Handbags at Dawn: Live Report 2

After a brief coffee break which saw this Kat feverishly trying to edit her first post, Michael Edenborough QC of Serle Court (picture, left) commenced his oratory on Google Adwords. He commenced by suggesting that the ECJ got it "absolutely right" in respect to some points but were 'barking mad' to other points in the recent Google Adwords case. Edenborough continued with the explanation of the mechanics and operation of Google AdWords and highlighted that the ECJ referred to Google's display of results as "natural results", which assumingly meant that the sponsored links were therefore "un-natural". The Google AdWords cases were all French cases, he explained by way of background, some of whom had certain French trade marks, owned by French companies who were suing an American company in France. No prizes for guessing what the French courts held, i.e. that Google was liable for trade mark infringement.

Edenborough QC launched into the main Google AdWords case by discussing the use of a sign in the course of trade. The ECJ defined "use in the course of trade" as use occurring in the course of commercial activity with a view of gaining an economic advantage and is not a private matter. Edenborough QC said it was a pretty good definition but questioned whether commercial activity necessarily has to be with a view to economic activity? Could you trade that in a way that was not for economic advantage, such as undercutting price or parasitic trading? The storing of keywords and organize of the display of ads is not use within the meaning of sign, the ECJ held. Edenborough agreed with this ruling because has he explained, Google is just selling an advertising sign - not as sign as used in relation to good, but as a sign as an item of commodity themselves.

The UK's section 10(4) of the Trade Mark Act 1994 illustrates what can be included as "use in the course of trade" but it was pointed out that this list is a non-exhaustive list so there could be more activities that could be classified as "use". Edenborough explained that the list in the Directive and Regulation was drawn up before the full emergence of e-commerce and advertisement on the internet. The Court was clear that they had in consideration in defining "use" that there may be future "uses" not yet contemplated by the ECJ and this definition allowed the scope for the future.

Edenborough also questioned why the ECJ was concerned with whether the relevant internet user is confused as to the origin of the goods in the cases of double identity (identical marks, identical goods). He suggested that the ECJ seemed to have introduced by the back door that double-identity is not an absolute wrong but is only wrong if there is in addition confusion as to trade origin or some other adverse affect on the other trade mark functions. Edenborough raised this because the Commission thinks the ECJ has gone wrong on this point and is in the process of challenging this and is a live issue. The ECJ ruling seems, he reiterated, to be going way from double identity being automatically actionable by itself to now double identity being actionable if confusion is present.

Edenborough then turned to the Portakabin case said that this case was interesting in regards to Article 6(1) or Section 11(2)(c) defences. The ECJ said that these defences were unlikely to avail the advertiser because it is unlikely that the advertiser could really claim not to have been aware by the ambiguity caused by the use of the sign and therefore fell foul of honest practices exception. Edenborough expanded greatly on this case but this Kat was unable to quickly jot down all of his musings.

Edenborough then touched on the InterFlora case that has yet to go anywhere yet as it is being batted back and forth from the ECJ. The questions refered to the ECJ ran to two sides of A4, single space, he was quick to point out.

Arnold LJ asked whether the use that occurs when one purchases and uses an AdWord falls within the definition of 'use'. However, Edenborough suggests that the ECJ is saying in their recent AdWords decisions that these types of uses fall within use for the purposes of e-commerce. He said he would be amazed if any of those uses would fall outside the scope. The more important point, he suggested, was in respect of trade mark function. Edenborough suggests that the ECJ is putting too many functions on a trade mark and we should really go back to the good ol' days of trade mark origin. This issue, he said, will be debated in the Interflora case.

Turning to the liability of the ISP Edenborough said that was obvious that Google's use in the AdWords case is not use. Edenborough suggested that the attack on the ISPs is yet to be formulated well and suggests that they be attacked as a joint tortfeasor with the advertiser and not as a primary tortfeasor. He suggested that without Google providing the service the advertiser could never by infringing AdWords. He believes that this is a possible line of attack and we may see this as a new round of fights heading to our courts.

Jeremy asked Michael if he could identify the winners and the losers in the fashion sector. Edenborough in barrister style said that "it is an incredibly complicated point". He went on to illustrate that although he loves cars, he does not own a Lamborghini, but you can purchase affordable imitations. (picture, left -Michael's new car) He said that the exclusiveness of the top brands does to a certain extent depend upon the fact there are a section of people that can never attain them. He said that the players in the fashion industry feed off each other, so its not clear to identify who are the winners or losers.

Next up was this Kat's colleague, Joe Cohen from Collyer Bristow, speaking on the important topic of litigation in the fashion industry. Before commencing his presentation, Cohen presented Jeremy with a counterfeit "Hello Kitty" bag. However, he was unable to give him the bag permanently because it is currently subject of an on-going case.

