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.

Galileo and the case of the ventilating hearing officer

The original Galileo

There has been a fair bit of bad blood between Galileo -- not the astronomer but the company -- and the European Commission in recent times over use of the word 'Galileo' by the EU for its satellite navigation system project (for samples of bad blood click here, here and here). The latest twist in the saga occurred last week, in the majestic surroundings of London's Royal Courts of Justice.  The event in question was Galileo International Technology LLC v European Union (formerly European Community) [2011] EWHC 35 (Ch), in which Mr Justice Floyd in the Chancery Division, England and Wales, delivered his judgment last week.  Still not yet on BAILII, this is an appeal by Galileo against the decision of a hearing officer at the UK Intellectual Property Office (IPO) to revoke one and partially revoke two of its UK trade mark registrations of the word GALILEO (Classes 9 and 42: goods and services relating to computer hardware and software) for lack of genuine use.

The original European Community

The European Union had sought revocation of Galileo's marks under the Trade Marks Act 1994 s.46(1)(a) for non-use.  Galileo said it had used its marks and submitted evidence to support this contention.  This consisted mainly of what the judgment describes as "the exhibiting, without description, of a large number of documents". The hearing officer thought this evidence lacked clarity and specificity regarding the use claimed, concluding that there had been no genuine use in relation to computer hardware and only a limited use in respect of software. Accordingly he revoked one mark in its entirety and partially revoked the other two by restricting the specification of goods.  Galileo was generously given four weeks to suggest alternative specifications for its registrations, based on the hearing officer's findings, but failed to do so.

On appeal, Galileo argued that the hearing officer had got it wrong.  First, he had applied the incorrect legal standard to his assessment of the evidence in relation to genuine use by imposing a quantitative threshold rather than a qualitative one.  Secondly he shouldn't have partially revoked the trade marks since the pleaded attack on the marks extended only to the entire specification of goods, providing an inadequate opportunity to deal with the proposed limitations.

Floyd J allowed the appeal in part.  In his view

* It was common ground that "there was no qualitative quantitative threshold" that use had to satisfy before being taken into consideration when establishing genuine use of a trade mark. It was therefore for Galileo to establish that the hearing officer had imposed a quantitative threshold when evaluating the evidence of use. In this case it was plain that the officer had not.

* Nor was there any no basis on which to suggest that the hearing officer had applied any special standard of proof to his evaluation of the evidence: all he did was to make the best determination of what use had been made of the mark in the difficult circumstances presented by the manner in which Galileo's evidence had been prepared.

* An applicant for revocation who believes that a mark had not been used at all within the relevant period in relation to any of the goods or services for which it is registered is entitled to plead that case, following which it is for the proprietor to plead what use it had made of the mark. While the burden of proof and the obligation to plead facts were different things, the burden of proving use was on the proprietor. The battle between the parties in revocation proceedings would thus usually be over the categories of goods on which the proprietor claimed to have used the mark. If the claim to actual use covered anything less than the entire specification, the unused portion was vulnerable to revocation, as every proprietor had to appreciate.

* A proprietor faced with an unrestricted application for revocation could not seriously claim to be taken by surprise by the suggestion that if it failed to prove use across the entire specification of goods, its mark would be revoked in respect of those goods for which use was not shown.

* On the other hand, procedural fairness had to be ensured in all proceedings, particularly where a hearing officer "ventilates possible restrictions to a specification at a hearing which had not previously been addressed in writing".

* A party who was faced with a restriction which took it by surprise -- or which it considered required further evidence which could not otherwise have been anticipated as being necessary -- needed time to ensure that an adequate opportunity was provided to deal with it.

* In this case the hearing officer had not excluded the possibility of further evidence being adduced or of a widening of the specification. It would accordingly have been open to Galileo to make submissions to the hearing officer about the width of the restrictions, even though the officer would not have been bound to accept them.

* Galileo's appeal would be dismissed except for one small triumph, where it was agreed that the words "consultancy in the field of computer hardware" could be included in the formula for the specification in Class 42 of the following  services: “rental of computer hardware, rental and leasing of computer software, installation, maintenance and updating of computer software; consultancy in the field of computer hardware; all for use in relation to travel and accommodation reservations".

