The UPCA Opt-in/Pin-out scenario

The Unified Patent court agreement (UPCA) has been ratified in 2014 by both Denmark and Sweden, so even if the actual advent of the unitary patent and UPC is still some way off, potential patent rights holders in the two countries should already now prepare for the new regime.

The coming into force of the UPCA – presumably in early 2016 – will bring about many changes to the patent system in Europe. Most importantly, the unitary patent will provide enforceable protection of IP rights in all the participating EU member states based on a single EP application without the costly and cumbersome validation and translation requirements associated with the present, nationally enforced “bundle patents”.

Enforcement of patent rights based on the unitary patent will take place via the UPC, which will have exclusive, centralized jurisdiction not only over unitary patents, but also over “regular” European patents (EPs) and supplementary protection certificates (SPCs) in those EU countries which have ratified the UPCA (Art. 3 UPCA).

The UPCA allows for a transitional period of at least seven years (Art. 83 UPCA). During this time, rights holders can choose to “opt out” of the exclusive competence of the UPC and stay with the “bundle patents” solution, provided that no action has already been brought before the UPC. This potential problem can even be prevented by opting out of the still pending EP application, so that the ensuing patent is automatically “opted out” from the unitary system at grant.

The opt-out will remain in effect until the patent expires unless the rights holder decides to “opt back in” again, i.e. to withdraw his “opt-out” application and accept the unitary patent solution. This choice should be made carefully, however, as there is no possibility of opting out of a Unitary Patent and reverting to the “bundle patent” situation (Rule 5.11 of the Rules of Procedure of the UPC (RoP), currently available in draft number 16).

It is foreseen that many cautious rights holders will choose to opt out since it can be seen as a “free ride” (apart from a fee), since Art. 83(4) UPCA allows European patentees, applicants or holders of SPCs who make use of the opt-out to change their minds under certain circumstances. They are thus “entitled to withdraw their opt-out at any moment”, but only if no action has already been brought before a national court.

The rights holder’s strategic decision to opt back in again once a central attack on a presumed infringer is desired can thus be blocked if just one of the bundle patents resulting from the opt-out has been “pinned out” by an action brought before a national court. At the present time the legal provisions for the UPCA transition period are far from clarified, and thus how much or how little will constitute “an action” is not certain. It is also not known what the effect will be if said action is completely overcome by the rights holder – will he/she then be allowed to opt back in?

In conclusion, present and future rights holders in Europe should be very careful when choosing to strategically opt out of the UPCA, as they can be outsmarted and prevented from opting back in again by a just as strategic pin-out by a competitor.

Michael Bech Sommer, European Patent Attorney

Winning and losing – The battle of the Jensens

A decision from the Danish Supreme Court arose the public’s anger in September 2014 even though the decision – in my opinion – is correct.

The Danish restaurant chain Jensen’s Bøfhus claimed that Sæby Fiskehal ApS’ restaurant by the name “Jensens Fiskerestaurant” was infringing Jensen’s Bøfhus’ trademark rights. The Maritime and Commercial Court found that Sæby Fiskehal ApS owned by Jacob Jensen was entitled to use the name “Jensens Fiskerestaurant” since “Jensen” is a common Danish surname and therefore was devoid of distinctiveness.

A united Supreme Court overruled the Maritime and Commercial Court and found that although “Jensen” is a common Danish surname it has the acquired distinctiveness through Jensen’s Bøfhus’ use since 1990 where the first restaurant was marketed. Furthermore, as Sæby Fiskehal ApS is a limited liability company and Jacob Jensen therefore was not personally liable for the company, the exception that one can use his own name when acting accordingly to fair trading practices did not apply. Exceptions to trademark rights should be interpreted restrictively and therefore the exception could not be extended to the owner of the limited liability company.

As a result Sæby Fiskehal ApS was not entitled to use the name “Jensens Fiskerestaurant” for catering trade.

