December 2015

News & Press

Algeria and The Gambia: ACCESSION TO MADRID PROTOCOL

Algeria acceded to the Madrid Protocol on July 31, 2015. The Protocol entered into force with respect to Algeria on October 31, 2015. As Algeria was the last remaining Contracting Party of the Madrid Union to be a member of the Madrid Agreement only, the Protocol is now in force in every Contracting Party of the Madrid Union, which allows for a merging of the two agreements. Therefore, there is now just one agreement governing the international registration of trademarks, and a single application form may be used for all Madrid System applications.

The Gambia acceded to the Madrid Protocol on September 18, 2015. With respect to The Gambia, the Protocol will enter into force on December 18, 2015. The Republic of The Gambia has notified the Director General of WIPO that an ex officio provisional refusal notified to the International Bureau by the Office of The Gambia is not open to review before that Office. Therefore, any such notification shall be deemed to include the confirmation of the said refusal, and may only be contested before an authority external to the Office.

- KL

Canada: VOLUNTARY CLASSIFICATION ALLOWED

As of September 28, 2015, the Canadian Trademarks Office now allows goods and services in trademark applications to be voluntarily classified. The adoption of a classification system is part of the significant revisions to Canadian trademark law made to adhere to the Nice, Singapore, and Madrid agreements. Classification is not expected to have any impact on the analysis of confusion, but could affect whether a search of the Canadian Trademarks Office database reveals a particular application or registration.

- KL

European Union: ECJ CLARIFIES STANDARDS FOR DETERMINING REGISTRABILITY OF THREE-DIMENSIONAL SHAPE MARKS

Société des Produits Nestlé SA v. Cadbury UK Ltd (Case C-215/14)

In a recent decision, the Court of Justice of the European Union answered three questions concerning the registrability of three-dimensional shape marks, referred by the UK High Court in connection with a case involving Société des Produits Nestlé SA’s (“Nestle”) UK application to register its three-dimensional mark, namely, the shape of its KIT KAT chocolate wafer bar. The questions were:

  1. Whether it is sufficient to establish that a trademark has acquired distinctiveness by showing that a portion of the relevant consumer class recognizes the trademark and associates it with the applicant’s goods or whether the applicant must instead prove that the portion of the relevant consumer class rely upon the trademark alone—and not any other marks that may be present—as indicating the origin of the goods;
  2. Whether an application can only be refused if all of its essential elements consist of features of a shape necessary to obtain technical results (as Nestle asserts) or whether such an application could be refused if one element results from the nature of the goods and the other two elements are necessary to obtain a technical result (as asserted by Cadbury); and
  3. Whether Article 3(1)(e)(ii), which precludes registration of a mark that consists of a shape necessary to obtain a technical result, applies only with respect to the function of the goods or also applies to the manner in which the goods are manufactured.

We reported the factual and procedural background to this case and the recommendation of the Advocate General for the Court of Justice of the European Union in September 2015. See September 2015 Newsletter

On June 26, 2015, Nestle applied to reopen the oral part of the procedure, which had been closed following the Advocate General’s opinion, arguing that the Advocate General did not adequately answer the first question. Nestle also asserted that the Adequate General’s opinion was based on a misinterpretation of Nestle’s written observations. The ECJ dismissed Nestle’s motion to reopen the proceedings and delivered its decision on September 16, 2015.

For our readers’ ease of reference, the relevant statutory law is set forth below:

Relevant Statutory Law: Article 3 of the EU Trade Marks Directive reads as follows:

  1. The following shall not be registered or, if registered, shall be liable to be declared invalid:

(b) trade-marks which are devoid of any distinctive character;

(e) signs which consist exclusively of:

i) the shape which results from the nature of the goods themselves,

ii) the shape of goods which is necessary to obtain a technical result,

iii) the shape which gives substantial value to the goods.

3. A trade mark shall not be refused registration or be declared invalid in accordance with paragraph 1(b), (c) or (d) if, before the date of application for registration and following the use which has been made of it, it has acquired a distinctive character. Any Member State may in addition provide that this provision shall also apply where the distinctive character was acquired after the date of application for registration or after the date of registration.

