From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Sunday, 26 February 2017

Patents and the Silicon Valley of clothespins

The American comedian Rodney Dangerfield was most identified with his iconic line-—“I don’t get no respect.” He would have been so jealous of the clothespin, also called a “clothes peg”, or simply “peg”, depending upon where you live. For a generic product (can any Kat reader recall any clothespin brand?) whose market is inexorably shrinking, it still draws attention from publications such as the New York Times and, just recently, The Economist. In 1998, the Smithsonian institute’s National Museum of American History carried a display—“America’s Clothespins”--, which included 41 patents dealing with clothespins for the period between 1852-1887 (although the child of one visitor was heard to say-- “What’s a clothespin, Dad?”) All of this points to a fascinating tale of how patents served as a linchpin (with a Kat apology for the unintended pun) for the rise of the American of State of Vermont, nestled in the northwestern corner of New England, as, in the words of the New York Times, “the Silicon Valley of 19-century clothespin technology”.

As recounted, clothespins first appeared in the 19th century. Before then, wet laundry was simply laid out to dry on bushes, tree limbs and other available natural platforms. The earliest clothespin patent issued in 1832 in the name of Samuel Pryor, being a bent strip of wood held together by a wooden screw, fashioned in one piece and which held the wet clothes by virtue of a gripping action. Unfortunately, as described by Anita Lahey, the devise was impractical because “… even dampness would cause the screw to swell, rendering the pin inoperable.

The breakthrough occurred in a patent issued to David Smith in 1853. Smith, a resident of Vermont who was a prolific inventor in a number of different fields, described the defect of the then-current form of clothes as frequently being “detach[ing] from the clothes by the wind as is the case with the common pin and which is a serious evil to washerwomen.” His solution was a two-piece device, which contained two prongs with a small spring wedged in between. In the words of the patent—
By pushing the two superior [upper] legs together the inferior [lower] ones are opened apart so that the instrument can be safely placed on the article of clothing hanging on the line. This done the pressure of the fingers is to be removed so as to permit the reaction of the spring C to throw the inferior legs together, and cause them to simply grasp the piece of clothing and the line between them.
It seems that some mass manufacture (in the terms of mid-19th century America) of clothespins had begun already in the 1840’s. Try as he could, this Kat could not find any account directly connecting Vermont with such manufacture before Smith’s invention. However, this Kat’s historian instincts suggest that already at least some of this production was taking place there, if for no other reason than the availability of lumber in the forests dotting the state. As well, that Smith chose to make an invention regarding clothespins points to the presence of at least a nascent industry as a spur for his inventive talents. In other words, the components were already being put into place for Vermont to become the center of the clothespin industry.

While further patents issued sought to improve on Smith’s design to better performance of the spring, durability (the winter in Vermont can be rugged) and means of manufacture, the key breakthrough took place on in 1887. Then, Solon E. Moore came up with an improved form of device, what he called a “coiled fulcrum”. It can be no accident that Moore was also from Vermont. The clothespin industry was presumably all around, just waiting for someone like Moore to give it one further substantial push to enhance its design and lower manufacturing costs. Moore’s invention seems to have perfectly filled the bill. As Moore described his invention, it was--
… an improved article of manufacture, the clothes-pin described, consisting of the two clamps having the fulcrum-recess on their inner sides about midway of their length, the line-grooves in the beveled jaws, and the transverse grooves a on their outer sides in rear of the said line-grooves, and the spring composed of a single wire coiled at D, with the tangential arms E at opposite ends of the coil, with angular branches f at their outer ends, to engage the sides of the clamps and 5 prevent lateral displacement thereof, and the terminal parallel branches 9, oppositely directed to engage the grooves 011 the outer sides of the said clamps, substantially as specified.

A flurry of industrial activity soon followed. The United States Clothespin Company was established in 1887 to produce Moore’s improved design. In the face of what is described as vigorous competition from other Vermont-based manufacturers of clothespins, the company was the industry leader, at least for time. In 1909 (after the Moore patent had presumably expired), an employee of the company, Allan Moore, apparently not a relation to Solon Moore, more (bad Kat pun once again) or less, walked across street and established a rival, the National Clothespin Company, whose hallmark was an improved and less expensive means for manufacture of the spring fulcrum. Allan Moore’s company overtook The United States Clothespin Company as the industry leader. By virtue of a reservoir of experienced labor, know-how, an ever-seeking inventive environment, as well as Vermont-based lumber, the state had become the Silicon Valley of wooden clothespins.

But its pre-eminence was short-lived. After World War I, European competitors, especially those from Sweden, could manufacture wooden clothespins for less. The automatic clothes dryer diminished demand in various markets. The United States Clothespin Company closed for good in the 1940’s. Later, Chinese imports became a further challenge. The National Clothespin Company held on until 2009 as the last U.S. manufacturer of wooden clothespins, although it still makes clothespins of the plastic variety. By then, Vermont as the Silicon Valley was long a thing of the past. [Still, it is worth noting that except for the Wikipedia entry for "Clothespin", which does not provide citations for some of these facts, this Kat found no corroborating on-line information, except for reports that the company had ceased manufacture of the wooden clothespin in 2009.] Be that as it may, maybe all that remains are patent citations, as late as in a 1998 filed application citing the Smith patent.This is testimony both to just how pathbreaking these 19th century patents were, but also the limits of how far even the most innovative patents can take an industry, whether or not it was the Silicon Valley of its time.

To view Rodney Dangerfield and his skit on “respect”, see here.

