We recently reported on the introduction in Greece of mandatory mediation in trademark infringement disputes in this blog here. The respective legal provisions of law 4512/2018 shall start to apply as of 17 October 2018. On 28.6.2018, the Greek Supreme Court’s administrative plenary panel issued an opinion holding that the mandatory mediation introduced by this law is contrary to the Greek Constitution and the European Convention on Human Rights. It opined that these provisions result in an obstruction of access to justice. The opinion was issued with a marginal majority of 21-18.
The opinion has not been published, information is derived solely from press coverage. According to that, the costs for the mandatory mediation were considered by the administrative plenary to be too high and in this way citizens’ access to justice obstructed. It is noted that these costs were set at 170 euros, minimum, covering 2 hours of mediation, in case there is no other fee arrangement. No maximum was set.
Furthermore, the administrative plenary found that the mandatory presence of a lawyer at a mediation also increases the costs and obstructs access to justice. The law provides for mandatory participation of lawyers at a mediation (which is not common in other countries) in an attempt to involve them more actively and reconcile lawyers with the institution of mediation so that they do not see it as a threat to their business.
The plenary opinion does not bind the courts or the State and the law is not annulled. The only way to “annul” a legal provision (in the sense of finding it contrary to constitution and refraining from applying it) is through a court decision. This was not the case here. The opinion was issued in the context of an administrative procedure where the plenary opines on issues of general interest to lawyers if a bar association so requests. In this case, the Athens Bar Association with the collaboration of all bar associations in Greece filed a question to the plenary, stating that in its opinion the provisions are contrary to the constitution.
It is noted that the Athens Bar Association operates a mediators’ school which has trained along with other bar associations thousands of mediators. The law provides that mediation training is made exclusively by bar associations in cooperation with chambers of commerce.
That said, the administrative plenary opinion may well set the pace for the future. It is likely to have an impact if the mandatory mediation is put at stake in a judicial proceeding. The way the system works in Greece allows any court of any instance to find a provision as contrary to constitution and refrain from applying it. A first instance court might rule in one way and a second instance court in another. Until the matter is resolved by the Special Supreme Court, competent in case of contradictory findings of the Supreme Court, the issue will be in a limbo. However, due to the infamous back lock of Greek courts (that lead to the initiative of the legislator to introduce mandatory mediation), before any case makes it to the final instance before the Supreme Court, many years will pass.
On the side – the Greek law 4512/2008 also provides for non-mandatory mediation. This was not subject to the plenary opinion and has, as such, not been queried.
Spain is obtaining the questionable reputation for protecting terms that are completely descriptive in other major languages as trademarks. MATRATZEN is one (in)famous example, DONUT is another. However, the term AFTERSUN, commonly applied to skin care to be used after sun bathing, has now been rescued from the trademark monopoly.
Laboratorios Genesse (now: AC Marca Personal Care, S.L.), had tried to prevent everyone else in the skincare business from using or registering AFTERSUN (or variants thereof like after sun or after-sun) on aftersun lotions in Spain or on EU level, based on their 1961 Spanish trademark registration no. 390096. However, this attempt has now finally failed: L’Oréal S.A., assisted by Salvador Ferrandis, obtained an appeal judgment (on 6 June 2018 – Audiencia Provincial de Barcelona, Appeal no. 948/2017 -1) confirming the first instance finding that this Spanish trademark has become generic.
L’Oréal, who was not the only cosmetics producer whose use and registration of AFTER SUN found itself under attack from Laboratorios Genesse, decided to take the matter to court – to this date the only way to cancel a Spanish national trademark. L’Oréal proved that AFTERSUN (or variants) had been in use in Spain by other producers of after sun care for at least 20 years, and that Laboratorios Genesse had remained inactive all that time (up until its 2016 cease and desist letter to L’Oréal). What is more, it had used ‘AFTERSUN’ descriptively, while distinguishing its own product, shown in the image, by the trademark ECRAN.
Genericide of a trademark under trademark law in the EU (which is a harmonized concept based on the EU Trademark Directive) involves that the trademark at issue has become ‘the common name’ of the product (which means something else than just having lost distinctiveness), and that this is due to the activity or the inactivity of the trademark owner. These requirements are frequently referred to as an ‘objective’ and a ‘subjective’ one, whereby ‘subjective’ here does not mean ‘subject to assessment’ but ‘subject to the individual of the trademark owner’.