ECJ’s decision and comments:

(a) The ECJ addressed the second question first, namely whether Article 3(1)(e)(i) precludes registration of a shape as a trademark when that shape consists of three essential features, one resulting from the nature of the goods themselves and the other two being necessary to obtain a technical result. It concluded that Article 3(1)(e) must be interpreted as precluding registration of such a shape, provided that at least one of the grounds of refusal is fully applicable to the shape at issue.

This decision is largely in line with the Advocate General’s opinion, which agreed with Cadbury and found that if any one of the criteria listed in Article 3(1)(e) is satisfied, a sign cannot be registered as a trademark. The fact that the sign could be refused on a number of grounds is irrelevant so long as any one of the grounds fully applies to the sign, because each of the grounds mentioned in Article 3(1)(e) is meant to prevent grant of a monopoly on features connected in different ways to the shape of the goods themselves.

It will be interesting to see how this standard is applied to the facts of the case, as it is not clear that any of the sections of Article 3(1)(e) “fully apply” to the shape at issue. Rather, the UK Examiner found that the first essential feature (the basic rectangular slab shape) results from the nature of the Chocolate Wafer Bars themselves, whereas the other two essential elements-the presence, position, and depth of the grooves and number of such grooves—are necessary to obtain a technical result.

(b) The ECJ then addressed the third question, determining that the provision in Article 3(1)(e)(ii), which precludes registration of signs consisting exclusively of the shape of goods necessary to obtain a technical result, refers only to the manner in which the goods at issue function and not to the manner in which the goods are manufactured. This conclusion, explained the ECJ, is consistent with the rationale of Article 3(1)(e) to avoid granting an applicant a monopoly on technical solutions or functional characteristics of a product that a user is likely to see in the products of competitors, so that competitors are not prevented from freely offering products incorporating such technical solutions or functional characteristics in competition with the trademark applicant.

This decision departs from the Advocate General’s opinion, which had found the provision to apply to both the function of the goods and the manufacturing process, noting that the presence of grooves in the Chocolate Wafer Bar gives the product its shape, which is necessary to achieve the desired technical result of allowing consumers to easily separate the wafer fingers. Notably, the Advocate General also explained that the UK examiner found that the angles of the grooves are determined by a specific chocolate mold used during the manufacture of the product, which, according to the subject ECJ decision, is no longer a valid basis for applying Article 3(1)(e)(ii).

(The ECJ’s decision also departs from the decision by the Singapore High Court reported in our March 2015 Newsletter Article that found that a similar Singapore Law provision would apply to both the manufacturing process, as well as the way the goods function for the end user.)

(c) Finally, the ECJ answered the UK High Court’s first question and clarified that the standard required to show acquired distinctiveness is whether, as a consequence of use (and regardless of whether the sign is used alone or as part of another registered trade mark) “the relevant class of persons perceives the goods or services designated exclusively by the mark applied for, as opposed to any other mark which might also be present, as originating from a particular company.” ¶ 67.

In answering this question, the ECJ did not adopt the language of either of the standards set out by the UK High Court in the question it posed (i.e., whether consumers recognize and associate a mark as originating from a particular source versus whether a significant portion of consumers rely upon the trademark alone as indicating the origin of goods), and the ECJ’s opinion can be read as establishing a somewhat softer standard for showing acquired distinctiveness by declining to require consumer’s reliance on a sign as indicating the origin of the goods.

We now await the UK High Court’s application of the EJC’s rulings to the facts of the case and will report further developments.

- CCW

European Union: CHRISTIAN LOUBOUTIN’S “RED SOLE MARK” OVERCOMES CHALLENGES

Roland SE v. Office for Harmonisation in the Internal Market (OHIM) (Case T-631/14, July16, 2015)

Christian Louboutin’s (“Louboutin”) CTM trademark application for its signature red sole mark (shown below) has successfully overcome all of the oppositions that were blocking its path to registration. Louboutin had been battling Roland SE (“Roland’), a manufacturer and distributor of electronic musical instruments, since it opposed the application in 2011. On July 16, 2015, the Ninth Chamber of the General Court issued a decision affirming the rejection of Roland’s opposition, which was based on Roland’s prior 2007 CTM registration for MY SHOES & Device covering “footwear” among other goods in Class 25, and goods and services in Classes 18 and 35 (shown below).

