Tag:  “Infringement”  | (11) posts

The dark side of the Internet

On Friday the 14 June 2013 we participated in a seminar arranged by the Danish PTO in corporation with the Confederation of Danish Industry on the topic “IP infringements online”.

The seminar aimed at discussing how to protect against infringement of one’s IP-rights on the Internet, and moreover a discussion of counterfeit, its extent and the seriousness about being aware of it. Several interesting speakers gave their view on the different issues under this topic.

The first speaker was David Shore, Director of Global Security EMEA at Pfizer. He gave a very interesting speak on counterfeit in relation to medicines, and the danger and consequences of buying such. He gave several examples from Pfizer, and their strategy in discovering and unraveling of some parts of the major counterfeit business within medicines.

Nikolai Bisgaard from GNResound also shared his experiences as Vice President of IPR & Industry Relations. He described a specific case, where GN Resound discovered that someone was copying one of their products. The case ended with court proceedings in China, and Nikolai Bisgaard explained the many challenges and immense formalities faced by GN Resound in the process of this lawsuit. Moreover he highlighted the importance of registering trademark rights in all countries where these are used, as trademark rights are “easier” to defend, as there is well developed practice within the trademark area in contrast to the unregulated Internet.

Erling Vestergaard, Vice Public Prosecutor, also gave a speak on the criminal fight against IP infringements on the Internet. He explained about the scanty practice within this area in Denmark. He only highlighted copyright cases, as this is the only area within IP where Denmark actually has practice regarding IP infringements on the Internet. He stressed the fact that the Danish legislation is not accommodated to the Internet. According to Mr. Vestergaard our laws have simply not developed in pace with the Internet and the extent of it.

What stood out as a main point from this seminar was that the global reach, openness, versatility and unregulated character of the Internet creates both a great place for marketing and easy access to consumers, but it also creates an obvious place for trademark abuse. In other words, the Internet has a very dark side as well. The non-material damage an infringement can cause a trademark is often much worse than the loss in turnover. Sale of counterfeit goods under a trademark can lead to the dilution of this through a false association of the trademark and goods not originating from the owner of this trademark. Therefore is it crucial to protect these rights.

There were several questions from the attendees. One of the start-up companies asked David Shore and Nikolai Bisgaard as being representatives from established companies, what they would recommend in order to prevent infringements on the Internet. Without any doubt the speakers answered that registered trademark rights formed the best basis to prevent infringements. 

Based on our experience, we fully agree with the reply from the speakers and therefore take this opportunity to stress the importance of having registered trademark rights in all the countries where you intend to use your trademarks. This gives you a right that is recognized, and a right which can be enforced. Moreover, we at Awapatent can assist you in navigating through this complex web of rules, and by forming an online trademark protection strategy. We can assist you in monitoring and surveilling your trademarks through our knowledge and access to specialized online trademark monitoring services.

As something new Awapatent also offers registration and monitoring of trademarks in Trademark Clearinghouse in relation to the new top level domains (TLD). Read more about this service here.

Henriette Vængesgaard Rasch, Attorney at law

Maria Dam Jensen, Associate

Infringement – Gangnam Style

In our line of business we deal with protection of intellectual property, ranging from purely technical issues to art. Sometimes you come across matters which cater for a more, err, acquired taste….

A couple of years ago the Danish political party the Conservatives used the tunes to the song “Afrika” written by the Danish singer and composer Nanna Lüders. The party wrote their own lyrics and made an artistically very doubtful performance at their annual convention. Their fellow party in Government at the time, Venstre, equally used a song called “Sunshine Reggae” by Laid Back. Venstre actually did the right thing and asked the owners of the song for permission. And got a no. And still used it. Both political parties had to pay heftily, Venstre especially as they had been in (very) bad faith.

Seen from the chair of an IP-advisor this is noticeable as these infringements are made by the very members of Parliament who pass the laws on protection of rights. One of the active vocal performers was the appointed Minister for Cultural Affairs…

It is ever more bizarre to see a head over heels repetition. Recently four mayors from four municipalities on the Danish island of Funen decided to promote their region in order to attract business. This was done by adding new lyrics to the K-pop hit “Gangnam Style” and also using bits of the actual hit too. And by the mayors dancing “Gangnam Style.”The result was a bizarre music video which did get enormous viral attention. In this respect they achieved their goal. Although this writer has to remind himself that even bad publicity is still publicity. It also got the attention of Universal Music, owner of the rights to the original hit and the recording.