It is not easy to show that these requirements are fulfilled. As regards the mark becoming the common name, certainly isolated instances of generic use by consumers or competitors are not enough and use by counterfeiters is more likely to prove trademark character than the opposite. The understanding of the term as generic or ‘common’ must be more or less generalized, at least among one relevant part of the public (see CJEU C-409/12, Backaldrin Österreich The Kornspitz Company). In the ‘AFTERSUN’ case, the Court was satisfied that the evidence showed generic character, relying, inter alia, on a detective’s report who had asked for “after sun” products in numerous drug stores and was regularly offered a variety of soothing skin care products from different brands.
As regards the activity or inactivity of the trademark owner, while some feeble attempts to object to generic use may not be sufficient, a trademark owner cannot be expected to pursue each and every such use by third parties, and less in times of the internet. That being said, using the mark in a seemingly descriptive manner can certainly be held against the owner, and tolerating wide-spread use by multiple competitors over an extended period of time would account for ‘inactivity’. Both was held to be present in the AFTERSUN case. As a result, companies in the skin care sector are free to use and register marks with AFTERSUN and variants thereof, also in Spain!
This closes the loop leading back to DONUT, also a trademark in Spain dating back to the early ‘60s: there are few companies as active in the protection of their trademarks as Panrico (bought by Grupo Bimbo in 2016 and renamed Bakery Donuts Iberia) is defending its rights to DONUT against anybody’s attempts to secure trademark rights to DONUT or variants (including Doughnut!) in Spain or on EU level – although not always successfully: in March 2017, the CJEU (C‑655/15 P) ultimately confirmed the rejection of the attempt to invalidate the following figurative EU mark based on DONUT:
By judgment of 28 June 2018 (C‑564/16 P), the CJEU rejected an appeal filed by the EUIPO. The case was, in essence, about whether and to which extent the EUIPO could or even had to take into account its own previous decision practice, including findings of fact (namely, that the trademark relied upon has a reputation) from previous cases. The General Court had gone quite far in imposing on the Office that it take such findings into account and potentially even request evidence from the opponent. The appeal of the Office was unsuccessful.
Background: In 2013, PUMA SE opposed GEMMA GROUP S.r.l.’s EUTM application for the mark shown above on the right relying on its trademark rights for the leaping cat. Puma relied on Art. 8(5) EUTMR, which provides protection against misappropriation and dilution for reputed marks. To prove its earlier marks’ reputation, Puma provided, inter alia, references to previous EUIPO decisions recognizing this reputation. The Fifth Board of Appeal dismissed the appeal, holding that Puma had not provided sufficient evidence of reputation. It refused to take into account the EUIPO decisions referred to because Puma’s references to these were vague and Puma had not indicated the precise submissions in the earlier cases that it intended to rely upon.
Puma went to the GC where it prevailed (9 September 2016, T-159/15). The GC held that the Office had to either provide reasons for deviating from its earlier decisions or ask the opponent for further evidence. The CJEU dismissed the appeal by the Office, stating that there was no specific formalism to be followed when submitting evidence for reputation so that any reference to earlier decisions was acceptable. It further interpreted the GC as having held that such a reference does not constitute a valid reference to the entirety of the evidence submitted in the earlier cases. It concluded that where the EUIPO decides to deviate from its previous findings related to the reputation of the same earlier mark(s), it should provide reasons for that.
Comment: The judgment is surprising. It appears to contradict constant case law of the EUIPO confirmed on multiple occasions by the GC and CJEU, whereby previous decisions do not have a binding effect (for instance, CJEU 16/06/2015, C-400/14P, Basic / BASIC, § 52 and the case-law cited therein). What is more, in recent decisions (e.g. GC 01/06/2018, T‑900/16, DAYADAY– discussed also here), the GC scolded the EUIPO for “assuming” that an earlier mark had a reputation (to then reject oppositions based on other reasons, such as lack of similarity of marks or absence of unfair advantage). Rather, the EUIPO has been obliged to assess the precise level of reputation of an earlier mark in each individual case. That does not fit in with the Court’s finding that the EUIPO should rely on a finding of fact from an earlier case without the corresponding evidence having been fully introduced in the proceedings. Finally, the procedural rules in the EUTMR and in the Delegated Regulation leave little room for the Office requesting evidence from an opponent.