Christian Louboutin
Christian Louboutin

Roland SE
Roland SE

Louboutin filed its CTM application for the red sole for “high-heeled shoes (except orthopaedic footwear)” in Class 25 in 2010. Although the application was initially rejected by the examiner on distinctiveness grounds, the refusal was overturned by the Second Board of Appeals on July 16, 2011. On publication, Roland opposed arguing likelihood of confusion. The opposition was rejected by the OHIM on June 21, 2013, and then again by the First Board of Appeals on May 28, 2014. Roland then appealed to the General Court.

Roland argued that Louboutin’s red sole mark is visually similar to its prior mark MY SHOES & Device, since both marks share the same dominant element, namely the color red. According to Roland, the color red is the dominant element of MY SHOES & Device because the word elements of the mark are descriptive and there are no other distinctive features. The court rejected this argument, finding that the color red is not the dominant element of Roland’s mark as it is only used in a portion of the mark (i.e. the box containing the word “shoes”), making it a decorative feature of secondary importance.

Roland also argued that Louboutin’s red sole mark was confusingly similar to its mark because if Roland were to apply its mark to the sole of a high-heeled shoe so that the red rectangle containing the word SHOES is on the arch of the shoe, the shoe would essentially look like it has a red sole. The court declined to compare the marks in this manner and stated that they must be compared in the form in which they were applied for or registered.

Finally, Roland argued that the marks are conceptually similar, given that they both feature the color red and are associated with shoes. The court found that Roland failed to demonstrate that any particular concept is associated with the color red. Further, the word elements of Roland’s mark “MY SHOES” are descriptive, given that the mark is for “footwear,” and thus the reference to SHOES is insignificant.

Now that Louboutin has a CTM registration for its red sole mark, it will be easier for it to enforce the mark all over Europe. In the U.S., Louboutin’s infringement action against Yves Saint Laurent resulted in the limitation of its trademark to a red sole that contrasts with the color of the adjoining “upper” of a shoe. We now await how the European authorities interpret and enforce Louboutin’s rights in this non-traditional trademark.

- EMG

European Union: CHANGES TO THE COMMUNITY TRADE MARK (CTM) SYSTEM

The European Union Council and Commission, as well as the European Parliament, have agreed to the following proposals for changes to the CTM Directive and Regulations that are likely to take effect in 2016. These will be the first substantive reforms since the CTM system was introduced in 1996. Noteworthy changes include:

  • The Office for Harmonisation in the Internal Market (“OHIM”) will be renamed the European Union Intellectual Property Office; the CTM will be renamed the European Union Trade Mark; and the Community Trade Mark Court in each Member State will be renamed the European Union Trade Mark Court;
  • The current application fees covering up to three classes will be replaced by a system allowing for fees to be assessed for the first class, with additional fees for additional classes;
  • Application fees will be due on filing, instead of the current option of payment within one month of the application being lodged;
  • The requirement that marks in CTM applications must be “represented graphically” will be removed in favor of a requirement that such marks merely be “capable of being represented in a manner which enables the competent authorities, and the public, to determine the precise subject of the protected afforded;”
  • Certification marks will probably be introduced; and
  • “Bad faith” will be introduced as a Ground of Opposition where the Opponent has an earlier trademark right outside the EU.

- KL

Poland: EXTENSIVE CHANGES TO TRADEMARK LAW

Two long-awaited amendments to the Industrial Property Law of June 30, 2000 will come into force in 2015 and 2016 respectively.

The first bill to amend the Law comes into effect on December 1, 2015. Significant changes include:

  • Acceptance of letters of consent by the Patent Office, whereby owners of earlier rights may agree to registration of later identical or similar trademarks that would otherwise by refused;
  • Allowance of owners’ requests to divide applications and registrations during opposition or cancellation proceedings, while retaining a priority date; and
  • Lifting of the ban on using POLSKA, POLAND or abbreviations thereof, and Polish city and town names as part of a trademark.

The second bill to amend the Law enters into force on April 15, 2016. Salient changes include:

  • Removal of relative grounds as a basis to refuse registration;
  • Filing of oppositions within 3 months of publication, with the Patent Office informing applicants about possible conflicting trademarks (but not informing owners of prior trademarks about a new application);
  • Removal of the requirement to prove legal interest to file a trademark invalidation action based on absolute grounds, or a trademark revocation action based on non-use.

