This week the High Court granted a fresh live blocking injunction to The Football Association Premier League for the 2018/19 season, as we discuss in this blog.
Towards the end of the 2016/17 Premier League Football season The Football Association Premier League Limited ("FAPL") brought an action against, although in reality approved and not contested by, BT, EE, Plusnet, Sky, TalkTalk and Virgin Media (the "Defendants"). The application and the subsequent order's purpose was to grant a 'live blocking injunction' to allow the blocking of illegal streams of Premier League matches as the matches are in progress for the last two months of the 2016/17 season (the "First Order"). Our blogs on the original Application and Order, and the new Order granted for the 2017/18 season (the "Second Order") can be seen here and here.
This week Mr Justice Arnold has granted a fresh order to FAPL for the 2018/19 season. Although the application was not opposed by the Defendants, the court had to be satisfied that the order was justified. The FAPL was able to provide evidence to show that the Second Order was very effective in blocking access to the target servers during Premier League matches. There was also no evidence found of over-blocking despite checks being undertaken.
The order sought by, and subsequently granted to, FAPL differs from the Second Order in two respects:
The subset of infringing streaming servers to be blocked is enlarged; and
The requirement to notify hosting providers is made subject to a short delay. This is to combat the attempts made to circumvent the Second Order, evidence of which was provided by FAPL to show this is a real concern.
On the basis of the evidence before him, Arnold J held that granting the order for a further season was justified. (No details of the evidence are provided in his short judgment.)
It appears that live blocking injunctions are here to stay provided FAPL can continue to provide evidence that they are working and that legitimate websites are not being blocked. It is also worth noting the court's willingness to expand and adapt the orders they are granting to encompass more servers and to defeat attempts to circumvent the order.
Now FAPL is into its second full season of operating live blocking injunctions we would not be surprised to see other sports organisations consider exploring their own live blocking injunctions to protect their investments and intellectual property, as was the case with UEFA in December 2017 (see our blog here).
A recent decision of the CJEU means that EUIPO bodies now have an obligation to take into account earlier decisions and if they depart from those decisions, provide an explicit statement of their reasons for doing so. In this blog we take a look at this decision in EUIPO v Puma SE (Case C 564/16).
On 14 February 2013, Gemma Group Srl filed an application for registration of an EU trade mark for the following mark:
This application covered various goods in class 7: ‘Machines for processing of wood; Machines for processing aluminium; Machines for treatment of PVC’. This application was opposed by Puma on the basis of prior registrations for the following marks:
Puma's registrations covered a range of goods in classes 18, 25, and 28 and the opposition was accordingly based on Article 8(5) of Regulation No 207/2009, which provides that a trade mark must not be registered if it is identical or similar to an earlier trade mark that covers different goods and services, where the earlier mark has a reputation, and the use without due cause of the trade mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.
It is well established that to prove such an injury, the opponent must show that there is sufficient similarity between the marks that the relevant section of the public makes a connection between those marks, i.e. establishes a 'link' between them.
Opposition Division and Board of Appeal decisions
In its initial decision, the Opposition Division moved forward 'for reasons of procedural economy' on the assumption that Puma had the requisite level of reputation in the earlier marks to support an Article 8(5) claim, but rejected the opposition on the basis that the required 'link' was not established.
Puma appealed and the Board of Appeal rejected Puma's argument that the Opposition Division had confirmed that Puma had a reputation in the earlier marks. It also examined the evidence filed by Puma and ruled that it did not establish a sufficient reputation, and held that even if it did, the other conditions of Article 8(5), i.e. the 'link' were not established anyway. As part of its evidence, Puma had relied on three earlier EUIPO decisions holding it had the required reputation. The Board of Appeal rejected the three earlier decisions as evidence of reputation, simply stating it was not bound by earlier decisions. The evidence filed in the earlier cases had not been re-filed in its entirety in the present action, although it was described in depth in the earlier decisions.
General Court decision
Puma argued before the EU General Court that the Board of Appeal had infringed the principles of legal certainty and sound administration by departing from earlier decisions holding that it did have a reputation in the earlier marks without providing adequate reasons for the departure. The General Court agreed with Puma holding that the Board should have requested that the evidence filed in the earlier cases be submitted as supplementary evidence, if only to rebut it, or provided reasons as to why it disagreed with the findings in the earlier cases.
