with precision.
The author thanks Tim Golder and Lester Miller of Allens for their assistance with this article.
Safe and sound: CJEU confirms a safener can be an active ingredient too
Author: Laura Whiting (Hogan Lovells International LLP)
Bayer CropScience AG v Deutsches Patent- und Marken Amt, Case C-11/13, EU:C:2014:2010, 13 February 2014, Judgment, Court of Justice of the European Union (CJEU)
Journal of Intellectual Property Law & Practice (2014), doi: 10.1093/jiplp/jpu139, first published online: August 1, 2014
The CJEU has confirmed the broader interpretation of ‘active substance’ proposed by AG Jääskinen (EU:C:2014:86) in the context of supplementary protection certificates (SPCs) for plant protection products—will this decision result in a move away from the strict approach previously applied in relation to SPCs for medicinal products?
Legal context
Bayer is a direct reference from the German Patent and Trade Mark Office (DPMA) in relation to the scope of supplementary protection certificates (SPCs) for plant protection products. The referral concerns the question of whether a ‘safener’—a substance contained in a plant protection product which improves herbicide selectivity for weeds by protecting crop plants from the toxic effect of the herbicide—falls within the scope of the terms ‘product’ and ‘active substance’ in Plant Protection Regulation 1610/96 (the ‘PP Regulation’). Like the SPC Regulation (469/2009), the PP Regulation requires that a valid authorization to place the ‘product’ on the market has been granted as a pre-requisite to the grant of a certificate (Art 3(b)). Under Article 1(8) of the PP Regulation, a product is the active substance or combination of active substances in the plant protection product.
Facts
The product concerned in this reference is MaisTer, a combination of the herbicides foramsulfuron and iodosulfuron, and the safener isoxadifen. Bayer's marketing authorization for MaisTer named only foramsulfuron and iodosulfuron as the active substances (although an earlier provisional MA had also listed isoxadifen as an active substance). Bayer applied for an SPC for isoxadifen based on this MA. The application was rejected on the grounds that the safener was not an ‘active substance’ and therefore could not be a ‘product’ under the PP Regulation.
Analysis
The Court of Justice of the European Union (CJEU) has ruled that the definition of ‘active substance’ can include safeners (or other substances) where the substance has a ‘toxic, phytotoxic or plant protection action of its own’. In such a case, the safener may be entitled to SPC protection if it satisfies the other requirements of the PP Regulation.
Article 1(3) of the PP Regulation defines an active substance as a substance which has ‘general or specific action: (a) against harmful organisms; or (b) on plants, parts of plants or plant products’. The CJEU interpreted Article 1(3) in light of Article 1(1) which sets out the effects which a ‘plant protection product’ containing one or more active substance may have. Therefore, according to the decision, any substance which exerts a toxic, phytotoxic or plant protection action itself is to be included in the definition, whether or not its action is direct or indirect. This is slightly different to the definition proposed by AG Jääskinen, who considered an active substance was one which ‘causes an action, chemical or biological, as an integral part of a causal chain whose objective is to produce a general or specific action’ on a plant.
The Advocate General's reasoning took support from two earlier CJEU decisions. Söll v Tetra (C-420/10, Judgment, EU:C:2012:111) related to the interpretation of Directive 98/8 on the placing of biocidal products on the market, which also contains a definition of active substance. In that case, the CJEU found that a flocculating agent could be an active substance in a biocidal product, as although it did not have a direct harmful effect on the organism itself, it was an integral part of a causal chain in controlling it. Chemische Fabrik Kreussler v Sunstar Deutschland (C-308/11, Judgment, EU:C:2012:548) related to the definition of ‘medicinal product’ in Directive 2001/83 on medicinal products for human use. The CJEU there considered that a substance which does not interact with a human cellular constituent may nonetheless qualify as a medicinal product if it directly or indirectly restores, corrects or modifies human physiological functions.
The CJEU's reasoning follows the rationale of Söll and Chemische Fabrik Kreussler in not requiring a direct relationship between the active substance in question and the effect produced. The Court also relied on its previous decisions concerning the SPC Regulation in which both excipients (Judgment in MIT, C-431/04, EU:C:2006:291) and adjuvants (Order in GSK, C-210/13, EU:C:2013:762) were held not to be entitled to SPC protection on the basis that both were substances ‘with no pharmaceutical effects of [their] own’ and therefore could not satisfy the definition of ‘product’ in the SPC Regulation. These cases are cited by the CJEU in support of its reasoning that a substance with no toxic, phytotoxic or plant protection action could not be considered to be an active substance.
Having set out the test under which a safener may qualify as an active substance, the CJEU then referred the decision on the facts of this specific case back to the national court.
Practical significance
The CJEU's decision does not suggest that medicinal products and plant protection products should be treated differently. While it relied on its decisions in MIT and GSK, no factual comparison between those cases and the present one was undertaken. It is therefore unclear whether this decision marks the start of a divergence between the legal treatment of SPCs for plant protection products and those for medicinal products, or whether it indicates the first step in a shift in direction for the jurisprudence of both systems.
Applying the Bayer decision to SPCs for medicinal products could (with the appropriate facts) potentially open up a wider category of products to SPC protection. In the case of adjuvants in particular, following the reasoning of the CJEU, it could be argued that if the adjuvant has an effect on the effectiveness or tolerability (or other qualities) of the active substance, then it should qualify as a ‘product’ under the SPC Regulation.
The CJEU will have an opportunity to consider the question of adjuvants again in Forsgren (C-631/13, a reference lodged on 2 December 2013). In this case, the adjuvant is a protein carrier molecule which is covalently bonded to various pneumococcal polysaccharides in a vaccine composition and is said to intensify the effect of those polysaccharides. It is further said to have a therapeutic effect of its own. The CJEU has been asked whether this carrier protein is itself an active ingredient either by virtue of its own therapeutic action or as a result of its intensifying effect on the pneumococcal polysaccharides. If the reasoning in Bayer were followed, this should be enough to qualify it as an active substance—but readers will have to wait for the answer, as no dates in the procedure have yet been set.
Bayer CropScience AG v Deutsches Patent- und Marken Amt, Case C-11/13, EU:C:2014:2010, 13 February 2014, Judgment, Court of Justice of the European Union (CJEU)
Journal of Intellectual Property Law & Practice (2014), doi: 10.1093/jiplp/jpu139, first published online: August 1, 2014
The CJEU has confirmed the broader interpretation of ‘active substance’ proposed by AG Jääskinen (EU:C:2014:86) in the context of supplementary protection certificates (SPCs) for plant protection products—will this decision result in a move away from the strict approach previously applied in relation to SPCs for medicinal products?
