New customs agreement between the EU and China: What does it mean for trademark owners?

Silk Market Beijing
(by gruntzooki via Flickr)

China and the EU have signed a landmark mutual recognition agreement on customs cooperation. Its main goal is making the customs procedures easier, cheaper and faster for trusted traders. Two other initiatives which complement this agreement have also been signed, namely a new Strategic Framework for Customs Cooperation and a new EU-China Action Plan on Intellectual Property Rights.

The “trusted traders”, also known as “Authorized Economic Operators”, have been present under EU customs regulations since 2008 and enjoy simplified customs procedures if they manage to prove that they are safe, reliable and compliant with security standards. In other words, the trusted traders go through fewer and quicker customs checks when entering or exiting the European Economic Area (EEA).

China is not the first country to sign such an agreement with the EU; there are mutual recognition agreements already signed with countries such as the US (2012) and Japan (2011), but the addition of China makes the EU certified trader system the most widely accepted in the world since there are currently around 15,000 companies listed as safe traders (for more information see the European Commission's press release here).

There is a more important point to be considered though. China has a reputation of a country where a lot of infringements of IPRs are being committed every day. However, on 1^st May 2014 a new Trademark Law has come into force (for details on the amendments, see our previous blog post here) which is supposed to strengthen the protection of trademark owners against infringements and bad faith applications. We are still to see how exactly it will be implemented in practice, but the combination between the new Trademark Law and the recently signed customs agreement, definitely means good news for trademark owners!

Our experience in China has proven that European trademark owners sometimes have more problems with trademark squatters rather than infringers. The reason behind this is simple – the widely established practice of European trademark owners to manufacture their goods in China without registering their trademarks there and later sell them on the European market. What happens then? A Chinese company simply goes to the SAIC and registers the European trademark without any problem since the Chinese trademark system is a first-to-file one. Then, they also register the trademark with the Chinese customs (GAC) and when the European owner tries to send his/her next shipping to Europe, the goods are stopped at customs for infringing a Chinese registered trademark. From here onwards, there are basically two options and neither of them is good – pay a subordinate amount of money to buy our own trademark or go to court / TRAB.

Maybe the most common route chosen by European trademark owners is to try to cancel the said registration on grounds of bad faith or non-use after the first three years from registration. In this case, the biggest problem faced by the rightful owner is to prove the use or at least some influence of the trademark on the Chinese market. However, this is quite difficult if not impossible, because manufacture only for export is not usually considered as actual use of the trademark (there is no precedent in Chinese judicial system, so Chinese courts are not obliged to follow previous decisions even if there are such) and only extremely famous trademarks have been recognized by the courts when they had not been used on the Chinese market.

With the strengthening of the good faith requirement in trademark registration and use by the new Chinese Trademark Law and the mutual recognition agreement with the EU, the cases  mentioned above should decrease. Not only because of the protections offered by the Law, but also because the enhanced customs cooperation will ease the fight against squatters by recognizing the European safe traders in China and maybe motivate EU companies to register their trademarks in the country in order to be fully protected. This way, Chinese customs will be able to dedicate much more resources to the high-risk traders and fight against infringements more efficiently.

While the Chinese IP-related legislation and the actions of the authorities is improving more and more every time, we should be conscious of the dangers that still exist and align our IP strategy in accordance to them. For the common person living in China, the efforts of the Chinese authorities are almost invisible, which once again shows the scale of the infringements and the enormous amount of resources and time which have to be put into this fight. If a trademark owner is manufacturing, using or planning to use his/her trademark on the Chinese market, his rights should better be registered before starting any commercial or other activity in China. In case the owner has already entered the Chinese market, it is highly advisable to register the trademarks as soon as possible.   

Author: Geri Dimitrova,

Visit our website: http://www.elzaburu.es/

The CJEU endorses the "right to be forgotten" in the EU

Paul David
(via Flickr)

On 13 May 2014, the Court of Justice of the European Union (CJEU) handed down its judgment in case no. C-131/12 between Google and the Spanish Data Protection Agency (AEPD).

On 5 March 2010, Mr. Costeja González filed a complaint with the AEPD against the publisher Vanguardia Ediciones S.L., Google Spain, S.L. and Google Inc. In the complaint he requested that La Vanguardia be required to remove or alter pages so that his personal data no longer appeared, or to use certain tools made available by search engines in order to protect the data. Mr. Costeja González also requested that Google Spain or Google Inc. be required to remove or conceal the personal data relating to him so that they ceased to be included in the search results and no longer appeared in the links to La Vanguardia. All these requests were based on the fact that the embargo proceedings to which Mr. Costeja González had been subjected at the time had been fully resolved for a number of years and were now entirely irrelevant.

