Tag:  “EU”  | (12) posts

The (trade) secret of success

We have all heard of success stories such as the Coca-Cola recipe and the Google search algorithm. Many companies value their trade secrets and consider them important for competitiveness and innovative performance.

Although the general understanding is that trade secrets are good for business, there seem to be many incorrect assumptions about their legal protection.

For example, some are under the impression that any own technical or commercial information may be a trade secret, whether kept confidential or not. Others assume that the protection provides exclusive rights that could be invoked against any third party using the information, irrespective of how the information was actually obtained by the third party. Some also take for granted that specific provisions on trade secret protection are in place globally.

Especially Swedish companies may be faced with an unwelcome surprise when realizing the lack of explicit protection in countries where their international business partners operate. In particular when information has already been disclosed without the parties having discussed the delicate nature of the information or a confidentiality agreement.

The fragmented international protection combined with an increase in trade secret theft is an issue that has been recognized by the European Commission. In November last year, a draft directive to harmonize the protection of trade secrets in the EU was presented.

The draft introduces a common definition of trade secrets as well as civil sanctions against misuse. It will surely have a positive effect on cross-border cooperation between business and research partners within the EU, if and when enacted.

As many aspects of the draft text correspond to Swedish legislation, companies that have already introduced a policy and procedure for managing their trade secrets under the Swedish Trade Secrets Act will benefit when it is time to enjoy EU-wide protection of their valuable information.

In the meantime I wish to remind you all that sometimes, silence is golden.

Anita Gillior, Attorney at Law

To hear more on trade secrets you are welcome to our breakfast seminar in Stockholm on April 28. More information and registration (in Swedish)

Will trademarks go up in smoke?

More than 10 years ago the Tobacco Products Directive (2001/37/EC) was adopted in the EU, and on 26 February 2014 the revised Tobacco Products Directive governing the manufacture, presentation and sale of tobacco and related products was formally approved by the European Parliament. This new directive sets in more stringent rules for tobacco and related products with the focus on limiting their appeal to young people.

Before implementation, these new rules were subject to a great deal of discussion, as especially the tobacco companies feared that the European Parliament would implement a requirement of plain packaging as seen in Australia and New Zealand.

Australia was the first country to implement these new measures mandating plain packaging for tobacco products. Australia has since 2012 completely banned the use of graphical trademarks or other kinds of decoration on cigarette packaging. Now, e.g. CAMEL must be written in a neutral font, size and position on the cigarette packages. Brand owners can therefore not use their trademarks in the stylized logo form that we usually see.

Cigarette packages from Australia. Source: http://www.theaustralian.com.au/

So what will these new cigarette packages in the EU look like?

Source: http://europa.eu/rapid/press-release_MEMO-14-134_en.htm

Source: http://europa.eu/rapid/press-release_MEMO-14-134_en.htm

From now on packages in the EU will feature mandatory pictures and text with health warnings covering at least 65 % of the front and back of cigarette packs, which must be placed on the top edge of the packaging. In addition, 50 % of the sides must be covered with health warnings such as “Smoking Kills – quit now”. Moreover, no promotional or misleading features or elements will be allowed on cigarette packaging.Therefore, from now on only a small part of the packaging will be available for branding. And in addition, Member States are allowed to introduce further measures for plain packaging if justified on grounds of public health, and where found proportionate and not leading to hidden barriers to the trade between member states[i]. Therefore we might see EU Member States implementing plain packaging measures as seen in Australia.

Of course the tobacco companies are not exactly jumping for joy over the new directive or the measures for plain packaging, and have claimed that it will have unintended consequences.  One of their arguments is that plain packaging will be easier to copy, and it will be harder to prevent counterfeit products from entering the markets.

What about the trademarks?

As an IP professional my concern immediately goes to the issue with possible restrictions on how to use trademarks on the packaging, and whether these new requirements jeopardize the actual function of trademarks.

One of the fundamental features of trademarks is their function as an indication of origin. Trademarks make it possible for owners to distinguish their products from other manufacturers of the same products. This fundamental function will not be fulfilled if trademarks are not visible, as consumers will not be able to make a reasoned choice based on their preferences. If such plain packaging requirements are implemented in the EU, the trademark owners will be prevented from using their trademark to distinguish themselves from their competitors, which will jeopardize the ability of these trademarks to function as an indication of origin.

Another issue is the “use requirements”. After a 5-year period from the registration date, a trademark can be cancelled – entirely or partially – for goods and/or services for which it is registered, if the owner is not able to prove use of the trademark for these goods/services.