Legal context
Facts
Analysis
The Court of Justice of the European Union (CJEU) has ruled that the definition of ‘active substance’ can include safeners (or other substances) where the substance has a ‘toxic, phytotoxic or plant protection action of its own’. In such a case, the safener may be entitled to SPC protection if it satisfies the other requirements of the PP Regulation.
Article 1(3) of the PP Regulation defines an active substance as a substance which has ‘general or specific action: (a) against harmful organisms; or (b) on plants, parts of plants or plant products’. The CJEU interpreted Article 1(3) in light of Article 1(1) which sets out the effects which a ‘plant protection product’ containing one or more active substance may have. Therefore, according to the decision, any substance which exerts a toxic, phytotoxic or plant protection action itself is to be included in the definition, whether or not its action is direct or indirect. This is slightly different to the definition proposed by AG Jääskinen, who considered an active substance was one which ‘causes an action, chemical or biological, as an integral part of a causal chain whose objective is to produce a general or specific action’ on a plant.
The Advocate General's reasoning took support from two earlier CJEU decisions. Söll v Tetra (C-420/10, Judgment, EU:C:2012:111) related to the interpretation of Directive 98/8 on the placing of biocidal products on the market, which also contains a definition of active substance. In that case, the CJEU found that a flocculating agent could be an active substance in a biocidal product, as although it did not have a direct harmful effect on the organism itself, it was an integral part of a causal chain in controlling it. Chemische Fabrik Kreussler v Sunstar Deutschland (C-308/11, Judgment, EU:C:2012:548) related to the definition of ‘medicinal product’ in Directive 2001/83 on medicinal products for human use. The CJEU there considered that a substance which does not interact with a human cellular constituent may nonetheless qualify as a medicinal product if it directly or indirectly restores, corrects or modifies human physiological functions.
The CJEU's reasoning follows the rationale of Söll and Chemische Fabrik Kreussler in not requiring a direct relationship between the active substance in question and the effect produced. The Court also relied on its previous decisions concerning the SPC Regulation in which both excipients (Judgment in MIT, C-431/04, EU:C:2006:291) and adjuvants (Order in GSK, C-210/13, EU:C:2013:762) were held not to be entitled to SPC protection on the basis that both were substances ‘with no pharmaceutical effects of [their] own’ and therefore could not satisfy the definition of ‘product’ in the SPC Regulation. These cases are cited by the CJEU in support of its reasoning that a substance with no toxic, phytotoxic or plant protection action could not be considered to be an active substance.
Having set out the test under which a safener may qualify as an active substance, the CJEU then referred the decision on the facts of this specific case back to the national court.
Practical significance
The CJEU's decision does not suggest that medicinal products and plant protection products should be treated differently. While it relied on its decisions in MIT and GSK, no factual comparison between those cases and the present one was undertaken. It is therefore unclear whether this decision marks the start of a divergence between the legal treatment of SPCs for plant protection products and those for medicinal products, or whether it indicates the first step in a shift in direction for the jurisprudence of both systems.
Applying the Bayer decision to SPCs for medicinal products could (with the appropriate facts) potentially open up a wider category of products to SPC protection. In the case of adjuvants in particular, following the reasoning of the CJEU, it could be argued that if the adjuvant has an effect on the effectiveness or tolerability (or other qualities) of the active substance, then it should qualify as a ‘product’ under the SPC Regulation.
The CJEU will have an opportunity to consider the question of adjuvants again in Forsgren (C-631/13, a reference lodged on 2 December 2013). In this case, the adjuvant is a protein carrier molecule which is covalently bonded to various pneumococcal polysaccharides in a vaccine composition and is said to intensify the effect of those polysaccharides. It is further said to have a therapeutic effect of its own. The CJEU has been asked whether this carrier protein is itself an active ingredient either by virtue of its own therapeutic action or as a result of its intensifying effect on the pneumococcal polysaccharides. If the reasoning in Bayer were followed, this should be enough to qualify it as an active substance—but readers will have to wait for the answer, as no dates in the procedure have yet been set.
Balancing tool or escape clause? Proportionality in temporary relief proceedings before the Greek courts
Author: Nikos Prentoulis (Prentoulis Lawyers & Consultants)
Single-Member First Instance Court of Athens, Decision No 4209/2014
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu135, first published online: August 1, 2014
A recent judgment of the Athens First Instance Court in preliminary injunction proceedings over trade mark infringement illustrates how the principle of proportionality may be (mis-)used.
Legal context
Within a ‘classic’ likelihood of confusion and famous trade mark violation case, the interesting part of the judgment lies in the court's interpretation of Article 155 of Greek Law No 4072/2012 on Trade Marks, which subjects any corrective measures for trade mark infringement to the balancing ‘hand’ of the principle of proportionality, in conformity with Articles 3(2) and 10(3) of Directive 2004/48.
Proportionality is no stranger to European intellectual property law (see Article 20 of the ‘InfoSoc’ Directive 2001/29) and it also informs the application of Articles 692(1), 692(3), 731 and 732 of the Greek Code of Civil Procedure, setting out the powers of Greek judges in temporary relief proceedings to ‘provisionally regulate’ the disputed ‘situation’, without being bound by the particular demands of the litigants. However, the express inclusion of the principle of proportionality in the normative ethos of the recently revised Greek trade mark law, centralizes its role in trade mark adjudication.
Facts
Hard Rock initiated preliminary injunction proceedings against a Greek entity, based in Athens, trading in apparel, accessories and souvenirs on the well-known Paradise beach in the island of Mykonos. Hard Rock alleged unauthorized use of its Greek and Community HARD ROCK CAFE and Community ROCK SHOP trade marks for similar goods and services and on store signage. The action was accepted and the preliminary injunction request was granted, but the court dismissed the applicant's request to publish the decision either on the internet (in a web news portal) or in the press. According to the court, the defendant had ‘already’ (presumably at the time of the hearing in November 2013) ceased the unauthorized use of the marks. Accordingly, the orders for preliminary injunction and seizure of infringing items constituted ‘adequate’ corrective measures. Publication of the judgment was further specifically denied due to the ‘limited scope’ of the infringement, obviously as a result of the cessation of the infringement.