The EUIPO appealed the General Court's decision to the CJEU. The CJEU upheld the General Court's decision, ruling at paragraph 66 that:
in circumstances where an opponent relies on earlier EUIPO decisions relating to the reputation of a mark, in a precise manner, before the Opposition Division, as evidence of the reputation, for the purposes of Article 8(5) of Regulation No 207/2009, of the same earlier mark relied on in support of its opposition, it is incumbent on the competent EUIPO bodies to take into account the decisions which they have already adopted and to consider with especial care whether it should decide in the same way or not … where those bodies decide to take a different view from the one adopted in those previous decisions, they should, having regard to the context in which they adopt their new decision, since reliance on those previous decisions forms part of that text, provide an explicit statement of their reasoning for departing from those decision
This decision does not create a common law style system of binding precedent, but it should increase the predictability and consistency of decisions by EUIPO bodies. In this sense the decision is a welcome one. However, it is not without risk for brand owners, who may find themselves having to devote more resources to EUIPO proceedings in the knowledge that an adverse decision may have ramifications for future disputes.
Earlier this month we reported on the UK government's proposal to implement EU Trade Mark Directive 2015/2436. (Our blog can be found here.) As a follow up, the government has now published the Trade Marks Regulations 2018 (SI 2018/825) which implement the Directive by amending the Trade Marks Act 1994 and related secondary legislation. The Regulations are consistent with the government's proposal and will come into force on 14 January 2019, meaning that the UK's trade mark laws will be harmonised with the EU upon Brexit.
Yesterday, the UK government published its latest White Paper setting out the future relationship between the UK and the EU after Brexit. In this blog we take a brief look at the implications for intellectual property (IP) rights.
Back in March 2018, the UK and European Commission announced that they had agreed a 'large part' of the Commission's draft agreement governing the UK's withdrawal from the EU and a revised draft withdrawal agreement was published with colour-coded text to highlight which provisions were agreed.
This draft agreement provided reassurance in relation to the continued protection of a number of IP rights, including EU trade marks (EUTMs) and registered Community designs (RCDs), although the precise details were still unclear. However, there were several key provisions concerning IP where agreement had not been reached. (For the details, see our blog here.)
As has been a recurrent theme in the various Brexit proposals of the last two years, there is little specific reference to IP in the 98 pages of this latest White Paper. However, there are a handful of partial answers to some of the outstanding issues in the IP field. There is also a general recognition by the government of the importance of IP rights and need for future cooperation when it states that:
"[IP rights] play an essential part in encouraging the universal benefits of innovation and creativity, as well as protecting the reputation of products and services and helping prevent consumers from being misled about the quality or provenance of goods. The high quality service offered by the UK’s rights-granting bodies and courts system help to make the UK one of the best places in the world to protect and enforce IP rights." (Paragraph 149.)
"Arrangements on future cooperation on IP would provide important protections for right holders, giving them a confident and secure basis from which to operate in and between the UK and the EU". (Paragraph 152.)
Geographical indications (GIs) provide registered products with legal protection against imitation, and protect consumers from being misled about the quality or geographical origin of goods. Significant GI-protected products from the UK include Scotch whisky, Scottish farmed salmon, and Welsh beef and lamb. GIs are also particularly important for many agricultural producers in continental Europe, for example those involved in the production of products such as Parmigiano Reggiano or Serrano ham.
In the March draft agreement, GIs were one of the few IP areas where agreement had not been reached. However, the White Paper now confirms that the UK will be establishing its own GI scheme after exit, which will go beyond the requirements of TRIPS, providing a "clear and simple set of rules on GIs, and continuous protection for UK GIs in the UK". The scheme will be open to new applications, from both UK and non-UK applicants, from "the day it enters into force". (Paragraph 38).
This position will be reassuring for many agricultural businesses in the UK and across Europe. However, while the White Paper indicates that there will be continued protection for UK holders of GIs under the system, it is not clear whether producer organizations will need to reapply under the new UK framework in order to secure equivalent UK protection. It is likely that the Commission will push for this protection to also be granted automatically to continental European holders of existing GIs.
The White Paper refers to the "long history of European cooperation on patents, which can be costly to enforce in multiple jurisdictions" (paragraph 150). It also refers to the UK's recent ratification of the Unified Patent Court Agreement (UPCA) in April 2018 (see our blog here). The government then answers the question many have been waiting to hear, which is that it "intends to explore staying in the Court and unitary patent system after the UK leaves the EU", although exactly what this means in practice is not yet clear.
The White Paper goes on to explain that the Unified Patent Court has a unique structure as an international court that is a dispute forum for the EU's unitary patent and for European patents, both of which will be administered by the European Patent Office and concludes that the "UK will therefore work with other contracting states to make sure the UPCA can continue on a firm legal basis" (paragraph 46).
It remains to be seen how the UPCA implementation will interact with the UK's post-Brexit arrangements. Because both processes, the implementation of the UPCA and Brexit, are ongoing and uncertain (with the former also facing constitutional challenges in Germany), there may be further shifts in direction as the practicalities start to bite.
This White Paper adds a few more pieces to the Brexit IP jigsaw puzzle but still leaves some significant issues out, including exhaustion of IP rights and copyright.