Reputation is a finding of fact made in a specific case based on specific evidence on which the other party has been allowed to comment. EUIPO has a duty of neutrality in inter partes proceedings and can only rule on the evidence introduced in a particular case. It is not for EUIPO to make the case for the parties or ask for evidence. Therefore, in the absence of a specific and precise identification by the opponent of the evidence on which it intends to rely, the Office should disregard evidence which the applicant did not have and on which it could not comment.
Even though the judgment of the CJEU might at first sight make life easier for owners of marks with a reputation, it opens a can of worms for inter partes proceedings before the EUIPO: it tacitly introduces a quasi-binding character of previous findings of facts, contrary to consistent case law and creates legal uncertainty regarding the reference to earlier EUIPO’s decisions as a means of evidence for proving reputation of a mark. Applicants must be on their toes and are best advised to take such references by opponents seriously and, if need be, request the specific evidence to be relied upon from the opponent.
If the Court had (finally) introduced a rule whereby truly well-known marks can be assumed to have a reputation without massive evidence being filed every time, that would be fabulous and a clear rule. As things stand, however, the judgment does not contribute to clarity, or to procedural economy.
In a recent Notice to Stakeholders, the European Commission has highlighted a possible outcome for customs and enforcement, following the British exit from the EU. Whilst this is subject to transitional provisions and the withdrawal agreement at large, it serves to reiterate the cliff edge which may conceivably be presented to UK based brand owners in the wake of Brexit.
At present, a third party may request that the customs authorities of a single or multiple member state take action against activity which may infringe that third party’s IP. If this request is accepted by the customs authority of the relevant member state, this decision to enforce the request will also be accepted in the other member states, as dictated by the request.
In the event that the UK leaves the EU without a provision to the contrary, the UK will no longer stand as a jurisdiction wherein such a request may be filed and then actioned in the remaining member states of the EU. In addition, decisions taken in the UK to enforce certain IP rights at customs will no longer bind the remaining EU27.
As such, the recommendation for the brand owner would appear to be that of pre-emptive action. If a UK based decision on a Union application has allowed certain IP rights to be enforced by EU based customs, the brand owner ought not assume that this protection will persist. Instead, a further application will need to be filed in one of the EU27.
Whilst this communication does not necessarily raise any new concerns, it certainly serves to highlight an additional area wherein the brand owner ought to be vigilant in light of Brexit. Whilst the UK’s withdrawal agreement and transitional provisions will hopefully address many of these legal pitfalls, a clear stop gap in protection remains a possibility.
A federal district court’s award of attorney fees under the Lanham Act and Utah’s Truth in Advertising Act (UTIAA) to a defendant following the parties’ stipulation of dismissal has been vacated and the case remanded by the U.S. Court of Appeals in Denver. The defendant was not a prevailing party entitled to attorney fees under the Lanham Act because there was no court action that materially altered the legal relationship between the parties. While it was possible that the defendant could be considered a prevailing party for purposed of the UTIAA, the case was remand for analysis of the factors governing prevailing party status under Utah law in the first instance and for determination, if appropriate, of the portion of fees incurred in defense of the UTIAA claim and the reasonableness of the requested fees (Xlear, Inc. v. Focus Nutrition, LLC, June 26, 2018, McHugh, C.).
Already in 2009, the Austrian Supreme Court granted an injunction against a pumpkin seed farmer from the Austrian province of Styria, who had had the ingenuous idea to “parody” Pfizer’s famous VIAGRA brand by selling pumpkin seeds in a blue sugar coating under the name “STYRIAGRA”, and registering that name as trademark. Unsurprisingly, Pfizer didn’t like the “parody” so much and successfully sued the farmer. The Austrian Supreme Court (“OGH”) considered Pfizer’s mark to have a substantial reputation in Austria. It found that use of STYRIAGRA was a parody and thus ruled out fair use, holding that it was primarily an exploitation of the reputation of the earlier mark (decision of 22.09.2009, case 17 Ob 15/09v).
Even though the case has generated quite some media echo, years later, in September 2013, the Austrian company Gall Pharma GmbH applied for a CTM (now EUTM) for the word mark “STYRIAGRA” in class 29, for the goods ‘preserved, frozen, dried fruits and vegetables, in particular pumpkin seeds’.
