European Commission proposes new directive on the protection of trade secrets

On 28 November 2013 the European Commission brought out its proposal for a Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. 

The proposal results from a public consultation and an external study carried out at the end of 2012 and during 2013 in connection with the relevance and protection of trade secrets in the European Union and is made within the framework of the global strategy adopted by the Commission aimed at optimising the internal IP market.

Through the external study the Internal Market and Services Directorate General of the European Commission had noted the marked differences existing between the Member States with respect to the legal protection of trade secrets and to the measures available to the holders thereof in the event of unlawful acquisition, use and disclosure. For this reason the Commission has drawn up this proposal for a Directive, within the general context of the harmonization of IP and related rights in the EU, with a view to making the legal protection of trade secrets more effective.

The proposal begins with a definition of trade secrets taken word for word from article 39.2 of the TRIPS Agreement. It then sets out the circumstances in which the acquisition, use and disclosure of a trade secret is unlawful, where the key element is the absence of consent of the trade secret holder. The proposal similarly makes reference to the circumstances in which such acquisition, use and disclosure is considered lawful. These include independent discovery and reverse engineering.

The proposal then establishes the measures, procedures and remedies that should be introduced in the laws of the Member States for the protection of trade secrets. The system of protection thus envisaged is similar to that relating to IP rights and provision is consequently made for the adoption of interim and precautionary measures and for the subsequent implementation of final measures resulting from the decision on the merits of the case, such as an order for cessation or prohibition of the use or disclosure of the trade secret and the removal from the marketplace and destruction of the infringing goods. It is likewise established that damages may be awarded to the holder for the detriment caused, that these may be calculated on the basis of hypothetical royalties, and that the judgment may be published. Lastly, provision is made for the imposition of sanctions in the event of non-compliance with any provisional or final measure adopted and reference is specifically made in this regard to recurring penalty payments.

The proposal introduces some procedural rules, such as the implementation of mechanisms to preserve the confidentiality of trade secrets disclosed in court for the purpose of litigation and the setting of a time limit of two years for bringing actions for the infringement of trade secrets, which will, when the time comes, require the amendment of the laws in Spain. It will also be necessary to include measures aimed at avoiding abuses of litigation.

In accordance with the ordinary legislative procedure, the proposal will now be referred to the Council and to the European Parliament prior to its approval, which the Commission expects will take place before the end of 2014. There will subsequently be a term of two years for transposition into the national laws of the Member States.

Author: Carlos Morán

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EPO to carry out searches on more than one invention in an application

The Administrative Council of the European Patent Office (EPO) has removed the obstacle to performing further searches for applications in the European regional phase (Euro-PCT applications) where an objection is raised on grounds of lack of unity of invention.

Under the current wording of Rules 164 and 135 of the Implementing Regulations to the EPC, where an application in the European regional phase is deemed not to comply with the unity of invention requirement, the EPO may only conduct a search on the invention appearing first in the claim set; no additional searches may be performed for any other inventions in the set. Since patent applications may not contain subject matter that has not undergone a search, up to now the only option for applicants interested in claiming such unsearched subject matter has been to file divisional applications, with the additional cost this entails. The costs attaching to filing a divisional application include paying anew all the official fees already paid previously for the parent application, including all the cumulative annuities, which can sometimes be considerable.

Rule 164 EPC is to be amended to allow additional searches where the EPO raises objections against the unity of invention of regional phase applications. The EPO will conduct a search on the first invention appearing in the claim set and will invite the applicant to pay further search fees for any other unsearched inventions within a two-month time limit.

The amended wording of these Rules will take effect on 1 November 2014.

Author: Ruth Sánchez

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Inventors' Day

The ELZABURU Firm marks Inventors' Day, celebrated on 9 November, in recognition of all the inventors who have worked with us.  

This day was chosen because it is the birthday of Hedy Lamarr, Austrian screen star, telecommunications engineer, and inventor. She invented an early version of the spread spectrum modulation technique used in telecommunications to transmit digital data over radio frequencies. As an actress, she had roles in many Hollywood pictures, including Samson and Delilah.

Inventors' Day is a day set aside in recognition of all those individuals who, working on their own or as employees, make a decisive contribution to our everyday lives and to the progress of society as a whole.

Inventions are the best testaments to human ingenuity and are an essential part of every country's innovation system. Behind an invention there is always someone (the inventor) who, alone or as part of a team, has expended great effort to achieve results that will benefit everyone.

This year, it should be remembered, a Spanish railway engineer, José Luis López Gómez, won the European Inventor Award 2013's Popular Prize. And so, to some extent Inventors' Day can be regarded as a tribute to all those who are engaged in research activity in Spain.