For the "Clothespin" steel sculpture by Claes Oldenburg in Center Square in Philadelphia, see here.

By Neil Wilkof

Never Too Late: If you missed the IPKat last week!

Too busy sorting through all your Valentine's mail last week to keep up with IPKat?! No problem, here's what you missed in the 136th edition of Never Too Late. 

Katfriend Gill Grassie (Brodies LLP) discusses the matter of Tartan Army Ltd v Sett GmbH and Others [2017] CSOH 22. This was a trade mark/passing off case relating to UK and EU registered marks ‘Tartan Army’ decided by the Court of Session in Edinburgh.

Neil reviews John Murphy’s book Brandfather: The Man Who Invented Branding. In his book Murphy describes his career from a job in corporate planning to the creation of a brand naming, such as PROZAC and ZENECA, and trademark prosecution company to the establishment of Interbrand and, in particular, the development of the field of brand valuation.

Intern Kat Verónica Rodríguez Arguijo continues her report from the 11th edition of the Pan-European Intellectual Property Summit which took place on 1st and 2nd December at the World Customs Organization in Brussels.

Recent call for papers, upcoming events and latest updates including the publication of the U.S. Chamber of Commerce 5th annual International IP Index.

A round up of the latest highlights from the IP bloggersphere!


Never Too Late 135 [week ending on Sunday 12 February] | Playing Polo with potential defendants I KYLIE trade mark battle spinning around I When the IP community reaches out to the broader public: the story of IDIA in India I Too big to pay? Employee-inventor compensation in the Court of Appeal I Willow Tea Rooms: A tale of tea and trade marks (Part 2) I BREAKING: AG Szpunar advises CJEU to rule that The Pirate Bay makes acts of communication to the public I No more counterfeiters! Chanel, Apple, Bayer, LVMH (and more) write to President Juncker on revision to IP Enforcement Directive I Is German SEP litigation set to increase with the "confidentiality club decision" of the Higher Regional Court of Düsseldorf? I After Sweden and Germany, GS Media finds its application in the Czech Republic

Never Too Late 134 [week ending on Sunday 5 February] | King Tut's tomb: conservation or replication (but don't forget the "aura")? | Willow Tea Rooms: A tale of tea and trade marks Part 1 | The next round of Cartier: UK Supreme Court will hear appeal re costs of intermediary injunctions | New National IP Strategic Action Plan in China | Full decision of Enlarged Board of Appeal in partial priority / poisonous divisionals referral (G01/15) published |INGRES Conference Part II - Trade Secret, Copyright, Design and Trade Mark Law Developments |5 mistakes to avoid in IP student essays ... and not only there | INGRES Conference Part I - European Patent Law Developments | Remembering Masaya Nakamura, the "Father of Pac-Man" 

Never Too Late 133 [week ending on Sunday 29 January] | IP Summit 2016 (First Part) | When a quote becomes famous: even if it was never quite said that way | The trademark licensing question that won't go away: the standing of a licensee to sue | Would you like a side of Mr Justice Arnold on SPCs with your wind turbine? Teva v Gilead, Abraxis v Comptroller and Wobben v Siemens kick of 2017's patent cases | AIPPI (UK) Event: 2016's patent cases - all you really need to know | BREAKING: CJEU rules that EU law does NOT prevent punitive damages in IP cases | Supreme Court rules Act of Parliament is needed to initiate UK leaving the EU| Book review: "From Maimonides to Microsoft: The Jewish Law of Copyright Since the Birth of Print"| Applications for information on infringers can be made outside of IP infringement proceedings| The Michael Jordan case in China – to be continued 

Never Too Late 132 [week ending on Sunday 22 January] |When this Kat doesn't know, he reaches out to Kat readers: what really happened at the dawn of modern commercial trademark use? I Social media, "WikiLeaks" and false news in the 18th century: Thomas Jefferson and the "Mazzei letter" I Does the economic impact of SPCs necessitate SPC Regulation reform? The European Commission wants to find out I A look at the proposal for the ePrivacy Regulation I BGH: to cease means to recall I Never too Late x2 I Around the IP Blogs 

Image: Found Animals Foundation

Saturday, 25 February 2017

Interested in EU copyright and wish to discuss it in Florence? Here's the event for you

View of the EUI campus
(allegedly the one portrayed is also the villa
of Boccaccio's Decameron)
'Quo vadis' is not only the title of an epic film (adapted from a classic novel), but also a Latin phrase that means 'where are you going?'.

It is now the title of a workshop [that I have helped organizing] that has three irresistible features: 
  1. It is about EU copyright;
  2. It is going to be held in Florence;
  3. It is going to be held in Florence in late April.
Entitled 'European copyright - quo vadis?', this 2-day (28-29 April) event will be held at the European University Institute and aims to discuss the recently proposed press publishers' right (Article 11 of the Proposal for a Directive on copyright in the Digital Single Market) and the so called 'value gap' proposal (Article 13 of the same directive).

The workshop will provide a forum for discussion and exchange of opinions between policy makers and academics, as well as representatives of business and non-governmental sectors. It will consist of keynote addresses, panel presentations, and roundtable discussions alike.

Confirmed keynote speakers include - amongst others - MEP Therese Comodini-Cachia, European Parliament rapporteur on the EU Commission's copyright proposals.

Attendance to the event is free, but registration is required. Just follow this (GS Media-approved) link to register!

ARGOS - trade marks, domains, and google advertising

First there was metadata, then there was Google AdWords, the latest High Court dispute concerns the question: can the adverts which are displayed on a website constitute trade mark infringement?

