This newsletter aims at providing a heterodox review of selected significant decisions and legislative Acts and Bills, each of them reconstrued in its essential features, and critically commented.
Thus, we particularly address the happy many(?) who want to go beyond
mere updating and descriptive overviews, and rather inquire into both the
systemic coherence and the jurispolitical meaning ("who gains, who loses") of the various legal 'novelties' which attract our attention.
We are of course aware of the higher risk of 'subjectivity' that such approach implies. But we do believe that a critical reader is immunized against such risk, and privileges a more controversial but 'salty' dish vis-à-vis an insipid one. And in this very spirit, however, we will welcome the readers' comments: especially the
“This article was automatically written by Tencent Dreamwriter robot”
Nanshan’s Court got certainly worldwide noticed for a pivotal decision, namely “Shenzhen Tencent Computer System Co., Ltd. (“Tencent”) vs Shanghai Yingxu Technology Co., Ltd. (“Yingxu Technology”)” (full text available here).
With this judgement, the Chinese Court ruled in favor of recognizing protection to AI-generated content under Copyright Law.
In August 2018, Tencent published an article on the Shangai stock exchange index on its website, which terminated with the following statement: “This article was automatically written by Tencent Dreamwriter robot”;
The article was written with the support of the software Dreamwriter;
Tencent claimed that Dreamwriter computer software was a data set and algorithm-based intelligent writing assistance system, independently developed by Tencent Technology (Beijing) Co., Ltd (an affiliate of Tencent), then licensed to Tencent (see claimhere);
Yingxun Technology published the same article on the Shangai stock exchange index on its website;
Tencent claimed, inter alia, copyright infringement since, according to its point of view, the article on Shangai stock exchange was protectable under copyright law and the rights were attributable to it;
The Chinese Court (specifically, the Court of Nanshan) ruled in favor of recognizing protection to an article written with the support of an AI under Chinese Copyright Law, sustaining – in brief – that the article (a) could be included within the scope of protection being a literary work and that (b) “creative choices” were made by the team who selected the data to be included in the AI which then was involved in the making of the work.
The decision here addressed represents a pivotal decision with reference to AI-generated content protection.
Notwithstanding the above, please note that of course the discussion on protectability and ownership of AI-generated content is still open at a worldwide level.
Francesca Di Lazzaro and Maria Di Gravio
Court of Nanshan (District of Shenzhen) 24 December 2019 – Case No. (2019) Yue 0305 Min Chu No. 14010, Shenzen Tencent Computer System Co., Ltd. vs Shanghai Yingxu Technology Co., Ltd.
On 9th February, the Italian Institute for Advertising Self-Regulation published the new regulation for Marketing Communications relating to food and beverages, the protection of children and their proper nutrition (full text available here).
In particular, these rules aim at integrating the provisions of the Code of Marketing Communication Self-Regulation which, in art.11, pays particular attention to the protection of children, who can be identified as individuals under 12 years old.
The new regulation focuses on the presentation of food products and beverages, affirming that it must avoid statements that could mislead children, including through omissions, ambiguities or hyperbolical overstatements, especially as regards the nutritional characteristics of the product.
Furthermore, Article 5 of the Regulation states that marketing communication must not stress the positive qualities of the nutritional aspects of foods or beverages that are dependent on fat, trans-fatty acids, sugar, sodium or salt, the over-intake of which is not recommended.
The regulation is in addition and without prejudice to the provisions of the digital chart, which constitutes the rules that social media influencers and vloggers must observe in order to ensure the distinctiveness of the commercial message.
We already referred about the Dabus case (see here, and here) and that appeal proceedings are pending before the EPO, against two decisions of 27 January 2020 that refused the applications designating an AI system as the inventor.
Now the EPO President requested the Board of Appeal to comment on the relevant questions (here). The EPO decisions held that the inventor must be a human being to fulfil the requirement for designation of inventor in the procedural and substantive terms. This seems also an international standard (based on discussions with the IP5 offices). The applicant contests such a standard. Given the importance of the issue and that this is the first time the EPO will take formal position on this, the President requested to comment on it.
The Board of Appeal granted the EPO President’s request (here). There are two main topics on which he wishes to comment. And the BoA made some additional thoughts: (i) If the inventor must be a human being from a formal and substantive angle – what is the purpose of such requirement? Is it redundant?
The BoA advanced that:
one possible view is that the sole purpose is to enhance the protection of the inventor’s right to be mentioned as such. In this case, if the application does not mention a person with legal personality as inventor, it could be argued that the requirement to designate the inventor is redundant. This would be based on the concept that human intervention is not an inherent element of a patentable invention under Art. 52 EPC.
On the other hand, if the concept of “invention” was limited to human-made inventions, the function of the inventor designation rules would also be to facilitate examination of a substantial requirement.