Today it is hard to find the video as Universal Music has requested its removal from channels such as Youtube. It is still available here: http://www.youtube.com/watch?v=51DuOq8GeZM though with the infringing bits replaced by enthusiastic applause. See it and enjoy. Or cringe – and please bear in mind that these people were elected not for their dancing and singing skills.

On a more serious note there is little doubt that this is an outright infringement. And there is little doubt that there will have to be compensation paid. Infringements like this happen on a daily basis but of course it should call for worrying attention when the politicians or even MPs commit them. But after all, to err is Human.

At Awapatent we still have deep faith in humanity, ingenuity and the arts. If only humanity would check with its IP-advisor before becoming too creative.

Thorbjørn Swanstrøm, Trademark and Design Attorney, Attorney at Law, Partner

Design just as important as technical issues in Apple vs. Samsung verdict

The dispute between Apple and Samsung on smartphones and tablets has received much public attention. Recently, a landmark verdict was reached when a California based court decided in Apple’s favour. Samsung now has to pay at least one billion US dollars to Apple, who also has sought a sales ban in the USA on a number of the Samsung products involved.  A preliminary injunction hearing is scheduled on September 20, 2012.

The court held that Samsung had infringed several of Apple’s utility patents for user interface related functions in both smartphones and tablets, including one utility patent relating to the now well known “bounce-back feature”. However, what is more interesting; the court considered that Samsung had infringed a number of design patents, for example relating to the appearance of the physical device as well as the design of its graphical user interface. This kind of intellectual property dispute normally tends to be dominated by technical patent issues, thus it’s an interesting and exciting development to see that protection of design has had such a great impact on the court’s decision.

Evidence in the court proceedings included an email from Google to Samsung, pointing towards that Samsung’s “P1” and “P3” tablets (Galaxy Tab and Galaxy Tab 10.1) were “too similar” to the iPad and demanding “distinguishable design vis-à-vis the iPad for the P3”. Additionally, Apple presented an internal Samsung technical development report where Samsung’s team of engineers compared the Samsung prototype with an iPhone.

So, is this the end for Samsung’s Android based smartphones? Most likely not. It should be fairly easy for Samsung’s engineers to design around Apple’s patents and design protection, however at the cost of losing some of the features nowadays generally expected when buying a Samsung smartphone. In any case, we may see a shift from Android based smartphones towards the use of the Windows Phone operating system. This is most likely well received by Microsoft, having a planned release of Windows Phone 8 later this year.

Magnus Nilsson, European Patent 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

Getting Personal in Sweden: Liability of Directors, Officers, and Owners for their Company’s IP Infringement

1. Introduction
Picture a scenario where a plaintiff in an IP infringement case in Sweden has received a well earned final ruling in its favor, or perhaps gotten a preliminary injunction issued against an accused infringer.

As the plaintiff is celebrating its success, it receives news that the infringer recently emptied its warehouses of infringing goods at dumping prices, filed for bankruptcy, or went into administration. The on-going infringing business, apart from the shares in the defendant company, has been sold to a third party. The plaintiff is left with not only the losses due to the infringement, but also the costs for the litigation.

Curtain falls and the show is over, or is it not? What actions are available now, and what could have been done to prevent this bleak outcome?

 2. Follow the money – pursue a claim for personal liability
Among the actions available to avoid the unlucky scenario, there is one that stands out from the crowd. This is to pursue the officers, directors or owners involved in the infringing business with claims for personal liability (to pay damages for the infringement). 

In direct contrast to the prevailing misconception that there is practically never any personal liability, Swedish law provides a forceful set of legal tools for a plaintiff to avoid much of the above-mentioned problems with an elusive defendant in IP cases. These tools will be outlined in the next section of this article.

3. Swedish law does give a basis for personal liability
Swedish case law provides a clear precedent that injunctions can be issued against representatives of a company on the same grounds as against the company to avoid possible defiance.

Although a director is not typically personally responsible for the company’s acts and undertakings, personal liability for IP infringement can be established under certain circumstances. 

