News in brief

The Federal Court of implemented informally by the in bad faith (Lindt Bunny Case IBM, as well as head of the IP law Australia has dismissed Mars court in the context of IP (Case C-529/07, June 11 2009)). team. Practitioners and mark Australia Pty Ltd’s claims of litigation. Overall, the court’s The dispute centred on the use by owners are generally in favour of passing off, misleading conduct objective is to facilitate, where two competing confectionery the appointment, noting that and trademark infringement possible, the scheduling of trials companies of a chocolate rabbit Kappos has the experience and against Sweet Rewards Pty Ltd to commence within two years shape. The European court did credibility needed for the role. (Mars Australia Pty Ltd v Sweet of the start of the proceeding. not provide exhaustive guidance Google changed its keyword Rewards Pty Ltd ([2009] FCA 606, New rules for the Regulations on how bad faith can be proved. advertising policy for the United June 5 2009)). The decision on Customs Protection of IP However, it did clarify some States on June 15. Under the suggests that where a Rights came into force in China on aspects of the test, which will be new rules, certain third parties trademark has become very well July 1. The rules require IP rights of assistance to brand owners in will be permitted to use known among consumers, the owners to file a more detailed contesting ‘register squatters’ and trademark terms in sponsored likelihood of deception or form when making an application others who seek to misuse the ad text. The change came soon confusion will be reduced. for the recordal of their rights trademark system. after the search engine The Canadian Federal Court with Customs. Customs officials The White House has extended its policy of permitting has issued a practice direction are also vested with greater announced President Obama’s third-party use of trademark aimed at streamlining complex discretionary powers with regard intention to nominate David terms as keywords – but not in litigation. The practice direction to the monitoring of goods. Kappos as director of the United ad text – to 190 countries. formalizes and extends to all The ECJ has issued its first States Patent and Trademark Google has also been hit with a practice areas various initiatives ruling on what it means to file a Office. Kappos is vice president series of actions over keywords that have recently been Community trademark application and assistant general counsel at in the United States.

Erratum: On page 10 of Issue 19 of WTR adidas and eBay should have appeared as nominees in the North America Team of the Year category in place of Apple and Levi Strauss. ©iStockphoto.com/Andrey Prokhorov

6 World Trademark Review August/September 2009 www.WorldTrademarkReview.com The Uniform Doman Name Dispute Resolution Policy (UDRP) celebrates its 10th anniversary this year at a time when the entire domain name system is on the cusp of change. Now seems the perfect moment to The reflect on the achievements of the UDRP over the past 10 years and to assess the challenges that lie ahead for trademark owners as the Internet opens up to new generic top-level domains (gTLDs). In this two-part name special, domain name experts from Silverberg Goldman & Bikoff first provide a detailed analysis of landmark rulings issued under the UDRP since its creation; WTR’s Adam Smith then examines the latest controversy game surrounding the expansion of the gTLD space. www.WorldTrademarkReview.com August/September 2009 World Trademark Review 7 Feature By James L Bikoff, David K Heasley, Phillip V Marano and Michael T Delaney

On October 24 1999, less than a year after its inception, ICANN approved perhaps its most notable achievement to date – the Uniform Domain Name Dispute Resolution Policy (UDRP). All ICANN-accredited domain name registrars for top-level domain names (TLDs) such as ‘.com’, ‘.org’ and ‘.net’ are required to abide by the UDRP. All parties registering a domain name with these registrars must also agree to abide by the UDRP. This mandatory agreement between registrars and registrants contains the substantive and procedural rules for resolution of any trademark-based domain name dispute. In short, it provides trademark owners with a relatively inexpensive and expeditious method of cancelling or transferring domain names that are identical or confusingly similar to their own marks. With the 10th anniversary of the UDRP rapidly approaching, it is fitting that we examine its defining characteristics, as well as some notable decisions made under its auspices, to predict and prepare for future UDRP practice.

The basics Under the UDRP, trademark owners that believe a registered domain name infringes or dilutes their marks may file a complaint with one of four ICANN-approved dispute resolution service providers: • the World Intellectual Property Organization (WIPO); • the National Arbitration Forum (NAF); • the Asia Domain Name Dispute Resolution Centre; and • the Czech Arbitration Court.

A UDRP complaint must specify, among other things: • the domain names in dispute; • the registrar with whom the domain names are registered at the time the complaint is filed; • the name of the registrant; and The UDRP • adequate grounds for the complaint. As adequate grounds, a UDRP complainant bears the burden of establishing all the following three elements. The domain name is identical or confusingly similar to a turns 10 trademark in which the complainant has rights – Generally, a national trademark registration or well-established common law rights will prove that a complainant has rights to a trademark. However, the more challenging, fact-specific question is whether a A review of the UDRP’s defining characteristics and key domain name is identical or confusingly similar to a complainant’s decisions is in order as the policy prepares to celebrate mark. its 10th anniversary at a time of intense speculation The registrant has no rights or legitimate interests in the regarding the future direction of the Internet domain name – A registrant has no rights or legitimate interests in a domain name where: • no demonstrable preparations have been made to use the Since the inception of the Domain Name System in 1983, domain domain name in a bona fide offering of goods or services; names have generally been granted registration on a first come, first • the registrant is not commonly known by the domain name; or served basis. Not surprisingly, when the Internet was opened to • the registrant has not made a legitimate, non-commercial or fair commercial traffic, trademark disputes over domain names use of the domain name. proliferated. Cybersquatters or cyberpirates sought to hold well- known trademarks hostage in domain names by quickly registering The registrant has both registered and used the domain name the names, then extorting a significant profit from the rightful in bad faith – Bad-faith registration contemplates, “without owners or using the names to misdirect internet traffic to their own limitation”, the following primary motivations of a registrant: sites. In the mid to late 1990s, the unbridled growth of the Internet • intent to sell a domain name, at a profit, to a complainant had convinced all the major stakeholders that the existing method trademark owner; of administering the Domain Name System – at the time a • intent to prevent a complainant from reflecting its trademark in cooperative agreement between the US National Science Foundation a corresponding domain name; and a company called Network Solutions – needed to be changed. So • intent to disrupt the business of a competitor; and in November 1998, the Domain Name System began a gradual • intent to attract and misdirect internet traffic by creating a transition to privatization; responsibility for its administration was likelihood of confusion with a complainant’s trademark. handed to a new non-profit organization called the Internet Corporation for Assigned Names and Numbers (ICANN). Use in bad faith exists in myriad circumstances developed over

8 World Trademark Review August/September 2009 www.WorldTrademarkReview.com time in UDRP jurisprudence and is generally established in connection with limited opportunity to supplement these filings. There is no to the registrant’s lack of rights or legitimate interests in a domain discovery in UDRP actions, so they avoid the delays and costs name. For example, bad-faith use typically exists where a registrant is associated with lawsuits. not using a domain name in a bona fide offering of goods or services, Lastly, and most importantly for trademark owners, the vast but is attempting to sell the domain name for a profit. majority of domain name disputes decided under the UDRP are Notably, the UDRP is the first trademark-based dispute policy to resolved in favour of the complainant. Since the first UDRP consider ‘reverse domain name hijacking’. This refers to a complaint was filed with WIPO on December 2 1999 over 15,200 complainant’s bad-faith use of the UDRP and abuse of the additional complaints – involving over 25,000 domain names administrative proceeding to deprive a registrant of a domain name. – have been filed with WIPO. Of the total UDRP complaints filed Such hijacking generally occurs where a ‘big business bully’ of a with WIPO, approximately 84% resulted in transfer of the domain complainant files a UDRP complaint against a proverbial ‘little guy’ name to the complainant. Since the first UDRP complaint was filed of a registrant who, for instance, has been using a domain name in with NAF on January 10 2000, over 11,100 complaints have been good faith but who also has inferior trademark rights. A filed. Of the total complaints filed with NAF, over 8,200 – or roughly complainant must have knowledge of a registrant’s legitimate 73% – resulted in transfer of the domain name to the complainant interest in a domain name; without it, imposition of reverse domain and only slightly over 1,300 – or roughly 11% – were denied (WIPO name hijacking is unduly harsh (see MAHA Maschinenbau Domain Name Dispute Resolution Statistics are available at Haldenwang GmbH & Co KG v Rajani, WIPO Case D2000-1816). http://www.wipo.int/amc/en/domains/statistics/ (last visited May 8 2009), while NAF Domain Name Dispute Proceedings and Decisions Pros and cons are available at http://domains.adrforum.com/decision.aspx (last First and foremost, the UDRP is the most expeditious and inexpensive visited May 8 2009)). tool that a trademark owner can use to combat cybersquatting. By Because of these advantageous characteristics and statistics, the requiring registrars and registrants to consent to its jurisdiction, the UDRP has been criticized as biased against respondents. As aptly UDRP eliminates jurisdictional issues and provides a ready forum to noted by the International Trademark Association (INTA), the UDRP resolve domain name disputes. Arbitration fees for the various is specifically designed for simple, straightforward cases of dispute resolution providers range from $1,000 to $7,100, depending egregious acts of cybersquatting. Therefore, most complainants are on the number of domain names in dispute and the number of able to provide both compelling and substantial evidence of a panellists – either one or three members. A UDRP panel will typically registrant’s bad faith and default judgments from a registrant’s transfer a domain name to a successful complainant within 60 days of failure to respond are common. At least one study has estimated filing the complaint. This brief period of time allows for: that registrants default over 54% of the time. Such default does not • the 20-day period a registrant has to respond to a complaint; automatically result in a decision for the complainant, but does • the 14-day period a panel has to forward its decision; and allow a panel to draw negative inferences that it deems appropriate • the 10-day appeal period between an arbitration decision and (see INTA Internet Committee, The UDRP by All Accounts Works implementation. Effectively; Rebuttal to Analysis and Conclusions of Professor Michael Geist in “Fair.com?” and “Fundamentally Fair.com?” available at Second, UDRP arbitrations are decided entirely on the evidence http://www.inta.org/downloads/tap_udrp_2paper2002.pdf (last included in the complaint and response – if a response is ever filed – visited May 11 2009)).

Contrast the ACPA

Signed into law in the United States by President Clinton on living individuals that are registered without consent and for November 29 1999, the Anti-cybersquatting Consumer Protection economic gain. Act (ACPA) created a new civil cause of action under Section 43(d) of Perhaps most importantly, remedies available under the ACPA the Lanham Act (15 USC § 1125(d)). Before enactment of the ACPA, include not only cancellation or transfer of a domain name, but also many federal courts begrudgingly ignored or stretched the damages and injunctive relief such as a temporary restraining order. requirement of fame to apply trademark dilution law to egregious Actual damages may be sought to recover a registrant’s profits from acts of cybersquatting. use of a trademark, any harm to the value of a trademark and filing An ACPA plaintiff bears the burden of establishing that: costs. Alternatively, an ACPA plaintiff may seek statutory damages – • the putative domain name is “identical or confusingly similar” to without proof of the amount of injury – between $10,000 and a distinctive trademark, or dilutes a famous trademark, owned $100,000 per domain name. In exceptional circumstances of wilful by the plaintiff; and or malicious cybersquatting, a federal court may choose to award • the domain name registrant had a bad-faith intent to profit treble damages and attorneys’ fees. from registering, trafficking in or using a putative domain name. Another significant advantage under the ACPA is the availability of in rem actions against a domain name itself. Such actions may be The ACPA differs from the UDRP in that bad faith under the filed only in the jurisdiction where the domain name registrar or former may be established via a more extensive enumeration of registry is located, and claims for damages and attorneys’ fees may considerations, such as material and misleading contact not be asserted. Perfectly suited for instances of offshore information provided in domain name registration and acquisition cybersquatting, federal courts hearing ACPA actions generally allow of multiple domain names which the registrant knows to be service of process via email. Default judgments abound because identical or confusingly similar to distinctive trademarks of others. cybersquatters frequently fail to respond. Litigation under the ACPA Moreover, the ACPA specifically provides protection for names of is generally expensive and extended – the opposite of the UDRP.

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 9 Feature: The UDRP turns 10

On the downside, the UDRP does not provide for damages or registration of a domain name consisting of an incorrectly spelled other injunctive relief. Remedies available to complainants under trademark (NAF Claim FA0705000991778). The central issue – the UDRP are strictly limited to cancellation or transfer of a domain whether the misspelled registration constituted a violation – name. Cancellation, however, is not a prudent option, as most oscillated as the Internet developed until 2007, when Ganz cybersquatters use computer programs to re-register domain names unambiguously vilified typosquatting. The panel held that domain immediately after their cancellation. Thus, successful UDRP names consisting of deliberately misspelled words – through the complainants often find themselves the not-so-proud owners of addition, inversion and replacement of letters – were confusingly numerous disparaging or defensive domain names that they never similar to the correctly spelled mark. intended to own or maintain. Criticism websites – Since 2000, three notable cases have In addition, all fees charged by a dispute resolution service emanated from WIPO discussing the issues of confusing similarity provider are almost invariably borne by the complainant. Although and disparagement. A trilogy of Wal-mart decisions (involving the these fees may appear relatively de minimis in isolation, frequent domain names ‘wal-martsucks.com’, ‘walmartblows.com’ and use of the UDRP can become quite expensive in amassing ‘boycottwalmart.com’) provides guidance to UDRP panels, but falls significant filing and attorneys’ fees. short of a precise rule (Wal-mart Stores Inc v MacLeod, WIPO Case Further, the UDRP contemplates court intervention during and D2000-0662; Wal-mart Stores Inc v xc2, WIPO Case D2006-0811; after arbitration proceedings are initiated. Thus, UDRP arbitrations Wal-mart Stores Inc v Traffic Yoon, WIPO Case D2006-0812). Panels may be stayed pending a court proceeding or reversed by later court are to consider factors such as: rulings. Indeed, in the United States, federal district courts are not • the language of the mark; required to accord UDRP decisions the slightest precedential weight • the language of the user; and may decide the dispute between a trademark owner and • the sophistication of the user; registrant de novo, as if no UDRP decision had been rendered (eg, • the position of the disparaging term or phrase in relation Sallen v Corinthians Licenciamentos LTDA, 273 F3d 14, 60 USPQ2d to the mark; 1941 (1st Cir 2001). • whether the disparaging term or phrase is colloquial or a proper Additionally, the UDRP is not an efficient means of dispute word or phrase; and resolution where large numbers of infringing domain names are • the strength of the mark. owned by multiple, unrelated registrants; where there are multiple infringers, a separate complaint must be filed against each registrant. In sum, disparagement remains uncertain in UDRP proceedings. Lastly, some legal disputes, such as licensing of trademarks between parties, simply fall outside the scope of the policy. Legitimate interest in the domain name As with trademark ownership, this element mainly follows generally Noteworthy decisions accepted principles of trademark law. However, the UDRP has The first decade of the UDRP has been marked with cases diverged in several areas to address the unique challenges of IP exemplifying the growth and development of a burgeoning rights on the Internet (Croatia Airlines dd v Modern Empire Internet international regime. These necessarily innovative decisions Ltd, WIPO Case D2003-0455, satisfying the minimal prima facie case primarily affect the prima facie elements of a UDRP claim. Unlike that showing lack of a legitimate interest shifts the burden to the courts of common law nations, which are governed by prior judicial registrant; Classmates Online Inc v Zuccarini, WIPO Case D2002- decisions, UDRP panellists are not constrained by stare decisis, and 0635, holding that generic terms are registrable as domain names can cite and adopt precedents to the extent that they are persuasive. upon demonstrating a legitimate interest in the terms). The greatest clashes concerning legitimate interests in domain names involve Trademark ownership and confusing similarity fair use and free-speech concerns. Over the past decade, the ownership requirement has evolved After-market parts – Caterpillar Inc v Feimer revolved around predictably, mirroring fundamental trademark principles (eg, Telcel CA the challenged use of a mark in the domain name of a website v Ramirez, WIPO Case D2002-0309, holding that assignees and selling spare parts (NAF Claim FA07060001008998). As in exclusive licensees may assert acquired rights in a mark). However, trademark law, such use was permissible under the UDRP so long as UDRP decisions regarding the confusing similarity requirement have it did not create a likelihood of confusion. The panel set forth a four- ventured into uncharted territory as the law of the Internet has evolved. part test encapsulating past decisions whereby a registrant: Personal names – Roberts v Boyd sparked the debate regarding • offers the mark owner’s goods for sale; domain names that substantially consist of personal names (WIPO • exclusively sells the mark owner’s goods; Case D2000-0210). And that dispute has not abated over the last • expressly discloses any relationship between the registrant and decade. WIPO panel decisions fall on each side of the personal name the mark owner; and debate. The modern consensus of UDRP decisions protects personal • does not attempt, through registration of similar domain names, names that have acquired statutory or common law trademark to exclude the mark owner from the marketplace. rights and denies protection to names that are merely famous, without more (eg, Ciccone v Parisi, WIPO Case D2000-0847, granting Parody and free speech – In Falwell v Lamparello Int’l, a NAF singer Madonna’s petition to transfer ‘madonna.com’; Owens v panel ordered the transfer of ‘fallwell.com’ to Reverend Falwell on Smith, WIPO Case D2003-0463, granting a professional football the grounds that registration and use of the domain name to player’s petition to transfer ‘terrellowens.com’; Kennedy Townsend v publish criticisms of the reverend’s views violated trademark rights Birt, WIPO Case D2002-0030, denying a politician’s petition to to FALWELL (NAF Claim FA0310000198936). Falwell, however, did not transfer ‘kennedytownsend.com’ and resolve the issue of whether use of a domain name similar to a valid ‘kathleenkennedytownsend.com’). trademark for parody or free speech is permissible. Despite the Typosquatting – In Ganz v Texas International Property uncertainty under the UDRP, US precedent clearly favours free Associates, a panel first addressed the issue of typosquatting – the speech and fair use in the absence of a likelihood of confusion (see

10 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Lamparello v Falwell, 420 F3d 309 (4th Cir 2005)). While it is too early to predict the precise remedies that will be included Fan websites – 2001 White Castle Way Inc v Jacobs addresses the in the new gTLD programme, they are likely to affect the substance and issue of cyber fanclubs (WIPO Case D2004-0001). As the Internet practice of the UDRP. Currently, the proposed rules for the new gTLD grew in prominence, fans expanded their idol worship to application process permit trademark owners to make an “existing cyberspace. In adoration, fans register domain names incorporating legal rights objection” pursuant to “generally accepted and the name of their favourite star. The UDRP permits such registration internationally recognized principles of law” such as the UDRP. so long as the domain name is actively used for a non-commercial However, the draft rules differ from UDRP practice by allocating costs purpose associated with the name or mark. Use of the domain name to both the complainant and applicant. Additionally, the proposed rules to cause confusion as to sponsorship or inhibit the use of the name expand a type of indirect UDRP liability to any registry that uses or or mark by the owner is not a legitimate use. operates a TLD in a manner that “causes or materially contributes” to the registration of domain names that, among other things, create Bad-faith registration and use impermissible confusion with a complainant’s mark. The requirement for bad-faith purchase and use is perhaps the most Last, the proposed rules currently contemplate a Globally prominent issue in UDRP proceedings. In dispute after dispute, Protected Marks List, as well as a Uniform Rapid Suspension System, allegations of bad faith lead to examples of impermissible conduct; which could reduce the need for UDRP complaints and defensive however, as a matter of judgment, bad faith has evaded the domain name maintenance. constraints of black-letter law (eg, World Wrestling Federation Unsatisfied with the UDRP, the drafters of the proposed Uniform Entertainment Inc v Bosman, WIPO Case D99-0001, holding that Rapid Suspension System have noted that “times and circumstances overt intention to sell a domain name for profit substantiates a have changed since the UDRP was implemented and brand owners finding of bad faith). Beyond the parabolic lessons of the UDRP and internet users find themselves facing unprecedented levels of tribunals, several common law concepts evade confirmation. abuse and infringement…” As proposed, the Uniform Rapid Passive holding – Telstra Corp Ltd v Nuclear Marshmallows was Suspension System is essentially a streamlined UDRP that is meant the first WIPO panel to address the issue of whether passively to address only clear-cut cases of cybersquatting in all new gTLDs. holding a domain name constitutes bad-faith use (WIPO Case The Uniform Rapid Suspension System reduces the time a D2000-0003). The panel concluded that passive holding might cybersquatter has to answer a complaint – among other allotted evidence bad-faith intent. However, such evidence must be time periods – from 20 days to 14 days. It also drastically reduces the evaluated in light of the surrounding circumstances to reach a costs of filing a complaint from approximately $1,300 to $100 for a conclusion as to intent. single domain name, with a ceiling of $300 for multiple domain Registration v use – Global Media Resources SA v Sexplanets names. Moreover, it places an economic onus on cybersquatters explicitly established the evidentiary relationship between bad-faith electing to file an answer or appeal. The Uniform Rapid Suspension use and purchase (WIPO Case D2001-1391). The WIPO panel held that System also freezes or locks a domain name rather than cancelling evidence of bad-faith use is persuasive evidence of bad-faith or transferring it. Thus, trademark owners will not have to maintain registration or acquisition. Thereafter, the two sub-elements of bad vast portfolios of defensive domain names in the new gTLD system. faith have begun to blend. However, the drafters of the Uniform Rapid Suspension System Serial cybersquatters – The panel in National Collegiate Athletic have failed to address concerns that trademark owners will now be Association v Halpern determined that a pattern of registering forced to challenge continually the same domain names as they multiple domain names containing well-known trademarks of become unlocked upon expiration. Additionally, the Uniform Rapid others is evidence of both bad-faith registration and use (WIPO Case Suspension System imposes a higher evidentiary burden on trademark D2000-0700). Even where some of a registrant’s domain names owners – raising the UDRP standard of “preponderance of the evidence” have not been found to be registration in bad faith, such a pattern of to “clear and convincing evidence”. Lastly, the Uniform Rapid registration may more than establish bad faith (Google Inc v Texas Suspension System adopts a draconian ‘three-strikes’ model of reverse International Property Associates, NAF Claim FA0806001212995, domain name hijacking whereby a trademark owner who files three involving over 100 prior adverse UDRP decisions). unsuccessful complaints is denied access to the system for one year. Consent to transfer – Some panels have felt that it is “expedient NAF, has argued that “panellists have taken the opportunity, over and judicial to forego the traditional UDRP analysis” where a time, to broaden the scope of the UDRP, but it started out as a registrant has agreed to comply with a complainant’s request to mechanism only for clear cut cases of cybersquatting … If the UDRP transfer (Disney Enters Inc v Morales, NAF Claim FA475191). In contrast, has strayed so far from its roots that the [drafters are] proposing it the panel in Graebel Van Lines Inc v Texas Int’l Prop Assocs held that be scrapped in favour of a more streamlined model, perhaps its [sic] in special cases of abusive registration, an analysis of the disputed time to take another look at the UDRP, rather than providing a new domain names under the UDRP is justified (NAF Claim FA1195954). process that has not been vetted and discussed by the internet community as a whole”. It remains uncertain whether the Uniform Considerations for the future Rapid Suspension System will ultimately be adopted by ICANN and In the next 10 years, the UDRP will face significant challenges as the whether it can be seamlessly integrated with the UDRP. What is Internet continues to expand and evolve. WIPO has recommended certain is that the UDRP, in its 10 years of existence, has proven itself adopting a ‘green UDRP’ for paperless online filing, which will a remarkably useful, accessible and effective means of trademark “remove the need for voluminous quantities of paper from an protection in the burgeoning medium known as the Internet. expedited mechanism for the resolution of disputes concerning domain names, which by their very nature exist online”. James L Bikoff and David K Heasley are partners of Silverberg The UDRP has expanded its reach with each new TLD that ICANN Goldman & Bikoff in Washington DC. Phillip V Marano and has added. Most recently, for example, ICANN has proposed creating Michael T Delaney are interns at the firm new gTLDs, which would allow for the registration of almost anything [email protected] under the sun as new TLDs (eg, ‘.Coca-Cola’ or ‘.WorldTrademarkReview’). [email protected] www.WorldTrademarkReview.com August/September 2009 World Trademark Review 11 Feature By Adam Smith ©iStockphoto.com/Andrey Prokhorov

12 World Trademark Review August/September 2009 www.WorldTrademarkReview.com .trademark: the battle over the new domain space

Innovations appear online daily. The next big thing will undoubtedly be the expansion of the generic top-level domain space next year, but brand owners fear that the step could undermine their rights. WTR joins the debate

The dominion of ‘.com’ is over. In a few short years, web users charting the evolution of the Internet will define this moment as the beginning of the end for today’s familiar domains. This is because soon, domain name registrants will no longer have to settle for one of 21 traditional extensions (‘.com’, ‘.net’, ‘.org’, etc). The expansion of the generic top-level domain (gTLD) space will offer registrants the opportunity to register almost any string of characters in the top- level domain space. But ahead of the introduction of gTLDs in early 2010, opinions are split on what the change could mean. While registrars suggest that gTLDs will topple ‘.com’ and open up the Internet to a new platform for innovation, many corporations decry the plan as an extortion racket, establishing a labyrinthine domain space that will confuse consumers. Brand owners are naturally concerned about the implications on their trademarks. Will the liberalization of the domain name space expose their brand names to malicious third-party abuse? Will competitors be able to steal market share by diverting web traffic through a cunning gTLD registration? Proponents of gTLDs reject such worries, pointing out that the best way to manage the Internet is to ensure it is as open as possible. “Innovation happens because the marketplace is open,” says Paul Twomey, president of the Internet Corporation for Assigned Names and Numbers (ICANN). “The public had not demanded a video website before YouTube was established.” The Internet has flourished as a space for experimentation and the development of new technologies. So, for Twomey, gTLDs are the natural progression. The domain registrars are, of course, in agreement. ICANN is a non-profit www.WorldTrademarkReview.com August/September 2009 World Trademark Review 13 Feature: .trademark: the battle over the new domain space

organization, so it is registrars that stand to benefit the most from increased and more widespread demand for top-level domains. It is especially important “Bring them on!” declares Jean-Christophe Vignes, vice president and general counsel of Euro DNS, one of Europe’s largest domain name to know whether the benefits registrars and domain recovery experts. The registrar is ready to offer new gTLDs immediately. “For example, if ‘.sport’ materializes, we’ll of the new gTLDs outweigh the add it to the portfolio.” While there is potential for registrars’ revenue streams to turn into mighty rivers, this must be managed considerable potential costs strategically, says Vignes. “We’ll listen to the market,” he explains. “We don’t want to carry every TLD for the sake of it.” and risks to brand owners and Indeed, such a policy would be impractical, flooding the Internet with millions of gTLDs. But still, it is the sheer scale of this new consumers. The rigorous exercise that concerns brand owners. With the existing 21 top-level domains, it is estimated that major brand owners face at least one analysis to answer that new suspected domain name infringement each day; with unlimited gTLDs, mark owners could have an insurmountable threshold question has not policing job on their hands. Fighting cybersquatters is difficult and expensive enough without the threat of online monopolies (eg, if a been done single private financial institution successfully registered ‘.bank’). “With the current state of the economy,” wrote Robert MacDonald, senior vice-president at 3M, to ICANN, “it is especially important to know whether the benefits of the new gTLDs outweigh the considerable potential costs and risks to brand owners and consumers. The rigorous analysis to answer that threshold question has not been done.” MacDonald’s argument is one voice in what has become a roar of dissent: ICANN has received thousands of comments from outraged brand owners criticizing the proposals and alleging that ICANN has able to resolve issues via the URS. “It is sensible to offer the small failed to listen to them. By the time of the 34th ICANN meeting, held number of supernova trademark owners who suffer serial in Mexico City in March 2009, discord among trademark owners infringement and abuse in many jurisdictions some kind of had reached fever pitch. ICANN’s Intellectual Property Constituency protection,” says Nick Wood, IRT member and managing director of placed enough pressure on the parent body to have a resolution domain registry Com Laude. passed by the board of directors drawing attention to brand owners’ But the IRT’s apparent focus on large companies in this way has pleas and establishing an Implementation Recommendation Team provoked stinging criticism. Most of the public comments received (IRT), consisting of senior in-house trademark counsel (including by ICANN at the time of going to press were from small companies those from Lego, Microsoft, TimeWarner and Yahoo!), internet and individuals concerned that the IRT’s proposals were skewed in experts from private practice, academics and domain registrars. favour of large corporations. “I will not tolerate big business telling The IRT worked intently over eight weeks, consulting with the us how the Internet will be managed,” writes one individual in public and bodies such as the World Intellectual Property ICANN’s official online public forum. Ellen Shankman, IRT member Organization. Its recommendations include: and former chair of the International Trademark Association • an IP clearinghouse, globally protected marks list (GPML) and internet committee, maintains that the IRT has considered the associated rights protection mechanisms and standardized pre- opinions of all stakeholders. “My experience with brand owners is launch rights protection mechanisms; across the board,” she told WTR. “I represent some very small start- • a uniform rapid suspension system (URS); up companies and some large brand owners.” • post-delegation dispute resolution mechanisms; It is individuals from the former category that have so far been • Whois requirements for new TLDs; and most vocal in their responses to the IRT’s proposals. But companies • use of algorithm in string confusion review during initial of all sizes are urged to participate in the debate, which continues evaluation. online and at special public forums organized by ICANN in July in London, New York, Hong Kong and Abu Dhabi. In the spirit of the The URS is the most contentious proposal, attracting fierce Internet’s inclusiveness, these opportunities are entirely open. But, criticism from both registrars and small businesses. Under the despite all the intellectual power plugged into the IRT, one wonders plans, the URS would solve the more glaring instances of trademark whether its mission was by definition impossible. It is entirely abuse by compelling an ICANN-appointed body to freeze the feasible that the creation of the group was an exercise in diplomacy offending domain name registration upon receipt of a mark owner’s only. Notwithstanding the report, perhaps the gTLD space will be complaint, provided that the complaint had passed an initial opened up entirely in the name of innovation. This may be a major compliance examination. The IRT describes its report as a “tapestry” test for trademarks. But the Internet has tested trademarks from day of interdependent proposals, in that if the URS were to be adopted, one – and so far they have survived the challenge. WTR the GPML could be kept necessarily short. States the report: “The IRT intends the GPML to include only marks that are globally protected, the standards for inclusion on the GPML should be high and strictly enforced.” The group stresses that the GPML would be available only for a small number of mark owners; other mark owners would be Adam Smith, World Trademark Review, London

14 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Column By Neil Wilkof Trademark management

Focusing on common law jurisdictions, the Is there a fiduciary claim in development of quality control was to accommodate the source theory of trademarks. More recently, common law relation to licences? jurisdictions have taken more diverse views, culminating in the English decision in the Scandecor Case, which points to uncoupling the quality control requirement from the source theory of trademarks. Besides the usual, already daunting rights • there was no special duty of loyalty or Use of the mark by the licensee may be and obligations involved in a licence trust; and deemed to be use by the licensor, thereby agreement, a recent decision revisits the • there was no inequitable exercise of defeating a cancellation claim for non-use. claim that a fiduciary relationship may discretion of power or authority. Where quality control is more strictly exit between licensors and licensees required – for example, in the United States Well and good – up to a point, because – the failure to establish the requisite The interweaving of proprietary and its seems reasonable that the court should quality control can lead to cancellation. contractual considerations can be daunting not deviate too far afield from the Whatever the scope of the quality control for anyone seeking to explain the rights and commercial foundations of a trademark requirement, from the point of view of the duties of the licensor and licensee to a licence. Nevertheless, the court’s decision integrity of the mark, commercially – if not trademark licence. On occasion, however, left me with a certain unease, because it necessarily for legal reasons – the licensee attempts are made to impose additional types recognized that there are circumstances in can be expected to exercise quality of legal duties on the parties. The argument which a fiduciary duty may arise in measures with respect to the goods or being made that, in some circumstances, a connection with the registration or use of a services under the licensed mark. fiduciary relationship is created between the trademark. Specifically, the court refers to If this is true, the relationship between a parties to the licence. This claim was recently another Canadian judgment in which an trademark licensor and licensee differs from revisited in the Canadian case of Bluefoot exclusive distributor registered a mark on that between the parties to a patent or Ventures Inc v Ticketmaster (Ontario Superior its own behalf, apparently to enable the copyright licence. Assuming that there are Court of Justice, 2007). There, in addition to distributor to combat unauthorized “flow of circumstances, despite my reservations, in allegations of infringement, passing off and the product” into Canada. which a distributor can be said to have a breach of the licence agreement, the plaintiff In that case, while the court dismissed fiduciary duty to a foreign manufacturer argued that the licensee had violated its the action as having not been timely and the distributor can be found to have fiduciary duty to the licensor. brought, it did suggest that a fiduciary breached that duty when it registers the According to the Bluefoot Ventures relationship might have existed between mark, even to prevent “the illegal flow of the court, there exists a fiduciary duty “where the parties. This was so because “of the duty product”, then there seems to be no less the other party is entitled to expect that the owed by a ‘distributor or agent to its foreign reason to recognize such a fiduciary duty by fiduciary will act in the other person’s principal’”. The suggestion was, therefore, the trademark licensee in carrying out the interests, or in the interests of both parties that in certain circumstances, a fiduciary quality control function. This is especially (where those interests coincide), to the relationship might exist. so when there are consequences for the exclusion of the fiduciary’s own interests Three points can be made. First, it is a value and even validity of the mark by (where those interests are opposed), and bedrock legal principle that merely virtue of the quality control requirements. where the fiduciary has the power to affect characterizing a party in a certain way does Or perhaps the opposite conclusion is the other party’s interests in a legal or not ipso facto create a legal relationship or true. That is, based on the foregoing, all practical sense, giving rise to a position of status. Thus, calling a distributor ‘an agent’ judicial attempts to impose a fiduciary duty vulnerability in the other party.” does not necessarily make it so nor does it on a distributor, agent, or licensee with On this basis, the court established the create a fiduciary duty. respect to use or registration of a mark are following three-part test: Second, there are cases in various ultimately artificial and bound to lead to • The fiduciary can exercise some common law jurisdictions which have held inconsistent and unsatisfying results. Under discretion or power. that a local distributor is entitled to register this view, since it is already difficult to • The fiduciary can act in a unilateral the foreign manufacturer’s mark in the describe the legal metes and bounds of a manner, affecting the interests of the distributor’s local jurisdiction, even when trademark licence and the relationship beneficiary. challenged by the manufacturer. Usually, between the parties, it is surely preferable to • The beneficiary is vulnerable or at the such a result follows from a finding that the refrain from venturing into the uncharted mercy of the fiduciary. mark has come to be identified with the legal terrain of a fiduciary duty in a distributor in the local jurisdiction. If, trademark licence relationship. WTR In most circumstances, no fiduciary however, a distributor/agent has a fiduciary relationship will arise in a mere commercial duty, as suggested above, then it is difficult to relationship. In the case at hand, no see how the court can permit the distributor fiduciary relationship had been created to register the mark. These two lines of since, according to the court: decisions cannot be readily reconciled. • the relationship between the parties was Third, the court did not address the Neil Wilkof is a partner with Herzog Fox & defined solely by the commercial terms special characteristics of a trademark Neeman in Tel Aviv of the licence; licence and especially quality control. [email protected] www.WorldTrademarkReview.com August/September 2009 World Trademark Review 15 FeatureFeature ByBy Xxx Marianand XxxCoquia-Regidor ©iStockphoto.com

16 World Trademark Review August/September 2009 www.WorldTrademarkReview.com In the current economic climate is defensive registration a proactive means of securing protection for global brands or a risky venture in light of well-established use requirements?

For global businesses and brand owners contemplating entry into new markets the possibility of securing registration for marks that need not be in actual use in commerce at the time of filing may be an attractive option. Generally, these defensive trademarks are registered for the purpose of preventing the registration of identical or similar marks by third parties, or to extend the scope of protection granted to registered trademarks. Countries treat defensive registrations differently, largely due to the variance in requirements for use before and after registration. In many cases, requirements relating to genuine use of a mark (as opposed to non-use or token use) do not explicitly prohibit defensive registrations, but pose impediments to their maintenance or continuing validity. There are a few jurisdictions such as Japan and Malaysia where the trademark system expressly provides for the registration of defensive marks. At the other end of the spectrum are countries such as Switzerland, where a recent court ruling declared that trademarks registered solely for defensive purposes are null and void.

Defensive trademark registration systems In those countries that make express provision for defensive registration, protection is granted within the regular system of registration for trademarks – rarely does defensive registration constitute a separate system. The acquisition of well-known or famous mark status is separate and distinct from the concept of ‘defensive trademarks’. However, in Japan and Malaysia, registration of defensive marks is not only possible, but is also a means for the owners of well- known marks to secure additional protection.