On 30 July 2010 the AEPD dismissed the complaint against the publisher and upheld the complaint against Google Spain, S.L. and Google Inc., requiring them to withdraw the data from their index and prevent future access thereto. Google Spain, S.L. and Google Inc. proceeded to lodge appeals against the Audiencia Nacional (Spain’s High Court) requesting that the AEPD’s judgment be vacated.

Under these circumstances, the Audiencia Nacional suspended the proceedings and referred a series of preliminary questions to the CJEU:

• The territorial application of EC Directive 95/46;
• The definition of the scope of responsibility of search engines as providers of content in relation to EC Directive 95/46;
• And the scope of the right of erasure and the right to object in relation to the right to be forgotten.

First of all, the CJEU classified the activity of a search engine which consists of “finding information published or placed on the internet by third parties, indexing it automatically, storing it temporarily and, finally, making it available to internet users according to a particular order of preference” as “processing of personal data”, thus converting the operator of the search engine into the controller of that processing of personal data, and the guarantor that the requirements of EC Directive 95/46, as well as the full and effective protection of the rights of the individuals in question, be fulfilled.

Turning to the territorial application, the CJEU rejected Google’s argument that Google Search did not carry out the processing of personal data as part of its activities in Spain. The CJEU ruled that Google Spain, S.L. must be regarded as an establishment within the meaning of Directive, since it is the subsidiary of Google Inc. in Spain. When a company with a seat in a third state has an establishment in a Member State and carries out the processing of personal data for the purposes of the service of a search engine in the Member State establishment, the Directive considers that this processing is carried out ‘in the context of the activities’ of the establishment if the intention is to promote and sell its goods and services in that Member State.

With regard to the extent of the responsibility of search engines as content providers in relation to the Directive, the CJEU stated that the controller of a search engine is obliged to remove from the list of results displayed following a search made on the basis of a person’s name links to web pages published by third parties and containing information relating to that person.  The CJEU added that this obligation also exists in a case where that name or information is not erased beforehand or simultaneously from those web pages, and even when the publication is lawful. According to the CJEU, a structured overview of the information relating to the individual in question may potentially affect his private life.

The CJEU in turn identified the need to consider the user’s right to access information on the one hand, and the affected individual’s right to protect his personal data on the other. This balance depends on the nature of the information in question and the role played by the affected individual in public life.

Finally, the CJEU introduced the possibility that after a certain time the affected individual may exercise his right to be forgotten and request that the list of results obtained be removed. If it is found that the list of results is at this point in time incompatible with the Directive, the information and the links displayed therein must be removed. These results are to be deemed incompatible when they appear to be inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes for which they were processed and in the light of the time that has elapsed.

This judgment affects more than 220 appeals lodged by Google against decisions issued by the AEPD that are currently pending before the Spanish Audiencia Nacional.

Authors: Cristina Espín, Alejandra Reyes

Visit our website: http://www.elzaburu.es/

Directive on the retention of data declared invalid by the Court of Justice

Via Wikimedia

On 8 April 2014 the Court of Justice handed down its judgment in the cases of Digital Rights Ireland against the Irish authorities and of the Austrian Constitutional Court against the Government of Carinthia and Mr Seitling, Mr Tschohl and other complainants, Cases C-293/12 and C-594/12, declaring the invalidity of the Directive on the retention of telecommunications and electronic communications data of 2006, hereinafter the “Directive”, with effect from the date on which the Directive entered into force.

What were the requirements of the Directive? What type of data was retained?

With the goal of combating terrorism and other serious offences, the Directive required telecommunications companies and internet operators to register and retain the following data from all types of telephone calls (fixed and mobile as well as unanswered calls) and e-mails during a period of between 6 and 24 months, depending on the applicable legislation in each state:

• In the case of fixed telephones, the data of the calling telephone number and destination number, the names and addresses of the persons calling and those to which the telephone numbers were registered at the time of connection, as well as the telephone service used and from where they were calling, but not the content of the conversation, which required judicial authorisation.

• In the case of mobile telephones, the identifier of the device was also required.

• In the case of internet, the dynamic and static IP addresses assigned by the internet access provider, the name and address of the user and data necessary to identify the date, time and duration of a communication.

• In the case of a pre-paid card, data regarding the date and time of the activation of the service also needed to be retained.