There are also significant questions as to how the proposed Facilitated Customs Arrangement (FCA) will interact with existing anti-counterfeiting measures. The White Paper makes it clear that the focus of the 'common rulebook' is on ensuring equivalent product quality standards and the White Paper explicitly excludes factors relating to marketing and labelling which do not relate to production and will be "most effectively enforced on the market". This suggests that factors relating to the consumer presentation of goods, including branding, will not be addressed in the arrangement.
At present, owners of unitary EU IP rights, such as EUTMs or RCDs, are able to apply for co-ordinated action by customs across the EU. Under this system, potentially infringing goods will be seized by the customs of any EU country at the point of entry into the EU. It is not clear how this system would operate under the FCA. If there are limited border checks between the UK and remaining EU, then the UK will become a legal channel by which goods which infringe IP rights in the EU, but not necessarily in the UK, can be moved into the EU while circumventing any EU customs actions that have been put in place by the rights owner. Alternatively, the UK would need to commit to check for and enforce EU IP rights when goods are entering the UK from outside of the EU, even if there may be no equivalent UK right that is infringed, which seems unlikely to be practicable.
From the perspective of rights owners, it is clear that businesses will need to ensure that their enforcement strategies in the UK are as reliable and as effective as those in the EU. Relying solely on the defensive curtain wall of "Fortress Europe" may no longer be enough.
We hope that the government addresses these remaining areas soon, as well as providing more details about those issues it has already agreed in principle, particularly surrounding the comparable UK rights after Brexit.
With special thanks to trainee, Jonathan Peters, for his contribution to this article.
Actions were brought by companies within the Apple group against Qualcomm Inc, a US-based chip designer, and its subsidiary Qualcomm UK. Apple claimed that Qualcomm UK had breached its obligations as a member of the European Telecommunications Standards Institute (ETSI) by not granting licences for standard essential patents (SEPs) using fair, reasonable and non-discriminatory terms (FRAND).
An SEP is a patent for technology essential to a standard that is set in a particular industry. SEP holders can license these patents to third parties, but must ensure they do so on FRAND terms. (For further background about SEPs see our earlier blog here.)
Apple further called for the revocation of five of Qualcomm Inc.'s patents that related to 3G, 4G and future 5G wireless chip technologies, on the grounds that they were invalid due to being non-essential and therefore not SEPs. They also called for a declaration that Qualcomm Inc.'s rights were exhausted in respect of certain patents where chipsets were supplied by Apple with the consent of a Qualcomm group company. Finally, Qualcomm Inc. was accused of abusing a dominant position in the applicable markets in breach of Article 102 TFEU.
Qualcomm UK applied to strike out the claim against it and Qualcomm Inc. applied for a declaration that the High Court had no jurisdiction in relation to the claims going beyond the patent claims made against it.
High Court ruling
Morgan J delivered his judgment in the High Court on 22 May 2018.
Claim against Qualcomm UK
Apple alleged that Qualcomm UK breached Article 6.1 of the ETSI IPR policy. This clause states that the Director General of ETSI can request the 'owner' to give an irrevocable undertaking to grant licences on FRAND terms in specific situations. The court found that the word 'owner' required Qualcomm UK to be the owner of the IP right. It was clear that the the UK company was not the owner at any point in time of the patents in question and therefore had not breached the clause.
Apple additionally argued that Qualcomm Inc. had made a declaration that covered Qualcomm UK when it stated that 'Qualcomm Inc. and/or its affiliates are prepared to grant licenses of the relevant IPRs on FRAND terms'. The court interpreted the declaration to mean that an affiliate was someone who has the power to grant the licence and for that to occur, they must own the right in the first place. Since Qualcomm UK did not own the right, it was not covered by the term.
Consequently. summary judgment was given in favour of Qualcomm UK because the court saw no real prospect of Apple's claim succeeding.
Claims against Qualcomm Inc.
Since Qualcomm Inc is US-based, it had to be served out of jurisdiction, for which certain criteria had to be satisfied. The burden was on Apple to convince the court that there was a serious issue to be tried. It also had to satisfy the court that there was a good arguable case that the claim fell within one of several jurisdictional gateways available for this type of action (CPR 6.36 and Practice Direction 6B). Finally, Apple had to satisfy the court that England was the correct forum to try the case in all the circumstances.
The applicable gateways that were claimed were gateways 3, 4A and 9.
Gateway 3 required Apple to show that there was a real issue between it and Qualcomm UK, and that Qualcomm Inc. was an important party to the claim. However, in light of the court's dismissal of the claim against Qualcomm UK, this gateway was not available.
Gateway 4A required that the claim must be made in reliance on one of several paragraphs mentioned in the gateway. Apple argued that although it did not rely on Gateway 4A, it could have done so. The court refused to interpret the words in 'reliance on' widely to incorporate the mere possibility of reliance. Consequently, this gateway was not available either.
For Gateway 9 to apply, the claim must be in tort. Under Gateway 9(a), on which Apple sought to rely, damage must have been sustained or will be sustained within the jurisdiction. The court identified being overcharged as an example of such damage. For Apple to have suffered this damage, they must either have sold the product after paying a higher price for it and not passed on the cost to the consumer (leading to a loss), or have transferred the extra cost to the consumer and lost sales as a result. Only Apple Retail UK Ltd and Apple Distribution International were within the UK jurisdiction and therefore were the only ones that could proceed with the claim out of the six claimants.
The judge found that the evidence provided was confusing and not presented in the correct manner. However, he decided to give directions for the service of further evidence and await further arguments in relation to Gateway 9.
Finally, the judge also determined that the UK was the correct forum for the claim of breach of Article 102, as Apple Retail UK Ltd was a UK company that had suffered loss in the jurisdiction as a result of Qualcomm's alleged abusive behaviour.
This action by Apple's against Qualcomm is the latest development in the companies' global dispute.
Those hoping that the recent ruling would provide some definitive guidance from the courts on breaches of FRAND undertakings may be disappointed – the judgment revolved instead around jurisdictional issues and the relevance of a subsidiary company to a claim.
What was demonstrated was that UK courts will consider carefully the scope of its jurisdiction when faced with disputes involving global group companies. Apple's attempt to use Qualcomm UK, which did not own the relevant patents and had not directly granted any licences, as an anchor to bring its claim in the High Court, was unsuccessful. Under the ETSI rules, an affiliate of a company making declarations of SEPs was held not to be liable for the actions of its parent.
In respect of the parts of the case concerning FRAND undertakings, it seems that the battle between the parties remains confined to California, where Qualcomm Inc. is based. As for the claims by Apple Retail UK and Apple Distribution International, the case will continue in the UK, with further hearings to answer the outstanding issues.
Following the European Commission's initial proposals in September 2016 on the draft copyright directive in the digital single market (the Copyright Directive) and after some long and intense debate, in particular in relation to Articles 11 and 13 (see below for further detail), it seemed that we were edging closer to an agreement on the text of the directive. The Council's permanent representatives committee (Coreper) agreed a common position on the text at the end of May and the Legal Affairs Committee of the European Parliament (JURI) followed suit and voted on 20 June 2018, adopting the approved text. This was despite a significant amount of fierce lobbying in recent months, urging the European Parliament to reject the draft. However, the plenary vote (where all MEPs come together) took place last week on 5 July 2018 and in a shock turn around, the European Parliament rejectedthe current draft by a margin of 318-278. This means that Parliament’s position will now be up for debate, amendment and a further vote during the next plenary session in September 2018 (10th-13th), instead of progressing to the fast track trilogue negotiation process. Interestingly, Italian Wikipedia shut down in protest over the controversial proposals ahead of the plenary vote last week and English-language users of the site were faced with large banner adverts urging readers to contact their European representatives before the vote in protest against the proposals. This is in contrast to the music industry (IFPI - representatives of the recording industry) which released a letter from Sir Paul McCartney to MEPs urging them to support the proposals.
What is the new Copyright Directive for?
The draft directive aims to modernise copyright law to adapt to the fast-pace of the modern digital world. It is a much-needed update given the last copyright laws introduced to deal with the information society date back to 2001 and technology has advanced significantly since then. The current (now rejected) text, however, has led to some deeply opposing views between content owners on the one hand, and online platforms on the other, the latter being particularly concerned with Articles 11 (press publishers' right) and 13 (in relation to the "value gap" or "transfer of value").
What are the concerns?
Often referred to as the 'link tax' or 'Google tax', the draft Article 11 proposed a new press publishers' right which would effectively allow publishers to charge news aggregator business models, for example Google News, for hyperlinking to news articles. News articles are already protected by copyright if they satisfy the originality test i.e. original in the sense they are the author's own intellectual creation. Snippets from those articles, however, such as a headline or a sentence do not fulfil this originality requirement and are therefore not protected by copyright (although the Meltwater case did suggest that a headline could, in some cases, be protected). It is therefore possible to refer to an article entitled, for example, "Harry Kane delights English fans everywhere", by way of a hyperlink, without permission from the author or publisher. The proposed neighbouring press publishers' right does not require originality but requires an investment by the publisher. Therefore, if the Article 11 proposal was to be accepted, it would no longer be allowed to refer to a news article by its title or a snippet or sentence when linking to it, without paying a licence fee to the publisher. Those in favour of this neighbouring right have confirmed that its main purpose is to create a new exclusive right over small snippets that are not currently protected under copyright law. This has been criticised for being a significant barrier to freedom of information online.