Therefore, if the tobacco companies can no longer use their trademarks for tobacco products, they could in theory after 5 years risk being met with cancellation actions putting their trademarks in great danger, as they will not be able to prove use of their trademarks for tobacco products.

A cancellation on such grounds seems completely unreasonable, and fortunately European case law states that even where there has been no genuine use of a trademark in the relevant period, the registration shall not be revoked if there are “proper reasons”[ii].

Even though revocation based on non-use as a result of plain packaging would be refused as an argument, there is still the risk of the trademarks losing their actual value.

If consumers stop associating trademarks such as CAMEL and KINGS, all meaning of the trademark will be lost, regardless of whether the trademark technically still exists. The actual value of the trademark will be gone, and the tobacco manufacturers will witness their trademark rights going up in smoke.

It will be interesting to follow how these new rules will affect trademarks, and whether the same measure will be seen implemented in other areas as well. If the focus is public health then what about unhealthy foods and alcoholic products?

Maria Dam Jensen, Legal Counsel

[i] http://europa.eu/rapid/press-release_MEMO-14-134_en.htm

[ii] Case T-28/09 Mo-Hwa Park v OHIM and Case C-259/02 La Mer Technology Inc v. Laboratories Goemar

Copenhagen Design Protection Conference 2012

Recently, the International Trademark Association INTA held the first design conference.

The number of attendees was 215 and more than 30 countries were represented in order to discuss issues such as the interplay between designs, copyrights and trademarks; highlights of European case law and enforcement of designs and many more interesting issues.

The conference was opened by the Danish Minister of Economic Affairs and the Interior, Magrethe Vestager. She spoke about why innovation was important to and absolutely necessary for the development of our world. She also recognized that development was necessary if we shall be able to compete and encouraged all of us to challenge and renew development. 

Many more speakers gave their view on design protection from different perspectives. One speaker illustrated how the legislation even within the EC is differing and how enforcement options are different. The requirements for protection and the scope of protection if possible may vary. Also copyrights are not at all harmonized within the EC. Those differences between national legislation make it difficult to navigate but may also be used strategically by the owners.

Some of the other speakers illustrated the balance between aesthetic designs and functional designs. The line has proved difficult to draw and especially the line for when a design is functional or not may be difficult to draw. Both Courts in the US and in Europe have taken several decisions  on this specific question and still the border is tricky. Such knowledge is important when deciding which strategies to use in order to protect designs.

The technology itself reveals new possibilities and may also challenge the way of thinking IP in general and especially designs. 3D printing allows you to print your own or somebody else’s designs or a design customized to you by yourself anywhere. The technology raises several questions, especially when a design is created by “networking” or “co-designing” which may be a new trend among designers. Who owns the design and how about individual character? And what about novelty? Is a design still new if created in this sort of public way?

Also owners of designs gave their perspective on designs and told us how, why and when they use registered designs strategically and in combination with the other rights. An interesting point of view was a multinational company which had experienced that design rights were faster and cheaper to enforce than both trademark rights and patents and thus used such successful enforcement as a strategic weapon against competitors.

As a unifying principle in the whole conference, the design conflict between Apple and Samsung was illustrated from different perspectives. The conflict proves that design rights and IP in general is important and may be used as an extremely efficient weapon against competitors.  

The impression of the conference is convincing: There is no doubt – design and the right design is becoming more and more important as a trigging buy factor. Thus enormous resources are used in order to create the right designs and to keep competitors from copying the design. Also the conference confirmed my point of view, namely that one should not decide ahead which rights are relevant without considering the other IP rights and, if relevant, combining them to strengthen the owners position.

Henriette Vængesgaard Rasch, European Trademark Attorney

Counterfeit Goods in the EU – Troubling News but No Surprise

On July 24, the European Commission published a press release concerning its report on seizure of counterfeit goods during 2011 in the EU (see the full report).

It turns out that seizure of suspected counterfeit goods increased some 15 % compared to 2010. Top categories are medicines (24 %), packaging material (21 %) and cigarettes (18 %). China continues to be the main source of origin for these goods (73 %). It is also important to note that out of all detained postal packages, a worrying 36 % concerned medicines.

Sadly, the press release is no surprise. The problem of counterfeit goods is not new and we know it is increasing. The true number of counterfeit goods entering the EU, however, must be many times higher than what the customs authorities manage to seize. This in itself is troubling. More worrying is that medicines is at the top of these seizures, as fake medicines may actually harm people severely. In addition to personal health, fake goods may affect consumer loyalty and severely damage the reputation built up by the brand owner. All in all, the constant and evidently growing influx of counterfeit goods into the EU is a serious problem.