Japan In Japan, ‘defensive marks’ are trademarks that are highly well- known or famous with respect to other goods and/or services, registered to prevent third parties from using or registering such marks on goods and/or services for which the mark is not well- known or famous. The application, registration and renewal processes for defensive trademarks are similar to those that apply to ‘regular’ marks, except for the additional requirement www.WorldTrademarkReview.com August/September 2009 World Trademark Review 17 Feature: On the defensive

that an applicant/registrant must show that the trademark is highly jurisdictions require actual use or use in commerce – if not for a well-known or generally famous throughout Japan. trademark application, then for a trademark’s continuing validity. Defensive marks are recorded on a register separate from that This of course stems from the universal purpose of a trademark as a used by the Japan Patent Office (JPO) for regular registrations. The source identifier, a distinctive device that points to the trademark National Centre for Industrial Information and Training (NCIIT) owner’s goods or services. It is also on this basis that trademark use hosts a non-exhaustive database of well-known and famous marks, requirements help prevent the “hoarding” of marks. There are some which currently consists of defensive marks and registered marks differences in approach between jurisdictions as the following round- that have been recognized as well-known marks in opposition up of selected key markets indicates. proceedings, trial or appellate decisions, or court judgments. There are no maintenance requirements to be listed in said database, but Germany the underlying trademark registration or defensive registration Trademark law in Germany does not specifically provide for must remain effective. defensive marks. Actual use of a trademark is not required at the Defensive registrations may be renewed every 10 years. Although time of application for registration. If no such use is made within the JPO does not always insist on evidence of the well-known status the five-year grace period, the trademark becomes vulnerable to of the trademark prior to renewal of registration, it is viewed as an cancellation. Before the five-year grace period expires, it is possible ongoing requirement. to file a new (or subsequent) application for an identical trademark, A third party cannot seek the cancellation of a well-known mark but the priority date of the original (first) application is lost. listing in the NCIIT database, but one may instead pursue the cancellation It is a basic principle that an applicant should intend to use the of its underlying trademark registration or defensive registration. trademark but the German Patent and Trademark Office does not assess intention to use at the time of filing the application. It is Malaysia likewise possible to file for a trademark in relation to goods or In Malaysia, defensive registration enables the proprietor of a well- services other than those goods/services for which the applicant known mark to defend the reputation of the mark against any party actually uses the mark. In addition, a trademark application will not that trades on its reputation in relation to goods or services with be considered as a defensive mark if the new application is different which the proprietor has no connection. The owner of a well-known from the prior registration. Therefore, it appears that there is no mark may secure protection through defensive filings under Section impediment to securing registration for a defensive mark. 57 of the Trademarks Act 1976. However, if a trademark is registered merely for defensive To secure defensive registration of a well-known mark in purposes, it may fall outside of the intentions of the German Malaysia, the following requirements must be met: legislature which instituted a requirement of trademark use (and • The mark must consist of an inventive word; established a limited period within which trademarks must be used • The mark must be well-known in Malaysia; to stave off cancellation). In this context, the filing of defensive • The applicant should have an existing registration for the mark; marks may be partially considered as an abuse of rights. • The mark must have an established reputation for certain goods The German Patent and Trademark Office will not reject a or services for which it is already registered; defensive trademark application on the grounds that the applicant • The proprietor must be able to demonstrate that if the public does not intend to use the mark. Nonetheless, in a proceeding saw the mark on other goods/services, a connection would likely involving infringement of a defensive mark the defendant could be drawn to such proprietor – it is not sufficient for the assert that the claim based on such defensive mark is an abuse of applicant to show that the mark is widely known; rights. German courts differ on the treatment of abuse of rights, so • The use of the mark on other goods/services by another party the particular circumstances will be considered in each case. would be likely to deceive or confuse the public; and • Evidence in support of a defensive mark application shall Spain include proof from persons trading in articles of the class for As with German law, the Spanish Trademarks Act does not explicitly which registration is sought, showing the importance attached prohibit defensive registrations. However, non-use renders a mark to brands and names for such traders, and indicating their likely vulnerable to cancellation for non-compliance with trademark use reaction to seeing the mark used for such articles. requirements. The Trademarks Act provides that a mark may be subject to cancellation if, within a period of five years following In addition to the regular requirements for trademark registration, the owner has not put the trademark to effective use in registration, a Statement of Case must be submitted in support of connection with the goods or services in respect of which it has been the defensive application. Once a defensive application succeeds, all registered or if such use has been suspended during an the registrations will be considered as ‘associated marks’, even if uninterrupted period of five years, unless proper reasons exist for they cover different goods/services. non-use (Article 39.1 of the Spanish Trademarks Act). While defensive marks are not vulnerable to cancellation for However, the Spanish Trademarks Act does not define what non-use in respect of the goods/services for which they are constitutes ‘genuine use’ so how does one defeat a cancellation registered, the registrar may at any time cancel the registration of a action for non-use or lack of use? Under the Spanish Copyright Act, defensive mark when the underlying registration in the name of the ‘effective use’ has a broad scope and includes: same proprietor no longer exists other than as a defensive mark. • use of the trademark in a form differing in elements that do not alter the distinctive character of the mark in the form in which it Use requirements in key markets was registered; and Specific defensive registration systems are, however, more the • affixing the trademark to goods or to the packaging thereof in exception than the rule. Most trademark systems have built-in Spain solely for export purposes. limitations primarily aimed at preventing non-use or merely token use of a trademark or worse, bad faith registrations. A majority of The question of whether particular use of a trademark would

18 World Trademark Review August/September 2009 www.WorldTrademarkReview.com qualify as genuine use is thus largely evaluated on a case to case basis. party may challenge the validity of such mark by filing a In a decision of the Supreme Court of Spain from 2001, genuine cancellation action on the grounds of non-use. use of a trademark was declared to be “a public use of that mark in the sector of the market for which it has been granted and which Added complications accomplishes the goal for which the exclusive right has been The above discussion shows that in many countries even if the law conferred onto the holder; that legal demand is not satisfied does not expressly prohibit the registration of defensive marks, through sporadic use of the distinctive sign simply in a bid to stringent trademark use requirements inevitably make it difficult to preserve the formal right” (Case 12/2000, January 22 2001). Spanish maintain such registrations. But some jurisdictions are even more case law shows that a token sale of goods or services would not challenging for a global brand owner considering a defensive qualify as genuine use – there must be continuity and a minimum registration strategy. The United States expressly allows intent-to- level of sales (the latter being determined by the nature and use trademark filings, but is defensive registration possible, characteristics of the product). especially in light of rulings on bona fide intent to use a trademark? Spanish courts have also applied case law from the European In Switzerland, meanwhile, the Federal Supreme Court has explicitly Court of Justice, which has established that there is genuine use of a stated that defensive marks are null and void. Notable rulings trademark where the mark is used in accordance with its essential discussed below provide insights into whether it is even possible to function, that is, to guarantee the identity of the origin of the goods pursue a defensive trademark registration strategy in either or services for which it is registered. Thus, courts have held that the jurisdiction. following conduct does not constitute genuine use: • Business limited to the adoption of preparations for sale (such as Bona fide intent to use designing the trademark or making the labels or the packaging Defensive registration strategies generally do not work in the United on which the sign will be printed); States as at least a bona fide intent to use the mark in connection • The placement of the sign on products that remain in storage; and with the applied for goods/services in US interstate commerce is • The internal use of the sign in the company or in the branches or required. To obtain a registration one must submit proof and dates of members of the corporate group. use in commerce and, to maintain a registration, maintenance documents attesting to current use of the mark on all the Further, use in commercials or advertising will be considered as goods/services listed in the maintenance document in US commerce genuine use only if such use precedes the sale of products or the must be filed with the US Patent and Trademark Office (USPTO). provision of services, or when serious arrangements exist for the The Lanham Act § 1(b) provides that “a person who has bona fide manufacture and sale of the products (decision of the Court of First intention, under circumstances showing the good faith of such Instance No 1 of Palma de Mallorca dated November 27 2007). The person, to use a trademark in commerce” may apply for registration use of a mark in a market test of goods or services will be deemed of the trademark. In several opposition or cancellation actions real and effective trademark use only if the market tests are before the USPTO’s Trademark Trial and Appeal Board (TTAB) endorsed by a suitable advertising campaign, which shows clearly involving a claim of fraud or lack of bona fide intent to use the that the market tests are not a pretext to avoid sanction for non- relevant mark in US interstate commerce, the TTAB has either compliance with the trademark use requirement. cancelled trademark registrations or nullified applications. The TTAB, in its precedential opinion in the case of Honda Motor Russia Co v Winkelmann (Opposition 91/170,552 (TTAB 2009)), denied Russian law does not specifically provide for defensive registration. trademark registration to a foreign trademark applicant on the It is possible to register a trademark for defensive purposes as there grounds that he lacked the bona fide intent to use the applied-for is no prior use requirement for trademark applications. However, mark in commerce in the United States for the goods identified in defensive registrations may be subject to invalidation on the the application. Note that an applicant who seeks registration under grounds of non-use (in full or in part) within three years from the Section 44(e) of the Lanham Act and claims priority based on a registration date. foreign trademark application under Section 44(d) must, in the US application, verify in writing that there is a bona fide intent to use Mexico the mark in US commerce. Defensive marks are not explicitly regulated or prohibited under Honda Motor Co filed a notice of opposition claiming likelihood Mexican law. They are commonly filed by companies or individuals of confusion between its CIVIC registrations and the applicant’s V.I.C. so as to prevent the registration and use of an identical or similar mark for “vehicles for transportation…” in Class 12 of the Nice trademark by a third party where the goods or services involved are Classification. Honda argued that mere statements of subjective not related to those for which the original trademark is being used. intention are insufficient to establish the applicant’s bona fide As with other marks, defensive registrations are subject to use intent to use the mark in commerce in the United States. On the requirements. If a defensive trademark has not been used within the other hand, the applicant pointed to his registration and use of the period of three or more years from the date of registration, a third mark in Europe, and the filing of applications for registration in

Right In Honda Motor Co v Winkelmann Honda filed a notice of opposition claiming likelihood of confusion between its CIVIC registrations and the applicant’s V.I.C. mark

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 19 Feature: On the defensive

other countries, as evidence of his bona fide intent to use the mark a defensive trademark application. Also, under Swiss law actual use in commerce in the United States. of a mark is not required at the time of application for registration, Reaffirming its ruling in an earlier case (Commodore Electronics but if no use is made within the five-year grace period, the Ltd v CBM Kabushiki Kaisha (26USPQ2d 1503, 1507 (TTAB 1993)), the trademark becomes vulnerable to cancellation. However, defensive TTAB held that the absence of any documentary evidence regarding an trademarks may already be cancelled in regular court proceedings applicant’s bona fide intent to use a mark in commerce is sufficient to within the grace period if it is proven that the applicant never prove that an applicant lacks such intention as required by Section 1(b) intended to use them. of the Lanham Act. A mere subjective intent to use the mark in US Both the US and Swiss decisions discussed above provide interstate commerce is not enough to support bona fide intent. guidance and also pose further questions, particularly with respect In this case, the applicant did not have current business plans, to applications from foreign trademark owners. strategies, arrangements or methods in the United States, or identified channels of trade for his goods. In the course of discovery, Opportunities for global brand owners when asked to provide documents concerning advertising and In these times of corporate restructuring, business migration and promotions for his goods, the applicant produced printouts from exploration of emerging and more profitable markets, brand owners his website, evidence of trademark registrations in Germany and naturally want to make full use of available tools to protect trademark with the Office for Harmonization in the Internal Market and the rights and strengthen global brands. Defensive registrations may World Intellectual Property Organization, and official come up against trademark use requirements in various countries, but correspondence with the USPTO. The evidence necessary to support knowing what works (and what does not) in each jurisdiction is the a bona fide intent to use depends on the circumstances of each case, first step towards an effective global brand protection strategy. but here the TTAB found that the applicant was unable to Whether you are a brand owner or are advising on trademark demonstrate trademark use for the claimed goods or provide protection, key questions to ask yourself include the following: sufficient evidence to show that he had a bona fide intent to use the • What are your primary and secondary business markets? mark in the United States. The mark may have been used to • In which locations do you intend to use the trademark in “identify car care packages or promotional material, not the vehicles relation to your goods or services within the period of time themselves” and “any intention to use the mark may go to allowed for intent-to-use filings? promotional services for dealerships, but not to ‘vehicles for • In which markets could a good-faith defensive registration transportation’”. The TTAB thus sustained Honda’s opposition. possibly help prevent the unauthorized use or dilution of your mark by third parties, or perhaps even strengthen your mark as No purpose of use a distinctive identifier for your goods/services? Meanwhile, the Swiss Federal Supreme Court declared last year that a trademark will not enjoy protection under the Trademark Act if With regard to the final question, defensive registrations based the holder has not registered the trademark to use it, but instead has on well-known marks should be given added consideration as they registered it with the sole purpose of preventing the registration of are a proactive means of securing protection and possibly similar marks by third parties or to expand the scope of protection preventing dilution of such marks. of a similar mark that is already in use (Case BGer 4C.82/2007, May On balance, both legal and business considerations come into 30 2008). The Swiss Federal Supreme Court thus concluded that play, from the costs of maintenance to the risk of rendering one’s defensive marks constitute an abuse of rights and should be mark vulnerable to non-use attack. Jurisdiction-specific rules and considered null and void. case law affect the manner in which trademark use is demonstrated. The case arose after Google sought the nullification of the The Swiss court ruling in the GMAIL Case, the TTAB’s opinion in the defendant’s trademark GMAIL in Switzerland, claiming that the CIVIC Case and other decisions all serve as reminders that defendant’s sole purpose was to extort financial benefit from Google zealousness should be matched by prudence and guided by an and thus the defendant did not seriously intend to use the mark. underlying strategy for trademark protection. It is part of the The court held that in deciding whether a registration is a defensive trademark counsel’s role to guide brand owners through the thicket mark, all the surrounding circumstances must be considered. It of options and arrive at the optimal mix of trademark protection determined that such an assessment may look at, among other tools – including a strategy for defensive registrations that are things, whether: founded on good-faith intention to use a global brand. WTR • the defendant has actually used the mark; • the defendant has developed any business activities; • the defendant’s use is serious or merely simulated; or • the defendant offered to sell the mark to the plaintiff with a view to financial gain (which would include an examination of the evidence stemming from negotiations between the parties Marian Coquia-Regidor is global knowledge officer for intellectual over sale of the mark). property at Baker & McKenzie [email protected] The Federal Supreme Court concluded that there was a need to clarify the issues fully and establish the circumstances pointing to The following members of the Baker & McKenzie Global IP Practice an abusive registration, and remanded the case to the lower court Group made contributions for their respective jurisdictions: Ana for an exhaustive consideration of the factual circumstances. Isabel Alpera and Allende Blanco (Spain); Bettina Brauer-Mueller It has to be noted, however, that although the applicant must (Germany); Michael Widmer (Switzerland); Denis Khabarov and have a serious intention to use the mark at the time of registration, Anton Bankovski (Russia); Kenichi Nakayama and Timothy Griffiths the Swiss Federal Institute of Intellectual Property does not examine (Japan); Kherk Ying Chew and Sonia Ong (Malaysia); and Lisa Rosaya this intention at the time of filing the application and will not reject (United States).

20 World Trademark Review August/September 2009 www.WorldTrademarkReview.com World Trademark Industry Review Awards 2009

On May 19 2009 WTR announced the winners of its third Industry Awards at a ceremony in Seattle. The awards are designed to recognize the vital work done by in-house trademark counsel, and identify the teams and individuals that are performing their functions to the highest possible standards. The following pages feature profiles of the winners

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 21 congratulates 2009 World Trademark Review Industry Award winner Ferrero, Asia Pacific Team of the Year team /tim/ noun 1. a number of persons associated in some joint action; 2. to work together with; collaborate with.

The concept of team is important to Watermark; that’s why we were proud to sponsor this year’s WTR Industry Award Asia Pacific Team of the Year category.

We take a team approach in two ways.

First, we listen to your aspirations for your business, we look at where you are, where you want to be and what needs to happen to help you get there. We build a team to make that happen. Then, we team with you. We work together to develop an IP strategy to build your brand. We don’t just file a trade mark; we analyse your markets and future trends, we conduct a competitive analysis, we look at your existing IP and we perform a gap analysis to work out what needs to be done to get you where you need to be.

Don’t just choose an attorney. Put a Watermark IP expert on your team

Watermark your top IP team down under

AUSTRALIA

Melbourne Sydney Perth Email [email protected] T +613 9819 1664 T +612 9888 6600 T+618 9325 1900 Internet F +613 9819 6010 F +612 9888 7600 F +618 9325 4463 www.watermark.com.au Patent &Trade Mark Attorneys Intellectual Property Lawyers Asia-Pacific Team of the Year Ferrero

In April 2008 China’s Supreme People’s Ferrero’s Asia IP team and local Looking forward, the team may have Court handed a significant victory to counsel Bai Tao of Jun He Law Offices to explore ways to reduce costs in Ferrero, holding that the sale by a local worked for years on the “Trésor Doré Case”. collaboration with local counsel. company of chocolates under the brand Because Ferrero had not obtained “However, our enforcement activity will Trésor Doré Jin Sha in packaging similar registration at that time for the three- not be reduced,” said the team to that of Ferrero Rocher chocolates dimensional trademarks infringed, the representative. constituted an act of unfair competition. team filed its claim under the Anti-unfair Ferrero did not wish to disclose the “Winning the award is confirmation that Competition Law, which proved to be a name of any of the IP team members. the way we have chosen to face the issues successful strategy. in Asia-Pacific is the right one,” declared a Ferrero’s IP team consists of spokesperson for Ferrero upon receiving approximately 10 people based in the gong. “More generally, it is also an Belgium and Italy. Part of the team is important acknowledgment of the work engaged in all IP legal matters while the we do,” he added. other professionals are in charge of the Ferrero’s strategy in Asia-Pacific is to administration of the trademark portfolio register its trademarks wherever possible (which consists of over 10,000 files). and take immediate action against The team’s success is due in great infringements. “As far as China is part to the solid relationships that it has concerned, we work closely with established with internal clients. Other nominees: authorities such as the AIC Ferrero’s business heads’ understanding Coca-Cola [Administration for Industry and of and sensitivity towards IP matters Mars Commerce] at central and local level,” has grown tremendously over the past SonyEricsson the spokesperson said. few years. VF Corp

Brian Hendy of Watermark presents the Asia-Pacific Team of the Year award to representatives of Ferrero

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 23 Europe suddenly looks different

From July 1, two leading IP-firms in Europe, Albihns and Zacco, have become one.

The merged company in short: 600 employees. More than 200 attorneys, of which almost 100 are authorized European Patent, Trademark and/or Design Attorneys. Top rankings in MIP surveys in Sweden, Denmark, Norway and the Netherlands. The name of the group will be The Zacco Group. The Danish and Norwegian offi ces will keep their name Zacco, but the Swedish and German offi ces will be named Albihns.Zacco. The Netherlands will keep the name Shieldmark.Zacco.

www.zacco.com www.albihns.com

ZaccoAlbihns WTR ad. 0609.indd 1 18-06-2009 11:16:53 Europe, Middle East & Africa Team of the Year adidas

“Fantastic!” exclaimed Tim Behean, goods in transit to Russia. The Helsinki substantially in recent years, with a general counsel, group intellectual Court of Appeal upheld the first instance growth in complexity and volume of property at adidas upon receiving the finding of infringement and work, but our resources do not increase award for the Europe, Middle East and distinguished the ECJ decision in Montex correspondingly,” Behean explains. Africa (EMEA) Team of the Year. “We are (Case C-281/05), which had put in question Apart from maintaining good rarely acknowledged for our work, even whether it was still possible to prohibit relationships with its numerous internal though we achieve very good results.” the transit of infringing goods under the clients, Behean puts his team’s success Indeed, the team seized 3.6 million EU Customs Regulation (1383/2003). “This down to strategic filing; regular training counterfeit products in the EMEA region has great practical importance for us as and education for enforcement in 2008 (out of 8 million globally) and significant quantities of counterfeits authorities; good market intelligence; and organized a vast number of training destined for the Russian market are good work processes and teamwork. sessions with Customs in most EMEA imported via Finland,” Behean comments. Looking ahead, he is concerned that the countries too. It also won some key civil Most of adidas’s EMEA IP team is recession will spark a surge in decisions in 2008, starting with a based in Amsterdam. These 17 people counterfeiting, at a time when he is landmark ruling from the European Court manage all of the group’s trademark coming under pressure to reduce costs. of Justice (ECJ) holding, in essence, that clearance, maintenance, prosecution and But experience shows that Behean and his infringers cannot hide behind the defence enforcement – a portfolio of around 9,200 team thrive under pressure. that their use of stripes is purely files due to grow further. The challenge decorative (C-102/07, April 10 2008). The here is the workload. The team is Other nominees: team also secured important rulings from responsible for all aspects of IP Google the Greek Supreme Court and the Madrid protection, including patent and design Intel Court of Appeal on dilution issues, as well work, which requires a wide range of L’Oréal as a notable decision involving infringing skills. “The adidas group has grown LVMH Group

Carl Thorfinn of Zacco presents the Europe, Middle East & Africa Team of the Year award to Vanessa Backman of adidas

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 25

Latin America Team of the Year Philip Morris

The Latin America trademark team at on a global scale to ensure coherence our opinion, unduly restrict our use of Philip Morris distinguishes itself from across the whole company and beyond. trademarks without providing sound others in the region, says Irina Lucidi, Back home, Lucidi’s three-strong team is evidence that they would achieve their because of its sheer enthusiasm. “We are fully integrated into the trademark group stated public health objectives,” explains all very passionate about intellectual based in Lausanne, Switzerland. Luckily, Lucidi. “These measures would encroach property,” says Lucidi, “as well as the the entire company is behind its 40,900 on the ability of adult consumers to company’s iconic trademarks and the trademarks (12,000 in Latin America). distinguish our brands from those of our region we are operating in.” So the While trademark teams in some competitors and would also be an recognition attained this year proves that corporations find it difficult to integrate incentive for counterfeiting. Our future enthusiasm can pay off. But simply their function with the rest of the challenge is to continue protecting and having a passion for the brand is not business, Philip Morris knows that defending the company’s brands, their enough, something that Lucidi, who has branding is crucial. “For a consumer goods value and goodwill.” been head of the Latin America & Canada company like ours,” explains Lucidi, “it is trademark group since early 2008, key for the in-house team to be recognizes. It is also essential to have “a incorporated in and supported by the motivated team, alignment with business company which values trademark rights goals and a good network of outside IP and sees trademark enforcement as the counsel who indentify with and tool to protect brand equity.” comprehend our business,” she explains. Philip Morris has to work increasingly Other nominees: Understanding one of the world’s harder to protect this, of course, especially Coca-Cola largest corporations and its sensitive as tighter regulation around the world Pfizer business model is no mean feat, but the threatens its trademarks. “We see more Televisa team works closely with outside counsel and more regulatory proposals that, in Unilever

Alejandro Luna of Olivares & Cia presents the Latin America Team of the Year award to Irina Lucidi of Philip Morris

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 27 It takes teamwork Greenberg Traurig congratulates this year’s World Trademark Review Industry Award winners.

GT works hand in hand with our clients to build and protect their trademark portfolios. With 200+ IP attorneys in 32 offices, we have the resources and reach to help our clients leverage their valuable brands in markets around the world. In fact, GT has been ranked No. 1 for number of USPTO trademark applications submitted for five consecutive years1, ranked No. 1 among trademark litigation firms2, and received CSC Trademark Insider’s No. 1 National Law Firm Award for 2008.

[1800 ATTORNEYS IN 32 OFFICES* | USA LAW FIRM OF THE YEAR, 2007 CHAMBERS GLOBAL AWARDS† ]

Greenberg Traurig is a service mark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. ©2009 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved. *These numbers are subject to fluctuation. †Greenberg Traurig was selected by Chambers and Partners as USA Law Firm of the Year, 2007. 1CSC Trademark Insider Annual Reports (2004-2008), based on number of USPTO trademark application filings. 2IP Law 360’s annual trademark litigation survey, based on number of new cases in 2006 (2007) 7947 North America Team of the Year E I du Pont de Nemours and Company

The trademark team led by Van H Leichliter regional trademark teams, based around including the licensing of the DuPont oval won the award for North America Team of the world as part of DuPont’s subsidiary logo to a large windscreen wiper blade the Year but many respondents to the WTR network. Leichliter manages the company for a new product that is survey think that its work is outstanding Wilmington group and coordinates the expected to do very well. Leichliter is keen across the board. “DuPont’s trademark regional teams’ work (some of which, to emphasize the stringent processes that portfolio straddles many industries, from including that for the United States and DuPont has in place before signing any agriculture and nutrition to electronics and Mexico, act as the company’s trademark licence agreement. These processes are telecommunication technologies, across agents in the relevant region). Two years key not only to setting up the licences, but over 100 business units,” explained one ago the team established a corporate brand also to managing the risks involved and trademark professional surveyed, “so the protection centre that works closely with preserving the brand identity and essence. trademark issues it faces are notably more the trademark group in monitoring use of “Since many of our licences involve the complex than those of most companies and, DuPont’s trademarks, taking action against corporate brand DuPont, the opportunity accordingly, dealing with these issues as infringers and counterfeiters globally and must also be consistent with our mission, efficiently as it does is more worthy piloting several product authentication core values and corporate sustainability of praise.” systems. goals,” Leichliter concludes. DuPont’s trademark function is divided Leichliter’s team also oversees an ever- into a corporate trademark team based in expanding trademark licensing corporate Wilmington, Delaware, responsible for the function. “The licensing programme has entire trademark portfolio of DuPont’s successfully expanded our brands to new Other nominees: parent company – which represents applications and captured significant adidas between 18,000 and 20,000 registrations marketplace value,” Leichliter explains. eBay at any given time. The other main part of For instance, in 2008 the team oversaw Google the trademark function is made up of the three key new deals in the United States, Intel

Susan Heller and Roxanne Elings of Greenberg Traurig present the North America Team of the Year award to Van Leichliter of E I du Pont de Nemours and Company

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 29

Automotive & Aviation Team of the Year BMW

As one of the world’s most prestigious car worldwide strategy for applications, design infringement and even manufacturers, BMW has to make sure its portfolio management and enforcement at oppositions. Add in falling sales and it is IP team stays focused on protecting the the team’s headquarters in Munich gives clear that BMW is facing testing times. brand’s core ideals of quality and safety. BMW an edge. “Every member of the team “The future development of the brands While these attributes are frequently has a specific responsibility for a territory has become a huge challenge,” admits threatened by infringers, the BMW brand and for special topics/internal clients,” says Volkmer. That said, the brand has survived remains strong. In 2008, a German court Volkmer. It is a tight-knit team with just world wars and several recessions since it handed BMW a major victory against five lawyers overseeing 20,000 trademarks. was founded in 1916. Volkmer is confident copycat car designer Shuanghuan. The Despite its small size, the team is greatly that the long-term approach of his Munich Regional Court banned the Chinese respected within the company. “BMW has a “excellent global legal network” will help manufacturer from importing its CEO car strong focus on trademarks,” states secure BMW’s future. After 10 years with into Germany as it infringed BMW’s design Volkmer. “Our cooperation with the the company, he is determined to enforce rights in its famous X5 vehicle. Jochen marketing departments works well: we are its rights, and knows that the centralized Volkmer, head of the trademarks, designs generally involved at a very early stage and, model works. “Our continuous approach and legal IP issues team at BMW, picks this accepted as the key partner regarding non- regarding portfolio management and case as the most memorable from the past technical IP matters, particularly worldwide enforcement is recognized by year, which has seen BMW bring hundreds trademarks. The board acknowledges our IP experts around the world,” he says. of cases all around the world. expertise and generally accepts our Volkmer’s team is designed with a recommendations and risk assessment.” Other nominees: global focus. “One department has global The economic crisis has hit the Caterpillar responsibility,” he explains. This factor sets automotive industry particularly hard. Daimler his team apart from any other in the Volkmer admits that the recession has Harley-Davidson automotive industry. Centralizing a already resulted in a rise in fake car parts, Honda

Jochen Pagenberg of Bardehle Pagenberg Dost Altenburg Geissler presents the Automotive & Aviation Team of the Year award to Jochen Volkmer of BMW

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 31 Own. Protect. Grow. Your IP assets.

2P?BC
+?PIQ .?RCLRQ !MNWPGEFR "CQGELQ #LDMPACKCLR

LRG AMSLRCPDCGRGLE

"MK?GL
,?KCQ *GRGE?RGML
!MKKCPAG?JGQ?RGML
'LTCQRGE?RGML 1RP?RCEW


"0 
'.
2P?LQ?ARGMLQ +?L?ECKCLR

Proud sponsor of the 2009 World Trademark Review Awards

-DjACQ


Australia (liaison), China, Hong Kong, India, Indonesia, Philippines, Thailand, UAE, United Kingdom, USA (liaison), Vietnam UUU GNPGEFRQ AMK Energy Team of the Year Chevron

In an unprecedented enforcement action, majority of the prosecution and for presenting infringement and Chevron recently took on thousands of enforcement work in-house. Naturally counterfeiting issues. Assessing the formerly licensed gas stations that there is some overflow and this is registrability of marks early on is also retained the company’s brand after outsourced on a case-by-case basis, but the important, explains Setton, as it gives the termination of the licence agreement. It fact that Chevron’s trademark operation is mark owner the basis upon which to file was by-and-large a successful campaign largely undertaken by Setton and her team accordingly. While Chevron continues to which will no doubt significantly keeps it in harmony with the business develop its brand in this way, Setton notes strengthen the energy giant’s trademarks aims of the company. “We work closely that recently the focus has stayed on the and overall brand. “It was unheard-of with the business units and operating company’s existing 15,000 registrations within the industry in terms of the companies,” explains Setton. This includes around the world. For such a small team, number of stations involved,” reveals the marketing, lubricants and corporate this presents a unique challenge in Eliane Setton, head of the trademark team brand groups, among others. “We try to portfolio management – but an essential at Chevron. Setton is based at the stay in direct contact with our clients so one nevertheless, given the economic company’s headquarters in San Ramon, that they involve us early in their climate. “This past year we restructured California. She works alongside just one projects,” she adds. “That way, we can the ownership of the entire portfolio,” staff attorney, plus a team of paralegals, a advise our clients early on and usually says Setton. “We try to spend every dollar docketing clerk and a legal assistant. “Our reach a solution that works for all.” as efficiently as possible.” team is smaller than most others in the Early involvement of the IP team is energy sector,” says Setton. “So we work as crucial for a company operating globally. Other nominees: a tight-knit group and have opportunities Chevron has operations in almost every BP for cross-training.” Close collaboration jurisdiction in the world. Among other ExxonMobil between multi-talented staff means that things, Setton concentrates on clearance General Electric Setton’s team can, remarkably, cover the both in key markets and those notorious Shell

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 33 Congratulations to Playboy – the World Trademark Review Industry Awards 2009 Entertainment and Media Team of the Year

Recognising excellence

If your team needs help establishing, protecting and exploiting your intellectual property, turn to Boult Wade Tennant. With one of the largest trade mark groups in the UK, we assist our clients with their most important assets – the selection, protection, management and enforcement of trade marks and give advice on copyright and domain name related issues.

In 2009, Managing Intellectual Property (MIP) recognised Boult Wade Tennant as the ‘UK Trade Mark Prosecution Firm of the Year’. And for the third consecutive year, we have been ranked in the top tier of MIP’s Global IP Survey for both patent and trade mark prosecution – the only UK firm to achieve top tier ranking in both categories.

So, your team can choose Boult Wade Tennant with confidence. Your intellectual property couldn’t be in better hands.

To discuss your IP needs, contact our senior partner Bruce Alexander on +44 (0)20 7430 7500 or email [email protected]

Boult Wade Tennant

European Patent and Trade Mark Attorneys Verulam Gardens, 70 Gray’s Inn Road, London WC1X 8BT UK Chartered Patent Attorneys www.boult.com Entertainment & Media Team of the Year Playboy

It has been a stand-out year for the applications we look closely at whether we of the relationships is very collaborative,” trademarks team at Playboy. The group can file multi-class applications for one she adds. This notion chimes with one of seized a staggering 1.5 million counterfeit price and include broad descriptions of Cashman’s five steps to success: that of goods in numerous coordinated efforts goods and services so that we won’t have sharing ideas and resources. Together, the across 28 countries. “We’ve been working to spend additional money to make new team is stronger in the face of new very hard with customs officials, local law filings later when the business expands.” challenges. Although Cashman quickly enforcement and our local lawyers,” says This level of detail is emblematic of identifies enforcement in both Russia and Anamaria Cashman, assistant counsel in Playboy’s considered corporate culture. Turkey as the next frontier, she is the trademarks team. “We are thrilled to Thought is given to every factor of the confident that her team will come up with get that much counterfeit product out of operation, even the terms the IP team the goods. “We continue to research and the market.” uses. Cashman eschews the term ‘clients’, develop creative strategies to combat the Operating out of its corporate for instance, preferring to describe her problems in these regions. Meanwhile, it headquarters in Chicago, the Playboy colleagues as ‘partners’. “We’re all in this is important to stay connected to changes team is organized strategically, with together,” she explains. “We all have very in the law – by reading WTR Daily!” different members taking on different good relationships with the business aspects of the overall job of managing people – across our divisions and up and over 8,000 trademark registrations in 200 down the organizational charts. We are jurisdictions. Added to this is the here to support our businesses and help challenge of an ever-tightening budgetary them grow.” Cashman’s team participates Other nominees: belt, as like so many others the team has in as many strategic planning meetings as Apple sought to spend less money this past year. is possible to ensure that IP issues are on Microsoft “In today’s economic environment,” the agenda with product development Nokia explains Cashman, “when we file and marketing departments. “The nature TimeWarner

John Wallace of Boult Wade Tennant presents the Entertainment & Media Team of the Year award to Mary Ball, Anamaria Cashman and Michele McCoy of Playboy

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 35

Fashion & Luxury Team of the Year Gucci

“Vision, entrepreneurship, passion and important historical portfolio that adjust our targets so that we are always trust are our guiding principles,” states contains a large number of registrations pushing ourselves,” explains Volpi. Vanni Volpi, head of Gucci’s IP to be managed and protected,” “In this way, we have taken steps to department, when asked to reveal the explains Volpi. internalize brand protection and secret of his team’s success. He also The team consists of a global network enforcement work on a global basis, points to the company’s clear overall IP of more than a dozen people, including reviewed our network of correspondents philosophy and vision, which fosters lawyers, paralegals and investigators. and investigators, increased litigation tight-knit collaboration at all levels of There are experts on the ground in action and raids, and enlarged the scope the business. strategic markets such as Asia-Pacific, of protection of our iconic marks.” Trademarks and designs are vital Japan, the United Kingdom, the United assets for any luxury and fashion group. States and of course Italy. Volpi therefore ensures that he and his Already a serious challenge for team are involved at the outset when the Gucci’s trademark team, counterfeiting company starts developing a new has become even more of a problem over product. The team also plays a key role at the past year as a result of the global product launch and throughout the recession. “Counterfeiters and infringers promotional process, maintaining a tend to increase at times of economic close relationship with both the creative crisis,” notes Volpi. But over the course of and marketing functions of the business. 2008 Gucci has become a force to be Other nominees: Trademarks and other IP rights are at the reckoned with, significantly expanding adidas core of the company’s strategy to protect its enforcement efforts. This is all part of L’Oréal its creativity and to preserve the strong the team’s overall drive to achieve LVMH Group heritage of its brands. “Gucci has an success. “We constantly review and Nike

Christina Berggren and Jeppe Clausen of MAQS present the Fashion & Luxury Team of the Year award to Vanni Volpi of Gucci

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 37

Food & Beverages Team of the Year Diageo

“The key word here is team,” states Bruce and prospective consumers, have access to inwards in light of the economic crisis, Proctor, general counsel for global our brands without the threat of being although it has not shed any members. intellectual property at Diageo. “I’m proud deceived or misled by those who would Instead, Proctor is saving money by of everyone within the IP group and feel steal our goodwill or harm our good increasing efficiency – doing “more with strongly that our ability to function as a name,” says Proctor. less”, as he puts it. In addition to his global high-performing unit is a direct result of To do this, the IP team has to be fully responsibilities, Proctor was recently made the camaraderie and team spirit we’ve integrated into the company’s overall general counsel for Diageo’s North America strived to achieve.” A WTR Industry Award business strategy – and vice versa. Proctor operation. Maximizing integration in this recognizes the important work carried out describes his team as having “an way empowers the team to address by Proctor’s group which, according to extremely commercial orientation, a close challenges on a truly global scale. On a one survey respondent, “sets the bar for knowledge of the business and the more practical level, Proctor is assigning as in-house trademark practice, delivering business objectives”. After having worked much pre-litigation and litigation work to excellent, pro-active legal management with some of the world’s largest brand the in-house team as possible. “The team and support for the Diageo business”. This owners, he adds that Diageo is the most has really pulled together to create was evidenced famously in late 2008 IP-focused company he is aware of. “This excellent outcomes despite the challenges when the team won damages totalling positions the IP team in close partnership of resource constraints,” he says. approximately $183,000 from a Chinese with all who touch our brands – drinks manufacturer for imitating the get- essentially the entire organization,” he up of Diageo’s Johnnie Walker Black Label says. “We find that everyone within Other nominees: whisky. The hard-won ruling (such Diageo is passionate about our brands, so Coca-Cola decisions are rare in China) proves when we say we need to act in furtherance Ferrero Diageo’s resilience in the face of imitators. of our brands, immediately understand.” Mars “We need to ensure that our consumers, Nevertheless, the team has had to look Unilever

Karen Butcher of Morgan Lewis presents the Food & Beverages Team of the Year award to Elliot Basner, Caron Tayler, Nicola Hastwell, Katherine Tsang and Dana Gilland of Diageo

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 39 Congratulations to all 2009 World Trademark Review Industry Award Winners!

'LRCJJCARS?J
NPMNCPRW
GQ
MLC
MD
WMSP
KMQR
GKNMPR?LR
?QQCRQ 5C
FCJN
K?IC
QSPC
GR
QR?WQ
RF?R
U?W

Email: [email protected] Website: www.iprights.com

-DjACQ


Australia (liaison), China, Hong Kong, India, Indonesia, Philippines, Thailand, UAE, United Kingdom, USA (liaison), Vietnam Household & Electronics Team of the Year Intel

Intel this year received one of the most expect, but for less money.” With this in she also supervises two lawyers in London famous – and confusing – decisions of mind, Zefo has entreated both her team and Hong Kong. They, together with recent memory. The European Court of and external counsel to conduct root-and- external counsel in almost every country, Justice decision in Intel v CPM (Case branch reviews of their processes. In this give Intel a truly global approach, which C-252/07), was certainly “surprising”, says way, Intel has challenged traditional helps most notably in the fight against Ruby Zefo, the computer chip company’s methods and, reveals Zefo, brought a fresh infringers and counterfeiters. “The bulk of head of trademarks. But it did not faze perspective on how to make them more our time is spent on enforcement of Zefo’s award-winning team: the everyday efficient. “A minor discount on an hourly Intel’s famous and well-known marks,” work continues apace. “You can’t always rate isn’t enough for the fundamental explains Zefo. “We certainly have a wide- predict what a defendant, judge or jury changes we need in efficiency and cost ranging portfolio of marks to protect.” will do, but you can plan in advance for containment,” she says. the possible scenarios and be ready to One way of doing this is to strip out address them,” she says. “And it’s not non-essential work, such as defensive always about the big win. It’s about how filings – without, of course, jeopardizing we do business every day to get results.” your rights. This is a tricky balance to Keeping the team’s eye on the strike, but it is something Zefo is business ball has of course been of the confident the team can manage. She has highest importance recently. Zefo “unfailing confidence that we can and will describes the budget cuts presented to her reach the goals we set for legal support of Other nominees: department as a “squeeze” but remains brand creation, maintenance and Beiersdorf pragmatic. “We’ve had to figure out ways protection”. It has to be a team effort, Johnson & Johnson of continuing our protection of the though. Zefo oversees 19 people. Most of Nokia brands that the company has come to them are based in the United States, but Research In Motion

Rupert Ross-MacDonald of Rouse presents the Household & Electronics Team of the Year award to Kelly Smith, Leslie Skinner and Ruby Zefo of Intel

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 41 At home in Europe

With over 2,400 lawyers in 54 cities throughout Europe and beyond, CMS provides national and cross- border advice on every aspect of business law. More than 100 leading IP specialists in our pan-European CMS team provide customised legal support to international corporations, technology leaders and R&D experts. We help you protect your intellectual property – wherever you are in Europe.