Cohen opened with an introduction of the issues relevant in deciding when a fashion house should commence a claim for infringement of their IP rights. Before turning to the nuts and bolts of a claim, Cohen introduced the rights that may apply to fashion items - design rights, trade marks, copyright, and passing off. Cohen emphasized the importance of fashion brands to register trade marks for their branding and emphasized the importance given to them by the earlier speech by Manny Silverman (see previous post here). He also alerted the audience to look out for trade mark use on swing-tags on garments.

Cohen explained that unlike Silverman his talk would emphasize on design rights, as protection of trade marks in the fashion industry is similar to that in most industries.

The ownership of a design is one of the fundamental building blocks of a claim and it is important for a design house to know who has design the garment and who owns the rights. Cohen explained that where the employee creates the design in the course of employment, UK law holds that the fashion house will own the design rights. He cautioned that where freelance designers and interns, who are not strictly employees for the purposes of employment law, the fashion houses must have these individuals assessing their IP rights in the design to the company. If the claimant does not own the rights, he warned, there is no claim.

But the claimant is not the only person to be concerned with. The identity of the defendant needs to be assessed as to whether it is worth the costs in taking action against a rogue trader. Small business should have policies in going against prolific infringer, but where the defendant is a large business, such as LVMH, potential claimants should consider whether you want to risk the costs of proceedings against such a giant who will fight such claims.

Cohen (picture, left) said that design litigation remains hazardous and potential claimants need to ensure that their case is nearly water-tight. Cohen then briefly touched on the requirements of design right protection - novelty, individual character, and not dictated by a garment's technical function. Cohen said the main battleground is in assessing whether a garment has individual character and this difficulty is illustrated by Autumn/Winter's trend of camel coats. Cohen then progressed through the test for design right protection: is a camel coat novel? Do they have individual character? It can be very difficult, Cohen explained, to identify the individual character of a garment that is protectable.

Cohen then cited Floyd J in Jimmy Choo v Towerstone case concerning the Ramona Jimmy Choo bag where the bag was recognized to be protected by design rights. However, this case was contrasted by the non-fashion design right case of Dyson Limited v Vax [2010] where Dyson lost the case due to the approach by Arnold J in assessing the individual character. The treatment of these cases evidenced the need, Cohen reiterated, in ensuring your case is strong.

Fashion houses can reduce costs and speed up the process of protecting their designs and commencing proceedings by employing some in-house procedures. These include collating good evidence of design drawings. He distinguished between good design drawings and bad. Although a design drawing may look better by virtue of a detailed drawing of a garment, if it does not have the date of the design being created and the name of the designer this type of drawing would be poor evidence in a claim.

Cohen continued by speaking on the important but admittedly boring pre-action protocol and civil procedure rules. He emphasized the importance of complying with the pre-action protocol and the need for a proper letter of claim to front-load the case and save on costs. Cohen also said not to try and write a letter to frighten the defendant. When you write a letter before action, he advised, you should be prepared to follow through with the claim. This is especially important in the case of unjustified threats under section 26 of RDA 1949 and section 31 of the TMA 1994. He warned that a threat's actions can be made against a claimant. The case of Best Buy v Worldwide Sales Corp [2010] was cited.

Depending on the response to the letter before action the next step could be making the claim. The first thing to consider is where to sue the defendant - England or somewhere else in Europe or the US - but also what court? One can sue in either the Patent County Court (soon to be the IP County Court) or High Court. Cohen introduced the new changes to the County Court - the savings of costs in the county court make it very attractive to potential fashion claimants to bring action here.

Cohen then quickly touched on the procedural issues of issuing a claim form, particulars of claim and the remedies achieved in an IP case. He emphasized the use of publication of judgment in fashion claims as a deterrent effect. But the main point that fashion brands should take home, Cohen emphasized, is that brands can use the new simplified procedure for border measures. These procedures are a cost-effective and simple way in detaining counterfeit garments and accessories before they enter the U.K.

Jeremy asked whether it is worth bothering to apply forwith due to the internet? Cohen said it is worth it due to the deterrent effect. Publication is provided for in PD63 para 29.4. Nicole Hirst from Withers explained that in the Cipriani case, where Withers acted for the defendant, an order for publication was ordered against the defendant, but explained that there was a lot of to-and-froing on the issue of publication on the restaurant's website and the issue of publication was somewhat fraught with issues. Jeremy believed that the publication on a claimant's website is very important. Cohen asked what happens if the court does not order publication, what can the Claimaint do? This IPKat is unsure if this question was ever fully answered.
Handbags at Dawn: Live Report 2 Handbags at Dawn: Live Report 2 Reviewed by Annsley Merelle Ward on Tuesday, September 21, 2010 Rating: 5

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