Back in 1992, Argos Systems Inc (ASI), an American company specialising in CAD systems for the design and construction of buildings, registered the domain  Several years later in 1996, Argos Limited, a well known UK retailer registered  Argos owned various EU and UK trade marks for ARGOS but was too late to the domain name party to secure the .com.

Between December 2008 and January 2012, ASI's website included Google AdSense ads to all visitors.  From January 2012 to December 2014, the website settings were reconfigured so that only visitors from outside the Americas saw the Google ads.  The vast majority of visitors to came from the UK and Ireland with the majority of these visitors (83%) immediately leaving the site.  Argos was understandably suspicious that the Google ads were left on for visitors outside the Americas with the intention of generating advertising revenue from Argos' name.  They were particularly peeved that some of the adverts which appeared on were for Argos itself and its competitors.  Argos alleged free riding and damage to the distinctive character and reputation of its trade marks.

ASI relied heavily on an indemnity in the contract between Google and Argos which conferred third party rights on ASI.

Not to be confused with...
Odysseus' dog
Can domain name + Google ads = trade mark infringement?

Argos argued that the combination of the domain name plus Google ads (some of which included ads for Argos or Argos' competitors) amounted to trade mark infringement.  This allegation failed for two main reasons: (1) Argos had consented to the use when it signed Google's terms and (2) in any event there was no targeting of UK consumers.

How did Argos consent?

It was common ground that the use of the domain alone was insufficient to establish trade mark infringement (or passing off). In order to succeed in its claim, Argos needed the domain name plus something else.

The judge found that:

  1. when it signed up to Google's advertising service, Argos had expressly and unequivocally consented to ASI's use of ARGOS in its domain plus adverts for Argos' goods and services.  Therefore any claim founded on adverts for Argos appearing on was 'doomed to fail' because the Claimant had consented to this use.  
  2. The clear terms in the AdWords terms, the judge noted that it had been open to Argos to block its ads from appearing on but had declined to use this feature. 
  3. Even if Argos did not have direct knowledge of where its ads were appearing this knowledge was available to its advertising agency and was attributed to Argos under ordinary agency principles.
The judge was careful to point out this decision did not mean that by agreeing to the AdWords terms, advertisers were consenting to the display of other people's adverts on any third party website.  
If Argos had been able to establish that the Google adverts concerned Argos' competitors it might have been a different result.  However, the only evidence of competitor adverts appearing from occurred following deliberate manipulation of the cookies (i.e. deleting browser history and searching for competitor websites). 

Why was ASI not targeting the UK?
or the Ben Affleck film

Argos accepted that without the display of Google adverts it had no case on targeting. The question of targeting was objective rather than subjective.  It was assessed from the perspective of the average consumer.  The judge considered there to be two types of average UK Internet user (i) enquiring and (ii) unenquiring.  The first would assume some connection with their browsing history if they saw a third party advert on a website.  The second would not worry about the reason for the ad being there.

The Judge noted that the majority of the visitors to ASI's website did so in error - UK consumers assuming that would be owned by Argos.  ASI obtained traffic to its site due to the domain name which they had lawfully registered.  The adverts which appeared on could be divided into:

  1. those for Argos which Argos had consented to when it signed up for Google AdWords;
  2. those clearly not aimed at UK consumers (e.g. because the price was in dollars);
  3. those which may be aimed at UK consumers;
  4. those which were definitely aimed at UK consumers but were obtained as a result of cookie manipulation.

Friday, 24 February 2017

Swedish Patent and Market Court of Appeal orders block of The Pirate Bay and Swefilmer

The Pirate Bay blocked in Sweden? Yes, this is indeed what the Swedish Patent and Market Court of Appeal has ordered a major Swedish access provider to do in a recent decision.

Katfriend Nedim Malovic (Sandart & Partners) explains how things went.

Here’s what Nedim writes:

“In a 2016 judgment [commented on IPKat here] the Stockholm District Court (Patent- och Marknadsdomstolen) rejected an application to issue an injunction against a major Swedish internet access provider, Bredbandsbolaget (B2), to block access to torrent site The Pirate Bay and streaming portal Swefilmer.

The rightholders in this case (including, amongst others, Universal Music, Sony Music Entertainment, Warner Music, and Nordisk Film) had brought a joint action in which they claimed that B2 - by supplying internet connection to its own customers (thus enabling access to The Pirate Bay and Swefilmer) - was aiding and abetting (objectively) infringements of their copyrights. 

The Stockholm District Court dismissed the claimants’ action and rejected the request to order B2 to block access to those sites. This was on grounds that it was not possible to determine whether B2 has knowledge of third-party infringements. The first instance court also rejected the claimants’ submission that Swedish law is incompatible with EU law for not allowing blocking injunctions, and ruled out that the decision by the Court of Justice of the European Union (CJEU) in Telekabel [also discussed here] could have any relevance to the present case.

The appeal judgment: in brief

In what can be considered a landmark ruling, on 13 February 2017 the Swedish Patent and Market Court of Appeal (Patent- och Marknadsöverdomstolen) reversed the first instance decision, and ordered B2 to pay SEK 500,000 [approx EUR 53,000] to the rightholders and block access to The Pirate Bay and Swefilmer for the next three years. The decision cannot be appealed and is therefore final.

The court noted that it is indeed possible under EU law for rightsholders to obtain an injunction [pursuant to Article 8(3) of the InfoSoc Directive] against an intermediary whose services are used to commit a copyright infringement, even if the ISP only provides its customers with internet access. 