Author: Pedro Saturio

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Modernization of the trademark system in the European Union

In March 2013 the European Commission adopted a number of proposals to recast the Directive to approximate the laws of the EU Member States relating to trademarks (now codified as Directive2008/95/EC), and to revise the Regulation on the Community trademark (now codified as Council Regulation (EC) No. 207/2009) and the Regulation relating to fees (codified as Commission Regulation (EC) No.2869/95).

The aim of the proposals is not to create a new system; instead they intend to modernize the existing provisions to make the trademark registration system in Europe more accessible, coherent and efficient.

The new proposals include:

New terminology:

The OHIM will change its name to the ‘European Union Trade Marks and Designs Agency’ (or ‘EUTMDA’) and the terms Community trademark and Community Trademark Court will be changed to "European trademark" and "European Trademark Court".

Fees:

The number of classes covered by a trademark application fee will be reduced from three classes to one, and the application fee will be lowered to reflect this change.

Definition of European trademark:

The requirement that a sign be capable of being represented graphically will be eliminated.

Absolute grounds:

Trademarks applied for in a foreign language will not be granted protection if refused on absolute grounds once the mark is translated into an official language of an EU Member State.

Designation and classification of goods and services:

The new legal texts will codify the EU Court of Justice’s ruling in the "IP Translator" case (literal interpretation). The applicants must specify the goods and services to be covered as opposed to using the general class heading. The owners of CTMs applied for prior to 22 June 2012 will be given a term (probably around six months) in which to evaluate and reformulate the list of goods and services.

Rights conferred by a European trademark:

- CTM infringement actions shall be brought without prejudice to any existing prior rights (article 16 (1) of the TRIPS agreement).

- In cases of double identity and similarity (in relation to the signs and goods and services in question) the only criteria applied shall be the origin function (the functions of advertising, communication and investment shall no longer enjoy protection).

- The use of a protected mark as a trade name shall be considered an infringement.

-  The "own name" defense shall only be applied to personal names. 

 - Rights holders will be able to prevent the use of their marks on illegal comparative advertising.

Protection of geographical indications and traditional terms:

Grounds for refusal shall be adapted to European laws with respect to geographical indications and traditional terms in the wine sector and other specialist sectors. 

Geographical indications and designations of origin protected under EU laws shall be considered applicable as relative grounds for refusal of registration and may thus be cited as possible bases for opposition.

European certification marks:

European certification marks, which currently exist at a national level only in some Member States, are introduced throughout the EU.

Changes in procedures:

- Member States shall establish an administrative procedure for the invalidation and revocation of trademarks (rather than court procedures).

- Ex officio examinations by national offices shall be limited to absolute grounds for refusal. 

- The option of applying for European trademarks via National Offices shall be eliminated.

Anti-counterfeiting measures:

-  Rights holders will be able to oppose the transit of counterfeit goods throughout the EU customs territory, irrespective of whether or not the goods had been released for free circulation. 

- Rights holders may also prevent the import of counterfeit goods to the EU even if the sender is acting for commercial ends (with a view to combating the sale of counterfeit goods online).

- Rights holders may prevent the distribution and sale of labels and packaging that may subsequently be used in connection with counterfeit goods.

Trademarks as objects of property:

Incorporation of new rules relating to the use of trademarks for commercial purposes.

It is expected that the above proposals will be formally adopted in spring 2014. Once these proposals are adopted, the EU Member States will need to incorporate the provisions of the new trademark directive into their respective national laws within a term of two years. Most of the amendments to the new Regulation on the European Trademark, meanwhile, will come into effect after its entry into force in 2014.

Author: Enrique Armijo Chávarri

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Divisional applications may again be filed as long as the parent application is pending

On 16 October 2013 the European Patent Office's Administrative Council adopted another amendment to Rule 36 of the Implementing Regulations to the EPC, dealing with the requirements for filing divisional applications. The purpose of this revision is to alter the existing approach of requirements governing divisional patent applications.

The EPO has amended Rules 36 and 135 of the Implementing Regulations to the EPC to enable divisional applications to be filed while the parent application is still pending. That is, the revision reverts back to the wording of Rule 36 as it stood before the current wording that took effect on 1 April 2010. This was not the only amendment adopted, however. An additional fee has been established as part of the filing fee for divisional applications in the case of divisionals of divisional applications. Accordingly, Rule 38 of the Implementing Regulations to the EPC has also been amended.

The intent behind the different revisions to Rule 36 has been to restrict the use of divisional applications as a strategy to extend the life of patent applications that looked as if they were going to be refused. The EPO's goal has been to afford certainty to third parties and decrease the number of divisionals filed, thereby reducing the additional workload they represented.

In the amended version currently in force, the EPO specified 24 months as a time limit for filing divisional applications. Specifically, it was stipulated that divisional applications could be filed:

• within 24 months of the Examining Division's first communication in respect of the earliest application for which a communication had been issued, or

• within 24 months of any communication in which the Examining Division had objected that the earlier application did not meet the requirements of unity of invention (Article 82 EPC), provided that this objection was being notified for the first time.