The only positive note is that over 90 % of all the goods seized were either destroyed or brought to court, which indicates that the work of the customs authorities is fruitful. It also shows the importance of filing customs applications to give the customs authorities the best possible information to detect suspected counterfeit goods.

To combat the negative trend of counterfeit goods, right holders need to take an active part in aiding customs authorities to detect counterfeit goods by lodging customs applications to a greater extent than today. Besides this, the EU may wish to establish specialized courts and a speedier and less costly procedural framework for court cases concerning seized goods. Finally, a reverse burden of proof concerning the authenticity of the goods may have a positive impact as well.

Most of all, however, we as consumers must make a stand. Rejecting counterfeit goods, if we can tell they are, will be the greatest weapon against counterfeiting.

Mattias Karlsson, Attorney at Law

Goods in Transit: When is a Fake not a Fake?!

You are, or you represent, a holder of rights. You become aware that some goods which you consider counterfeit have entered the EU on their way to, say, Canada. The goods are only in transit at a port or an airport before they continue their onward journey.

What do you do? You want to stop the goods but they are only in transit, i.e. not destined for the European market.

Recently, the European Court of Justice (ECJ) has tried to shed some light on this. The court ruled in two joint cases:

Philips: in the port of Antwerp Belgian Customs inspected a shipment without a clearly stated destination. The cargo was from Shanghai and contained electrical shavers, similar in appearance to Philishave. Customs detained the goods and Philips brought action against the manufacturer based on Philips’ registered design rights in Belgium.

Nokia: UK Customs inspected a shipment of mobile phones and accessories for mobile phones at Heathrow Airport. The shipment came from Hong Kong and was on its way to Columbia. The goods were deemed fake by Nokia, but Customs refused to detain the shipment as the goods were in transit. Nokia brought this before the courts.

So, can the right holders, Nokia and Philips, enforce their rights against these goods? Or are they off bounds as they are not on the market in the EU?

The ECJ pondered this question for ages. Firstly, the ECJ confirmed that goods from outside the EU do not infringe IP rights in the EU when they are in transit. The exception is of course if there is marketing underway, directed against European consumers or if Customs suspects something fishy – which can later be verified. Secondly, the ECJ states that if it is 100 per cent clear that the goods are destined for a non-EU country, like Columbia, they cannot be considered counterfeit in the legal sense – (not very fortunate for the consumers in the destination market and a curious lack of consequence for IP right owners’ enforcement possibilities and costs of enforcing their rights). Thirdly – and finally – the CECJ says that any goods may still be seized by Customs if the goods violate other codes, for example if the goods pose a risk to health or safety.

Personally, I am not terribly happy with this ruling. The ECJ’s business is to interpret and that it has done. It is not to blame for the law. But – current law aside – it seems bizarrely without consequence that the EU as a champion of the protection of IP rights is not stretching this protection to the goods themselves, only to the domestic market. Counterfeit goods will damage the rights holder in Columbia too. Instead of being able to stop obvious counterfeits en route, the rights holder is now referred to spend further funds taking legal action in Columbia. This drives up the costs for enforcing the IP rights.

The ECJ has placed a huge burden on the shoulders of Customs and the rights holders. It is up to Customs and the owners to investigate and document whether the goods are actually meant for the European market. This seems out of proportion if we are dealing with clearly counterfeit goods. The same goes for the resources and time needed for such investigations.

The European Commission is currently reviewing the regulations. If the Commission is serious about protecting IP-rights it should also focus on the products. If you want to stop fake goods you will also have to make it financially difficult for the pirates. One way is not to provide cheap and easy transport routes through EU airports and cargo ports or, indeed, IP infringement immunity for the goods.

And the two cases at hand? Well, Philips is happy. The consignment did not have a clear destination and Belgian Customs and the ECJ considered this fishy enough to let Philips enforce their rights successfully. In the Nokia case there were no such extra insecurity relating to the shipment; UK Customs therefore were right in denying Nokia the right of enforcing their rights. Nokia will therefore face some unhappy customers in Columbia and possibly an unfortunate blow to its good-will there.

Thorbjørn Swanstrøm, Attorney at Law

 

EU patent to pave Europe’s way out of crisis

On 12 October 2011 the European Commission presented a so-called “Roadmap for stability and growth” outlining the response that they believe is needed to get Europe out of the current economic crisis. The roadmap includes five areas of action, four of which relate to financial and economic issues, including of course the problems currently encountered by Greece and the other Euro countries.