At home in:

Amsterdam | Berlin | Brussels | London | Madrid | Paris | Rome | Vienna | Zurich | Aberdeen | Algiers | Antwerp | Arnhem | Beijing | Belgrade | Bratislava Bristol | Bucharest | Budapest | Buenos Aires | Casablanca | Cologne | Dresden | Duesseldorf | Edinburgh | Frankfurt | Hamburg | Kyiv | Leipzig | Ljubljana | Lyon Marbella | Milan | Montevideo | Moscow | Munich | New York | Prague | Sao Paulo | Sarajevo | Seville | Shanghai | Sofi a | Strasbourg | Stuttgart | Utrecht | Warsaw | Zagreb

The members of CMS are in association with The Levant Lawyers with offi ces in Beirut, Abu Dhabi, Dubai and Kuwait. www.cmslegal.com

CMSRRH_0401_IP PAG_Tube_L2indd 1 21.04.2009 18:55:32 Uhr Internet Team of the Year Microsoft

Russell Pangborn’s invitation to join the internet trademark issues that Microsoft Saving money in this way helps the Implementation Recommendation Team encounters,” he says. company continue to innovate and (IRT) is a major endorsement of his and The past year itself has predictably expand in the ever-booming web-space. his team’s pre-eminence in internet been full of such issues. But behind its Microsoft’s internet presence already issues. The expert panel was established success in several high-profile includes the news, entertainment and in March 2009 by the Internet cybersquatting cases (such as the Spam marketplace sector with Xbox Live and Corporation for Assigned Names and King Case, prosecuted in Seattle), MSN, business productivity with Office Numbers (ICANN) to propose methods Microsoft has taken stock back home, Live, search and online services with the under which trademarks will be protected consolidating its intellectual property and new Bing decision engine and Windows when new generic top-level domains the trademark team’s operations. “For Live services, as well as a cloud computing come online in 2010. Before the creation example,” explains Pangborn, “we have platform in Azure. It is enough to keep of the IRT, Pangborn, head of trademarks streamlined our docketing and filing the Internet Team of the Year busy. at Microsoft, submitted several high- process. That has significantly reduced our “I anticipate that we will continue to be profile comments to ICANN’s various costs this year. We have also pursued more challenged by cutting edge, technology- consultation processes. With a major web strategic clearance and filing practices that related trademark issues for the presence and approximately 16,000 have further resulted in cost savings.” In foreseeable future,” says Pangborn. trademark registrations, Microsoft’s addition, the team has thrown itself into interest in trademarks online is one of making use of the Madrid Protocol, which the deepest in the industry. Thus, offers real savings, says Pangborn. “We Other nominees: Pangborn was perfectly placed to join the have meaningfully reduced overall filing Amazon IRT. “I would venture to guess that there costs and anticipate continued future eBay are very few in-house trademark practices savings from resulting simplified portfolio Google facing the volume and complexity of maintenance.” Yahoo!

xxx

Isabel Davies of CMS presents the Internet Team of the Year award to Pete Becker, Pamela Kilby, Jennifer Scully, Jennifer Ennis and Russell Pangborn of Microsoft

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 43

CMSRRH_0401_IP PAG_Tube_L2indd 1 21.04.2009 18:55:32 Uhr [ WHAT’S IN A NAME? ]

PI

IP. Trademarks are often the most valuable asset associated with a new brand in virtually every business sector. Just ask the trademark law attorneys at Fitzpatrick.

At Fitzpatrick, we respect and value the exceptional talents and ingenuity of our clients, and applaud the impact their vision has on business. Their creativity and high standards continue to inspire us all. Congratulations to all World Trademark Review Industry Award winners.

www.fi tzpatrickcella.com /&8
:03, 8"4)*/(50/ $"-*'03/*" 30 Rockefeller Plaza 975 F Street, NW 650 Town Center Drive, Suite 1600 New York, NY 10112-3800 Washington, DC 20004-1405 Costa Mesa, CA 92626-7130 212.218.2100 202.530.1010 714.540.8700 Pharmaceuticals Team of the Year GlaxoSmithKline

GlaxoSmithKline (GSK) has changed. Over products. One respondent to the survey strategic collaboration with Aspen in sub- the past year it has appointed both a new used by WTR to decide the nominees and Saharan Africa, the acquisition of a chief executive officer and a new general winners of the Industry Awards described portfolio of AstraZeneca’s over-the-counter counsel. As if this was not enough for the GSK’s enforcement successes in China as brands and the acquisition of US company trademarks team to become accustomed “worthy”, adding that “GSK continues to Stiefel Labs.” It seems there is no stopping to, the pharma giant also recruited a new lead the way in pursuing pharma this pharma giant, as a WTR Industry head of global trademarks in Sophie Bodet. counterfeits through criminal prosecution Award confirms. “It is fantastic that for the “The trademark team has shown – the team is recognized repeatedly by key third year running, GSK has won the award tremendous resilience during this time of organizations such as the Quality Brands for the best in-house trademark team in transition and has embraced the resulting Protection Committee and the Public the pharmaceutical industry,” says Bodet. changes with enthusiasm and energy,” she Security Bureau in China.” “Peer recognition is of great value in any explains modestly. Meanwhile, the team Merely policing registered rights is not organization and no more so than this year has been coping with budget cuts, a rise in enough, despite the economic situation. when the entire industry is facing an counterfeit products and stricter The team acknowledges that it must increasingly challenging economic and regulation. But the drive to keep its continue registering new marks too. regulatory environment.” systems running at full capacity continues Notably, in 2008 GSK secured a Community regardless, despite the mammoth task of trademark registration for the purple colour managing 116,000 trademark registrations combination that the company uses on its around the world. With all eyes on China, asthma medicine Seretide, known in the Other nominees: the team worked alongside local law United States as Advair. Bayer enforcement and GSK’s corporate security The team has also worked on a number Eli-Lilly department over the past year to raid over of significant transactions over the past Pfizer 20 factories manufacturing counterfeit year, reports Bodet. “For example, GSK’s Sanofi-Aventis

Pat Razzano of Fitzpatrick Cella Harper & Scinto presents the Pharmaceuticals Team of the Year award to Carly Mansell, Maribeth Case, Sarah Jeffrey, Sophie Bodet and Terry Dixon of GlaxoSmithKline

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 45

In-house Counsel of the Year Vanni Volpi – Gucci

It has been almost three years since Vanni “the most appropriate techniques in each explains. “However, there is no doubting Volpi took over the reins as head of jurisdiction – both the rapier and the that we will always strongly defend our Gucci’s IP department. In that short time sledgehammer.” iconic marks against any confusingly he has succeeded in redefining the While it is clear that Volpi is the major similar application or infringing use.” fashion and luxury company’s IP strategy. driving force behind the IP department’s On collecting his award, Volpi declared “He really is the architect of Gucci’s impressive enforcement record across the himself deeply honoured to receive such current success in the IP field,” stated one globe, he is quick to thank his team for recognition from the IP community. “The notable private practitioner when asked to their unstinting determination to the Industry Awards are the best feedback we describe Volpi’s influence since joining cause. “I’m very proud of all the team could hope for,” he said. “Such accolades Gucci. Others commended his “clear members for their commitment and definitely stimulate everyone to achieve thinking”, “hard work” and “innovative continuous support,” he states. The praise more and to undertake further challenges approach”. He works tirelessly to build is certainly justified as his team also on behalf of our company.” and implement the company’s IP scooped the Industry Award for Fashion & strategies, and also coordinates and Luxury this year. In addition, he manages an international network of acknowledges the important role played lawyers and investigators to protect the by the team’s network of external lawyers company’s IP assets. who handle litigation. In the past year, Volpi has refined the Looking to the future, Volpi pinpoints overall IP strategies even further. In a the importance of keeping costs down Other nominees: market increasingly plagued by without jeopardizing the consistent Danise van Vuuren-Nield – Coca-Cola counterfeits, he has taken vital steps to protection policy he has put in place. “It’s Rhonda Steele – Mars increase the visibility of the brand using, essential to maintain the right balance Rose Hagan – Google according to one informed commentator, between resources and results,” he Ruby Zefo – Intel

John Olsen of Edwards Angellxxx Palmer & Dodge presents the In-house Counsel of the Year award to Vanni Volpi of Gucci

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 47 At the IAM website you can:

Read the contents of the latest issue Search and read articles from previous issues Update your account details Renew your subscription

And don’t forget to read the editor’s blog – a different slant on breaking IP news stories Lifetime Achievement Rhonda Steele – Mars

Rhonda Steele came to trademarks by protecting those rights that are truly Republic, thanks to its positioning of key accident. It is a fact that she admits important to them. That then needs to be people such as Steele in the region. “We openly, remembering that it was a balanced with what is important to the have been putting more trust in the spontaneous decision to accompany a consumer and what he/she sees.” It is this Chinese court system by taking civil friend on a holiday to Australia that set fundamental understanding of business, actions in important jurisdictions and the groundwork for her professional life. brands and intellectual property that Steele against repeat offenders,” she explains. Since taking a job as a secretary to a draws on every day in her role as senior “Our aim is to use these as learning partner in the IP team at Baker & marketing properties manager (Asia- opportunities on both sides because we McKenzie in Australia, Steele has forged a Pacific) with Mars. When she first took a job want to understand how the Chinese successful career in intellectual property, with the Mars Asia-Pacific team in 1991, the system works and, at the same time, we most notably in-house at Mars. In 2008, confectionery company was only just want to use the benefit of our experience she held the presidency of the beginning to enter the region. “Working in other jurisdictions to help Chinese International Trademark Association, a with brand new Mars businesses in judges expand their knowledge and credit topped this year by a Lifetime completely new markets, watching them expertise.” Very few people have such Achievement award. “It has been a expand and being able to support them has tenacity – or power – but this is just one remarkable, accidental journey,” she says. been fantastic,” Steele reveals. example of how influential the former There may be a strong serving of luck Steele has seen Mars’s operations in secretary has become. She certainly has involved, but one does not go as far in Asia-Pacific grow from two sales offices to enacted her trademark promise to “turn business as Steele has without an astute a dominant position. Most recently, Steele the world upside down”. commercial attitude. “To be really has observed the boom of Chinese successful in trademarks,” she says, “you markets – both legitimate and illicit. Mars must be totally aligned with the business is one of the companies at the forefront of priorities so that you are registering and anti-counterfeiting action in the People’s

Dee-Ann Weldon Wilson of ExxonMobil presents the Lifetime Achievement award to Rhonda Steele of Mars

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 49 50 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Awards night Over 150 senior IP professionals attended the third WTR Industry Awards (www.Industry-Awards.com) at the stylish Greg Kucera Gallery in Seattle on May 19 2009. Representatives from the nominated teams mingled with leading private practice lawyers at the exclusive champagne reception in honour of the world’s top in-house trademark counsel. WTR wishes to thank all nominees and sponsors for helping to make the Industry Awards 2009 such a successful event.

1 1

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 51 1

2345

6 7

891011

52 World Trademark Review August/September 2009 www.WorldTrademarkReview.com 12 13

14 15

17 18

11 Jochen Pagenberg (Bardehle Pagenberg) 12 Roxanne Elings (Greenberg Traurig) 13 Justin & Mona Pierce (SonyEricsson) 14 Scott Gelin (Greenberg Traurig), Maria del Mar Oliva (Philip Morris) 16 19 15 Pat Razzano, Tim Kelly and Warren Olsen (Fitzpatrick Cella Harper & Scinto) 1 Audience 16 Sophie Bodet, Maribeth Case and 2 Carmen Quintanilla Madero Carly Mansell (GlaxoSmithKline) (Televisa), Alonso Camargo 17 Veronica Abreu (eBay) and Dana (Olivares & Cia) Northcott (Amazon) 3 Egon Engin-Deniz (CMS), Reiner 18 Tom LaPerle and Chetuan Shaffer Hansert (Beiersdorf) (Apple) 4 Don Knapp (BP), Bob Rippe 19 YeWon Min and Maria Scungio (ExxonMobil) (Edwards Angell Palmer & Dodge) 5 Helena Östblom (Zacco), John 20 Vanni Volpi (Gucci) and Christina Donald (Apple) Berggren (MAQS) 6 Chris Lim, Barbara Kaplan, Michelle Frye, Lisa O’Hal and Andre Betita (VF Corp) 7 Jennifer Ennis (Microsoft), Pamela Kilby (Microsoft), Jennifer Scully (Microsoft), Isabel Davies (CMS) 8 Isabel Davies (CMS) 9 Jeppe Clausen (MAQS) 20 10 John Olsen (Edwards Angell Palmer Dodge) www.WorldTrademarkReview.com August/September 2009 World Trademark Review 53 Feature By Adam Smith

communicate them,” Macpherson explained, advising brand owners to do the same in light of the economic downturn. “This is a defining moment in world economics.” she said. Commenting that brands would therefore be more important than ever. “Economic and political challenges present an opportunity; brand owners can be the touchstone of change,” Macpherson explained. On paper, it may sound like an Obama impersonation, but Macpherson’s speech was lauded as an original take on trademark issues. The lingerie entrepreneur (and “spokesmodel” for Revlon) was not the only one winning plaudits: the host city attracted many compliments. The fact that the venue was downtown and close to so many hotels, bars and restaurants was at the heart of the meeting’s success. Where the positioning of last year’s Berlin meeting forced people to take transport out of town, the WSCTC’s location was perfect – and celebrated accordingly. It also meant that it was no trouble for delegates to travel to the various parties and receptions, dotted around the city on every night of the conference. Seattle’s proliferation of chic art galleries hosted more parties than most. And while the obvious venue – Seattle’s iconic, 124-metre-tall Space Needle – was probably the most sought-after venue, one of the finest had to be the offices of Graham & Dunn, on Pier 70. The stylish office and party venue, jutting out into the Puget Sound and flanked by the Olympic Sculpture Park, boasts superb views over Elliot Bay, through which Pacific Ocean cruise liners and freight container ships glide frequently. Despite a low economic tide, INTA’s 131st annual meeting was definitely ‘full steam ahead’. Returning to Seattle after 10 years was a The International Trademark Association’s (INTA) annual meeting is lot like coming home, a number of delegates told WTR, a feeling all still the most important – and busiest – event in the trademark the more soothing given the global financial conditions. So make community’s calendar. This year the conference returned to Seattle yourself comfortable and read on, as WTR looks back at a selection of for the “greenest annual meeting” ever, as Katrina Burchell, head of the best sessions and table topics. trademarks at Unilever and co-chair of the meeting, explained at the opening ceremony. “We live in a competitive world,” Burchell said. Session highlights “Trademarks are key to winning that battle, so brands are jumping The meeting’s programme offered delegates a diverse range of on the environmental bandwagon.” INTA leapt on board too this concurrent sessions and table topics, but the following sessions stood year, with its special theme of corporate social responsibility. In this out as being particularly (or surprisingly!) well presented and engaging. section, WTR looks at some of the meeting’s many highlights, so numerous that one delegate said she was “too busy to sleep!”. Trademarks and Web 2.0 Moderated by Microsoft’s head of trademarks Russell Pangborn, this Coming home session was more engaging than any other attended by WTR. The At moments of stress it is always good to be back in familiar panel, which included Fabricio Vayra of TimeWarner, discussed timely surroundings. Trademark lawyers had been in Seattle 10 years ago developments. Panellists and commentators in the audience touched for the 121st INTA annual meeting. To return to the city in 2009, on the recent change to Google’s AdWords policy in the United States, when times are tough for business, was somewhat comforting. The which now allows for advertisers to use competitors’ trademark city oozes quality, from its globally famous brands to its charismatic terms in sponsored ads for which they own keywords. The debate avenues, elegant waterfront area and fabulous fish market. Seattle’s naturally gravitated towards whether, as Google claims, the change trademark is its style. It is no surprise, then, that INTA decided to was consumer-driven. In Web 2.0, consumers are so active that they revisit the city. are the producers of the actual content. This presents many The downtown Washington State Convention & Trade Centre challenges for trademarks, said the panel. “Brand owners have to look (WSCTC) is a little confusing for the first-time visitor, but the 7,500 underneath the surface and find out how their brand will be delegates who flooded into the city for the marathon five-day event represented and where it will appear,” advised Pangborn. soon acclimatized. Given the economic conditions and lawyers’ natural cynicism, rumours flew through the convention centre Getting in shape for global design protection regarding the delegate numbers, with observers in disagreement Panellists from the European Union (David Musker, RGC Jenkins & over whether or not there were fewer delegates than last year. The Co), Japan (Kozo Takeuchi, Fukami Patent Office) and the United official statistics show that attendance had indeed dropped, but few States (Robert Katz, Banner & Witcoff) reviewed procedural and could argue that this had a detrimental effect on the conference. substantive matters in their respective jurisdictions. Katz reviewed Attendance at the opening ceremony was certainly boosted by in some detail the Egyptian Goddess Case (88 USPQ2d 1658 (TTAB the profile of the keynote speaker, Elle Macpherson. The brand owner 2008)), decided by the US Court of Appeals for the Federal Circuit, and supermodel delivered a rousing speech about the practicalities of which he labelled as “the most important design patent case in the developing and running a global brand. “I had to dig deep to United States for 125 years”. Ruling en banc, the court banished the understand the purpose of my business, my brand values and how I ‘point of novelty’ test as a “second and free-standing requirement

54 World Trademark Review August/September 2009 www.WorldTrademarkReview.com www.WorldTrademarkReview.com August/September 2009 World Trademark Review 55 56 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Feature: Sleepless in Seattle

for design patent infringement because it is inconsistent with the Supreme Court’s Gorham v White ‘ordinary observer’ test. Later considering the benefits of the Hague Agreement, the panellists concurred that key countries such as China, Japan and the United States would have to join to make the international procedure (the design equivalent to the Madrid system) truly attractive. The US government has signed the agreement, but Congress must approve it before it is implemented – and such approval requires amendments to US law first (eg, regarding the term of protection of a design). Katz expressed his concern that because the representation requirements of the US Patent and Trademark Office are so strict, it is likely that the rate of rejection of foreign applications designating the United States would be high. Lastly, the speakers noted a degree of convergence between what constitutes a design across different jurisdictions, but called for an international treaty on design law. “There is an international patent law treaty and an international trademark law treaty,” said Takeuchi, “but no international design treaty.”

Annual review of US federal case law and TTAB developments The speakers managed to make what could have been a very dry session a lively and engaging one. Since the previous review session in Berlin in 2008, there had been no decision from the US Court of Appeals for the Federal Circuit dealing with the registrability of trademarks and only one decision from a federal court: Pro-Football Inc v Harjo (87 USPQ2d 1891 (DDC 2008)). The case focused on whether a delay of seven years and nine months to bring an action against the registration of a trademark constitutes laches. ‘Yes’ was the court’s answer. In contrast the US Patent and Trademark Office’s Trademark Trial and Appeal Board was very busy, issuing decisions covering topics as varied as descriptiveness, res judicata (eg, In re Hotels.com OP (87 USPQ2d 1100 (TTAB 2008)), functionality (eg, In re Vertex Corp LLC, 89 USPQ2d 1694 (TTAB 2009)) and fraud.

Market evolution and brand collision This interactive workshop focused on the reality of market change and its implications for brand owners. Paul Reidl (Law Office of Paul Reidl), a past president of INTA, explained that the channels of trade have developed dramatically and new goods arrive constantly on the market. As an example, Reidl pointed out that 50 years ago, no one would have envisaged that people would be buying bottled water. All these changes raise new issues for trademark enforcement. In the BAREFOOT Case, a recent example from Australia, the court had to compare wine and beer. The trial judge found that the goods were different and that confusion was unlikely, but the appellate court held that “these are goods of the same description”. The trial judge had thus erred in focusing on the differences, rather than the similarities. Would the results have been the same 20 years ago? According to Reidl, BAREFOOT may be a sign of a changing market. J Scott Evans, head of trademarks at Yahoo! spoke about trademark clearance in an evolving market, explaining how it has become more challenging in light of the variety of services provided by Yahoo! and the multitude of channels within which it operates. Evans concluded that it is impossible to clear a mark completely because new products emerge every day. Finally, Dinisa Folmar from Coca-Cola agreed that big brand owners cannot disregard any classes when clearing marks. For example, circa 1962 products of concern for Coca-Cola included other colas, milk and teas. Nowadays, products and services of concern include beer, sweets, restaurants and entertainment. WTR

Adam Smith, World Trademark Review, London www.WorldTrademarkReview.com August/September 2009 World Trademark Review 57 Feature By John Batho

Spanish revolution

The global downturn and changes to domestic practice having a significant impact on the prosecution side of the market, and procedure have altered Spain's prosecution and which is also directly influenced by the performance of the Spanish Patent and Trademark Office – Oficina Española de Patentes y enforcement landscape significantly. WTR takes a Marcas (OEPM). Spanish practitioners have noted some detailed look at the effects on the Spanish legal market improvements here, but remain concerned by the quality of decision making and a perceived lack of transparency. This is no longer such a problem on the litigation front where the introduction of part-specialized courts around five years ago changed the enforcement landscape in Spain dramatically. However, as this Spain has played a central role in the development of trademark law. survey of the market shows, in some ways, the new courts have been It has become synonymous with the globalization and a victim of their own success. harmonization of trademark procedures. The agreements establishing the international trademark system bear the name of Case for the prosecution its capital city (the Madrid Agreement and Protocol) and the choice Spain’s economy is in freefall. The once booming southern European of Alicante as the seat for the Office for Harmonization in the market has seen one of the greatest reversals of fortune among EU Internal Market (OHIM) reinforced its position as a leading voice in member states since the global meltdown hit. In the first quarter of IP protection. The rise of the Community trademark (CTM) has also this year the Spanish economy contracted by its fastest rate in at been good news for many Spanish firms, a significant number least 40 years. This is clearly demonstrated by the latest trademark regularly feature in OHIM’s lists of leading CTM filers. The general filing figures, which show a decline of around 14% last year. sentiment from those who were on the ground at the time is that, in According to the OEPM, approximately 60% to 70% of the initial scramble to establish market share when the CTM system trademark applications are filed through legal representatives, with came into operation in 1996, Spanish firms benefited from a the rest being filed directly by brand-owning companies. Local perception among some international clients that the proximity of entities are the main users of the national system, as borne out in these firms to the European trademark agency gave them some sort the OEPM’s filing statistics, which indicate that only around 4% of of advantage in terms of technical expertise. national registrations originate from outside Spain. Those years perhaps marked a golden period in the development In 2007 the OEPM received 57,833 applications. This dropped to of the Spanish market for trademark-related legal services. Myriad 49,750 in 2008 and the number is likely to fall further in 2009. It new names entered the fray. Foreign firms set up office in Alicante predicts that the final total for the year will be around 43,000. This to raise their CTM filing profile and also tried to develop some level fits with the general trend across the European Union. On average, of national practice. Not to be outdone, Spanish firms made giant national filings in Europe are down by 15% to 20%. However, the strides to broaden expertise at EU level. At around the same time, OEPM’s director general, Alberto Casado, believes that this situation patent and trademark agents began offering services traditionally is temporary and expects his office to return to a yearly average of undertaken by law firms. They engaged lawyers (abogados), thereby around 55,000 applications once the global economy recovers. The transforming themselves into IP boutiques – Elzaburu being a OEPM is entirely self-funding and Casado confirms that the office notable example. In response, some law firms, including Garrigues, has a healthy surplus to dip into should the economic crisis lead to a started to handle prosecution matters. sustained drop in filings. Work areas continue to blur but the transition is perhaps less In the meantime, the OEPM is taking steps to ensure that its pronounced in Spain than in many other jurisdictions. “I would say pricing structure remains competitive in light of the recent cut to around 80% of prosecution work is still carried out by patent and CTM fees and to guarantee that registration remains an attractive trademark agent firms,” says Joao Miranda de Sousa, head of IP option for brand owners working to tighter budgets. Casado feels practice at Garrigues in Madrid. “Conversely, approximately 80% of that a reduction at the national level is vital for local industries, litigation work is undertaken by law firms.” particularly small and medium-sized enterprises. Under the current While the speed of change may be slower in Spain than in other fee schedule, the OEPM charges €154.38 per class to register a mark, jurisdictions, it is starting to accelerate. The economic crisis is with renewals costing €178.73 per class. The application and renewal

58 World Trademark Review August/September 2009 www.WorldTrademarkReview.com According to the OEPM, local entities are the main users of the national system, as borne out in the filing statistics, which indicate that only around 4% of national registrations originate from outside Spain. In 2007 the OEPM received 57,833 applications. This dropped to 49,750 in 2008 and the number is likely to fall further in 2009. It predicts that the final total for the year will be France around 43,000.

Spain

Portugal

Representative name Trademark filings

1 Ungría Patentes y Marcas SA 2,736 2 Pons Patentes y Marcas SL 1,631 3 Iberpatent SL 1,141 4 Clarke Modet & Co SL 1,126 5 Consultores Urízar y Cía SL 1,121 6 J Isern Patentes y Marcas SL 954 7 Elzaburu SA 765 8 Heda Patentes y Marcas SL 647 9 Cuatrecasas SRLU 578 Morocco 10 Santiago Mediano Abogados SLP 569 11 Molero Patentes y Marcas SL 529 12 Kapler SL 474 13 ITM SL 469 14 D'K Dissen Mark SL 453 15 Oficina Ponti SLP 423 Top 20 filers of Spanish 16 Durán-Corretjer SLP 387 trademark applications 17 Propi SL 369 (Between January 1 2008 and 18 Dr Ing M Curell Suñol II SL 351 December 31 2008) 19 Salvador Orlando Asesores Legales 324 y en Propiedad Industrial SL Source: OEPM 20 Consulpi SL 307

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 59 Feature: Spanish revolution

Spain’s most valuable brands

Rank Brand Brand Logo Rank Brand Brand Logo Owner value 2009 Owner value 2009 Industry (€M) Industry (€M)

1 SANTANDER 10,840 6 ZARA 4,055 Grupo Santander Inditex Group Financial services Retail services

2 MOVISTAR 7,126 7 EL CORTE INGLÉS 3,721 Telefónica Móviles El Corte Inglés Telecommunications Retail services

3 TELEFÓNICA 6,615 8 EROSKI 2,935 Telefónica SA Mondragón Telecommunications Corporación Cooperativa Retail services

4 BBVA 6,008 9 IBERDROLA 2,104 BBVA Iberdrola SA Financial services Energy

5 MERCADONA 5,209 10 LA CAIXA 1,778 Mercadona Caixa d'Estalvis Retail services i Pensions de Barcelona Financial services

Source: Interbrand (www.interbrand.com)

fees are reduced by 15% where the application is filed electronically European Union. Following his move to Garrigues last year, he can (amounting to €131.22 and €151.92 respectively). “In general, our fees now assess the various systems from the point of view of the user. already compare favourably with most other EU jurisdictions,” notes “Judging the OEPM against other trademark offices in Europe I Casado, “but we must do more, which is why we are cutting the would say that it ranks among the top tier of registries,” he says. application and renewal fees by 15% across the board.” It will take “Having said that, there are still many aspects of performance that time for the reduction to be implemented as any change to the fee need attention.” schedule in Spain requires an amendment to the law. Nonetheless, Casado is confident that mark owners will benefit from the Examination issues reduction soon. The OEPM has submitted the relevant proposal to Once an application is filed it comes before a sub-section of the the government and it is simply a matter of time before it is ratified. Trademark Department, where it is first examined on formal Casado took charge of the OEPM just over a year ago and this grounds. Ex officio examination of prior rights was abolished in 2001 latest initiative seems typical of his proactive approach to reforming so the mark is examined solely on absolute grounds. However, the national agency. Prior to becoming director general of the OEPM, Antonio Castán, a partner with Elzaburu in Madrid highlights an Casado was vice president at OHIM and was heavily involved in important difference between Spanish examination procedure and developing the training and education programme there. “Being a the systems in place in most other jurisdictions. “Unusually, in Spain pioneer involved in the creation of the CTM system was a wonderful the official examination as to absolute grounds takes place after experience for me,” he says. “My time with OHIM has certainly publication,” he explains. At OHIM, for instance, CTM applications are influenced the plans I am putting in place to improve the examined first on formal grounds and then on absolute grounds. It is performance of the OEPM.” only once these steps are completed that the mark is made available Practitioners have noticed a difference, but they remain critical for opposition. In contrast, under the Spanish system, once the of some aspects of the OEPM’s performance. Miranda de Sousa is formal assessment has been carried out the mark is then published perhaps better qualified than most to compare the Spanish for opposition, with examination on absolute and relative grounds trademark agency’s operations with those of OHIM and other EU occurring simultaneously. “The OEPM also examines ex officio national offices. Until fairly recently he was director of OHIM’s whether the trademark consists of a name, surname, pseudonym, or institutional affairs and external relations department, which also any other sign which, to the general public, identifies a person other required him to maintain close ties with national offices across the than the applicant for the trademark,” adds Castán.

60 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Rank Brand Brand Logo Rank Brand Brand Logo Owner value 2009 Owner value 2009 Industry (€M) Industry (€M)

11 REPSOL 1,675 16 UNIÓN FENOSA 1,107 Repsol YPF SA Unión Fenosa Energy Energy

12 GAS NATURAL 1,642 17 GAMESA 1,100 Gas Natural Gamesa Corp Energy Energy

13 MAPFRE 1,551 18 CAJA MADRID 1,012 Mapfre Caja Madrid Insurance Financial services

14 ENDESA 1,407 19 ALCAMPO 968 Enel Alcampo SA Energy Retail services

15 ABERTIS 1,191 20 FCC 947 Abertis Fomento de Infraestructuras SA Construcciones Construction/ y Contratas SA infrastructure Construction

Examination is comparatively quick and as the OEPM has no real Having examination on backlog, Casado has no immediate plans to recruit more examiners. However, while practitioners commend the speed of examination, absolute and relative grounds they complain that Spanish procedural legislation imposes too many formal requirements. Every application must be accompanied occurring simultaneously is far by a power of attorney, for example. Moreover, the OEPM makes detailed signature compliance checks each time a trademark file is more logical. Applicants need presented. “While it is vital to scrutinize applicants carefully, there is significant scope to reduce the number of checks and controls in to know the likely fate of a place,” says Miranda de Sousa. “All these controls put an unnecessary burden on applicants and delay the process. They also require the mark as soon as possible. OEPM to employ clerical staff simply to assess whether applicants have complied with the formalities.” Enduring three separate Casado dismisses suggestions that the OEPM registration procedure is overly formalistic. “We have formal requirements that perhaps do not procedural stages exist in other national systems or at CTM level, which are prescribed by domestic legislation,” he says. “But in other ways our processes are unnecessarily prolongs the more flexible. For instance, having examination on absolute and relative grounds occurring simultaneously is far more logical. period of uncertainty between Applicants need to know the likely fate of a mark as soon as possible. Enduring three separate procedural stages unnecessarily prolongs the application and registration period of uncertainty between application and registration.”

Oppositions under attack Although combining absolute examination and opposition in one procedure may be beneficial, the process is effective only if the www.WorldTrademarkReview.com August/September 2009 World Trademark Review 61 The OEPM is working hard to improve transparency and is developing a system to allow direct access to trademark files

Online tools under review

Around 75% of applications are filed electronically and the done offline.” He complains that the current system is not much of average registration time for such applications is around five an improvement over sending the application by fax. “Once an months when there is no opposition. The target is to reduce that application is filed various other documents must also be to three to four months. Opposed applications currently take submitted, but the OEPM's e-filing system cannot cope with such an average of nine months. documents at present and they must be supplied separately.” Casado believes that the OEPM is on course to becoming a paperless The OEPM has taken note of such criticisms and is implementing office, he expects electronic filings to hit 95% by the end of the year and a number of key changes that will streamline procedures and allow other procedures will come online over a similar timeframe. “In fact, we for greater flexibility. “I am aware of the difficulties faced by launched an e-appeal system on June 22,” he says. practitioners in gaining access to certain documents,” says Casado. In general, practitioners feel the electronic tools in place “The OEPM is working hard to improve transparency and we are function efficiently; however, more needs to be done to improve developing a system to allow direct access to trademark files.” He transparency. According to Miranda de Sousa, the OEPM's website explains that it will be similar to OHIM's MYPAGE tool, which allows does not allow users to consult their files online. Moreover, there are for quick and efficient online access to the various e-business no databases for case law produced by the OEPM, making it difficult solutions and online databases available. According to Casado, the to predict the likely outcome of a particular action. “With the OEPM's equivalent will be unveiled during 2010. progress that has been made in the past 10 years in terms of Casado points to recent simplifications to the renewal process, technological advances, I find it difficult to accept that I still need to which came into effect at the end of June, as evidence of the OEPM’s go in person to the OEPM's offices to perform certain operations commitment to continuous improvement. The new system allows pertaining to my clients' files,” says Miranda de Sousa. “While the mark owners to renew a number of marks within a single application, OEPM has implemented e-filing, the rest of the process has to be previously each renewal request required a separate application.

62 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Feature: Spanish revolution

decision making is of the requisite quality. This is where the OEPM within the deadline decreed. “This is highly unusual and often falls down. “We have no real concerns in terms of delays and the catches IP rights owners by surprise,” says Gonzalo Ulloa y Suelves, a OEPM has or is putting in place the electronic tools it needs to partner with Gómez-Acebo & Pombo Abogados in Madrid. However, perform its functions adequately; the problem lies with the quality such evidence need not include proof of use of the opponent’s of the rulings issued at all levels, but particularly in opposition alleged prior right. This contrasts with the CTM system under which proceedings,” comments Alejandro Angulo a partner with Grau & evidence of genuine use is mandatory for trademarks registered for Angulo in Barcelona. According to Angulo, the reasons for this are more than five years. In Spain, the simple fact that the opponent historical and are based in large part on the inadequate recruitment owns a conflicting registration is sufficient basis to bring an action. selection criteria within the Spanish civil service as a whole. “A This makes the Spanish opposition process far less onerous than the significant number of people working within the opposition CTM system, for example. When one factors in the low cost of filing department lack the necessary skills and IP expertise to perform an opposition (€44.29), it is easy to see why Spanish practitioners their functions to the level required by industry,” he says. complain about the high volume of spurious opposition actions To become an examiner one must have studied law and taken filed. While putting up the price would help to deter those intent on the relevant civil service entrance exams. But practitioners point out filing unfounded oppositions, Miranda de Sousa also suggests that IP law and practice have changed beyond recognition in recent making the loser liable to pay costs as is the case with the CTM. years; the perception being that the OEPM’s examiners have failed “That would focus a few minds and I am sure we would see a to keep pace. “They are not very well paid, in relative terms, and I dramatic fall in spurious claims,” he comments. think many lack the motivation to improve performance,” says However, Casado strongly disagrees with any suggestion that Angulo. “Ideally, the OEPM should be looking to recruit better- opposition fees should increase. “If anything the opposition fee should qualified staff who would be more receptive to ongoing training. be reduced further,” he argues. “For the well being of the economy as a Unfortunately, because of the rigidity of the Spanish civil service whole it is absolutely vital that small and medium-sized companies employment framework, I imagine that it would prove extremely have the means to protect their rights and we should be encouraging difficult to clear out the deadwood at the OEPM.” them to do so.” Casado notes that this point was raised in the recent Practitioners complain that opposition decisions from the OEPM discussions on the CTM fee reduction, which involved all national lack the sophistication they expect. “Examiners can cope with offices. “We at the OEPM agreed fully with the German Patent and straightforward factual situations, but they must start to explore Trademark Office’s proposal to reduce opposition fees at all levels.” complex issues in more detail,” argues Sofía Martínez-Almeida y Alejos-Pita, a partner with Gómez-Acebo & Pombo Abogados in Madrid. The reasoning for an opposition decision from the OEPM is usually no longer than a few sentences, with very little clarification as to the thought processes of the examiner. Further articulation of the motivation behind a ruling would allow users to identify trends, and would lead to improved consistency and predictability. Practitioners argue that it is difficult to extrapolate the principles governing opposition examiners’ determinations, which is compounded by the lack of a full database of decisions. Legal advisers have only the guidelines and the rulings issued to them on which to base their conclusions. “There are no other reference points for comparison,” states Miranda de Sousa. “I suspect that there are inconsistencies within opposition practice, but I have no way of isolating them, as I have access only to cases in which I have been involved.” Casado concedes that improvements to the opposition procedure are essential, yet he stresses the need for a balanced system. He argues that decisions must provide sufficient reasoning to justify the final outcome, without leading to frustrating delays. His aim is to ensure that opposition action takes no longer than six to seven months. To meet that target, opposition examiners are encouraged to craft shorter determinations, while maintaining appropriate levels of quality. Clearly, whether opposition rulings currently meet the necessary standards is a matter of some debate. “I accept that we do have some way to go before we get the balance right,” says Casado. “But we are working on a new set of guidelines for opposition examiners that will improve matters and I am confident they will bring our procedure in line with practitioners’ expectations.”

