CASE LAW
- Prior unregistered rights can be used against a trade mark registration
- The importance of a clear chain of entitlement to patent priority
- Interpretation of patent claims
- easyHotel trade mark survives further challenge
- Bad faith trade mark registrations
- Innocence is no defence for trade mark infringement
- Employee compensation for a patent of outstanding value
- Successful petition for review at the European Patent Office
Prior unregistered rights can be used against a trade mark registration
In the case of Last Minute Tours Spa v Last Minute Networks, Last Minute Networks sought to rely on its UK unregistered rights to invalidate a Community trade mark (CTM) registration.
Last Minute Tours had looked to register marks containing the words “Last Minute Tours”. These were opposed by Last Minute Networks on the basis of its own rights, under UK passing off laws, in the sign “lastminute.com”. The action was initially rejected by the Community Trade Mark Office (OHIM) on the basis that there was a lack of confusion between the marks. However, on appeal, this decision was annulled by the European Court of First Instance (CFI) and the CTM registration was cancelled.
The CFI found that the OHIM Board of Appeal had examined the mark and earlier sign side-by-side for an aural, visual and conceptual comparison, which would be the expected approach for assessing an infringement action. However, under passing off, the relevant criteria are goodwill, misrepresentation and damage; these factors had not been considered.
Additionally, instead of looking at the relevant public of the earlier user’s customers, as should be done under the law of passing off, OHIM had looked at the average consumers of the goods and services for the trade mark registration.
The OHIM Board of Appeal was also found to have erred in its judgement that the term “last minute” was generic and devoid of distinctive character, which had led to the conclusion that no-one could expect to be granted a monopoly in this term.
Under the law of passing off, a sign that is devoid of distinctive character may still have acquired a reputation.
Ultimately, even though the sign was unregistered, it was found to have acquired
earlier national rights, under the UK law of passing off, that were able to cancel the
CTM.
OHIM had clearly struggled with implementing national laws it was unfamiliar with,
but this case has now paved the way forward for the use of national prior rights,
including passing off rights, against registered CTM rights.
Rosalyn Newsome and Rosanne Jenkins
The importance of a clear chain of entitlement
to patent priority
In the case of Edwards Lifesciences AG v Cook Biotech Incorporated the UK High
Court addressed the issues of loss of priority due to an incomplete assignment, as
well as the credibility of expert witnesses. This case highlights the importance of
ensuring a correct chain of title when filing a patent application.
Cook was the proprietor of a European patent which related to an artificial heart
valve, which Edwards had applied to have revoked in the UK. During the case the
Court considered whether Cook’s patent was entitled to its priority date. The
patent derived from a PCT patent application that was filed in the name of Cook as
applicant. However, it claimed priority from a US patent application that was in the
name of the three inventors. One of the inventors was an employee of Cook and
his rights in the invention were automatically assigned to Cook via his contract of
employment. However, the rights of the other two inventors were assigned to Cook
by an assignment document dated after the filing date of the PCT application. The
Court held that the priority claim was invalid because at the date of filing of the PCT
application the right to claim priority belonged jointly to Cook and the two nonemployee
inventors, and not to Cook alone.
Since Cook’s patent was not entitled to its priority date, a document published
between the priority and filing dates was citable as prior art. The Court held that
several claims of the patent were obvious in light of this document.
A question was also raised regarding the credibility of an expert witness and
specifically whether an expert changing his opinion undermined his value as an
expert. One expert witness appearing in the case had also appeared as an expert in an earlier decision of the UK High Court involving Edwards and another party. It was noted that the opinions of the expert differed in material respects between the
two cases. However, the Court decided that opinions may change during the course
of a case, particularly after cross examination and further consideration as to the
abilities of the ordinary skilled person. The expert’s opinions were found to be“cogent and reasonable” rather than partisan.
Interpretation of patent claims
The recent case of Ancon Limited v ACS Stainless Steel Fixings Limited has
highlighted the UK Court of Appeal’s attitude towards interpretation of patent
claims. Claim interpretation is of particular importance because the interpretation
adopted by a court can be pivotal in determining whether a patent is held infringed
and/or invalid.
The patent at issue related to channel assemblies used in the construction industry
to fix components to a building. In the initial decision, the High Court held that
ACS’s assembly did not infringe Ancon’s patent. However, on appeal by Ancon, the
Court of Appeal held that the High Court had interpreted the claimed feature“generally elliptical cone shape” too narrowly and so was wrong to find noninfringement
by ACS. The Court of Appeal held that the claimed feature should in
fact be interpreted more broadly as “any rounded non-circular form”. The ACS
assembly fell within this broader interpretation and so the ACS device was held to
infringe Ancon’s patent.