The last area of action is called “Speeding up stability and growth-enhancing policies” and suggests, amongst others, to accelerate the adoption of the proposed unitary European patent. If the 25 member states, who have indicated their intention to join the unitary patent, all do so the Commission estimates that it would lead to an 80% reduction in costs for companies utilising the system. Together with a series of other initiatives this should not only make life easier for European companies, but also contribute to making Europe more attractive to foreign investors.

Read more about the EU patent in our earlier blog post: A brighter future for the EU patent

The full document adopted by the Commission can be found here.

Vibeke Warberg Rohde, European Patent Attorney, Awapatent

Supplementary protection for combination products heading for setback at the CJ of the EU

Supplementary protection for combination products heading for setback at the Court of Justice of the EU

On 13 July 2011, the opinion of the Advocate General (AG) was released in the consolidated cases C-322/10 and C-422/10, “Medeva” and “Georgetown” respectively, concerning supplementary protection certificates (SPCs) for combination vaccines. In her opinion, the AG recommends the adoption of the “disclosure test”, rather than the “infringement test”, to resolve the question whether a product is protected by a basic patent in the sense of Article 3a of the SPC regulation.

The cases concern the interpretation of the EU regulation on supplementary protection certificates (SPCs) for medicinal products, Regulation 469/2009. An SPC may be granted to a patent holder when a product covered by the patent (the “basic patent”) must be subjected to clinical trials in order to be sold. An SPC provides a maximum of five years’ extra protection as a compensation for the delay in getting to the market.

The question in these cases is whether a product is eligible for SPC protection when it comprises a combination of active ingredients and only a subset of these ingredients is the subject of the patent. In particular, the issue has come up in connection with the development of multi-component vaccines, where one vaccine composition may contain many different disease antigens.

In the EU member states, there are currently different approaches. In a few national authorities, notably Germany and Denmark, the tendency is that a product is considered eligible for SPC protection if a combination product would infringe the basic patent (the so called “infringement test”). In most other national patent offices, the requirement is instead the so-called “disclosure test”, which mandates that the product must not only be covered by the patent in the infringement sense, but must also be explicitly described. Exactly how specific this description must be varies between member states. In other words, there is clearly a situation where guidance from the CJEU is needed, and several related referrals for preliminary rulings on this issue are pending. See also Sidsel Hauge’s article in AWA ip Review #2 2010.

The AG opinion released yesterday is a recommendation for the court’s final ruling, and, while followed in the majority of cases, it is not binding on the final judgment. The opinion contains a very detailed analysis of the EU law on the subject, and is interesting reading. To summarize the AG’s position in relation to the ultimate question, however, does not take more than a few words: the AG is of the opinion that the infringement test is definitely not the correct test, but that national law still has to be applied in order to determine whether a combination product forms the subject-matter of the basic patent.

In her opinion, however, the AG also recommends that an SPC should be available for a subset of active ingredients in a combination product when the subset is disclosed in the basic patent, even if the marketing approval concerns a combination of additional active ingredients.

It remains to be seen if the Court comes to the same conclusion in its final opinion.

Niklas Mattsson, European Patent Attorney, Awapatent

A Favourite in Trademark Law: Repackaging – now gassy

Danish courts are traditionally reluctant to ask preliminary questions on the interpretation of EU-legislation. Recently, the Supreme Court has done so, and quite comprehensively. During the 1990′s there were countless cases all over Europe regarding repackaging of products, especially medicines and printer toner cartridges, after parallel imports from one state to another. This case is a new product area: composite gas bottles and it does not contain aspects of parallel imports.

Put shortly, company A sold gas in composite bottles with a distinct shape. These bottles were trademark registered but A was not the proprietor of the registration, only the exclusive licensee.

The bottles with contents were sold to the consumers. Upon refilling the empty bottle the consumer would return the bottle to A and receive a new, full one or the bottle would be refilled. Competitor B was in the same line of business and refilled bottles as well. The bottles from A were also refilled by B and a sticker was affixed which indicated that it had been refilled by B.

The Central Court (formerly the European Court of Justice, ECJ) is yet to pass its ruling but the Advocate General has given her opinion. Traditionally, the Court will most likely follow this opinion.

The suggested ruling is that A, as proprietor of the trademarked bottle cannot prevent B from refilling their bottle provided that it is clearly stated that the refilled bottle does not contain gas from A (the affixed sticker) and provided that the bottle has been put on the market legally by A. So in this case A is not going to get the backing of the Central Court, nor the Danish Supreme Court; B has most likely not infringed A’s registered trademarks.