Doing things differently Spanish opposition procedure differs in certain key areas from the systems in place in many other jurisdictions. As previously mentioned, there are no separate opposition proceedings as such. Absolute and relative grounds are assessed together. Plus, Spanish procedure does not allow for the filing of supplementary evidence once the opposition starts. All necessary evidence must be filed www.WorldTrademarkReview.com August/September 2009 World Trademark Review 63 Feature: Spanish revolution

Casado also dismisses any suggestion that opposition action There are conflicting reports as to the current health of the should require evidence of prior use of the allegedly conflicting market in relation to litigation services. Angulo has noticed a clear mark. “Under Spanish law, evidence of an existing right is sufficient rise in the number of cases filed, but says that clients are taking in itself and I see no reason to modify this approach,” he says. extra measures to keep costs down. Miranda de Sousa supports this view, commenting: “From my firm’s perspective the current Enforcing your rights economic climate has not affected the volume of work noticeably, While local clients are at the heart of filing and prosecution work in but clients are seeking more competitive pricing. This is the Spain, litigation tends to have more of an international flavour. “On challenge for all firms in the market. Legal advisers have to adapt the litigation side, an examination of the jurisprudence indicates their practices to the reality of the marketplace by being cost that more than 50% of legal action is filed by foreign brand owners,” effective and reducing or altering their fee schedules. Garrigues has explains Angulo. Companies from outside Spain could be said to be revised its fees to meet the current needs of clients; if a firm the driving force behind the market for legal services in the responds quickly to a client’s needs, that client is far more likely to enforcement field. While Spain does have a number of large brand retain the firm’s services.” owners (as indicated in the table highlighting Spain’s most valuable Other firms report a slowdown in litigation cases. “In particular, brands on pages 60 to 61), Angulo argues that many of them lack a brand owners seem far more reluctant to initiate action at the more formal, internal IP department. Where such departments exist, the complex end of the spectrum,” says Martínez-Almeida y Alejos-Pita. focus is on prosecution with little thought given to enforcement “Anti-counterfeiting action has also slowed, with clients focusing on strategy. “Considering that Spain is such an important market, I feel larger cases where there is a higher chance of obtaining damages,” that local companies (with a few exceptions) at all levels are a long adds Ulloa y Suelves. way behind their European competitors when it comes to IP awareness.” Not all practitioners agree with this assessment though. The courts “The Leading Brands of Spain Association has played a key role in Trademark enforcement action in Spain was revolutionized by the improving trademark protection since it was established around 10 introduction of new Commercial Courts (Juzgados de lo Mercantil) years ago,” says Martínez-Almeida y Alejos-Pita. “I think the on September 1 2004. While these courts have competence to hear difference is that foreign rights owners are more willing to allocate various commercial matters, including certain aspects of company greater financial resources to implement their trademark rights.” and insolvency law, they are specialized in IP matters to a certain

“The procedural system went “Examiners can cope with “With the progress that has “We have no real concerns in through a complete overhaul in straightforward factual situations, been made in the past 10 years terms of delays and the OEPM 2001: the previous model was but they must start to explore in terms of technological has or is putting in place the almost entirely written. Now the complex issues in more detail.” advances, I find it difficult to electronic tools it needs to procedure is 70% oral and only accept that I still need to go in perform its functions adequately; 30% written – it’s very much an person to the OEPM's offices to the problem lies with the quality Anglo-Saxon approach.” perform certain operations of the rulings issued at all levels, pertaining to my clients’ files.” but particularly in opposition Sofía Martínez-Almeida y proceedings.” Alejos-Pita, partner, Gómez- Antonio Castán, partner, Acebo & Pombo Abogados, Joao Miranda de Sousa, head of Alejandro Angulo, partner, Elzaburu, Madrid Madrid IP practice, Garrigues, Madrid Grau & Angulo, Barcelona

64 World Trademark Review August/September 2009 www.WorldTrademarkReview.com degree. They took over the exclusive competence for IP and unfair “Proceedings in Barcelona tend to last around 10 to 12 months on competition litigation from the civil courts of first instance and average, compared to between 18 months and up to two years or each province has established at least one Commercial Court. more in Madrid,” he says. Although not fully IP-specialized, practitioners are generally While the Commercial Courts are universally praised, they have satisfied with the performance of the courts since their creation. become, in a way, a victim of their own success. They have been Angulo singles out the courts in Barcelona for particular praise, inundated with claims, particularly insolvency cases as a result of suggesting that the level of IP specialism is higher in the Catalonian the worsening economic situation over the past year or two. The city than in the rest of Spain. “There has been a specialized section system is groaning under the strain, prompting the authorities to of the Barcelona Court of Appeal for about 20 years, which has given establish new courts. “It’s disappointing as the timeframe for the Barcelona courts a solid foundation on which to develop IP decisions had improved so much,” says De Ulloa y Suelves. jurisprudence,” he explains. Plans are underway to intensify further “Hopefully this situation will prove only temporary, but I think it’s the level of IP specialism within the Commercial Courts of fair to say that certain courts have almost completely collapsed Barcelona. “No official announcement has yet been made,” notes under the weight of insolvency litigation.” Angulo, “but I am aware that the Barcelona Commercial Courts will soon start dividing the work between themselves so that three or Litigation procedure four of the eight Commercial Courts handle company and According to local practitioners, the Spanish enforcement system insolvency matters, with the remaining courts hearing IP matters compares favourably with the leading jurisdictions in Europe. exclusively.” Apparently, specialization will also continue to filter “The procedural system went through a complete overhaul in 2001,” through to the judicial level. Trademark and copyright litigation will notes Castán. “The previous model was almost entirely written. be assigned to experts in those fields, while other judges will focus Now the procedure is 70% oral and only 30% written – it’s very solely on patents and designs. much an Anglo-Saxon approach.” The changes brought in oral cross- Increasing specialization can only be good news for brand examination and what can be classed as a form of discovery. Judges owners and their advisers, as it will lead to greater legal certainty. are now very much involved and lead the direction of the case. Angulo predicts that it could encourage forum shopping, Despite these amendments, Spanish procedure remains highly particularly as, in his experience, the courts of Barcelona tend to formalistic in nature. Some international mark owners complain that process IP cases more rapidly than their Madrid counterparts. the process of initiating a case in Spain can take longer than in other

“Hopefully this situation will “For the well being of the prove only temporary, but I think economy as a whole it is it's fair to say that certain courts absolutely vital that small and have almost completely medium-sized companies have collapsed under the weight of the means to protect their rights insolvency litigation.” and we should be encouraging them to do so.”

Gonzalo Ulloa y Suelves, No official announcement partner, Gómez-Acebo & Pombo Alberto Casado, director Abogados, Madrid general, OEPM, Madrid has yet been made, but I am aware that the Barcelona Commercial Courts will soon start dividing the work between themselves so that three or four of the eight Commercial Courts handle company and insolvency matters, with the remaining courts hearing IP matters exclusively www.WorldTrademarkReview.com August/September 2009 World Trademark Review 65 Feature: Spanish revolution

Problematic litigation that they need to provide all the relevant evidence up front before action can commence, particularly when they come from common law jurisdictions where one need only file a notice of claim to get Action against alleged infringers that own registered trademark things underway.” To complicate matters further, a power of attorney rights poses particular problems for brand owners. A peculiarity of is also required, which must be legalized through apostilles. the Spanish system is that quite often the defendant has managed to Once the formal requirements have been met and the evidence secure registration of a mark. Under Spanish law, the owner of a gathered, brand owners can move for an interim injunction. Ex parte trademark has a positive right to use it, which means that the courts hearings are possible, but judges tend to prefer to hear both sides. In are generally very reluctant to grant interim action against the owner urgent cases, the court will issue a decision on interim action within of a national right. Moreover, the court has to consider the about two weeks. A decision on the merits can be obtained in around cancellation of the mark before (or at the same time) it deals with the 10 months depending on the court and the state of the backlog. question of infringement. As cancellation action may, on occasion, The Spanish courts are traditionally quite restrictive as far as take up to five years, brand owners can find themselves embroiled in damages are concerned. But attitudes are changing and awards have complicated and lengthy proceedings. Foreign plaintiffs need to started to creep up. “One novel remedy, which I believe is not widely understand that defendants with registered rights are often in a very used outside Spain, is that the plaintiff can request 1% of the strong position in law and, unfortunately, litigation could prove far infringer’s turnover figure, without the need to adduce further lengthier than would be the case in other jurisdictions. evidence,” notes Martínez-Almeida y Alejos-Pita. “Judges tend to grant that 1% in any case. But in general terms courts are very reluctant to award substantial damages awards.” jurisdictions. Angulo sympathizes but points out that Spanish firms have to build a case in compliance with strict procedural rules. “We Spanish outlook have to file any and all evidence with the initial writ presented to the The Spanish legal system has developed beyond recognition over the court,” he explains. “As a general rule, we cannot file supplemental past 10 to 15 years. The introduction of the CTM and the establishment evidence at a later stage in the proceedings (apart from in exceptional of OHIM in Spain placed the country at the centre of the revolution in circumstances established by law).” De Ulloa y Suelves agrees, trademark law occurring at that time. Procedural changes and the commenting: “Sometimes it’s difficult to make clients understand creation of part-specialized courts have brought welcome improvements to the enforcement regime. However, the global downturn will force many firms to rethink their operational strategies. For one thing, Spanish law firms will have to ensure that they have sufficient resources in place to handle IP litigation matters, which grow ever more complex. “In my view, the days of the sole practitioner or micro-firm are numbered; we are likely to see a series of mergers in the Spanish market over the coming years,” comments Angulo. Meanwhile, the prosecution market is under severe stress. The current decline in applications may be a temporary blip as a result of the dire state of the economy, but filing levels are not predicted to rise significantly over the next few years. The filing process itself is also becoming easier, which is likely to instigate a move on the part of brand owners towards performing this function in-house. Firms that handle prosecution work exclusively may find that they have to downsize to compensate or move further into the litigation and advisory fields. The OEPM will play a key role in plotting the course of the market. Reflecting on his first 12 months in charge, Casado declares himself satisfied with the rate of progress so far. Thanks to technical developments and improvements in performance, the OEPM has managed to streamline many procedures. He points out that a year ago it took between two and three months to register a design. “By the end of 2009 it will take three days.” Over the same period, the OEPM will have cut the time taken to register a trademark from an average of between eight and nine months to between four and five. The OEPM’s action to reduce filing and renewal fees is another positive step. IP protection is very much part of the business culture in Spain, but some would argue that Spanish rights holders need to boost their understanding of the value in their brands. An increased focus on intellectual property will help Spanish companies drag the domestic economy out of the mire. The government may need to do more to assist by introducing legislative changes to reduce the formal burdens on brand owners and their advisers, allowing them to focus on substantive challenges and less on observing overly restrictive formal requirements. WTR

John Batho, World Trademark Review, London

66 World Trademark Review August/September 2009 www.WorldTrademarkReview.com The trademark experts’ experts

WTR spoke to a number of leading practitioners in Spain to find out who they rated as the best in the trademark law business. Here are the names that were mentioned most

Carlos Fernández Novoa 1 23 Herrero & Asociados SL Madrid

Manuel Lobato (1) Bird & Bird Madrid

Antonio Castán (2) Elzaburu Madrid

Carles Prat (3) Baker & McKenzie Barcelona

Alejandro Angulo (4) Grau & Angulo Barcelona 5

Ignacio Temiño (5) Abril Abogados Madrid

Jesús Muñoz-Delgado y Mérida (6) Gómez-Acebo & Pombo Abogados 4 Madrid

Jorge Grau (7) Grau & Angulo Barcelona

Jorge Llevat (8) Cuatrecasas Gonçalves Pereira Barcelona

José Manuel Otero Lastres (9) Bufete Otero Lastres Madrid

6 789

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 67 Column By Omar Shteiwi Counterfeiting perspectives

Common laws applicable in all GCC Time to push through unified states, such as the Common Customs Law of the GCC States of 2002, are already in place. Moreover, some of the GCC member states, trademark law in Gulf region such as Bahrain and Oman, have signed bilateral free trade agreements (FTA) with the United States, bringing another degree of harmonization. However, following the entry into force of the US-Bahrain FTA in The penalties imposed on counterfeiters possession for sale, of counterfeit August 2006 and the US-Oman FTA on in the Gulf region are not stringent products, or the possession of tools to January 1 2009, any change to these enough to act as a deterrent. Brand carry out infringing activities or the countries’ IP laws is subject to compliance owners are calling for a rapid infringing registration of a well-known with the provisions of the relevant FTA. implementation of the Unified Gulf trademark will be punished by three The implementation of the Unified Cooperation Council Trademark Law to years’ imprisonment and/or a fine of GCC Trademark Law will mark a milestone help them in their fight Sr100,000 or its equivalent GCC in the protection of IP rights in the region. currency amount. It will also be seen by brand owners as The United Arab Emirates (UAE) Customs, • Habitual and repeat offenders will be tangible proof of the local governments’ police and other enforcement agencies subjected to serve and/or pay double dedication to protecting intellectual regularly stop counterfeit products. For the maximum penalty. property, thus giving brand owners the instance, Dubai Customs recently seized 4 confidence to consider more investments million capsules of fake Plavix (an These penalties – the same across all in this fast-growing region. WTR anticoagulant drug) from a warehouse in GCC member states (ie, Bahrain, Kuwait, Jebel Ali. But as Dubai is a transshipment Oman, Qatar, Saudi Arabia and the UAE) – hub, hundreds of containers enter and leave are considered sufficiently high to act as a the country every day – among them an deterrent. The Unified Trademark Law also unknown but suspected high level (based on provides guidelines for the seizure and the containers seized) of counterfeit detention of counterfeit products across all automobile spare parts, electronics, mobile GCC member states and thus can be phones and accessories, healthcare and considered a strong tool for the protection skincare products and pharmaceuticals, all of IP rights in the region. of which are potentially dangerous for However, the law will not be users. Unfortunately, the punishments implemented until it is ratified by each GCC currently provided under UAE law are not member state and the implementing tough enough to act as a deterrent. The regulations are issued by the GCC Trade maximum punishment for counterfeiting Cooperation Committee (composed of the is a fine of just Dh5,000 (around $1,360) trade ministers of the member states). To and imprisonment not exceeding one year. date, only two states have ratified the law: Repeat offences lead only to a maximum Qatar, through Decree 18/2007, and the UAE, fine of Dh10,000. As counterfeiting is a through Federal Decree 52/2007. Brand multi-million dollar cross-border business, owners strongly support the Unified more stringent punishment is needed Trademark Law and are working for its – in fact, punishment for counterfeiting immediate ratification in Bahrain, Kuwait, should be equivalent to the actual Oman and Saudi Arabia. damages suffered. Besides offering a useful tool against The implementation of the United Gulf counterfeiters, the unified law will represent a Cooperation Council (GCC) Trademark Law, notable step forward in the harmonization of enacted on December 10 2006 during the procedural rules. The statute introduces 27th Summit of the GCC Supreme Council, binding legal provisions governing will represent a step in the right direction procedures such as opposition, cancellation on this issue by introducing more stringent and publication of trademarks. Accordingly, punitive measures for counterfeiting. brand owners will follow the same process Some of the most noteworthy penalties across the GCC from filing to registration. are as follows: (However, the law does not unify the • The illegal use or infringement of a trademark offices in each GCC state; therefore, Omar Shteiwi is chairman of the Brand trademark to a degree which may cause a separate application needs to be filed so that Protection Group – GCC & Yemen public confusion shall be punished by the same level of protection will be enjoyed by (www.gulfbpg.com), a group of brand owners imprisonment of up to five years and/or the brand owners in each member state.) and trademark professionals fighting a fine of up to Sr1 million (around Additionally, one of the salient features of the counterfeiting, and Senior Regional IP $266,980) or its equivalent GCC Unified GCC Trademark Law is the Counsel at Nestlé Middle East for the Middle currency amount. management of licensing agreements or East, North and Northeast Africa Regions • The sale, offer for sale, or promotion or contracts in Articles 32 to 34. [email protected]

68 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Feature By Mark Sommers and Naresh Kilaru

New directions for laches defence

The laches defence can prove an effective weapon for The district court dismissed MDE’s laches defence, finding that: striking out a trademark infringement claim in the • IS West did not unreasonably delay in bringing suit because a likelihood of confusion did not exist until 2004 when MDE United States. However, a controversial ruling from started to offer nationwide DSL services; and the Ninth Circuit may have served to raise the • IS West’s delay did not prejudice MDE. evidentiary burden placed on defendants Upon a finding of likelihood of confusion by the jury, the district court enjoined MDE from using the ISPWEST mark. The Ninth Circuit Court of Appeals affirmed in a two-to-one split One of the equitable defences available to defendants in US decision. Although the Ninth Circuit disagreed with the district trademark infringement suits is laches. If proven, laches can bar court about the reasonableness of IS West’s delay (saying that IS some or all of the relief requested by the plaintiff. To establish West should have recognized that a likelihood of confusion existed laches, a defendant must prove that: in 1998 when both companies were offering identical services in the • the plaintiff unreasonably delayed in enforcing its rights; and same geographic area under similar business names), it affirmed • the delay caused prejudice to the defendant. the lower court ruling on the ground IS West’s delay did not prejudice MDE. While most cases involving laches have tended to focus on what The Ninth Circuit ruled that the prejudice inquiry must focus on constitutes ‘unreasonable delay’, a recent decision from the Ninth the level of public awareness MDE actually built up in the ISPWEST Circuit Court of Appeals provides new guidance on the concept of mark during the period of IS West’s delay. Citing the Seventh ‘prejudice’ and what a defendant must prove to establish this Circuit’s decision in Tisch Hotels Inc v Americana Inn Inc (350 F2d element. In Internet Specialties West Inc v Milon-DiGiorgio Enters Inc 609, 615 (7th Cir 1965)), the court noted that “[if]… prejudice could (559 F3d 985 (9th Cir 2009)), the Ninth Circuit held that prejudice consist merely of expenditures in promoting the infringed name, requires more than showing that the defendant has sunk costs in then relief would have to be denied in practically every case of the mark. Rather, it requires proving that the defendant’s use of the delay”. As to the public awareness of ISPWest, the court said the mark generated actual brand recognition and goodwill. evidence at trial showed that MDE had made very little use of the mark. Most of MDE’s advertising consisted of pay-per-click Summary of decision advertisements (which, the court noted, by their very nature create Founded in 1996 Internet Specialties West Inc (IS West) was an little, if any, brand awareness), and most of those pay-per-click internet services provider (ISP) that provided nationwide internet advertisements did not contain the ISPWEST mark. Such minimal services through dial-up, DSL, and T-1 connections. Starting in July use of ISPWEST, the court held, could not have created any public 1998 Milon-DiGiorgio Enterprises InC (MDE) began providing dial- awareness of the mark. up internet access to customers in southern California under the Accordingly, the Ninth Circuit affirmed both the denial of MDE’s name ISPWest. Although IS West became aware of MDE’s use of the laches defence and the injunction enjoining MDE from using the ISPWest name in late 1998, it decided that: ISPWest domain name and email addresses. And while the court • MDE’s regional service offerings were not competitive with IS acknowledged that MDE would face some hardship given that West’s nationwide service; and 13,000 of its customers would need to change their email addresses • in the then-volatile market for internet start-ups, MDE’s chances (as opposed to 2,000 had IS West not delayed in filing suit), the of becoming a successful competitor were low. Ninth Circuit relied on the lower court findings that the financial Accordingly, it took no action against MDE at that time. Contrary burden to MDE would not be significant, including evidence that to IS West’s expectations, however, MDE grew and eventually MDE had successfully changed its name in the past and that it was expanded to offer nationwide dial-up service in 2002, followed by common for ISPs to change their names due to mergers and high-speed DSL service in 2004. IS West sent MDE a cease and desist consolidations. letter in 2005, demanding that MDE cease use of the ISPWest name. In a vocal dissent, Judge Kleinfeld said that: When MDE refused, IS West sued for trademark infringement. • the majority’s “new” holding that a defendant must show actual www.WorldTrademarkReview.com August/September 2009 World Trademark Review 69 Feature: New directions for laches defence Below In Pro Football Inc v Harjo, relating to use of the REDSKINS mark the court held that “the district court … acted well within our precedent … in finding economic prejudice on the basis of investments made during the delay period”

“public awareness” of its mark to establish laches prejudice was dissenting opinion, however, many courts have (although without unprecedented; and extended analysis) found prejudice based solely on a defendant’s • the practical effect of the majority’s decision was “to eviscerate economic investment in the mark or business expansion during the the [defence] of laches in trademark law”. delay period (eg, Bridgestone/Firestone Research v Auto Club (245 F3d 1359, 1363 (Fed Cir 2001)), finding that “economic prejudice arises Although he agreed with the majority that the standard for from investment in and development of the trademark, and the prejudice under Ninth Circuit precedent was whether a defendant continued commercial use and economic promotion of a mark over “continued to build a valuable business around its trademark” during a prolonged period adds weight to the evidence of prejudice”; Pro the plaintiff’s delay, he noted that prior decisions had always deemed Football Inc v Harjo (90 USPQ2d 1593 (DC Cir 2009)), holding that a defendant’s economic investment in the mark and business growth “the district court thus acted well within our precedent… in finding as sufficient. Kleinfeld said that MDE easily satisfied this test given economic prejudice on the basis of investments made during the that it had realized “exponential increases” in business-building delay period”; Dwinnell-Wright Co v White House Milk Co (132 F2d 822 expenses (a 438% increase in general business expenses and a 14,931% (2d Cir 1943)), finding prejudice where the plaintiff “merely stood increase in advertising expenses) and an increase of nearly 11,000 aside and watched [the defendant’s] business grow at great cost”; customers during the period of IS West’s delay. Also, contrary to the Conan Properties Inc v Conans Pizza Inc (225 USPQ 379 (5th Cir 1985)), majority’s conclusion that MDE barely used the ISPWEST mark, finding prejudice where the defendant opened four additional Kleinfeld said MDE’s use of the name ISPWest was at the very “heart” restaurants and experienced a 30-fold increase in sales during the of its business model and growth, pointing to the fact MDE had period of the plaintiff’s delay; Hubbard Feeds Inc v Animal Feed utilized the ‘ISPWest.com’ domain name and provided all of its Supplement Inc (182 F3d 598, 602 (8th Cir 1999)), finding prejudice customers with ‘@isp-west’ email addresses. where the defendant made substantial investments in equipment and had $250,000 in inventory). Survey of circuit case law While the Tenth and Eleventh Circuits do not appear to have any The laches prejudice issue presented by Internet Specialties (ie, appellate decisions directly on point, district courts in those circuits whether a defendant need show an investment of resources in the take an approach similar to the cases above (eg, Stanfield v Osborne mark versus showing actual “public awareness” of the mark) has not Industries Inc (839 F Supp 1499, 1507 (D Kan 1993)), finding prejudice been squarely dealt with by most courts. Consistent with Kleinfeld’s where the defendant “spent considerable time and expense registering

70 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Internet Specialties increases the burden for defendants asserting laches when compared to the weight of prior and promoting [its] trademarks… [and] would have saved several authority finding financial hundred thousand dollars if [the] plaintiff had timely pursued his claim”; Freedom Sav and Loan Ass’n v Way, (583 F Supp 544, 552 (MD Fla investment or business 1984)), finding prejudice where the defendant “expended considerable time, effort and money in promoting his business and his name… expansion alone sufficient to [while the] plaintiff slept on its rights for almost five years”). The Fourth and Sixth Circuits take an even broader view that establish laches prejudice prejudice basically requires a defendant to show that its potential liability during the delay period has increased, or that potentially helpful evidence has been lost (eg, Nartron Corp v STMicroelectronics noted that the brand awareness requirement is consistent with prior Inc (305 F3d 397, 412 (6th Cir 2002)), holding that “any prejudice is Ninth Circuit decisions. For instance, the majority noted that in sufficient, including an increase in potential damages or a loss of Grupo Gigante SA de CV v Dallo & Co (391 F3d 1088 (9th Cir 2004)), evidence” (emphasis added); Herman Miller Inc v Palazzetti Imps & the Ninth Circuit found prejudice based on the defendant’s Exps Inc (270 F3d 298, 322 (6th Cir 2001)), finding prejudice where prominent display of its name for four years at the entrances of two potential liability for damages increased during the delay period; grocery stores. As a grocery store’s “very identity rests in its name”, Brittingham v Jenkins (16 USPQ2d 1121, 1127 (4th Cir 1990)), finding the majority offered that such public display was sufficient to show that prejudice was “manifest” where potential liability for damages brand awareness. In contrast, it noted here, “MDE failed to show… increased during 15 years of uncontested use). Other courts have that its identity had much at all to do with the mark ISPWest”. specifically rejected the notion that prejudice can arise from a The majority opinion made no mention of MDE using the ISPWest potential increase in liability (eg, adidas Am Inc v Payless Shoesource domain name or email addresses, or any impact such use may have Inc (546 F Supp 2d 1029, 1074 (D Or 2008)), holding that “potential had on public awareness of the ISPWest mark. Kleinfeld seized that liability for damages… cannot constitute economic prejudice for the opportunity in the dissent to note the majority “seems to be saying the purposes of laches… [because] such a rule would result in material brand name of a grocery store means more than the domain name of prejudice in every infringement action” (citing cases)). an internet provider”. Of course, depending on the context of their use, The remaining circuits either do not have appellate decisions domain names can serve an important branding function. By not directly on point, or take the more restrictive view that economic directly addressing MDE’s use of ISPWest in its domain name and email investment in the mark is, by itself, insufficient to establish addresses, and given existing Ninth Circuit precedent recognizing the prejudice. This more restrictive view appears to have its origins in important source-identification role domain names play on the the Seventh Circuit’s Tisch Hotels decision, cited by the Internet Internet, such issue will likely work its way into future fact Specialties majority. While various district courts in the First, Third consideration (eg, Brookfield Communs Inc v West Coast Entm’t Corp and Ninth Circuits have previously followed Tisch Hotels in this (174 F3d 1036, 1055 (9th Cir 1999)), holding that “the domain name is regard (eg, adidas Am Inc v Payless Shoesource Inc, holding that more than a mere address: like trademarks, second-level domain names “prejudice is not simply a matter of expending resources promoting communicate information as to source”; Panavision Int’l LP v Toeppen a potentially infringing design” but requires a showing “that the (141 F3d 1316, 1327 (9th Cir 1998)), holding: “We reject [the] premise that a expenditures were made promoting the design as its trademark, or domain name is nothing more than an address. A significant purpose as part of its business identity”); Copy Cop Inc v Task Printing Inc of a domain name is to identify the entity that owns the website”). (908 F Supp 37 (D Mass 1995)); Estate of Presley v Russen (513 F Supp 1339, 1353 (DNJ 1981)); Alfred Dunhill of London Inc v Kasser Distillers Final analysis Products Corp (350 F Supp 1341, 1368 (ED Pa 1972)), holding that “the In the end, courts can look at both the economic investment a defendant has suffered no prejudice where nothing more is shown defendant has made in the mark, as well as the brand awareness the than that it has continued to sell the infringing product for the mark has achieved, to determine whether the defendant has been period in question”), it appears that the Ninth Circuit is the first prejudiced by the plaintiff’s delay. No legal or policy reason exists to court of appeals to do so directly. consider one to the exclusion of the other. In the past, most courts As Kleinfeld’s dissent points out, however, the holding of Tisch have not distinguished between these two inquiries, presumably Hotels (ie, that economic investment alone is not sufficient to show concluding that economic investment in the mark leads to at least prejudice) is arguably limited to that case’s particular set of facts, some degree of brand recognition by the public. which involved a plaintiff delaying less than one year and there In considering MDE’s use of ISPWest only in pay-per-click being evidence of “deliberate” infringement by the defendant. advertisements and not in its domain name, the Ninth Circuit left Additionally, it is worth noting that subsequent Seventh Circuit on the table the potential goodwill trademark owners may build up decisions, while not expressly overruling Tisch, have found laches in their domain names. Given the branding power of domain names prejudice based solely on the defendant’s financial investment in on the Internet today, look for that issue to appear in future laches the mark (eg, Chattanoga Mfg Inc v Nike Inc (301 F3d 789, 795 (7th Cir prejudice determinations. WTR 2002)), finding prejudice where the defendant spent substantial sums of money promoting the mark; Hot Wax Inc v Turtle Wax Inc (191 F3d 813, 824 (7th Cir 1999)), finding prejudice where the defendant “invested significant amounts of time and money in product development and advertising”). In sum, Internet Specialties increases the burden for defendants asserting laches when compared to the weight of prior authority Mark Sommers is a partner and Naresh Kilaru is an associate with finding financial investment or business expansion alone sufficient Finnegan, Henderson, Farabow, Garrett & Dunner LLP in Washington, DC to establish laches prejudice. Responding to the dissent’s concern [email protected] that the decision “defies circuit precedent”, the majority opinion [email protected] www.WorldTrademarkReview.com August/September 2009 World Trademark Review 71 Feature By Matthias Koch and Kathrin Samwer

Preserving prestige

With demand for luxury goods tumbling, many brand The Supreme Court asked: owners are looking to licensing as a means of boosting • whether Article 8(2) must be interpreted as meaning that the proprietor of a trademark can invoke the rights conferred by income. A recent decision from the ECJ could help that trademark against a licensee disregarding a provision in the them maintain a firmer grip on their rights licence agreement prohibiting, on grounds of the trademark’s prestige, sale to discount stores; • whether, in such case, the licensee acts without the consent of the trademark proprietor (Article 7(1)); and • if not, whether the proprietor can invoke such a provision to In Copad SA v Christian Dior Couture SA (Case C-59/08), the European oppose further commercialization of the goods on the basis of Court of Justice (ECJ) granted luxury brand owner Dior a landmark Article 7(2). victory. The decision will have a significant impact on trademark law in EU member states and puts luxury brand owners on the front foot Interpretation of Article 8(2) when protecting their rights against licensees within a selective Article 8(2) provides that a trademark proprietor can sue a licensee distribution system. It is not yet clear how national courts will interpret for infringement where the licensee breaches a licence term relating the ruling, but rights holders should take careful note of the ECJ’s to, among other things, “the quality of the goods manufactured or findings and apply the insights gained to their licensing strategies. the services provided by the licensee”. In Dior, the ECJ started out by clarifying that the list in Article 8(2) is exhaustive. Therefore, the ECJ Background had to decide whether selling luxury branded goods outside a Christian Dior Couture SA (Dior) had licensed its trademark DIOR to selective distribution system could be harmful to the “quality of the Société Industrielle de Lingerie (SIL), a French lingerie company, for goods manufactured”. the manufacture and distribution of luxury corsetry goods. The While some commentators have argued that only characteristics licence agreement contained an explicit clause stating that “in order of the goods themselves can constitute the necessary quality referred to maintain the repute and prestige of the trademark” SIL was to in Article 8(2), the ECJ held that the quality of luxury products is prohibited from selling Dior-branded products to, among other “not just the result of their material characteristics, but also of the entities, discount companies outside the selective distribution allure and prestigious image which bestows on them an aura of network, unless SIL had obtained prior written consent from Dior. luxury”. The ECJ further stated that impairing the aura of luxury “is When SIL, facing economic difficulties, asked for such consent, Dior likely” to affect the actual quality of the goods in the sense of Article refused. SIL nevertheless sold the Dior-branded products to Copad 8(2), but that the circumstances of the case in question are decisive. SA, a company operating discount stores. The ECJ stressed the importance of an effective selective Subsequently, Dior brought an action against SIL and Copad for distribution system for the quality and prestige of high-end trademark infringement. Undoubtedly, Dior could sue SIL for breach products. According to the ECJ, selective distribution systems – that of contract (which was of little use since SIL had gone into is, their characteristics and conditions – can “in themselves” preserve insolvency in the meantime), but the main question was whether the quality and ensure the proper use of such goods. Dior’s selective Dior could use the DIOR trademark: distribution system apparently met the criteria the ECJ had in mind. • to sue SIL and Copad for trademark infringement; and In the case at hand, the ECJ considered that it was “conceivable” that • consequently, to stop Copad from selling the Dior-branded products. the licensee’s sale of Dior goods outside the selective distribution system could affect the quality of such goods so that, given the circumstances, After the Paris Court of Appeal had ruled that SIL had not violated such sale falls under Article 8(2). However, the ECJ left it to the national trademark law by selling the Dior-branded products to Copad, but that court to examine whether the aura of luxury of the goods is damaged sales made in breach of the licence agreement did not trigger and whether their quality is affected, in this specific case. exhaustion, both parties appealed to the French Supreme Court, which referred three questions regarding the interpretation of Articles 7 and Interpretation of Articles 7(1) and (2) 8(2) of the First Trademarks Directive (89/104/EEC) to the ECJ. Article 7(1) states that the rights of a trademark proprietor are

72 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Licence agreements – best practice

Advice for trademark owners Even though the ECJ did not lay out general guidelines for an effective selective distribution system, Dior stressed how important it is to include detailed terms in a licence agreement on the prestige of the brand and the way the trademark owner aims to protect and enhance this prestige. Therefore, in general, licence agreements should be carefully drafted, including express, broad and suitable provisions on provisions of the licence agreement does so without the consent of quality control and inspection, as well as clear provisions (to the the trademark proprietor, provided that such breach meets the extent permissible under competition laws) on the following: criteria laid out in the answer to the first question (ie, it affects the • authorized and unauthorized distribution channels; quality of the goods) or any other element provided for under Article • volumes to be sold; 8(2). This means that if a selective distribution system incorporated • appropriate means of presenting the goods (eg, market into a licence agreement effectively protects and enhances the positioning, advertising, packaging etc); quality of the distributed goods, the breach of this licence agreement • marketing policy; and averts exhaustion of the rights conferred by the trademark. • maintenance of the repute and the prestige of the mark. Even if the proprietor is deemed to have consented in the sense of Article 7(1) on the basis of the aforementioned criteria, it may still The decision also stresses the importance of a well-constructed be able to prevent further commercialization on the basis of Article and enforced selective distribution system. Therefore, the same 7(2). The court adds that the aspects of alteration or impairment of attention to detail should be applied to selective distribution the condition of marked goods only exemplify what may constitute agreements. Here, brand owners should always bear in mind that “legitimate reasons” in the sense of the directive. Damage done to the selective distribution agreements have to be compliant with reputation of a trademark may, according to the ECJ, “in principle, be competition laws. a legitimate reason, within the meaning of Article 7(2)”. The national The agreement should enable the brand owner (licensor) to police courts dealing with this question have to assess whether further quality control provisions, including all provisions encompassing commercialization by the third party “using methods which are elements that contribute to the “aura of luxury” of the brand. This can customary in its sector of trade” damages the reputation of the include actual inspections on site or options for enforcement of trademark. Elements to consider in this regard may include: obligations, as well as monitoring of the licensee’s activities. • the parties to whom the goods are resold; and In case of a breach, the licence agreement should explicitly allow • the specific circumstances in which the goods are usually put on for different options, such as: the market. • damages; • termination of the licence agreement; and Impact of the decision • the possibility of bringing an infringement suit (ie, on the basis of contractual obligations and Article 8(2)). Brand-owner friendly law The Dior decision is likely to be very helpful to brand owners. It not Given that a trademark proprietor can, on the basis of Article only stresses that the essential function of a mark is to guarantee 8(2), sue a licensee for infringement where the licensee breaches a the origin and consistent quality of trademarked goods and/or licence term relating to, among other things, “the quality of […] the services, but it also clarifies – at least partly – the interpretation of, services provided by the licensee”, and, according to the ECJ, services and the interaction between, Articles 7 and 8 (and, consequently, the provided in the context of the retail trade of goods can fall within national trademark laws transposing Articles 7 and 8) in favour of the concept of ‘services’ in the sense of Article 8(2), brand owners mark owners. In this way, Dior will have an impact on both EU and may consider registering their marks for retail trade services to national trademark laws, leading to further harmonization across broaden the basis of possible trademark claims. Europe in a direction favourable to brand owners.

Advice for licensees/resellers Criteria to consider Licensees need to ensure that they have the explicit consent from The ECJ leaves it up to the national courts to examine whether brand owners to use certain distribution channels; otherwise, they contravening a licence agreement (similar to the one at issue) may be facing cease and desist claims, and claims for damages. At the actually damages the aura of luxury goods and, consequently, same time, companies buying products from licensees for resale will affects their quality in the sense of Article 8(2). However, the ECJ have to ensure that wholesalers/members of the distribution network does share its views on possible criteria relevant to this evaluation. act with the brand owner’s consent. Otherwise, they may be sued for The decision expressly names: trademark infringement as has now been clarified by the ECJ in Dior. • the nature of the luxury goods bearing the mark; • the volumes sold and whether goods are sold regularly to discount stores or on an occasional basis only; exhausted in relation to goods that have been put on the market in • the nature of goods normally marketed by those discount stores; and the European Union under that trademark “by the proprietor or • the marketing methods normally used in that sector. with his consent”. However, Article 7(2) provides that there is no exhaustion if “legitimate reasons” exist for opposing further In addition to the guidelines set out by the ECJ, further factors to commercialization of the goods, especially where the condition of consider may include: the goods is changed or impaired after they were put on the market. • high prices compared to equivalent products; This is where effective selective distribution systems come into • sale of goods through selected retail points; play again. The ECJ held that, as a general rule, it must be considered • high-quality outlets (services provided at the point of sale); that where a licensee puts goods bearing the trademark on the • type of target customers/positioning; market, it is doing so with the consent of the proprietor of the • quality of goods/packaging; trademark in the sense of Article 7(1). However, since Article 8(2) • business policy; and expressly enables the proprietor to invoke the trademark rights • reputation of goods and their brands. against a licensee breaking provisions of the licence agreement, Article 7(1) must, in the eyes of the ECJ, be understood as stating that All these aspects could play a role when a national court is confronted a licensee which puts goods on the market while breaking the with a selective distribution system similar to the one in Dior. www.WorldTrademarkReview.com August/September 2009 World Trademark Review 73 Above and Italy, the decision could at least bring some much-needed The Dior decision may have clarification or confirm the rights of trademark owners (Spain). implications beyond luxury brands and apply to other brands in niche Dior gives luxury brand owners an additional, far more powerful, areas, such as the automotive or weapon against contracting parties and resellers. First, the rights of technology industries trademark owners will be extended in relation to third parties with which no contractual relations exist, such as resellers. This makes an additional party potentially liable to claims, which is helpful in cases where contractual claims against the contracting party are ineffective (eg, due to insolvency), or in cases where the products Room for interpretation have already been sold on further down the distribution line. The Even in light of the guidelines established by the ECJ, there is room ruling seems to render it possible to stop distribution at a later for interpretation by the national courts and it is not yet entirely point in time where contractual claims would no longer be helpful, clear how they will apply the decision. However, it is safe to assume such as when the goods are already in the possession of a third that national traditions will continue to play an important role. party. Before Dior, this was impossible under trademark law in many Experience shows that an ECJ decision does not automatically bring EU member states and very difficult under unfair competition law actual harmonization across the EU member states. It will be in certain member states. interesting to see where national courts draw the line as to which Second, the decision extends the rights of trademark owners goods qualify as possessing an aura of luxury and whether other regarding licensees and third parties in jurisdictions where claims valuable trademarks will be afforded similar protection. based on trademark law usually go beyond contractual claims and where the decision therefore grants access to additional remedies, Proving damage to quality such as ex parte injunctions, recalls or destruction as is the case in While, in theory, luxury brand owners can now effectively restrict Austria, Benelux or Germany, or simplified methods of calculating regular sales outside their selective distribution networks (provided damages (eg, Germany). that the networks comply with antitrust laws), it may prove difficult in practice to demonstrate that contravention by a licensee of a Ramifications beyond luxury brands provision of the selective distribution system actually damages the The question remains as to whether Dior will have ramifications aura of luxury of the goods, thus, affecting their quality. The beyond luxury brands and apply to other brands in niche areas, question of whether a selective distribution system enhances the such as the automotive or technology industries. Selective quality of the branded goods depends on the specific aspects of the distribution systems can be used for a wide range of goods, case and it is not yet clear how the guidelines set out by the ECJ will including technically complex products or products where brand be interpreted and applied by the national courts. This will also image is significant. Therefore, the decision could apply to cases depend on the level of unauthorized sales and the type of product involving high-quality, technical products with an aura of luxury sold. Trademark owners may not use every single sale outside their (eg, certain brands of car) and possibly also to high-quality products authorized network as the basis for a lawsuit; they will have to that are technically complex, yet generally not considered luxury prove that such occurrence is frequent to claim trademark products (eg, technically complex tools, power drills etc). In these infringement successfully. cases, it could be argued that, as the ECJ puts it, “the characteristics As a matter of precaution, brand owners also may wish to find and conditions of a selective distribution system can, in themselves, out if consumers perceive a certain method of distribution as preserve the quality and ensure the proper use of such goods”, and negatively affecting the prestige of the mark. Here, it may be helpful that contravention by a licensee of a provision of the selective to conduct appropriate consumer surveys that not only identify distribution system actually affects the quality of the product itself. customer preference, but also come in handy in case of court The Dior decision looks set to be a turning point for rights proceedings where brand owners must offer up proof of the holders, and luxury brand owners in particular. As increasing perception of luxury associated with their mark. numbers of mark owners are entering into licence agreements to maximize the value of their brands, they have been seeking greater Strengthened trademark rights across Europe clarification as to the scope of their rights. The ECJ has called on Despite the remaining uncertainty, the ECJ’s decision will likely national courts to assist. It remains to be seen whether they will strengthen the rights of trademark owners across Europe. There is answer that call. WTR limited national case law on this issue, especially with regard to Article 8(2). Cases similar to Dior have usually been dealt with on a Matthias Koch is a partner and Kathrin Samwer is an associate contractual basis. By allowing the possibility for actions based on in the IP and IT practice group at Freshfields Bruckhaus Deringer LLP trademark rights, the ECJ has opened the door to an extension of in Cologne rights. Brand owners in Austria, Germany and the United Kingdom [email protected] could benefit greatly. In other jurisdictions, including Benelux, France [email protected]

74 World Trademark Review August/September 2009 www.WorldTrademarkReview.com 459 07K J 01

JONAS

Uniqueness deserves special protection.