In its reasoning the Court of Appeal emphasised that it had come to its conclusion
by using the claim construction test established by the UK House of Lords, in which
the court determines what the person skilled in the art would have understood the
patentee to have used the language of the claim to mean.
Following the EPC2000 law changes that came into effect in December 2007,
European patent law now requires that “due account” should be taken of any
element that is equivalent to an element specified in the claims but which the claim
language does not literally cover. However, the Court of Appeal indicated that it did
not rely on any rule of equivalents in coming to its decision and indeed suggested
that the new language used in EPC2000 was not intended to change the law on this
subject.
This decision is a clear signal that the Court of Appeal does not favour use of
equivalents in interpreting claims, and emphasises the importance of careful
drafting of the entire patent specification, since before a UK court it might not be
possible to successfully rely on a doctrine of equivalents in a potential case of patent
infringement.
easyHotel trade mark survives further challenge
In the case of Commercy AG v OHIM, easyGroup IP Licensing Ltd, the European
Court of First Instance (CFI) considered whether easyGroup’s mark “easyHotel”
should be cancelled on the basis of Commercy’s earlier German registration for the
trade mark “EASYHOTEL”.
The cancellation action before the Community Trade Mark Office (OHIM) had been rejected, and in the appeal to the CFI this decision was upheld. The CFI ruled that the respective goods and services of the “easyHotel” mark and the earlier right were not to identical or similar.
In particular, the nature, intended purpose and method of use of the goods and
services differed, because Commercy’s goods and services were intended for businesses whilst easyGroup’s services were intended for the general public. It was
also noted that the goods and services were not in competition with each other, nor
were they complimentary, as Commercy’s goods and services related to the actual
computer software required for on-line reservation and booking services, whereas
easyGroup’s services related to the provision of its own reservation and booking
services on-line. Further, all on-line services inevitably require the support of
computer software to function and therefore this similarity was not sufficient to
detract from the differences between the goods and services.
This case therefore acts as a reminder that an identical earlier registration does not
guarantee a complete monopoly right in the mark, even if the marks are registered
for goods and services that have some similarities. Therefore it is important that
consideration is given to the classes of goods and services in which a mark is
registered and used.
Rosalyn Newsome and Rosanne Jenkins
Bad faith trade mark registrations
In 2000, Chocoladefabriken Lindt & Sprügli AG applied for a Community trade mark (CTM) for a 3D mark for the shape of its chocolate bunny as shown below; this was registered on 6 July 2001. Lindt had been producing such chocolate bunnies since the early 1950s. Another company, Franz Hauswirth GmbH had been producing its own style chocolate bunnies, also shown below, since the early 1960s.
Lindt proceeded to bring trade mark infringement proceedings in Austria against Hauswirth to stop manufacture of its bunny. Hauswirth counterclaimed for invalidity of Lindt’s 3D CTM on the grounds that Lindt was acting in bad faith when it applied for the CTM. Hauswirth claimed that Lindt knew that many other manufacturers in the EU were making similar chocolate bunnies and stated that Lindt had only applied for registration of a 3D CTM in order to prevent competitors from making these products. Indeed, after the grant of its CTM Lindt actively took steps to pursue Hauswirth and the other chocolate bunny manufacturers.
After decisions by the lower courts in Austria, an appeal was filed to the Austrian Supreme Court. This court decided that a reference should be made to the European Court of Justice (ECJ) for a definitive EU ruling on the criteria that should be taken into consideration when assessing if a trade mark application has been filed in bad faith.
The ECJ has ruled that when determining whether a trade mark applicant is acting in bad faith when applying to register a Community trade mark the national court must take into consideration all the relevant factors specific to the particular case which pertained at the time of filing the application for registration. In particular, consideration must be given to:
- whether the applicant knows, or must know, that a third party is using, in at least one EU country, an identical or similar sign for an identical or similar product capable of being confused with the sign for which registration is sought
- whether the applicant has the intention to prevent that third party from
continuing to use such a sign - the respective degrees of legal protection that are enjoyed by the third party’s
sign and by the sign for which registration is sought.
The above guidance must now be applied by the Austrian Supreme Court to the facts of this particular case. We will therefore await a ruling in this matter to see how the ECJ decision is put into practice.
Karen Hensman
Innocence is no defence for trade mark infringement
In the case of Essex Trading Standards v Wallati Singh the UK High Court considered an appeal from a decision of the Magistrates’ Court that had found a market stall holder, Mr Singh, not guilty of trade mark infringement.