This case shows that you have to be diligent in all links of the sales chain; a trademark registration does not necessarily give the owner complete control over the entire retail chain. However, if the packaging had been well known, say, a Coca Cola bottle or a distinct and well known perfume bottle, would the outcome then have been the same? Probably not. This would give raise to consumer confusion and you cannot avoid this provided the container that your competitor sells his products in is well known. The shape in itself is decoded by the consumer as being e.g. Coca Cola – long before any stickers are read.

The gas seller A would probably be in the clear had he not sold the bottles to the consumers but instead licensed the use to the consumers. Then the bottles would still be A’s property and out of bounds for B.

Even though repackaging has been debated and ruled on endlessly over the last twenty years this shows that the area still can stir emotions. I will report back here on the blog once this gassy drama comes to an end.

Thorbjørn Swanstrøm, Attorney at Law, Awapatent

A brighter future for the EU patent

A brighter future for the EU patent

11 EU member states have decided to move towards an EU patent under an enhanced cooperation aiming to reduce costs of patenting in the EU.

Progress towards implementation of the long desired EU patent has until now been hindered by disagreements between the EU member states regarding translation requirements. However, at a meeting at the Council of the European Union on 10th December it was decided by a group of member states to ask the Commission to present a formal proposal for initiating a so-called “enhanced cooperation” to move ahead on the creation of an unified EU patent system. An enhanced cooperation is a last resort option when at least nine member states agree to proceed to reach a goal for which unanimity cannot be reached by all member states. At the meeting the sufficient number of states, i.e. Denmark, Germany, Estonia, France, Lithuania, Luxembourg, the Netherlands, Slovenia, Finland, Sweden and the UK, thus authorised the Commission to submit the legislative proposal, which will be submitted on 14th December.

It is expected that the EU patent emerging from the enhanced cooperation will significantly reduce costs for translations by letting the European Patent Office prosecute the application in English, German or French with no further immediate translations required. The states supporting the enhanced cooperation are all parties to the London Agreement and thus already have reduced translation requirements compared to other member states/EPC-countries. However, the EU patent system may allow a further reduction of the translation costs by no longer requiring a translation of the patent claims, and moreover it may also provide a simplified procedure for validation of the patent once granted. Additional expectations from the EU patent system are that machine translations of published patent applications will be made available on demand, online and free of charge.

When the enhanced cooperation is implemented it will be open to other member states wishing to join in.

Keep track of the progress of the EU patent system on the websites of the Council: http://www.consilium.europa.eu/app/newsroom/PressHome.aspx?id=221&lang=EN and the Commision: http://ec.europa.eu/news/index_en.htm

Anders Heebøll-Nielsen, European Patent Attorney, Awapatent

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Supplementary protection certificates for plant protection products

Supplementary protection certificates for plant protection products

11 November 2010 the Court of Justice of the European Union issued a preliminary ruling in the case C-229/09 that Supplementary protection certificates for plant protection products may validly be obtained based on provisional marketing authorisations

In this recent decision by the Court of Justice (CJ) it was ruled that a supplementary protection certificate (SPC) may also be validly issued based on a provisional MA granted by a competent national authority of a Member State. That is a MA which has been granted pursuant to Article 8(1) of European Council Directive 91/414/EEC.

The case in question, C-229/09, was referred to CJ during the course of proceedings between Hogan Lovells International LLP and Bayer CropScience AG by the Bundespatentgericht (German Federal Patent Court).
Lovells petitioned for invalidation of a SPC granted to Bayer in Germany on the product ‘iodosulfuron’. Lovells disputed that the certificate was valid since it was issued based on a provisional MA granted by the Bundespatentgericht and not a definitive MA. Lovells stated that according to Article 3(1)(b) of the Regulation relating to SPC (Regulation No 1610/96) a SPC can only be granted after a definitive MA has been issued under the conditions laid down in Article 4 of Directive 91/414/EEC – thus, it cannot be based on a provisional MA under Article 8(1) of the same directive.

However, the CJ based their decision on that Article 8(1) stipulates that the provisional MA is to be granted only if the product is expected to satisfy the same requirements as provided in Article 4. Thus, they found the criteria of both the provisional and the definitive MA to be equivalent and thereby found no reason to exclude provisional MAs from forming the basis in respect to granting a SPC on a plant protection product.

Jakob Leffland Reimers, Associate, Awapatent

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