This also means that there is no need for a contractual requirement, or any other relationship, between the intermediary and the third-party infringer [recently, the CJEU has confirmed this in Mc Fadden, here, and – in the broader context of Article 11 of the Enforcement DirectiveTommy Hilfiger, here].

Will pirates have
a harder time now?
Then the court turned to Article 53 b of the Swedish Copyright Act and said that this provision should be interpreted in light of EU law. The result is that an intermediary, that supplies access to copyright content unlawfully provided by third parties, should be regarded as “participating” in the infringing activity. It follows that it should be possible to issue an injunction against such an intermediary. In contrast with the first instance ruling, the Court of Appeal also stated there is also no need establish an intermediary’s own criminal liability (for aiding and abetting the users’ infringements) for an injunction to be issued against it.

The court then considered whether it was proportionate to issue the injunction in the case at hand. In this regard, it highlighted the importance of striking an appropriate between the fundamental rights to (i) copyright protection; (i) receive/impart information; and (ii) to conduct one’s own business. Because the services of the intermediary were used to make works available without the rightholders’ consent it was considered to be proportionate to issue an injunction.

The reasoning of the Court of Appeal

More specifically, the Court began its analysis by discussing relevant provisions and CJEU case law on Article 8(3) of the InfoSoc Directive (“Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.”)

The CJEU decision in Telekabel clarified that “an intermediary that provides access to content which third parties’ made available through its services on the internet is an intermediary whose services are used by a third party to infringe copyright or related rights within the meaning of Article 8(3) of the InfoSoc Directive”.

In that case the CJEU also clarified that Article 8(3) of the InfoSoc Directive does not set out a requirement for there to be a special circumstance, such as a contractual relationship between the intermediary and the third party, or that it must be shown that third parties are taking part in unlawful activity using the services of the intermediary. 

Furthermore, the CJEU in Tommy Hilfigher held that there is an obligation for Member States to ensure that intermediaries whose services are used by third parties to infringe IPRs, irrespective of the intermediaries’ own potential responsibility for the activity at issue, may be forced to take measures to the ensure that the infringements stop and also take measures to prevent new infringements. 

Celebratory fika time
for Swedish rightholders
…. What about the safe harbour provisions?

Articles 12-14 in the E-commerce Directive set out exemptions from liability (safe harbours) in favour of mere conduit, caching and hosting providers. Article 12(3) provides however that the safe harbour should not affect the possibility for a court or administrative authority, in accordance with the Member States legal systems, to require a certain provider to terminate or prevent an infringement. 

This reading has been recently confirmed by the CJEU in Mc Fadden (para 79).

Hence EU law…

… intends to provider rightsholders with a high level of protection, also by enabling national courts to issue injunctions against intermediaries whose services are used by third parties to commit infringements. In this regard the court emphasized that Recital 59 in the preamble to the InfoSoc Directive provides that “[t]he conditions and modalities relating to injunctions should be left to the national law of the Member States”.

The Court thus turned to Article 53 b (first sentence thereof) of the Swedish Copyright Act. This provisions states that “[u]pon a petition by the author or his or her successor in title or by a party that, on the basis of a license, has the right to exploit the work, [a] Court may issue an injunction prohibiting, on penalty of a fine, a party that commits, or contributes to, an act constituting an infringement or a violation referred to in Article 53 to continue that act.”

The Marleasing principle and the Swedish Copyright Act

When implementing the InfoSoc Directive into the Swedish legal system, the Swedish Government decided not to use the same language of Article 8(3), but rather phrase Article 53 b in the sense of allowing an injunction to be granted against those who commit copyright infringements and those who aid and abet such infringements. However, as opposed to what the first instance court thought, this national provision must be interpreted in light of EU law (Marleasing principle) and there is no requirement for the claimant to demonstrate that the defendant did so through action or other active conduct. The court said that this conclusion was confirmed by both the preparatory works to Article 53 b and the InfoSoc Directive.

In conclusion the court found that Article 8(3) of the InfoSoc Directive requires that an internet intermediary such as an access provider may be subject to an order to block access to The Pirate Bay and Swefilmer. The requirement of proving a certain relationship between the intermediary and the infringing third party should be considered incorrect/obsolete. The court also ruled out that rightholders would need to prove that the intermediary’s customers have accessed the works (a condition stated instead by the first instance court).

The injunction enters into force on 28 February and will be in place for three years. The decision may not be appealed since the Patent and Market Appeal Court is in principle the last instance court in IP cases."

The Enforcement Directive permits punitive damages - or does it?

The common reading of the ECJ's (yes) recent judgment in case C-367/15 - OTK is that the Enforcement Directive (Directive 2004/48) does not compel Member States to introduce punitive damages for infringement of intellectual property rights, but allows for national law to impose punitive damages (see, e.g., the case reports on IPKat or Kluwer Patent Blog).

But a closer reading of the decision casts some doubt on this common understanding. In the answer to the question (for the background of the case see the IPKat post), the ECJ states "Article 13 of Directive 2004/48/EC ... must be interpreted as not precluding national legislation ... under which the holder of an intellectual property right that has been infringed may demand from the person who has infringed that right either compensation for the damage that he has suffered ... or, without him having to prove the actual loss, payment of a sum corresponding to twice the appropriate fee which would have been due if permission had been given for the work concerned to be used."