However, the outcome has not been as expected. Numbers of divisional applications have actually grown, because applicants have preferred to file divisionals before the end of the 24-month time limit, as a precaution. Not only that, but interpretation of the current wording of Rule 36 is not straightforward; in fact, it was revised further a few months before it was to enter into force. There have, as well, been numerous complaints from applicants who feel that the current wording of Rule 36 goes against their interests. Filings of successive divisionals from the initial application remains possible and is another aspect that has not improved. Thus, Rule 36, as it currently stands, has been more of a problem than a solution.

With this new revision the EPO has decided to try a new approach to solving the initial problem, i.e., limiting use of divisionals as a means of indefinitely extending the life of patent applications.

Under the new approach, the 24-month time limit has been rescinded, hence divisional applications may once more be filed as long as the parent application is still pending. However, an extra fee has been added on top of the filing fee, perhaps a simpler and more direct way to deter applicants who might be interested in filing successive divisionals.

The amount of the extra fee remains has yet to be decided, and discussions are planned, but the idea is to increase the fee progressively for each generation of divisional applications filed. The amendment provides that the first divisional application filed will not be subject to an additional fee.

This new revision of Rule 36 will enter into force on 1 April 2014 and will be applied to divisional applications filed on or after that date.

Author: Ruth Sánchez

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China passes new Trademark Law

On 30 August 2013 the Standing Committee of the National People's Congress, China's top legislative body, passed the third revision to the Trademark Law. The new law will take effect on 1 May 2014. Here are some of the main changes:

Faster prosecution: Under the former law there were no time limits for prosecuting applications, oppositions, requests for cancellation, or disputes, and proceedings were very slow. The law has been amended to specify time limits of from 9 to 12 months for each proceeding, extendible for 6 or 12 months.

Sound and other non-traditional trademarks The new law paves the way for registration of sound marks and other non-traditional marks, though the latter are not specifically mentioned in the amended version of the law.

Multi-class filings Up to now, trademark filings in China have required a separate application for each class, even for the same trademark. Under the new law, China joins other countries, like Spain, in allowing a single application to claim multiple classes.

Electronic filing: Applications may be filed electronically now, but only on a limited basis. The new law specifies electronic filing as a valid means of filing applications and also makes provision for the electronic filing of all sorts of documents relating to an application.

Labeling of well-known brands: From entry into force of the new Trademark Law, sellers and manufacturers will not be able to label their products as well known in any sector of trade. In the event of non-compliance, the seller/manufacturer may be fined RMB 100,000 (approximately 12,500 euros).

New grounds for contesting bad-faith applications: Under the provisions of the new law, a trademark shall not be registered for goods that are the same or similar to those on which an earlier mark has been used where the applicant for the trademark has had a contractual, business, or other relationship with the owner of the earlier identical or similar mark and had knowledge of the earlier mark.

The Berne Convention in the modern age, with Spanish legal principles as a point of reference

In the tumultuous times currently faced by copyright, the best thing to do is to go back and look for handholds at the source from which considerable rivers, tributaries and springs flowed for authors.  At a time when scientific knowledge seems to be limited to the microscopic boundaries of a 140-character “tweet” or confined to a post in a topical blog, it will be good to take our hats off to genuine scientific contributions.                  

A group of Spanish professors and experts in the field of copyright, led by the master Rodrigo Bercovitz, has just published a commentary of almost 1700 pages on the Berne Convention entitled Comentarios al Convenio de Berna which analyses, provision by provision, the intricacies of this key document in the history of copyright protection.        

The extreme importance of this Convention was consolidated by the tribute paid to it by the World Trade Organization’s TRIPS Agreement, among the tributes paid by many other international and Community initiatives. The WTO decided to adopt Berne as a legal reference framework for all countries.         

International legal doctrine did not, however, rise to the occasion.  Notwithstanding a number of isolated contributions, there did not seem to be any specific work that did justice to the magnitude of Berne’s contribution.  This void has now been filled as a result of this book with Spanish roots.                                                                                                          

Comentarios, published by Tecnos, contains the work of up to 15 university scholars, such as  Pilar Cámara, Ignacio Garrote, José Carlos Erdozaín, Nazareth Pérez de Castro and Rafael Sánchez Aristi, all of whom have proven experience in the field of copyright. It is cause for satisfaction that one of the contributing authors is the Doctor of Laws Patricia Mariscal Garrido Falla, a lawyer at ELZABURU, who provided commentaries on two of the articles of the Convention.                                       

In times of tribulations and uncertainty, it cannot hurt to utter a “long live the Berne Convention"  and delve into this transcendental study in order to find out where we came from and also to figure out where we want to go under expert guidance.

Author: Antonio Castán

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