- KL

South Korea: TITLES OF MUSICAL PRODUCTIONS PROTECTABLE AS SOURCE IDENTIFIERS WHEN THEY HAVE ACQUIRED DISTINCTIVENESS

Seol and Company v. Yu-Jung, Korean Supreme Court (Case No. 2012Da13507, January 29, 2015)

Until recently, titles of musical productions, along with titles of books and musical albums, were not protectable as trademarks under governing Korean practice (unless such titles were used for a series of works). However, a recent case from the Korean Supreme Court (Case No. 2012Da13507, January 29, 2015) has changed the landscape for titles of musical productions, holding that such titles may be protected as source identifiers under the Unfair Competition Prevention and Trade Secret Protection Act (“UCPA”).

The production company Seol and Company (“Seol”) stages performances of Andrew Lloyd Webber’s famous musical “CATS.” In October 2010, they brought an action before Seoul Central District Court under Article 2(1)(ii) of the UCPA seeking to enjoin Yu-Jung, a representative of Mudad, a drama company, from staging a musical called “CHILDREN’S CATS.” Article 2(1)(ii) prohibits acts likely to cause confusion with a third party’s business facilities or activities, and requires evidence that (a) the asserted mark is well-known as a source identifier in Korea; (b) the cited mark is identical or similar to the asserted mark; and (c) there exists a likelihood of confusion given the similarity between the respective marks.

A decision was reached in Seol’s favor in the first instance; however, on appeal, the Seoul High Court reversed and held that in order for the title “CATS” to act as a source identifier, merely conveying the content of the musical is not enough. Rather, the musical title needed to be used specifically in relation to Seol’s business, and that factor was not met.

Recently, the Supreme Court reversed the High Court’s decision and held that in view of the facts at hand, the title “CATS” functioned as a source identifier for the plaintiff. The Supreme Court highlighted the fact that since 2003, Seol has staged numerous productions of the musical under a license, spent significant sums in advertising the production, and the production has been seen by a wide audience. As such, “CATS” had become distinctive and associated with Seol, and therefore functioned as a source identifier. The Supreme Court noted, however, that generally the title of a copyrighted musical production simply serves to convey the content of the musical, which is not sufficient on its own to receive trademark protection.

The Supreme Court remanded the case to the High Court, which found in favor of Seol. The defendant, Yu-Jung, subsequently appealed and the matter remains pending.

- MS

Thailand: AMENDMENTS TO THAILAND’S COPYRIGHT ACT CREATE PUNITIVE DAMAGES, EXHAUSTION, AND OTHER RIGHTS AND REMEDIES

Thailand’s Copyright Act of 1994 has recently been amended by two acts, resulting in a number of significant changes and additions to the original Copyright Act, as summarized below:

1. Protection against Tampering with Rights Management Information (“RMI”)

To make Thailand’s Copyright Act consistent with the WIPO Copyright Treaty—of which Thailand is not yet a contracting state—the Copyright Act now defines RMI as “information which identifies the author of a work, the work itself, a performer, a performance, a copyright owner, the duration and conditions of use of a work enjoying copyright as well as any numbers or codes that represent such information when any of these items of information is attached to or appears in connection with the work enjoying copyright or a recording of the performance.”

Under the amended law, the deletion or alteration of any RMI with knowledge that such act may induce, cause, accommodate, or conceal an act of infringement of copyright or of a performer’s rights is deemed an act of RMI infringement, which is a criminal offense punishable with a fine ranging from THB 10,000 to THB 100,000 (about US $275 to US $2,750). The law also provides that importing or communicating to the public a work in which RMI has been deleted or altered is an infringing act, if done with knowledge that the RMI has been deleted or altered.

2. Protection against Circumvention of Technological Measures

Also to bring Thailand’s Copyright Act into conformity with the WIPO Copyright Treaty, the amended Copyright Act provides that the circumvention of technological measures, or the provision of services for such purpose with knowledge that the provision of services may induce or cause infringement of copyright or of a performer’s rights, is deemed an infringing act. The law defines technological measures as “any technology designed to prevent reproduction of or restrict the access to a work enjoying copyright or a performance recording; such technology must have been effectively used on the work enjoying copyright or the performance recording.” The circumvention of technological measures is a criminal offense punishable with a fine ranging from THB 10,000 to THB 100,000 (about US $275 to US $2,750). The law acknowledges, however, that deleting “cookies” from one’s own computer does not constitute circumvention of technological measures.