(ii) Does the EPO have competence to examine the acquisition of the rights on the invention? If yes, what principles should the EPO apply?
The President now has 3 months to deliver his comments. More updates soon.
EPO Board of Appeal, communication of 1 February 2021, in the appeal proceedings relating EP 3564144
Today, the Italian Competition Authority (ICA) issued a 7 million euro fine to Facebook Ireland Ltd and Facebook Inc for failing to comply with the request to end their unfair practice regarding the use of users’ personal data, and to publish a due rectification (full text in Italian here).
Indeed, in November 2018 the ICA found the information given by Facebook to the users at the moment of the creation of the account misleading, due to the lack of adequate disclosure about the economic value of their personal data, which are monetized through the supply of targeted advertising (case PS1112). On the contrary, the ICA found that Facebook emphasized the free nature of the service, inducing users into making a transaction that they would not have taken otherwise. The misleading nature of such practice has also been confirmed by the Italian administrative judge (T.A.R. Lazio, decisions nn. and 261/2020).
The ICA advances that Facebook, despite having removed the claim about the free-of-charge nature of the service, still fails to provide users with clear information on the role of data as a means of payment in the exchange.
Italian Competition Authority, decision of 17 February 2021, ICA v. Facebook Ireland Ltd and Facebook Inc
On 21 September 2020 (full text, here), the England and Wales High Court (Patents Court – Judge Marcus Smith) dismissed the appeal brought by Dr. Thaler against the IPO decision of 4 December 2019 rejecting two patent applications indicating as inventor an AI system, a creativity machine called “Dabus”.
We reported that both the USPTO and the EPO rejected the corresponding US and EU applications filed by Dr. Thaler, with Dabus named as the inventor (here). Similarly, in its previous decision the IPO held that Dabus fails to meet the requirements of the Patents Act 1977 and that the “inventor” must be a person – meaning a natural person and not merely a legal person. Secondly, there could be no transfer of patent right to Dr. Thaler. Dabus cannot “own” anything capable of being transferred and had no power to assign any rights it might have.
The High Court substantially confirmed the IPO decision and dismissed the various grounds of appeal advanced by Dr. Thaler:
Inventor must be a person. Dr. Thaler did not contend that Dabus was a natural or legal person, and focussed instead on the contention that the “inventor” of statute is a legal construct detached from the question of personality. Inventorship should not be a substantial condition of the grant of patent. On the contrary, the Court held that under the Patents Act 1977 the applicant for a patent must be a “person” and a patent can only be granted to a “person” – whatever the meaning of the term “inventor”. This means that there is a correlation between the inventor and the first “owner” of the invention. Also, the inventor is defined by the Patents Act 1977 as the “actual deviser” of the invention. Although there is no express statement that an inventor must be a person, the term “deviser” at least implies “someone” devising “something”. The natural reading is thus that the inventor is a person and the invention a thing.
AI as “inventor” is incapable of conveying any property on the invention to its owner. The law differentiates between the first creation of rights in property and their subsequent transfer. Even if Dabus was capable of being an “inventor”, Dabus would by reason of its status as a thing a not a person be incapable of “own” any initial right and of conveying any property to Dr. Thaler. In sum, AI lacks any ability to “own” and “transfer”.
No analogy with computer-generated works. Any analogy with computer-generated works provisions under UK copyright law is to be rejected. The Court emphasized the formal role of patent applications: merely inventing something does not result in a patent being granted to the inventor. A patent must be applied for and that must be done by a person. There must either be an application by the inventor (not Dabus as it is not an inventor nor a person) or the inventor must have transferred the right to apply enabling Dr. Thaler to apply (which again cannot be the case).
This decision comes as no surprise and furhter confirms the same position taken by the USPTO and the EPO. According to the Court, despite the absent definition of “inventor”, the law is clear (and so the concept of “inventor” as “person”). And the emerging role of AI as inventor is mostly a policy problem that lawmakers (not Courts) have to cope with.
The question is however still debated. On 7 September 2020, the UK government published a call for views on the future relationship between AI and IP (here). And WIPO conversation in July 2020 (here) showed different approaches to the inventorship issue. See for example a Chinese view from HE Juan (Senior Judge of the Intellectual Property Court of the Supreme People’s Court of the People’s Republic of China): “for AI- generated-inventions, as long as they meet the legal requirements, they are not excluded from patent protection […] There are no obstacles to recognizing AI as an inventor at the legal and practical levels. Even if the inventor is credited to be only a natural person, there is the possibility of creating a legal subject status for AI” (here). Yet, most western scholars firmly see AI as a mere tool.