In the grounds for the decision, the Court further elaborates (paras. 29-31, emphasis added):

In addition, without there being any need to rule on whether or not the introduction of ‘punitive’ damages would be contrary to Article 13 of Directive 2004/48, it is not evident that the provision applicable in the main proceedings entails an obligation to pay such damages.
Thus, it should be pointed out that, where an intellectual property right has been infringed, mere payment of the hypothetical royalty is not capable of guaranteeing compensation in respect of all the loss actually suffered, given that payment of that royalty would not, in itself, ensure reimbursement of any costs — referred to in recital 26 of Directive 2004/48 — that are linked to researching and identifying possible acts of infringement, compensation for possible moral prejudice (...) or payment of interest on the sums due. Indeed, OTK confirmed at the hearing that payment of twice the amount of the hypothetical royalty is equivalent in practice to compensation of an amount remaining below what the holder would be able to claim on the basis of ‘general principles’, within the meaning of Article 79(1)(3)(a) of the UPAPP.
It is admittedly possible that, in exceptional cases, payment for a loss calculated on the basis of twice the amount of the hypothetical royalty will exceed the loss actually suffered so clearly and substantially that a claim to that effect could constitute an abuse of rights, prohibited by Article 3(2) of Directive 2004/48. It is apparent, however, from the Polish Government’s observations at the hearing that, under the legislation applicable in the main proceedings, a Polish court would not be bound in such a situation by the claim of the holder of the infringed right.

From the first sentence emphasized in the passages cited above it becomes clear that the Court of Justice explicitly  did not address the issue of whether Article 13 of the Enforcement Directive prohibits punitive damages, because according to the Court, the amount payable in the present dispute does not amount to punitive damages.
Looking closely

The second emphasized sentence makes clear that a "compensation" that substantially exceeds actual damages suffered may constitute an abuse of right. This sounds harmless enough - but to assess whether the hypothetical (double) royalty exceeds the actual loss suffered, the actual loss needs to be calculated, and that is exactly what provisions setting a hypothetical royalty want to do away with, because it is difficult and costly. It also raises the question of burden of proof - generally, the burden of proof for losses suffered lies with the party claiming compensation (typically the rightsholder). Where the law provides for a double royalty payable irrespective of actual loss suffered, the burden of proof that the double royalty "substantially exceeds" the actual loss is however an exception that needs to be proven by the party invoking the exception, i.e. the infringer.

In sum, the judgment in C-367/15 - OTK leaves room for debate whether the statutory damages due in a specific case are permitted under the Enforcement Directive, and it specifically does not address whether "punitive" damages are permitted under the Enforcement Directive.

For the pointer I thank Guido Kucsko, Vienna.

Thursday, 23 February 2017

Trader keeps the [good] faith in a spare part in trademark doublebill

Disputes involving the IP rights of spare parts dealers have challenged courts and registries for decades. An interesting instance with respect to the use and rightful proprietorship of a registered trademark occurred recently in Singapore in the case of AUDI AG v Lim Ching Kwang. Kat Friend Kevin Wong, of Ella Cheong LLC has kindly shared his thoughts on this case.

"In the Intellectual Property Office of Singapore case of AUDI AG v Lim Ching Kwang [2017] SGIPOS 2, German car maker AUDI AG applied on 31 March 2015 to revoke and declare invalid Registration No. T0911230B for a stylised trade mark “AOne”, in the name of Lim Ching Kwang, a spare parts trader. The mark is registered in respect of Classes 7 and 12, of which the proceedings involved only the latter class. The grounds for revocation and invalidation are respectively Section 22(1)(a) and (b), and Section 23(1) read with Section 7(6), of the Trade Marks Act (TMA).

Revocation--In respect of the revocation application, the Registrar had to decide whether the mark has been put to genuine use in relation to the Class 12 goods it covers during the period of non-use alleged by AUDI. Taking into account all the relevant circumstances and the evidence tendered by Lim, including emails, quotations, purchase and delivery orders, invoices, and pictures of packaging boxes labelled with the mark, the Registrar found that Lim has made genuine and not mere token, colourable or internal use of the mark in relation to torque rod bushes during the relevant period.

The Registrar disagreed with AUDI’s argument that an instance of Lim’s use of “AOne” in plain font in an e-mail quotation does not constitute use of the stylised “AOne” mark as registered, stressing that the adduced items of evidence must be considered in totality. The Registrar was also sufficiently convinced that, on the balance of probabilities, another instance of Lim’s sale of torque bushes to a local company involved use of the mark as labelling on box packaging for the goods. This is even though the fact that “AOne” brand label stickers were shipped to Singapore together with torque bushes, when looked at in isolation, does not show that such use materialised. As noted, the evidence must be considered in totality.

Nevertheless, as Lim failed to show use of the mark in respect of all the Class 12 goods covered by his registration, the Registrar proceeded to decide that the limitation of the specification to “torque rod bushes” would be fair for the use made. AUDI therefore partially succeeded in revoking Lim’s registration with effect from 19 January 2015, save for this lone item.

Invalidation--As for the invalidation action, the Registrar had to decide whether the mark was applied for in bad faith. AUDI’s case was that Lim’s specification is overwhelmingly broad in reproducing the entire list of Class 12 goods in the Alphabetical List of the Nice Classification, and clearly it cannot be a realistic or bona fide intention to use the mark for all the goods. To support this, AUDI further relied on the modest scale of Lim’s business, judging from its paid-up capital.