Reasons for the invalidity of the Directive

The Court of Justice indicates that the requirements on telecommunications operators imposed by the Directive entails a wide-ranging and particularly serious interference of the fundamental right of individuals to privacy and the protection of their personal data, given that there are no substantive and procedural limits in the Directive regulating and restricting those interferences to what is strictly necessary, thus exceeding the limits of the principle of proportionality.

In fact, the judgment states that “the Directive covers, in a generalised manner, all persons and all means of electronic communication as well as all traffic data without any differentiation, limitation or exception being made in the light of the objective of fighting against terrorism and serious crime.”

Consequently, the judgment holds that the said data taken as a whole, what we call Big Data, may provide very precise information concerning the private lives of the persons whose data has been retained, such as the habits of everyday life, permanent or temporary places of residence, the activities carried out in their daily life, when going out or on holiday, the relationships, friends, of those persons and the social environments frequented by them, in short all their life, thoughts, beliefs, feelings, location, and that of their children, current accounts, without prior information provided or consent sought to process that data, basic principles of the fundamental right to the protection of personal data.

Blocking user access to copyright-infringing websites – an option?

By Tobias Myrstrand Leander
Vía Flickr

The Court of Justice of the European Union (CJEU) has issued its judgment in Case C-314/12 dealing with a request for a preliminary ruling regarding interpretation of Article 8.3 of Directive 2001/29/EC (on harmonization of copyright in the information society) referred by Austria's Oberster Gerichtshof. The Austrian court asked whether copyright holders could apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright.

The case involved a rightholder who had applied for an injunction to force an Internet access provider to prevent its customers from accessing the website of a third party who was not itself a customer of the said access provider

The issue raised by the matter was whether the third party – who owned an infringing website – could, under Article 8.3 of the Directive, also be deemed to be using the services of providers of access to persons seeking to access the website in question.

The CJEU's decision is incontrovertible in ruling that the infringing third party was indeed using the services of access providers who allowed their customers to access the infringing website irrespective of whether or not there was a contractual link between provider and infringer. This means that an injunction may be ordered against all service providers, not only against the one that provides services to the infringer as its customer.

The judgment further rules that an injunction may be ordered without having to prove that an Internet service provider's customers have actually accessed a website containing unlawful content, because injunctions are aimed not only at bringing infringements of copyright and related rights to an end but also at preventing such infringements.

Nevertheless, the Court goes on to specify that the measures to be adopted by service providers in compliance with injunctions issued under the legislation cited may not unnecessarily deprive users of lawful access to the information while at the same time need to be reasonably effective so that they cannot be readily circumvented by users.

Accordingly, the judgment entitles copyright holders to apply to the courts for injunctive relief against Internet service providers whose services are used by users to access unauthorized material, and relief may comprise blocking access by users to copyright-infringing third-party websites such as websites providing downloads or streaming of films without the rightholder's consent.

Author: Joaquín Rovira 

Visit our website: http://www.elzaburu.es/

Revisions to the Patent Act: a necessary step to foment inventing in Spain

Nearly 30 years after passage of the current Patent Act, the legislation currently in force plainly stands in need of revision to bring it up to date with the advances made by society since that time. With this in mind, the Spanish Patent and Trademark Office (SPTO) has proposed a revised Patent Act, and a second draft of the proposed bill (in Spanish) was published this past month of December.

Lately, one of the most controversial aspects of the current system is what is known as the alternate route to grant, where the applicant may choose between the traditional granting procedure, in which all patent applications mature to grant, and the granting procedure involving preliminary examination, in which SPTO examiners examine the patent application, which will be granted only if the invention as claimed is deemed to fulfil the requirements of novelty, inventive step (non-obviousness), and industrial applicability. Unfortunately, this latter granting procedure has never taken hold, and today just 8 % of applications follow the route involving examination of the application. This shifts the burden of having to cancel patents that should never have been granted onto society, competitors, and the courts.

This is probably the main change in the draft bill, and from enactment substantive examination of patent applications will be mandatory, so that patents will only be granted where the invention claimed fulfils the legal patentability requirements.

Still, it is by no means the only change included in the new draft bill, which would put in place quite a few new provisions intended to have far-reaching effects on patent law by streamlining the system, simplifying requirements, doing away with formalities, and avoiding involuntary loss of rights.