Marketing-Oriented Solutions in the Field of IP. Practice areas:

ƒ Trademark Law (Trademarks, Names, ƒ Litigation and Arbitration Titles, Domain names) ƒ Sponsoring and Sports ƒ Unfair Competition Law ƒ Media- and Entertainment Law ƒ Food Law ƒ Personality Rights and Data Privacy Law ƒ Pharmaceutical Law and related Unfair Competition Law ƒ Distribution Law ƒ Design Law ƒ Commercial Law ƒ Copyright Law ƒ Contract Law

JONAS RECHTSANWALTSGESELLSCHAFT MBH JONAS VIEFHUES HAMACHER WEBER Hohenstaufenring 62 . 50674 Cologne . Germany Tel. +49 (0)221 27758-0 . Fax +49 (0)221 27758-1 [email protected] . www.jonas-lawyers.com LAW FIRM OF THE YEAR IN “TRADEMARK AND UNFAIR COMPETITION LAW”

Feature By George Chan, Tim Smith and Lawson Hao

An insight into China’s top trademark cases

Among the top 10 cases of the year selected by the the cases may seem conservative, unexceptional and indeed not Chinese People’s Supreme Court, five were of key what one might regard as groundbreaking. Is that impression accurate? And if so, what is the reason behind the significance to trademark owners. The selection court’s decision to nominate these cases among the top 10 for 2008? criteria left many puzzled, but a new analysis shows It had over 6,000 to choose from so it was not through lack of choice. that each decision is remarkable in its own way What we seek to do in this article is threefold. First, we look at each of the cases in detail and extract the essence of the decisions. Second, we look at them together and discern whether a common intention from the SPC’s point of view can be identified. Finally, we This article takes a look – both close up and from a distance – at the draw our own conclusion as to the key insights to be drawn. five trademark-related cases among the top 10 IP cases of 2008 identified by the Chinese Supreme People’s Court (SPC). The cases The cases themselves may not be familiar to many readers, as most involved Of the SPC’s top 10 IP cases, the five that involved trademarks or disputes between domestic parties and thus failed to attract have relevance to trademark owners and practitioners are as follows: significant attention overseas. The SPC’s selection may also surprise • the RITZ Case (Lei Ci (RITZ) Hotel Co Ltd v Shanghai Huangpu Li readers who expect the cases to push the very boundaries of Chi (RITS) Fitness Co Ltd (Shanghai High People’s Court (2008) protection at the leading edge of the law. Based on first impressions, Final Instance Civil Judgment 70; Shanghai Second Intermediate

76 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Throwing light on China’s civil IP judgments

Left The 19floor Domain Name Case, Evaluating and benchmarking IP enforcement in China is tricky as heard at first instance in Hangzhou, applied correctly the Supreme the tens of thousands of administrative actions and thousands of Court’s Interpretation on Domain criminal prosecutions issued every year are not made publicly Name Disputes available. However, the civil IP courts around the country have begun publishing decisions, including final judgments and settlements, in increasing volume. People’s Court (2008) First Instance Civil Judgment 74)), In June 2009 Rouse & Co launched a database tracking these civil concerning the infringement of exclusive trademark rights; IP decisions at www.ciela.cn. The database is free to use and offers • the White Noodles Case (Henan Zheng Long Food Co Ltd v flexible search criteria. For instance, a search for the top five venues Sichuan Baijia Food Co Ltd (Henan High People’s Court (2008) for trademark infringement, ranked by damages awarded, length of Final Instance Civil Judgment 37; Zhengzhou Intermediate trial or other key points, would bring up Beijing at the top of the list, People’s Court (2008) First Instance Civil Judgment 46)), with mean damages of Rmb345,904 (approximately $50,000). The concerning the infringement of exclusive trademark rights; search report would also indicate that Beijing courts have a relatively • the Wrongful Injunction Case (Jiangsu Baite Trading Co Ltd v Xu low ratio of damages awarded compared with the amount claimed, at Zangyou (Jiangsu High People’s Court (2008) Final Instance Civil only 33%, compared with some other courts which actually grant a Judgment 0071; Nanjing Intermediate People’s Court (2006) Civil higher proportion of the damages claimed, on average. Judgment 382)), concerning an IP-related compensation dispute; The site also offers an 'instant statistic' function. One interesting • the 19floor Domain Name Case (Hangzhou Dukuai Internet trend highlighted by the function is that out of all the records in the Media Co Ltd v Wang Linyang (Zhejiang High People’s Court database, trademark cases have the highest mean damages awards (2008) Final Instance Civil Judgment 286; Hangzhou overall at Rmb179,084 compared with patent, copyright and unfair Intermediate People’s Court (2007) First Instance Civil Judgment competition cases. 193)), concerning the infringement of domain name rights; and • the Counterfeits Case (Xiapu County Huafeng Machinery Co Ltd v Zeng Fengxi (Fujian, Xiapu County People’s Court (2008) First conceptual similarities. Article 10 requires that similarity be judged: Instance Criminal Judgment 178)), concerning a bad-faith • on the basis of the attention generally given by the general public; trademark registration. • following both an overall assessment of the marks and a comparison of the principal parts; and The analyses below give a brief overview of the facts to frame the • while taking into account the prominence and repute of the context of each decision and as necessary to understand the registered marks. relevant court’s key considerations. However, these synopses are not intended to be full, detailed analyses of each case. (Links to all the Rejecting the defendant’s contention that the frequent appearance final decisions in Chinese are available at: of RITS with ‘ ’ made the marks distinguishable, the appeal court http://www.chinacourt.org/public/detail.php?id=353877.) held the marks to be sufficiently similar to invite confusion in the public’s mind as to a connection between the parties. The Ritz Case This was the most widely reported case internationally at the time, Similarity of services probably because of the international plaintiff and the very well- In finding for the plaintiff on this issue, the appeal court further known marks. referred to and applied Article 11 of the SPC Interpretation, which The plaintiff was Ritz Hotels Limited, the proprietor of various provides that similar services are those that share similarities in registered trademarks in China including LE RITZ and RITZ in Classes purpose, method of delivery and targeted consumers. 43 and 44 of the Nice Classification for, among other things, hotels, Uncontentiously, the court found the defendant’s services to be bars, restaurants, beauty parlours and barber shops. identical to the plaintiff’s services in Class 44. Further, however, the According to its promotional materials, the defendant’s services court found that, despite the defendant’s provision of food and included massage, beauty treatment and sauna services, hair drink being subsidiary to its ‘spa’ services, this had no impact on the dressing and podiatry, together with “free accommodation” and determination of the overall services provided, thus finding that the “free breakfast, lunch, dinner and snacks available at any time”. The services were sufficiently similar to the plaintiff’s services in Class 43 evidence before the court confirmed that the defendant was using to cause confusion. the mark RITS alone and in combination with other English words (eg, ‘Club’) or with Chinese characters, most frequently ‘ ’ What interested the SPC? (literally meaning ‘beautiful pond’). What appears to have interested the SPC about this decision is that The plaintiff claimed infringement of its registered marks on the the facts demanded the application of each of the main elements of basis that the defendant’s use of similar marks in relation to similar the law regarding the consideration of the similarity of marks and services was likely to confuse consumers. The first instance court services. This task was achieved with commendable rigour and found that the plaintiff’s RITZ mark was well known in China and clarity in the appeal judgment. was infringed, granting the plaintiff an injunction and damages of Rmb200,000 (around $29,260). The defendant appealed. At second The White Noodles Case instance a number of claims were made, but those of most Domestically, this was a significant case given the fierce, significance were the claims that neither the defendant’s marks nor acrimonious and long-running battle between the parties over the the defendant’s services were sufficiently similar to those of the branding of their respective instant meal products. plaintiff’s registrations to cause confusion. The plaintiff was the proprietor and user of the mark (‘bai xiang’, meaning ‘white elephant’), a mark registered in a highly Similarity of marks stylized form with one character above the other. The registration In finding for the plaintiff on this issue, the appeal court carefully was in relation to instant noodles in Class 30. The defendant was the applied Articles 9 and 10 of the SPC’s Interpretation of Issues user of the mark (‘bai jia’, meaning ‘white home’), also in a Relating to Jurisdiction Over and Scope of Application of Law to the highly stylized form with one character above the other. The Hearing of Trademark Cases. Article 9 provides, among other things, defendant’s use was in relation to instant vermicelli. In finding that the comparison of the similarity of marks includes visual infringement by the defendant, the appeal court considered the (shape and colour of words or graphics), phonetic (aural) and similarity of the marks and the goods in detail. www.WorldTrademarkReview.com August/September 2009 World Trademark Review 77 Feature: An insight into China’s top trademark cases

Similarity of marks the defendants’ relevant stock; and finally, an order was obtained to As in the RITZ Case, the court was required to make a careful detain relevant goods of the defendant passing through Customs. assessment of the similarity of the two marks and again structured its consideration using the provisions of Articles 10 and 11 of the SPC Hearings and invalidity Interpretation. At first instance, the plaintiff succeeded in infringement actions The first characters of the respective marks are identical in against both defendants, obtaining permanent injunctions and pronunciation, form and meaning. As to the second characters, the compensation totalling Rmb1.4m. Unable to challenge the validity lower parts are the same and, in the highly stylized fonts used, their of the patent in the judicial proceedings, the defendants made a upper parts are also similar, but their pronunciation (‘xiang’ and parallel application to the State Intellectual Property Office (SIPO) ‘jia’) and meaning (‘elephant’ and ‘home’) are quite distinct. claiming the invalidity of the plaintiff’s design patent and then Despite the aural and conceptual differences, the appeal court appealed the infringement decision. found the two marks to be similar. This conclusion may surprise Highlighting the difficult situation that these types of parallel some readers, particularly those that read Chinese. Given that both proceedings can give rise to, while the appeal proceedings regarding trademarks are word marks, one might argue that the distinctions infringement were ongoing, SIPO held the plaintiff’s design patent between them are strong enough to outweigh the visual similarities. invalid. The appeal court therefore overturned the first instance However, the appeal court, upholding the lower instance’s decision, decisions and rejected all claims by the plaintiff in a final decision. carefully set out the factors that led it to its conclusion. In addition to the similarities already noted, given that both marks were printed The counterclaim vertically and in stylistically very similar fonts and given, in Not surprisingly, the two defendants then commenced proceedings particular, the strong distinctiveness and substantial reputation of against the plaintiff for compensation for the loss which they had the plaintiff’s registered mark, the court was persuaded that on an suffered as a result of the (now wrongful) asset freezing, product overall assessment the marks were similar. seizure and destruction (which itself put them in breach of contract with a third party) and the lost profit from their inability to trade Similarity of goods during the relevant time, together with interest. Instant vermicelli are physically different from instant noodles, A total compensation award of Rmb500,995 was made and though would be registered in the same class as instant noodles upheld on appeal. (Class 30), albeit in a different sub-class. The court took a methodical approach to assessing the level of similarity between the goods. It What interested the SPC? noted that the respective Nice classes were one reference point, but Again, in the main, it is not the end result – however significant – must not be the only one; in this case, not only were the function, that appears to be of primary interest to the SPC, rather it appears specific application, production chain sector and targeted to be the careful consideration and balancing of the relevant factors consumers of the goods (all as referred to in Article 11) the same, but that the appeal court made in affirming the compensation order, the consumption and packaging methods and the sales channels of together with the detailed assessment of the causality between the the goods were also the same. loss of the defendants and the plaintiff’s applications. The compensation awarded was high for Chinese proceedings What interested the SPC? and it may therefore also be inferred that by choosing this case, This decision was more contentious than the one made in the RITZ the SPC wants to warn against the abuse of judicial procedures Case, heightened to some degree by the surrounding commercial by IP owners. circumstances. However, it was neither this nor the ultimate In China, as in other jurisdictions, design patents are granted conclusion that appears to have interested the SPC. without any substantive examination and, although the court may Analyzing the first instance and appeal decisions, what stands undertake some quasi-examination when considering a out in particular appears to be the decision made by the appeal preliminary injunction application, owners of such ‘precarious’ court. On appeal, the court gave consideration and due weight to all rights are well advised to heed the risks as well as the benefits of the relevant factors at play. In assessing the similarity of the two preliminary relief. marks, the court made an overall comparison, concluding that significant aural and conceptual dissimilarities could be overcome The 19floor Domain Name Case by visual similarities and a distinctive registered mark of repute. The plaintiff and its predecessor in title held the registration for the domain name ‘19floor.net’, and had run and managed a website The Wrongful Injunction Case under that domain for several years, developing a strong reputation This case involved design patents rather than trademarks, but dealt for service. Subsequently, the defendant registered the domain name with significant issues concerning the wrongful grant of temporary ‘19floor.com’ operating a site with similar look and feel, including measures that are equally relevant to brand owners. the same colour scheme, and similar functionality. The similarities caused users to mistake the defendant’s site for the plaintiff’s. Temporary relief In 2004 the plaintiff, the proprietor of a registered design patent, The findings took three separate preliminary actions to protect itself against the While the Chinese Anti-unfair Competition Law includes general ongoing infringement of its patent through the use and sale by two provisions in Article 2 prohibiting acts that are contrary to honest defendants of a similar design. First of all, a successful asset commercial practices, Chinese courts generally resist the use of Article 2 preservation application was made, freezing Rmb300,000 in one of alone as the foundation for a cause of action, requiring plaintiffs the defendant’s bank accounts; secondly, interim injunctive relief was instead to rely on one of the specified forms of unfair competition set obtained against both defendants requiring them immediately to out in the remainder of the law. For domain owners, however, the law cease manufacture and sale, together with an order for the seizure of contains no provisions specifically related to domain names, meaning

78 World Trademark Review August/September 2009 www.WorldTrademarkReview.com In the Wrongful Injunction Case, first heard in Nanjing, the defendants won significant compensation damages

owners that do not enjoy rights such as relevant registered trademarks, intended to protect the exclusive rights of domain owners to use a would likely struggle to persuade the court they had a valid cause of domain name. The attraction of this case to the SPC appears to be the action were it not for the SPC Interpretation on Domain Name Disputes. faithful and correct application of the interpretation in association with This SPC Interpretation specifically provides for the use of Article 2 of the Anti-unfair Competition Law. Article 2 of the Anti-unfair Competition Law as the basis for a The involvement of a famous Chinese domestic brand in 19floor domain name-related claim and further sets out the conditions that gives the case a further profile, if not further significance, though the must be met for a case to be found (Article 4 of the SPC fact that the ‘19floor’ site had already been a huge target for internet Interpretation on Domain Name Disputes). The conditions include: counterfeiters does suggest an additional intention of the SPC to be • the domain being a well-known mark; seen as protecting the role and value of domain names in China. • the infringing domain being a reproduction or imitation; and • the defendant having registered or used the domain with malice. The Counterfeits Case A suspicious trademark application for an auto parts manufacturer’s The SPC Interpretation also sets out activities which mark, in a class in which the manufacturer itself had not registered, demonstrate the defendant’s malice. prompted an investigation which led to an administrative raid, the On the facts of this case, the court at first instance and on appeal seizure of over 130,000 counterfeit brake parts and packaging from had little difficulty finding that: 13 different brand owners, and the transfer of the case to the Public • the defendant acted with malice; and Security Bureau (PSB). • his actions constituted unfair competition. In criminal counterfeiting cases, the valuation of the infringing goods is critical in determining how the case will be classified and, consequently, Subsequently, the court ordered the cancellation of the ‘19floor.com’ what sentences are available if the defendants are found guilty. domain name and compensation to be paid to the plaintiff. The PSB engaged the Price Evaluation Board, which valued the counterfeit goods at just over Rmb200,000. When transferred to the What interested the SPC? local prosecutor, the case was therefore classified as “serious” under Although the SPC Interpretation has been in place since 2001, ‘free-riding’ the 2001 Joint SPC/Supreme People’s Procuratorate Judicial by registering and/or using the domains of or similar to those of others Interpretation on the Application of Relevant Laws on Criminal has been growing in China and continues today. The interpretation is Cases of IP Infringement. www.WorldTrademarkReview.com August/September 2009 World Trademark Review 79 The Ritz Case was the most widely reported case internationally when it was issued by a Shanghai court

The revaluation of the counterfeit goods emphasized the role of the leading cases which it announces to Unsatisfied with the low valuation, the various brand owners began ‘guide’ the courts in handling IP litigation. working with the prosecutor to provide their own supporting The most important overall theme that we see is an emphasis on evidence – such as invoices and sales contracts between the brand professionalism and best practice. We would not describe any of the owners’ local businesses and their distributors, and retail price lists cases as at the leading edge of the development of substantive IP law for genuine goods – to show the ‘real’ value of the counterfeit goods. itself, rather the focus this year appears to be on the approach that After detailed analysis of the various categories of evidence that the court takes to difficult issues and the careful application of the came before it, the court confirmed a new valuation of Rmb1.15 relevant law – whether that be legislation, regulation or million and reclassified the case as “very serious”, opening up the interpretation – to the facts. real possibility of a custodial sentence. Following conviction, the Looking at the cases with a ‘common law eye’, the court’s analysis court awarded a three-year suspended custodial sentence against in the White Noodles Case is particularly impressive. For local the principal defendant, together with fines totalling Rmb1.8m practitioners, it is also particularly useful (and perhaps surprising) against him and the company that he controlled. to learn that the SPC held the analysis in high regard.

What interested the SPC? Key message The challenges faced by rights owners in overcoming the complicated China now has more than 400 dedicated IP chambers in the civil valuation system for counterfeit goods used by the local authorities courts – an impressive feat in itself – but outside of the major cities in China are myriad. Faced with conflicting valuation evidence from the levels of experience remain variable, particularly in the face of the Price Evaluation Board (via the PSB), the brand owners (via the the increasingly subtle and complex issues being brought before prosecutor) and the defendants, what seems to have impressed the judges by ever-more sophisticated parties. SPC is the court’s well-structured and considered approach. Assessing In that light, while the decisions are obviously important and the weight to be afforded to the valuation evidence for each category interesting reading for rights holders and advisers alike, the key of branded products and doing so in a highly structured way, the message that we see is one for the subordinate courts themselves: court’s final assessment applied three different standards according these cases have been chosen by the SPC for their training value, as to what was available. This included taking the brand owner’s excellent examples of the discipline required by all Chinese courts valuation for some products, the Price Evaluation Board’s for others when applying the law in IP cases. WTR and the defendant’s for a third category.

Drawing all the cases together George Chan is a consultant in the Beijing office of Rouse and With such a variety of issues considered by the courts in the five Tim Smith is the firm’s deputy international service head for Asia cases, it is a challenge to discern whether there are common themes litigation. Lawson Hao is a senior litigator in the Beijing office of that can be identified. Lusheng, Rouse’s associated law firm in China The SPC is clearly keen to increase transparency for both courts [email protected] and users alike and also to enhance the development of IP case law [email protected] in mainland China. In recent years, the SPC has increasingly [email protected]

80 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Now in its seventh edition, IP Value 2009 – An international guide for the boardroom is firmly established as the indispensable guide for all corporate professionals with an interest in IP – investors, board members, in-house counsel, finance officers and attorneys in private practice.

Published every January for seven years, IP Value – Have you An international guide for the boardroom has become an indispensable guide for all corporate professionals with an interest in IP – investors, got your board members, in-house counsel, finance officers and attorneys in private practice.

copy? The 2009 edition is published in partnership with NASDAQ, PricewaterhouseCoopers, Morgan Stanley and Thomson Reuters, and features over 50 chapters offering a country-by-country analysis of the latest developments in IP globally.

Separate sections by our international distribution partners detail key global IP tax, finance, investment and valuation topics. The US section contains several chapters focusing on a wide range of the latest issues affecting companies’ ability to maximise and protect the value of their IP assets.

For more information, or to receive your own copy, please contact Gavin Stewart at [email protected] or on +44 20 7234 0606.

Alternatively, go to www.iam-magazine.com where the entire book is available to view or order online. Column By Simon Bennett and Ben Kieft The view online

and the potential defences available. The key Clarification on keyword questions to be resolved can be summarized as follows: • Can a keyword that reproduces a advertising now urgent registered trademark be registered where the party offers identical or similar goods or services to those offered under the mark? • Can a keyword reseller, such as a search Courts from five different EU jurisdictions accused of using the claimant’s trademark on engine, sell a keyword that comprises a have referred questions to the ECJ with its website and in metatags. On appeal, the registered mark and then display regard to keyword advertising. Further court held that the public expect irrelevant infringing goods in any search results? guidance on the issue is vital website results to be generated by search • Can a mark owner oppose the use of a engines and that there could not be sufficient keyword where there is sufficient The use and/or infringement of registered confusion to allow a finding of infringement. reputation in the mark so as to lead to a trademarks on the Internet through The court also doubted whether use of the claim of unfair advantage or detriment? keywords has generated a considerable identical mark REED in metatags by the • Can an internet service provider take number of cases, brought against both defendant and in conjunction with identical advantage of the safe harbour provisions advertisers and search engines. Rights holders goods and services could amount to in the E-commerce Directive claim that search engines infringe trademark infringement, but did not make an (2000/31/EC), where it takes down trademarks by allowing them to be used by express finding on this point. At first infringing content promptly on keyword advertisers. Search engines retort instance, the late Mr Justice Pumfrey decided notification? that they are a mere conduit and have no that use in a metatag would not amount to general obligation to monitor illegal activity infringement if the only effect was to make Interflora also requested, in a separate by internet users. The situation is crying out the defendant’s website appear higher in the application, an order preventing the use by for resolution and with Google deriving most result list. M&S of the keywords in question pending of its revenue from keyword advertising, the The UK High Court also considered the resolution of the reference to the ECJ. stakes are high. keywords in Wilson v Yahoo! ([2008] EWHC No doubt Interflora had in mind the Trademark owners dispute the use of 361 (Ch), February 20 2008), a case heard at potential loss that it could suffer while registered trademarks for AdWords (Google’s summary judgment. Although the registered waiting for the ECJ to give its decision. keyword advertising business) by anyone trademark in this case had not been used, the The High Court rejected this application on willing to pay the asking price. Popular court held that the search results generated the basis that Interflora had not sought this trademarks can command high sums, the by Yahoo! did not suggest a connection to the relief from the outset and applied for it only most recent example being the use of trademark owner, were not a guarantee of once it became apparent that the case would ‘Interflora’ by UK retailer Marks and Spencer origin and therefore did not amount to be referred to the ECJ. plc (M&S) to link to its own mail order flower trademark use as per Arsenal v Reed ([2002] The implications of a ruling outlawing service (Interflora Inc v Marks and Spencer plc EWHC 2695). keyword advertising are obvious. Google and ([2009] EWHC 1095 (Ch), May 22 2009). In the The recent Interflora Case involves a well- other search engines would be forced to re- nine days before Valentine’s Day 2009 the known, worldwide brand. The facts, which are think radically their business model. Should price for per-click advertising rose to between largely agreed between the parties, concern the ECJ find such use lawful, the 23 and 29 pence as M&S, Flowers Direct and the use by M&S of ‘Interflora’ as a keyword ramifications for mark owners would be Interflora all entered the bidding. This was in search term. M&S denies that: equally problematic. The growth of the contrast to an average of 2p per click in 2008. • its use of the trademark INTERFLORA Internet as an instrument of commerce has While M&S paid the greatest amount for use constitutes use in the course of trade; provided rights holders with the ability to of the keyword, the estimated value of lost • there is a likelihood of confusion; and increase their market for goods and services business to Interflora was $750,000. • its use of the keyword will dilute the to consumers while at the same time making Another feature of keyword advertising is distinctiveness of the trademark. it easier for legitimate competitors to the use of words such as ‘imitation’, ‘copies’ compete and for counterfeiters to copy. and ‘knock-offs’ in association with The High Court judgment summarizes We wait with bated breath for the trademarks. In a French case against Google the current references made by a number of outcome of the cases pending before the ECJ, (now referred to the European Court of national courts throughout Europe to the especially since the opinion of the advocate Justice (ECJ) (Case C-236-08)), LVMH Group European Court of Justice and compares the general on the LVMH Case was postponed on claimed that it was not surprising that many questions posed. In addition to the UK case June 4 – presumably so that the ECJ can of the sponsored links that used such words and the French cases against Google (LVMH, consolidate all references. WTR in conjunction with LVMH trademarks Viaticum and EuroChallenges), there are directed users to websites that offered cases referred from Austria (BergSpechte), the counterfeit LVMH products. Netherlands (Portakabin) and Germany A similar issue was considered in the (Banana Bay). (On May 22 the UK court also Simon Bennett is counsel to Arnold & United Kingdom for the first time in relation referred a case against eBay on similar issues.) Porter in London and Ben Kieft is an to metatags in Reed Executive v Reed Business The cases are all slightly different, but associate at the firm Information ([2004] EWCA Civ 159, March 3 essentially relate to the same issue of [email protected] 2004). Reed Business Information was infringement of the trademarks in question [email protected]

82 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Country correspondents

The Country correspondents section of World Trademark Review is a feature in which leading firms from countries across the globe take a detailed look at a specific topic affecting trademark owners

Non-traditional trademarks

In this issue the correspondents Italy 98 consider key aspects surrounding Bugnion SpA the protection of non-traditional Donatella Prandin and Vincenzo Melilli trademarks in their respective Mexico 100 jurisdictions Olivares & Cia Gabriela González Nájera Benelux 84 SteinhauserVandenBrinkHeeziusRijsdijk Norway 102 Advocaten Zacco Paul Steinhauser and Milica Antic Lisbeth G Wolther and Line Schartum-Hansen

Brazil 86 Portugal 104 Dannemann Siemsen Advogados Garrigues Rodrigo Borges Carneiro Gonçalo da Cunha Ferreira and Isabel Bairrão

Canada 88 Romania 106 Bereskin & Parr LLP Vilau & Mitel Justine Wiebe and Jonathan Burkinshaw Dragos M Vilau and Ionut Lupsa

China 90 Russia 108 Kangxin Partners, PC Gorodissky & Partners Vanessa S Zhou Alexander Nesterov

Denmark 92 Spain 110 Zacco Garrigues Heidi Rehné and Janne Britt Hansen João Miranda de Sousa and Sandrine Peters

India 94 United States 112 Luthra & Luthra Law Offices King & Spalding LLP Mohit Lahoty Clark Lackert and Jill Wasserman

Israel 96 Luzzatto & Luzzatto Patent Attorneys Kfir Luzzatto and Oren Weiner

www.WorldTrademarkReview.com August/September 2009 World Trademark Review 83 Country correspondent: Benelux

SteinhauserVandenBrinkHeeziusRijsdijk Advocaten Benelux

The protection afforded to non-traditional obstacle to trademark registration – namely, 371/06, September 20 2007). trademarks in Benelux is regulated in that signs that are devoid of any distinctive The first exception mentioned above – large part by EU regulations and case law. character cannot constitute trademarks. that is, that signs which consist exclusively However, Benelux courts are often (This issue is addressed later.) of a shape resulting from the nature of the prepared to grant protection where the EU The basis for the second exception is the goods themselves cannot constitute instances are not public interest: technical solutions must trademarks – may sound similar to a remain free for all to use and therefore one rejection on the grounds of lack of Trademark protection in Benelux is should prevent shapes “whose essential distinctiveness. However, the latter can be available through Benelux and Community characteristics perform a technical function remedied by acquired distinctiveness, while registrations. Since the national laws of the and were chosen to fulfil that function” the former cannot. The good news for brand EU member states have been harmonized, from being monopolized through owners is that the main reason of the BOIP and these harmonized laws are in line with trademark registration (see the European and the Office for Harmonization in the the Community Trademark Regulation Court of Justice’s (ECJ) decision in Case C- Internal Market (OHIM) for rejecting (40/94) that governs Community 299/99, Koninklijke Philips Electronics NV v applications for three-dimensional marks is trademarks (CTMs), in theory there should Remington Consumer Products Ltd, June 18 lack of distinctiveness, rather than the fact be no scope for an article on non-traditional 2002). In that case, the ECJ also held that it is that the shapes result from the nature of trademarks in Benelux specifically. But as irrelevant whether shapes other than the the good themselves. always, the application of the law by the technical shape for which registration is In the Remington Case mentioned national courts across the European Union sought are available to obtain the same above, the ECJ held that the criteria for can differ substantially. Besides, while it is technical result. Accordingly, on February 21 assessing the distinctive character of three- now generally accepted that shapes, colours, 2008 the Court of Appeal of The Hague dimensional marks are no different from smells and sounds can in principle function upheld the refusal of the Benelux Office for those applied to other categories of mark. as trademarks (ie, they are capable of Intellectual Property (BOIP) to register a However, the ECJ later held that the average identifying the origin of goods or services), refill packaging for sticking plasters as a consumer is not accustomed to recognizing in practice it is difficult to register these shape mark because the essential a three-dimensional shape as an indication unusual signs or, if they have been characteristics of the sign were exclusively of the origin of the goods, and that it can registered, to maintain the registration. created on the basis of technical therefore be more difficult to establish considerations (Case B95685). distinctive character in the case of such a Three-dimensional signs The third exception means that if the three-dimensional mark. Consequently, a The 1962 Benelux Trademark Act explicitly character of the goods to which the sign three-dimensional sign must significantly allowed three-dimensional marks. Section applies is such that aesthetic features of deviate from the norm or customs of the 1(1) provided that “denominations, designs, their shape substantially determine the relevant sector to be recognized as a prints, seals, letters, numbers, shapes of value of the goods, this shape cannot trademark. A simple deviation is not products or of packaging and all other signs constitute a trademark for the goods (eg, the sufficient (see Henkel, Case C-218/01, serving to distinguish an undertaking’ s shape of crystal glasses cannot be February 12 2004). This has been applied in products shall be regarded as individual successfully registered). It is questionable two recent Dutch cases concerning the trademarks”. This provision was also whether this exception also applies if the shape of chocolates. Both the Court of codified across the European Union. appeal of the shape and its popularity are Appeal of The Hague (January 3 2008, in a Article 2(1)(2) of the Benelux Convention substantially determined by the shape’s case concerning triangular-shaped on Intellectual Property and Article 7(1)(e) of recognition as a distinctive sign. In April chocolates) and the Den Bosch District the CTM Regulation both preclude the 1989 the Benelux Court of Justice held that Court (April 16 2008, in a case concerning registration of shapes as trademarks when the goodwill which a trademark has gained curly-shaped chocolate sticks) held that the the shapes: (and which determines its appeal) does not average consumer is used to many varieties • result exclusively from the nature of the constitute ‘substantial value’ (Case IER of chocolate shapes and therefore would not goods themselves; 1989/30, Burberry). Market value stemming easily recognize the shapes at issue as • consist of the shape of goods which is from aesthetic appeal is an obstacle; market indications of the origin of the products. necessary to obtain a technical result; or value stemming from goodwill is not. If the • give substantial value to the goods. three-dimensional mark in itself gives Other unusual marks substantial value to the goods (ie, aesthetic It is beyond the scope of this article to Signs that fall into any of these market value, which is often the case in discuss all types of non-traditional mark. categories will remain unregistrable even if fashion), this cannot be remedied by the However, a common criterion to all is that they acquire distinctiveness through use. goodwill that has been created over the the mark must be capable of being The first exception is similar to another course of time (see ECJ decision in Case C- represented graphically (Article 2(1) of the

84 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

Benelux IP Convention and Article 4 of the musical work or the cry of an animal. If, CTM Regulation). In the Sieckmann Case (C- however, the sound is represented by “a 273/00, November 23 2003), the ECJ held stave divided into measures and showing, in that “a trademark may consist of a sign particular, a clef, musical notes and rests which is not in itself capable of being whose form indicates the relative value and, perceived visually, provided that it can be where necessary, accidentals”, it may qualify represented graphically, particularly by as a trademark (Shield Mark, Case C-283/01, means of images, lines or characters, and November 27 2003). The problem of the that the representation is clear, precise, self- practical representation of a sound mark contained, easily accessible, intelligible, has been considerably reduced by the durable and objective”. development of mp3 files. Thus, since 2006 OHIM has accepted mp3 sound samples Colour marks combined with a sonogram as an acceptable Before the ECJ ruling in Libertel (Case C- representation of sound marks. 104/01, May 6 2003), it was relatively easy to register a colour as a trademark. Libertel Conclusion imposed stricter criteria. For instance, a Paul Steinhauser Benelux and ECJ case law show that colour sample on its own is no longer Partner although in principle it is possible to sufficient to meet the requirement of [email protected] register all kinds of unusual trademark, in graphical representation. A description of reality it is difficult to obtain a registration. the colour using an internationally Paul Steinhauser is an IP all-rounder, Applicants seeking to register three- recognized colour code is accepted; a verbal specializing in patent, trademark and dimensional trademarks will often have to description may suffice. The Brussels Court copyright issues. In 1993 he co-founded rely on acquired distinctiveness – but only if of Appeal held that such a verbal Steinhauser Hoogenraad Advocaten, the first the sign does not fall into one of the three description may later be completed with a firm (now dissolved) in the Netherlands to permanent exclusions from registration colour code (Case 2003/AR/679, Veuve deal solely with IP and advertising matters. mentioned above. Colour, olfactory and Cliquot, June 24 2004). The same court Mr Steinhauser is an active member of sound mark applications may run into invalidated the registration for the well- various professional associations, including further practical objections. known green mark of Dutch MARQUES. He also advises the Dutch This does not mean that when a sign is telecommunications company KPN in 2008 government on trademark law as a member not accepted for registration, the goodwill (Case B96211, May 23 2008). (It appears that of the Committee of Eight. attached thereto cannot be protected. The the Brussels Court of Appeal is more Benelux courts are prepared to grant prepared to deviate from decisions of the protection against slavish imitation, even BOIP than the Court of Appeal of The though it is questionable whether such Hague, which almost always upholds BOIP protection can be granted in respect of decisions. Therefore, the authors three-dimensional signs. For instance, the recommend that wherever possible, cases be Breda Court of First Instance protected the filed with the Brussels court.) LEGO bricks against imitation by competitor Mega Bloks (Case 118470/HA ZA 03-501, July Olfactory marks 6 2005), even though the cancellation Following Sieckmann, chemical formulae (ie, division of OHIM had previously held that a representation of the chemical matter, not the shape of the LEGO bricks was not a valid the smell itself), verbal descriptions and trademark (as upheld by the Grand Board of samples are considered insufficient (on Appeal of OHIM and the European Court of their own or in combination) to meet the First Instance). The Dutch case is now before graphical representation requirement the Supreme Court and it is likely that because they are not “clear, precise, self- questions will be referred to the ECJ. WTR contained, easily accessible, intelligible, durable and objective”. Consequently, since the ECJ decision in Sieckmann, there have Milica Antic been no new applications to register such Associate signs as Benelux trademarks. [email protected]

Sound marks Milica Antic advises on various areas of IP The first case dealing with sound marks to law, especially trademark, trade name, reach the ECJ stemmed from an application copyright and domain name law. She also to register the first nine notes of Ludwig van specializes in information and Beethoven’s “Für Elise” and the cry of a communication technology contracts and rooster as a Benelux mark. The ECJ held that disputes. Ms Antic has extensive litigation a sound does not meet the requirements of experience. She has written extensively graphical representation if the sound is about intellectual property. described in words referring to a well-known www.WorldTrademarkReview.com August/September 2009 World Trademark Review 85 Country correspondent: Brazil