Jensen’s Bøfhus is a very well-known brand for restaurants and has been for more than 20 years. Of course it should be possible to market your own restaurant under your own name according to fair trading practices. But in this case, Jacob Jensen was not hindered in having a restaurant his own name, but Sæby Fiskehal ApS was hindered to use Jensens. Further to this, Sæby Fiskehal ApS recently made a logo which consisted of similar shapes and colours as Jensen’s Bøfhus’s logo and therefore did not use the name Jensens according to fair trading practices. Thus I believe that the Supreme Court made the correct decision.

The decision caused an intensive media debate and in only a few days, more than 100.000 people united to boycott Jensen’s Bøfhus. Those who boycotted Jensen’s Bøfhus were angry that an ordinary man was prevented from using his own name – a name that more than 250.000 people in Denmark are carrying.  Jensen’s Bøfhus had simply gone too far in enforcing their rights. The fact that the decision was correct drowned in the storm.

The bad publicity which arose from the decision was difficult to foresee. In the times of social media it is important for companies to be aware of the fact that news travels fast. Retrospectively the storm faded out fast as well, but that does not change the importance of having a strategy on how to enforce your rights. Because even though you win in court, you might lose in public.

However, it is very important for the companies to react on infringements as otherwise the risk of becoming passive is present and as a consequence the rights will be limited.

It does not seem like Jensen’s Bøfhus has suffered any great damages, since the publicity storm calmed down. But hopefully they will have a strategy on how to enforce their rights in the future, which is not only a question of money and being right but also a question of public opinion.

Johanne Mørk-Hansen, Associate

Trademarks: Device elements – no longer a safe path to registration

For many years, adding device elements to descriptive words included in trademarks has been sufficient for obtaining distinctiveness – non-distinctive words could be registered if only a device element was added. Of course, the scope of protection would be reduced compared to distinctive word marks and in that sense the value of the trademark was limited.

OHIM has changed and is still in process of changing their practice regarding device marks including descriptive words. The change implies that a device mark including descriptive word(s) does not necessarily have the necessary distinctiveness per se. Now, also the figurative elements are evaluated.

A special typeface or simple device element may not suffice in terms of adding distinctiveness. Examples of such are marks consisting of a descriptive word written in italics, adding a circle around the word, placing a dot above the word or underlining the word. But also other device elements may not be sufficient as it was decided in the application for the device mark BEST BUY sought for services in classes 35, 37 and 42 – see T-122/01. The trademark consisted of a yellow price tag containing the words BEST BUY in black. This mark was not accepted for registration and one of arguments therefore is that the trademark “is merely composed of elements which, when examined separately, are devoid of distinctive character for the marketing of the services concerned. Nor is there any interaction between these different elements which might confer a distinctive character on the whole” .

Simple device elements are not sufficient, but more complex device elements may be. The more complex a device element, the more distinctive a trademark. But where is the line between acceptable marks and unacceptable marks?

According to OHIM, they will also consider whether a device element is commonly used within the line of business. The question is to which degree and how similar? And will the list of goods and services, which is usually affected by the line of business, also be taken into account? I trust that these matters will also be taken into account and if so, the device element may not be sufficient for registration even though the device element is not banal. This may also be the case if the device element underlines the meaning of the word, even if the device itself is complex. But how about adding further device elements? Or colors? And what about marks presently registered, but unacceptable if applied for today? Will their scope of protection be influenced and how would this be evaluated in conflict cases? Is the value of such trademarks increased or decreased?  At this stage, a lot of questions are raised and practice is still developing.

National practice among the community member states also varies and may be different to OHIMs practice. This is the case when comparing Danish and OHIM practice and may be worth considering when applying for trademarks. When deciding which trademarks should be used as basis for oppositions, cancellation actions etc. such considerations are also essential.

We will follow case law closely as much more attention should be paid to trademarks which include device elements, and as it is now even more essential to have a discussion on risks, filing strategy and expectations of the scope of protection prior to filing a trademark application.

Henriette Vængesgaard Rasch, Attorney at Law