Coffee wars plunge into shape protection

In the early hours of every morning, this Kat performs a ritual which will be very familiar to some readers. She (a) takes her clean cafetiere from the cupboard; (b) adds two big scoops of ground Italian coffee; (c) adds boiling water; (d) pushes the plunger down and, (e) hopes for the best. Accordingly, she has been reading with interest the recent decision in Australia concerning an alleged case of misleading and deceptive conduct and passing off between two manufacturers of cafetieres.

Peter Bodum A/S ('Bodum'), a Danish company, was founded in 1944. Since at least April 1986, Bodum widely advertised the Bodum Chambord Coffee Plunger (BCCP) and made substantial sales in Australia. The BCCP possessed a number of readily identified and reasonably distinctive features, being marked with the Bodum name in a number of places. When sold it also bore a prominent sticker on which the Bodum logo appeared.

DKSH Australia Pty Limited ('DKSH'), an Australian
company, was a subsidiary of a Swiss company DKSH Holdings Ltd. DKSH imported into Australia, and sold by wholesale, homeware and kitchen products including the Euroline Coffee Plunger. The Euroline Coffee Plunger possessed almost all the same physical features as the BCCP but is not marked in the same way. When sold it carried a sticker on its base which says 'Made in Taiwan'.

Not surprisingly, Bodum was far from pleased by DKSH's Euroline Coffee Plunger product on account of its similarities to the BCCP. It commenced actions for misleading and deceptive conduct under ss 52 and 53 of the Trade Practices Act 1974 and for passing off in the Federal Court. In particular, Bodum contended that the BCCP is packaged for sale in packaging that prominently depicts a photograph of the coffee plunger, thus giving prominence and emphasis to the design features of the plunger within, rendering, it is said, the packaging, in a practical sense, transparent to the consumer. According to Bodum, it had acquired a substantial and valuable reputation in the features and distinctive shape of the BCCP -- which meant that the sale in Australia of coffee plungers which embody those features (or a significant number of them) and the shape signifies to consumers that such a coffee plunger is the BCCP or is otherwise authorised by Bodum. Finally, Bodum contended that (independent of trade marks) a secondary meaning or independent reputation can subsist in the features and shape of an article or the get-up for a product which operates to associate products of that shape or those features in the mind of consumers with a particular trader although it is not necessary that the consumer knows the name of that trader.

At first instance in the Federal Court Justice Middleton found that DKSH had not engaged in misleading or deceptive conduct or passing off by marketing and selling its Euroline coffee plunger: Playcorp Group of Companies Pty Ltd v Peter Bodum A/S [2010] FCA 23. At [82] he stated:

'I should state from the outset that while I am of the view that the Bodum brand itself has a significant reputation in the homewares/ housewares market, I do not consider that Bodum has the secondary meaning or reputation in the Bodum Chambord Coffee Plunger ... features it identifies. I consider that Bodum’s reputation is distinctly tied to its products being properly labelled and sold in conjunction with reinforcing packaging and, significantly, by reference to the Bodum name. Bodum’s reputation does not exist in the naked Coffee Plunger features ... (without its logo in place) alone. If I am wrong about this, and if Bodum does have a secondary reputation in the features alone, then I am not satisfied that the accused products ... in the way they are packaged or exposed to potential customers in Australia are sufficiently similar to give rise to the misrepresentation alleged by Bodum'.

Bodum appealed to the Full Court of the Federal Court, being was critical of Middleton J's findings that the BCCP had not acquired a secondary meaning or independent reputation. In particular, it submitted (at [66]) that Middleton J 'did not look at the vast body of advertising material put in evidence and relied upon by Bodum as the foundation of its secondary meaning or independent reputation for the features of the product'.

A majority of the Full Federal Court (Greenwood and Tracey JJ; Buchanan J in dissent) reversed the decision of Middleton J and found in favour of Bodum: Bodum v DKSH Australia Pty Ltd [2011] FCAFC 98.

So what changed?

Writing the majority judgment, Greenwood J reviewed the relevant advertising material and was satisfied (at [197]) that

'the evidence establishes a very significant secondary reputation in the features of the Bodum Chambord Coffee Plunger associated in the mind of consumers with Bodum as the manufacturer of the product and, with respect to the primary judge, that reputation is not “distinctly tied” to Bodum in the sense that in the absence of the name Bodum there cannot be a secondary reputation in the features of the product'.

On this basis, according to Greenwood J (at [198]), the real question in the case is 'whether DKSH has done enough having regard to all the relevant differentiation factors to distinguish its rival product from the Bodum product'. Greenwood J answered the question in the negative. His Honour considered that:

• The BCCP enjoyed a substantial or significant reputation by reference to its features and shape (at [220]).