Analysis
One can reasonably question this particular part of the judgment. ‘Heralding’ that it has stopped the alleged infringement, after the end of the high-season in the Greek islands (May–September), the defendant should not have impressed anyone. The minimal commercial interest in the tourist market in the Greek islands after September is common knowledge in Greece; just ask any anti-counterfeiting manager responsible for the territory. Post-September trade mark infringement in the Greek islands could be of ‘limited scope’, but infringement between May and September is by definition severe. Significantly, Hard Rock filed the action in early July, which can only mean that the infringement subsisted within the high season.
Moreover, why would anyone who has ceased the use of the claimant's marks ever set foot in the courtroom (unless he is waiting for next May)? Conventional wisdom and IP practice in Greece state that taking down marks and then appearing in court to argue against an injunction is usually a sign that one does not particularly savour committing oneself to not repeating the use of the marks in the future.
One may argue that the qualities of the infringing behaviour should not inform the application of proportionality and render it a ‘punitive’, ‘outing’ mechanism. So, why does the judgment mention it?
But even if that were the case, publication of the judgment is per se a standard corrective measure of trade mark infringement, even in temporary relief proceedings. Considering that trade mark law undeniably also protects consumers' interests, publication has long been advocated and consistently granted as an effective remedy for IP infringement. Moreover, Greek trade mark law, via its recent revision in 2012, explicitly provides for publication of judgments as a civil remedy in trade mark infringement cases. In addition, privacy concerns cannot hinder publication since court judgments are a matter of public interest, subjected to the demand for transparency of the exercise of the judiciary powers within a democratic society.
Accordingly, publication of a preliminary injunction judgment can essentially be hindered when the case is a doubtful one or when the impact of the infringement has indeed been minimal. But non-publication cannot be justified by the defendant having ceased the use of the marks involved. Moreover, by all standards, the infringing use of a well-known mark both on goods and store signage in Mykonos in the summer is anything but minimal.
In addition, the order for the provisional seizure of infringing items and store signage, which had already been removed by the defendant, appears acutely incompatible with the court's own reasoning. The version of proportionality inferred from the particular judgment should direct the court against such (fruitless) seizure.
The court may very well have had good reasons for rejecting the publication request, but such reasons are not evident in its reasoning; nor can they even be inferred from it. The court makes no reference, for example, to a possible swift compliance to a cease and desist letter before legal action, or any fact or circumstance that could validate its reading of proportionality.
Practical significance
Proportionality is a tool. This is not a very nice word in the human rights vocabulary, from which proportionality originates but, in adjudication terms, it is a very accurate definition. As a tool, it allows the court of a statutory law jurisdiction to ‘maneouvre’ within the particular factual environment of the case in order to deliver a sound and fair judgment. But ‘fair’ does not mean ‘free-ride’ (at least not in cases where leniency is not warranted); proportionality is not a ‘forgive and forget’ mechanism.
And this is where the danger of an interpretation of proportionality along the lines of this judgment lies: in distorting its role as a balancing tool of overly strict corrective measures and subverting the clear pro-IP rights spirit of the Greek trade mark law.
One may argue that the concerns raised above are somewhat ‘disproportionate’ themselves; this may just be an isolated ‘over-leniency’ case. But one cannot stress enough the importance of not mistaking proportionality for a single-sentence escape mechanism when, right or wrong, any court considers certain remedies as overly austere.
In defence of Greek courts, it should be mentioned that in another recent judgment of the Single-Member First Instance Court of Athens in main proceedings (555/2014), proportionality was genuinely employed to limit publication of the operative part of the judgment in the press and not also on the internet. Publication on the internet might have been more effective. Still, this judgment illustrates the intended role of proportionality.
Single-Member First Instance Court of Athens, Decision No 4209/2014
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu135, first published online: August 1, 2014
A recent judgment of the Athens First Instance Court in preliminary injunction proceedings over trade mark infringement illustrates how the principle of proportionality may be (mis-)used.
Legal context
Within a ‘classic’ likelihood of confusion and famous trade mark violation case, the interesting part of the judgment lies in the court's interpretation of Article 155 of Greek Law No 4072/2012 on Trade Marks, which subjects any corrective measures for trade mark infringement to the balancing ‘hand’ of the principle of proportionality, in conformity with Articles 3(2) and 10(3) of Directive 2004/48.
Proportionality is no stranger to European intellectual property law (see Article 20 of the ‘InfoSoc’ Directive 2001/29) and it also informs the application of Articles 692(1), 692(3), 731 and 732 of the Greek Code of Civil Procedure, setting out the powers of Greek judges in temporary relief proceedings to ‘provisionally regulate’ the disputed ‘situation’, without being bound by the particular demands of the litigants. However, the express inclusion of the principle of proportionality in the normative ethos of the recently revised Greek trade mark law, centralizes its role in trade mark adjudication.
Facts
Analysis
One can reasonably question this particular part of the judgment. ‘Heralding’ that it has stopped the alleged infringement, after the end of the high-season in the Greek islands (May–September), the defendant should not have impressed anyone. The minimal commercial interest in the tourist market in the Greek islands after September is common knowledge in Greece; just ask any anti-counterfeiting manager responsible for the territory. Post-September trade mark infringement in the Greek islands could be of ‘limited scope’, but infringement between May and September is by definition severe. Significantly, Hard Rock filed the action in early July, which can only mean that the infringement subsisted within the high season.
Moreover, why would anyone who has ceased the use of the claimant's marks ever set foot in the courtroom (unless he is waiting for next May)? Conventional wisdom and IP practice in Greece state that taking down marks and then appearing in court to argue against an injunction is usually a sign that one does not particularly savour committing oneself to not repeating the use of the marks in the future.
One may argue that the qualities of the infringing behaviour should not inform the application of proportionality and render it a ‘punitive’, ‘outing’ mechanism. So, why does the judgment mention it?
But even if that were the case, publication of the judgment is per se a standard corrective measure of trade mark infringement, even in temporary relief proceedings. Considering that trade mark law undeniably also protects consumers' interests, publication has long been advocated and consistently granted as an effective remedy for IP infringement. Moreover, Greek trade mark law, via its recent revision in 2012, explicitly provides for publication of judgments as a civil remedy in trade mark infringement cases. In addition, privacy concerns cannot hinder publication since court judgments are a matter of public interest, subjected to the demand for transparency of the exercise of the judiciary powers within a democratic society.
Accordingly, publication of a preliminary injunction judgment can essentially be hindered when the case is a doubtful one or when the impact of the infringement has indeed been minimal. But non-publication cannot be justified by the defendant having ceased the use of the marks involved. Moreover, by all standards, the infringing use of a well-known mark both on goods and store signage in Mykonos in the summer is anything but minimal.