Dannemann Siemsen Advogados Brazil

Although the definition of ‘trademark’ word mark, but INPI will not accept written Further, shapes that cannot be under the Industrial Property Law is descriptions or representations of a musical disassociated from a technical effect are not restrictive, most non-traditional signs can piece, a smell or a taste. registrable as three-dimensional marks. The enjoy a degree of protection in Brazil Although sound, olfactory and taste INPI Patent Department may help marks are not protected, INPI has been trademark examiners assess whether three- Companies around the world are accepting registrations for other non- dimensional marks would fall under this increasingly adopting new ways to traditional marks that are capable of direct prohibition. communicate the attributes of their brands visual perception, such as holograms, Packaging and product configurations to consumers. The concept of ‘brand position and gesture marks. Registration in have been registered as three-dimensional experience’ goes beyond any magnetism these cases was achieved by filing design marks in Brazil. As use is not a pre-requisite that a mere name may have to encompass, mark applications instead of trademark for obtaining a registration, distinctiveness among other things, sounds, smells and applications. must be analyzed without requesting proof of tastes. However, these creative signs do not secondary meaning, which is a difficult task always fit the legal definition of ‘trademark’. Visual signs for examiners. In any event, in a forfeiture This is the case in Brazil where practitioners Motion marks can also be registered proceeding it is possible to conceive the have to find alternative forms of protection. provided that the application is filed as a cancellation of a three-dimensional mark if This article reviews the protection figurative design showing the desired there is no use of the sign as a mark capable of requirements and the limitations regarding movement. INPI will not accept a distinguishing and identifying the product or non-traditional marks in Brazil, as well as multimedia recording of the mark for service in the market. alternative forms of protection. It also registration. Conflicts between three-dimensional considers slogans, as the criteria applying to Colour marks face a different challenge. marks and industrial design registrations their registration differ from those of The current Industrial Property Law are possible. The law specifically prohibits traditional marks. prohibits the registration of colours and the registration as three-dimensional marks their names, except when arranged or of industrial designs owned by third parties. Background combined in an unusual and distinctive Three-dimensional marks can indirectly The basic requirement for the protection of manner. Therefore, INPI has denied protect certain aspects of a package or a trademark is set out by Article 122 of the registration of a single colour in abstract, product which are tactile in nature, such as Industrial Property Law, which determines but marks consisting of a combination of engravings and texture details. Further, that any “visually perceptive distinctive colours can be registered. Also, design marks three-dimensional marks can also be used sign”, when not prohibited by law, is capable consisting of a single colour can be to protect decorative elements of of registration as a mark. registered as trademarks provided that the commercial establishments such as Based on this provision, the National colour is not described in abstract and is restaurants, banks and gas stations. Institute of Industrial Property (INPI) has positioned on the design (eg, a blue adopted the narrow position that a mark rectangle on the sole of a shoe). Slogans must be “directly” visually perceptible in The prohibition also applies to colour Although slogans are not commonly order to be registered. Thus, INPI has denied names. These may not be registered unless categorized as non-traditional marks, it is registration to signs that are not visually they are used in a distinctive manner for important to point out some particularities perceptible but can be represented by products or services that are not related to the relating to their protection in Brazil. visually perceptible forms, such as a written colour itself. For instance, the word mark First, the protection of slogans as description (of a particular smell or taste) or VERDE LIMÃO (LIME GREEN) cannot be trademarks is a matter of a great musical notation. registered for limes, but it could be for services. controversy in Brazil. Under the previous Industrial Property Non-visual signs Three-dimensional marks Law, slogans were subject to a specific In relation to sound marks, some companies Three-dimensional marks are registrable in registration system separate from that for have attempted to circumvent this narrow Brazil. The requirement of direct visual trademarks, albeit also managed by INPI. approach by registering word marks that perception is not an issue. Applications for The current law has abolished the separate represent a particular sound, as sounds three-dimensional marks have to contain registration of slogans. However, it also themselves cannot be registered. For different views (in perspective, front, back, prohibits the registration as trademarks of example, the words ‘PLIM PLIM’, which upper, lower and side views). signs or expressions used only as a means of represent a sound mark used for many As with any other mark, three- advertising. years by a local television channel, have dimensional signs must be distinctive and, This prohibition is not absolute. If the been registered as a word mark. Such marks thus, necessary, common or usual shapes of a slogan functions as a trademark, it may still are protected in the same way as any other product or of its packaging are not registrable. be registrable. The key consideration is the

86 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

scope of use. If the slogan is used as a mark – not extend to partial dates (eg, December 25). that is, as a source identifier on commercial Finally, in all cases where trademark material – it would qualify for registration. If protection is not possible, alternatives can the slogan is used in advertisements only, be considered to curb possible then registration is prohibited. infringements. For instance, unfair The problem is that under the Brazilian competition law provides residual system there is no obligation to begin the protection. The protection against acts of use of a mark until five years after the grant unfair competition is commonly used in of registration, so that the examiner cannot cases involving trade dress and could easily request evidence of use for a mere be adopted to prevent the use of a similar application. slogan by a competitor, for example. Moreover, trademark examiners have The remedies readily available against been systematically rejecting applications unfair competition practices include: for marks consisting of more than three • ex parte preliminary injunctions; words where the examiners suspect that the • search and seizure of products; expression can be a slogan. In some cases, • monetary damages; and even two-word, meaningful expressions can Rodrigo Borges Carneiro • permanent injunctions. be considered to be slogans and, as such, Partner rejected. [email protected] Even though court actions may take a Many practitioners, including the long time to reach their conclusion, author, believe that the law needs to change Rodrigo Borges Carneiro is a lawyer, injunctions can be obtained reasonably and that slogans should be protected as registered industrial property agent and a quickly, sometimes within a week. trademarks without additional partner at Dannemann Siemsen Advogados Copyright protection can also be requirements. In case a slogan is not used to in Rio de Janeiro. Mr Carneiro practises in considered in some cases. Original titles of identify and distinguish a product or service the areas of trademark, unfair competition, works receive copyright protection if they in a trademark fashion, it will always be copyright and entertainment law, are not subject to confusion with another possible to request its cancellation. counselling clients and litigating IP matters work of the same genre previously The Brazilian Association of Intellectual in state and federal courts. Mr Carneiro published by another author. Property noted the problems that have obtained a LLM in IP law from John An original slogan could in theory also arisen after the enactment of the current Marshall Law School and a postgraduate receive copyright protection, as could Industrial Property Law and issued a diploma in copyright law from King's original decorative or ornamental designs. resolution aiming to serve as a guide. College London. He has authored numerous Resolution 38 expressly recommends that articles on intellectual property and is an Final words INPI should: adjunct professor of IP law at the Catholic In sum, even though non-traditional signs are • not reject an application based on the University of Rio de Janeiro. not always registrable as trademarks, they presumption of use of the slogan only as normally enjoy a degree of protection or a means of advertising; and enforceability against third parties. The • cancel a registration only if trademark the product or service being certified. creativity of the legal practitioner will be use was not proved. Geographical indications are subject to a paramount in protecting such signs and, more separate registration system from often than not, an in-depth analysis of the Obviously, this resolution does not bind trademarks. Accordingly, they cannot be actual mark, together with its context of use, INPI and, thus, the issue remains. registered as trademarks, or collective or will be essential for the proper assessment of certification marks. the chances of success in a proposed Collective and certification marks protection or enforcement strategy. WTR Other types of mark worth commenting on Other signs are collective and certification marks, which Literary, artistic or scientific works, as well can be registered under the current law. as titles protected by copyright cannot be While a certification mark is used to attest registered as trademarks without the that a product or service conforms with consent of their author or copyright owner. determined technical norms or However, INPI traditionally views titles of specifications, notably with reference to its periodic publications or of a series as quality, its nature, the material used and the capable of being registered as trademarks. methodology employed, a collective mark is Individual works are generally not protected used to identify products or services as marks as they are not perceived as originating from members of a given entity. trademarks but as mere titles of the work. The registration of a collective mark Isolated letters, digits and dates are also may be requested only by a legal entity barred from trademark registration, except representing a group and able to exercise an when sufficiently distinctive. The prohibition activity different from that of its members. concerns the numerals 0 to 9 and all the letters The registration of a certification mark can of the alphabet in Portuguese or any other be requested only by a person without any language. The prohibition for dates applies to direct commercial or industrial interest in complete dates (eg, December 25 2009) but will www.WorldTrademarkReview.com August/September 2009 World Trademark Review 87 Country correspondent: Canada

Bereskin & Parr LLP Canada

Three-dimensional shapes can be Another statutory restriction that • the right to prevent the use of the protected under trademark, industrial applies to the registration (and registered distinguishing guise in such design and/or copyright law in Canada. enforcement) of a distinguishing guise a way as to depreciate the value of the To obtain immediate and comprehensive stipulates that the exclusive use of the guise goodwill attaching to the guise. rights, brand owners should consider an cannot be likely to limit unreasonably the integrated strategy combining all three development of any art or industry. Further, Unregistered trademarks protection schemes the registration of a distinguishing guise It may be possible to establish trademark will not prohibit the use by third parties of rights in unregistered three-dimensional In Canada, certain types of non-traditional any utilitarian feature embodied in the product shapes or packaging, provided that mark, including sound, olfactory and moving distinguishing guise. the shape is not purely or at least primarily image marks, are not currently accepted for A distinguishing guise may also be functional. registration, while other types of non- barred from registration on the basis of In Canada, one can establish common traditional mark, such as the shape of functionality. In assessing whether the law trademark rights simply through use products and their packaging, are registrable registration of a guise is barred due to and/or advertising of a trademark. only if acquired distinctiveness can be shown. functionality, regard will be had to any past Common law rights are restricted to the This article focuses on the protection of patent obtained for the guise (see Thomas & geographical region where a reputation in three-dimensional product configurations Betts Ltd v Panduit (2000) 4 CPR (4th) 498 the trademark has been established and are and packaging, and the strategic use of and Kirkbi AG v Ritvik Holdings Inc (2005) 43 enforced through an action for passing off trademark, design and copyright regimes to CPR (4th) 385 (SCC)). at common law and/or Section 7(b) of the acquire immediate and comprehensive rights. While jurisprudence leaves some Trademarks Act. uncertainty, it appears that the test for Trademark protection functionality is whether the trademark is Industrial design protection “primarily” functional. In other words, not Protection for three-dimensional product Trademark registration every trademark that displays some shapes and packaging may also be obtained In Canada, trademarks consisting of the functional features will be barred from through registration as an industrial design. “shaping of wares or their containers” or registration (see Remington Rand Corp v The Industrial Design Act provides a “a mode of wrapping or packaging wares” Philips Electronics NV (1995) 64 CPR (3d) 467 scheme for the registration of designs that fall within the statutory definition of a (FCA); Kirkbi AG v Ritvik Holdings Inc (as consist of or incorporate “features of shape, ‘distinguishing guise’ trademark. above); and Crocs Canada Inc v Holey Soles configuration, pattern or ornament and As a general rule, three-dimensional Holdings Ltd (2008) 64 CPR (4th) 467), a any combination of those features that, in a product shapes and packaging are likely to summary judgment decision in which the finished article, appeal to and are judged fall within the definition of distinguishing Federal Court noted that the language of the solely by the eye”. guise. Examples of well-known product statutory provisions relating to To qualify for registration as an shapes and packaging that have been distinguishing guise trademarks clearly industrial design, a design must meet a registered as distinguishing guises include suggest “a policy choice to permit some two-prong novelty test: the tread design of the TOBLERONE functional (or utilitarian) features in a mark • The design must not be identical to, or chocolate bar and its triangular packaging, so long as they do not create a monopoly of so similar as to be confounded with, a and the wrapper design for the HERSHEY’S the function”). registered design; and KISS chocolate. Registration of a distinguishing guise • The design must be original (the design Special rules apply to the registration as a trademark carries certain benefits. must not only originate with the of distinguishing guise trademarks. First, the term of protection is author, but also be more than a mere First, a distinguishing guise trademark potentially indefinite. Like an ordinary trade variant of an old design). is registrable only if it has been used in trademark registration, a distinguishing Canada so as to have become distinctive at guise registration has an initial term of 15 Also, a design cannot be dictated by the date of filing. Evidence of acquired years and can be renewed indefinitely for utilitarian function. Industrial design distinctiveness must be provided in the further terms of 15 years. registration does not protect “features form of an affidavit or statutory declaration. Trademark registration also provides applied to a useful article that are dictated A distinguishing guise registration may be multiple possible causes of action, ‘solely’ by a utilitarian function of the limited geographically to those areas of including: article”, or “any method or principle of Canada where acquired distinctiveness is • the right to prevent the sale, manufacture or construction”. While shown. Therefore, it is important to show distribution or advertising of goods or functionality is a hurdle for both trademark acquired distinctiveness throughout services with a confusingly similar and industrial design protection, it would Canada if possible. trademark by another in Canada; and appear that the permitted threshold for

88 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

functionality is higher for industrial designs. copyright infringement for another to However, design protection is available reproduce the design (or a substantially only if sought quickly. An application to similar design) by making the article, or register the design must be filed within one making a reproduction in any material form year of its publication or public disclosure of the article, unless one of the enumerated anywhere. exceptions apply. One enumerated Also, design protection is limited in term. exception applies to trademarks. A design registration lasts for a maximum of The issue of copyright in a design 10 years, provided that a maintenance fee is applied to a useful article is currently paid at the five-year anniversary. before the courts in the CROCS Case In terms of enforcement, industrial discussed above. design registration grants the owner the exclusive right to prevent another from Integrated protection strategies making, importing, selling or renting any Immediate and comprehensive protection article in respect of which the design is of three-dimensional product shape and registered and to which the registered packaging in Canada requires strategic use design (or a design not differing Justine Wiebe of all three schemes. substantially therefrom) is applied. Partner For new product shapes and packaging, Canadian jurisprudence has clearly [email protected] the first step that should be considered is to established that: file an industrial design application. As • industrial design protection does not Justine Wiebe is a partner, barrister, noted above, the application must be filed preclude protection of the same design solicitor and trademark agent at within one year of public disclosure or as a distinguishing guise; and Bereskin & Parr LLP. She has practised registration will be statute barred, but the • acquired distinctiveness as a trademark exclusively in the field of intellectual threshold for novelty is relatively low and can be established during the 10-year property for over 15 years and her the threshold of permitted functionality is monopoly granted by industrial design expertise encompasses non-traditional relatively high. Moreover, successful registration (see WCC Containers Sales marks. Ms Wiebe was recently recognized industrial design registration will provide a Ltd v Haul-All Equipment Ltd (2003) 28 as a leading trademark practitioner in 10-year monopoly, during which trademark CPR (4th) 175). Canada in a peer review (Experts’ Experts) distinctiveness can be acquired. conducted by World Trademark Review. The second step should be to establish Copyright protection common law trademark rights in the It may also be possible to obtain copyright product or packaging shape. To do so, the protection for three-dimensional product shape of the product or packaging should shapes and packaging. be treated as a trademark. This can be done Copyright is a statutory right that through the use of appropriate marking automatically arises upon the creation of and trademark notices and identifying the an original work. Registration is not product or packaging shape as a trademark required. However, certain criteria must be on packaging and in advertising. An met, including that the work be in fixed additional step to consider is filing regular form and qualify as a protected work (eg, trademark applications for two- an artistic or literary work). The threshold dimensional depictions of the product or for originality for copyright protection is packaging shape (such applications could lower than that for industrial designs. be filed based on proposed use). Copyright grants the owner the right to Then, once acquired distinctiveness prevent the unauthorized production or throughout Canada or in a significant reproduction of the work or a substantial region of Canada can be shown, a part thereof. distinguishing guise application should be The general term of protection for filed. Trademark registration will provide copyright is the life of the author plus 50 Jonathan Burkinshaw potentially indefinite protection for the years, but other terms may apply to Associate product shape or packaging. Trademark particular types of work. [email protected] protection also will ensure that copyright in Sections 64 and 64.1 of the Copyright the shape of the product/packaging can be Act create some exceptions to copyright Jonathan Burkinshaw holds a BA from claimed and enforced. protection, which are intended to address Trinity Western University and an MA and A coordinated strategy that employs the interface between copyright and a law degree from the University of trademark, industrial design and copyright industrial design protection. Certain acts do Toronto. His practice focuses on trademark schemes will grant an overlay of rights in a not constitute copyright infringement, matters, including prosecution, product or packaging shape, and multiple including the application to useful articles oppositions and related litigation. Mr legal grounds on which to enjoin would-be of features that are dictated solely by Burkinshaw’s experience encompasses the imitators. WTR utilitarian function. Also, if a design is protection of product shapes and other applied to a useful article that is reproduced non-traditional marks. more than 50 times, it will not constitute www.WorldTrademarkReview.com August/September 2009 World Trademark Review 89 Country correspondent: China

Kangxin Partners, PC China

Three-dimensional trademarks can be the packaging – a yellow triangle featuring Generally speaking, the configuration of registered in China as long as they are the word ‘Toblerone’ in red – while the the goods cannot be registered as a three- distinctive and non-functional. However, second registration concerns the zigzag dimensional mark; this applies to a trademark owners should be aware that configuration of the chocolate itself. common beer bottle when registration is similar shapes may already have been In September 2007 Kraft filed a sought for beer or the common registered as patent designs complaint with the Administration of configuration of a three-headed razor when Industry and Commerce (AIC) of Yunfu City registration is sought for razors. The reasons Throughout the 20th century and to the in Guangdong Province against Switzerland for this are twofold. First, to the common present day, China has undergone dramatic Joy on the basis of the latter’s use of a consuming public, the concept of goods changes. The changes undergone by the triangular zigzag shape for its chocolate sold configuration is so closely connected with country’s trademark law in the past 30 years in triangular packaging. Following the filing the goods themselves that the public will reflect the general process followed by China of the complaint, the AIC confirmed that rarely consider the configuration of or to catch up economically with the rest of the Kraft enjoyed exclusive rights in China in its decorations on packaging as signs indicating world. Thus, the 1982 Trademark Law long-used zigzag configuration and the origin of the goods. Second, a purely mentioned only words, devices and triangular packaging. The AIC immediately functional configuration falls under the combinations thereof as recognized forms of issued an injunction against Switzerland Joy protection of patent laws and patents trademarks; the 1993 Trademark Law also and confiscated the infringing products on eventually fall into the public domain. If a failed to mention other types of mark; but the grounds that Switzerland Joy’s use of the functional configuration were mistakenly the 2001 Trademark Law took a substantial shapes infringed Kraft’s trademarks since: protected as a trademark, its owner would step forward in this regard. Article 8 of that • the shapes were confusingly similar to be entitled to a monopoly on the statute provides that “any visual sign capable Kraft’s; and configuration of the designated goods for an of distinguishing the goods or services of • Switzerland Joy did not have consent or unlimited period as trademark rights can be one natural person, legal person or any other a licence from Kraft to use these shapes. renewed upon expiration of a registration organization from those of others, including and thus have the potential to be words, devices, letters or numerals, three- Kraft’s success resulted mainly from the permanent rights. This would: dimensional symbols, combinations of outstanding distinctiveness and non- • impede technical developments and colours or any combination of the above functionality of its three-dimensional improvements; elements may be applied for the registration marks. Brand owners seeking trademark • harm fair competition; and of a trademark”. This is a broad definition of protection for three-dimensional shapes in • ultimately impair consumers’ right to what may constitute a trademark. China should thus note that their chances of choose. So far, few applications have been filed for success will depend on their ability to meet non-traditional marks and few infringement these two criteria. The second requirement for three- disputes involving such marks have been dimensional marks – as for any other sign – reported. One such dispute, between Swiss Principles is that they be distinctive (pursuant to confectionery manufacturer Kraft Foods A three-dimensional mark may consist of Article 9 of the Trademark Law, “any Schweiz AG and one of its local competitors, the configuration of the goods, the package trademark in respect of which an Switzerland Joy Co Ltd of Gangcheng, may of the goods or other three-dimensional application for registration is filed shall be shed some light on the protectability of three- designs. Popular examples of three- so distinctive as to be distinguishable”). dimensional marks in China. dimensional marks include the ridged Coca- As stated above, a three-dimensional Cola bottle, the Rolls-Royce figure of the mark cannot be the common configuration The Kraft Case Spirit of Ecstasy and Ronald McDonald, the of the designated goods; it must be a unique Most readers will be familiar with Kraft’s McDonald’s clown character. In practice, configuration with distinctive bestselling product Toblerone, which is however, not all three-dimensional signs can characteristics so as to distinguish the specially moulded into triangular zigzags be registered and protected as trademarks. goods from others. and sold in triangular packaging. Toblerone This is because three-dimensional marks Kraft successfully registered the zigzag chocolate has been sold in over 100 must not be merely functional. Article 12 of configuration and the triangular packaging countries for over a century. the Trademark Law states that “where an for its chocolate as three-dimensional marks Kraft holds International Registrations application is filed for registration of a because the shapes had been originally and 615992 and 615994 for three-dimensional three-dimensional sign as a trademark, any uniquely created. The three-dimensional trademarks for “chocolate, chocolate shape derived from the goods itself, signs were not common configurations or products, cocoa, confectionery, pastries and required for obtaining the technical effect, packaging for chocolate; nor were they edible ice” in Class 30 of the Nice or giving the goods substantive value, shall functional. The shapes of both the chocolate Classification. The first registration concerns not be registered”. bar and its packaging had acquired

90 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

substantial distinctiveness thanks to their This means that Nestlé’s application to extensive use for over a century. extend its international trademark registration to China was accepted while a Similarity test similar shape was already protected in The test of similarity for three-dimensional China as a design patent. As Weishida’s soya marks is unique in that such marks are sauce is very popular in 15 major cities in assessed not only against other three- China and its annual sales between 2001 dimensional marks, but also against and 2003 were over Rmb100 million ordinary marks. (around $14 million), far exceeding Nestlé’s In its ruling against Switzerland Joy the sales, it is likely that Weishida would be AIC of Yunfu City referred to the Guidelines successful in challenging the validity of on Chinese Trademark Prosecution co- Nestlé’s brown bottle three-dimensional published by China’s Trademark Office and trademark in China. the Trademark Review and Adjudication Board (TRAB) under the State Conclusion Administration of Industry and Commerce. Trademark owners should be careful when The guidelines state that where the Vanessa S Zhou selecting any three-dimensional trademarks. structure, shape and visual effect created by Trademark attorney Under current Chinese practice, to obtain two plain three-dimensional signs are [email protected] registration such marks must be distinctive similar and may easily cause confusion (ie, differ from the common shapes used for among the public as to the origin of the Vanessa S Zhou obtained her bachelor of the products to which they apply) and may goods and/or services to which the signs arts degree from the Guangdong not be functional. Any functionality-led apply, such signs must be considered as University of Foreign Studies in 2003. She shape would have to be registered as a similar. worked as a merchandiser at Jones New design patent rather than as a trademark, In the Kraft Case, the AIC considered the York Inc’s Guangzhou office for 18 months which would substantially limit the chocolate produced by Kraft and before joining Kangxin Partners, PC in duration of the protection afforded. Switzerland Joy to be similar with regard to 2005 as a trademark attorney. Kraft’s successful action against their structure, shape and visual effect, Ms Zhou has a deep understanding of Switzerland Joy demonstrates the strength which would lead to public confusion. Chinese IP laws and regulations, specializing that a three-dimensional mark can enjoy. A Further, the AIC referred to the in trademark prosecution, domain name well-designed three-dimensional sign may guidelines in its assessment of the disputes, IP customs protection and in fact be considered more distinctive than similarity between the packaging at issue. copyright protection. She counsels clients an ordinary mark. WTR The guidelines state that where two marks from a wide range of industries. combine distinctive three-dimensional Ms Zhou speaks Chinese, English and signs and other distinctive signs, such Cantonese. marks will be considered similar if either the three-dimensional signs or the other signs are similar to each other and may The Nestlé Case easily cause confusion among the public as Brand owners should be aware that three- to the origin of the goods and/or services. dimensional marks and design patents for The chocolate packaging manufactured by similar or identical shapes can coexist in the both Kraft and Switzerland Joy consisted of market. This can be a problem when the a distinctive triangular shape featuring holder of each right is a different entity. For other elements such as colours, words and instance, Société des Produits Nestlé, Kraft’s devices. The AIC found that while the compatriot and one of the world’s largest food packaging shapes were similar and would producers, recently filed a complaint with the cause confusion among the public, the AIC of Kaiping City in Guangdong Province colours, words and devices featured on each against three soya sauce producers that used were different. However, following the brown bottles. Concurrently, Nestlé issued guidelines, the AIC held that the similarity warning letters to two other major local soya between the three-dimensional elements of sauce producers. The basis of Nestlé’s actions the marks trumped any dissimilarities was its three-dimensional trademark for a between the other elements. Accordingly, brown bottle under International Registration the AIC held the two three-dimensional 640537. The registration was extended to signs to be similar. China in 2007, after the TRAB had upheld This infers that Kraft’s three- Nestlé’s appeal against the Trademark Office’s dimensional shape by itself enjoys stronger initial decision to reject the application. distinctiveness than any other elements However, Weishida, one of the local soya sauce added to it and, thus, the key element in a producers, allegedly started using a brown similarity test between three-dimensional bottle of a shape similar to Nestlé as early as signs featuring other elements is the three- 1983 and had registered that shape as a design dimensional signs themselves. patent in 1991. www.WorldTrademarkReview.com August/September 2009 World Trademark Review 91 Country correspondent: Denmark

Zacco Denmark

In principle, any sign that is distinctive Even clearer guidelines may be expected are non-distinctive); and and can be represented graphically may be in the near future, as a result of the • whether elements of the shape can be registered as a trademark in Denmark, but implementation of the Singapore Treaty on characterized as decoration rather than these requirements often prove to be the Law of Trademarks. The Singapore as guarantees of origin (aesthetic insurmountable hurdles for non- Treaty entered into force in Denmark on originality does not make a shape traditional marks March 16 2009 and Danish practice in distinctive). respect of non-traditional marks will Over the past decade, marketing specialists therefore have to adhere to the standards In line with the Office for have begun considering non-traditional adopted by the treaty’s Assembly of Harmonization in the Internal Market trademarks as necessary and useful Contracting Parties. (OHIM) guidelines, the PTO’s test is whether supplements to traditional marks. When The current requirements concerning the shape is so materially different from branding a company or promoting its the registration of non-traditional marks basic, common or expected shapes that it products and services, the use of signs such according to Danish practice are further can enable consumers to identify the goods as colours, shapes, sounds, smells, tastes, discussed below. It appears that three- by shape alone. holograms and moving images has become dimensional marks are the most commonly The Danish courts have assessed the popular and is sometimes considered to be registered non-traditional marks; a small distinctiveness of three-dimensional marks a stronger marketing tool than a traditional number of sound marks and moving images twice: mark. have been registered; whereas no colour, • On August 28 2003 the Supreme Court For instance, well-known Danish olfactory, taste or touch mark has yet been ruled in a case involving a cylindrical marketing guru Martin Lindstrom discusses registered. cardboard tube for sweets (Case HD 159- non-traditional trademarks in his latest book, 2001). The court found that the shape Buy-ology – Truth and Lies About Why We Buy, Three-dimensional marks was non-distinctive since it was a basic in which he notes that visual indicators such Three-dimensional signs will be regarded as geometric shape. as logos are far more effective and trademarks provided that they are capable • On June 4 2003 the Danish Maritime memorable when combined with other of being represented graphically and of and Commercial Court considered the elements that appeal to other senses. distinguishing the goods or services of one shapes of coffee plungers (Case V-25-97). Using non-traditional marks results in a undertaking from those of another. The court held that the shapes were not need for exclusive rights to the signs in In the past few years, the PTO has capable of performing the function of question. In Denmark, the Trademarks Act, received a large number of applications for trademarks. the Designs Act, the Copyright Act and the three-dimensional marks. Typically, three- Marketing Practices Act provide possible dimensional marks consist of the shape of A relatively large number of three- protection. However, this article focuses on the goods themselves or their dimensional marks (eg, for perfume flacons, trademark registration. packaging/containers. bottles and containers) have been registered Unlike other non-traditional marks, the in Denmark. Legal framework main practical hurdle for three-dimensional Denmark is a member of the European marks is not the requirement of graphical Sound marks Union and the European Economic Area. representation, but rather the requirement A sound mark (eg, a jingle or musical piece) The current Trademarks Act is based on the of distinctiveness. The requirement of can be registered as a trademark if it fulfils EU First Trademarks Directive (89/104/EEC), graphical representation is fulfilled by any the requirements of graphical which harmonizes the trademark laws of kind of depiction of the mark, such as representation and distinctiveness. the EU member states. perspective drawings or photos. With regard to the requirement of In principle, a trademark can consist of Whether a three-dimensional mark graphical representation, the PTO refers to all types of sign that fulfil the requirements fulfils the distinctiveness requirement the European Court of Justice (ECJ) decision of graphical representation and depends on: in Shield Mark (Case C-283/01), in which the distinctiveness. The Trademarks Act does not • whether the shape is a common shape ECJ held that the representation must be specify what would constitute graphical for the goods in question (the shape clear, precise, self-contained, easily representation or distinctiveness with regard must depart from the shape which is accessible, intelligible, durable and objective. to non-traditional marks. However, the expected by the consumer); Musical notations with indication of timing Patent and Trademark Office (PTO) recently • whether the shape is necessary to and pitch will meet this requirement. In this published online guidelines that provide achieve a technical result (the shape respect, the PTO no longer requires that comprehensive and clear information (in must not be merely functional); music notations be accompanied by Danish) on its practice concerning some • whether the shape is an ordinary information about the specific instruments types of non-traditional mark. geometric shape (basic geometric shapes on which the sound must be performed.

92 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

Moreover, sonograms and oscillograms original application. The court questioned are accepted for registration if they are the validity of the later addition of a specific accompanied by a description of the sound colour code to the registration. and thereby provide an unambiguous The examination of a colour mark for graphical impression of the mark. distinctiveness must include consideration With regard to the requirement of of the public interest in not unduly distinctiveness, a single tone will not be restricting the availability of colours for considered distinctive. Similarly, a sound other traders which market goods or mark consisting of a longer musical piece or a services of the same type as those in respect conversation between two or more people of which registration is sought (see Libertel). will not be considered sufficiently distinctive. Hence, in compliance with OHIM practice, So far, the PTO has granted registration the PTO does not consider colour marks to only three sound marks: distinctive, except in special circumstances. • the Intel jingle (VR 1998 00524); As with any other non-distinctive sign, a • the sound of an animated troll saying colour mark may be considered registrable if “Hvaaa, hvor ska’ vi hen du?” (Danish for it has acquired distinctiveness. In two recent “Hey you, where are we going?”) (VR Heidi Rehné cases (V-161-04, May 20 2008 and V-78-05, 1999 04561); and Trademark and design attorney November 22 2006), the Danish Maritime • the sound of an ice cream van bell (VR [email protected] and Commercial Court concluded that 2003 02355). evidence of acquired distinctiveness had not Heidi Rehné is a European trademark and been submitted with regard to Ferrari’s red Motion marks design attorney with over 12 years of colour and, therefore, an exclusive right to Trademarks consisting of moving images – experience in counselling clients on this colour could not be claimed. typically, animations in the form of a trademark and internet law. Ms Rehné offers sequence of device marks – will meet the strategic advice on the development of new Olfactory marks requirement of graphical representation. trademarks and trademark portfolio Until a widely accepted method of The mark must be represented by a series of management, including the registration, unambiguous graphical representation for key depictions, numbered in the order they maintenance, use and enforcement of smells exists, olfactory marks will not be are viewed in the sequence. trademarks. She holds a master of law registered as trademarks in Denmark. In this With regard to the distinctiveness degree from the University of Aarhus (1996). respect, the PTO guidelines refer to the requirement, very lengthy animation Sieckmann Case (C-273/00), in which the ECJ sequences or actual movies will most likely stated that the representation of a smell not be considered distinctive. must be clear, precise, objective, intelligible, Danish registrations of moving marks durable and easily accessible. These include one for “feet moving in a bed” (VR requirements will not be met by: 2002 02967) and “a screaming monster” (VR • a chemical formula, since this is not 2003 02487). intelligible; • a verbal description, since this is not Colour marks sufficiently clear, precise and objective; or In principle, colours per se can be registered • a sample, since this is not durable. as trademarks. Besides a graphical representation of the A combination of these methods will mark, the PTO requires a colour designation not meet the requirement either. by use of an internationally recognized The PTO has not accepted any olfactory identification code. This is in line with the marks for registration, contrary to other EU ECJ’s recommendation in its preliminary national offices and OHIM itself. In fact, the ruling in Libertel (Case C-104/01) concerning PTO has considered only two applications for an application to register the colour orange. registration of such marks – a certain smell With regard to enforcement, a recent Janne Britt Hansen for bubble bath soap (VA 1997 05710) and a judgment of the Eastern High Court (ØLK, Attorney at law certain smell for perfume (VA 1997 05711). May 28 2008) supports the need for an [email protected] The PTO rejected both applications on the exact description of a colour mark by use of grounds that the graphical representations colour code. In that case, the court rejected a Janne Britt Hansen is a European trademark consisted of unclear gas chromotograms. request by Deutsche Telekom – the owner of and design attorney with substantial a Community trademark (CTM) registration experience in advising on international Other marks for the colour magenta – for a preliminary trademark protection strategies and the So far, the PTO has provided no guidelines injunction against TeliaSonera’s use of management of trademark portfolios. Ms with respect to taste, touch and hologram magenta as part of its visual identity in Hansen’s practice also includes trademark marks. At the time of writing, no application Denmark. The court found that there could filing and prosecution, litigation concerning had been filed for such marks. In any case, be doubt as to which colour was protected the infringement of trademarks, designs the PTO would presumably find such marks by Deutsche Telekom’s CTM registration, and copyright, as well as product imitation. incapable of fulfilling the requirement of since no colour code was provided in the graphical representation. WTR www.WorldTrademarkReview.com August/September 2009 World Trademark Review 93 Country correspondent: India

Luthra & Luthra Law Offices India

The Indian Intellectual Property Office is trademarks as: The manual indicates that evidence putting together a manual on trademark • colour marks; required to support a claim of factual practice and procedure which provides • sound marks; distinctiveness of a colour mark needs to be thorough guidelines on the requirements to • shape of goods or packaging; very strong and persuasive. It would have to register non-traditional marks. This article • olfactory marks; and demonstrate clearly that the colour mark examines the latest proposals in detail • holograms. exclusively designates the applicant’s goods or services to the relevant consumers. Trademark protection in India has improved This article summarizes the guidelines tremendously in the past 10 years. To meet envisaged for non-traditional marks, as well Sound marks its obligation under the Paris Convention for as the evidence that will be required to The manual confirms that the Trademarks the Protection of Industrial Property and the prove factual distinctiveness. Act neither explicitly excludes sound marks Agreement on Trade-Related Aspects of from registration nor does it stipulate that a Intellectual Property Rights, the Indian Colour marks trademark must be visually perceptible. The government enacted the Trademarks Act act provides only that the trademark must 1999 (in force since September 15 2003). The Single colours be “capable of being represented graphically” government then upgraded the facility and The draft manual clarifies that a single besides being capable of distinguishing. infrastructure of the Intellectual Property colour may be registrable as a trademark, as Therefore, a trademark may consist of a Office (IPO), for instance, by introducing long as it is a “very unusual and peculiar” sound and be represented by a series of electronic filing for trademark applications. colour in the trade and is recognized by both musical notes, with or without words. The government has now turned its attention traders and consumers as serving as a badge The manual states that no sound marks to laying down a framework for uniform, of origin for the goods or services to which it will qualify, prima facie, for acceptance transparent and efficient working of the applies. The manual suggests that traders without evidence of distinctiveness. In Trademarks Registry, among other things. and consumers do not normally perceive particular, simple pieces of music consisting The IPO, after holding meetings and colour per se as the source of goods and of only one or two notes, songs commonly inviting comments from stakeholders on its services and, therefore, a single colour will be used as chimes and nursery rhymes for maiden manual for Trademark Practice and capable of denoting the origin of a product goods or services aimed at children would Procedure, recently released a revised draft. or service only in exceptional circumstances. not qualify as sound marks. Thus, sound There are no changes in the revised manual It appears that marks consisting of a mark registrations would remain thin on the with regard to guidelines for the examination single colour will usually face objection ground. So far, only Yahoo!’s three-note yodel of unconventional trademark applications. At from the registry on the grounds that: has been registered in India as a sound mark. the time of writing, it is unclear whether the • the colour lacks the inherent capacity to Trademarks Registry will adopt the revised distinguish; and/or Olfactory marks manual as it stands, Nevertheless, it is worth • it is in the public interest not to limit The manual reiterates that the Trademarks examining these guidelines in detail. the availability of the colour for other Act requires a trademark to be “capable of The Trademarks Act defines ‘trademark’ traders. being represented graphically”. Therefore, and ‘mark’ as “a mark capable of being unless this requirement is satisfied a smell represented graphically and which is capable Colour combinations will not constitute a trademark. The manual of distinguishing the goods or services of The manual states that the registrability of prescribes that a mark is graphically one person from those of others and may colour combinations will depend on their represented when the representation is in include shape of goods, their packaging and uniqueness and what they are applied to. In paper form, for instance, and it is possible to combination of colours; ....’mark’ includes a other words, if the colours are presented as a determine precisely what the mark is device, brand, heading, label, ticket, name, figurative mark, then as few as two colours without the need for supporting samples. signature, word, letter, numeral, shape of may be accepted; but if they are simply the The manual appears to be in line with goods, packaging or combination of colours colours of the product packaging, they are less the European Court of Justice’s opinion that or any combination thereof.” likely, prima facie, to be accepted as a mark. an olfactory mark would not satisfy the The manual provides that the definition of The manual suggests that extensive use requirements of graphical representation if ‘mark’ includes any sign that is capable of being of two colours in many different it is presented in the form of: represented graphically and distinguishing the arrangements may result in the colour • a chemical formula; goods or services of one person from those of combination becoming distinctive of the • an odour sample; or others. Thus, the word ‘mark’ is to be applicants’ goods. However, if the colours are • a combination of both. interpreted broadly and no type of sign is not used in a special or particular pattern or automatically excluded from registration. arrangement, it is unlikely that they would Therefore, the greatest obstacle to the The manual lists unconventional enjoy distinctiveness as a badge of origin. registration of olfactory marks appears to be

