RESTRICTED WORLD TRADE IP/Q2/GBR/1 13 October 1997 ORGANIZATION (97-4396)

Council for Trade-Related Aspects Original: English of Intellectual Property Rights

REVIEW OF LEGISLATION ON , GEOGRAPHICAL INDICATIONS AND INDUSTRIAL DESIGNS

United Kingdom1

The present document reproduces the questions put to the delegation of the and the responses given in the review of legislation on trademarks, geographical indications and industrial designs in the context of the Council's meeting of 11-15 November 1996.2

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I. REPLY TO THE GENERAL QUESTION CONCERNING PRIORITY RIGHTS3

Does your country recognize a right of priority on the basis of an earlier application filed in any other WTO Member by a national of a WTO Member?

At the end of 1995, the United Kingdom amended its trademarks legislation to recognize a right of priority on the basis of an earlier trademark application filed by any person in any other country which at that time was a WTO Member.

The relevant legislative provisions providing this priority right for trademarks applications are Sections 35, 36 and 55 of the Trade Marks Act 1994. Section 35 together with Section 55 of the United Kingdom Trade Marks Act 1994 automatically provides for priority to be accorded to a trade mark application which has been filed in a Paris Convention country. Section 36 of the Trade Marks Act 1994 provides the power to extend the same privilege to other "relevant countries". The countries deemed to be "relevant countries" are specified in The Trade Marks (Claims to Priority from Relevant Countries) Order 1994. This particular measure was amended on 24 November 1995 [with effect from 1 January 1996] to include the following, who at that time were all the WTO Members not party to the Paris Convention:

Antigua and Barbuda Dominica Maldives Bahrain Ecuador Mozambique

1 As regards laws and regulations relevant to the areas under review as notified by the United Kingdom, reference is made to document IP/N/1/GBR/1 as well as documents IP/N/T/GBR/T/1-2, IP/N/1/GBR/G/1-2, IP/N/1/GBR/D/1-2 and IP/N/1/GBR/C/1.

2 The minutes of this meeting are contained in document IP/C/M/11.

3 At the meeting of the TRIPS Council of 11-15 November 1996, Members agreed to respond to this question in the context of the present review (document IP/C/M/11, paragraph 43). IP/Q2/GBR/1 Page 2

Belize Guatemala Myanmar Bolivia Hong Kong Namibia Botswana India Nicaragua Brunei Darussalam Jamaica Pakistan Colombia Kuwait Sierra Leone Djibouti Macau Thailand

Further amending legislation is currently being produced to update the above list to include those countries who have more recently acceded to the WTO and who are also not party to the Paris Convention.

II. REPLIES TO QUESTIONS POSED BY THE UNITED STATES

1. Section 56(3) of the Trade Marks Act 1994 appears to permit the use of a well-known mark, by other than the proprietor of the mark, if the use began prior to the passage of the current law. Please explain whether this is an accurate understanding of this provision and, if so, how this is consistent with Article 2 of the TRIPS Agreement, to the extent it incorporates Article 6bis of the Paris Convention, and Articles 16.2 and 16.3 of the TRIPS Agreement.

Section 56(3) of the Trade Marks Act 1994 does not permit the use of a well-known mark, by other than the proprietor of the mark, if such use began before the commencement of the current law. Rather it ensures that means of other than Section 56(2) must be relied upon to prevent the continuation of any bona fide use of a trademark begun before the commencement of the section; for example, the law of .

2. Please explain how well-known marks used by third parties prior to the Trade Marks Act 1994 are protected in the United Kingdom and how United Kingdom law in this regard complies with the requirements of Article 16 of the TRIPS agreement.

Well-known marks used by third parties prior to the entry into force of the relevant provisions of the Trade Marks Act 1994 continue to be protected as they were prior to the entry into force of the 1994 Act. That is, under the common law tort of passing off. The United Kingdom considers that the protection afforded to well-known marks against use by third parties under the law of passing off fully complies with the requirements of Articles 16.2 and 16.3 of the TRIPS Agreement.

[Follow-up question from the US]

What are the elements that must be shown by the owner of an unregistered well-known mark in order to prevail in an action to protect its mark under the common law tort of passing off prior to the passage of the 1994 Act? For example, must the owner of the well-known mark have used the mark in the United Kingdom? Must the owner of the well-known mark have goodwill in the mark in the United Kingdom? Are there any recent reported cases on this matter?