• 'Sales' of the BCCP were substantial, 'dwarfing the respective sales of ... DKSH' (at [222]).


• DKSH had not undertaken any retail advertising of its Euroline Coffee Plunger during 2008 or 2009 (at [223]).


• BCCP's features were 'strikingly similar' to the EuroLine Coffee Plunger (at [225]). Further, 'for all practical purposes, the overall appearance of the two products is the same' (at [227]).


• The Euroline Coffee Plunger had no branding, such as symbol, name or logo, on the product itself (at [231]). The branding was only on the packaging and this was not sufficient.
  


• The Euroline brand was 'not well known', being an 'unknown brand' (at [235]). It was 'not distinctive' and was thus 'very likely to be regarded as an abbreviated description of a product having a provenance as a product within a line of European products' (at [236]).

Having regard to these factors Greenwood J found (at [236]) 'it difficult to accept that DKSH has distinguished its product'.

This Kat says this decision should be welcomed by those seeking to rely on misleading and deceptive conduct and passing off claims to protect their product designs or 'get up'. However, he wonders whether the decision could mark the start of a slippery slope for seeking quasi protection for shapes rather than obtaining a registered trade mark or design.

Merpel, rather cheekily, questions whether the following cartoon (as shown on the Bodum website when trumpeting its success against DKSH) is the best way to encapsulate the majority decision of the Full Federal Court...

Hargreaves in the wild: The Top 10 Recommendations

Drum-roll please: the Report that we have all been waiting for since a cold November morning on a roundabout in Shoreditch has entered the wild. Entitled “Digital Opportunity”, complete with a picture that Adobe tells me is “cover image showing digital studio” (although it fails to mention that this has been mixed with what looks like a photo of the inside of a PC - still, it beats a lightbulb), the Report weighs in at 130 pages, split into 11 chapters and four appendices.

The work of another Hargreaves –
which is the more apt descriptor of the report?
The choice is yours…

For those short of time, the Executive Summary begins on page 3 and ends on page 9. There are 10 recommendations (pages 8 & 9) running the gamut from International Priorities through Copyright issues to Patent Thickets and the Enforcement of IP.

The Executive Summary notes that:

“Taken together, the Review proposes a clear change in the strategic direction of IP policy direction designed to ensure that the UK has an IP framework best suited to supporting innovation and promoting economic growth in the digital age. This change is modest in ambition and wholly achievable.

The Review’s specific recommendations would support growth of the UK’s increasingly intangibles intensive economy. This requires:

• an efficient digital copyright licensing system, where nothing is unusable because the rights owner cannot be found;
• an approach to exceptions in copyright which encourages successful new digital technology businesses both within and beyond the creative industries;
• a patent system capable of preventing heavy demand for patents causing serious barriers to market entry in critical technologies;
• reliable and affordable advice for smaller companies, to enable them to thrive in the IP intensive parts of the UK economy;
• refreshed institutional governance of the UK’s IP system which enables it to adapt organically to change in technology and markets.”

So what, I hear you ask, are these recommendations? Well, apart from a couple of rather bland statements that: the “Government should ensure that development of the IP System is driven as far as possible by objective evidence”, as opposed, for example, to simply making things up; and “The UK should resolutely pursue its international interests in IP, particularly with respect to emerging economies such as China and India, based upon positions grounded in economic evidence”, the unified EU Patent Court gets a significant endorsement – the Report stating that the Government should “attach the highest immediate priority” to achieving this aim.

Copyright is, as expected, singled out for more extensive developmental opportunity, to coin a phrase. Appointment of a senior figure to oversee the design and implementation of a “cross sectoral Digital Copyright Exchange” framework is suggested (nominations in the comments section please), as is Government support of moves by the European Commission to establish a framework for cross border copyright licensing.

The work of another Hargreaves –
which is the more apt descriptor of the report?
The choice is yours…

Orphan works are also included in the review, with suggestions that the Government should establish extended collective licensing for mass licensing of orphan works, and a clearance procedure for use of individual works. Copyright clearance clearly being the name of the game as far as the Report is concerned.

Continuing the Copyright theme, the Report also suggests that the “Government should deliver copyright exceptions at national level to realise all the opportunities within the EU framework, including format shifting, parody, non-commercial research, and library archiving. The UK should also promote at EU level an exception to support text and data analytics.” For those that are wondering, the wholly fictitious Parody Act of 1852 gets nary a mention (much to Merpel’s consternation).