The Registrar held that it is baseless to conclude that a specification is too broad merely because it encompasses all the goods in the Alphabetical List of the class concerned. Neither is paid-up capital a reliable indication of the present and future trading capacity of a business. Furthermore, it is legitimate and not prohibited by law to seek registration encompassing present as well as intended future uses of a mark, and applying for a specification wider than current trading scope does not impute a departure from established principles of ethical conduct or honesty in commercial dealings.

Although the mere length or breadth of a specification is no basis for a conclusion of bad faith, the Registrar further held that a lack of intention (at the time of filing) to use a mark for all the goods claimed can constitute bad faith, given that the form of application for registering a mark incorporates a declaration of actual or bona fide intention to use. Given Lim’s legitimate spare parts business and market expansion intentions, coupled with the lack of evidence of unconscionable conduct or moral impropriety on Lim’s part, the Registrar decided that the high standard of proof for a bad faith claim has not been met. AUDI therefore failed in this invalidation action.

This case illustrates how non-use of a trade mark can attract loss of registration rights. It also reflects the burden of proof associated with bad faith allegations, and warns that broad specifications may be scrutinised for bad faith allegations."

Never Too Late: If you missed the IPKat last week!

Been away and want to catch up on last week's IP news? No problem! As always, the IPKat is here to bring you a quick summary -- the 135th edition of Never Too Late. 

Playing Polo with potential defendants 
Rosie Burbidge brings readers a Polo story: the longstanding dispute between the Beverly Hills Polo Club’s UK licensee (Lifestyle) and its increasing defendants that concerns infringement of EU and UK trade marks and procuring breach of a licence agreement. 
Rosie Burbidge also explains the trade mark filing spree/battle between Kylie Minogue and Kylie Jenner about the KYLIE mark. 

Neil Wilkof invites Kat friend Professor Shamnad Basheer, a noted figure in the Indian IP community, to report on the story of the Indian organization – “Increasing Diversity by Increasing Access to Legal Education (IDIA)” that was founded by him. 

Too big to pay? Employee-inventor compensation in the Court of Appeal
Eibhlin Vardy recaps the Court of Appeal’s answer to the question of “Can an employer be 'too big to pay' employee-inventor compensation under s40(1) of the Patents Act?” – the court has provided guidance on the relevance of this issue to the question of “outstanding benefit” in the long running dispute of Shanks v Unilever PLC and others [2017] EWCA Civ 2

Willow Tea Rooms: A tale of tea and trade marks (Part 2)
InternKat Hayleigh Bosher hosts a tea party continues her analysis (see Part 1 here) regarding Ms Mulhern, owner of the mark The Willow Tea Rooms opposing the Willow Tea Rooms Trust attempt to register the mark “The Willow Tea Rooms” in classes 35, 41, 42 and 43. 

No more counterfeiters.

BREAKING: AG Szpunar advises CJEU to rule that The Pirate Bay makes acts of communication to the public
Eleonora Rosati speaks on the AG Szpunar’s “extremely interesting” opinion advising the CJEU to answer the question of the Dutch Supreme Court regarding the Stichting Brein, C-610/15 case in the AFFIRMATIVE.

No more counterfeiters! Chanel, Apple, Bayer, LVMH (and more) write to President Juncker on revision to IP Enforcement Directive
Last week, a group of around 80 of the world’s best known consumer brands wrote to the President of the European Commission calling for action in tackling counterfeiters. Annsley Merelle Ward brings Catriona MacLeod’s report on the key points that merit attention. 

Is German SEP litigation set to increase with the "confidentiality club decision"​ of the Higher Regional Court of Düsseldorf?
“Can you just agree the confidentiality club regime with the other side?” -- the popular AmeriKat this time invites Kat friend Christopher Weber (Kather Augenstein) to explain the recent ground-breaking decision from Düsseldorf which is set to make litigating standard essential patents (SEP) in Germany a whole lot easier. 

After Sweden and Germany, GS Media finds its application in the Czech RepublicAfter Sweden [here, here, and here] and Germany [here and here], it is now the turn of a Czech court [here] to apply the seminal decision of the Court of Justice of the European Union in GS Media [for a quick, visual summary see here; Kat-coverage here] -- Eleonora Rosati brings Katfriend Juraj Vivoda (Marek & Partners) to readers to explain the quite “interesting” result in Czech court. 

Photo courtesy of Ms. Ana Bárbara. 


Never Too Late 134 [week ending on Sunday 5 February] | King Tut's tomb: conservation or replication (but don't forget the "aura")? | Willow Tea Rooms: A tale of tea and trade marks Part 1 | The next round of Cartier: UK Supreme Court will hear appeal re costs of intermediary injunctions | New National IP Strategic Action Plan in China | Full decision of Enlarged Board of Appeal in partial priority / poisonous divisionals referral (G01/15) published |INGRES Conference Part II - Trade Secret, Copyright, Design and Trade Mark Law Developments |5 mistakes to avoid in IP student essays ... and not only there | INGRES Conference Part I - European Patent Law Developments | Remembering Masaya Nakamura, the "Father of Pac-Man" 

Never Too Late 133 [week ending on Sunday 29 January] | IP Summit 2016 (First Part) | When a quote becomes famous: even if it was never quite said that way | The trademark licensing question that won't go away: the standing of a licensee to sue | Would you like a side of Mr Justice Arnold on SPCs with your wind turbine? Teva v Gilead, Abraxis v Comptroller and Wobben v Siemens kick of 2017's patent cases | AIPPI (UK) Event: 2016's patent cases - all you really need to know | BREAKING: CJEU rules that EU law does NOT prevent punitive damages in IP cases | Supreme Court rules Act of Parliament is needed to initiate UK leaving the EU| Book review: "From Maimonides to Microsoft: The Jewish Law of Copyright Since the Birth of Print"| Applications for information on infringers can be made outside of IP infringement proceedings| The Michael Jordan case in China – to be continued 