Mr Singh had been found to have in his possession 392 pairs of trainers bearing the NIKE name or logo and fifteen pairs of trainers bearing the BAPE sign or logo, all of which were counterfeit goods. In the original trial the defence was based on the fact that the defendant had no previous convictions and that he was merely minding a market stall belonging to a friend, whom he had asked about the legitimacy of the goods in question. Mr Singh had been told that the goods were genuine but were clearance stock, hence the cheap price. It was noted that Mr Singh was in the business of selling ladies’ fashion shoes and hence was not in a position to determine the provenance of the sports shoes.
However, the High Court overturned the not guilty verdict. Based on existing case law, Mr Singh had to be treated as being aware of the existence of the registered trade marks in question; this meant that the burden of proof was on Mr Singh to show that he believed, on objectively reasonable grounds, that the goods were genuine. The High Court found that Mr Singh had failed to discharge this burden of proof as he did not go far enough to ascertain for himself whether the goods were genuine. Mr Singh failed to seek any independent evidence, such as documentation relating to the goods’ supply or provenance.
In conclusion, when considering commercial dealings with potentially counterfeit branded goods it is not sufficient to act honestly or in good faith; reasonable steps should be taken to come to an objective conclusion that the goods are genuine. Therefore ignorance, voluntary or otherwise, is no defence to trade mark infringement.
Employee compensation for a patent of outstanding value
In the first successful action of its kind in the UK, in Kelly & Chiu v GE Healthcare Ltd, two inventors have been awarded compensation totalling £1.5 million as a result of the outstanding commercial benefit to their employer of its patents for a radiopharmaceutical heart-imaging agent.
UK law was amended in 2005 in an attempt to make compensation easier to obtain for employee-inventors, with the current legal test being that the invention, or the patent for it, or a combination of both, must be of outstanding benefit to the employer. However, this case was decided under the law prior to the 2005 amendment, under which the patent itself had to be shown to be of outstanding benefit to the employer.
In assessing the benefit of the patent, the position of the employer if the patent had not been granted was compared with the employer’s position with the benefit of the patent. Finding that the patents had “transformed” the company, the court had no difficulty in recognising that the patents were of outstanding benefit to the employer, and that an award was just.
In determining the “fair share” of the benefit of the patent to be awarded to the
employee-inventors, the court found that the claimants’ thought and creativity, and the relatively low R&D costs of the imaging agent, weighed in their favour. In the employer’s favour were the opportunities it provided to the employees to make inventions, its marketing, and its taking of the risk involved in the project. It was ultimately decided that 3% of the benefit, equating to £1.5 million, represented a just and fair award to the claimants.
A detailed article is available -please contact us or download directly from our website
Successful petition for review at the European Patent Office
Since the new European patent law of EPC2000 came into force in December 2007, it has been possible for parties adversely affected by a decision of the Board of Appeal to refer the case to the Enlarged Board of Appeal (EBA) for review. Previously, decisions from the Boards of Appeal were entirely final and non contestable.
However, the circumstances under which a petition for review to the EBA can be allowed are restrictive. Generally, the reasons allowed relate to: the Board of Appeal including a person who should not have been on the Board; a fundamental procedural defect occurring during the appeal proceedings; or a criminal act having occurred that may have had an impact on the decision.
Therefore whilst there have been a number of petitions for review filed, with an
average of about one case a month being submitted, it has taken some time before a successful case has been concluded.
In the case R7/09 the patent in question had been opposed, but the Opposition
Division rejected the opposition. The opponent appealed, and subsequently the
Board of Appeal decided that the patent would be revoked. However, the patentee requested review of this decision by the EBA, on the basis that the decision was taken without it having had the right to comment, which is a fundamental procedural violation.
Essentially, the patentee should have been provided with the opportunity to
comment on the opponent’s grounds of appeal before a final decision was taken. However, although the Board of Appeal did generate a letter inviting the patentee’s comments, the patentee’s representative did not receive this and the Board of Appeal could not provide any record of dispatch for that letter. In the absence of any evidence to the contrary, it had to be concluded that the patentee had not been notified of the grounds of appeal and invited to comment before the Board of Appeal took its final decision in favour of the opponent.
Accordingly, it was clear that a fundamental procedural violation had occurred and the Board of Appeal decision has been set aside by the EBA. The case has now been remitted to the Board of Appeal for the correct procedures to be followed, such that the patentee has the opportunity to comment before a final decision is taken.
It is therefore good news for users of the European patent system that the new
review system has been shown to work when there has been a clear breach of the correct procedures during an appeal case.
Find news article by title: