Tag:  “Trademark”  | (18) posts

The value of design patents

It is a perfectly clear, crisp morning as I make my way from Washington DC’s Union Station, through a clean and perfectly trimmed Senate Park, to the white neoclassical palace that houses the United States Supreme Court. The wide pavement and massive stairs leading to the building’s entrance is filled with journalists, photographers and television crews gearing up alongside hundreds of gathered spectators. Inside, the Supreme Court is in session, hearing its first design patent case in 120 years.

What sparks such an unusual interest in the hearing of an IP case is the fact that this is one of the final chapters in the ultimate “super heavyweight” patent rumble, between the largest corporation in the US, Apple and the by far largest South Korean corporation, Samsung. This lengthy dispute has all the components necessary to attract the public’s eye: it concerns a category of products that basically everyone of us is using (on average 40 times per day), the design patents concerned are understandable and the patents cover the iconic design of the game changing iPhone.

The question that the Supreme Court agreed to hear is not that of infringement, which has already been settled in a final decision by the Court of Appeal for the Federal Circuit (CAFC). Instead, the court is reviewing the size of the damages, and in further detail, the relevance of a century old piece of legislation stating that the infringer in a design patent “shall be liable to the owner to the extent of his total profit”. This in practice means all profit generated by the infringing Samsung Smartphones (article of manufacture), and it is this wording that made the CAFC affirm the $400 million in damages awarded to Apple.

Samsung, as well as several academics, argue that a statement made by the US congress in 1887 that “it is the design that sells the article” (forming the basis for the above wording in the legislation), does not apply to complex products such as the iPhone. On the other side, Apple’s Chief Litigation Officer Noreen Krall, who by the way hired me to my first job in the IP industry, argues the opposite and stated that Apple’s “designers and engineers are distinguished by their originality” and that Apple “firmly believe that strong design patent protection spurs creativity and innovation”.

Knowing how dedicated Apple fans can be, and how much value the Apple customer places in the look and feel of the products, I am inclined to agree with Noreen and Apple. In many instances, I believe that originality and design are features that actually may trump the function of Apples products.

The Supreme Court’s decision is expected in early 2017. Whatever the outcome will be, i.e. if the Supreme Court confirms the principle of the “total profit” or chooses to interpret the law as meaning “total profit” attributed to the specific parts of the “article of manufacture” covered by the patent, the ruling will have a considerable impact on how the IP world views and values design patents.

Joacim Lydén, Awapatent Partner and temporary US Correspondent

If Plant and Page stole “Stairway to Heaven”, why wait 45 years to take action?

On May 10 a trial will start in a district court in Los Angeles. A jury will decide whether Robert Plant and Jimmy Page of Led Zeppelin copied the opening chords of their classic song “Stairway to Heaven” from “Taurus” of Spirit. Judge Klausner holds that the songs are similar enough to allow the case of copyright infringement to be tried.

The composer of “Taurus”, Randy Wolfe, died in 1997 and the lawsuit has been filed by a trustee of the estate. It is argued that Plant and Page were inspired by the song on a joint Led Zeppelin and Spirit tour in 1968 and 1969.

The defense is likely to be based upon a claim that the chord progressions have been used by composers well before “Taurus” was written in 1967, as well as argumentation that there in fact is an overall difference between the two songs. Personally, I think there may be some merit to this, see (and listen) for instance https://www.youtube.com/watch?v=JcYeLRI76No.

I also reflect on the rather strange fact that “Stairway to Heaven” was written in 1971 and that it actually is possible to wait 45 years to file a copyright infringement claim.

There are several examples in different legislations and in doctrine to the fact that if you are bound by your passive behavior. For instance, sometimes in civil law a party that does not speak up within reasonable time will be held to have accepted certain conditions, whether or not he or she agrees to those conditions.

For me, the rule of passivity frequently comes up in trademark conflict discussions.  Article 54.1 of the EU Trademark Directive states that acquiescence or passivity limits your ability as a trademark owner to apply for invalidity or to oppose a later trademark.