In Germany, Spain and Belgium, a similar neighbouring right already exists but this new right has not been without its problems. In Spain, Google News shut down its Spanish operations rather than pay publishers to link to their content. The Spanish Ministry of Culture claimed at the time that it was not hindering freedom of information, but protecting the intellectual property rights of others. In Germany, though the measure was aimed at forcing Google News to pay German newspapers for links in its search results, many publishers opted out without taking a fee because it would have had a detrimental effect on the internet traffic being directed to their websites.
Content industries have been growing more and more concerned about the amount of unlicensed copyright content finding its way to platforms such as YouTube and other similar platforms. As a result, content creators, such as musicians and journalists, feel that there is not a fair distribution of revenues from the online use of copyright works that adequately benefits creators, publishers and platforms alike. This shortfall has become known as the "value gap". In an attempt to bridge this so-called "value gap", lobbyists (including high profile musicians like Paul McCartney and Annie Lennox) have pushed for new legislation under Article 13, which, controversially, puts pressure on content platforms to introduce automatic upload filters, which will block all videos, photos and texts that raise suspicion of copyright infringement before it has even been made available to the public.
On the opposing side, Article 13 has sparked some fierce opposition from legal scholars, digital activists, politicians (e.g. well-known Pirate Party MEP, Julia Reda) and more prominent figures such as, World Wide Web inventor, Sir Tim Berners-Lee, Internet pioneer Vint Cerf and co-founder of Wikipedia, Jimmy Wales. The latter lobbyists sent an open letter to the European Parliament in June this year expressing their grave concern that the draft proposal posed a huge imminent threat to the Internet. Whilst they, as content creators themselves, appreciated and accepted that there must be a fair distribution of revenues when it comes to the use of online copyright works, they are concerned that requiring Internet platforms to perform automatic filtering of all user-generated content would turn the Internet from an open platform for sharing and innovation, into a 'tool for the automated surveillance and control of its users'. Wikipedia relies on contributions from the public so both Articles 11 and 13 if they had gone through, could have had a huge impact on the website. The European Commission had tried to assuage Wikipedia in May this year by proposing a draft exemption for encyclopaedias acting in a 'non-commercial purpose capacity' but every file of Wikipedia is licensed for commercial use.
Some have gone so far as to say that Article 13 would kill the Internet as we know it. The letter goes on to make the point that the 'balanced liability model' established under the Ecommerce Directive has, so far, been working well – those who upload content to the Internet bear the initial responsibility for its legality, and platforms must assume that responsibility if and once they are notified of any illegality. By inverting this system and requiring platforms to filter content at the first instance could have a huge impact on businesses – "The damage that this may do to the free and open Internet as we know it is hard to predict, but in our opinions could be substantial". One of the great concerns about the draft proposal is the lack of clarity and consistency for the definition of which Internet platforms would be caught and which may be exempt. A worse case scenario could see some online platforms steering clear of Europe which would have a dire impact on European consumers.
Another issue is that automated upload filters are expensive so there has been a great deal of concern about this extra burden on many websites if the law was to go through. There is also concern that these systems would have a high error rate because some of the technologies have still not been developed to a point where their reliability can be guaranteed. Some critics have labelled the potential filter systems as "censorship machines" because there is a concern that popular memes, parodies, remixes and other small amounts of user-generated content would no longer be freely available on the Internet.
As well as the cost burden of automatic filtering technologies, critics say they could prevent European start-ups and SMEs from competing with large American Internet platforms.
We must not lose sight, however, of the reason for the EU proposal in the first place. The problem of online infringement is currently off the scale and shows no sign of abating unless something is done to prevent it. Press reports have indicated that Google alone receives three million take down requests everyday.
There have been mixed reactions following the rejection of the draft directive by the EU Parliament. We can only hope that the European Council and the European Parliament will be able to find a compromise that addresses and balances the competing interests of content owners, online platforms, news aggregators and Internet users generally, without restricting the proper functioning of the Internet and impeding creativity and innovation online. It remains to be seen whether some parts of Articles 11 and 13 will be preserved or whether they will go back to the drawing board (as some press reports have indicated) and draft new proposals from scratch. But one thing is for sure - the text will not pass in this version.
The situation is even more complicated by the fact that Brexit negotiations are ongoing (and MPs seem to be dropping like flies over the UK's Brexit strategy). The fact that EU Parliament has now rejected the draft is likely to lead to further delays, by which point the UK may have left the EU and the directive may never be implemented into the UK.
We will be sure to report back in September after the next plenary vote. In the meantime, watch this space for, no doubt, some further campaigning from both sides!
The Court of Justice of the European Union (CJEU) has dismissed Jägermeister's appeal against the EUIPO's decision that a filing date could not be attributed to its design applications.
Jägermeister had applied for two Community designs for "beakers". The designs they filed showed beakers and bottles. In the EUIPO examiner's view, the correct indication was "bottles", not "beakers" and he suggested Jägermeister remedy the defects in the application within a prescribed period. Jägermeister replied to confirm that it was not seeking protection for the bottles. The examiner responded to say that because of the presence of the bottles, the characteristics of the designs for which protection was sought was not clearly visible and he again suggested Jägermeister remedy the defects in their application.