In any case, Dr. Thaler is not desisting. He filed appeals in the EPO in March 2020 (here). More updates soon…
England and Wales High Court (Patents Court), Judge Marcus Smith, decision of 21 September 2020, Stephen L Thaler v. the Comptroller-general of Patents, Designs and Trade Mark
Affectionate readers of this blog will already be familiar with the Italian rules on the reproduction of cultural heritage as well as with two 2017 Court decisions that dealt with unauthorized reproductions of, respectively, the Teatro Massimo of Palermo and the David by Michelangelo (see here) (for an earlier dispute over a controversial picture of the David “bearing arms”, see here).
Among the many Italian public entities having the right to authorise the reproduction of their cultural heritage assets, those having rights on the David by Michelangelo in particular seem to be the most aware of their prerogatives, as in early 2019 the Court of Florence was called to rule on yet another case involving this Renaissance masterpiece (the full decision is available here).
The facts of the case are rather simple: Brioni, a prestigious Italian menswear couture brand, launched an advertising campaign (consisting of a video and some pictures) centred on a full-scale marble replica of the David by Michelangelo wearing a tailor made suit from Brioni’s couturiers.
The replica had been manufactured by an Italian sculpture workshop in 2002 and then used for a couple of other projects before being lent for free to Brioni for their campaign in 2018.
The Italian Ministry of Cultural Heritage and Activities started urgency proceedings before the Court of Florence against both Brioni and the workshop asking, inter alia, for an interim injunction against the use of the David’s image for profit purposes.
Upon commencement of the proceedings, the advertising campaign was immediately withdrawn, and the sculpture workshop undertook not to further use the replica for future events without the Ministry authorization.
The Court to Florence therefore rejected the petition for interim relief on grounds of lack of urgency. That said, in a meaningful obiter dictum, the Court briefly touched upon some of the substantive issues that were at stake.
According to the Court, among these issues were in particular (i) “the exact scope of the concept of “reproduction” [and] of its object pursuant to Articles 106-108 of the Code of Cultural Heritage”; and (ii) whether the contested use of the David constituted a “creative re-elaboration” pursuant to Art. 4 of the Italian Copyright Law – rather than a reproduction. The Court of Florence did not provide an answer to those questions; but the very fact that the Court felt the need to mention them, made it clear that the answer would have been far from obvious.
The first of these issues appears to be of capital importance and is arguably linked to the second one.
The scarce case-law that dealt with cases of reproduction of Italian cultural heritage seems to have taken it for granted that the notion of reproduction pursuant to Art. 107 of the Code of Cultural Heritage could be borrowed from copyright law.
This was in fact confirmed in 2013 by the Court of Cassation, which in a case involving the sale of replicas of the fossilized skull of a Neanderthal (the Altamura Man – see picture below), ruled that, in principle, “it is indeed possible to refer to the provision of copyright law that defines the concept of reproduction”, i.e. Art. 13 of the Italian Copyright Law according to which “the exclusive right of reproduction concerns the multiplication of copies of the work in all or in part, either direct or indirect, temporary or permanent, by any means or in any form, such as copying by hand, printing, lithography, engraving, photography, phonography, cinematography, and any other process of reproduction” (Italian Court of Cassation, decision no. 9757/2013).
Eventually, however, the Court of Cassation concluded that no reproduction had taken place in that case, because the replica had been created without reproducing the actual shape of the skull (which was for the most part embedded in a cave and therefore not even visible), but with “an hypothetical reconstruction, based on a series of scientific findings and reconstructive hypotheses, of what could be the entire cranial structure”. According to the Court of Cassation, this resulted in “a new work which, as such, is the subject of autonomous protection under copyright law”.
It seems possible to read the Court of Cassation decision as follows: where a given cultural heritage asset is not literally copied but independently recreated in the context of a new creative work, this does not constitute a reproduction pursuant to the Code of Cultural Heritage.
Indeed, it has been noted that “the copies obtained by a specific (moulded) impression of the original piece are reproductions, and the ones obtained by a free sculpting or shaping operation (creation) represent different actions. In the latter case, the work is certainly closer to an independent artistic action than to a copying act. Digital models share the same difference: any digital 3D model may be the result of the reproduction of an existing object (through laser scanners or the process of photogrammetry), or the result of a modelling (creation from scratch) operation (see here).
In this perspective, in the 2019 Court of Florence case, Brioni had defended itself by claiming that the advertising campaign did not reproduce the original David by Michelangelo, “but rather a different asset, created by a sculpture workshop, in combination with a tailor’s work”.
Plainly transposing copyright law notions into cultural heritage law could have spiralling consequences. Especially if one considers that the Code of Cultural Heritage also provides for criminal penalties against “anyone who, in order to profit from it, […] reproduces a work of painting, sculpture or graphics, or an object of antiquity or of historical or archaeological interest” (Art. 178).
Should Matt Groening be jailed for up to 4 years? (Matt Groening being the creator of the animated TV series “The Simpsons” where the following image comes from).
