General Court decides the time has come to limit the scope of protection for the watch brand, SWATCH

From Wikimedia Commons

Three days ago the General Court issued its judgment (Case T-71/14) upholding the grant of the SWATCHBALL trademark filed by Panavision Europe for goods and services relating to a company involved in the manufacture and sale of photographic and movie equipment (Classes 9, 35, 41, and 42). As an added quirk, the application expressly excluded goods and services relating to timekeeping.

The famous Swiss watch-making company Swatch AG opposed the application on grounds that it was confusingly similar to their earlier trademark registrations for SWATCH and that it was an attempt to take unfair advantage of the repute of their earlier mark. They also claimed that SWATCHBALL was detrimental to the distinctive character and repute of the earlier mark.

The Court concurs that the conflicting marks are similar and accepts the well-known character and reputation of the SWATCH marks. Nevertheless, the Court has found that for registration to be barred under Article 8.5 Regulation 207/2009, the relevant public must establish a link between the two marks and that absent such a link, the distinctive character and repute of the earlier mark cannot be taken advantage of or harmed.

While the Court acknowledges that certain factors (the similarities between the marks and the reputation of the SWATCH mark) support the conclusion that a link might exist, it has held that any such link is diluted by the differing natures of the goods and services covered (especially bearing in mind Panavision's limitation); by the different distribution channels and market segments; by the non-competitive nature of the goods, which are not interchangeable; and, above all, by the existence of two separate relevant publics,  the general public in the case of SWATCH watches and a much more specialized public in the case of Panavision's goods and services.

In point of fact, the Court has found that even though the specialized public for Panavision's goods is likely to be aware of the SWATCH branded goods, the public is still unlikely to draw a link between the goods or between the SWATCHBALL and SWATCH marks.

This judgment shows that even the most famous trademarks need to make strenuous efforts to prove that the requisite link exists, since the bar to registration laid down in Article 8.5 is contingent on the existence of such a link for well-known and reputed trademarks to be able to exert their full effect.

Author: Luis Baz

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Furniture and Copyright. Judgment by the CJEU of 13 May 2015 in the Dimensione Case (C-516/13)

Certain judgments of the Court of Justice of the European Union are less interesting for what they say than for what they stand for. The CJEU's judgment of 13 May (C-516/13) considers a request for a preliminary ruling in a dispute between two Italian companies in Germany. Complainants were Knoll International SpA, holders of exclusive distribution rights in certain pieces of designer furniture that have their own names, the Wassily chair; the Laccio table; the Barcelona chair, stool, couch, and table; the Brno and Prague chairs; and the Cantilever chair; defendants were Dimensione Direct Sales Srl, which was behind an advertising campaign selling reproductions that imitated those pieces of furniture, specifically targeting Germany.

 The pieces were offered for sale on the defendants' website, available in German, and through advertisements placed in German magazines and newspapers.

The starting point for the judgment is what some might think of as the core of the dispute. Under German law, the furniture in question are works of art protected by copyright. No jurisdictional issues were raised with the Court. Manufacture of the furniture in Italy did not preclude action from being taken in Germany, since the advertising was aimed at the German market and the pieces were protected in Germany.

However, there is another issue, whether offering or advertising an original or a copy of a work of art infringes the distribution right where the works are protected, even if it is not established that the advertising in question gave rise to purchase of the products.

The judgment is a reminder that the CJEU has to some degree come down on the side of a broad construction of the distribution right, understanding it to encompass other acts (contractual offers, non-binding offers and advertising) which also fall under the series of acts taken with the objective of making a sale of an object.

The CJEU has thus interpreted that Article 4(1) of Directive 2001/29 does not preclude the holder of an exclusive right to distribute a protected work from preventing an offer for sale or advertisement of the original or a copy of that work, even if it is not established that that advertisement gave rise to the purchase of the protected work by an EU buyer, "insofar as that advertisement invites consumers of the Member State in which the work is protected by copyright to purchase it".