Under the relevant European regulation (6/2002) it is a condition for the attribution of a filing date that the representation filed serves to identify the design for which the protection is sought. In the examiner's view it was not possible to determine from the representation of the two designs concerned whether protection was being sought for the beaker, for the bottle, or for a combination of the two. Until the defects were rectified therefore, the application would not be given a filing date.
A filing date for a design application is critical as it determines the start of the priority period within which an applicant has the possibility of filing abroad subsequent applications for his design and of claiming priority.
There was much back and forth but ultimately Jägermeister did not follow the examiner's suggestions and did not rectify the defects identified. Its application therefore was not given a filing date.
The CJEU dismissed Jägermeister's submission that the attribution of a date of filing depends only on an examination of the representation of the design from the perspective of whether it can be physically reproduced. The court analysed the wording of the applicable EU regulations and noted the aim of entering designs on a public register which is to make it accessible to the competent authorities and the public - particularly to economic operators. Both require clarity and precision in the representation filed - the former to conduct its examination properly and maintain the register and the latter to have legal certainty of third party rights.
In the CJEU's view, the fact that the date of filing enables a right of priority is itself justification for the requirement that the representation must not lack precision. An imprecise application for registration would give rise to the risk that a design in respect of which the matter to be protected is not clearly identified would obtain excessive protection under the right of priority.
The CJEU held that as Jägermeister's application contained deficiencies that were not remedied within the prescribed period, the application could not to be dealt with as one for a registered Community design and that, consequently, no date of filing would be attributed to it.
This judgment conveys a stark message to all potential design applicants as to the importance of filing a properly considered representation. If you are not claiming an element, either do not include it at all, or alternatively, if it provides critical context to your design then use drafting tools to make clear that it is not claimed. This decision may well be indicative of the court and indeed the EUIPO's intention to address the historical practice of filing almost any representation for design protection.
If you require advice as to the impact of this decision on your business activities, please contact a member of our Intellectual Property team.
Confidentiality clubs have become a standard feature of English patent and trade secret litigation. Now, the High Court has clarified that "external eyes only clubs" – which are particularly restrictive – will only be appropriate in exceptional circumstances (TQ Delta LLC v Zyxel Communications UK Ltd  EWHC 1515 (Ch)).
What are confidentiality clubs?
IP proceedings often revolve around valuable and commercially sensitive trade secrets. Confidentiality clubs enable a party who must disclose confidential information to the other side to limit disclosure of that information to a small number of individuals from the opposing party. The receiving party can then prepare its case without jeopardising the confidential nature of the information.
Often, the exact terms of confidentiality clubs are hotly debated between the parties. "External eyes only" confidentiality clubs ("EEO clubs") seek to restrict the ring of individuals with access to the information to the receiving party's external solicitors, counsel and independent experts, (excluding directors and employees of the party itself). The disclosing party may suggest an EEO Club because it has very real concerns that the receiving party might gain an unfair commercial advantage if it is told the confidential information in question. In certain cases, disclosure may even give rise to competition issues (e.g. disclosure of pricing information in a market where there are very few competitors). The receiving party may complain, nevertheless, that it needs its internal people to know the information so that they may have informed discussions with the party's lawyers, attend the full trial and understand all the reasons for any judgment.
The patents in suit were declared essential to the implementation of certain technology. TQ Delta was therefore required to license those rights to Zyxel. Zyxel sought disclosure of TQ Delta's licences with third parties in order to enable the court to determine what would constitute reasonable and non-discriminatory licence terms between the parties.
TQ Delta proposed an EEO Club restricting disclosure to Zyxel's external solicitors, counsel and independent experts. Zyxel objected to this arrangement claiming that two named individuals from its group should also have access to the patent licences to allow Zyxel to run its case properly.
6 points of guidance
UK court proceedings are conducted on the basis of the principle of "natural justice". This has a number of strands: A party has a right to know the case against it and evidence on which the case is based. A party is entitled to have the opportunity to respond to any such evidence and to any submissions made by the other side. The other side may not advance contentions or adduce evidence of which it is kept in ignorance. The UK courts are very reluctant to deviate from the principle of natural justice and will rarely hear IP matters in private ("in camera").
Against this backdrop, Carr J reviewed the recent authorities on EEO Clubs and distilled 6 points of guidance:
"parties may choose to agree an external eyes only tier, as in Unwired Planet  EWHC 3083 (Pat);
confidentiality club agreements are often essential in intellectual property cases, which cases require disclosure of confidential information. In such cases, a regime for disclosure which limits access to sensitive documents to specific individuals within one of the parties, in order to protect confidentiality, is now commonplace;
redactions to documents can be made to exclude material which is confidential and irrelevant to the dispute;
external eyes only access to individual documents of peripheral relevance, whose disclosure would be damaging, may be justified in specific cases; as in IPCom v HTC Europe  EWHC 52 (Pat);
in certain exceptional cases, external eyes only access to specific documents of greater relevance might be justified, at least at an interim stage;
however, in the absence of exceptional circumstances, each party must be able to see and discuss with its lawyers the relevant parts of the key documents in the case."
