EPO and IP AUSTRALIA launches new PPH agreement

As the PPH network continues to expand, the Awapatent IP Blog lets its readers stay one step ahead by keeping monitoring the new expansions and arising possibilities.

Most recently, European patent applicants are offered a new possibility of speeding up and simplifying examination of their patent applications. This possibility comes in addition to the eight existing agreements that the EPO has with the patent offices of Canada, China, Korea, Israel, Japan, Mexico, Singapore and USA.

Effective 1 July 2016, the EPO and the Australian IP office, IP AUSTRALIA, has launched a new PPH agreement. The agreement applies to both national and to PCT work products. The press release of the EPO may be found here.

To recall, for a given PPH-agreement the PPH allows for requesting accelerated examination at the one office participating in this agreement based on the search results and a set of claims accepted for grant in an analogous application at the other participating office.

Finally, it is worth mentioning that also the Peruvian and Vietnamese IP offices have entered the PPH-network. Namely, the Peruvian IP office has signed an agreement with the Spanish patent office, OEPM, and the Vietnamese IP office has signed an agreement the Japanese patent office, JPO, respectively. Thereby the total number of IP offices participating in the PPH network is 39.

Troels Peter Rørdam, European Patent Attorney & Certified Danish Patent Agent

Has China taken another Bite out of the Apple?

After locking horns with a local Chinese company for six years over the IPHONE trademark, Apple took a drubbing after last month’s decision by the Beijing High People’s Court.

Apple applied for the “IPHONE” trademark for software and hardware (Class 9) in China in 2002. A Chinese company, called Xingtong Tiandi, which makes leather goods, is the owner of the suit mark “IPHONE’, which was filed in 2007, the same year Apple’s first Smartphone, the iPhone, was sold. The brouhaha began in 2010 when the US giant opposed Xingtong Tiandi’s trademark.  The appeal was dismissed by the Beijing Court on 31st March stating that Apple was unable to prove that its “IPHONE” mark was well known in China before 2007 when it first sold its smartphones.

After being dealt a series of unsuccessful outcomes; Apple was unlucky at the opposition, the opposition review, the appeal at the Beijing Intermediate People’s Court and finally the appeal at the Beijing High People’s Court. Apple has stated that it plans to vigorously protect its intellectual property rights by requesting a retrial by the Supreme Court.

The Beijing High People’s Court made specific reference to the fact that Apple’s iPhone was released in June 2007, and sold on the Mainland China in October 2009.  The evidence filed by Apple was predominantly after the application date of the suit mark, i.e. 29 September 2007. The Court found that Apple was unable to establish that its iPhone trademark was well known before that application date.

This is another case demonstrating the difficulty that brand owners face in the fight against trademark squatters, in the absence of registered trademark rights in China.  If the brand owners have to rely on the ‘well-known mark’ ground, the odds are stacked against them unless they have been on the ground in Mainland China for a significant period, before the relevant time.   So, the cardinal lesson/key takeaway for brand owners is to register the trademark for the goods that you need protection for in China at the earliest possible time.  It is expensive and time consuming to deal with a preemptive application, not to mention the negative publicity that inevitably arises out of a legal throw-down.

A degree of bewilderment seems to underlie some reports, especially the non-Chinese ones, on the decision that iPhone is not a well-known trademark in China.  The decision has made it clear that the relevant point of time in determining the well-known mark status is the application date of the suit mark. It is irrelevant as to how famous iPhone is nowadays or at the time of the hearing of the court of appeal.  Though without the benefit of knowing what the evidence consisted of, it is not difficult to imagine how onerous it would be to produce the required evidence of use and reputation in China before 29 September 2007.

Another point to note is that in the appeal to the Beijing Higher People’s Court, Apple claimed an additional ground, which provides for the invalidation of trademarks that are, for example, registered by deception or other improper means.   The Court did not consider this ground because it was never raised in the first instance appeal and the opposition review, and the Court did not comment on the applicability of the ground.  If Apple has some prospect of success by availing of this reasoning, it is curious as to why this was not pleaded in previous proceedings.

Apple was reported to plan to seek a retrial by the Supreme People’s Court and to continue to vigorously protect its trademark rights.  It will be interesting to see if the Supreme Court decides differently.

Ai-Leen Lim, CEO and Principal Counsel, AWA Asia

What does Brexit mean for the EUTM system?

The people of the United Kingdom have spoken: They do not wish to be part of the EU any longer. It will now take time, probably years, before we know the terms of the divorce between the UK and the EU. Having said that, what impact of Brexit do we foresee for trademark owners?

Short-term EUTM registrations are still valid in the UK. Keep in mind that the referendum has voted for Brexit, but the UK is actually yet to request for an exit, which might not happen until the autumn. This means that no short-term action is required and EUTM registrations remain valid in the UK.

Once Brexit is a fact, does it mean that the trademark protection in the UK will be lost by EUTM proprietors?

For existing EUTM registrations the answer is probably no. The expected solution is that a transitional period is set up where EUTM owners can extend/convert their EUTM registration to national UK registrations (this will likely include payment of official fees).

For new EUTM registrations the answer is that the UK will no longer be covered by EUTM and a separate application in the UK will therefore need to be filed. Today’s official fee to add the UK to an International/Madrid registration is only CFR 262 for the first class and CFR 73 for each additional class. In other words, it is not massively expensive.