In addition, the order for the provisional seizure of infringing items and store signage, which had already been removed by the defendant, appears acutely incompatible with the court's own reasoning. The version of proportionality inferred from the particular judgment should direct the court against such (fruitless) seizure.
The court may very well have had good reasons for rejecting the publication request, but such reasons are not evident in its reasoning; nor can they even be inferred from it. The court makes no reference, for example, to a possible swift compliance to a cease and desist letter before legal action, or any fact or circumstance that could validate its reading of proportionality.
Practical significance
Proportionality is a tool. This is not a very nice word in the human rights vocabulary, from which proportionality originates but, in adjudication terms, it is a very accurate definition. As a tool, it allows the court of a statutory law jurisdiction to ‘maneouvre’ within the particular factual environment of the case in order to deliver a sound and fair judgment. But ‘fair’ does not mean ‘free-ride’ (at least not in cases where leniency is not warranted); proportionality is not a ‘forgive and forget’ mechanism.
And this is where the danger of an interpretation of proportionality along the lines of this judgment lies: in distorting its role as a balancing tool of overly strict corrective measures and subverting the clear pro-IP rights spirit of the Greek trade mark law.
One may argue that the concerns raised above are somewhat ‘disproportionate’ themselves; this may just be an isolated ‘over-leniency’ case. But one cannot stress enough the importance of not mistaking proportionality for a single-sentence escape mechanism when, right or wrong, any court considers certain remedies as overly austere.
In defence of Greek courts, it should be mentioned that in another recent judgment of the Single-Member First Instance Court of Athens in main proceedings (555/2014), proportionality was genuinely employed to limit publication of the operative part of the judgment in the press and not also on the internet. Publication on the internet might have been more effective. Still, this judgment illustrates the intended role of proportionality.
Gold bear wars reloaded
Author: Birgit Clark (Venner Shipley LLP, London)
Higher Regional Court of Cologne (Oberlandesgericht Köln), Case ref: 6 U 230/12, 11 April 2014
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu128, first published online: July 16, 2014
Disagreeing with the first instance court, the Higher Regional Court of Cologne held that sweetmaker Lindt's three-dimensional gold-foiled chocolate bears did not infringe Haribo's well-known GOLDBÄREN gummy bear (word) trade marks.
Legal context
In accordance with Article 5(2) of the European Union's Trade Mark Directive, Article 14(2) No 3 of the German Trade Mark Act (MarkenG) provides that it constitutes trade mark infringement ‘if a third party without having consent of the trade mark owner in the course of trade exploits the distinctive character or the repute of a well-known trade mark in relation to goods or services which are not similar to those for which the trade mark is registered without due cause and by such use takes unfair advantage of the distinctive character or the repute of the trade mark’.
Facts
German confectioner Haribo had sold its multi-coloured gummy bears wrapped in gold-coloured packaging since the 1960s and owned various registered trade mark rights in these, inter alia, covering confectionery: GOLDBÄR (in English: gold bear) and its plural form GOLDBÄREN as well as its ‘Goldbär device’; a yellow-gold coloured bear device wearing a red ribbon bow. Haribo's competitor, Swiss confectioner Lindt, producer of the well-known chocolate Gold Bunnies, had made and sold gold-foil wrapped chocolate bears (the ‘Lindt Teddy’, wearing a red ribbon bow) since 2011. Haribo took objection and brought a claim against the distribution of Lindt's chocolate bears in Germany based on its trade mark rights, asking for information, damages and the destruction of Lindt's products. In essence, Haribo argued that Lindt's bears amounted to a three-dimensional representation of Haribo's gummy bear trade marks. Lindt denied infringement and argued that gold foil and red ribbon as used on its chocolate Lindt Teddies were the same as those used on its well-known Easter chocolate Gold Bunnies. Lindt also stressed that it had intentionally refrained from using brand names such as ‘Goldbär’ or ‘Gold Teddy’ and that gold was a traditional Christmas colour. The Swiss chocolate maker thus invited the court to find that the competing products did not look in any way similar so that consumers would not be confused.
Analysis
The first instance court, the Regional Court of Cologne (Landgericht Köln, 33 O 803/11, 18 December 2012) agreed with Haribo and held that Lindt's three-dimensional gold-foiled chocolate bears amounted to an infringing ‘visual representation’ of Haribo's well-known GOLDBÄREN gummy bear word mark under Article 14(2) No 3 MarkenG. In view of the Landgericht, the appearance of the shape of Lindt's chocolate bears inevitably produced connotations with Haribo's bears.
Bearing in mind that there had so far been no decision by the German Federal Court of Justice (Bundesgerichtshof) on the question of a conflict between a word mark and a three-dimensional product design, the first instance judges emphasized that that there could be similarity between different ‘categories of trade marks’.
The Landgericht therefore applied legal principles which the Bundesgerichtshof had previously developed in precedents concerning a conflict between word marks and figurative trade marks (BGH GRUR 1971, 251, 252—Oldtimer; BGH GRUR 2004, 779, 783—Zwilling/Zweibrüder) and according to which there could be similarity where there was not only a ‘concordance in theme’ but where a term was the ‘obvious, unforced and exhaustive description’ adopted by consumers.
On Lindt's appeal to the Higher Regional Court of Cologne, the appeal judges agreed with Lindt and confirmed the lower court's view that—in theory—a word trade mark, such as ‘Goldbär’, could be infringed by a three dimensional shape, such as the defendant's chocolate teddy. However, the appeal court did not agree with the Landgericht's application of the Bundesgerichtshof's precedents in the Oldtimer and Zwilling/Zweibrüder cases on a potential similarity between different ‘categories of trade marks’. The appeal judges agreed with both parties that Lindt's teddy shape was a complex sign but did not believe that the allegedly infringed sign (here: Haribo's gold bear) was the obvious, unforced, self-contained and distinctive title and thus the closest and most fitting description of the Lindt teddy shape. The judges explained that there were several additional levels of abstraction that separated the chocolate teddy shape from the Goldbär word mark.