Probably not. In fact, in regard of this criminal provision, the Court of Cassation has been more categorical: “reproduction shall mean copying the work in such a way that the copy can be confused with the original” (Court of Cassation, decision no. 29/1996).
Mr. Groening can breathe a sigh of relief, this time (criminally speaking, at least).
Another related issue, which to our knowledge has not been expressly tackled by case-law yet, is whether the Code of Cultural Heritage provides for an exclusive negative right, allowing rightsholders to prevent any third party from reproducing its subject matter (again, just like copyright law) or merely for a right to a compensation in case a reproduction takes place (as maintained by POJAGHI, Beni culturali e diritto d’autore, Dir. aut., 1/2014, 153).
Policy considerations could suggest the latter. In the vast majority of cases, cultural heritage assets are part of the public domain (at least in a copyright perspective). Why leave it to the unquestionable discretion of various public entities to authorise their reproductions? Shouldn’t rightsholders at least prove some kind or reputational damage to stop the unauthorised use of a given reproduction?
It has also been argued that, the Code of Cultural Heritage being a text of public law, the only possible consequences in case of a violation of its provisions would be administrative sanctions – not injunctions or other remedies typical of intellectual property law (see here).
In the past, the Court of Florence seems to have – perhaps too hastily – borrowed from the copyright/IP regime of remedies. Specifically, it did not hesitate to issue a (pan-European) interim injunction against the unauthorised photographic reproduction of the David by Michelangelo in the promotional materials of a travel agency. This was done on the grounds that “the indiscriminate use of the image of cultural assets is liable to diminish their attractiveness” (which is particularly counterintuitive, considering that the travel agency was using the materials to promote guided visits to the actual David). Furthermore, it also issued additional – and rather afflicting – orders of withdrawal of all the promotional materials from the market, destruction of those materials, destruction of all instruments used to produce or market those materials, publication of the decision on several national newspapers and magazines, as well as online, and – for every single order – very high penalties in case of non-compliance (see the 2017 decision mentioned at the beginning of this post).
The Court of Milan, on the other hand, has proven to be more cautious. In a 2015 case involving the unauthorized photographic reproduction in e-books of a number of drawings from the Fondo Peterzano (which is part of the Italian cultural heritage), it ruled that “in the absence of any appreciable prejudice deriving from the publication of the reproductions, […] the request for an injunction from further commercialisation must be rejected” (see here).
All in all, the interpretation of the Italian rules on the reproduction of cultural heritage is not 100% clear yet, but the increasing awareness of the subject by public entities will most likely lead to other disputes in the near future, which could shed more light on this topic.
Emanuele Fava – Nicoletta Serao
Court of Florence, 2 January 2019, MIBAC vs. Brioni S.p.a., case Docket No. 15147/2018
Not surprisingly, also the USPTO came to that conclusion: inventorship is limited to natural persons. Thus, this is in line with the EPO‘s and the UKIPO‘s recent decisions.
Similarly to the European cases, the decision issued on 22 April 2020 (here) came in response to two patent applications on inventions created by an AI system called “Dabus”, in the context of the Artificial Inventor Project. Dabus is also known as the Creativity machine, which was developed by Dr. Stephen Thaler, who is named as the applicant and assignee in the patent applications. The Artificial Inventor Project has filed patent applications via the Patent Cooperation Treaty in various countries including the US, UK, Germany, and China.
The applicant (Dr. Thaler) referred that the Creativity machine is programmed as a series of neural networks trained with general information to independently create. It was the machine, not a person, who recognized the novelty and salience of the inventions at stake.
The application was listing a single inventor (Dabus) and the family name “invention generated by artificial intelligence”.
The main argument of the USPTO is similar to that of the EPO: US patent law refers to inventors as humans, individuals, or persons. The term “inventor” therefore means the individual who invented the subject matter of the invention. The patent statues preclude a broad interpretation where “inventor” could be construed to cover machines. This view was confirmed by the Federal Circuit that (albeit referring to inventorship in the context of corporations) explained that patent laws require the inventor to be a natural person (see University of Utah v. Max-Planck-Gesellschaft zur Forderung der Wiessenschaften e.V., 734 F.3d 1315 (Fed. Cir. 2013), here: “[t]o perform this mental act, inventors must be natural persons“).
Also, the Manual of Patent Examining Procedure explains that inventorship requires “conception”. And “conception” is defined as a mental act, that is the formation in the mind of the inventor of the idea of the invention. Reference to “mental” and “mind”, again, points to a natural person.
The Office has also explained that inventorship has long been a condition for patentability, as naming an incorrect inventor is a grounds for rejection.
Last, the Office has refused to enter into any policy considerations on the advantages of supporting allowing AI as inventor, as in any case “they do not overcome the plain language of the patent laws”.