Claimant’s / Opponent’s trademark:
Defendant’s trademark and use in Austrian case
EUTM appl. no. 12161469
of Gall Pharma GmbH
(depiction: 3D mark
EUTM 000848812Pfizer VGR 50)
The EUIPO Opposition Division rejected the opposition filed by Pfizer, but the EUIPO Board of Appeal (“BoA”) upheld Pfizer’s appeal, and the General Court (short “GC”), in its decision of 3 May 2018, case T-662/16, dismissed the applicant’s appeal, agreeing in full with the BoA’s reasoning.
The GC discarded the applicant’s argument that the marks at issue STYRIAGRA and Viagra are dissimilar and confirmed the BoA’s finding that there is a low degree of similarity between the marks, but sufficient for the relevant public to establish a link between the marks, considering the significantreputation of VIAGRA for the treatment of erectile dysfunction. This reputation was found to extend not only to the consumers of drugs for erectile dysfunction, but also to the entire population of the European Union. Evidence of reputation included sales figures for most of the countries of the European Union for the period 2001-2013, evidence of advertising campaigns and wide press coverage, and, specifically in Austria, a survey from 2008 showing a public awareness of VIAGRA of 90% amongst a sample population of men and women above the age of 18.
The relevant public for establishing detriment to reputation and distinctiveness, though, was found to be the general public in the EU, which is addressed by the mark applied for (and not the relevant public addressed by the earlier mark). With reference to the Austrian judgment, the BoA had found that in particular Austrian consumers would associate the marks, as they would single out the name of the region of Styria and would perceive the mark applied for as a combination of ‘Styria’ and ‘agra’ or even as a play on words between ‘Styria’ and ‘Viagra’.
The undersigned (and born Styrian) can only confirm this finding. Notably, the black-green Styrian pumpkin oil made from pumpkins seeds is not only a very popular seasoning for salads and flavoring for different dishes in Austria, protected by a geographical indication, but is also said to be healthy, and – rather ironically – also to have aphrodisicac effects. Whether this fame is true or not did not matter for the GC: it found that the general public with an average degree of attention would be inclined to purchase the goods at issue, thinking that it will find similar qualities, such as an image of improving sex life, owing to the transfer of positive associations projected by the image of the earlier mark. Consequently, by using the mark STYRIAGRA, the applicant would take unfair advantage of the reputation of the earlier mark VIAGRA.
The appeal deadline is still open as at the time of posting this blog, but it would be surprising if the CJEU came to a different conclusion, in case an appeal were brought at all.
The General Court (in Case T-1/17) was, as it found the sign (IR 5510921)
(hereafter LA MAFIA SE SIENTA A LA MESA) (in English: ‘The mafia is seated at the table’) contrary to public policy within the meaning of Article 7(1)(f) EUTMR.
The sign was applied for and registered for goods/services in Classes 25, 35, 43 in 2006.
The test of Article 7(1)(f) EUTMR stands out from most of the other rejection grounds in Article 7 EUTMR, as the relevant public cannot be limited to the public to which the goods and services in respect of which registration is sought is directly addressed. Consideration must be given to the fact that the signs caught by that ground for rejection will shock not only the public to which the goods and services designated by the sign is addressed, but also other persons who, without being concerned by those goods and services, will encounter that sign incidentally in their everyday lives.
Later on in 2006, the Italian Republic requested that the registration LA MAFIA SE SIENTA A LA MESA be cancelled, arguing that the sign was contrary to public policy and to accepted principles of morality since the word element ‘Mafia’ referred to a criminal organization, and that its use in the contested mark designating the applicant’s restaurant chain had, in addition to arousing deeply negative emotions, the effect of ‘manipulating’ the positive image of Italian cuisine and trivialising the negative meaning of that element. Next, the Italian Republic stated that the word element ‘la Mafia’ is understood world-wide as referring to a criminal organization originating in Italy, whose activities extend to States other than the Italian Republic, ia within the European Union.
Both the Cancellation Division and the First Board of Appeal (BoA) found that the contested mark was contrary to public policy and cancelled the registration.
The applicant appeals the BoA-decision to the General Court (GC). The GC starts by agreeing with the BoA that the most dominating element in the contested mark is LA MAFIA, and the Mafia is a criminal
organization that resorts to intimidation, physical violence and murder when carrying out its activities, which include, ia, drug trafficking, arms trafficking, money laundering and corruption.
Then the GC takes the argumentation a notch up by stating that the criminal activities of the Mafia ‘breach the very values on which the European Union is founded, in particular the values of respect for human dignity and freedom as laid down in Article 2 of the Treaty of the European union and Articles 2, 3 and 6 of the Charter of Fundamental Rights of the European Union. Those values are indivisible and make up the spiritual and moral heritage of the European Union. Moreover, organised crime and the activities (drug trafficking, arms trafficking, money laundering and corruption (added by the author)) are some of the areas of particularly serious crime with a cross-border dimension that the EU legislature may intervene into, as provided for in Article 83 Treaty on the Functioning of the European Union.’
It is food for thought (and impressive) that the GC reads fundamental human rights and values of the EU into ‘contrary to public policy’ in Article 7(1)(f) EUTMR.
That neither the organization known as the Mafia nor its members are included in the list of terrorist persons and groups in the Annex to Council Common Position 2001/931/CFSP of 27 December 2001 on the application of specific measures to combat terrorism does not alter the fact that the Mafia is a criminal organization. Nor does the reputation of ia the Godfather films change the association of the contested mark. Thus, the GC rejects the main arguments put forward by the applicant.
Substantial evidence supported the Trademark Trial and Appeal Board’s finding that the mark “AQUAPEL” and design for leather and imitation leather hides, furniture covers, and various home goods was confusingly similar to the mark “AQUAPEL,” registered in standard characters, for different types of home goods, the U.S. Court of Appeals for the Federal Circuit has held. The marks were confusingly similar and the goods were so highly related as to be expected to emanate from a single source (In Re: Halo Leather Ltd., June 13, 2018, per curiam).
Throughout its lifespan, Cartier has been a test case. The courts have been called on to decide whether website blocking injunctions should be available at all in cases of trade mark infringement, and then to work out the practicalities of how such an order should be obtained and implemented. UK law provides specifically that these injunctions should be available where a website is infringing copyright, but has no equivalent for trade marks. Therefore, when Cartier first came to trial at the High Court, Arnold J was required to refer to the EU Directives to reach the conclusion that the same sort of injunction should be available to prevent access to a website selling counterfeit goods which infringe a trade mark right.
Readers may be wondering why the UK Supreme Court, and not the Court of Justice of the European Union, was called on to determine a point in a case largely governed by EU law. The Supreme Court’s decision deals with this point at some length. Whilst the EU legislation states that something like these website blocking injunctions must be available to rights owners, it provides very little guidance on precisely what these should look like, how courts should deal with applications, and, particularly, how costs should be determined. These are all matters for member states’ national laws.
There is a well-established body of case law in the UK determining when and how a third party can be compelled to assist a claimant whose rights are infringed. These cases deal with the role of an innocent intermediary who has no active involvement in the infringement. That line of case law states that the claimant should bear the costs of implementing these orders (e.g. for impounding goods at a port, or providing information about an infringer), given it is the claimant who benefits from them.
The Court of Appeal had ruled that, as the ISPs gain commercially from providing access to infringing websites (via subscription fees from their customers, who may well use their internet connection to access infringing websites), and benefit from the safe harbour provisions of the EU directives, the quid pro quo is that they should pay the costs of implementing blocking orders. The Supreme Court disagreed with this reasoning and found that it was not supported by the existing case law. Accordingly, the brand owners in this case have been ordered to pay the ISPs’ costs for implementing the block.
The big question for brand owners is how much the ISPs will ask them to pay to implement one of these orders. The ISPs have agreed that the cost of setting up, maintaining and managing the systems required to block these websites should be excluded from any such calculation. ISPs use these systems anyway, in order to block access to child abuse images and provide parental controls. However, the ISPs argue that rights holders should bear the costs of:
a) processing the application and configuring their system to block a specific website,
b) updating the block over the lifetime of the order as an infringing website moves to different Internet locations, and
c) any liabilities that may be incurred if the blocking malfunctions through no fault of the ISP.