The basic rule in Sweden is that officers, directors and (active) owners, or board members, of a company who have taken part in, or have furthered, or have failed to prevent an IP infringement can be held directly personally responsible for their company’s IP infringement. 

Personal liability for IP infringement in Sweden can be established on mainly two different grounds, either by the so-called piercing the corporate veil doctrine, or by direct personal liability. These two counts will be discussed in turn below.

3.1 Piercing the corporate veil
The conditions for piercing the corporate veil are not clearly specified under Swedish law. However, from existing case law the following conditions can be listed as important: undercapitalization, lack of independence, undue organization or influence over the business by the owner (“Alter Ego”), and conduct directed against and disloyal to the creditors or other parties who have suffered a loss.

One of the problems with the piercing the corporate veil theory is that undercapitalization does not have any legal, commercial, or even fiscal definition in Sweden. And what is more: undercapitalization is not as such prohibited under Swedish law.

3.2 Direct personal liability
The basic rule of direct personal liability is more straightforward. It applies if a company has infringed someone else’s IP and a director, owner or board member has participated in the decisions or activities leading to the infringement, supposing also at least negligence on part of the director, owner or board member.

The Swedish Supreme Court ruling in NJA 1986 s 702 (“Demonstration music”) together with successive rulings has cemented the principle that a leading representative, such as a CEO, of a limited liability company can be liable to pay damages because of negligent corporate copyright infringement. Intent or gross negligence are not necessary prerequisites.

The duty to investigate whether a product can be protected by IP rights is extensive in Sweden, and to stay uninformed about possibly existing IP rights is normally deemed sufficient to establish negligence in itself.

Nevertheless, even though negligence can be thought to come almost free of charge, most judges in Sweden would not perhaps readily hold that the burden of proof rests solely upon the defendant (to exculpate himself), i.e. the plaintiff makes best by tainting the defendant by dressing him up in culpa.

3.3 Swedish law on personal liability for IP infringement – brief conclusion
The discussion above shows that there are still some pitfalls and surprises left when it comes to personal liability for a company’s IP infringement in Sweden.

For one thing, and as surprising as it may be, personal liability for a company’s IP infringement has not been put to the test by the Swedish Supreme Court in a patent, trademark or design case.

It is also uncertain what it would take for a finding of negligence in cases where the infringing goods only fall within the mere formal scope of protection of, say, a trademark or design right, and where it is clear that blatant copying has not taken place.

However, having said that, the basic rule under Swedish law is still clear. The directors, officers and owners, or board members, of a company who did not do what they should have done can indeed be personally liable to pay damages for their company’s IP infringement.

4. Conclusion: How to deal with an evasive infringer
The situation under Swedish law makes it clear how an IP owner plaintiff should deal with an evasive infringer.

The best way to pursue a claim in such a case is obvious – make thorough preparations and go after everyone already from the start.

There may be challenges along the way, but aggressive action probably gives the best chance for success at the least risk and for a reasonable premium (i.e. initially higher litigation costs, but with the prospects of recovery if the case is won).

It should also be clear that a well founded claim for personal liability is the perfect platform for a good amicable settlement. Clearly, the bravado and confidence in defending an infringement case is usually much higher when the personal belongings and private welfare is not at stake.

Robin Berzelius, Attorney at Law

A visit to the Copenhagen office

This week has so far been one of the most interesting weeks in the Specialist programme (soon to be renamed to the Trainee programme). Topics of the week include infringement, opposition and sales training, not to mention a trip to the Copenhagen office. The latter definitely being one of the highlights of the week.

The Copenhagen office is situated in the eastern part (Østerport) of the city in an old genuine building. The topic of the day was foreign filing which turned out to be a very interesting subject. Acceptance date, PPH (Patent Prosecution Highway), heavy prosecution countries and restriction requirements were all new expressions for the most of us. We found out that there is a lot more to know than EPC and Swedish patent law. Strategic decisions, for example using utility models instead of patents, were especially interesting. And although we didn’t get a hold of any Danish pastry, we had the pleasure to enjoy a Grøn Tuborg.

To analyze claims from another perspective – like when to file an opposition – was the topic of today. Arguing why a claim should not be valid instead of the opposite differed from what we are used to and resulted in many intriguing discussions. Hopefully, it will be more time to deal with oppositions in the upcoming practice period.