94 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

the requirement for graphical representation. upon the applicant’s mark as serving a trademark function. The manual prescribes Holograms that a survey would be of assistance only if The manual states that the distinctive it is conducted in accordance with the character of a hologram mark will be assessed guidelines and is directed to matters in in the same manner as that applicable to the respect of which there is room for doubt. assessment of a word or device mark. The recommended guidelines are as follows: To meet the graphical representation • The survey should explain how the requirements for multiple feature hologram interviewees have been selected (a marks, the manual prescribes that the survey will carry more weight if it applicant will have to provide representations represents a cross-section of the relevant of each of the various views depicted in the public or trade). hologram. However, for a simple image, where • The survey should not be restricted only the essential features do not change according to the class of person who might to the angle at which it is viewed, multiple purchase the applicant’s goods/services. views may not be necessary and a single • The number of persons issued with representation may be acceptable. Mohit Lahoty questionnaires or invited to take part in Senior associate the survey should be disclosed. Shapes of goods [email protected] • The total of those responding should be The manual reiterates the Trademarks Act’s disclosed and should equal those provision that a trademark shall not be Mohit Lahoty joined the Bar in 2000 and responses submitted to the registrar. registered if it consists exclusively of the shape: attained a LLM from Franklin Pierce Law • The name of the applicant should not be • of goods which results from the nature Center in the United States in 2002. He disclosed in the questionnaire or in the of goods themselves; subsequently worked for international law covering letter. • necessary to obtain a technical result; or firms in the United States and Singapore • A representation of the sign(s) (if any) • which gives substantial value to the goods. before joining a leading IP boutique firm shown to interviewees should be included. in New Delhi in 2006. He joined Luthra & • The exact answers should be disclosed The manual suggests that while the legal Luthra Law Offices in November 2008. Mr by providing copies of the actual test for distinctiveness is the same for shape Lahoty is engaged in IP litigation and response sheets. marks as for other marks, recognition must enforcement, and also focuses on advisory • The place where the survey was be given to the differing perceptions of the services with regards to transactions for conducted should be disclosed, together average consumer in relation to non- the media and entertainment sector. with the exact instructions given to traditional marks. In particular, the average interviewers. consumer may not as readily accept the appearance of the goods themselves as an commerce or other trade and professional The manual clarifies that the questions indication of trade origin. associations, or from consumers. Such must not be leading. For example, the survey The manual clarifies that shapes which evidence may assist in establishing that the should not ask closed questions such as: “Is the are, or have been, the subject of registered trademark has been used to a sufficient extent sign regarded as the applicant’s trademark?” designs are not excluded from registration in the marketplace and has acquired a Instead, it encourages use of open questions under the Trademarks Act, unless the shape distinctive character in the eyes of a significant such as: “What, if anything, does this picture adds substantially to the value of the goods. proportion of the relevant class of consumers. signify to you?” The survey must probe those The manual states that the stronger the that directly or indirectly mention the Evidence objection to the application, the more applicant to test the nature of any association. The manual suggests that the key issue with important it will be for the applicant to Therefore, the success of survey evidence regard to non-traditional marks will usually be provide trade evidence. The manual would depend on how well it is able to whether the proprietor has used the sign prescribes that evidence in the form of demonstrate that the respondents recognize distinctively to educate the public that it is a witness statement and unsworn exhibits, that the mark is from a particular source. trademark. The most obvious way of educating such as letters submitted alongside and as the public that a sign is a trademark is to use it part of an affidavit, would be acceptable. Conclusion in advertising statements such as “Look for the However, evidence from any party under The launch of the manual will greatly assist one with the [blue] wrapper” or “You can rely the control of the applicant or in respect of in the examination of non-traditional marks on the [description of appearance of goods or which the applicant is able to apply and the appreciation of the evidence packaging] to tell you its a [brand name]”. commercial pressure for supporting required to establish factual distinctiveness. Evidence of such use would go a long way statements (eg, the applicant’s manufacturer, Simultaneously, it will help to develop the towards demonstrating that the public distributor (other than independent retailers), law on non-traditional marks – an area that considers the sign as a trademark. or parties with a vested interest such as a is still nascent – and shape the future for the licensee) would be given little weight. protection of such signs. WTR Trade evidence The manual recommends that on top of the Survey evidence Views and opinions expressed in this article declaratory affidavit by the applicant itself, The manual states that survey evidence may are those of the author and do not trade evidence may be useful. The applicant assist in establishing that a significant necessarily reflect the views or opinions of may submit evidence from chambers of proportion of the relevant consumers look Luthra & Luthra Law Offices www.WorldTrademarkReview.com August/September 2009 World Trademark Review 95 Country correspondent: Israel

Luzzatto & Luzzatto Patent Attorneys Israel

Israeli law recognizes a broad range of basically the same as those applied to Marks consisting of the shape of signs as being registrable as trademarks. traditional marks. Accordingly, these marks packaging may be considered as belonging However, the Trademark Office’s practice may be registered on the basis of inherent to a separate category of three-dimensional on this matter is rather restrictive distinctiveness. mark. Unlike three-dimensional marks A different category of three- consisting of product shape, it is unclear Israel’s legal doctrine and the position of the dimensional trademarks includes marks whether the shape of packaging is country’s Trademark Office vis-à-vis the consisting of the shape of the product itself. registrable on the basis of inherent registrability of various types of non- The Israeli Supreme Court addressed the distinctiveness. The Supreme Court referred traditional mark have evolved recently and registrability of this type of mark in a to this issue in the August Storck Case and in therefore deserve special attention. precedential ruling rendered in March 2008 another judgment that was rendered in May The term ‘mark’ is defined in Section 1 of (Case CA 11487/03, August Storck KG v Alfa 2008 (Case CA 3776/06, Ein Gedi Cosmetics the Trademarks Ordinance [new version] Intuit Food Products Ltd). In its decision, the Ltd v The Registrar of Patents, Designs and 5732/1972 as “letters, numerals, words, images Supreme Court held that a mark consisting Trademarks) but in neither case did the or other signs or combinations thereof, of the three-dimensional shape of a product court rule on this matter because it was not whether two-dimensional or three- cannot be registered on the basis of required to do so to decide the cases. dimensional”. This broad definition explicitly inherent distinctiveness. Nevertheless, such In view of the registrar’s position that the recognizes the possibility of registering three- a mark can be registered on the basis of proper way to protect a three-dimensional dimensional signs, which are usually acquired distinctiveness, provided that the shape of packaging is through design regarded as non-traditional trademarks. The shape of the product has no real functional registration, the criteria to be applied by the phrase ‘other signs’ also opens the door to the or aesthetic role. The aforementioned ruling Trademark Office to the shape of packaging registration of other types of non-traditional essentially confirms the strict policy that are expected to be similar to those applied to mark, as long as the signs are capable of being the Trademark Office has applied in recent product shapes. In a recent decision represented graphically. This article discusses years when examining applications to (Trademark Application 169606), the deputy the registrability of the shapes of products or register three-dimensional trademarks. registrar held that the criteria applied to the of their packaging and colours in most Following the Supreme Court ruling in the shapes of goods should also be applied to details, as these: August Storck Case, the registrar of trademarks the shapes of bottles and containers. • are the most commonly applied-for issued a circular that clarifies the current In practice, applications for the non-traditional marks in Israel; and policy of the Trademark Office regarding the registration of three-dimensional marks • have been specifically addressed in case registrability of three-dimensional images as consisting of the shape of a product or its law, unlike other types of non- trademarks. In the circular, the registrar packaging will be rejected by the examiner traditional mark. expresses the opinion that, in general, the and the applicant will be presented with the proper way to protect three-dimensional option of raising arguments before the Three-dimensional marks designs of goods or their packaging is by filing registrar, in order to convince him that the As mentioned above, in light of the broad an application for the registration of a design. mark is indeed registrable. definition of the term ‘mark’ in the According to the circular, three-dimensional Trademarks Ordinance, there is no statutory images may be registered as trademarks in Colours obstacle preventing the registration of special cases, where it is proved by evidence In principle, colour marks are registrable in three-dimensional marks in Israel, provided that the following three cumulative Israel. However, a single colour is regarded that the signs comply with the criteria for conditions are met: as lacking inherent distinctiveness, and this registration set forth in the ordinance. • The image de facto functions as a also appears to be the case when a The term ‘three-dimensional trademark’ trademark; combination of colours is involved. Colours is very broad and encompasses various types • The image has no real aesthetic or per se will be allowed for registration in of mark. One category includes signs in functional role; and Israel only in rare cases, where the applicant three-dimensional form which are entirely • The mark has acquired a distinctive can prove that the colour has acquired a separate from the product itself. Another character as a result of use to an extent distinctive character. category includes three-dimensional signs that can convince the registrar that a In Eastman Kodak Company v Conko Ltd that are not part of the inherent shape of the special case is involved (mere (CA 225/96), the Tel Aviv District Court ruled product, but rather constitute an additional presentation of sales figures is unlikely that: element extrinsic to the product (eg, the to convince the registrar that the shape • the colour yellow is a trademark of the statuette on the bonnet of Rolls-Royce cars). of a product has acquired distinctiveness Eastman Kodak Company; and Since the marks belonging to both categories and more compelling evidence, such as a • Kodak is the only company authorized fulfil the classic role of a trademark, the market survey, will have to be submitted to use this colour in connection with criteria applied to their registrability are for that purpose). photography products.

96 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

To the authors’ best knowledge, this is position of the Trademark Office in this the only case where the Israeli courts have matter has not yet been challenged and the been willing to accept that a single colour issue has not yet been addressed in local constitutes a protectable trademark. case law, it is not yet clear whether these A trademark application to register a types of mark can be registered in Israel. colour should include a visual presentation of the colour. In addition, applicants may Conclusion designate the colour by using an While it is clear that certain types of non- internationally recognized colour traditional mark are registrable in Israel, identification system code such as Pantone. there is still uncertainty regarding the However, this mode of description is not registrability of other types of non- mandatory under local trademark law and traditional mark. The increasing use of new practice. technologies and the development of The registrar of trademarks has recently innovative and creative marketing strategies considered the registrability of colour may lead to an increase in the number of combination marks. The applications at applications filed in Israel for the hand (Trademark Applications 182676, Kfir Luzzatto registration of non-traditional marks. This 182677, 182679 and 182680) sought the Senior partner expected increase will require the registrar registration of the colours green and yellow [email protected] of trademarks and the civil courts to address in any possible combination to be applied to various aspects related to non-traditional a parallelepiped-shaped packaging of any Kfir Luzzatto was born in Italy and marks that have not yet been decided. Thus, size. The registrar rejected the applications, educated in both Italy and Israel where he at least part of the uncertainty surrounding finding that the marks were abstract and received a PhD in chemical engineering. the registrability of non-traditional undefined. It may be inferred from this Mr Luzzatto received a number of trademarks in Israel will be resolved. decision that an application for the academic awards, including the Landau In the meantime, brand owners should registration of a colour combination mark Award for Research. He has taught university remember that while colours and three- should include a systematic arrangement courses on patents and technology, and is dimensional product or packaging shapes associating the colours concerned in a the author of numerous technical, scientific can be registered in principle, in practice it predetermined and uniform way. and professional articles. is quite difficult to do so. Therefore, brand owners should consider alternatives – for Sounds instance, they should consider protecting Sounds are registrable as trademarks in the unique shape of their products or Israel. A trademark application to register a packaging by registering a design. WTR sound mark should be submitted together with the sound recording. It is also advisable to submit a graphical reproduction of the mark – for instance, in the form of musical notation. To date, only a limited number of sound marks have been applied for and registered in Israel. According to Trademark Office practice, proof of acquired distinctiveness is not a prerequisite for registration.

Scents and tastes The unofficial position of the Trademark Office is that olfactory and taste marks are not registrable. Conflicting views on this Oren Weiner matter have been expressed by leading Advocate trademark commentators. Since the [email protected] position of the Trademark Office regarding the registrability of scents and tastes has Oren Weiner holds a LLB from the Hebrew not yet been challenged and there is no case University of Jerusalem and a MBA (obtained law on this matter, it is not clear whether cum laude) from Bar-Ilan University. He has these types of mark can be registered in been a member of the Israeli Bar Association Israel. since 1998. Mr Weiner joined Luzzatto & Luzzatto in 2003. His practice covers various Moving images and holograms aspects of trademark and patent protection, As is the case with scents and tastes, the including trademark prosecution, patent and unofficial position of the Trademark Office trademark opposition proceedings and patent is that moving images and holograms are term extensions. not registrable as trademarks. Since the www.WorldTrademarkReview.com August/September 2009 World Trademark Review 97 Country correspondent: Italy

Bugnion SpA Italy

The conservative approach of the Patent European Court of Justice (ECJ) apply and application to register the shape of Ferrero’s and Trademark Office and the courts to are binding for Italian judges. Kinder chocolate egg (which is very popular the protection of non-traditional among Italian children) featuring two trademarks, as well as limited national Shape marks colours (white chocolate inside and milk case law on the issue, mean that much The appearance of a product and its shape chocolate outside). The court found that the remains to be clarified with regard to the often catch consumers’ attention without shape provided the product with substantial scope of protection of such signs the need to use words (either written or value as the dual colour was structurally spoken). This enables marketers to develop linked to the product and no variations were As modes of communication evolve subtle strategies to differentiate their possible unless the product lost its intrinsic constantly and influence consumers’ daily products from those of competitors. Thus, nature (Case 13159, July 16 2004). lives, signs such as shapes, colours, sounds, three-dimensional shapes often make A recent decision of the Court of Turin smells and motions are increasingly convincing source identifiers. confirms that meeting the requirements for perceived as source identifiers. Although However, of all the types of non- three-dimensional shapes to be recognized Italian trademark practice is rather traditional mark, shape marks are those that as trademarks is extremely difficult. In the conservative, consumers’ and companies’ have triggered the hottest debate among case at hand (March 3 2008), the Court of demands to protect non-traditional signs Italian judges, the PTO and commentators. Turin held that the shape of the Smart car are forcing the legislature and the judiciary This is because Article 9 of the Code of may be validly registered as a Community to adopt a more modern approach. Industrial Property provides that “signs trademark because: Thus, pursuant to Article 7 of the Italian consisting exclusively of the shape which • it is not required by the intrinsic nature Code of Industrial Property, all signs capable results from the nature itself of the product, of the product; of graphical representation – in particular, or consisting of the shape of the product • it is not needed to achieve a technical words (including persons’ names), designs, which is necessary to obtain a technical result; and letters, numbers, sounds, product shapes or result or of the shape which gives • it does not give substantial value to the packaging and colour combinations – may substantial value to the product may not be vehicle. obtain trademark registration provided that registered as trademarks”. they enable consumers to distinguish the This means that when the shape is Despite these rulings, no consistent case source of the goods or services. required by the nature of the products, the law on shape marks currently exists. shape lacks distinctive character and no General issues trademark protection may be granted Sound marks Italian law does not provide an exhaustive (Italian Supreme Court, Case C 01/14863, Sound combinations have always been list of signs that may be registered as November 23 2001). protectable under copyright law. However, a trademarks. As seen above, Article 7 of the Further, the PTO Board of Appeal argues more effective (and potentially unlimited) Code of Industrial Property provides a that the rationale behind the prohibition of level of protection may also be available under limited list of signs that may be considered the registration of shapes that are dictated trademark law if some requirements are met. eligible for registration by the Italian Patent by the nature of the products is the need to Increasingly, consumers can recognize and Trademark Office (PTO). prevent the monopolization of shapes that the source of products and services through Another important issue, which also are needed for the products at issue jingles or the particular sound a product applies to non-traditional marks, is that of (Decision 58/2001, October 26 2001). The makes. graphical representation. The Italian Supreme Court reached the same conclusion Case law is scarce as the courts and legislature considered replacing the word in a recent case (Case 7254, March 18 2008). the PTO Board of Appeal have had limited ‘representation’ with ‘reproduction’ in Moreover, trademark protection is opportunities to decide on the issue. Article 7, which would probably have led to precluded if the shape provides the product Accordingly, when faced with sound mark the recognition that non-traditional marks with substantial value (since design/ cases the Italian courts would have to apply are included in the scope of that provision, ornamental patent protection would be more the rather abstract principles set out by especially in view of the technologies now suitable). For instance, in a case involving a the ECJ. available. Unfortunately for mark owners, bottle of perfume, the PTO Board of Appeal The Board of Appeal of the Office for though, the legislature settled on the term held that the shape of the bottle could be Harmonization in the Internal Market ‘graphical representation’. registered if it was clear that consumers were (OHIM) has found the roar of a lion to be Case law on the issue of non-traditional not buying the perfume merely for the bottle registrable as a sound mark. It has also trademarks is still limited in Italy and the (eg, as an ornament for the home), but for the provided clear guidelines with regard to the issue is still disputed among commentators fragrance contained in the bottle (Decision requirement for graphical representation. and judges. However, where no national case 37/2001, May 21 2001). The board stated that “the fundamental law is available, the decisions of the Similarly, the Supreme Court rejected an registrability of sound marks as Community

98 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

trademarks is not disputed … provided it can Olfactory marks be represented graphically. [However,] the Olfactory marks are the most controversial question of the graphic representation of type of non-traditional marks because of such marks is still being debated… If the the difficulty to represent them graphically. sound mark involves music in the Although no cases have reached the Italian traditional sense of the word, there is an courts to date, the courts would have to obvious way to represent it graphically… On apply the strict ECJ case law on the issue. the other hand, the situation is different when it is not music in the traditional sense Conclusion ... that is to be registered as a sound mark, A legal framework that can accommodate but animal noises… Here, representation by new types of mark is being built as more musical notation regularly fails to work… [As cases reach the courts. However, much a result,] representation by means of a remains to be clarified. Neither the Italian sonogram is comparable with legislature nor the PTO should miss the representation using musical notation.” chance to provide brand owners with the (Case R 781/1999-4, August 25 2003). tools they require to give their investments The three key Italian decisions with Donatella Prandin the best possible protection. WTR regard to sound marks were issued by the Partner Court of Naples, the PTO Board of Appeal [email protected] and the Supreme Court. Despite the reluctance of the Italian courts Donatella Prandin is a partner of Bugnion to take a position on novel issues without SpA and is the foreign department manager. additional guidance, during an interim She graduated in law from the University of injunction proceeding the Court of Naples Milan and joined the firm in 1991. She is a stated that a musical jingle for advertising registered Italian trademark attorney and a purposes may be considered a sound mark Community trademark and design attorney. (Case 3753/2006, March 16 2006). Ms Prandin has extensive IP experience. Her The PTO Board of Appeal decision practice covers trademark, copyright, concerned the submission of samples for a designs and domain name issues. sound mark. An applicant had submitted an audiotape recording of the sound mark for which it sought registration. The PTO examiner rejected the application on the grounds that no graphical representation had been provided. The Board of Appeal reversed the decision, holding that it is potentially feasible to convert a recorded sound into musical notation, thus defeating any finding of lack of graphical representation. Accordingly, the board declared the application admissible (Case 40/2001, July 5 2001). On further appeal, the Supreme Court affirmed the board decision (Case 1061, January 19 2006).

Colour marks In one key decision, the Court of Milan held Vincenzo Melilli that primary colours are not registrable (July Associate 30 2002). However, by and large, Italian courts [email protected] have issued few decisions on colour marks and the decisions should be interpreted in Vincenzo Melilli graduated from the light of the ECJ principles on the matter. Catholic Law School of Milan and obtained According to the ECJ, colours may his LLM from Fordham University School acquire a certain degree of distinctiveness as of Law in New York. applied to specifically identified goods or Before joining Bugnion SpA, Mr Melilli services, provided that they may be worked at a New York IP law firm where he represented clearly, exhaustively, objectively specialized in trademark, prosecution, and graphically. To do so, the colours at infringement, counterfeiting and dilution. issue should be identified by an His practice still focuses extensively on internationally recognized identification trademark matters. (Case C-104/01, Libertel, May 6 2003). www.WorldTrademarkReview.com August/September 2009 World Trademark Review 99 Country correspondent: Mexico

Olivares & Cía Mexico

The definition of ‘trademark’ in Mexican this means that non-traditional trademarks • The three-dimensional signs may not law is restricted to signs that can be are not protectable in Mexico? consist of the shape of products or a perceived visually. In practice, the To answer this question, we must shape imposed by the goods’ nature or Trademark Office narrows this definition first define ‘non-traditional trademarks’. industrial function. further – for instance, by not granting These are: registration to colours unless they are • colours or combination of colours Unfortunately, under current TO combined with other distinctive elements applied to products or to the packaging practice it is very difficult not to fall into in which they are sold (for services, one of these categories. Any suspicion that Words, letters and numbers have long been colours applied to the visual the sign applied for is a common shape for registered as trademarks around the world. In appearance, external or internal, of a the relevant products will trigger an contrast, the registrability of sounds, colours, store or restaurant); objection based on the mark’s shapes, textures or smells is still debated in a • three-dimensional shapes of products, descriptiveness and lack of distinctiveness. number of jurisdictions. The discussion often their container, a label or a tag; The good news is that the Federal Court of hinges on whether such signs can distinguish • motion marks (ie, a series of images); Tax and Administrative Affairs (FCTAA), the products or services of one company • sounds, such as jingles or pieces of music; which hears all appeals against TO decisions, from those of others. • smells; has issued a number of resolutions that From a doctrinal point of view, a • tastes; and reversed objections issued by the TO with trademark represents something else (ie, an • textures. regard to the registrability of three- indication of origin) and, consequently, there dimensional signs. Further, the author is no doubt that sounds, colours, shapes, From this list, only signs that are expects that the creation of the Specialized textures or smells, which are perceived by distinctive and can be perceived visually can IP Court within the FCTAA, which started various senses – most of them other than be protected through a registration granted operating in January 2009, will result in an sight – can be distinctive. To hold otherwise by the Mexican Trademark Office (TO). increase in the number of decisions would imply that the public is incapable of granting registration to three-dimensional distinguishing one product or service from Colours shapes. This in turn should force the TO to another by using senses other than sight. Under Mexican law, single colours are not change its practice with regard to three- However, not all products are capable of registrable, “unless they are combined or dimensional marks. being identified through non-visual senses. accompanied by elements such as symbols, It may be possible to prove that certain designs or denominations that give them a Motion marks products have a distinctive smell or taste, distinctive character”. This means that, In contrast, motion marks are not only but what happens if these products are not theoretically, a combination of two or more unprotected under Mexican law; they are in perfect condition and their smell or taste colours can be subject to trademark also expressly considered as signs that has deteriorated, or if their smell or flavour protection and registration, regardless of the cannot constitute trademarks. Article 90(1) cannot be directly appreciated because form or surface to which they are applied. of the Law of Industrial Property provides doing so would require the product to be However, the TO practice has been not to that morphing names, figures or forms shall unwrapped? grant protection to a combination of colours not be registered as trademarks, regardless These and other practical considerations, if it is not part of a design or logo – which is of whether they are visible. such as the graphical representation of such contrary to Supreme Court case law. marks, are the main obstacles to recognition Other signs of many non-traditional signs as trademarks Three-dimensional shapes As for the other types of mark listed above, in various countries. Article 89 of the Law of Industrial Property none can be registered as trademarks in expressly mentions three-dimensional signs Mexico. However, this does not mean that Background as elements that can constitute trademarks they are left completely unprotected. For Article 88 of the Mexican Law of Industrial and be registered with the TO. However, the instance, sound marks consisting of musical Property provides that “a trademark is any provision also imposes the following pieces may be eligible for protection under visible sign capable of distinguishing limitations: copyright law. Although not all sound marks products or services from others of the • The three-dimensional signs may not be will comply with the requirements for same type or category on the market”. in the public domain. musical works, Article 13 of the Federal Article 89 narrows this definition by • The three-dimensional signs may not Copyright Law protects musical works (with providing that only visible words, names have fallen into common use. or without words) which, by analogy, can be and designs, as well as three-dimensional • The three-dimensional signs may not considered artistic works. Thus, it appears forms, can constitute trademarks in Mexico lack sufficient originality to be easily that as long as a sound mark is of a similar and, consequently, can be registered. Does distinguished. nature to a musical work – that is, it consists

100 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

of a harmonic composition and can be issue. Non-traditional trademarks are used reproduced identically each time it is increasingly often to distinguish products performed – such sound may obtain and services in the marketplace. Accordingly, copyright protection. However, the decision as modern marketing strategies continue to as to whether this premise applies to a sound evolve, trademark protection in Mexico will mark lies with the Mexican Copyright Office. have to adapt. WTR Smells, tastes and textures do not meet the requirement of being visible signs. Thus, one can assume that they, along with other non-traditional marks which do not comply with the requirements established by the Law of Industrial Property in order to be registered by the TO, do not enjoy full and consistent protection in Mexico. However, Article 213(IX) of the Law of Industrial Property provides that an administrative infringement has occurred Gabriela González Nájera when a party commits, in exercising an Associate industrial or commercial activity, acts which [email protected] deceive or induce the public to confusion, error or deceit, leading them to believe or Gabriela González Nájera joined Olivares & assume without foundation that: Cía in 2002 and has been an associate with • there is a relationship or association the firm since 2008. Prior to joining between an establishment and a third Olivares, she worked at Baker & McKenzie party; in Mexico City, handling trademark and • the products are manufactured under copyright matters. She obtained her law specification, licences or authorization degree from the law department of the of a third party; Universidad Panamericana in 2003. She • the services are rendered or products are holds a postgraduate diploma from the sold under authorization, licences or Universidad Panamericana and a master’s specifications of a third party; or degree from the University of Alicante. • the product in question originates from Ms González Nájera is a member of the a territory, region or location other than Mexican Association for the Protection of the true place of origin, in such manner Industrial Property, the International as it induces the public into error in Trademark Association and the Mexican Bar respect of the geographical origin of the Association. She specializes in trademarks product. and speaks Spanish, English and French.

This implies that to obtain a favourable ruling on the use of a non-traditional mark long as they are not the common shape of that is not recognized and protected under the product to which they apply. Sound the Law of Industrial Property, a plaintiff marks may be protected under copyright should file evidence which proves that: law, provided that they can be considered • consumers identify its goods or services musical works. Smells, tastes and textures, from the sound, smell, taste or texture as well as any other distinctive signs that are at issue; and not protected under trademark law, cannot • the unauthorized use of such sign be registered as trademarks. However, constitutes an act of unfair competition administrative infringement actions can be and consequently should be stopped, initiated against any unauthorized use of even though the sign is not registered as these signs. a trademark. Finally, an amendment to the Law of Industrial Property to include, among other However, to date there has been no cases things, the recognition of non-traditional – whether pending or decided – involving trademarks such as sound, texture, olfactory these types of mark. and motion marks was introduced into Congress recently. While Congress did not Conclusion approve the changes and the proposed Mexican trademark law grants protection to amendments failed to define or regulate non-traditional trademarks if they are non-traditional marks (which would have distinctive, visible signs. This applies to left their recognition to subjective colours – if combined with other distinctive interpretation), the proposals opened the elements – and three-dimensional forms, as door to future changes on this important www.WorldTrademarkReview.com August/September 2009 World Trademark Review 101 Country correspondent: Norway

Zacco Norway

Non-traditional marks are, by and large, limited inherent capacity for distinguishing Holograms protectable in Norway, with the restrictions the goods and services to which they apply. The requirements for registration are the imposed across the European Union also Protection may thus depend on whether same as for three-dimensional marks and applicable in this non-EU country distinctiveness has been acquired through use. the number of representations depends on According to case law from the European the mark. Electronic representation is Introduction Court of Justice (ECJ) (ie, Libertel (C-104/01) preferable to capture the hologram effect. Norway is not a member of the European and Sieckmann (C-273/00)), the graphical NIPO may require that the applicant also Union and accordingly, the Community representation of the marks must be “clear, submit a written description of the mark. Trademark Regulation (40/94) does not precise, self-contained, easily accessible, apply. However, as a member of the intelligible, durable, ...objective and concise”. Colour marks European Economic Area, Norway had to Even though recent technical and digital NIPO requires that the applicant submit a implement the EU First Trademarks developments have made it easier for some representation indicating the specific colour, Directive (89/104/EEC). Because the types of non-traditional mark to meet these for example by using the Pantone colour substantial part of the regulation requirements, certain difficulties remain, code. Colours are widely seen as elements to corresponds to the provisions of the especially for non-visible signs. be kept free and available for general use. directive, EU case law relating to the However, NIPO will allow registration where regulation is decisive for the Norwegian Visible marks the applicant shows that the colour mark has interpretation of the directive. Accordingly, acquired distinctiveness. Norwegian trademark law practice is in line Three-dimensional marks NIPO has registered only a limited with that of the European Union. The Norwegian Industrial Property Office number of marks stating colour per se. The broad definition of ‘non-traditional (NIPO) requires that the applicant submit a Some examples include the colour ‘Warm trademarks’ encompasses “everything that is graphical representation of the mark that will Red C’ registered for Rizla cigarette paper not a word mark and/or device mark”. These enable NIPO to examine the mark in its and the colour pink defined as Pantone marks may be further categorized into two three-dimensional form. The number of 196C for isolation material, both based on groups: visible signs and non-visible signs. representations needed depends on the mark distinctiveness acquired through use. Visible signs include: – that is, the application should contain as • three-dimensional marks; many representations as necessary to show Slogans • holograms; clearly all features of the mark and what the Under current registration practice, a slogan • colour marks; applicant seeks an exclusive right to. The mark must not: • slogans; applicant should point out that the mark is a • indicate the kind or quality of the • titles of films and books; three-dimensional sign in the application. related product or service; • motions or multimedia signs; NIPO further requires that the mark “[depart] • consist of an ordinary statement; or • gesture marks; and significantly from the norm or customs” (see • amount to a mere sales promotional • position marks. ECJ Cases C-473/01 and C-474/01, Procter & statement. Gamble). A written description of the mark is Non-visible signs include: not needed. NIPO’s practice is in accordance with the • sound marks; NIPO applies the following criteria when reasoning from the ECJ in Case C-64/02 (DAS • olfactory marks; examining three-dimensional signs: PRINZIP DER BEQUEMLICHKEIT) that the • taste marks; and • The sign must depart significantly from distinctiveness of a mark made up of signs • texture/feel marks. the norm or customs in the trade. or phrases which are also used as an • The sign must be distinctive. advertising slogan has to be assessed on the The following article discusses the • The sign must not be a shape dictated by basis of the general principles established Norwegian practice (or lack of practice) for functionality or a technical result. by the ECJ with regard to trademarks. most of these types of mark. • The sign must not constitute a shape Examples of slogans rejected by NIPO that serves the sole purpose of giving include: Main requirements for registration substantial value to the goods to which • MAKEUP SO PURE YOU CAN SLEEP IN IT, The registration of non-traditional trademarks it applies. because it is descriptive for goods in raises several challenges, as a balance must be • Certain signs must be kept free and Class 3 of the Nice Classification; maintained between trademark protection available for general use. • BUILDING INSIGHT THROUGH and the need to keep signs available. In any INVESTIGATION, found descriptive of event, marks must be distinctive and capable If NIPO rejects an application, the services in Class 44; and of being represented graphically. applicant may still be able to show that the • IMAGINE THE POSSIBILITIES, found to Certain non-traditional marks have a mark has acquired distinctiveness through use. lack distinctiveness.

102 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

Such slogans may however be registered For sound marks that can be reproduced on the basis of acquired distinctiveness. in musical form, the sound must be A substantial number of slogans are reproduced in a notation. The notation registered in Norway, for example: must be followed by a clear, written • HINT OF A TINT for hair-colouring description of the sound. Such graphical products in Class 3; reproduction can for example indicate the • THE BIG PICTURE for projectors in Class notes and instruments, the length of the 9; and sound, the beat/tempo, the volume or other • I’M LOVING IT for McDonald’s goods and characteristics of the sound, what objects or services in Classes 29, 30, 32, 35, 42 and 43. instruments are being used to produce the sound or sounds, the name of the piece of Motion and gesture marks music or a quotation of the text that is Only about one-third of trademark offices being sung or read, together with a worldwide accept motion marks as translation if necessary. trademarks. NIPO is one of these offices. For sound marks that cannot be The representation of the mark must be reproduced through musical notation, in the form of an electronic file showing the Lisbeth G Wolther adequate representation may consist of: moving mark, or a maximum of 16 still Associate lawyer • a verbal description; pictures showing the motion. The pictures [email protected] • a sound sample; have to indicate clearly and precisely the • a sonogram; changes undergone by the mark in the Lisbeth G Wolther joined Zacco in 2008. • an onomatopoeia; or designated period. The images should be As an associate lawyer she works primarily • a combination of these. numbered in sequence order and be followed with trademark law, patent law, employees’ by a clear and precise description of the inventions and IP strategy. She has wide NIPO also requests a soundtrack on a picture sequence and the motional changes experience of intellectual property and suitable medium and in a suitable format, within it. The description should always related areas. Ms Wolther was director of such as mp3 or similar open format. A include the total number of pictures in the legal and international affairs at NIPO soundtrack will make it easier for both NIPO sequence, a statement of the representation before joining Zacco. and a third party to form an idea of the mark. frequency (numbers of pictures per second) and the total time of the sequence. NIPO Olfactory marks prefers electronic representation. NIPO has not yet received any applications To the authors’ knowledge, only two for olfactory marks. Because EU case law is motion marks have been registered in decisive for Norwegian registration practice, Norway. One is owned by Microsoft for goods NIPO will place emphasis on the previously in Class 9 where the trademark is described mentioned Sieckmann Case, as well as the as “an animated sequence with two conic later Smell of ripe strawberry Case (T-305/04). shaped segments connected on the upper Thus, such signs may in principle be right part of the mark. During the animated registered as trademarks as long as the sequence a geometrical object is moving up described smell is sufficiently clear, precise along the first segment and then down the and unambiguous. However, in the Smell of other while individual chords or ribbons ripe strawberry Case the European Court of change from dark to light. The stippling as First Instance found that the smell of shown is only meant for gradation”. strawberries differs from one variety to No application has yet been filed for a another and thus “the smell of ripe gesture mark. It is still under debate strawberry” is not unique. whether these marks are just another form of motion or figurative mark, or whether Line Schartum-Hansen Taste and texture marks they are a different sort of mark. Associate NIPO has not received any applications for [email protected] either taste or texture marks. However, the Non-visible marks marks would have to meet the requirements Line Schartum-Hansen joined Zacco in set out in Libertel, Sieckmann and Smell of Sound marks 2008. She works on all IP matters, ripe strawberry Cases – namely, being clear, NIPO accepts sound marks for registration. including trademarks, copyrights, designs precise, self-contained, easily accessible, So far about a dozen applications have been and dispute resolution. She has particular intelligible, durable, objective and concise. filed and the majority have been accepted. expertise in the field of anti-counterfeiting Most applications have consisted of musical action stemming from seizures by Final remarks marks (ie, where the applicant submitted Customs. Ms Schartum-Hansen graduated The use and registration of non-traditional musical notes). Single tones or trivial with a master’s degree in law from the marks raises a number of issues for which sounds are not perceived as distinctive University of Oslo in December 2007. clarification is keenly awaited. In this regard, marks. Lengthy conversations or She is a member of the Norwegian Bar NIPO plays an active role in the World monologues will typically not be viewed as Association. Intellectual Property Organization’s trademarks. trademark standing committe. WTR www.WorldTrademarkReview.com August/September 2009 World Trademark Review 103 Country correspondent: Portugal

Garrigues Portugal

Although a number of non-traditional identical to those set out in the EU First form of a musical notation. Although the signs are protectable as trademarks under Trademarks Directive (89/104/EEC), which latest practice of the IPO seems to indicate EU law, Portuguese law and practice are precludes from registration trademarks that that sound recordings are acceptable, this rather more restrictive consist exclusively of: practice should not be understood as a • a shape which results from the nature of waiver of the legal requirement for a Before the entry into force of the Industrial the product or its packaging (natural graphical representation of the sign. Property Code of 1995, only words and logos, shape); or combinations of both elements, were • a product shape which is necessary to Other signs accepted as national trademarks in Portugal. obtain a technical result (technically Trademarks consisting exclusively of a However, even then three-dimensional functional shape); and single colour cannot be registered. As trademarks could be admitted for • a shape which gives substantial value to previously mentioned in respect of three- registration if they: the product (aesthetically functional dimensional marks, this prohibition cannot • were free or arbitrary; shape). be remedied by a finding of secondary • had a distinctive character; and meaning acquired through use. • displayed novelty. These prohibitions are absolute and Applications for a combination of colours cannot be overcome by acquired must indicate which colours are claimed. Thus, the shape of the Mercedes grill distinctiveness obtained through use. and the Ungaro perfume bottle were However, even in the case of signs Current practice registered as trademarks following judicial composed of arbitrary shapes (ie, shapes which decisions (in 1991 and 1993 respectively). are not the natural, technically functional or Three-dimensional trademarks The entry into force of Decree-Law 16/95 aesthetically functional shapes of the products The authors are aware of the existence of a marked the official recognition as potential or their packaging), the law stipulates that only number of Portuguese three-dimensional trademarks of three-dimensional shapes three-dimensional signs that have distinctive trademark registrations. However, the and other non-traditional signs such as character can be granted registration. classification system used in the IPO database sounds and colours (for the latter, only in Therefore, generic, customary or makes it impossible to ascertain the exact combination with other colours, or with descriptive three-dimensional signs cannot number of such registrations in Portugal. words or logos). be protected as trademarks, unless they What is certain is that the criterion Nevertheless, the protection of non- have acquired secondary meaning through adopted by the IPO for the examination of traditional signs is still dependent on their use in commerce. three-dimensional trademarks tends to be capacity: From a formal point of view, in order restrictive. Examiners will assess the novel, • to be represented graphically; and validly to file an application for a three- inventive or creative character of the sign – • to distinguish the goods or services of dimensional trademark, it is necessary to an assessment that does not take place for one company from those of others. submit a graphical representation of the ordinary marks. sign and the express indication of the type In fact, the IPO has been cautious in its The Industrial Property Code of 2003 of trademark at issue. Should the Industrial examination of three-dimensional signs, and the amendments introduced in 2008 Property Office (IPO) hold that the considering the restrictions to registration did not alter the existing law with regard to reproduction submitted is not sufficient, it already applicable to such signs. The IPO has non-traditional signs. will request that the applicant file thus held that alleging that the shape for additional elements within a specific term. which registration is sought is a variation of Legal requirements one of the usual shapes of a type of product Article 222(1) of the code provides that a Sound marks is not sufficient to confer distinctive trademark may consist of a sign or set of signs Similarly to three-dimensional marks, character on the sign. Further, IPO practice which is capable of being represented sounds can be registered under Portuguese aims to guarantee that the averagely graphically – namely, words (including law only if they are distinctive. Such informed and careful consumer can personal names), designs, letters, numerals, distinctiveness can be acquired through use. distinguish a product or packaging from the sounds, the shapes of products or of their Sounds that do not have an original, products or packaging of other companies: packaging – provided that these signs are distinctive character include signs that • without making a comparative analysis; capable of distinguishing the products or merely reproduce the sounds which and services of one company from those of others. designate the type or quality of a product or • without paying special attention to the which are generic and customary. sign in question. Three-dimensional marks Applications should indicate that the The requirements applicable to three- mark applied for is a sound mark and the The courts tend to be less restrictive. dimensional trademarks in Portugal are application should be submitted in the Some have held that a sign can consist of