In the Patent field, the problem of thickets and other obstructions to innovation are the focus of the Report’s ire. With this in mind, the Government is advised to take “a leading role in promoting international efforts to cut backlogs and manage the boom in patent applications by further extending “work sharing” with patent offices in other countries. It is also advised to be vigilant in ensuring that “patents are not extended into sectors, such as non-technical computer programs and business methods, which they do not currently cover, without clear evidence of benefit” – ‘not just for the sake of it’ is a theme running throughout the Report. Finally on the patent side of things, if the Government acts on the proposals then it looks like fees are to rise, as the Report advises the Government to:

“investigate ways of limiting adverse consequences of patent thickets, including by working with international partners to establish a patent fee structure set by reference to innovation and growth goals rather than solely by reference to patent office running costs. The structure of patent renewal fees might be adjusted to encourage patentees to assess more carefully the value of maintaining lower value patents, so reducing the density of patent thickets.”

Designs are not neglected either. The Report suggesting that the IPO should, in the next 12 months, “conduct an evidence based assessment of the relationship between design rights and innovation, with a view to establishing a firmer basis for evaluating policy at the UK and European level”.

The work of another Hargreaves –
which is the more apt descriptor of the report?
The choice is yours…

Despite coming at number 8 in the list, the section on Enforcement of IP rights is noted to contain some “urgent” recommendations. The enforcement regime set out in the Digital Economy Act 2010 (DEA), that much-beloved piece of legislation swept out of Parliament’s door in the wash-up just before its dissolution last year, is targeted for specific monitoring when it comes into force next year. Hargreaves noted that this is “urgent and Ofcom should not wait until [the provisions enter into force] …to establish its benchmarks and begin building data on trends.” The Report also suggests the introduction of “a small claims track for low monetary value IP claims in the Patents County Court” in order to support rights holders in enforcing their rights.

The final two recommendations concern suggestions that the IPO seek to facilitate improvements in the accessibility of the IP system for small companies, and that it “be given the necessary powers and mandate in law to ensure that it focuses on its central task of ensuring that the UK’s IP system promotes innovation and growth through efficient, contestable markets”, including the power to provide “statutory opinions where these would help to clarify copyright law.”

If the recommendation is followed, we can also expect to see an impact report on the measures advocated by the review at some point in 2013.

Summary over, this Kat is now off to read the report in a little more detail.

Update: as the IPKat's friend Mary-Ellen Field has pointed out, the fictitious Act of 1852 is not the only thing to have nary a mention in the Report: she notes that "the words 'trade' and 'marks' are not mentioned" either.

ICE, ICE.... - the BGH and the citation of a design

Those of our readers that have been travelling by train in Germany may be familiar with the Intercity-Express or ICE high speed trains. The German Federal Supreme Court (Bundesgerichtshof) last week had to decide on a design right case relating to the depiction of an ICE type 3 (see left) train in a marketing brochure. On 7 April 2011 the Bundesgerichtshof held that depictions of designs are not permissible under § 40 (3) of the German Design Act (GeschMG) if they are merely used for advertising purposes (case reference I ZR 56/09). The claimant, Fraunhofer-Gesellschaft, had been seeking a declaratory judgement that German railway company Deutsche Bahn AG had no claims against it for having used photographs of ICE trains in an advertising brochure published by Fraunhofer-Gesellschaft. The relevant provision in the German Design Act § 40 (3) of the German Design Act (GeschMG) relating to the right of citation provides as follows: the rights conferred by a design right can not be exercised in respect of acts of reproduction for the purposes of making citations or for teaching, provided that such acts are compatible with fair trade practice and do not unduly prejudice the normal exploitation of the design, and that the source is mentioned. By way of background: § 40 (3) GeschMG is shaped according to Article 13 (1)(c) of the Design Directive 98/71/EC and an equivalent provision can also be found in Article 20 (1) (c) of the Design Regulation (EC) 6/2002 as regards to Community Designs.

The Bundesgerichtshof took the view that § 40 (3) GeschMG required that there was a connection between the depicted design and the operations of Fraunhofer-Gesellschaft and that the photographs of the ICE trains that were used in the brochure had served as a quotation for statements made by Fraunhofer-Gesellschaft. Pure marketing however did not meet the requirements of a citation in the sense of § 40 (3) GeschMG. The information provided by the claimant in its brochure referred to the ICE train type 1 but a photograph of an ICE train type 3 was used. Consequently, the Bundesgerichtshof found that the depiction of the ICE train type 3 had only served marketing purposes and could not be seen as a permissible citation that served to illustrate the operations of the claimant.


The court’s press release relating to this case can be found here (in German). The moral of this story according to Merpel is rather more simplistic: use a photo of ICE type 1 when you are writing about ICE type 1. Use a photo of ICE type 3 when writing about ICE type 3, otherwise, do not try to invoke § 40 (3) GeschMG.