Soon, it’s time for sales training and I’m convinced that it will be as instructively as always.

Oskar Kronsell, Associate

Changes in the Taiwanese Trademark Act

The following amendments to the Taiwanese trademark Act has been announced by the authorities. The effective date is however still to be set by a further order.

Any distinctive identification may be registered as a trademark, including inter alia three dimensional laser tags and the boot screen of a mobile phone. 

Exclusive trademark licenses and non exclusive licenses are clearly differentiated. The holder of an exclusive license has the right, within the scope of the license, to prevent others (including the trademark owner) to use the trademark, to sublicense the trademark and to initiate proceedings against infringements in its own name. The above cannot be done by the holder of a non exclusive license without the consent of the trademark owner.

 The provisions for a deemed trademark infringement has been amended as follows:

  •  It is deemed to be a trademark infringement when using words included in a well known registered trademark as a company name since this will be deemed to be likely to dilute the distinctiveness or reputation of the well known trademark.
  • However the provision that it shall be deemed to be a trademark infringement to use word included in a trademark as a company name will be deleted. The deemed infringement will only apply to well known trademarks.
  • It shall be deemed as a trademark infringement to sell, display, hold, produce, export or import the packaging containers, tags, labels and/or other things related to the service, knowing that the same may be used for infringing acts.

Acts typically constituting use of the trademark has been specified as follows:

  • Utilizing the trademark on commercial documents or advertisements related to the goods and/or services
  • Utilizing the trademark on things related to the provision of service
  • Utilizing the trademark on the goods, or on the packaging containers for the goods and to hold, sell, display, import or export the goods in question

The above indicates that the Taiwanese authorities want to broaden the scope of possible trademarks and clarify some issues that previously might have been ambiguous.

Peter Hermansson, Attorney at Law 

Trademark Infringements in Social Networks

Trademark Infringements in Social Networks

Last year, in 2010, Facebook passed 500 million users. That’s more than the population of USA, Canada and Mexico put together. It is safe to say that Facebook and other social networks are very powerful and important tools of communication in many different aspects, affecting most things from your personal social life to world politics. It is also a great tool for a trademark owner to be used in brand building activities.

Most of all, the social networks are inexpensive and very speedy. A web campaign for your trademark usually costs a mere fraction of an ad campaign on TV or in other media. This is good news for the trademark owner but, regrettably, equally good news for the trademark infringer.

On the web, it is not very complicated to set up a site in a manner and quality equal to the trademark owner’s original site. As a consumer it is sometimes impossible to tell the trademark owner from the impostor. This is particularly true in social networks where the trademark owner’s communication sometimes is of a less professional quality than his communication in other media.

Naturally, trademark infringement in social networks is subject to trademark law and any legal action that is possible “in real life” is in principle possible also for the digital world. However, most social networks have their own administrative procedure and Network Administrator to handle the procedure. In order to become a user of the network you need to accept the conditions of the agreement and you are thereafter bound by the regulations.

The Statement of Rights and Responsibilities of Facebook, for instance, provide tools for a trademark owner to report infringement and request removal of infringing content. This regulation provides a quick and inexpensive alternative to court action. Of course, the only result of such action is the removal of the infringing contents, not compensation or damages, but to get the infringing trademark of the net is almost always the top priority of the trademark owner.

If you are on the other side of the administrative procedure, and you feel that content has been removed from your site by mistake, you may appeal the decision.

A trademark owner is often a strong party in “real life” trademark infringements. Often you face an infringer that is a small size entity or a private person and the trademark owner, as a large corporation, has many advantages when it comes to access to legal assistance, financial strength and endurance, media contacts etc. However, in social networks the individual has a possibility to make their voice heard, quickly and at no cost at all. Before you know it, the message of the individual can be spread around the world, sometimes with substantial effect to your image and brand. This needs to be taken into consideration before you act against a trademark infringer.

Lessons to learn for the trademark owner
1) Question your strategy on how to handle infringement
Most successful trademark owners have a good strategy on how to handle trademark infringement. However, in social networks it is particularly important to be flexible and consider that there may be different aspects to each infringement matter and the end result is more important than that you are strict in following a previously set strategy. Maybe your usual standard type warning letter is far too strict and rigid and maybe you need to examine new means of communication with your counter parties. An overall consideration is the speed of things on the web. If you want to stop the infringer, speed is of the essence.