The judge went on to say that:
"the authorities…establish that it is exceptional to limit access to documents in the case to external eyes only, so that no representative from the party which is subject to the restriction can see and understand those documents. An external eyes tier does not require justification for the restriction by reference to individual documents. It enables one party to decide to exclude all representatives of the opposite party from access to any document that it chooses, and places the onus on the party seeking access to apply to court to obtain it. That approach, in my judgment, is wrong in principle." (emphasis added)
On this basis, the Judge ruled that EEO Clubs would usually be incompatible with the right to a fair hearing under Article 6 of European Convention on Human Rights, and also with the principles of natural justice and the obligations of lawyers to their clients.
Ultimately, Carr J ruled that TQ Delta's licences should be disclosed to certain Zyxel personnel as they were likely to be highly relevant to the questions in dispute and because otherwise:
"Zyxel would potentially be precluded from hearing and understanding the arguments and evidence on FRAND licence terms being advanced by TQ Delta.
The Zyxel lawyers would have to construct arguments and put together evidence without any input from their clients.
Zyxel would not be able to see, let alone approve, the arguments being advanced by their lawyers or the evidence being drafted by their experts.
The proceedings would be bedevilled on Zyxel's side by the constant need for their lawyers to monitor what Zyxel could be told about the case and which documents being prepared for the case they could be shown.
It would be impossible to take informed instructions as to whether to accept any Part 36 or other offers made by TQ Delta in the course of proceedings.
It would be practically impossible for Zyxel to have an informed discussion with their lawyers about the appropriate terms of any Part 36 offer to be made by them.
Zyxel would be substantially excluded from the trial, having to sit outside while the debate took place in the courtroom".
The disclosure order was effectively postponed for 14 days to allow the parties to apply to set aside or vary the decision. At the time of posting, we are not aware of any appeal against the decision by either party.
Receiving parties who are asked to agree to an EEO Club now have a helpful decision on which to rely when arguing for a standard confidentiality club to include members of their own internal team. The burden will be on the disclosing party to justify the need for more restrictive arrangements.
A disclosing party should aim to identify confidential documents as early as possible. Documents whose value and confidentiality can be preserved adequately by means of a standard confidentiality club agreement or by redaction, should be dealt with accordingly. In other cases, there may be an incentive for both parties to agree an EEO Club for certain classes of document (e.g. where there is a mutual interest in withholding certain terms of a FRAND licence).
For confidential documents which are highly commercially valuable or sensitive, the disclosing party must be ready to justify why it would be fair and proportionate to subject those documents to an EEO club and explain why the other side is unlikely to be prejudiced by such an arrangement when running its case. If the information can be protected by another less restrictive method, such as redaction, the court is very unlikely to permit an EEO Club.
Due to be implemented in the UK by 14 January 2019, EU Trade Mark Directive 2015/2436 aims to further harmonise the national trade mark laws of EU member states (see our earlier article here on the Directive). To help prepare for the changes, earlier this year, the UK government published a consultation paper on how to approach the Directive and its impact on existing legislation. The government has considered the responses to the consultation and has just published its own response. The key aspects are summarised below:
Removal of requirement for "graphical representation" of trade marks: The government confirmed that the ultimate intention is to allow trade marks to be represented in the widest range of digital file formats permitted by its current system. However, trade marks must still be clearly and precisely defined regardless of whether they are represented graphically. Further guidance on new filing requirements and acceptable file formats will follow.
Distinctive character acquired after application date but before registration (optional): This optional provision permits use of a trade mark between the filing and registration dates to be taken into account when deciding whether it has acquired distinctive character. The government's view is that this would create unnecessary uncertainty. Respondents to the consultation agreed and added that it could increase complexity and lead to applicants prolonging the registration process. This optional provision will not be implemented.
Definition of "earlier trade marks": The Directive contains an exhaustive list of "earlier trade marks" which may be considered for the purposes of relative grounds for refusal. However it does not list expired marks. This is at odds with section 6(3) of the Trade Marks Act 1994 ("the Act") which requires expired marks to be taken into account one year after expiry, provided that mark has been used during the two year period immediately preceding expiry. The two year use proviso is also incompatible with the five year proof of use period referred to in the Directive. The government added that if expired marks do not fall within the definition of "earlier trade marks", they would no longer be notified to applicants as potentially conflicting rights. This could lead to applicants facing unexpected opposition by the owners of expired, but later restored, marks. To implement the Directive, the government will repeal section 6(3) and amend rule 37(1) of the Trade Mark Rules 1994 ("the Rules") by allowing restoration of expired marks only if the failure to renew was unintentional. It will also add rule 37(1A) which will protect the legitimate interests of third parties who, in good faith, adopt a sign that is identical or similar to an expired, but later restored, trade mark.