For this rule to apply, the following needs to be fulfilled:

  • The younger mark has been used in the territory where the older trademark is protected.
  • The trademark has been used in more than five successive years in the relevant territory.
  • The owner of the older trademark has been aware of the use of the younger mark for more than five years.
  • The owner of the older trademark has been passive and not acted against the use of the younger mark.
  • The younger mark was not applied for in bad faith.

Here, it should be noted that the holder of the later trademark has the burden of evidence to the first four bullet points above, whereas the holder of the older right has the burden of evidence to the last bullet point.

A period of five successive years is stated as a relevant period of time. I think this period is generous enough for the owner of the older trademark to evaluate the situation from different perspectives and to prepare and file a claim.  There is really no just reason why a right holder should be allowed to wait around for decades before deciding to notify a good faith party that they have been committing infringement all that time.

Personally, I feel for Jimmy Page and Robert Plant and think that there is a moral right in the old Italian proverb; “silence means consent”.

Kristina Fredlund, European Trademark Attorney

The struggle to avoid trademark degeneration

I have met trademark owners that are thrilled when their trademark has become part of the language as generic term. They regard it as undisputable evidence that they are a market leader and that their product is a great success. The thrill, however, quickly fades when the consequences of degeneration are realized.

The loss of a trademark to degeneration is a massive failure from a marketing aspect and often a major financial problem. The trademark is the bearer of the collected renown achieved under the mark, perhaps the sum of decades of work. Here we can include the value of the quality of the product, the cost spent on marketing and the recognition obtained in the marketplace. When a company is subject to an evaluation the trademark usually represents the majority of the company’s total value, sometimes up to 80% or more. To lose such a trademark to degeneration is to lose this value.

A degenerated trademark becomes part of the general language and is then available for everyone. This includes all competitors that are free to use the word and, accordingly, take advantage of the renown and value held by the previous trademark. For the trademark owner it’s like your private garden suddenly becomes a public park. Anyone can enter and you might as well take down the fences once degeneration is a fait accompli.

Not only do you lose the sole right and value connected to your previous trademark, you are probably still in need of a trademark to communicate in the marketplace. So you need to start over with trademark clearance, registration procedures and all the headaches and costs that this can entail.

So, what can you do to avoid this type of trademark failure? Well, it’s not easy to halt the process once the trademark has started to become a part of the general language. In very few cases degenerated trademarks have been restored to trademark status by massive marketing activities. Jeep comes to mind. However, most trademark owners lack the muscles for such an endeavor.

Instead, it is important to think ahead and to make smart choices already when you select your trademark.

  • Choose a trademark that is not in risk to be regarded as a generic word. For instance, very short trademarks for products with very long generic names are at high risk, simply because people are likely to choose the word that is easier to use.
  • If your product is new and lacks a generic description, make sure that there is a proper generic word that the language can adopt instead of your trademark. If necessary, invent one and communicate it.
  • Always use your trademark as a name. Start with a capital letter and never put the mark in plural form.
  • Use the symbols ® and ™
  • Establish clear trademark guidelines and make sure that they are followed.

Kristina Fredlund, European Trademark Attorney

Have faith in bad faith?

Swedish furniture retailer IKEA has lost the rights to its trademark in Indonesia. The Indonesian Supreme Court has cancelled the trademark registration of the Swedish company at the request of the local furniture company PT Ratania Khatulistiwa on the basis of non-use.

In 2013, the Indonesian company registered the trademark IKEA – an acronym for Intan Khatulistiwa Esa Abadi. The Swedish furniture maker registered its trademark in Indonesia in 2010, but has not used it in three consecutive years for commercial purposes. IKEA’s first and only store in the country so far was opened in late 2014. Under Indonesian trademark law, this means the registration can be deleted.

In my mind this immediately invokes the thoughts of a counter claim based on bad faith, which I expect IKEA has or is thoroughly considering. Naturally, the relevance and success for such a claim is up to the Indonesian courts.

Well-known trademarks are granted the possibility to cancel bad faith applications or registrations in the Paris Convention, but national trademark law is in need of harmonization.

