Open Justice in Europe: IP practitioners speak out

'Tis the season of IP parties - fa la la la la, la la la la! And indeed it is! Able to depart her desk last night at a semi-reasonable time, the AmeriKat made it down to the first of her season's IP extravaganzas - Middle Temple for AIPPI's Annual Garden Party. There, along with the IPKat, she brushed elbows with some of the best and the brightest of IP lawyers. (picture, left - the AmeriKat burrowing into Middle Temple gardens last night) The topic of UCL's IBIL Annual Hugh Laddie Lecture came up a number of times -- especially the issue that the AmeriKat reports on today -- the secrecy of written observations to the Court of Justice of the European Union (CJEU).

For those not familiar with the idiosyncrasies of the procedure in cases that reach the CJEU, they are briefly as follows. A Member State's court can make a reference to the CJEU on issues of interpretation of European law in matters arising from a case. EU Member States are then invited to make observations on the case. In the UK, the Intellectual Property Office advises Ministers who then decide whether the UK should submit any observations to the Court. Member States have two months to make written observations after receiving notification from the EJC. The kicker, of course, is that the content of the UK's observations in an case before the CJEU is not disclosed to the public.

The general consensus among all walks of practitioners last night was that these documents should be made public: why shouldn't the public that is bound by the law of a national government and of the European Government not see how their own national government interprets that law? The initiator of the debate on this topic at the Hugh Laddie Lecture was IPKat friend, Richard Ashmead (picture, right). Richard wrote to the AmeriKat this week with the following comments on this topic and of which he has kindly allowed the Kat to publish:

"Thank you for this report on IBIL's Annual Hugh Laddie Lecture last week, and the kind words in it to the unintendedly anonymous contributor on the lack of transparency of member states’ observations on CJEU references. It was I. That contribution was triggered by Mrs Macken’s comment on how interesting it will be to read the written observations which will no doubt be filed by numbers of member states in the Dutch High Court reference in the ONEL case on CTM genuine use. The chances are, sadly, that we will not be able to read them as they are regarded by the CJEU as confidential, a position reflected in the practices of some, possibly all, member states and other “parties” consulted by the CJEU.

There have been recent attempts to obtain Her Majesty's Government's (HMG)’s written observations in two IP reference cases, the UK “IP TRANSLATOR” case [see IPKat/Ashmead post here] on the use of class headings in trade mark applications/registrations, and the German patent annulment case of Brüstle v Greenpeace which raises a question on the definition of the human embryo in Directive 98/44/EC on the legal protection of biotechnological inventions. Freedom of Information (FoI) requests on both have been declined with reasons in the generality only, that is to say regardless of the individual case details. HMG is prepared to acknowledge that written observations have been submitted, and that it is not obliged to keep its own observations confidential, but has a policy to keep them secret.

The FoI Act provides a number of exemptions to allow secrecy to be maintained. The one on court papers is specifically not subject to any public interest balance, and other applicable FoI exemptions (which are subject to public interest factors) have been viewed, on a policy basis, as not in fact in the public interest, e.g. so as to preserve the UK’s reputation internationally, to avoid undermining the integrity of the proceedings concerned, or to allow the government to develop its policy in CJEU proceedings.

These written observations are made available to the parties to the basic actions, to all member states and to other allowed CJEU “parties”, such as the Commission and OHIM, but learned advice is as follows:

Are these Written Observations public documents? No
Can their content be discussed publicly? No
Is there a contempt issue? Yes

The point of a CJEU reference from a member state's court is to obtain a definitive interpretation of (existing) EU law in a context in which it is, axiomatically, legally unclear. That sounds like a public interest matter to me and will almost always be so, at least in IP matters. The public interest in a reference on what constitutes a human embryo and its use in medical and industrial matters sounds quite important to society, commerce and the IP world. What EU law really means on the scope of a very large number of trade mark registrations is perhaps not as fundamental to society’s mores and concerns but clarification of the legality of the “class-heading-covers-all” practice, on which the IP TRANSLATOR case centres, is of widespread concern to trade mark owners and users throughout Europe, as well as to their advisers. Once HMG has concluded that its involvement in these references cases is appropriate to help the court clarify what the law should be, why keep that secret as a matter of policy?

Mrs Macken’s support for more openness was most welcome, as has been IPKAT’s in related earlier commentary. A policy basis may be a comfortable way for HMG to avoid publication of its thinking but sits poorly with support for open justice. Aside from looking worryingly like making law without consultation, a bit of governmental confidence in the use of sensible discretion in public interest matters would not go amiss."

Transparency in court cases which include government involvement, especially at the European level, is essential to open justice. The AmeriKat finds it interesting that in the U.S., when the US Government makes observations in cases to the Supreme Court on issues of legal interpretation of US law (by way of amicus briefs), those briefs are public documents. The underlying rationale is that the US public should know the position of their own government in the interpretation of the law and legal issues with bind and concern them. There are obviously other issues to take into account in relation to observations made not by one's own federal government, but by several sovereign nations - but should not the philosophy and fundamental principle of "open justice" be the same?