Evidence given at earlier stages in the proceedings suggests that these costs could range from £500 – £5,000 per ISP. Five major ISPs serve more than 90% of the UK market, so in order for a block to be broadly effective, the claimant would need to pay these costs to all five major ISPs. Whilst most brand owners with the resources available to obtain an injunction from the courts could probably cover a further £2,500, if the overall cost of implementing a blocking order comes closer to £25,000, it risks putting these injunctions out of the financial reach of many brand owners.
These blocking orders remain a useful tool in a brand owner’s arsenal. Most orders are not defended by the ISPs, so they are relatively easy to obtain. Unlike other mechanisms, such as take-down notifications or domain name complaints, where infringing content can often be quickly reposted or moved to another domain, these blocks can track the infringing website to a number of different Internet locations. However, in practical terms, we must wait and see how much the ISPs ask brand owners to pay to implement one of these blocking injunctions before we can know for sure whether they will remain within the reach of less wealthy brand owners.
The wordings of Article 7(1)(f) EUTMR (for ease of reference: ‘trade marks which is contry to public policy or to accepted principles of moral’) and the Danish equivalent – Section 14(1)(1) of the Danish Consolidate Trade Marks Act – are very broad and allow much room for interpretation. A judicious application of this provision necessarily entails balancing the right of traders to freely employ words and images in the signs they wish to register as trademarks against the right of the public not to be confronted with disturbing, abusive, insulting and even threatening trademarks.
The balancing act should preferably result in trademark offices not refusing to register a trademark which is only likely to offend a small minority of exceptionally puritanical citizens. Similarly, a trademark should not be granted protection simply because it would not offend the equally small minority at the other end of the spectrum who find even gross obscenity acceptable. Some people are easily offended; others are totally unshockable; and many Scandinavians fall into the latter category. The trademark offices must assess the mark by reference to the standards and values of ordinary citizens who fall between those two extremes.
The Danish Patent and Trademark Office (DKPTO) takes the approach that it has not been established to be the defender of a strict moral. Thus, very few applications are rejected under the Danish equivalent of Article 7(1)(f) EUTMR. The best way to become acquainted with the Danish standard of morality is to have a closer look at the marks that have been refused and the marks that have been accepted.
The following few marks are examples of ‘recent’ decisions from DKPTO.
VA 2014 00460
Classes 21 and 34.
DKPTO did not find the sign applied for – Bongland.dk – morally offensive or contrary to law (‘bong’ means ‘a water pipe for smoking marijuana or other drugs’) , especially as the sign is applied for goods in Classes 21 and 34.
VA 2010 00387
CUMMING IS FOR PUSSIES
Classes 25, 35, 41.
DKPTO gave the following explanation for rejecting the mark: CUMMING IS FOR PUSSIES is a vulgar English slang expression. CUMMING is slang for ’coming’ in the meaning of ’ejaculation’ or ’orgasm’. ’Pussy’ is inter alia slang for ’sissy’ and overall the sign can give the meaning that ejaculation is for sissies. The explicit sexual meaning of the sign, especially the use of the expression ‘cumming’ in relation to everyday goods and services can be perceived as morally offensive.
VA 1999 00834
25 and 42.
DKPTO rejected the sign as it shows frivolous activity.
It is necessary to consider the context in which the mark is likely to be encountered, assuming normal use of the mark in connection with the goods and services covered by the application. If the goods are of a type that is sold only in sex shops, a more relaxed attitude can be expected. If the goods are likely to be advertised on prime-time television or worn in the street with the trademark prominently displayed, a stricter approach may be justified.
In deciding whether a trademark should be barred from registration on the grounds of public policy or morality DKPTO applies the standards of a reasonable person with normal levels of sensitivity and tolerance. It can be extremely difficult to ascertain when a sign crosses the boundary from being merely irreverent or distasteful to being seriously abusive and likely to cause offence. Signs which contain slightly rude words or mild sexual insinuations might not be refused, but signs which contain manifestly offensive language or depict gross obscenity have no place on the register.
Article 7(1)(f) EUTMR is an European provision and has to be interpreted on the basis of a common European standard. In this connection, it is important for Scandinavians to note that public morality is less strict in Scandinavia than in more religious Member States. In general, Scandinavians have a more rough sense of humour and are less likely to be offended by trademarks which are perceived as offensive by people of other nationalities. It is advisable to tread carefully since it is difficult to know what will offend people of other nationalities.