INTA (International Trademark Association) did express the following general criteria for bad faith cancellation in a Board Resolution from 22 September 2009:

  1. the applicant/registrant knew of the third-party’s rights or legitimate interests in a mark identical to or substantially identical to the mark applied for/registered, where such knowledge is actual or may be inferred from the surrounding circumstances; and
  1. the applicant/registrant’s conduct in applying for/registering the mark is inconsistent with norms of reasonable, honest, and fair commercial behavior.

Bad faith cancellations generally have a huge problem, namely the burden of evidence. Generally, this lies heavily on the shoulders of the plaintiff. Ideally, the plaintiff can show some solid written evidence, such as in cases where the applicant actually has been in contact with the plaintiff concerning the trademark. This is rather common for instance with respect to local distributors, licensees or other business relations who proceed and register the trademark in their jurisdiction as a precaution, perhaps with a good intention of acting on behalf of the trademark owner. However, if the business relationship starts shaking, the local trademark right may become a cause for conflict.

However, if no such prior relation exists, the plaintiff needs to find other ways to prove to the court or other authority that the applicant in fact was in bad faith at the time of filing. Without a very well-known trademark you will certainly need some form of evidence and it may be hard to find.

You might end up filing a cancellation action against the conflicting trademark on other grounds, as I did many years ago before a small district court in the north of Sweden. I represented a well known international luxury hotel chain against a local business in the cancellation of their company name. The name was intended to be used for a hotel business, but no hotel ever actually opened. However, the company name was in fact used in contacts with local authorities, banks etc and the court was to decide if this use was sufficient to uphold the company name right.

I couldn’t believe my luck when the managing director of the Swedish company took the stand and started to tell his story with the sentence “Well, we had a lot of ambitions when we established this business and wanted to open a hotel here in the north of Sweden with the same quality and luxury level as XX (the name of my client)”. Needless to say, that company name got cancelled.

Kristina Fredlund, European Trademark Attorney

Names as trademarks – maybe not such a good idea!

In Denmark the owner of a trademark cannot prevent others from branding themselves under their own name, as long as it is done in accordance with good marketing practice. This means that as long as the use of your own name does not lead to confusion, it is possible to trade under this name. Therefore if one is using his/her own name as a sign of recognition and assigns it to another company, then this person will be prevented from using his/her name as a sign of recognition in commercial activities conflicting with the proprietor. Therefore in that sense a name does not differentiate from “normal” trademarks.

On 30 November 2015 the Danish Commercial and Maritime Court gave their decision in a case between Topbrands and the Danish designer Benedikte Utzon. For several years she has designed clothing under her own name, and she has built her business on her name as her trademark. In 2012 her company went bankrupt and the Danish company Topbrands bought the main part of the bankrupt’s assets, including the unregistered trademark rights to “Benedikte Utzon”. Topbrands has since registered the name as a trademark in Denmark and EU. Benedikte Utzon herself was offered to buy the trademark for 20,000 DKK, but as she had no money after the bankruptcy she wasn’t able to do so.

Since the bankruptcy Benedikte Utzon has started a new brand under the name “My Little Curvy Love”. According to the Commercial and Maritime Court, she is not permitted to use her own name to market the company. Not even in variations as “My Little Curvy Love by Benedikte Utzon” or “designed by Benedikte Utzon”. She can still use her name in a personal context, but not as a sign of recognition in commercial matters conflicting with the existing brand “Benedikte Utzon”. Therefore she is actually now prevented from writing “Designed by Benedikte Utzon” on any commercial activities within jewellery, leather goods and apparel, as this will lead to confusion amongst the consumers.

Benedikte Utzon has appealed the case to the Supreme Court, as she finds that there are several untouched issues. She believes that the case is a matter of principle, as it concerns the basic right to the use of own name. Especially for designers, musicians, writers and artists she feels that this case is important, as they often are all building their career on their name.