2) Involve the legal department and the communications department
Generally a trademark infringement is handled 100% by your legal department. However, when it comes to social networks your communications department needs to be involved in the process as early as possible so that they can act against the spread of bad will and do so without delay. It is generally very important to be active in the debate. Silence is very seldom golden in social networks and it is important that the brand owner’s version of a matter is heard and presented in a sound way. Therefore, a close co-operation between the legal department and the communication department is vital throughout the process.

3) Pick your fight and accept that you are not always in control
Naturally, you need to make sure that you act strongly against infringement that is clearly of detriment to your brand. However, cases where you have a little to gain and risk a lot of bad will should be dealt with only after careful consideration and sometimes even left alone. In social networks, you risk a lot of bad publicity if you act unduly rigid and formalistic.

4) Stay true to your values and keep you promises
A good way to avoid criticism and negative campaigns is to be very careful about the values and promises that are incorporated in your brand and to stay true to these values and keep the promises. This way, you can stand tall when you enter debates involving your brand in social networks. Sooner or later, my guess is that you will have become an active user on behalf of your brand.

Kristina Fredlund, Attorney at Law, European Trademark Attorney

Counterfeit pharmaceuticals case settled without main hearing

Counterfeit pharmaceuticals case settled without main hearing

In April 2010 Eli Lilly and Company (“Lilly”), the manufacturer of the erectile dysfunction pharmaceutical Cialis, was informed that the Swedish customs had ceased a consignment of products marked and/or shaped in such a way that it was suspected to infringe the intellectual property rights of Lilly. The consignment was addressed to an individual, herein named G.N.

Lilly instituted action against G.N. before the Stockholm District Court, demanding that the packages, bottles of pills and brochures marked with the CIALIS and LILLY trademarks as well as the pills shaped as and marked with the trademarks should be destroyed on the expense of G.N. Further, Lilly demanded that G.N. was to be prohibited under penalty of a fine of SEK 300 000 to import, market, distribute and keep the products in stock. As basis for their action Lilly referred to several trademark registrations and presented excerpts thereof as evidence, as well as photographs of the ceased products.

Considering the material at hand and since no party requested it, the case was settled without a main hearing. The court found that G.N. has, without the permission of Lilly, brought the packages, bottles of pills, brochures and pills marked with the CIALIS and LILLY trademarks from a country outside of the EEA. The products marked are such goods for which the trademarks owned by Lilly are registered and the marks are practically identical to those owned by Lilly. The actions of G.N. constitute an infringement in the trademark rights of Lilly. The circumstance that G.N. never received or actually handled the products does not affect this judgment. Neither does it affect the possibility of imposing a prohibition under penalty of a fine. Due to Lilly´s interest of preventing further infringements in their trademark rights and considering the fact that it is imperative from a health perspective that pharmaceutical products are not put on the market without supervision the fine was decided to SEK 300 000. The products were also to be destroyed. However if G.N. cannot bear the costs of destruction, it may be Lilly who has to bear the costs.

Hanna Nilsson, Associate, Awapatent

Centocor (Johnson & Johnson) awarded the largest patent verdict in U.S. history

1.67 billion U.S. dollars, $1.16 billion in lost profit, and $504 million in royalties. That’s what Centocor is awarded in damages for infringement of their patents.

On Monday, June 29, a jury found that Abbott Laboratories had willfully infringed two patents covering antibodies against tumor necrosis factor owned by Centocor. Abbott’s drug Humira was found to infringe Centocor’s U.S. Patent Nos. 7,070,775 and 7,276,239. Humira is widely used in the treatment of various forms of arthritis, and is also approved for psoriasis and Crohn’s Disease.

Humira has been somewhat of a blockbuster for Abbott, and is said to have generated $4.5 billion in global sales last year. Centocor has made it clear that it isn’t seeking to block sales of the drug, only to get a share of the profit.

Therefore, this verdict is in a way the ultimate evidence that the patent system actually works in practice: it gives a patent owner a time-limited exclusive right to prevent others from commercially exploiting the protected invention. And needless to say, a strong patent portfolio can have a significant value. Ask Centocor.

Inga-Lill Andersson, European Patent Attorney