Is the end of the story? As the UKIPO said, further debate is needed. It will be interesting to see what local patent offices in other countries will say, especially after a Chinese court held AI-written articles protected by copyright – see here – although a human element still appears necessary.
Some important reforms have recently concerned our Code of Industrial Property.
First, the Italian legislator has implemented Trademark Directive 2015/2436/EU (previous comments on this blog about this Directive here and here) adopting Legislative Decree No. 15 of February 20, 2019 (text here; some comments here and here).
The Legislative Decree at issue came into force on March 23, 2019 and introduced in our Code of Industrial Property some important amendments, among which:
Abolishment of the “graphic” representation requirement of signs registrable as trademark. It can be now registered as trademark any sign which is distinctive and capable of being represented in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to the relevant proprietor. As a result, this provision has expanded the scope of the signs eligible to be registered as trademark, such as signs composed both of images and sounds.
The Italian PTO has technically adjusted its online filing platform with a view to allowing users to file applications for signs represented also in not graphic manners by means of .mp3 and .mp4 files, as explained in Circular of the Ministry of Economic Development No. 605 of March 29, 2019 (here).
Extension of shape marks’ absolute grounds of refusal to signs consisting of “another characteristic of the goods”. Given the abolishment of the “graphic” representation requirement, this provision aims at preventing that the registration of unconventional marks may confer on the relevant proprietor exclusive rights on characteristics of the goods with a technical function, substantial value or resulting from the nature of the goods, such as a colour or a sound.
Additional grounds for opposition: (i) earlier reputed mark; (ii) earlier well-known mark under Article 6-bis of Paris Convention for the Protection of Industrial Property; (iii) earlier designation of origin or geographical indication or earlier application for designation of origin or geographical indication.
The implementing Legislative Decree does not provide any transitional provision on the applicability of these new grounds of opposition. In particular, it is not clear whether or not the ground of reputation applies to oppositions proceedings against trademark applications filed/published before the entry into force of the Decree at issue.
Although there would be room to maintain that an opposition may be grounded on reputation irrespective of the date of filing/publication of the contested application in light of the fact that the relevant younger mark could be considered invalid on the basis of the same ground, the issue remains questionable. What is certain is that this law uncertainty is detrimental to trademark rights enforcement.
Introduction of administrative invalidity/revocation actions before the Italian PTO. These actions are not immediately available. We shall wait for the relevant Ministry of Economic Development implementing regulation for they to come into force (as known, Member States have until January 14, 2023 to implement the actions at issue in their national laws).
Introduction of certification marks. Any natural or legal person, including institutions, authorities and bodies having law requirements to guarantee the origin, nature or quality of certain products or services may apply for the registration of a sign as certification mark provided that it does not carry out any business involving the supply of products or services of the kind certified.
Unlikely the EU certification mark, the national certification mark may consist in signs or indications which may serve, in trade, to designate the geographical origin of the goods or services certified. The Italian PTO may refuse registration to such mark where it may cause situations of unjustified privilege or prejudice the development of similar initiatives whatsoever in the same area. The certification mark shall not entitle the proprietor to prohibit a third party from using in the course of trade such geographical signs or indications, provided that third party uses them in accordance with honest practices in industrial or commercial matters.
The implementing Legislative Decree has provided for a transitional period of one year as from its entry into force for the conversion of the collective marks filed/registered under the previous law into collective or certification marks governed by the new law subject to their revocation.
Second, the Italian legislator has adopted Legislative Decree No. 34/2019, the so called “Decreto Crescita”, converted into law, with amendments, by Law No. 100 of June 28, 2019 (text here), including, among others, amendments to our Code of Industrial Property (some comments here and here).
The “Decreto Crescita” has introduced a new category of mark under Article 11 ter of our Code: the “historic mark of national interest”. This is a sign that has been registered/used as mark for at least fifty years in relation to products/services of a national undertaking of excellence which has been historically linked with the national territory. Any proprietor or licensor of this kind of mark may apply for its recordal in the newly established special register of “historic mark of national interest”. This recordal entitles these subjects to use the new public logo “historic mark of national interest” in their marketing and promotional activities.
The identification of this new kind of mark seems to be not easy in the practice. Proving continuous use of a mark for at least fifty years is certainly too burdensome for a proprietor or licensor; moreover, the legal requirements of “excellence” of the relevant undertaking and its historic link with our country seems to imply a discretional rather than a legal assessment.
The legislator has also introduced some economic measures related to this new mark.
