Conference Report: IBIL's Annual Hugh Laddie Lecture

The AmeriKat gets a twinge of nostalgia whenever she walks up Gower Street to UCL, returning to her LL.M alma mater and the scene of her first sturdy paw prints into her career in IP. Perched at the back of the lecture theatre this evening, sandwiched between a counsel and a colleague, she observed the IP glitterati as they shuffled in to this year's IBIL Annual Hugh Laddie Lecture entitled, "Killing the Goose that Laid the Golden Egg: Too Many Trademarks?" - a lecture all about trade mark use (the bane of many a IP practitioner's existence). This year's lecture was given by The Honourable Mrs Justice Fidelma Macken of the Irish Supreme Court, and formerally Ireland's appointee on the European Court of Justice. (picture, left - the AmeriKat during her time at UCL living in the shelf next to one of her many IP text books)



Before Mrs Justice Macken began her speech, there was the matter of introductions - all three of them! Dame Hazel Genn DEB QC, Dean of UCL Faculty of Laws (and an inspiration to this Kat) first welcomed everybody, with Sir Robin Jacob (picture, right) seconding the welcome together with a brief statement of intent now that he finds himself truly "arrived at UCL". Sir Robin stated that he wanted the function of his role at IBIL to be "not an academic IP lawyer or a solely practical IP lawyer, but something in between" with the view that IBIL is to be the institute that the IP world looks to for their views on IP goings-on. Sir Robin stated that when he tried to convince Mrs Justice Macken to speak at this year's lecture, there was really very little convincing to be done; her answer was

"Yes, because of Hugh."

Lord Justice Mummery, the Chairman of the evening's lecture, in introducing Mrs. Justice Macken set out her list of accomplishments and highlights - from her educational background at Trinity College, to her work as a barrister and then as a judge first for the High Court and then as the first woman judge at the European Court of Justice. Before handing over the floor, Mummery LJ, like any good judge and chariman could not help but make some observations about the topic of trade marks:

"Why should such a simple idea of having a sign to indicate the source of goods be so unpredictable?...Why does a subject that is all about preventing confusion be so confusing?"

Mrs Justice Macken (picture, left) in brief response, after thanking Michael Fysh and Valentine Korah (thanks!), stated that the reason that trade mark law is of great interest, annoyance and confusion is probably due to more than just Europe and the Court of Justice for the European Union (CJEU) "sticking their nose in", it is also due to the fact that it probably "pays to have a great deal of problems with IP" from the perspective of all stakeholders = the trade mark proprietors who fight to protect and strengthen their rights, the trade mark users, and of course, us lawyers.

Mrs Justice Macken commenced her speech by acknowledging that "trade marks are the most wonderful things in the world apart from children, grandchildren..." and that it is a great area to work in because, she says, the philosophical reasonings underpinning trade mark law can be traced to logical (sometimes) answers in legislation. But trade marks, despite all of their merits, only function well if they are actually suitable for their job and that they are in fact used. She then regaled the audience of stories of yesteryear that when registering a trade mark in Ireland the most difficult element to prove was not the requirements for registrability but that the applicant had an intention to use the trade mark.

Following a brief recap of the Community Trade Mark (CTM) story, Mrs Justice Macken criticized the Trade Mark Directive and Regulation for lacking a unified rationale and for the lack of clarity on the issue of use/non-use. Even after seven years of these instruments being in force, she said, you would think that there are few legal questions left to resolve - not so. The criticism that was at the focus of Mrs Justice Macken's discussion was Article 15 of Council Regulation 40/94 which states:

"If, within a period of five years following registration, the proprietor has not put the Community trade mark to genuine use in the Community in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the Community trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use."

The provision, she argued, does not impose a positive obligation of use on the proprietor despite Recital 9 of the Regulation stating that there really is not much point of having a trade mark without it being used. Recital 9 states:

"Whereas there is no justification for protecting Community trade marks or, as against them, any trade mark which has been registered before them, except where the trade marks are actually used"

Clark & Smyth (Please help the AmeriKat out on referencing if you can!) was cited in support of the argument that Article 15 had no teeth in specifying the sanctions provided for in the regulation for non-use (i.e. Article 9) especially as it does not present a "stumbling block to registration". Mrs Justice Macken also cited an article by Shane Smyth in Intellectual Property who argued that the problem of the use/non-use issue has meant that the trade mark register is crowded with inactive marks. This is as a result of two things: First, that during registration an application can apply a mark for two or three classes of goods for the price of one (bargain!); and second, that the Nice Classification system is so broad that an application can obtain a registration for a full class of goods even though they have no intention to use the mark for a subset of that class of goods. This overly broad and crude classification is especially problematic in priority applications. For example, if the priority mark is from the US the mark is first subject to tighter registration proceedings and more restricted goods/services specifications, but as soon that mark gets to European shores their registrable class suddenly enlarges.