104 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

the shape of a product without being Conclusion innovative, as long as the shape possesses a Portuguese law follows the Community differentiating capacity. Trademark Regulation (40/94) in that it Thus, on October 19 2004 the Lisbon does not typify signs that are acceptable as Court of Commerce held that a “translucent trademarks; neither does it comment on the bottle in blue, with a grip incorporated to the possibility of accepting hologram, smell, right, crossed by a large blue strip which taste, touch, motion or multimedia marks. covers the respective grip” had enough As mentioned above, the classification distinctive character to be granted registration used in the Portuguese IPO database makes as a three-dimensional trademark. it impossible to list non-conventional marks On January 24 2005 the same court held exhaustively. However, besides the Coca- that Application 790272 for a guitar head Cola bottle, the BIC pen and the Toblerone could be protected as a trademark. The packaging, the authors know of a number of court reasoned that the shapes of guitar other three-dimensional marks that have heads are generally very similar, while the been registered in Portugal. Likewise, some shape for which application was sought sound marks are protected in Portugal diverged from these usual shapes in some Gonçalo da Cunha Ferreira through international registrations (but details that rendered the shape protectable. Partner there is no local case law in respect of this Legal commentators argue that the [email protected] category of distinctive signs). assessment of the distinctive character of Although olfactory, tactile and taste three-dimensional trademarks should Gonçalo da Cunha Ferreira holds a law marks are not currently accepted for follow the criteria applicable to degree from the Universidade Moderna and registration due to the difficulties inherent conventional trademarks. However, the has completed further training in strategic in their graphical representation, holograms greater complexity of this type of sign has management, and mediation and and motion marks (ie, marks made up of led some authors to consider that the arbitration. Mr Ferreira has been a image sequences) could meet the legal average consumer in these cases should be consultant in industrial and intellectual requirements for graphical representation more diligent than the averagely aware and property since 1985. He founded Cabral, by reproducing the various successive careful consumer considered in the context Cunha Ferreira & Associados in 1988 and images making up the mark and describing of traditional trademark applications. joined Garrigues in 2006. these images. A sample in a multimedia carrier may also be required. Sound marks As regards colours, although the ECJ There appear to be no national sound marks ruling in Libertel (Case C-104/01, May 6 registered in Portugal. However, the World 2003) admitted the existence of situations Intellectual Property Organization database in which a colour per se can constitute an shows that four sound marks are protected in indication of the origin of the products or Portugal through international registrations. services of one company, Portuguese law To put this seemingly small number in expressly states that single colours are perspective, altogether there are only 100 excluded from registration as trademarks. Community trademark applications and The Portuguese legal system could be registrations for sound marks. considered ideal for testing the admissibility of non-conventional Other signs trademarks because: The decision of the European Court of • the schedule of fees for these types of Justice (ECJ) in Sieckmann (Case C-273/00, mark is identical to that for ordinary December 12 2002) has established that the marks; and following are not acceptable (on their own • the IPO allows for the subsequent or in combination) as graphical alteration of applications should a mark representations for olfactory marks: Isabel Bairrão be initially rejected on absolute grounds. • a chemical formula; Senior associate This represents a distinct advantage over • written descriptions; and [email protected] the Community trademark system, for • odour samples. instance, where alterations are not Isabel Bairrão obtained her law degree from allowed. WTR Most Portuguese commentators agree the University of Coimbra and a post- with this restrictive interpretation of the graduate diploma in industrial property requirement of graphical representation. law from the University of Lisbon. She Prior to Sieckmann, the Office for undertook further training in IP law under Harmonization in the Internal Market (OHIM) the supervision of the World Intellectual had interpreted the criterion of graphical Property Organization and is a qualified representation generously. Thus, it had European trademark and design attorney. admitted for registration a mark described as Ms Bairrão’s main areas of practice are IP “the smell of freshly cut grass” (OHIM Second law and issues relating to new technologies. Board of Appeal, February 11 1999). www.WorldTrademarkReview.com August/September 2009 World Trademark Review 105 Country correspondent: Romania

Vilau & Mitel Romania

Even though the traditional view that However, the Trademark Office does not shape of some of its products and packaging trademarks can consist only of visual currently accept olfactory, gustatory and (Bucharest Municipal Court, Case signs lingers in Romania, shapes, sounds tactile signs for registration. 26407/3/2007). The decision was appealed, and colour combinations may be In time, it is likely that this will change as: but the appeal was dismissed on procedural registered as trademarks. Case law • Romania ratified the World Intellectual grounds. regarding other non-traditional marks, Property Organization’s Singapore however, remains limited Treaty on March 16 2009; and Colour marks • the treaty expressly recognizes three- Although the 1967 Trademark Law expressly Romania’s first-ever Trademark Law in the dimensional marks, holograms, motion mentioned that “one or more colours” could 19th century recognized letters, images, and position marks, as well as other non- be registered as a trademark, the current stamps and signatures as signs capable of visible signs, as trademarks. Trademark Office prosecution rules provide being registered as trademarks. The 1967 that one colour is not distinctive enough for Trademark Law added sounds, one or more Three-dimensional trademarks registration as a trademark. colours and shapes to the traditional words, Three-dimensional trademark applications The language of the 1998 Trademark figures and letters. are now seen as common and, together with Law is clear: only colour combinations are The current trademark law, adopted in two-dimensional signs, represent the bulk allowed for registration. Nevertheless, 1998, follows the principles of the EU First of the 100,000 signs on the Romanian practitioners have found this approach too Trademarks Directive (89/104/EEC). Thus, a Trademark Register. strict, and legal commentators and now also ‘trademark’ in Romania is defined, in rather The shapes of products or their practice support the view that single colours standard language, as any sign capable of packaging may not: may be registered provided that they have being represented graphically and • be ordinary in the trade or imposed by acquired secondary meaning (ie, distinguishing one entity’s products from the nature of the product; distinctiveness through use). those of others. Such signs include: • be necessary to achieve a technical For instance, United Parcel Service of • words; function; or America Inc (UPS) applied to register a shade • names; • bring substantial value to the of brown (described by a specific Pantone • designs; product/packaging. code) for services in Class 39 of the Nice • letters; Classification. The Trademark Office accepted • figures; Each criterion constitutes an absolute the application on appeal (Cases 188/2002 and • three-dimensional forms; ground for refusal. 189/2002) after establishing that the 1998 • product or packaging shapes; The Trademark Office often uses the Trademark Law provision in respect of colour • colour combinations; and example of an application to register the combinations should not be understood as a • any combination thereof. three-dimensional shape of a toothbrush to barrier to one-colour trademark applications. show how it assesses whether a shape is The office further established that UPS’s Most trademarks registered in Romania dictated by functionality. In the Colgate brown had acquired distinctiveness through are traditional visual signs. However, Toothbrush Case, the office held that the use on the Romanian territory, based on the statistics show that trends are changing, with newly claimed shape (the flexible head) was evidence filed. Consequently, the office applications on the rise for less conventional solely dictated by a technical function since accepted the application. signs such as three-dimensional, sound, a patent had been granted 10 years Thus, even though the Trademark Law olfactory and tactile marks. previously for the same toothbrush. does not list single colours as registrable The Romanian Trademark Office usually Registrations 092857 and 092858 (for a trademarks, the fact that single colours can accepts trademark applications for three- Hummer vehicle body) are the other be represented graphically and are capable dimensional, sound and colour combination reference cases concerning the registrability of being described by an internationally marks as these signs are capable of visual of three-dimensional marks. Although the recognized colour identification system (eg, representation and are distinctive enough. body or shape of a vehicle is generally Pantone or CMYK) means that the Although the 1998 Trademark Law does dictated by its functionality or purpose, a Trademark Office is likely to accept them for not expressly provide for sound mark special or uncommon shape (eg, the shape registration, provided that the colour gained registration, case law and commentators of a Hummer) is not ordinary, nor is it enough distinctiveness through use. have come to accept that sounds can be imposed by the nature of the product or registered as trademarks as long as they are necessary to obtain a technical function. Sound marks capable of being visually represented. The Lastly, the shape does not add substantial Both the Romanian Trademark Office and same rationale and principles should apply value to the product. the Office for Harmonization in the Internal to olfactory, gustatory and tactile marks, In addition, Ferrero SpA has recently Market (OHIM) have had to consider which are not listed in the 1998 law. been successful in enforcing its rights in the whether certain sounds (eg, onomatopoeia,

106 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

rain drops, wind or animal sounds) are Moving images, holograms and capable of being registered as national or position trademarks Community trademarks (CTMs). These types of sign have gained a lot of Given the simple way in which one can popularity over the past few years. Part of visually represent sounds on a musical this popularity can be attributed to the score, for instance, OHIM has had to open continuous battle against piracy and its doors to these types of trademark counterfeiting, which often makes it applications. Following the registration of necessary to use holograms to control the the famous MGM lion roar in 1994, OHIM distribution of genuine products. registered Intel’s famous five-note jingle The Trademark Office often refers to (CTM 008174039) and the Yahoo! yodel moving images as ‘dynamic images’. The (CTM 001772086). The trend picked up and office has accepted at least two such images there are now over 70 sound marks for registration: registered as CTMs. • Registration 080630 consists of The Romanian Trademark Office, in consecutive hand gestures, but is not contrast, has so far granted registration to described verbally in the application; and only three sound marks. This is not due to a Dragos M Vilau • Registration 082189 is described in the restrictive approach by the office – in fact, Partner application as one letter changing the authors have heard that examiners are [email protected] colour from red to green for use on happy to process such applications, television or online presentations. especially if the sounds are reproduced on a Dragos M Vilau is one of the founders of score and a CD. Rather, the low number of Vilau & Mitel. His practice focuses primarily The Trademark Office has accepted registration is due to the limited number of on corporate and commercial law, three position trademark applications applications filed. The sound marks intellectual property, mergers and (Registrations 086111, 085814 and 086138, registered so far were filed by local wine acquisitions, and banking/finance. Mr Vilau which consist of photos showing a courier producers for advertising purposes has significant experience in advising clients van from different angles). The office has also (Registrations 052177 – PIETROASA WINE on investing and growing their business in registered a word and device combination JUST TOLD YOU WHAT TIME IS IT, 052178 Romania. He has authored various articles mark (Registration 086110), where the device and 062091 – a Romanian folk-inspired on intellectual property, among other topics. may have been filed as a positional song with lyrics). trademark, although this is unclear.

Olfactory, gustatory and tactile marks Conclusion Neither the Trademark Law nor Trademark Considering the rapid increase in the Office practice expressly excludes olfactory frequency of use and number of applications and gustatory signs from registration. filed for sound and colour marks, such marks However, these are generally considered will soon be treated as traditional rather non-registrable, even though olfactory signs than non-traditional marks. Although case may be considered, to a certain extent, as law regarding other types of non-traditional capable of being represented visually by mark is limited at the moment, this will also referring to their chemical compounds or change in the coming years as such signs formula, or by providing a sample of the become more commonly recognized as smell and a detailed description. (However, indicating the source of origin of goods and in the Sieckmann Case (C-273/00) the services and are consequently increasingly European Court of Justice has held that such frequently infringed. WTR representations were not acceptable.) The only application accepted for registration in Europe (pre-Sieckmann) was that of a Dutch applicant for “the smell of Ionut Lupsa freshly cut grass” for tennis balls. This Senior associate unique olfactory mark has now lapsed and [email protected] there are no other registered CTMs for olfactory marks. Ionut Lupsa coordinates the IP, IT and To date, no application for this type of copyright practice group at Vilau & Mitel. sign has been filed with the Romanian He is a member of the Bucharest Bar Trademark Office. Although it means that Association and is qualified as a trademark there is no case law on the issue in Romania, attorney. Over the past 11 years his practice the Sieckmann criteria and the fact that has focused mainly on intellectual property, most national offices across the European information technology, e-commerce, Union consider that it is difficult to dispute resolution and litigation. He has represent such signs visually indicate how been involved in numerous cases before the Romanian office would rule on the Romanian courts. matter. www.WorldTrademarkReview.com August/September 2009 World Trademark Review 107 Country correspondent: Russia

Gorodissky & Partners Russia

Part IV of Russia’s Civil Code provides for the delivery forms displaying the mark and and vegetables; jellies, jams, compotes; eggs, registration of an array of non-traditional mentioning its owner; milk and milk products; edible oils and fats; trademarks. But graphical representation • a survey confirming that the colour is food products made on the basis of may be an issue in some cases known to consumers as a trademark (ie, aforesaid goods and included in Class 29, as a designation of origin), and is including paste and other paste products” Article 1482 of Part IV of the Russian Civil associated with the applicant and the (Applications 2005713885 and 2005713882). Code (in force since January 1 2008) goods to which the colour is applied; The PTO rejected the applications on the provides that the following types of mark • copies of the applicant’s annual reports grounds that they lacked distinctiveness, may be registered on their own or in showing that the goods are sold in since they represented three-dimensional combination: Russia and the volume of such sales; objects the shapes of which were • word marks; • statements or other evidence from local considered: • picture marks; distributors and/or local shops, • not original; • three-dimensional marks; and including dated price lists; • defined exclusively by their functional • other indications or their combination. • the Russian quality and conformance purpose; and certificates; • to be widely used for similar goods (ie, Trademarks can be registered in any • copies of dated advertising materials; paste products) on the market. colour or combination of colours. • information about the applicant’s Further, Article 1483 of Part I of the code attendance at trade fairs in Russia and Mortier appealed to the Chamber of prohibits the registration of signs that lack abroad; and Patent Disputes. Mortier’s main arguments distinctiveness. • extracts from the Russian media and were that: other materials. • it already held a registration for a Colour marks similar mark; and A trademark may be registered in any Three-dimensional marks • other companies had registered colour or colour combination as long as it is Article 1483 of Part IV of the Civil Code analogous shapes as trademarks. distinctive. prohibits the registration of designations However, neither the Civil Code nor that represent the shape of goods where the The Chamber of Patent Disputes regulations of the Patent and Trademark Office shape is determined exclusively or mainly dismissed these arguments. It held that the (PTO) specifically cover the registrability of by the properties or purpose of the goods. shapes for which Mortier was seeking trademarks that consist of colours without any This is probably because such marks can be registration were the shapes of containers in word or figurative elements. Therefore, one can considered to lack distinctiveness. which products were sold – in this case, assume that the registration of a colour per se Accordingly, the key aspect of the containers with covers for paste products. In is not prohibited. examination of a three-dimensional sign is the chamber’s opinion, the shapes were The applicable test for applications to to determine: unoriginal and defined exclusively by their register a single colour or a colour • whether the shape results from and is functional purpose in relation to the goods combination is the general distinctiveness defined exclusively by its functional in Class 29. The shapes did not feature test. However, in practice the PTO tends to purpose; or enough original elements to be considered consider that marks consisting of a single • whether the shape is an original design characteristic of Mortier’s goods. colour or a combination of colours alone which gives the mark distinctiveness. Accordingly, the chamber found that the lack distinctiveness and are thus not shapes lacked distinctiveness and upheld protectable. While the Trademark Register A shape that is unique and special may the PTO decision contains marks in colour, including be recognized as distinctive and registrable, Further, practice shows that trademark combinations of colours, a single colour or a even if it is functional. Also, if the shape has applications representing the shape of a combination of colours appears to have very been intensively and widely used in Russia bottle for goods in Class 32 or 33 (beverages) little chance of being registered. To obtain a before the filing date, the applicant may be can be refused registration on the grounds registration, the applicant would have to able to prove that the shape has acquired that the shape lacks distinctiveness and is prove the acquired distinctiveness of the distinctiveness and thus obtain a trademark the traditional shape of a bottle (ie, is an colour or combination of colours by registration for the shape. unoriginal form of container or vessel in submitting evidence of its extensive use in For instance, Mortier Catering NV which the products are usually sold) defined Russia. Evidence of use before the filing date applied to register the shapes of lidded exclusively by its functional purpose. The would be most important. Evidence could plastic containers in respect of goods in shape of a bottle for goods in Class 21 include the following documents: Class 29 of the Nice Classification – namely, (bottles) could also be considered to lack • shipping and customs documents, “meat, fish, poultry and game; meat distinctiveness and to represent realistic including invoices and copies of the extracts; preserved, dried and cooked fruits images of such products. In this case,

108 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

arguments that the applications consist of representation for olfactory marks. For original shapes and as a whole form original example, as discussed above, an application compositions that could distinguish the to register a light mark must contain the applicants’ goods from similar goods of characteristics of the light symbols, their different manufacturers could be taken into sequence, the duration of the glow and consideration. Besides, Russian legislation other features. An application to register a provides protection to signs that have sound mark must contain either a musical acquired distinctiveness through extensive score or a phonogram. Thus, if a musical use in Russia. Therefore, documents showing score is considered an adequate graphical that such signs were used in Russia before representation for a sound mark and a word the filing date and that the signs have description is considered an adequate become known to consumers as a result of representation for a light mark, then it is such use can be taken into consideration and likely that the PTO would consider a word increase the applicants’ chances of obtaining description acceptable for olfactory marks. protection for such marks. However, no olfactory mark has yet been applied for in Russia and so only time will Sound marks Alexander Nesterov tell what difficulties applicants of such The requirements to register sound marks Trademark attorney marks will face. WTR are similar to those applicable to the [email protected] registration of ordinary marks. However, the representation of sound marks may be Alexander Nesterov graduated in law from different – for example, it can consist of an the Moscow Military Academy in 1995, audio file, a phonogram or a musical score. specializing in criminal law. He then worked The potential to register a sound mark as a lawyer for Russian state organizations. under Russian law is higher than under In 2001 Mr Nesterov joined Gorodissky & international procedures since the latter Partners, where he specializes in and advises allow only musical scores as a on the protection of trademarks and representation of sound marks. The appellations of origin of goods, with a presentation of a musical fragment only in particular emphasis on trademark the form of musical notation does not proceedings in Russia, the Commonwealth always give a full impression of the mark of Independent States and the Baltic states. and does not fully identify the musical Mr Nesterov speaks Russian and English. phrase since the musical phrase will sound different if played on different instruments. The Russian PTO accepts audio files in There are currently over 30 sound marks, different forms, including tapes and CDs. held by Russian and foreign owners, on the This gives applicants the possibility to Russian Trademark Register. register not only musical marks which can be represented graphically on a score, but Light marks also natural sounds (eg, surf sounds, bird The requirements to register light marks are sounds, growls) and functional sounds (eg, the same as those for ordinary marks. engine sounds). However, an application to register a light Not all elements of a sound mark will mark must include its characteristics such always be registrable. Elements that lack as sequence of light, the duration of the distinctiveness in respect of the goods glow and other features. and/or services for which registration is sought will be considered unprotectable. Olfactory marks The sound mark must contain no As mentioned above, Article 1482 of Part IV element that: of the Civil Code provides that verbal, • could be considered as misleading in pictorial, three-dimensional and other signs respect of the manufacturer of the or combinations thereof may be registered. goods and/or service provider; or ‘Other signs’ refers to sound, light and other • is contrary to public interest or morals. marks and combinations thereof – that is, the law does not specifically mention that During the examination of an olfactory marks can be registered, neither application for a sound mark that includes does it directly prohibit the registration of words or graphical elements, the PTO will such marks. No special requirements apply evaluate the degree of similarity of such to the examination of olfactory marks. elements with registered marks and However, marks must be able to be pending applications. The examination lasts represented graphically. This raises the between 12 and 14 months and if there are question of whether a word description no obstacles, the registration is issued. could be considered an adequate graphical www.WorldTrademarkReview.com August/September 2009 World Trademark Review 109 Country correspondent: Spain

Garrigues Spain

Spanish trademark law and practice are the protection of non-conventional 104/01), which held that “a colour per se bound by EU regulations and case law. trademarks at national level, the Spanish … may, in respect of certain goods and However, the Spanish Patent and Patent and Trademark Office (PTO) has to services, have a distinctive character …, Trademark Office is even more reluctant follow the relevant leading decisions of the provided that ... it may be represented than the EU trademark bodies to register European Court of Justice (ECJ). graphically in a way that is clear, precise, unconventional marks According to the ECJ decision in the self-contained, easily accessible, Sieckmann Case (C-273/00), which intelligible, durable and objective …” Traditionally, trademarks have consisted of concerned an olfactory sign, “a trademark words, logos, letters or numbers, or may consist of a sign which is not in itself As the spectrum of colours is limited, the combinations thereof. However, the ever- capable of being perceived visually, concrete shade claimed in an application evolving trends to identify the commercial provided that it can be represented should be clearly specified. The most origin of goods and services have graphically, particularly by means of common way to do so is to indicate the progressively led businesses to use new images, lines or characters, and that the corresponding Pantone colour or the specific types of sign that do not fall into the representation is clear, precise, self- CMYK (cyan [blue], magenta, yellow and key traditional trademark categories. These contained, easily accessible, intelligible, [black]) combination of which the mark unconventional marks include colours, durable and objective”. consists. Where such specification shapes, sounds, holograms and scents. As argued by ECJ Advocate General Ruiz- requirement has not been met, the burden of Article 2 of the EU Trademarks Directive Jarabo, the question under discussion was proving that the colour claimed has acquired (2008/95/EC) (which replaced the First not whether a certain smell possessed distinctive character as a consequence of its Trademarks Directive (89/104/EEC)) was distinctive character (ie, whether it use rests with the applicant. implemented in Spain by Article 4 of the constituted an indication of trade origin), According to the foregoing, colours per Law on Trademarks (17/2001). but whether it was capable of being se are registrable if duly represented. The development of, among other represented graphically and was thus However, the approach of the Spanish PTO things, product differentiation methods eligible for registration as a trademark. to colour marks is still quite stringent. For called for the update of the Trademark Law The official application form for a instance, Applications 2683700 and 2683701 Treaty of 1994 (TLT). The Singapore Treaty is Spanish trademark requires the applicant to for a shade of green and a shade of blue the World Intellectual Property tick the appropriate box indicating the type were filed in 2005 in connection with goods Organization’s response to this need. of trademark applied for (ie, ‘word’, in Class 5 of the Nice Classification, Although the Singapore Treaty does not ‘exclusively figurative’, ‘figurative’, ‘three- respectively claiming the priority of two replace the TLT, it introduces significant dimensional’, ‘sound’ and ‘others’). However, German marks. changes to the latter, having a wider scope few signs falling into the ‘others’ category The PTO rejected the applications in of application. One of the main innovations have been registered so far in Spain. 2006 (ie, over four years after the current of the Singapore Treaty is that it explicitly Trademarks Law had entered into force) on recognizes non-traditional marks. Colour marks absolute grounds. Although the applicant The Singapore Treaty entered into force Single colours and colour combinations are had indicated the specific Pantone colours in Spain on May 18 2009. However, while acknowledged as trademarks in Spain even claimed, the PTO found the signs devoid of the protection of non-traditional marks is though they are not expressively recognized any distinctive character, arguing that “a accepted in principle, the registration of by the Trademarks Law. colour in itself is not considered to possess such marks in Spain continues to be Before the enactment of the 2001 law, the capacity to distinguish goods and exceptional. colours per se were expressly excluded from services”. registration. The absolute grounds for Fortunately, applications to register General requirements refusal contained in the 1988 Trademarks colour combinations do not encounter as Article 4 of the Spanish Trademarks Law Law expressly mentioned that a “colour in many difficulties as those for single colours. requires that the mark applied for be itself .... may, however, be registered capable of indicating trade origin and of provided it is defined by a given form” Shape marks being represented graphically. (Article 11(1)(g)). Three-dimensional shapes, including While the first requirement is common None of the absolute grounds for refusal wrappings, containers and the shape of to all marks irrespective of their nature, the contained in the current Trademarks Law goods or their packaging, may constitute requirement of graphical representation excludes the registration of colours per se. trademarks pursuant to Article 4(2)(d) of the often constitutes a serious obstacle for non- This is in accordance with: Trademarks Law. conventional marks – particularly non- • Article 3(3) of the First Trademarks However, Article 5(1)(e) excludes from visible signs (eg, scents, tastes and textures). Directive mentioned above; and registration “those [signs] consisting In the absence of case law relating to • the ECJ decision in Libertel (Case C- exclusively of the form imposed by the

110 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

nature of the good itself or by the form of constitute trademarks. However, it is the good necessary to obtain a technical generally accepted that a olfactory mark result, or by the form which gives may possess distinctive character. substantial value to the good”. No olfactory marks have yet been In general, shapes are admitted for registered in Spain. (Unfortunately, searches registration provided that there is no need of this kind are currently unavailable at the for such shapes to be freely used by PTO.) Consequently, the Community competitors in the relevant commercial trademark consisting of “the smell of sector. Three-dimensional signs are most freshly cut grass” – the registration of which commonly rejected on the grounds that: has now lapsed – continues to be the most • they lack distinctive character; cited example of an olfactory mark in the • they consist of shapes which have European Union. However, this mark was become customary; or registered long before the ECJ issued its • they consist of shapes which are ruling in Sieckmann (C-273/00). In that case, necessary in connection with the goods the ECJ held that a non-visible sign could and/or services that they designate. João Miranda de Sousa constitute a trademark “provided that it can Partner, global head of Garrigues IP practice be represented graphically, and that the Additionally, upon assessing the [email protected] representation is clear, precise, self- registrability of these marks, the examiner contained, easily accessible, intelligible, should bear in mind whether the shapes in João Miranda de Sousa obtained his law durable and objective”. However, referring question possess inherent value. This is degree from Universidade Católica specifically to the requirement of graphical because, contrary to patent and design Portuguesa and later an executive MBA representation of olfactory signs, the ECJ rights, trademark protection is granted for a from ESADE. His areas of expertise are IP found that such requirement was not potentially unlimited period of time. and EU law, having worked, among other satisfied “by a chemical formula, by a Three-dimensional shapes that have things, as director of the general affairs description in written words, by the deposit been accepted for registration include a and external relations of the Office for of an odour sample or by a combination of computer mouse on wheels and a face- Harmonization in the Internal Market. those elements”. shaped biscuit. Shapes for which registration In light of this jurisprudence, it is highly was rejected on absolute grounds include a unlikely that any olfactory marks will be mustard jar and a green bottle. registered in Spain or elsewhere in the European Union in the near future – or at Sound marks least until alternative means of graphically Article 4(e) of the Trademarks Law expressly representing scents are devised. contemplates the registration of sound marks. Conclusion Title 1(2)(6) of Royal Decree 687/2002 The main obstacle to the registration of implementing the Trademarks Law further non-conventional marks in Spain – as in the provides that “when applying for the European Union in general – is the registration of a sound mark, the sign has to requirement of graphical representation. be graphically represented, or it can also At the time of writing, Spain was one of consist of a musical stave”. only seven EU member states to have This is in line with EU case law. The ratified the Singapore Treaty. On account of leading case on this issue (Shield Mark, Case the foreseeable ratification of the treaty by C-283/01) clarified what could constitute an additional member states and increasing acceptable graphical representation of a Sandrine Peters technological advancements, it is reasonable sound mark – namely, “a stave divided into Senior associate to anticipate that EU law and the national measures and showing, in particular, a clef, [email protected] laws of EU member states will evolve rapidly musical notes and rests whose form as regards the protection of non- indicates the relative value and, where Sandrine Peters obtained her law degree conventional marks and the requirements necessary, accidentals”. from the Université Catholique de Louvain for their registration. The few examples of registered Spanish in Belgium. Ms Peters has been a consultant The changes brought by the sound marks which the authors have found in intellectual property since 1993. Before implementation of the Singapore Treaty consist of melodies represented in standard joining Garrigues New York in 2008 as head throughout the European Union will not be notations (eg, Trademark 2427263 in the of the European IP desk, she worked for the apparent for some time. Meanwhile, the name of MasterCard International Inc for European Communities Trademark authors consider the decision of the goods in Class 9 and Trademark 2539332 in Association, among other institutions, President of the Office for Harmonization in the name of Orbitel SA ESP for services in where she followed the legislative the Internal Market (EX-05-3, October 10 Class 38). developments at EU and international level 2005) to allow the filing of a sound file in with regard to IP matters. mp3 format in connection with sound mark Olfactory marks applications as evidence of a trend to The Trademarks Law does not specifically simplify the process to register non- mention scents among the signs that may conventional trademarks. WTR www.WorldTrademarkReview.com August/September 2009 World Trademark Review 111 Country correspondent: United States

King & Spalding LLP United States

Non-traditional signs enjoy broad US definition of ‘trademarks’? The following structure, whereas the competitor used protection in the United States as long as review provides insights and practice tips a different colour on the roof of its they can function as trademarks. for addressing this issue. structure. Nonetheless, proving acquired distinctiveness may be challenging for Single colours Motion, product shapes and trade dress those signs, such as product designs, that The United States allows trademark owners Generally, motion trademarks, such as the lack inherent distinctiveness to protect and enforce single colours as moving skyline images of Broadway Video trademarks when they serve a trademark (Registration 2092415), have been registered In 21st century commerce, signs of origin function. Well-known examples of single and protected in the United States under and quality for goods and services can come colour marks include Dow Corning’s pink, the same standards as those applied to in all forms perceivable by the five senses: United Parcel Service’s brown and Home ordinary design marks. • visual signs (eg, words, two- and three- Depot’s orange. Unsurprisingly, however, However, a distinction is drawn between dimensional shapes, motions, colours single colour marks present unique trade dress (get-up)/product packaging and and designs); clearance, registration and enforcement product design. Trade dress and product • sounds; challenges. packaging may be inherently distinctive (ie, • scents; In the landmark case of Qualitex Co v they do not require a showing of secondary • tastes; and Jacobson Prods Co (514 US 159 (1995)), the US meaning) (Two Pesos Inc v Taco Cabana Inc, • textures. Supreme Court held that although a single 505 US 763 (1992)). In contrast, product colour (in this case, the green-gold colour of designs – like single colours – have been Whether these signs qualify as an ironing board cover) can function as a held to be inherently non-distinctive, trademarks and are registrable and trademark, a single colour can never be prompting a requirement to show protectable per se depends on national law inherently distinctive. Rather, the trademark secondary meaning for protection (Wal-Mart read together with international treaties applicant must prove that consumers Stores Inc v Samara Bros Inc, 529 US 205 such as the World Trade Organization’s associate the colour with a single source for (2000)). Agreement on Trade-Related Aspects of the goods or services. This quality is known Intellectual Property Rights (TRIPs). as ‘acquired distinctiveness’ or ‘secondary Sound marks Trademarks that are beyond words and meaning’. Acquired distinctiveness may be The US Patent and Trademark Office designs are called non-traditional proven with evidence – such as surveys or (USPTO) has a long history of allowing the trademarks. These types of mark are proof of extensive use or advertising of the registration of sound marks, starting in 1950 afforded significant protection in the mark – or through the presumption of when it granted registration to a three-tone United States. secondary meaning that accompanies chime for NBC Radio. Other well-known The Lanham Act – the US federal registration of the mark on the sound mark registrations include: trademark and unfair competition law – supplemental register for a period of time. • Microsoft’s start-up tones; defines a ‘trademark’ as including “any word, In contrast, if not descriptive, word marks • the Yahoo! yodel; and name, symbol, device, or any combination may be inherently distinctive and therefore • MGM’s lion roar. thereof used by a person, or which a person registrable without such evidence. Thus, has a bona fide intention to use in each colour mark faces a hurdle to However, in March 2009 the USPTO commerce and applies to register on the registration beyond that imposed upon Trademark Trial and Appeal Board (TTAB) principal register ... to identify and word marks that are not simply descriptive. took a new approach to the registrability of distinguish his or her goods ... from those Further, searching and enforcing colour sound marks. In In re Vertex (89 USPQ2d manufactured or sold by others and to marks present the practitioner with practical 1694 (TTAB 2009)), the applicant sought to indicate the source of the goods, even if that problems. For example, in a recent case the US register the particular alarm noise made by source is unknown” (Section 45, 15 USC § District Court of Minnesota denied a a product known as AmberWatch, a child’s 1127). In addition, the Lanham Act protects temporary restraining order sought by the watch or wristband that could, when unregistered marks, words, phrases and manufacturer of ice fishing shelters which activated, emit a loud alarm noise to signify designations against false designations of held a registration for a particular shade of that the child wearing the device was in origin and false affiliations (Section 43(a), 15 blue for the structures against a competitor danger. The TTAB held that the alarm sound USC § 1125(a)). This definition is very broad (Clam Corp v Innovative Outdoor Solutions Inc, was not registrable as an inherently and goes beyond the more limited Case 08-5895 (D Minn December 15 2008)). distinctive mark. In doing so, the TTAB also definition in Article 15(1) of the TRIPs Importantly, the court relied on the fact that: stated a new rule for registrability of sound Agreement. How can trademark • the shade of blue used by the marks, requiring a showing of acquired professionals from the United States and competitor was slightly different; and distinctiveness when the goods “make the elsewhere take best advantage of this broad • the registrant used blue over the entire sound [at issue] in their normal course of

112 World Trademark Review August/September 2009 www.WorldTrademarkReview.com Co-published editorial

operation”. Notably, however, the TTAB does the applicant’s goods or services will be not appear to have overruled or invalidated rejected on the basis of descriptiveness (15 the rule that sound marks that are “unique, USC §1052). different or distinctive” can be inherently distinctive for services. Practical considerations Best practices in the United States include Olfactory, taste and touch marks the following: Unlike visual and sound marks, olfactory, • Practitioners should expect to be taste and touch marks are relatively new, yet required to provide evidence of protectable, in the United States. One of the secondary meaning when seeking to earliest of this group to be registered was register non-traditional marks. the scent of plumeria blossoms in yarn (In Providing a specimen or a written re Clarke Case, 17 USPQ2d 1238 (TTAB 1990)), description of the non-traditional mark followed by registrations such as a cherry may prove challenging. Traditional scent for lubricants (Registration 2463044). barriers to registration and protection, Generally speaking, the scent should not such as functionality and relate to the product itself, but be an Clark Lackert descriptiveness, also come into play – independent indication of origin. In certain Partner just as they do in connection with a cases, as for all other non-traditional [email protected] traditional trademark. trademarks, proof of secondary meaning • Registration on the supplemental may be required. Clark Lackert is a partner in King & Spalding register may be advisable while In a recent case on taste trademarks, the LLP’s IP group. Mr Lackert represents a secondary meaning in the non- TTAB rejected an application to register an number of large companies, as well as start- traditional mark is established. However, orange flavouring for a pharmaceutical ups, in trademark and domain name supplemental registrations are product, in part because the record protection. He frequently lectures on IP unavailable for Madrid Protocol filers. contained no evidence that consumers issues at international organizations such as • Trademark owners should use associated the applicant’s orange flavour the World Trade Organization, the World marketing and advertising to emphasize with a source (In re Organon NV, 79 USPQ2d Intellectual Property Organization and the the non-traditional mark’s character in 1639 (TTAB 2006)). Touch marks have fared Office for Harmonization in the Internal connection with the goods or services. better; thus, a ‘velvet feel’ for a wine bottle Market, and is consistently ranked as one of • If the basis of registration is a home has been registered (Registration 3155702). the world’s leading trademark lawyers. country application or registration, or the Madrid Protocol, any limitations on Ornamentation, descriptiveness and registration of non-traditional functionality issues trademarks in the home country will By their very nature, non-traditional affect the US filing. However, other bases trademarks may give rise to objections of filing, actual use in commerce or a based on ornamentation, descriptiveness or bona fide intent to use in commerce is functionality under US trademark available if needed. registration law (see “Trademark Manual of • While the rules applicable to traditional Examination Procedures” (TMEP) §§ 1202.02, and non-traditional marks are 1202.03 and 1209). A feature is functional if fundamentally the same, the way they it is “essential to the use or purpose of the are applied by the courts may be slightly product or if it affects the cost or quality of different, reflecting the flexibility of the the product” (TrafFix Devices Inc v US legal system in general. Marketing Displays Inc, 532 US 23 (2001)). In • Trademark owners should always both the Organon and Vertex Cases consider enforcing their non-traditional discussed above, functionality of the taste trademarks, even if they are deemed and sound at issue was a subsidiary basis unregistrable, under the common law presented for each rejection. Importantly, and the unfair competition provisions while distinctiveness and functionality are Jill Wasserman of the Lanham Act (Section 43(a)). separate issues, in many cases the USPTO Partner refuses registration on both grounds. For [email protected] Conclusion example, the TMEP provides that “[i]n any The United States has been at the forefront of case where a product design or product Jill Wasserman is a partner in King & addressing non-traditional marks, due in part packaging is refused because it is functional, Spalding LLP’s IP group. She focuses on IP to the broad definition of what a trademark is registration should also be refused on the litigation and trial practice, particularly in and the nature of commerce in the United ground that the proposed mark is non- the areas of trademarks, unfair competition States. While non-traditional marks pose distinctive” (TMEP § 1202.02(c)). and false advertising. certain challenges to registration and In addition, where the matter that the enforcement – most importantly, the need to applicant seeks to register is merely provide secondary meaning – as a general decorative, rather than source-identifying, it 1202.03). Likewise, a mark that is merely matter they are subject to the same protection will be rejected as ornamental (TMEP § descriptive or deceptively misdescriptive of in the United States as traditional marks. WTR www.WorldTrademarkReview.com August/September 2009 World Trademark Review 113

23rd MARQUES Annual Conference 15th - 18th September 2009

Brighton, United Kingdom Sustainable Brands A Luxury or a Necessity?

For further information and online registration visit www.marques.org