The proprietor or licensor of a mark recorded in the above-mentioned new register or that anyway meets the legal requirements provided by Article 11 ter that intends to close its Italian production site for (i) cessation of its activity or (ii) delocalization of the same outside the national territory, both implying a collective redundancy, shall inform of this the Ministry of Economic Development as well as of, among others, the possible actions to find new buyers and the chances for employees to launch a takeover bid or to recover the assets anyway. As a result, the Ministry shall initiate formal proceedings aimed at determining appropriate public interventions into the venture capital of the relevant undertakings through the newly established economic “Fund for the safeguard of historic mark of national interest”.
These new economic measures – that in the wording of the law are meant to safeguard the “historic mark of national interest” as well as the employment levels and the continuation of business in Italy – do actually introduce a new procedure of management of business crisis involving public institutions and funds, which arises some concerns under EU competition law and the free movement of goods and capitals principles. Moreover, the fact that any subject that meets the (uncertain) legal requirements provided by Article 11 ter irrespective of the recordal of its mark in the register of “historic mark of national interest” is subject to this procedure is particularly worrisome: it seems to leave room for ex-officio economic public interventions clearly not in line with our constitutional law.
Finally, it is worth mentioning also the new provisions that prohibit the registration of signs linked with the police as well as of words, pictures or signs detrimental to the image or reputation of Italy. It seems that these new provisions follow a demagogic political purpose rather than a reasoned trademark legislative policy. As a matter of fact, their application in the practice seems to be rather limited, since our Code of Industrial Property already prohibits the registration of signs that have a public interest or that are contrary to law, public policy or accepted principle of morality without mentioning any national interest.
The latest step of this package of reforms is the Italian Minister of Economic Development’s Decree of January 10, 2020 (text here), which has established the modalities for recording the “historic mark of national interest” in the new special register and has instituted the following official logo (press release here; a comment here).
In conclusion, the recent Italian trademark reforms seem to follow two different directions: the harmonization of our Code of Industrial Property with EU trademark law on one side and an approach that uses the mark as a tool for the political purpose of promoting a generic national interest on the other side.
| Italian Minister of Economic Development’s Decree of January 10, 2020 | Legislative Decree No. 34/2019 (“Decreto Crescita”), converted into law, with amendments, by Law No. 100 of June 28, 2019 | Circular of the Ministry of Economic Development No. 605 of March 29, 2019 | Italian Legislative Decree No. 15 of February 20, 2019 |
Svenskt Tenn, as trademark and copyright holder over a renowned design pattern of a furnishing fabric, filed a lawsuit against Textilis, a UK company that sells textiles in the UK, arguing infringement of its rights and asking for an injunction prohibiting such sales.
Textilis in turn filed a counterclaim arguing for the invalidation of the EUTM on the grounds of lack of distinctiveness (Article 7(1)(b) EUTMR) and since it would consisted of a shape which gives substantial value to the goods (Article 7(1)(e)(iii) EUTMR).
On March 22, 2016 the Stockholm District Court found that Textilis was guilty of trade mark and copyright infringement. The court noted that Textilis had not provided any evidence that the trade mark in question lacked distinctiveness. In relation to Article 7(1)(e)(iii), the court dismissed the claim simply based on the fact that the contested trade mark does not consist of “a shape” within the meaning of Article 7(1)(e)(iii) of EUTMR.
Textilis then appealed that decision before the Court of Appeal, Patents and Market division, in Stockholm.
The Swedish Court of Appeal focused on the interpretation of Article 7(1)(e)(iii) of Reg. 207/2009. In particular, the CJEU was asked to rule on the meaning of the wording “consist exclusively of the shape” (used both in the original text of the EUTMR provision and in the new Regulation No 2015/2424 (“EUTMR as amended”) which entered into force on March 23, 2016) and whether its scope encompasses a sign consisting of the two-dimensional representation of a two-dimensional product, such as the fabric decorated with the sign in question.
The CJEU observed that, since the EUTMR does not provide any definition of the term “shape”, its meaning must be established with reference to its usual meaning in everyday language, while also considering the context in which it occurs and the purposes of the rules to which it belongs.
The CJEU affirmed that “it cannot be held that a sign consisting of two-dimensional decorative motifs is indissociable from the shape of the goods where that sign is affixed to goods, such as fabric or paper, the form of which differs from those decorative motifs”.
The CJEU recalled its previous Louboutin decision (Case C‑163/16), where it established that the application of a particular color to a specific location of a product does not mean that the sign in question consists of a “shape” within the meaning of Article 3(1)(e)(iii) of Directive 2008/95. This is because what the applicants intended to protect through the trademark registration in Louboutin was not the form of the product or part of the product on which it may be affixed, but only the positioning of that color in that exact location.
The Court also added that the fact that the drawings covered by the Trademark enjoy copyright protection does not affect this finding in any way.