On the other side stands Topbrands which bought the trademark. “My company bought the trademark – she even rejected buying the trademark “Benedikte Utzon”, and as we are now the owners of the trademark, we of course want our rights to be respected. You can’t just ignore others’ rights”, says Lasse Skarup from Topbrands.

As an IP professional it will be interesting to see where the Supreme Court will draw the line. Do they find that an owner of a trademark, which is also the name of a person, must accept use – that up until this point – was seen to be in conflict with good marketing practice, and therefore must now accept use of names in loyal commercial activities? Or will they find that a trademark that is rightfully obtained and used as a trademark must be respected as a trademark, even though it is the name of a person. And, is it fair that you can wind up in a situation, where you are not allowed to put your name on your work? We’ll see..

Maria Dam Jensen, Legal Counsel

New hope for trademark owners in China

In China, the trademark system is based on the “first-to-file” system, which means that the first company or person to file owns the legal right to the trademark. There is no requirement for the intention to actually use the mark as we know it from a.o. the US system.

Up until now the so called “Trademark Squatters” have been a huge problem in China. These Trademark Squatters file hundreds of names with the Chinese authorities long before the brand owners enter the Chinese market and then they try to extort the owners in settlements, forcing them to “pay up” if they wish to be able to use their trademark in China.

Revised rules to prohibit trademarks registered in bad faith
China has recently implemented a new revised set of rules that among other things prohibits registering trademarks in bad faith. This is a step towards the system we know from Europe.

Until this point, trademark owners have been left with the options of either creating an entire new trademark for the Chinese market, expensive settlements or taking legal actions and spending huge amounts on legal fees in the hope of gaining legal right to their own trademark. Tesla, Apple, Sothesby’s and Michael Jordan are only some of the many trademark owners that have fought battles with these Chinese Trademark Squatters. Many of these battles have proven unsuccessful up until now.

Recently, the American brand Michael Bastian has fought for their trademark and won the case against a Trademark Squatter before the Chinese Trademark Review and Adjudication Board (TRAB). A Chinese company had registered the trademark Michael Bastian’s English name and the Chinese transliteration in 2007. The TRAB found that the Trademark Squatter had abused the trademark registration, use and administration process in China even though there was insufficient evidence of Michael Bastian’s use of the trademark or publicity in China prior to the date of filing by the defendant. Further the TRAB found that the defendant violated the principle of Honest and Good Faith. According to his principal counsel Foley & Lardner, Michael Bastian is the first non-Chinese individual or entity to win a case under the principle of honest and good faith despite little evidence of prior use.

A step in the “right” direction, but…
So does this mean that all troubles are solved in China and that trademark owners can feel home safe? Definitely not! It is important that trademark owners are aware that there are distinguishing features in this decision and uncertainty as to how much weight the TRAB will give to this decision in the future. In the Michael Bastian case, the TRAB cited that the defendant had engaged in similar conduct and attempted to file many trademarks identical or similar to other prior trademarks. Therefore in this case it was rather clear that the defendant actually was a Trademark Squatter. It is therefore uncertain whether the TRAB would have reached the same decision had the defendant not clearly just registered trademarks to put pressure on right holders and make money from this.

However, the decision is a step in the “right” direction so to speak. Moreover, this decision is important in the sense that it will send a signal of increased confidence to foreign companies entering the Chinese market, and to use their name and IP to build their brand in China. Hopefully, this decision will set precedent and make it easier for trademark owners to regain and protect their IP rights in China.

It is still uncertain what line the TRAB will take against these Trademark Squatters, and we at Awapatent will definitely advice right holders to still consider the previous cases in China as a warning to get their trademarks registered early in China, at least if at some point in the future China is considered a market of interest.

Maria Dam Jensen, Legal Counsel

Cookyright…? Cookieright…? huh…?

A couple of years ago a successful German chef with a restaurant in Rome called for protection of recipes. And was laughed out. But consider this: over the last ten years cooking has evolved into big business. Television chefs like Nigella Lawson, Jamie Oliver, Claus Meyer, Tim Mälzer, Ernst Kirchsteiger, Gordon Ramsay, Alain Ducasse and Tina Nordström have all become familiar household names – internationally for some or nationally for others. For some television networks and publishers they are a huge export.