Further, the overall impression conveyed by Lindt's teddy was not only based on its shape and gold colour wrapping, red ribbon and the imprint of ears, face and paws but also affected by the fact that Lindt's name and logo and the words ‘Lindt Teddy’ were prominently displayed on the teddy's stomach. In this context the court also referred to the Higher Regional Court of Frankfurt's precedent in the Gold Bunnies dispute cases between Lindt and its competitor Riegelein (GRUR-RR 2012, 255), in which the Frankfurt court had found that that the shape and colour of the Gold Bunnies were of a lower level of distinctiveness than the respective word elements (‘Lindt’ versus ‘Riegelein’) displayed on the bunnies. Applying this guidance to the case at hand, the Cologne judges concluded that that consumers would regard the word element ‘Lindt-Teddy’ in particular as an indication of origin, bearing in mind that the ‘Lindt-Teddy’ was a seamless addition to Lindt's established Gold Bunny product line. The court thus disagreed with Haribo's view that Lindt had taken unfair advantage of Haribo's Goldbär by ‘approximating’ its Lindt teddy to Haribo's gold bears in order to exploit the expectations of quality that consumers associate with Haribo's bears. The judges further explained this by pointing out that Lindt was a well-known confectionery manufacturer and the allegedly infringing Lindt Teddy product an obvious addition to Lindt's product line of gold-foiled chocolate shapes.
Practical significance
Whether the guidance developed by the Bundesgerichtshof for conflicts between word and device marks (similarity, where the later mark is an ‘obvious, unforced and exhaustive description’ of the earlier mark) may equally be applied to conflicts between word marks and three-dimensional shapes is a crucial one, bearing in mind the impact this can have on search strategies and advice when it comes to clearing any category of (shape) trade mark (or designs) for use and registration in Germany. In its closing remarks the Higher Regional Court of Cologne stated that the question of such a ‘cross collision’ (Überkreuzkollision) of trade marks was indeed of a ‘fundamental nature’. It is now expected that Haribo will appeal the matter to the Bundesgerichtshof, which may in turn even refer the question to the Court of Justice of the European Union for pan-European guidance.
Higher Regional Court of Cologne (Oberlandesgericht Köln), Case ref: 6 U 230/12, 11 April 2014
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu128, first published online: July 16, 2014
Disagreeing with the first instance court, the Higher Regional Court of Cologne held that sweetmaker Lindt's three-dimensional gold-foiled chocolate bears did not infringe Haribo's well-known GOLDBÄREN gummy bear (word) trade marks.
Legal context
In accordance with Article 5(2) of the European Union's Trade Mark Directive, Article 14(2) No 3 of the German Trade Mark Act (MarkenG) provides that it constitutes trade mark infringement ‘if a third party without having consent of the trade mark owner in the course of trade exploits the distinctive character or the repute of a well-known trade mark in relation to goods or services which are not similar to those for which the trade mark is registered without due cause and by such use takes unfair advantage of the distinctive character or the repute of the trade mark’.
Facts
Analysis
The first instance court, the Regional Court of Cologne (Landgericht Köln, 33 O 803/11, 18 December 2012) agreed with Haribo and held that Lindt's three-dimensional gold-foiled chocolate bears amounted to an infringing ‘visual representation’ of Haribo's well-known GOLDBÄREN gummy bear word mark under Article 14(2) No 3 MarkenG. In view of the Landgericht, the appearance of the shape of Lindt's chocolate bears inevitably produced connotations with Haribo's bears.
Bearing in mind that there had so far been no decision by the German Federal Court of Justice (Bundesgerichtshof) on the question of a conflict between a word mark and a three-dimensional product design, the first instance judges emphasized that that there could be similarity between different ‘categories of trade marks’.
The Landgericht therefore applied legal principles which the Bundesgerichtshof had previously developed in precedents concerning a conflict between word marks and figurative trade marks (BGH GRUR 1971, 251, 252—Oldtimer; BGH GRUR 2004, 779, 783—Zwilling/Zweibrüder) and according to which there could be similarity where there was not only a ‘concordance in theme’ but where a term was the ‘obvious, unforced and exhaustive description’ adopted by consumers.
Further, the overall impression conveyed by Lindt's teddy was not only based on its shape and gold colour wrapping, red ribbon and the imprint of ears, face and paws but also affected by the fact that Lindt's name and logo and the words ‘Lindt Teddy’ were prominently displayed on the teddy's stomach. In this context the court also referred to the Higher Regional Court of Frankfurt's precedent in the Gold Bunnies dispute cases between Lindt and its competitor Riegelein (GRUR-RR 2012, 255), in which the Frankfurt court had found that that the shape and colour of the Gold Bunnies were of a lower level of distinctiveness than the respective word elements (‘Lindt’ versus ‘Riegelein’) displayed on the bunnies. Applying this guidance to the case at hand, the Cologne judges concluded that that consumers would regard the word element ‘Lindt-Teddy’ in particular as an indication of origin, bearing in mind that the ‘Lindt-Teddy’ was a seamless addition to Lindt's established Gold Bunny product line. The court thus disagreed with Haribo's view that Lindt had taken unfair advantage of Haribo's Goldbär by ‘approximating’ its Lindt teddy to Haribo's gold bears in order to exploit the expectations of quality that consumers associate with Haribo's bears. The judges further explained this by pointing out that Lindt was a well-known confectionery manufacturer and the allegedly infringing Lindt Teddy product an obvious addition to Lindt's product line of gold-foiled chocolate shapes.
Practical significance
Whether the guidance developed by the Bundesgerichtshof for conflicts between word and device marks (similarity, where the later mark is an ‘obvious, unforced and exhaustive description’ of the earlier mark) may equally be applied to conflicts between word marks and three-dimensional shapes is a crucial one, bearing in mind the impact this can have on search strategies and advice when it comes to clearing any category of (shape) trade mark (or designs) for use and registration in Germany. In its closing remarks the Higher Regional Court of Cologne stated that the question of such a ‘cross collision’ (Überkreuzkollision) of trade marks was indeed of a ‘fundamental nature’. It is now expected that Haribo will appeal the matter to the Bundesgerichtshof, which may in turn even refer the question to the Court of Justice of the European Union for pan-European guidance.
August and beyond
If you want to check out the list of articles, reviews and current intelligence notes that are currently available online only, since the printed version of the issue in which they are to be included has yet to be printed and despatched, just click here.
Sri Lankan Court of Appeal balances tobacco trade mark rights and the promotion of public health
Author: Althaf Marsoof (King's College London, London, UK)
Ceylon Tobacco Company PLC v Hon Maithripala Sirisena, Minister of Health and others, CA 336/2012 (Writ), Court of Appeal, Sri Lanka, 12 May 2014
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu131, first published online: July 16, 2014
The Sri Lankan Court of Appeal refused an application made by the Ceylon Tobacco Company PLC seeking to quash the Tobacco Products (Labelling and Packaging) Regulation No 1 of 2012 (published in Gazette Extraordinary No 1770/15 of 8 August 2012) subsequently amended by regulation published in Gazette Extraordinary No. 1797/22 of 15 February 2013 (‘regulations’) for being ultra vires its empowering statute, the National Authority on Tobacco and Alcohol Act 2006. The court came to its finding having considered the impact pictorial health warnings have on the use of tobacco, the nature of trade mark rights guaranteed under the Intellectual Property Act 2003 and the Sri Lankan government's interest of promoting public health, especially in view of its obligations under the World Health Organization Framework Convention on Tobacco Control.