From a prosecution perspective the changes will likely only be administrative and mean two applications with a little higher cost. From other perspectives we see the following three issues:

  1. Injunctions based on EUTM registrations normally cover the entire EU. Post-brexit the courts in the UK will no longer be able to issue pan-EU injunction, and vice versa court injunction in other EU member states will not cover the UK. This will increase the cost of litigation since two sets of litigation will be required.
  2. Today it is sufficient to use a EUTM registration in the UK to maintain it in the entire EU. Post-brexit EUTM proprietors, who rely on their EUTM in the UK, will need to revise their filing strategy.
  3. The case law of the Court of Justice of the EU will no longer be directly applicable in the UK, which probably will lead to differences in jurisprudence between the EU and UK. This will be important for brand owners to keep track of.

Overall our initial position is that there is no need for drastic actions with regard to the Brexit referendum. We will of course keep reverting to this subject until the dust has settled and the picture is more clear.

Kristian Martinsson, Attorney at Law 

Effects of UK leaving the EU on the Unitary Patent and the UPC

The result of the EU referendum held on 23 June was that the UK decided to leave the EU (European Union). As we have written previously the process of leaving the EU is long and can even take up to a couple of years.

The UK will have to negotiate with the EU and the remaining member states regarding several issues, and until the UK is finally ready to leave, nothing is expected to change.

It is for instance expected that the UK will stay within the European Patent Convention, since the EPO is not an EU institution, and thus be available for national validations for years to come. British European Patent Attorneys holding a certificate to litigate before the UPC will most likely still be allowed to do so.

In general terms no IP rights, including trademarks and designs in the UK will be lost, even though some might have to go through transitional actions when the UK finally leaves the EU.

What will happen to the Unitary patent package, including the UPC, is more difficult to predict. It is likely that the process will be delayed, and that the entry into force cannot take place in the beginning of 2017. Some voices have been heard that the UK might still be inclined to ratify the agreement during the negotiation period, as they are still a part of the EU until that period ends, meaning that the UPC can be up and running while the UK is still in the EU. If that happens, the UPC might very well be on its way during 2017. The UPC is also an international agreement, leaving some room for (Art 24(2)(2) UPCA) the UK to stay within the UPC, and have jurisdiction over traditional European patents, if they ratify before the end of the negotiation period ends and if proper amendments to the UPCA are made.

As one of the locations of the court is set to be in London, the UPC agreement will either have to be amended to relocate the court, or the seat will still be in London even though this court would have no jurisdiction over patents in UK and neither would UK nationals be able to sit as judges in the Court. None of these options is very attractive, and it is possible that keeping the Court in London will violate EU law. The UPCA will thus have to be amended, and a new location would likely be Milan in Italy or The Hague in the Netherlands.

One major concern is that the value of the Unitary patent will be diminished if the UK is not one of the countries in which the unitary patent can be obtained, and subsequently litigated in a unified manner. The UPC will then lose some of its attractiveness, since UK nationally validated patents will have to be nationally litigated and enforced. On the other hand, patent holders might be less inclined to opt out of the UPC since the UK designation would not be able to be attacked in the UPC.

It is also foreseen that the language regime will remain unchanged, i.e. the three languages English, French and German will still be used as stipulated by the Unitary patent regulation and the UPC.

Once the gun smoke has settled in the UK, we will know if they intend to ratify or not, and the time schedule for the UPC will be settled.

Sofia Willquist, European Patent Attorney

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Candy co-operation turns into candy competition

Kraft Foods Sverige IP AB recently won over Mars Inc. and their Swedish subsidiary Mars Sverige AB in a trademark matter before Svea Court of Appeal in Stockholm.

Mars started using the trademark “m&m’s” in 1941. Shortly after that Mars entered into a co-operation with Marabou/Freia A/S (later acquired by Kraft). This co-operation resulted in the development of a product, peanut covered in milk chocolate and sugar coated, that Marabou (Kraft) started selling in Sweden under the trademark “m” in 1957.

The co-operation concerned exchange of information and know-how and was formalized in a written agreement between the parties in 1989. In this agreement Mars undertook not to sell “m&m’s” in Sweden, Norway or Finland and Kraft undertook not to sell their “m”-product on markets outside of those countries.

M&M vs m

However, Mars started selling the product “m&m’s” on the Swedish market in 2009.

Kraft presently holds two registrations for the trademark “m” (device) in Sweden dating back to 2005 and 2009. In addition, they claim a right to the trademark acquired through user on the Swedish market, dating back to at least 1996. In a previous court matter between the parties, this reputation was found to be a prior right to a now cancelled Swedish trademark registration for “m&m’s”.

The present decision, however, concerns a request from Kraft to prohibit the use of “m&m’s” in Sweden. The Court of Appeal found that Kraft held an unregistered right to the trademark “m” in 2009, before Mars started using “m&m’s” in Sweden. Market surveys showed brand recognition of around 80% and the annual sales were around 200 tons.

The court held that Mars had provided evidence to the fact that “m&m’s” was considered a well known trademark on the Swedish market in 2014 and that the Swedish consumers could correctly identify the commercial source of origin. 88% could identify Mars as origin for “m&m’s” whereas only 31% could identify “m” to Kraft, Marabou or candy. However, the court was not convinced that this was the case in 2009, the relevant point of time, since sufficient evidence was not shown to this effect.

The decision of the court results in a prohibition for Mars to use the trademarks “m” or “m&m’s” in Sweden for candy in penalty for a fine of SEK 2.000.000. In addition, Mars should compensate Kraft for their court costs.

Kristina Fredlund, European Trademark Attorney