Never Too Late 132 [week ending on Sunday 22 January] |When this Kat doesn't know, he reaches out to Kat readers: what really happened at the dawn of modern commercial trademark use? I Social media, "WikiLeaks" and false news in the 18th century: Thomas Jefferson and the "Mazzei letter" I Does the economic impact of SPCs necessitate SPC Regulation reform? The European Commission wants to find out I A look at the proposal for the ePrivacy Regulation I BGH: to cease means to recall I Never too Late x2 I Around the IP Blogs 

Never Too Late 131 [week ending on Sunday 15 January] | Arrow declarations can be granted: Fujifilm v AbbVie | Guest Post - China's Patent Boom | Watch out lawyers - do you own your name? 

Wednesday, 22 February 2017

Book Review: The Informal Economy in Developing Nations - Hidden Edge of Innovation?

Off the beaten path of science and technology innovation lies a world of innovation in the informal sectors. Think lifehacks but with the goal of improving handmade soap, making-do with limited materials or other forms of improvisation and improvements outside the formal economy. Do innvotors in the informal sector protect their ideas? If so, how?  Staring with this exam question, a new book examines innovation in the informal economy, its structure, impact and role in economic development. The Informal Economy in Developing Nations book draws on WIPO research and, like the other volumes in the Intellectual Property, Innovation and Economic Development series, aims to inform policy through scholarly analysis, with an emphasis on economics. Edited by IP economists Erika Kramer-Mbula (Tshwane University) and Sacha Wunsch-Vicent (WIPO), the book seeks to apply analysis of innovation in the informal economy to policy.

The informal economy is the part of the economy not monitored by governments. It does not necessarily break laws; it is simply not captured by standard government regulation. Common types of labour in the informal economy include domestic workers, home-based and street vendors, and informal employment in construction, farming and textiles. As the authors detail, innovation in this sector does not follow the classic science-and-technology-innovation (STI), but a doing-using-and-interacting (DUI) process of innovation. IP has been developed for STI, and is less adroit at protecting DUI; hence investigating the informal sector can give us fresh insights into the machinations of IP.

The book is a collection of chapters which build a comprehensive picture of the informal economy and innovation. Early chapters detail the evolution of the definition of the informal economy and statistics, and our current understanding. Later chapters examine country-specific studies in Kenya, South Africa and Ghana, and the final chapters bring the analysis into IP, innovation and policy.

A picture of a man using a home-made welder for
the jua kali sector in Kenya, Erik (HASH) Hersman
A chapter on the informal metalworking sector in Nairobi, by Christopher Bull, Steve Daniels, Mary Kinyanjui and Barrett Hazeltine, looks at the production of metal goods such as pots, pans and wheelbarrows in the Kamukjunji region. The informal sector is so economically and cultural relevant in Kenya, that is is known as jua kali ("hot sun" in Kiswahili), and workers are referred to as fundi. The sector accounts for 20% of Kenyan GDP and the majority of job growth. Using photographic evidence and interviews, the authors identified innovations in the sector. The study finds that while the sector differentiates with quality and style, product or process innovation is sporadic; reverse engineering is the norm and secrecy is discouraged. The collaborative nature of the sector means the strongest 'protection' for innovation stems from first-mover advantage, which is estimated to last two-weeks. Currently, a cost-benefit analysis does not favour securing IP.  The authors conclude that there is scope to improve access to IP protection through awareness and grants, which, along with structural changes to help the domestic sector compete with imports, could benefit the sector.

Turning to South African home and personal care products, Erika Kraemer-Mbula examines the production of products such as lotions, cosmetics and detergents. Kraemer-Mbula notes that South African apartheid limited opportunities for black entrepreneurship, thereby restricting the majority of the population. The informal economy emerged as the, "entrepreneurial response to the legislative limitations." Analysing survey data, the author finds innovations in improved formulations, packaging, process and quality control. 76% of surveyed manufacturers did not feel ownership of the ideas associated with their products. Yet, 80% have their own brand, and nearly half have of respondents use secrecy as a protection mechanism. As is often the case with small businesses, surveyed firms report low levels of IP awareness, or consider it "unsuitable" or "inaccessible." Kraemer-Mbula suggests strategies to support appropriation:
  1. Creation of industry associations
  2. Raising awareness of IP
  3. Promoting use of informal protection mechanisms
Shamnad Basheer, of SpicyIP, picks up on two main themes. He cautions against, "the simplistic tendency to superimpose an existing "formal" IP appropriation regime onto the informal economy," and, "it is foolhardy to assume that the informal sector simply needs to learn from the formal sector and formalise as quickly as possible. On the contrary, the informal economy may have important lessons for the informal economy..." Supporting innovation is important, but a formal approach to IP may not always be the answer.

The final chapters detail the challenges of developing policy to support the informal sector, and the difficulties faced in studying. The authors note that studies point to common strategies for IP protection (appropriation) in the informal economy: social norms, secrecy, customer relationship management, non-IP strategies such as first-to-market, and branding. An entire chapter is devoted to creating an agenda for the measurement of innovation in the informal economy - a longstanding point of frustration for economists. The authors discuss two main sticking points: how to ensure survey and interview questions get meaningful results, and how to chose samples that support valid studies.