Legal context and facts
The Sri Lankan government, through its Ministry of Health and in pursuance of its obligation under the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC), promulgated these regulations in terms of s 30 read with s 34 of the National Authority on Tobacco and Alcohol Act 2006 (NATA Act), which empowered the Minister of Health to make regulations that prescribed the nature and dimensions of health warnings to be displayed on every tobacco pack. The regulations, inter alia, introduced the following mandatory labelling and packaging requirements in relation to tobacco products:
Analysis
It was in this backdrop that the court had to balance the interests of CTC, including its trade mark rights, against the Sri Lankan government's interest of promoting public health.
Two arguments were advanced by CTC in challenging the legality of the regulations introducing pictorial health warnings. The first argument related specifically to the vires of the regulations. CTC argued that in the absence of any express reference to ‘pictorial’ health warnings in s 34(1) of the NATA Act, the minister was not empowered to make regulations prescribing pictorial health warnings—as his powers were limited only to deal with textual warnings.
In further strengthening this argument, CTC relied on the fact that the FCTC neither compels State parties to impose pictorial health warnings, nor requires the imposition of health warnings on 80 per cent of the display areas of tobacco packs, the minimum being 30 per cent and the recommended being 50 per cent or more (Article 11:1 FCTC). It was on this basis that CTC claimed that the imposition of pictorial health warnings covering a surface of 80 per cent of tobacco packs was not only unreasonable and disproportionate, but also ultra vires the minister's powers under the NATA Act. In this regard, having considered literature from varying jurisdictions on the effectiveness of pictorial health warnings on the use of tobacco, the court concluded that the term ‘health warning’ should not be narrowly interpreted since a warning in today's context and society could be expressed by means of both text and pictures. The court was certain that it could never have been the intention of Parliament to exclude pictorial health warnings since such warnings could reach all categories of persons including those who may be illiterate. Accordingly, the implementation of pictorial health warnings in terms of these regulations was lawful and within the scope of the NATA Act and the powers of the minister.
The second argument advanced by CTC was that permitting pictorial health warnings to be displayed on 80 per cent of the display area of tobacco packs interfered with the tobacco company's right to use its trade marks effectively—which it argued was guaranteed under s 121(1) of the IP Act. Going beyond its minimum obligations under the Agreement on the Trade Related aspects of Intellectual Property Rights (TRIPS), which requires contracting States to confer on trade mark owners a negative right to exclude the unauthorized use of their trade marks (Article 16:1, TRIPS), the Sri Lankan government expressly guarantees anyone having a registered trade mark in Sri Lanka a positive right to use it in trade. The court acknowledged this positive right to use a trade mark, referring to an earlier decision of the Sri Lankan Court of Appeal in Leelananda v Earnest de Silva [1990] 2 Sri LR 237, where Sarath N Silva J (who later became a Chief Justice of Sri Lanka) interpreting the provisions of the former Code of Intellectual Property 1979 (that resembled s 121 of the IPAct), observed:
Accordingly, although CTC's application was dismissed, the regulations were adjusted such that now only 50–60 per cent of the display surface of tobacco packs is subject to pictorial health warnings, leaving at least 40 per cent of space for the display of trade marks.
Practical significance
The gruelling duel between tobacco trade mark owners and health conscious governments is far from over, and has led to stringent legislative measures being taken in some jurisdictions. The recent enactment of the Tobacco Plain Packaging Act 2011 (Cth) (‘TPP Act’) in Australia that has completely abolished the use of trade marks on consumer tobacco packs serves as a fitting example, although the TRIPS compliance of this law is currently being challenged before the World Trade Organization (WTO).
What is noteworthy, however, is that, just as in Sri Lanka, the Australian Trade Marks Act 1995 (Cth) guarantees all trade mark owners a right to use their marks (s 20(1)). Yet when the Australian High Court was called upon to determine the constitutional validity of the TPP Act, the justices (except Haydon J who dissented) answered in the negative, or avoided answering at all, the question whether a right to use a trade mark exists (JTI v Commonwealth, [2012] HCA 43, paras 43, 77, 248 and 348). In contrast, the Sri Lankan Court of Appeal not only endorsed the existence of a positive right to use a trade mark under Sri Lankan law, but also concluded that if the display of tobacco trade marks was limited to just 20 per cent of the display area of tobacco packs that would be an unreasonable restriction on that right to use. This approach of the Court of Appeal in drawing a balance between the rights of tobacco trade mark owners and the government's interest in promoting public health is no doubt sound and is in fact consistent with the spirit of TRIPS.
However, the Court of Appeal's conclusion that the limitations on trade mark rights under the IP Act only apply to the negative right of exclusion conferred on trade mark owners, ought not to be taken as implying that the positive trade mark right of use is somehow absolute or unqualified. In order to arrive at its final decision, the Court of Appeal did not have to come to such a conclusion on a trade mark owner's right to use a trade mark, especially because all that TRIPS requires its contracting States to guarantee is the negative trade mark right of exclusion. In any event, the Court of Appeal's conclusion is not without problems in the Sri Lankan context, since a citizen's fundamental right to engage in a lawful trade guaranteed by the Sri Lankan Constitution (Art. 14(1)(g)) is subject to restrictions as may be prescribed by law in the interest of inter alia public health (Art 15(7)). If the use of trade marks is necessary to fully realise the fundamental right to engage in trade, then any positive right to use a trade mark must be subject to this constitutional limitation. The Supreme Court of Sri Lanka now has the opportunity of providing guidance on the nature and scope of trade mark rights, in particular as regards the positive right of use, in view of CTC's appeal to the land's highest court from the judgement of the Court of Appeal (S.C. Spl. L.A. No. 85/2014 dated 23.5.2014). Unless such guidance is provided, there could be implications in the event the Sri Lankan Government wishes to introduce more stringent tobacco packaging legislation, such as plain packaging.