To protect its mark under the common law tort of passing off, the owner of an unregistered well-known mark would have to show the following three elements: misrepresentation (which need not be intentional), reputation (sometimes expressed as "goodwill") and damage. IP/Q2/GBR/1 Page 3

The courts in the United Kingdom have given no specific guidance concerning whether a well- known mark must be used in the United Kingdom, or whether the owner of the well-known mark must have goodwill in the United Kingdom. The court will consider each individual case on its merits, according to the specific facts.

We are not aware of any recent reported cases on this matter.

3. The provision for well-known marks in Section 6(1)(c) of the Trade Marks Act 1994 does not specify that the renown of the mark be determined by taking into account the relevant sector of the public and knowledge obtained through the promotion of the mark, as is required by the TRIPS Agreement. Please explain whether this standard is established by regulation or through case law and, if neither, how the law of the United Kingdom can be considered consistent with Article 16.2 of the TRIPS Agreement.

As US question 3 correctly surmises, the Trade Marks Act 1994 does not specify explicitly that, in determining whether a trademark is well known, account must be taken of the knowledge of the trademark in the relevant sector of the public and knowledge obtained through promotion of the mark. This standard is established by case law. In determining whether a trademark is well known, a court in the United Kingdom would necessarily have to take account of any and all relevant facts upon which it is addressed. In this respect, the law of the United Kingdom is consistent with Article 16.2 of the TRIPS Agreement.

[Follow-up question from the US]

Please provide citation to and a copy of any case(s) in which the Article 16.2 of the TRIPS Agreement is established and applied by UK courts.

We are not aware of any case(s) in which the standard of Article 16.2 of the TRIPS Agreement has been established and applied by courts in the United Kingdom.

4. Please describe the methods by which industrial designs are protected in the United Kingdom, in particular:

- the form or forms of intellectual property used to protect the design (e.g., patent, copyright, sui generis);

- the conditions that must be satisfied to obtain the grant of such protection (e.g., whether designs must be new or original and the parameters of these concepts), and a brief description of the registration or granting procedure;

- the nature of the rights granted and the term of protection provided;

- the nature of remedies available to the owner of each type of protection, including a description of the conditions that may be imposed (e.g., whether commercial use is required); and

- whether any exceptions to protection or rights exist for each type of intellectual property involved. IP/Q2/GBR/1 Page 4

Introduction

The United Kingdom's obligations under Section 4 of Part II of the TRIPS Agreement are met by the Registered Designs Act 1949. The Act was significantly amended by the Copyright, Designs and Patents Act 1988. This latter Act includes in Schedule 4 a copy of the Registered Designs Act 1994 as amended.

The Registered Designs Act 1949 provides protection, based upon registration, for designs which are new.

Section 1(1) of the Act defines designs as features of shape, configuration, pattern or ornament applied to an article by any industrial process, being features which in the finished article appeal to and are judged by the eye. Excluded from protection are features of shape or configuration of an article which are dictated solely by the function which the article has to perform or are dependent upon the appearance of another article of which the article is intended by the author of the design to form an integral part. Such exceptions are consistent with Article 25.1 of the TRIPS Agreement.

Registration Procedure

An application for registration of a design is first filed at the United Kingdom Patent Office in the manner and form prescribed in the Act and the Registered Design Rules 1995. A search and examination is then performed to ensure that the design is new. If it is and the formal requirements specified in the Rules and Act are also met, then a certificate of registration is issued. Registration should normally be completed within six months.

Rights Conferred

The registration of a design under the Act gives the registered proprietor the following exclusive rights:

(a) to make or import for sale or hire or for the purposes of a trade or business; or

(b) to sell, hire or offer or expose for sale or hire, an article in respect of which the design is registered and to which that design, or a design not substantially different from it, has been applied. Such rights fully meet the requirements of Article 26.1 of the TRIPS Agreement.

The duration of protection for a registered design is up to a maximum of 25 years, renewable at five yearly intervals on payment of the required fee. This exceeds the minimum of ten years protection required by Article 26.3 of the TRIPS Agreement.