Some of the most important of these changes are:

1. Simplifying the requirements for according a filing date by allowing first filings to be made in any language, though subsequently filing a Spanish translation would be compulsory.
2. Bringing forward the prior art search to the filing stage, hence the search fee will have to be paid at the time of filing.
3. Explicitly declaring medical uses or new therapeutic applications of known substances to be patentable.
4. Shifting the opposition stage to after grant.
5. Implementing new administrative procedures for revoking patents and for limiting them at the request of the patent holder, who will be entitled to limit the scope of the claims at any time during the legal lifetime of a patent.

Patents are not the only rights to be slated for significant changes: amendments are also being proposed for utility models, a mainstay of small and medium sized enterprises (SMEs) in Spain.

The novelty requirement for utility models is to be brought into line with the novelty requirement for patents, thereby removing a source of uncertainty in existing law. Conversely, the degree of inventive step will not be changed and will continue to be lower than required for patents. At the same time, the range of inventions that can be protected as utility models will be enlarged to include chemical substances, biotechnology inventions and pharmaceutical compositions excluded.

These changes could make utility models into an interesting option as, for instance, a means of obtaining rapid protection while a patent is being prosecuted more slowly.

And lastly turning to fees, the draft bill also provides for a 50-% reduction in the filing, search, and examination fees for certain inventors and SMEs, to make it easier for them to protect their inventions.

In short, the changes are intended to bring the patent system up to date and should be a step forward in providing protection for innovation in Spain.

Author: Francisco J. Saez

Visit our website: http://www.elzaburu.es/

A toast with sangria to the new EU regulation on geographical indications of aromatised wine products

By Katherine Price
(Vía Wikimedia)

On 20 March 2014 EU Regulation 251/2014 on geographical indications of aromatised wine products was published in the Official Journal of the European Union. The new regulation is to take the place of Council Regulation (EEC) 1601/91, although it is not until 28 March 2015 that the former will actually be applied, with the exception of certain transitional measures, and the latter will be repealed. Regulation 251/2014 provides greater protection for geographical indications of this kind, on a par with that already enjoyed by others regulated at the Community level (those relating to agricultural produce and foodstuffs, spirits and wines).

Aromatized wine products are divided into three categories: aromatised wines, aromatised wine-based drinks and aromatised wine-product cocktails.

The sphere of protection of aromatised wine products is extended with respect, for example, to names which evoke these geographical indications and it is also stipulated that the GIs protected under the regulation shall not become generic.

The use of expressions such as ‘style’, ‘type’, ‘method’, ‘as produced in’, ‘flavour’, or the like is prohibited, as is the use of terms similar to any of the regulated sales denominations in the designation, presentation or labeling of alcoholic beverages which fail to comply with the requirements of the regulation. At the same time, rules for the use of those sales denominations and indications of provenance and for the registration of geographical indications in respect of goods of this kind are laid down, while the scope of protection and verification requirements are defined.

Turning to more specific details, it is to be noted that the word “Clarea” may only be used as a sales denomination for products made in Spain and that "Sangría"/"Sangria" is reserved for those made in Spain or Portugal.  When the product is made elsewhere, those words may be used only to supplement the sales denomination ‘aromatised wine- based drink’ and on condition that they are accompanied by the words ‘produced in …’ followed by the name of the Member State of production or of a more restricted region.

Author: Miguel Angel Medina

Visit our website: http://www.elzaburu.es/

Good news for forgetful applicants in Spain

Spanish Patent and Trademark Office
By Ricardo Ricote
(Via Flickr)

Article 33.3 of the Spanish Patent Act is very clear. If you do not request the search report in the 15 months following the patent application, it will be deemed to be withdrawn.

However in a breakthrough decision the Madrid High Court has now ordered the Spanish PTO to resume prosecution of a patent application which protects an innovative test for detecting the presence of certain viruses in the body. The applicant argued that Article 76.3 of the Administrative Procedure Act, which governs all applications to government offices, should prevail as it was passed by Parliament four years after the 1986 Patent Act. The Administrative Procedure Act treats the citizen much more benevolently, allowing him to remedy the defect even though the time limit for doing so has expired. In fact, he can remedy it at any time up to and including the day the public office notifies him of the expiration of the time limit. In the case of the search report, this will be the day on which the withdrawal of the application is published in the Official Gazette of the SPTO. The applicant may request the search report and pay the fee that same day.

This judgment (no. 77/2014 of 29 January 2014 in appeal no. 458/2011) breaks with the practice of the Spanish PTO. It has enormous implications as the same reasoning is applicable to any occasion on which an applicant for a patent, trademark or industrial design fails to comply with a step in the procedure, for instance if he forgets to pay the annuity fee.  

Author:Colm Ahern

Visit our website: http://www.elzaburu.es/