Author: Antonio Castán

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World Intellectual Property Day

The UN's international day observances are an important means of raising social consciousness. No-one questions the need to give over one day each year to commemorating health or the struggles to end poverty, hunger, sickness, and violence. Who among us does not identify with, or at least feel some solidarity towards, these causes?

Today, 26 April, is World Intellectual Property Day. The date marks the entry into force of the Convention establishing the World Intellectual Property Organization (WIPO Convention) 45 years ago.

A substantial segment of the population may, it is true, feel estranged from this cause, to them the words "intellectual property" are synonymous with sanctions, licenses, censorship, and other obstacles to the so-called free culture of the digital age. Even when viewed not so critically, "intellectual property" is still likely to bring to mind notions that stand outside most people's everyday lives, like the law, regulations, the courts, or packs of lawyers in suits and ties all on the side of "big business". Perhaps world creativity day, world innovation day, or world culture day would be a more fitting name. At least, it would "pack more punch". Because, simply put, with no beating about the bush, intellectual property is creativity, is innovation, is culture. It's in the alarm clock that wakes us up to go to the office, in the music we listen to on the way to work, in the video clip we watch on the screen on the platform, in the play advertised at the bus stop, in all the programs, utilities, and applications that help us in our daily work, in the coffee machine that rouses us from our mid-morning daze, in the television show or the book we turn to before going to sleep …. And behind it all are musicians, artists, programmers, engineers, actors, writers, producers, and, yes, probably too droves of judges, lawmakers, and lawyers in suits and tie doing their best to salvage what is left of intellectual property, this at times unfairly criticized redoubt.

Author: Patricia Mariscal

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Clarity examination in opposition proceedings at the EPO: Decision G3/14

The European Patent Office's Enlarged Board of Appeal recently issued a major decision (G3/14) on the issue of the clarity examination of claims in opposition proceedings at the Office.

Lack of clarity of claims (Article 84 European Patent Convention) is not one of the allowable grounds for opposition enumerated in Article 100 EPC. However, where the patent claims have been amended during opposition proceedings, Article101(3) EPC stipulates that the Opposition Division shall examine whether the amended patent fulfils the requirements of the EPC (including the clarity requirement laid down in Article 84 EPC ) and hence assess whether to allow or revoke the patent as amended.

The question of whether the EPO should examine the clarity of claims that have been amended during opposition or appeal proceedings has been raised repeatedly. There have been two diverging lines of case law decisions in this respect.

- The approach taken in decision T301/87 (the "conventional" view), holding that, where claims are amended during opposition proceedings, objections by reason of lack of clarity are not allowed "if such objections do not arise out of the amendments made".

- The approach taken in decisions T1459/05 and T459/09 (the "diverging" view). Decision T 1459/05 held that examination of the clarity of a feature of a granted dependent claim incorporated into a granted independent claim was permissible, especially where that additional feature was critical for differentiation from the prior art but could be regarded as being unclear. Decision T459/09 held that "unrestricted exercise" of the examination power under Article 101(3) EPC was justified where a claim was amended with a technically meaningful feature.

In these circumstances, the Enlarged Board of Appeal was asked for its opinion as to whether examination of the clarity of amended claims was permissible in cases where one or more elements of dependent claims were inserted into an independent claim, and, if so, as to the scope of the clarity examination.

The Enlarged Board's response was that, for purposes of the examination provided for in Article 101(3) EPC, patent claims may be examined for compliance with the requirements of Article 84 EPC only when, and then only to the extent that, the amendment introduces non-compliance with Article 84 EPC.

Furthermore, the Enlarged Board explicitly approved the "conventional line" and disapproved the "diverging line".

Therefore, the conclusion to be drawn is that from decision G3/14, examination of the clarity of claims in opposition proceedings will be much more restricted in scope than has been allowed under the "diverging line" of case law.

Author: Pedro Saturio

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Tomatoes and broccoli: products obtained by essentially biological processes are patentable

Spring has sprung and has brought with it two important decisions concerning plants, Decisions G2/12 (Tomatoes II) and G2/13 (Broccoli II) by the Enlarged Board of Appeals of the European Patent Office (EPO).