Therefore, the CJEU concluded that the exclusion from registration established in Article 7(1)(e)(iii) of EUTMR is not applicabletothe sign at issue in the main proceedings on the grounds that “a sign such as that at issue in the main proceedings, consisting of two-dimensional decorative motifs, which are affixed to goods, such as fabric or paper, does not ‘consist exclusively of the shape’, within the meaning of that provision”.
Judgment of the Court (Fifth Chamber) of 14 March 2019, Textilis Ltd and Ozgur Keskin v Svenskt Tenn Aktiebolag, Case C-21/18
This past January, the revocation of McDonald’s “BIG MAC” word EU trade mark for non-use was widely reported, both among IP aficionados (here, here, here and here) and in the media (here, here and here). The EUIPO decision (Cancellation No 14 788 C) can be read here.
A few days later, McDonald’s arch-rival Burger King temporarily renamed the sandwiches on the menu of its Swedish operation “Not Big Mac’s” (see the article on The Guardian, here). The opportunity for a poignant joke was evidently too juicy to be missed (it would appear that the video of Burger King’s Swedish stunt is not available on YouTube any longer, but you can still see it here).
Unsurprisingly, McDonald’s has recently filed an appeal against the EUIPO Cancellation Division’s decision (see here).
Waiting to see what the Boards of Appeal will eventually decide, the “BIG MAC” decision offers an interesting chance to discuss the role of evidence and of “well-known facts” in the assessment of (non-)use and reputation of trade marks in the EU.
The EUIPO decision
McDonald’s filed the “BIG MAC” word EU trade mark (No. 62638) for goods and services in classes 29, 30 and 42, which included “meat sandwiches“.
Supermac’s, an Irish burger chain, brought an application under Article 58(1)(a) of the EUTMR, requesting the revocation of “BIG MAC” in its entirety, arguing that the mark was not put to genuine use during a continuous period of five years in the EU. The application for revocation followed McDonald’s own opposition against an EU trade mark application for “SUPERMAC’S”.
In reply, McDonald’s provided the following evidence of genuine use:
3 affidavits signed by McDonald’s representatives claiming significant sales of “Big Mac” sandwiches in EU Member States;
brochures and printouts of advertising posters, packaging and menus showing “Big Mac” sandwiches;
printouts from McDonald’s official websites for many (18) EU Member States, depicting, among others, “Big Mac” sandwiches; and
a printout from the English version of Wikipedia, providing information, nutritional values and history on the “Big Mac” sandwich.
Supermac’s argued that the evidence of use submitted by McDonald’s did not prove that the “BIG MAC” mark was put to genuine use “for anything other than sandwiches“, thus allowing that use for sandwiches would be proved.
However, the Cancellation Division found that the evidence submitted was insufficient to establish genuine use of the trade mark for all products and services. In particular, the Cancellation Division noted that:
ex parte affidavits, although explicitly allowed as means of evidence before the EUIPO, are “generally given less weight than independent evidence“;
practically all evidence submitted originated from the EUTM proprietor itself;
the mere presence of a trade mark on a website is, of itself, insufficient to prove genuine use “unless it shows also the place, time and extent of use or unless this information is otherwise provided“;
in this regard, the EUTM proprietor could have provided records of internet traffic, hits, or online orders; however, the printouts submitted carried “no information of a single order being placed“;
Wikipedia entries cannot be considered a reliable source of information, as they can be amended by users and may be relevant only if supported by other pieces of evidence; and
a declaration by the applicant itself concluding that the evidence submitted was sufficient to prove use of the trade mark in relation to some of the goods (i.e. sandwiches) could not have any effect on the Office’s findings.
On these grounds, the Cancellation Division revoked the “BIG MAC” trade mark in its entirety (including burgers).
A bitter pill (or “bite” as Italians would say) for the trade mark proprietor?
Following the publication of the decision, many comments highlighted how, although ostensibly strict, the Cancellation Division provided helpful guidance to trade mark proprietors on the kind of evidence that would be needed to show genuine use (here, here, here and here).
In the context of opposition or cancellation proceedings, it is quite common to rely, among others, on affidavits and printouts from company websites and online sources (such as Wikipedia) as evidence of use and reputation. However, the “Big Mac” decision suggests that this may be not enough.
It is most likely that McDonald’s will now try to submit additional evidence before the Board of Appeal, along the lines suggested in the cancellation decision. According to Art. 27 of the EUTMDR, this could be allowed since: “the Board of Appeal may accept facts or evidence submitted for the first time before it” provided that “they are, on the face of it, likely to be relevant for the outcome of the case; and […] they are merely supplementing relevant facts and evidence which had already been submitted in due time“.
In any case, leaving aside the inherent limits of the evidence submitted by the trade mark proprietor, the outcome of the “BIG MAC” decision seems somewhat counter-intuitive.
