INGRES Conference Part II - Trade Secret, Copyright, Design and Trade Mark Law Developments

Christoph Ann telling secrets

The afternoon of the INGRES conference in Zurich was dedicated to developments in trade secret, copyright, design and trade mark law.

Prof Christoph Ann (TU Munich) explained the new Trade Secret Directive. He emphasized the importance of the issue in an age where every enterprise has valuable information to guard. Since trade secret protection is currently regulated in Germany in disparate acts, consolidating the regulation into a new Trade Secret Act seems the way to implement the Directive. Christoph Ann was sceptical, however, that a solution to the whistle blower protection problem could be found before expiration of the implementation deadline on 9 June 2018. A provisional solution would have to be found. Another area that requires reform is German civil procedural law - under the current rules, the old adage "lose the secret or lose the case" applies. Germany namely does not know any "counsel eyes only" restriction, which means that any submission to a court will be accessible to the counter party and possibly be mentioned in a public decision. This, in addition to the relatively strong patent protection in Germany, may be a reason why trade secret litigation is currently rather rare in Germany, unlike in the US, where it is increasingly common.

Guido Kucsko (Schönherr) entertained the crowd with a tour de force of European copyright law. His main point, well taken by the audience, was that with ten Directives concerning copyright and three more Directives and three Regulations in the pipeline (Portability Regulation, Transmissions Regulation, implementation of Marrakesh Treaty, Copyright in the Single Digital Market Directive, Audiovisual Media Service Directive), the time has come for a consolidated EU Copyright Regulation that addresses all aspects of copyright in one act. Guido Kucsko also cautioned that OTK v. SFP, C-376/15, which is generally read to allow punitive (double) damages under the Enforcement Directive is more cautious in its reasoning than the answer to the question would suggest. While the answer states that the Enforcement Directive does not preclude national legislation awarding a right holder "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", the reasoning states that "it is not evident that the provision applicable in the main proceedings entails an obligation to pay [punitive] damages". Namely, "mere payment of the hypothetical royalty is not capable of guaranteeing compensation in respect of all the loss actually suffered", and "where payment for a loss calculated on the basis of twice the amount of the hypothetical royalty will exceed the loss actually suffered ... clearly and substantially ... a claim to that effect could constitute an abuse of rights, prohibited by Article 3(2) of Directive 2004/48". 

Peter Schramm (Meyerlustenberger Lachenal) reported on the developments in the highly contentious - and economically hugely important - issue of design protection for spare parts. Germany and Italy are taking contrasting views namely on whether wheel (caps) are "must match" parts in the sense of Article 110 Design Regulation, and two referrals are pending before the ECJ (C-435/16 and C-397/16). The wording of the questions referred to the ECJ clearly indicates which way the respective courts - the German Bundesgerichtshof and the Italian Corte d'Appello di Milano - are leaning.  While the Italian court wants to know whether "the principles of the free movement of goods and of the freedom to provide services within the internal market, (b) the principle of the effectiveness of EU competition law and of the liberalisation of the internal market, (c) the principles of effet utile and of the uniform application within the European Union of EU law and (d) the provisions of secondary EU law, [...], preclude an interpretation of Article 110 of Regulation No 6/2002, which contains the repair clause, that excludes replica wheels", the German court enquires whether "the application of the bar to protection as provided for in Article 110(1) of Regulation (EC) No 6/2002 limited to fixed shape parts, namely those parts whose shape is in principle immutably determined by the appearance of the product as a whole and cannot therefore be freely selected by the customer, such as rims for motor vehicles?" (emphasis added). Also mentioned was the tdecision issued by the District Court of the Hague in the consolidated cases Samsung Electronics Co Ltd v Maxperian NL BV and Samsung Electronics Co Ltd v Digital Revolution BV [ECLI:NL:RBDHA:2016:14383, para 4.74], which held that toner cartridges can be protected under Community Design rights because they are not component parts of a complex product (MARQUES Class 99 post).

Common practice for LOC and signs with non-distinctive elements

Ulrich Hildebrandt (SKW Schwarz) shone a spotlight on the likelihood of confusion caused by non-distinctive elements, not mincing words when calling C-182/14 - MEGA Brands International v OHIM "the worst ECJ decision ever". A non-distinctive element, even when dominant, cannot by itself form the basis for a finding of a likelihood of confusion. Hildebrandt attributed the sometimes errant ECJ decisions to the case load of the court - parties had little financial incentives not to appeal to the ECJ, and the ECJ has a tendency to approve whatever the General Court found. Only 5% of appeals in trade mark matters are successful, which supports the thesis that the ECJ is not overly critical. Hildebrandt is optimistic, however, that the practice of the lower instances will improve, as the Convergence Program 5 - Relative Grounds – Likelihood of Confusion (Impact of non-distinctive/weak components) addresses the issue in a sensible manner.

Christoph Bartos (Member, Board of Apeal, EUIPO) highlighted developments in European trade mark law. The decisions were too many to mention here, but one that struck me as particularly important concerns the use of individual marks that are used "like" collective marks. In R-2897/2014-5 BOSQUE VERDE (fig.) / VINHO VERDE et al. the Board of Appeal found that regarding the proof of use in relation to Article 8(1)(b) and 8(5) CTMR invoked, the Opposition Division correctly concluded that the evidence showed use of the sign only as a designation of origin but not as a trade mark and, consequently, that the opponent had not provided sufficient indications concerning the earlier marks’ nature of use. In other words, if you are registering signs that are used like collective marks as individual marks, you risk losing your mark for lack of use after the five year non-use period. Expect a surge in applications for collective marks.