The two decisions confirm that the EPO considers product claims directed to plants to be admissible, and this extends to parts of plants (G2/13) and to such plant material as a fruit (G2/12), even where on the filing date of the application the plants claimed were only obtainable by an essentially biological process disclosed in the application. The decision in Broccoli II (G2/13) has further ruled that the plant or plant material may be defined in terms of the process for obtaining it ("product-by-process claims"), even where the features of the process in question define an essentially biological process for producing plants, subject to the condition that a single plant variety is not claimed.

These decisions make clear that the exclusion of essentially biological processes for producing plants and animals from patentability under Article 53(b) of the European Patent Convention (EPC) does not extend to the plants and parts of plants produced using those processes. Nevertheless, claims directed to such products may not relate to a single plant variety, because Article 53(b) EPC also excludes plant and animal varieties from patentability. Rule 27(b) Implementing Regulations to the EPC specifies this same bar to patentability in detail, stipulating that biotechnological inventions concerning plants shall be patentable only if the technical feasibility of the invention is not confined to a particular plant variety.

This is not the first time that the Enlarged Board of Appeals has been asked to interpret Article 53(b) EPC. Two earlier decisions also concerning tomatoes and broccoli, G1/08 and G2/07, sought to elucidate the conditions to be fulfilled by a process for producing plants in order to be regarded as "essentially biological" and hence unpatentable. The two recent decisions, G2/12 and G2/13, have held the products produced by such processes to be patentable, provided that they fulfil the general patentability requirements just like any other product and also fulfil the conditions laid down in Rule 27(b) Implementing Regulations.

The significance of these decisions lies not only in their shedding light on the criteria for assessing the patentability of inventions under Article 53(b) EPC but also in the commercial importance of the products concerned, now and in the future.

The inventions dealt with by these decisions are further examples of mankind's relentless drive to enhance plant species for many different purposes, for instance, to achieve greater food diversity. Broccoli (Brassica oleracea italica) is a particularly apt example of the results achieved, being a cultivar of the same species as cabbage, cauliflower, and Brussels sprouts, all variations on the common ancestor, wild cabbage, which have originating through selective breeding over the years. Humanity's role in species diversification and in modifying specific attributes has been so commonplace since Neolithic times that the public ordinarily views it not as a biotechnology process giving rise to alarming products with unpredictable consequences but rather as an intrinsic and natural part of human history. By contrast, society often rejects other biotechnological inventions based on more recent scientific advances, and this, in its turn, can sometimes influence decisions regarding the patentability of those inventions or legislation regulating the conditions of production or sale.

Author: Mª Rosa de la Colina

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New judgment by the CJEU concerning SPCs for combinations of pharmaceutical products

The Court of Justice of the European Union has issued new judgment interpreting Articles 1, 3, and 13 of Regulation (EC) No. 469/2009 concerning the supplementary protection certificate (SCP) for medicinal products.

The judgment (Case C-577/13) was issued in the context of a dispute between the Actavis and Boehringer Ingelheim pharmaceutical companies. The question referred to the CJEU for a preliminary ruling basically comes down to whether an SPC may be sought for a combination of two products included in the claims after the initial grant of the basic patent, subsequent to amendment of the said patent. The combination was composed of: (i) an active ingredient claimed as the sole subject matter of the invention, for which the holder had already obtained a first SPC (telmisartan) and (ii) a second substance (hydrochlorothiazide) within the public domain.

In response to the questions from the referring court, the CJEU made the following preliminary observations:

- First, the expression "as such" as used in Article 1(c) and Article 3(a) of the EU Regulation is to be interpreted autonomously in light of the objectives pursued by that Regulation and the "subject matter of the invention" covered by the basic patent.

- Second, where a patent claims several products, it may be possible to obtain several SPCs for the different products, provided that each of the said products "as such" is protected by the basic patent and constitutes the "subject matter of the invention" covered by the patent.