The Informal Economy in Developing Nations does an admirable job of detailing current thinking and mapping out the way forward in this area. Readers interested in broadening their understanding of innovation, ways to appropriate the returns to innovation with frugal resources, and potential policy support solutions will find the book useful. The third in the series edited by WIPO Chief Economist, Carsten Fink, the book is commendable for drawing from a geographically diverse group of contributors. Nearly a third of the authors are women. Readers interested in conducting their own surveys will find the annexes helpful, as the full survey instruments (guidelines and interview questions) are included.

The Informal Economy in Developing Nations: Hidden Engine of Innovation?, edited by Erika Kraemer-Mbula, Sacha Wunsch-Vinceny, Cambridge University Press, 2016, ISBN 9781316798942, is available here for £100 in print, and $100 in e-book. Rupture factor: Medium, 400 pages.

Tuesday, 21 February 2017

Copyright law in the UAE: it's not what you might think

Practitioners who think that copyright in the United Arab Emirates (UAE), a market of increasing importance for IP owners, is similar to that
in place in common-law jurisdictions, will be surprised to learn that this is not so. Kat friend Vanessa Delnaud of the Dubai office of Gowling WLG puts us straight on some of the major features of copyright law in the UAE.

“It is common practice for many companies operating in the UAE to run their business on the assumption that the principles enshrined in the UAE Federal Copyright Law are the same as those applied in common law jurisdictions. This is not the case. This false belief may have a significant impact on businesses, since it may result in authors' rights arising out of the company's activities not being effectively passed through to the company, rather remaining with the individuals who created those rights, thus putting the company at risk.

In fact, the UAE is a civil law jurisdiction, highly influenced by French law and Islamic law. As such, the provisions of the UAE copyright law fundamentally diverge, in some respects, from copyright law in common law jurisdictions. It is paramount for companies employing people and/or commissioning works in the UAE to be familiar with the typical main differences between the copyright law in the UAE and the copyright laws in common law jurisdictions.


In common law countries, the copyright may initially vest in the employer or another person/entity for whom the work was prepared. For example, in the United States, under the "work made for hire" doctrine, copyright in a work created by an employee within the scope of his/her employment will automatically (without a written assignment) and initially vest in the employer. A commissioner may also own the copyright in a work made by an independent contractor as a work made for hire under certain circumstances. A similar rule exists under the laws of the UK and of Ireland with respect to works made by employees.

In civil law countries, however, ownership of copyrights in a work vests in the author of such work, until the copyright is assigned through a written assignment instrument. (But, in some countries, there may be some specified rebuttable presumptions of transfer with respect to, for instance, employee-created software, audiovisual works and collective works – works involving numerous contributors). Under the UAE Copyright Law, absent a written assignment of copyright in an employment contract or commissioning agreement, the copyright will not be passed through to the employer or commissioner of the work. Rather, it will remain with the employee or the independent contractor (unless the work may qualify as a collective work under Article 1 of the UAE Copyright Law, which may be difficult to prove in practice). This means that a clause merely referring to the assignment of all the rights in the works as works 'made for hire' would be irrelevant and ineffective.

It is important to note that a copyright assignment is only valid under the UAE Copyright law if it satisfies a number of conditions, including that the assignment should: (1) be in writing, (2) expressly specify the rights assigned, and (3) include statements of the purpose for which the rights are assigned and the geographical area in respect of which the rights are assigned. Without an assignment that complies with the provisions of the UAE Copyright Law, companies are at risk of having to defend a copyright infringement claim from the owner of the rights that were not transferred (either an employee or a contractor), and/or a contractual liability claim from their third party licensee/assignee facing a copyright infringement claim from the owner of the rights. Also, if a company cannot prove its ownership of copyright, it may have a significant impact on the admissibility of any infringement claims against potential infringers as well as on its ability to find investors or on the price of its business when trying to sell it.


In common law countries, there is no prohibition on the contractual assignment of a future copyright in a work that has yet to be created. In civil law countries, however, as a general rule, an agreement that concerns all the works or all the works of a specific type that will be created by an author in the future is void. In particular, the UAE Copyright law contains a provision that deems any disposal of the author's future intellectual rights in five or more future works to be null and void. But if, for example, an employee is employed in a creative role, he/she may complete five or more works within a few hours of signing his employment agreement. As a result, in order to overcome such restrictions, we recommend that companies put in place with their employees and service providers in the UAE a system of confirmatory assignments that should be completed and signed by the employee/service provider once it has created and delivered any work in the context of its employment or service agreement.


Moral rights are personal and cannot be assigned. However, in most common law jurisdictions, moral rights can be waived. It is therefore usual practice to see in assignments or licensing agreements governed by US, UK or Irish law, provisions under which authors waive their moral rights. Such an approach is consistent with the functional view of authors' rights in these countries.

On the contrary, in civil law countries, including the UAE, a general waiver of moral rights would ordinarily be unenforceable. This is because it would be equivalent to an assignment of moral rights, which is prohibited in accordance with the traditional approach of copyright in civil law jurisdictions (pursuant to which authors' works are protected as the products of the authors' personality, so that authors should be protected against any modification of their works). An author may only undertake in writing not to exercise his/her moral rights in relation to a specific person or entity, provided that the agreement specifies the work(s) and specific uses to which the undertaking applies. The more detailed these provisions are, the greater the likelihood that they will, if challenged, prove valid and enforceable in court.”

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