In March, Master of the Rolls, Lord Neuberger, (picture, below) a former member of the Patents Court, delivered the annual Judicial Studies Board lecture entitled "Open Justice Abound?". He stated that

"The importance of open justice as a fundamental principle has not only secured its place in our legal system. It has also secured its place in the legal systems of all those countries which are signatories to the European Convention on Human Rights. Article 6 of the Convention was specifically drafted to replicate the House of Lords’ ringing affirmation of open justice in the seminal early twentieth century decision of the House of Lords in Scott v Scott. In that case, Lord Shaw described how open justice was ‘a sound and very sacred part of the constitution of the country and the administration of justice. . .The principle is equally embedded into the framework of all common law systems; not least the United States, where, in 1791, it was enshrined as a constitutional right by the 6th amendment. It is as important as it is well-travelled and long-lived."

Well then...give us our written submissions, the AmeriKat says!

What do readers thinks? Does anyone have any fun arguments regarding open justice, freedom of information and Regulation 1049/2001? Is there a legitimate public interest not to disclose the observations in IP cases? Are all of the exceptions swept up by "international relations" justification?

Further, is there really a contempt issue, as suggested? How can there be contempt in circumstances where the Court, who cannot rule on the underlying substantive case anyway, is charged only with making a preliminary ruling about abstract legal questions? And more preliminarily, where does the power of the Court to find contempt even come from? Let the debate begin!

Genuine Intention to Use - Practitioners Speak Out

Only a few hours after the AmeriKat posted her article last night (or this morning, depending how accurate one wishes to be) on Mrs Justice Macken's speech at IBIL's Annual Hugh Laddie Lecture, she received a flurry of e-mails commenting on the issue raised by the judge's speech on the issue of genuine intention to use in trade mark law. One of the most interesting e-mails, and most convincing of arguments, she received was from Roland Mallinson of Taylor Wessing (picture, left). With Roland's kind permission, the AmeriKat reproduces his comments below:

"As regards Mrs Justice Macken's answer to my question [see report of lecture and Roland's question here], I can think of some situations where one might consider an application to have been made with no genuine intention to use (or perhaps should give rise to a rebuttable presumption of as much). These include:

• where an applicant with no history of broad trading (or perhaps not having traded at all) applies in all Nice classes using class headings;
• where the application is in respect of goods/services for which the applicant previously held a registration but which was just revoked for non-use in respect of those goods/services and possibly even just where the timing of the application is suspiciously close to the date on which an earlier identical unused registration becomes revocable for non-use;
• where the nature of the mark itself clearly identifies one type of use and yet the specification relates to a totally different use; and
• where the applicant has applied for precisely the same mark at the USPTO but with a considerably narrower specification (due to the need to show use) - this is more controversial and perhaps should just raise a suspicion that all of the claimed broad use isn't intended in the EU.

Whilst disclosure and cross-examination are the best tools for revealing intent, clearly it is not desirable to make that routine. However, neither would be necessary to prove the above facts if they exist.

I was reminded by my neighbour in the auditorium (thank you Stephen Jones) that, in days of old (Rule 21 under the 1986 Rules) the Trade Mark Registry (as it then was) could raise an office action questioning the genuineness of the intention to use. The applicant was then required to justify the breadth of the goods/services claimed or else face refusal of the application. How about resurrecting that for OHIM? Clearly a supermarket, department store or major industrial conglomeration could well have reason to apply in respect of a vast range of goods/services but that's unlikely for a flower shop or taxi business.

As I mentioned, the UK option potentially arises pre- or post-grant (under s3(6) and s47 TMA - relating to bad faith). Bad faith isn't a ground for pre-grant objection to a CTM (Art 7 and Art 46 CTMR) but it is post-grant (Art 52(1)(b)). Then it's a question of whether having no real intention ever to use amounts to "bad faith". Ignoring what the cases have said on this, it seems reasonable to think it should do. However, perhaps it may be preferable not to attribute the stigma of "bad faith" to this (connotations of fraud etc - which was how the USPTO has been seeing this). A better option would be to make a lack of any bona fide intention to use a standalone ground of objection (akin to s26 of the 1938 TM Act). There could be an initial presumption that a statutorily declared intent is genuine. Case law should fairly quickly establish a suitably low standard of proof to show genuine intent. It would need something more than just a declared wish or ambition, e.g. with some consideration of synergy with existing or core business, opportunity and/or resource. The idea would be to ensure that only the completely unreasonable and deliberate land grabbers are affected. Over broad applications or over zealous attacks could perhaps also face adverse/indemnity costs orders, although this would require removing the fetters of the fixed scale awards for registries."

The AmeriKat sees a lot of merit in Roland's argument that there be an initial statutory presumption of a genuine intent, but if an objection on these ground was raised the proprietor need only show a low standard of proof (preponderance/balance as opposed to a "clear and convincing" in Ameri-speak) of a genuine intention to use the trade mark in order to rebut the objection. (The AmeriKat may just be tired, but the whole concept of rebuttable presumptions and standards of proofs in relation to objecting to registered IP rights, a la i4i v Microsoft, seem to be coming through in this debate).

What do readers think?

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.