The IPKat senses that Mr Justice Floyd was somewhat disappointed that the status of the European Union as a litigant in these proceedings was not challenged, or at least discussed: "No point is taken about the identity of this somewhat unusual party", he said at para.3 of his decision, which rather suggests that someone should make the effort to do just that whenever the European Union is next a litigant in his court.  Merpel is still trying to decide why the judge used the unusual term "ventilate"; still, she muses, it's better for a hearing officer to ventilate an issue than to give himself airs ...

The Kats agree that the word "ventilate" is actually a contraction of "venti" and "latte", which means that a nice fresh coffee is called for.

Galileo and cats here

And the winner is...

In the spirit of Oscars obsession that has overtaken the UK, the IPKat brings you the news that the Academy of Motion Picture Arts and Sciences is asking the USPTO to revoke the HACKADEMY AWARDS trade mark on the ground that it may cause confusion. The mark is used for an alternative awards ceremony, where Breathe California of Sacramento-Emigrant Trails gives awards to films with the most and least incidences of smoking. This year the winner of the 'Thumbs Up' was 'What Happens in Vegas' and the 'Thumbs Down', 'The Curious Case of Benjamin Button'. 'Slumdog Millionaire' doesn't seem to have won any awards.

Hm, says the IPKat. He's not really sure that there would be confusion here. Tarnishment perhaps because of the association with cigarettes, but this would be a long shot, since the junior user is anti-smoking.

Crocodiles in court -- and not a smile in sight

Although he can spot even a black cat in the dark, the IPKat has always struggled to tell a crocodile from an alligator -- and certainly can't easily tell one crocodile from another -- which is why he took a keen interest in last week's Chancery Division (England and Wales) decision of the Chancellor himself, Sir Andrew Morritt, in Crocodile International Private Ltd v La Chemise Lacoste, handed down on 8 October and noted by LexisNexis.

Lacoste, which was founded in 1933, registered in 1981 the word CROCODILE as a UK trade mark for 'shirts, not including sports shirts'. In August 2006 Crocodile International commissioned a firm to investigate use of the CROCODILE mark; that firm reported that there was no relevant use. In October 2006 Crocodile International's solicitors wrote to Lacoste, inviting it to show use of the mark. In January 2007 Crocodile International applied to revoke the mark for lack of genuine use. The parties subsequently exchanged witness statements, Lacoste's witness statement providing evidence of sale of garments bearing the mark CROCODILE. Though the note doesn't make it particularly clear, it appears that Crocodile International sought summary judgment.

The Chancellor dismissed the application. As he explained,

* 'genuine use' meant actual use of the mark and should thus be understood to denote use that was not merely token, serving solely to preserve the rights conferred by the mark. Such use had to be consistent with the essential function of a trade mark, which was to guarantee the identity of the origin of goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the product or service from others which had another origin.

* 'genuine use' of the mark entailed use of the mark on the market for the goods or services protected by that mark, not just internal use by the undertaking concerned.

* use of the mark might thus relate to goods or services already marketed or about to be marketed and for which preparations by the undertaking to secure customers were under way, particularly in the form of advertising campaigns. Such use might be either by the trade mark proprietor or by a third party with authority to use the mark.

* the issue as to whether Lacoste's use of the mark was genuine was one of fact to be determined at trial. In the circumstances, Lacoste had a real prospect at trial of establishing that there had been genuine use of the mark.

From this brief note it's not clear to the IPKat what the nature of the disputed use was, or why Crocodile International should have pressed for summary judgment -- unless perhaps to bring extra pressure on Lacoste to surrender (improbable, given that company's size and resources) or enter into a coexistence agreement (equally improbable, given Lacoste's previous track record here ), not to mention -- adds the historically-inclined Merpel -- the lengthy history of ill-will between the two companies.

Never Smile at a Crocodile here
Crocodiles or alligators here
Cats v crocs: who wins?