Ceylon Tobacco Company PLC v Hon Maithripala Sirisena, Minister of Health and others, CA 336/2012 (Writ), Court of Appeal, Sri Lanka, 12 May 2014
Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu131, first published online: July 16, 2014
The Sri Lankan Court of Appeal refused an application made by the Ceylon Tobacco Company PLC seeking to quash the Tobacco Products (Labelling and Packaging) Regulation No 1 of 2012 (published in Gazette Extraordinary No 1770/15 of 8 August 2012) subsequently amended by regulation published in Gazette Extraordinary No. 1797/22 of 15 February 2013 (‘regulations’) for being ultra vires its empowering statute, the National Authority on Tobacco and Alcohol Act 2006. The court came to its finding having considered the impact pictorial health warnings have on the use of tobacco, the nature of trade mark rights guaranteed under the Intellectual Property Act 2003 and the Sri Lankan government's interest of promoting public health, especially in view of its obligations under the World Health Organization Framework Convention on Tobacco Control.
Legal context and facts
Substance of regulation Reg. 4 No manufacturer, importer, retailer, storekeeper, agent or seller of any cigarette packet, package or carton containing cigarettes shall produce, supply, distribute, sell or offer for sale any such packet, package or carton unless every packet, package or carton containing cigarettes which is distributed, sold or offered for sale carries the specified health warnings as depicted in the Schedule to these regulations.The Ceylon Tobacco Company PLC (CTC) challenged the legality of these regulations, seeking to have them quashed by way of a writ of certiorari, on the basis that they were, inter alia, unreasonable and disproportionate, ultra vires the minister's power to make regulations under s 30 read with s 34 of the NATA Act and illegally subverted the statutory right of the CTC to use its trade marks guaranteed under s 121(1) of the Intellectual Property Act 2003 (IP Act).
Reg. 5 The pictorial health warnings as is specified in the Schedule to these regulations shall be printed on the top surface area of both front and back sides of every cigarette packet, package or carton containing cigarette and shall cover an area not less than eighty per centum (80%) of the total area of the packet, package or carton.
Analysis
It was in this backdrop that the court had to balance the interests of CTC, including its trade mark rights, against the Sri Lankan government's interest of promoting public health.
Two arguments were advanced by CTC in challenging the legality of the regulations introducing pictorial health warnings. The first argument related specifically to the vires of the regulations. CTC argued that in the absence of any express reference to ‘pictorial’ health warnings in s 34(1) of the NATA Act, the minister was not empowered to make regulations prescribing pictorial health warnings—as his powers were limited only to deal with textual warnings.
In further strengthening this argument, CTC relied on the fact that the FCTC neither compels State parties to impose pictorial health warnings, nor requires the imposition of health warnings on 80 per cent of the display areas of tobacco packs, the minimum being 30 per cent and the recommended being 50 per cent or more (Article 11:1 FCTC). It was on this basis that CTC claimed that the imposition of pictorial health warnings covering a surface of 80 per cent of tobacco packs was not only unreasonable and disproportionate, but also ultra vires the minister's powers under the NATA Act. In this regard, having considered literature from varying jurisdictions on the effectiveness of pictorial health warnings on the use of tobacco, the court concluded that the term ‘health warning’ should not be narrowly interpreted since a warning in today's context and society could be expressed by means of both text and pictures. The court was certain that it could never have been the intention of Parliament to exclude pictorial health warnings since such warnings could reach all categories of persons including those who may be illiterate. Accordingly, the implementation of pictorial health warnings in terms of these regulations was lawful and within the scope of the NATA Act and the powers of the minister.
The second argument advanced by CTC was that permitting pictorial health warnings to be displayed on 80 per cent of the display area of tobacco packs interfered with the tobacco company's right to use its trade marks effectively—which it argued was guaranteed under s 121(1) of the IP Act. Going beyond its minimum obligations under the Agreement on the Trade Related aspects of Intellectual Property Rights (TRIPS), which requires contracting States to confer on trade mark owners a negative right to exclude the unauthorized use of their trade marks (Article 16:1, TRIPS), the Sri Lankan government expressly guarantees anyone having a registered trade mark in Sri Lanka a positive right to use it in trade. The court acknowledged this positive right to use a trade mark, referring to an earlier decision of the Sri Lankan Court of Appeal in Leelananda v Earnest de Silva [1990] 2 Sri LR 237, where Sarath N Silva J (who later became a Chief Justice of Sri Lanka) interpreting the provisions of the former Code of Intellectual Property 1979 (that resembled s 121 of the IPAct), observed:
[T]he rights of a registered owner are both positive and negative in nature. The rights operate in a positive way and entitle the owner to use the mark or to assign or transmit the registration of the mark or to conclude licence contracts in relation to it … The negative aspects of the rights … preclude third parties from doing certain acts in relation to a registered mark. In my view both the positive and negative aspects referred above form integral parts of the rights of a registered owner of a mark.Most importantly, the court concluded that any limitations on the rights of a trade mark owner (as prescribed in s 122 of the IP Act) apply only to the negative aspect of the right, whereas the positive right to use a trade mark does not succumb to any such restriction. In the circumstances, the court concluded:
Where 80% of the pack is covered with the health warning, the practical issue that arises is whether the remaining 20% is reasonably sufficient to present and exhibit the mark or in other words to use the mark … 20% of the space is not reasonably sufficient to present and exhibit a trade mark … .The court added that the core function of a trade mark is to enable consumers to identify goods they desire without being misled as to their source and quality. By depriving tobacco trade mark owners of a reasonable opportunity to realize the function of a trade mark, ‘… unscrupulous traders may even misuse [that] situation to mislead … consumers by selling products from wrong sources rather than selling what actually the consumer wants to buy.’
Accordingly, although CTC's application was dismissed, the regulations were adjusted such that now only 50–60 per cent of the display surface of tobacco packs is subject to pictorial health warnings, leaving at least 40 per cent of space for the display of trade marks.
Practical significance
The gruelling duel between tobacco trade mark owners and health conscious governments is far from over, and has led to stringent legislative measures being taken in some jurisdictions. The recent enactment of the Tobacco Plain Packaging Act 2011 (Cth) (‘TPP Act’) in Australia that has completely abolished the use of trade marks on consumer tobacco packs serves as a fitting example, although the TRIPS compliance of this law is currently being challenged before the World Trade Organization (WTO).
What is noteworthy, however, is that, just as in Sri Lanka, the Australian Trade Marks Act 1995 (Cth) guarantees all trade mark owners a right to use their marks (s 20(1)). Yet when the Australian High Court was called upon to determine the constitutional validity of the TPP Act, the justices (except Haydon J who dissented) answered in the negative, or avoided answering at all, the question whether a right to use a trade mark exists (JTI v Commonwealth, [2012] HCA 43, paras 43, 77, 248 and 348). In contrast, the Sri Lankan Court of Appeal not only endorsed the existence of a positive right to use a trade mark under Sri Lankan law, but also concluded that if the display of tobacco trade marks was limited to just 20 per cent of the display area of tobacco packs that would be an unreasonable restriction on that right to use. This approach of the Court of Appeal in drawing a balance between the rights of tobacco trade mark owners and the government's interest in promoting public health is no doubt sound and is in fact consistent with the spirit of TRIPS.