So considering this, didn’t the German chef have a point? One of the purposes of IP is to encourage and facilitate development for the benefit of society and economy, and to protect human creativity.

In May this year in New York City local patissier Dominique Ansel put his ingenuity to work and struck a chord with the American sweet tooth: he invented the Cronut, a cross between a croissant and a doughnut. Amazingly, it has quickly become the stuff of legends: the things, of which the patisserie can only produce 200 a day as the process is quite laborious, sells out by 8 in the morning and people are queuing from 6. Black market prices (!) are up to $80 a piece.

© Dominique Ansel (Cronut). © Jeff Glasse (Line)

Mr Ansel has applied for trademark registration for the name CRONUT, which has caused quite a few raised eyebrows. Clearly Mr Ansel is more than just a baker. He has struck gold and is thinking ahead by protecting the trade name. Unfortunately, outlook is that New York will see all sorts of knock-offs of the Cronut and all that is left will be the name. Already, Dunkin Donuts have tried a knock-off in South Korea.

As IP-advisors we always stress that there is no legal protection for concepts. But should that really be set in stone? Chefs can rely on trade secrets or copyright for protection but really this is not a satisfactory protection. Copyright protects mainly works of art and creativity. Yes, you can argue that a recipe is a work of art, albeit with a narrow protection but there is more to it than that. I think most will agree that a chef who develops his/her own recipes does invest a lot of skill and labour in it. Then one must also take into consideration the whole universe surrounding this: television shows, books, appearances in shows, cookery lines etc. One can easily argue that such things have become so important both culturally and for society economics that this can be a thing that society should have an obvious interest in protecting through IPR. Here, copyright is just too cumbersome and inflexible. As for Mr Ansel from Manhattan, would it not be fair to let him reap the fruits of his ingenuity – as any inventor? And reward him for the flurry of activity and increase in turnover he has caused in the world of baked-goods?

Things change around us, and some things require mentalities and perspectives to change. Does current IPR reflect current society and how creativity is manifested and commercially exploited? Do we not have a need for protecting things like Dominique Ansel’s Cronut?

Personally, I think IPR should be alive, evolving and above-all reflecting the balance between society’s need for protecting incentive and inventors’/creators’/businesses’ need for protection.  Therefore we should not refrain from discussing these matters, nor accept that things seem to be set in stone.

Cookyright? Even Cookieright? Bring it on, I say!

Thorbjørn Swanstrøm, Trademark and Design Attorney, Attorney at Law, Partner

I have seen it on TV… so it must be true

Once upon a time most of us believed that everything seen or told on television was true … and still news and programs from the national television stations in Denmark are perceived as trustworthy sources. The credibility is actually so important that others try to exploit it.

Many of you may have seen the Danish television documentary program “KONTANT”. In May 2013 this program showed how easy it is to be tricked – you believe that you take part in a free competition, but actually you commit yourself to a subscription for products such as weight loss pills etc. The aim of the program was to warn people against these kinds of tricks and subscriptions which are sometimes extremely difficult to get out of.

One of the tricks used by the sales companies is to write “As seen on TV2” or “As seen on DR1” showing the logos of these two Danish television stations. The intention is to make the products more trustworthy. Typically, the products have not been shown on these television stations, nor have the owners of the logos given their consent to the use of the logos according to “KONTANT”. To such extent the use of the logos – or trademarks, actually – may be an infringement.

The Danish trademark law and the EU legislation are very specific at this point. The main rule is that a trademark may only be used by the owner or someone who has a consent to the use of the trademark. However, other parties’ trademarks may be used, if necessary, to inform possible buyers that a certain product fits with another product. This rule is often used in connection with spare parts, but recently it has also been applied in connection with for example accessories for mobile phones, tablets etc.