Available Remedies

Although the Act does not specifically state what remedies are available to the proprietor, the usual remedies for intellectual property infringement are available: namely, injunctions, damages or an account of profit, orders for delivery up of infringing articles and costs and interest would apply. Further details on this matter are included in the United Kingdom's responses to the checklist of issues on enforcement of intellectual property rights. (IP/C/5).4

4 The United Kingdom's responses to this checklist can be found in document IP/N/6/GBR/1. IP/Q2/GBR/1 Page 5

5. Please explain how textile designs are protected under your law.

Textile designs are protectable in the United Kingdom under the Registered Designs Act 1949 to the extent that they meet its general requirements as to protectability, and by copyright law as artistic works under the Copyright, Designs and Patents Act 1988. Such protection is provided in accordance with Article 25.2 of TRIPS.

III. REPLIES TO QUESTIONS POSED BY JAPAN

1. Please explain differences in detail between "well-known trademarks" described in Section 6(1)(c) and 56(2) of the Trade Marks Act 1994, and "reputed trademarks" described in Section 5(3) of the Act.

Section 6(1) of the Trade Marks Act 1994 defines the meaning of "earlier trademark" as used throughout the Trade Marks Act 1994. Sub-section (c) fulfils the United Kingdom's obligations under Article 6bis of the Paris Convention by ensuring that well-known trademarks are considered to be prior rights. Section 56(2) entitles the proprietor of a well-known mark to restrain by injunction the use in the United Kingdom of identical or similar marks in respect of the same or similar goods, even if the well-known mark is not registered as a trademark in the United Kingdom.

Section 5(3) implements Articles 4(3) and 4(4) of the European Council Directive of 21 December 1988 to approximate the laws of the Member States of the European Communities relating to trademarks (89/104/EEC). In so doing, it extends beyond the protection required by Article 16.3 of the TRIPS Agreement to cover registered trademarks which have a reputation, and not merely registered trademarks which are considered to be well-known.

However, in the United Kingdom, the matter of whether a mark is well-known or whether it has a reputation are questions which must ultimately be left for the Courts to decide. Nevertheless, the United Kingdom is confident that the requirements of the TRIPS Agreement are fully met in this respect.

2. Please explain whether or not "if the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trademark" described in Section 5(3) of the Trade Marks Act 1994 is identical with "provided that use of a trademark in relation to goods or services which are not similar to those in respect of which the trademark is registered would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use" as described in Article 16.3 of the TRIPS Agreement.

Section 5(3) of the Trade Marks Act 1994 mirrors Article 8(5) of Council Regulation (EC) 40/94 which implements the Community trademark system. Regulation (EC) 40/94 became operational on 1 April 1996. To date, Article 8(5) of the Regulation has not been applied in practice. Nevertheless, it should be noted that the reference to "use without due cause" reflects a general principle of law, i.e. a "rule of reason", as a consequence of which the use of a sign, which would in principle constitute trademark infringement under Article 8(5), may be considered justified in exceptional circumstances. In Article 8(5) of the Regulation, this principle is reflected by the wording "without due cause", implying that in exceptional cases, use of a sign which is identical or similar to a registered mark for dissimilar goods or services may be permissible, even where the other elements of trademark infringement apply. It should be stressed that, as a rule, the exception under the rule of reason will not apply. Jurisprudence at the level of the Member States has shown that defences on the basis of the rule of reason have never been successful. In order to successfully invoke the rule of reason, some Member States' jurisdictions IP/Q2/GBR/1 Page 6 require that the user of the sign must prove either that he has an imperative need to use the sign and that he cannot reasonably be obliged to renounce on such use, or that such user proves that he has an own right to use the sign.

3. Please elaborate on "the use without due cause" described in Section 5(3) of the Trade Marks Act 1994 by giving examples, and also whether or not the trademark may be used or is registrable when there is "due cause". If it is so, please explain its consistency with the provisions of Article 16.3 of the TRIPS Agreement which makes no reference to "due cause".

As indicated above, the words "the use without due cause" in Section 5(3) of the Trade Marks Act 1994 mirror those in Article 8(5) of Council Regulation (EC) 40/94. Again, it must be left for the Courts (and ultimately the European Court of Justice) to decide precisely what is meant by these words. So far, no such examples have been considered by the Courts.