However, the Court of Appeal's conclusion that the limitations on trade mark rights under the IP Act only apply to the negative right of exclusion conferred on trade mark owners, ought not to be taken as implying that the positive trade mark right of use is somehow absolute or unqualified. In order to arrive at its final decision, the Court of Appeal did not have to come to such a conclusion on a trade mark owner's right to use a trade mark, especially because all that TRIPS requires its contracting States to guarantee is the negative trade mark right of exclusion. In any event, the Court of Appeal's conclusion is not without problems in the Sri Lankan context, since a citizen's fundamental right to engage in a lawful trade guaranteed by the Sri Lankan Constitution (Art. 14(1)(g)) is subject to restrictions as may be prescribed by law in the interest of inter alia public health (Art 15(7)). If the use of trade marks is necessary to fully realise the fundamental right to engage in trade, then any positive right to use a trade mark must be subject to this constitutional limitation. The Supreme Court of Sri Lanka now has the opportunity of providing guidance on the nature and scope of trade mark rights, in particular as regards the positive right of use, in view of CTC's appeal to the land's highest court from the judgement of the Court of Appeal (S.C. Spl. L.A. No. 85/2014 dated 23.5.2014). Unless such guidance is provided, there could be implications in the event the Sri Lankan Government wishes to introduce more stringent tobacco packaging legislation, such as plain packaging.
The JIPLP Readers and Writers Group
During the past few weeks, an increasing number of attempts have been made to post to the Group, the aims of which are clearly stated as follows
This group is a forum for the exchange of ideas by contributors, readers and subscribers to the Journal of Intellectual Property Law & Practice (JIPLP), published by Oxford University PressThe Group is not a news service; nor is it a convenient dumping ground for law firm newsletters, commercial advertisements or solicitations of business. Any post to the Group that is not related to JIPLP, in terms of its range and quality of content, ease of access, functionality of website and so on will be deleted.
Please respect the integrity of this Group. There are plenty of other avenues for spreading news and for commercial marketing. Thanks!
Luxembourg, we have a problem: where have the Advocates General gone?
Here's the August 2014 JIPLP editorial, "Luxembourg, we have a problem: where have the Advocates General gone?", penned by Deputy Editor Eleonora Rosati (e-LAWnora)
What is the story with the Court of Justice of the European Union (CJEU), its references for a preliminary ruling, and what looks like a sentiment of increasing uneasiness of the court towards its Advocates General, at least in the area of copyright?
Over the past few months the CJEU has ruled on key copyright issues, that spanned from the scope of exclusive rights (Case C-466/12 Nils Svensson and Others v Retriever Sverige AB, 13 February 2014; Case C-351/12 Ochranný svaz autorský pro práva k dílům hudebním os (OSA) v Léčebné lázně Mariánské Lázně as, 27 February 2014) and related exceptions and limitations (Case C-435/12 ACI Adam BV and Others v Stichting de Thuiskopie and Stichting Onderhandelingen Thuiskopie vergoeding, 10 April 2014; Case C-360/13 Public Relations Consultants Association Ltd v Newspaper Licensing Agency Ltd and Others, 5 June 2014) to enforcement (Case C-170/12 Peter Pinckney v KDG Mediatech AG, 3 October 2013; Case C-387/12 Hi Hotel HCF SARL v Uwe Spoering, 3 April 2014; Case C-314/12 UPC Telekabel Wien GmbH v Constantin Film Verleih GmbH and Wega Filmproducktionsgesellschaft mbH, 27 March 2014), and everything in between, including the evergreen (because still highly unclear) database right (Case C-202/12 Innoweb BV v Wegener ICT Media BV and Wegener Mediaventions BV, 19 December 2013).
What most of these cases had in common was the role or, more appropriately, the absence thereof, of any input from the Advocate General. The CJEU either departed significantly from their Opinions or ruled without seeking one in the first place. The former is possible because Opinions of Advocates General are not binding on the CJEU. The court made this eloquently clear in recent references that required consideration of controversial issues, such as the criteria for determining jurisdiction in case of alleged online infringements (Pinckney) or the requirements of blocking injunctions (UPC Telekabel). The latter is expressly allowed by Article 20 of the court's Statute in those instances that raise “no new point of law”. This was the case, for instance, of Svensson, Public Relations Consultants Association, Hi Hotel, and Innoweb. In general terms, the CJEU has increasingly reverted to this possibility, as the 2013 Annual CJEU Report made clear together with the fact that in that year the number of references for a preliminary ruling was 33% higher than 2009.
By not seeking the Opinion of an Advocate General, the CJEU implied that there was no need for a detailed analysis of the legal aspects of the case at hand. By departing from the Opinion sought, the CJEU showed that it did not share the legal analysis conducted by the designated Advocate General. Either way, the CJEU appeared to suggest that it knew better than its Advocates General.
What appears like an emerging trend may thus prompt a specific question: Have Advocates General and their Opinions become a waste of time and resources in this area of the law?
It is unlikely that this was because copyright is an “easy” area of the law or the issues it has been presenting recently do not require much thought. Was it straightforward to say that hyperlinking falls outside the scope of copyright protection tout court? Was it easy to determine that the courts of a given Member State have jurisdiction to hear cases of alleged online copyright infringements just because the website where allegedly infringing content is available can be accessed from that particular territory? Was it so clear that the database right might come into question when operating a meta search engine?
One may wonder whether all this, instead, may be a consequence of the fact that, similarly to the judges of the court, Advocates General are not IP and copyright specialists. Would the statistics on Advocates General and their Opinions change at all if there were (more) subject specialists among them and – possibly – among the judges of the court too? What if, elaborating upon Article 252 of the Treaty on the Functioning of the European Union, the duty of Advocates General, acting with complete impartiality and independence, was to make, in open court, reasoned submissions on cases which, in accordance with the Statute of the court, require not just their involvement, but also their specific competence?
Opinions of Advocates General are usually more thoughtful than subsequent judgments, especially where the court agrees with the Opinion. But when it comes to copyright, what is and – most importantly – what should be the role of Advocates General? Is #saveourAGs the answer (and relevant hashtag of course)? If so, how can this be done?
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