3. Internet Service Provider (ISP) Liability

The amended Copyright Act provides that ISPs can be ordered by the Intellectual Property and International Trade Court (“IP & IT Court”) to remove infringing content from their systems. If the copyright owner has credible evidence that an ISP’s computer system contains infringing content, the owner may petition the IP & IT Court for an injunction. The petition must describe, among other things, the damage that may be caused by the infringement, and must contain a request for a court order for the ISP to remove the infringing content from the ISP’s system or to stop the infringing act by other means. If the IP & IT Court is persuaded to issue an injunction, it will take immediate effect, following which, the copyright owner must take legal action against the alleged infringer without delay. If the ISP complies with the injunction, it will not be held responsible for any damage caused by such compliance.

4. Exhaustion of Rights

The amended Copyright Act provides for the “first sale doctrine.” Prior to the amendments, the Act stated that selling a copyrighted work was considered an act of communicating the work to the public and could only be done with the copyright holder’s permission. Under the amendments, however, the sale of a legally acquired copyrighted work is explicitly recognized as legal: “The sale of an original work enjoying copyright or copy thereof by the party who has legally acquired such work or copy thereof shall not be deemed copyright infringement.”

5. Temporary Copying Is Fair Use

Prior to the amendments, it was unclear whether Random Access Memory (“RAM”) copying was fair use. This term refers to a computer automatically but temporarily copying installed programs and other materials to the computer’s RAM during, for example, the buffering process. The amended Copyright Act now clearly states that RAM copying is legal: “Acts conducted [upon] a work enjoying copyright lawfully created by or acquired through a computer system which are in the form of reproduction necessary for the use of a copy of the work in order to enable the equipment used in the computer system or the process for transmission of a work enjoying copyright via the computer system to work properly shall not be deemed copyright infringement.”

6. Moral Rights

Under the amendments, performers also have moral rights. Previously, only authors of copyrighted works had moral rights. The amended Copyright Act states, “A performer shall have the rights to present himself as the performer of his performance and to prohibit an assignee or any other person from distorting, mutilating, adapting or otherwise acting on such performance to the prejudice of the performer’s reputation or honor.”

7. Punitive Damages

Prior to the amendments, Thailand did not provide for punitive damages in the context of copyright or any other intellectual property right. Now, the law provides that in a case where there is clear evidence that the infringement of copyright or of a performer’s rights has been committed deliberately or with the intention of causing the copyrighted work or the performer’s rights to be widely accessible to the public, the IP & IT Court may order the infringer to pay up to twice the amount of actual damages awarded to the plaintiff.

8. Confiscation of Infringing Materials

Prior to the amendments, the Copyright Act provided that all infringing items would be handed over to the copyright owner or performer. The amended law now provides that such items must be confiscated, and the IP & IT Court may order their destruction at the infringer’s cost.

9. Unauthorized Recordings in Movie Theaters Are Not Fair Use

The new law is designed to deter the following scenario: Previously, several pirates would each enter a movie theater to record certain segments of a film. The segments would then be merged together to form a bootlegged version of the entire film, which would be sold to consumers for the pirates’ financial gain. The pirates operated in this manner so that, if caught, each of them could claim that he recorded the film segment only for personal use and that his act should therefore be considered fair use under Section 32(2) of the Copyright Act. The revised Act now states, “The reproduction by recording the sound or pictures or both of a cinematographic work copyrighted under this Act in a cinema theater as defined by the Act on Motion Picture and Videos, whether in whole or in part, without a license under Section 15(5), during its showing in a cinema theater shall be deemed copyright infringement. Section 32, Paragraph Two (2) shall not be applied under such circumstances.”

10. Reproduction for the Disabled Is Fair Use

A new section has been added to the Copyright Act to provide that the not-for-profit reproduction or adaptation of a copyrighted work for the benefit of the disabled who are not otherwise capable of accessing such works due to visual, hearing, intellectual, learning, or other types of impairment is deemed fair use.

- RNB