In my opinion, using the trademarks as described above, is an infringement of other parties’ trademarks provided that no consent is given. The interesting thing is that this is still a rather new variation of infringement and that this is attractive due to the original intention, namely recognition of the trademarks used. Trademarks are valuable assets and owners thereof must take care that this value is kept on their own hands. 

Henriette Vængesgaard Rasch, Attorney at Law 

Playing with Trademarks – Watch Out

If you ask us, we will say that you shall register your trademark as you use it and use your trademark as you have registered it. However, as times goes by you may prefer to play a little with your trademark and to make minor changes without filing a new application. You may for example prefer to delete the vowels or to use the trademark as a verb. From a marketing perspective this may be a good idea. It provides attention to the trademark and hopefully the trademark is top of mind in your market segment.

From a legal perspective, the idea may not be so brilliant. What is the risk? Well, first of all you may risk having no protection for the trademark you spent money on marketing. In most countries, someone else may therefore register “your” trademark without vowels or the other changes as soon as you have spent money on marketing and leaving you with limited chances to stop this – simply because you have no trademark rights to the trademark you have used. The assumption most certainly is that this was not the intention.

Another problem may be that the use-requirement may not be proven fulfilled if you have not used the trademark as it is registered. Case law differs on this point and some authorities accept use of a trademark in a form slightly different from the registered trademark, but most authorities are very strict when evaluating whether the use requirement is fulfilled. In other words, your registered trademark may be vulnerable. The safe side is to use the trademark as registered. If you wish to use the trademark for example without vowels, the recommendation is to register this as a new trademark.  

A variation is to bend the trademark. This often happens when consumers have no other obvious (enough) word for an action. An example is “to google” something. GOOGLE is a trademark and should not be bend when used. Most trademark owners put a lot of effort in finding other words for the relevant actions and to make people use this instead. The reason is that the trademark will risk dilution if used as a verb and of course there is only little mercy if the owners themselves use the trademark as a verb.

Playing with a trademark requires that the trademark has a very strong position and that it is done only to a limited extent and next to normal use. So, dear reader, if you wish to play with your trademark, you must be very aware of the risks. Our advice is to register the trademark as you wish to use it and use the trademark as registered.

Henriette V. Rasch, Attorney at Law, Partner

Excitement in the IP world: Will Danish courts make counterfeit goods more illegal?

I recently wrote about a pending court case regarding an imported counterfeit Rolex watch. The importer, a private person, was well aware that the watch was counterfeit and the import was for private use. Customs ceased the watch and the Maritime- and Commercial Court (High Court) took the novel stand that the watch was barred from release as it would have infringed the rights of Rolex, had it been manufactured in Denmark.

In Danish IP legislation an infringement only exists in the commercial sphere. It is permissible for private people to own counterfeits and even personally import these. Whether a private person may import for personal use via shipment is still not quite settled in law. Therefore, the court’s expanded interpretation of the Customs Regulation is indeed noteworthy. Is the court really taking us to a new and exciting level?

Happily for legal practitioners the decision was appealed to the Supreme Court. Danish courts are traditionally (too?) reluctant in asking the European Court of Justice (ECJ) preliminary questions on the interpretation of EU-legislation. In this matter the Supreme Court has recently decided to ask the ECJ. We can therefore expect an answer from the ECJ at the end of 2013.

If the ECJ confirms the Maritime- and Commercial Court’s interpretation this will mean a significant strengthening of brand owners’ rights and a parting from long-established legal interpretation on this field. It may even mean a need to revise Danish national legislation.

I will also take the opportunity to crudely bang my own drum and refer to my blog post about fake goods in transit. Although not identical this was about related questions. In the two ECJ cases referred (Philips and Nokia) the ECJ answered questions on whether or not fake goods in transit could be ceased and destroyed. A part of these cases was the lack of detailed labeling or uncertainty as to the final destination of the goods. In this Danish matter regarding Rolex there is no question about the final destination of the fake watch. Therefore, we must expect the ECJ to rule on the question on whether or not commercially produced fake goods can be ceased and destroyed when (legally?) imported for strict private use.

Thorbjørn Swanstrøm, Attorney at Law