Earlier rights being "industrial property" (optional): Under section 5(4)(b) of the Act, earlier rights "in particular by virtue of copyright, design right or registered designs" may prevent registration of a later filed trade mark. Although optional, the Directive allows for the definition of earlier rights to make reference to the broad term "industrial property rights". The government will implement this optional provision and ensure that section 5(4)(b) refers to "industrial property rights", thus eliminating the risk of excluding a type of earlier right that was intended to be covered by legislation.
Earlier marks protected abroad (optional): The Directive provides that a trade mark may not be registered if it is liable to be confused with an earlier mark protected overseas, provided that the applicant has acted in bad faith. The government will not implement this optional provision. Adequate protection is already contained in section 3(6) of the Act relating to bad faith filings.
Comparative advertising: The Directive prohibits use of a sign in comparative advertising if it is contrary to the Misleading and Comparative Advertising Directive 2006/114/EC. To implement this, the government will add the relevant wording of the Directive as new section 10(4)(e) of the Act and will also repeal section 10(6) as it will become redundant.
Goods in transit: The government will introduce section 10A to the Act allowing for potentially counterfeit goods originating from outside the EU to be detained in the UK without being released for free circulation.
Right to prohibit preparatory acts in relation to the use of packaging or other means: The Directive enables trade mark owners to prohibit preparatory acts such as applying an infringing sign to packaging, labels or tags. This is, to some extent, dealt with in section 10(5) of the Act. However, there are differences. For example, an infringement under section 10(5) requires knowledge that the offending sign is being applied to packaging without the consent of the trade mark owner. There is no such requirement under the Directive. The government will implement this part of the Directive by repealing section 10(5) and adding new provisions to the Act.
Reproduction of trade marks in dictionaries: The government will introduce section 99A to the Act allowing trade mark owners to request publishers to correct dictionaries (and other reference works) which wrongly identify a trade mark as a generic term. To ensure this can be enforced, certain remedies will be available to trade mark owners including the granting of a court order for amendment of the relevant publication.
Prohibition of the use of a trade mark registered in the name of an agent or representative: The Directive contains a prohibition on the use of a trade mark registered by an agent or representative without the owner's consent. To implement this, new section 10B will be introduced to the Act. It will allow for the trade mark register to be rectified by substituting the name of the offending agent or representative with the name of the relevant owner.
Non-use as defence in infringement proceedings: Under the Directive, trade mark owners cannot seek to prevent use of a sign if their earlier mark is liable to be revoked for non-use. As such, defendants may ask trade mark owners to prove that an earlier mark has been used during the five year period preceding the date an infringement action is brought. If they cannot, the action will fail. Section 11A will be inserted into the Act to implement this part of the Directive.
Licensing: The Directive sets out conditions that apply to exclusive and non-exclusive trade mark licenses. However, it remains silent on whether trade mark owners should be joined as parties to infringement proceedings brought by licensees. Sections 30(4) and 30(5) of the Act allow for this and so, to bring the Act into line with the Directive, the government initially suggested that those sections be repealed. Respondents to the consultation raised a number of concerns about this, including that trade mark owners should not be able to shield themselves from proceedings and should be joined for cost implications so that they can be bound by arguments in proceedings and decisions issued. The government will therefore not repeal sections 30(4) and 30(5). Instead, the wording of section 30(4) will be amended to reflect the different circumstance under which infringement proceedings may be taken by authorised users.
Division of trade mark registrations: The government will amend section 41(1) of the Act by providing for the division of trade mark registrations. Only trade mark applications may be divided under the current regime. This will be supplemented by new rule 26A of the Rules which will specify that licences, security interests and disclaimers recorded against an existing registration will apply to each subsequent divisional. Rule 26A will also stipulate that registrations may not be divided if they are subject to an existing dispute.
Disclaimers and limitations: Although this issue does not arise from the Directive, the government considered whether disclaimers and limitations should be repealed. Its view is that the ability to disclaim or limit certain elements of a trade mark right serves a useful business function and should therefore be retained under section 13 of the Act. Respondents to the consultation paper agreed and argued that the removal of disclaimers and limitations would reduce opportunities to settle disputes, make it more difficult to deal with objections raised during examination and could lead to an increase in the number of registry proceedings. Section 13 of the Act will therefore be retained.
The government will now finalise the draft Statutory Instrument so the Directive can be implemented into UK law. With the 14 January 2019 implementation date just six months away, it should not be a long wait.