After all, Big Mac is one of (if not “the”) signature sandwiches of the largest restaurant chain in the world, and it has been sold continuously for the past fifty years (WARNING: these are Wikipedia facts!). Big Mac is such a globally wide-spread product that, in the late 80’s, The Economist developed the “Big Mac index” using the different local prices of the sandwich to measure buying power and currency misalignments across the world. The “Big Mac index” has been used and updated for more than 30 years (for more Burgernomics, see here).
One may thus wonder: how can such a “famous” trade mark be legitimately revoked because of insufficient evidence of genuine use, at least in relation to some of the goods and services (notably: hamburger sandwiches!)?
Perhaps, the doctrine of “well-known facts” (in Italian, the so-called “fatti notori“) could (or should) have played a bigger role in the reasoning of the Cancellation Division. In fact, the CJEU case law on trade marks suggests that well-known facts can be taken into account when assessing elements such as reputation, likelihood of confusion and distinctiveness.
For instance, in the Picasso/Picaro case, the General Court argued that “the restriction of the factual basis of the examination by the Board of Appeal does not preclude it from taking into consideration, in addition to the facts expressly put forward by the parties to the opposition proceedings, facts which are well known, that is, which are likely to be known by anyone or which may be learnt from generally accessible sources. […] Article 74(1) of Regulation No 40/94 cannot have the purpose of compelling the opposition division or Board of Appeal consciously to adopt a decision on the basis of factual hypotheses which are manifestly incomplete or contrary to reality. Nor is it intended to require the parties to opposition proceedings to put forward before OHIM every well-known fact which might possibly be relevant to the decision to be adopted” (T-185/02, 22 June 2004, Claude Ruiz-Picasso and Others/OHIM; see also T-623/11, 9 April 2014, Pico Food GmbH/Bogumił Sobieraj, § 19).
Along the same lines, the General Court more recently allowed that “where the Board of Appeal finds that the mark applied for is not intrinsically distinctive, it may base its analysis on well-known facts, namely facts resulting from the generally acquired practical experience of marketing products of wide consumption, which facts are likely to be known to any person” (T-618/14, 29 June 2015, Grupo Bimbo, SAB de CV/OHIM, free translation from Spanish).
In Italy, this principle is enshrined in Art. 115(2) of the Code of Civil Procedure, which provides that “the judge may, without the need for proof, base its decision on facts which are part of the common knowledge“.
And, when considering the distinctiveness of Apple’s device trademark in the context of opposition proceedings, the same Italian Patent and Trademark Office (“IPTO”) argued that “although on the basis of the evidence on file it is not possible to assess the percentage of the relevant public which purchases the products and services distinguished by the […] trade mark […] the [reputation of the] trade mark consisting in the representation of an apple bitten on the right side belongs to the category of well-known facts” (IPTO decision 193/2016 of 20 May 2016, in the opposition No. 1083/2013, BITTEN APPLE WITH LEAF/BITTEN PEAR WITH LEAF, §§33-34, here; see also IPTO decision 340/2017 of 21 September 2017, in the opposition No. 959/2014, AppleFace, §§ 30-31, here).
A similar stance was taken also in relation to the “DECATHLON PLAY MORE PAY LESS” trade mark, whose reputation was held to be “in the public domain, so it does not need a specific burden of proof on behalf of the opponent” (IPTO decision 40/2015 of 10 February 2015, DECATHLON PLAY MORE PAY LESS/DECATHLON ITALY; on the IPTO practice on well-known facts, please refer also to the comments on the SPRINT portal by Prof. Stefano Sandri: here, here and here, all in Italian).
Of course, this is not to suggest that the burden of proof of genuine use should be lifted entirely when the trade mark at stake is so-to-say “famous”. However, in the assessment of the evidence on trade mark aspects such as genuine use or reputation, administrative bodies and courts should take into account the facts that “are likely to be known by anyone or which may be learnt from generally accessible sources“. Amongst these – it could be argued – one may count the continuous use of the “BIG MAC” word trade mark in relation to (at least) sandwiches in the EU. And this especially in a case where the applicant of the revocation action itself acknowledged that the trade mark was genuinely used in relation to these goods.
Finally, on the relevance of written statements and affidavits before the EUIPO, we note that Art. 97(1)(f) of the EUTMR, provides that “in any proceedings before the Office, the means of giving or obtaining evidence shall include […] statements in writing sworn or affirmed or having a similar effect under the law of the State in which the statement is drawn up“. This provision implies that the admissibility, the formal requirements and the probative value of written statements and affidavits are tied to the law of the country where they were drawn up. To take into account the different approaches, a study on the regimes on written statements in several EU Member States was commissioned by the EUIPO and can be found here.
EUIPO Cancellation Division, Cancellation No. 14 788 C, Supermac’s (Holdings) Ltd vs. McDonald’s International Property Company, Ltd., 11 January 2019