4. Please explain differences between "the genuine use" of a trademark described in Section 46 of the Trade Marks Act 1994 and "the use" of the trademark described in Article 19.1 of the TRIPS Agreement. In the case where a trademark is put to "the use" as stipulated in of Article 19.1 of the TRIPS Agreement, though not to "the genuine use" as provided for in the Trade Marks Act 1994, for three years after the lapse of two years of non-use, would the registration of the said trademark be cancelled?

Section 46 of the Trade Marks Act 1994 requires "genuine use" to maintain registration of a trademark, and not merely "use" which is the subject of Article 19 of the TRIPS Agreement. Once again, the words "genuine use" mirror those in Council Regulation (EC) 40/94.

Articles 15 and 50 of Regulation (EC) 40/94 stipulate that if, within five years following registration, the proprietor has not put the Community trademark to genuine use, such mark shall be the subject of the sanctions provided for in the Regulation. In applying Article 19 of the TRIPS Agreement, the courts or other competent authorities of the Members of the WTO will have to interpret the concept of "use". In interpreting this concept, they may well arrive at the conclusion that, for example, the simple advertising of the trademark, with the only objective to prevent cancellation of the mark on the ground of failure to use, does not constitute "use" within the meaning of Article 19 of the TRIPS Agreement. In view of this, the reference to "genuine" use in the said Articles of the Regulation constitute an indication as to how the concept of "use" must be interpreted under Community law.

5. It seems that the Trade Marks Act 1994 has no provisions on refusal or invalidation of the registration of a trademark for wines which contains or consists of a geographical indication identifying wines or a trademark for spirits which contains or consists of a geographical indication identifying spirits with respect to such wines or spirits not having this origin. Please explain how the geographical indications for the wines and spirits originating from other WTO Members are protected by the Trade Marks Act 1994 and also whether such protection is consistent with Articles 3 and 23.2 of the TRIPS Agreement.

Section 3(3)(b) of the Trade Marks Act 1994 provides that an application to register a trademark in the United Kingdom shall be refused on absolute grounds if it is of such a nature as to deceive the public as to the geographical origin of the goods. In practice, this means that applications for trademarks which contain or consist of geographical indications with respect to wines or spirits not having such an origin are refused because they could deceive the public as to the geographical origin of the wines and/or spirits. In such cases, there is no need to consider whether there has been, or would be, actual deception. Geographical indications for wines and spirits originating anywhere in the world are thus protected in the United Kingdom by the Trade Marks Act 1994, and the United Kingdom believes that its laws fully comply with the requirements of Article 23.2 of the TRIPS Agreement. IP/Q2/GBR/1 Page 7

6. In your country, where the provisions on the "Crown use" are applied, some restrictions are imposed on the owner of a protected industrial design: for example, license fees will not be paid to the owner of a registered design. Is there any possibility that the legitimate interests of a rightholder can be unreasonably prejudiced within the meaning of Article 26.2 of the TRIPS Agreement?

The Registered Designs Act 1949 provides that any government department or any person authorized in writing by a government department may use any registered design for the services of the Crown. Such use includes:

(a) the supply to the government of any country outside the United Kingdom under an agreement between that country and the United Kingdom of articles required for the defence of that country or any country whose government is party to an agreement with the UK Government over defence matters; and

(b) the supply to the United Nations or a government of any country belonging to that Organization of articles required for armed forces operating under a United Nations Resolution.

The Act requires that, unless it would appear contrary to the public interest to do so, the registered proprietor is to be notified as soon as practicable after the use is begun and is to be given such information as to the extent of the use as he may from time to time require. The use of a design by or on behalf of the government after the date of registration shall be on such terms as may be agreed between the government and the registered proprietor or as may be determined by the court in the absence of such agreement.

Compensation is also available to the registered proprietor, or to an exclusive licensee, for any loss resulting from his not being awarded a contract to supply the articles to which the design is applied.

The only exception to the above is where the Crown has independently developed a design which is not substantially different, prior to the date of registration of the proprietor's design. In such cases, the Crown may continue to use its design free of royalty. Such a limited exception is therefore not considered to unreasonably prejudice the legitimate interests of the proprietor of the registered design and as such is not considered to conflict with Article 26.2 of the TRIPS Agreement.

It should also be noted that cases involving the use of a registered design by the government are rare. Indeed the Patent Office, which is the government authority responsible for administering the Registered Designs Act, is unaware of any recent uses of a registered design by or on behalf of the government.