OHIM apparently responds to these concerns by saying that there is no clutter on the register and that every year when some marks are up for renewal, a very large proportion (tens of thousands?) of marks are not renewed either for classes of goods/service or at all. Mrs Justice Macken argued that in an academic world that would be fine, but in the real world it is not attractive to be advising your client that they have to wait 10 years for that mark to come up for renewal before you can grab it. Sure, there are revocation and cancellation proceedings but they are expensive, lengthy and highly uncertain. It was suggested that it is better to advise a client to get their marketing people to find a better mark that is available, then waiting around or bringing proceedings. One would only be sensible to use revocation proceedings to oppose registration or if they are being sued for infringement and are able to use it as a defence.

Mrs Justice Macken then went on to tackle the issues and comments raised in the Max Planck Institute's recent report (see here) on the European trade mark system. When the Trade Mark Directive and Regulation were originally published a joint statement was issued that stated that adequate use of a trade mark would be use of a trade mark in a single member state. Such use would then be sufficient against a non-use attack. The Max Planck report examined whether this was a justifiable approach and whether there was any feeling from concerned parties that the 5 year period for use should be reduced to 2 years. According to the report, a vast majority of practitioners and users wanted to keep the 5 year period, but the lawyers did not - but no reasons were given for this view (Does anyone want to give any thoughts?)

Mrs Justice Macken then briefly turned to the issue currently being raised in the ONEL case (supported by the VP of the Hungarian Patent Office and the Danish IPO). She stated that the reasoning behind this support is that if a trader wants to trade in a small area, like Belgium, under Mark X but has no interest in trading in Slovenia why should a trader in Slovenia who has no interest in trading in Belgium not be able to trade under Mark X? The current Community Trade Mark system does not allow this because there is a very European rationale underpinning this position, i.e., trade mark use is to be considered use for the purposes of the internal market, not merely as use as per each Member State. The joint statement can be interpreted as saying that use in one state "could be" use through out the Community, i.e., it does not necessarily have to be, but such an interpretation although logical, Mrs Justice Macken stated, is not found in the text.

Mrs Justice Macken then closed by touching briefly on the issue of competition law and intellectual property - the necessary evil the AmeriKat feels she needs to start taking seriously in her own education. She stated that with the rise in consumer protection the impact of competition law on IP is more and more intrinsically felt. Mrs Justice Macken stated that in her opinion trade marks, patents and other IP rights, provided they are not abused should not be heavily restricted by competition law because IP rights are a integral part of a functioning market - only if they are abusive should competition law intervene. In closing, she also expressed concern that there is an automatic assumption that if a company is large, has a large IP portfolio they ipso facto are bound to abuse their IP rights; this is a falsity that Mrs. Justice Macken wishes to correct.

The floor was then open for questions. Kate Szell was the first up who echoed, from experience, Mrs Justice Macken's speech. Szell stated that the cluttering of the trade mark register was a significant problem when advising clients to register especially from the "use" perspective. It is rare that a search does not reveal anything of potential concern and as a practitioner one has to advise their client that if they proceed they could be faced with an interim injunction. Szell also stated that it can also be the case that after an internet search a prior mark can seem to be limited for a class of goods, but the risk is of course still there. There is this element of risk due to the "use" problem, but if an overly-cautious approach is taken then new registrations may never occur because clients would be too reluctant to adopt a mark. The general opinion was that this state of the law is massively undesirable.

Steven Jones of Baker & McKenzie clarified for the audience that the 5 year period is from date of registration, so during the application time as much as an additional 2 years can be added to this period. Therefore, during the 5+ year period the mark is "stuck like glue" and there is very little one can do to challenge it. Roland Mallinson of Taylor Wessing stated that under UK law one can attack a mark on the grounds of "bad faith" for non-use or non-intention to use the mark. Under CTM you cannot do this at pre-registration stage and Mallinson questioned whether this could be a way forward. Mrs. Justice Macken stated that she was unsure if this was practically feasible and stated that bad faith arguements can also be a huge expense (quite, says the AmeriKat, someone please define "bad faith" under the Trade Mark Act 1994 because she has yet to find anyone who can).

The most interesting part of the discussion was when a member of the audience (now identified as Richard Ashmead) questioned why there is a lack of transparency regarding the observations that governments are making in respect of the ONEL case and the recent German reference on embryos. We should be able to see what the UK government is saying about these issues and that the secrecy is absurd. Mrs Justice Macken had sympathy with this position and stated that this is something that should be reviewed. This Kat absolutely agrees. How can the UK Government, or any EU Government, expect the people of their countries, including trade mark users, proprietors and practitioners to work under their trade mark law if they do not even know what their Government thinks about such issues? Why should there be such secrecy at all? These are cases that are being referred to the Court of Justice which we will eventually be bound by in some respect. Thoughts?

The Annual Sir Hugh Laddie Lecture was closed by Lord Justice Mummery and the participants ventured across Gower Street for much-deserved drinks and canapés and an evening of further topical trade mark discussions. Mrs Justice Macken's paper will be made available through the IBIL website in due course and this Kat will be greatly interested to get her paws on it for some light summer reading.

The AmeriKat would like to thank the wonderful Lisa Penfold of the UCL Law faculty for getting this Kat into the session after she neglected to register in time.