On that basis, the CJEU ruled that a second SPC may not be obtained for a product comprising a combined product composed of an active ingredient that is the sole "subject matter of the invention" for which an SPC has already been obtained in combination with another substance. In the CJEU's view, in the case that concerns us here the combination of the active ingredients telmisartan and hydrochlorothiazide, the latter being in the public domain, is not the true "subject matter of the invention" covered by the basic patent.

The CJEU based its decision in this case on the requirement to balance the interests of the pharmaceutical industry and those of public health, since unlimited entitlement to multiple SPCs for subsequent marketing of an active ingredient by combining it with another ingredient or substance that is not the subject matter of the invention as originally protected would tip the balance in favour of the former.

The CJEU thereby upheld previous case law set forth in earlier judgments concerning SPCs for combinations of products (see cases Actavis vs Sanofi – C-443/12 – and Georgetown University II – C-484/12). The judgment leaves undecided the question as to whether a patent may be amended after grant so as to insert claims for a combination of products that could comply with the requirements for obtaining an SPC. However, while this question was not expressly addressed, the CJEU appears to be implicitly opposed to that possibility.

Authors: Enrique Armijo Chávarri -- María Cadarso

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Resale royalty right for works by visual artists – Who pays?

The resale royalty right benefiting the author of original artwork, traditionally known as the droit de suite, is, as its name implies, the right of visual artists to remuneration in the form of a royalty on subsequent resale of their works. The purpose of this right is quite clear: to enable artists to profit from the economic success of their works and thereby offset any disproportionate difference between the price at which works are sold by an artist and the price subsequently fetched at resale involving art market professionals.

This right has traditionally existed in the legal systems of most European Union countries, and a Directive to harmonize the right was issued in 2011 (Directive 2001/84/EC). The purpose of the Directive was two-fold: to ensure that visual artists effectively benefited from the right in all EU countries and to eliminate differences in the laws of the EU countries that resulted in different treatment of artists depending on where their works were sold, which ultimately was a factor contributing to distortion of the functioning of the internal market. Nevertheless, Community harmonization did not encompass all aspects of the operation of this right. Such issues as the beneficiaries of the right, the transactions and artworks subject to the right, the calculation basis, and the persons responsible for payment were addressed, but the Directive did not define, or did not clearly define, who was ultimately liable for bearing the cost of the royalty. Article 1.4 of the Directive provides that: "The royalty shall be payable by the seller. Member States may provide that one of the natural or legal persons referred to in paragraph 2 other than the seller shall alone be liable or shall share liability with the seller for payment of the royalty."

In this situation a clause in the general conditions of sale of the French art auction house Christie's France SNC for 2008 stipulated that the buyers were required to pay the house a sum equivalent to the royalty due on sales made through the said auction house that were subject to payment of the royalty  Christie's France SNC took the money on behalf of the seller and subsequently paid it to the collective management organization in charge of collecting the royalty. A competing association, the SNA, claimed that sales made by Christie's France under the aforesaid contested clause constituted unfair competition and were in breach of national law regulating the resale royalty right. The clause was voided by the Paris Cour d'Appel, and Christie’s appealed to the Cour de Cassation, which stayed the proceedings while it referred the question of whether Article 1.4 of Directive 2001/84 should be interpreted to mean that it is the seller who is definitively liable for bearing the cost of the royalty to the CJEU for a preliminary ruling.

The key issue underlying the CJEU's ruling (Case C-41/14) is doubtless the difference between the person liable for payment and the person who must definitively bear the cost. According to the CJEU, the Directive merely makes provision specifying the first issue, whereas it is silent about the second. In this regard the CJEU has held that a clause like the one in Christie's France's general conditions of sale stipulating that the cost of the royalty is to be borne by the buyer is not contrary to Community law. Basically what the CJEU has held in this judgment is that the essential objective of harmonizing the droit de suite in the Community is to ensure that artists effectively receive remuneration, and the issue of who may or should in actuality definitively bear the cost is left to the discretion of the Member States.

Author: Patricia Mariscal

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