Category: trademark

What happens when copyright protection expires? Trade mark/copyright intersection and George Orwell’s ‘Animal farm’ and ‘1984’

IPlens1 Comment

The 1st of January of each calendar year marks not only the days full of new years’ hope, resolutions, and promises, but also the public domain day. 1 January 2021, a moment full of hope with the anti-COVID vaccine rolling out, is no different for copyright law purposes. On the 1st of January, many copyright protected works fell in the public domain.

This year marked the falling into the public domain of the works of George Orwell. Born in 1903, under the real name of Eric Arthur Blair, he has authored masterpieces such as ‘1984’ and ‘Animal Farm’, which in recent years have become extremely topical and relevant. In early 2017, the sales of ‘1984’ went so high up that the book became a bestseller once again. Some have suggested this is a direct response to the US Presidency at the time in the face of Donald Trump.

Orwell passed away in 1950, which means that, following the life of the author plus seventy years rule as per Article 1 of the Term Directive, copyright in Orwell’s works expired on 1 January 2021. Despite this, in the last several years an interesting trend has prominently emerged. Once copyright in famous works, such as those at issue, has expired, the body managing the IPRs of the author has often sought to extend the IP protection in the titles by resorting to trade mark applications. At the EUIPO, this has been successful for ‘Le journal d’Anne Frank’ (31/08/2015, R 2401/2014-4, Le journal d’Anne Frank), but not for ‘The Jungle Book’ (18/03/2015, R 118/2014-1, THE JUNGLE BOOK) nor ‘Pinocchio’ (25/02/2015, R 1856/2013-2, PINOCCHIO).

This is the path that the ‘GEORGE ORWELL’, ‘ANIMAL FARM’ and ‘1984’ signs are now following. The question of their registrability as trade marks is currently pending before the EUIPO’s Grand Board of Appeal. This post will only focus on the literary work titles – ‘ANIMAL FARM’ and ‘1984’, as the trade mark protection of famous authors’ personal names is a minefield of its own, deserving a separate post.

The first instance refusal

In March 2018, the Estate of the Late Sonia Brownell Orwell sought to register ‘ANIMAL FARM’ and ‘1984’ as EU trade marks for various goods and services among which books, publications, digital media, recordings, games, board games, toys, as well as entertainment, cultural activities and educations services. The Estate of the Late Sonia Brownell Orwell manages the IPRs of George Orwell and is named after his second and late wife – Sonia Mary Brownwell.

The first instance refused the registration of the signs as each of these was considered a “famous title of an artistic work” and consequently “perceived by the public as such title and not as a mark indicating the origin of the goods and services at hand”. The grounds were Article 7(1)(b) and 7(2) EUTMR – lack of distinctive character.

The Boards of Appeal

The Estate was not satisfied with this result and filed an appeal. Having dealt with some preliminary issues relating to the potential link of ‘ANIMAL FARM’ to board games simulating a farm life, the Board turned to the thorny issue of registering titles of literary works as trade marks. The Board points out that while this is not the very first case of its kind, the practice in the Office and the Board of Appeal has been diverging. Some applications consisting of titles of books or of a well-known character are registered as marks since they may, even if they are well-known, still be perceived by the public also as an indicator of source for printed matter or education services. This was the case with ‘Le journal d’Anne Frank’. Other times, a famous title has been seen as information of the content or the subject matter of the goods and services being considered as non-distinctive and descriptive in the meaning of Article 7(1)(b) and (c) EUTMR. This was the case for ‘THE JUNGLE BOOK’, ‘PINOCCHIO’ and ‘WINNETOU’. The EUIPO guidelines on this matter are not entirely clear. With that mind, on 20 June 2020, the case has been referred to the Grand Board of Appeal at the EUIPO. Pursuant to Article 37(1) of Delegated Regulation 2017/1430, the Board can refer a case to the Grand Board if it observes that the Boards of Appeal have issued diverging decisions on a point of law which is liable to affect the outcome of the case. This seems to be precisely the situation here. The Grand Board has not yet taken its decision.

Comment

The EUIPO’s Grand Board is a bit like the CJEU’s Grand Chamber – cases with particular importance where no harmonised practice exists are referred to it (Article 60, Rules of Procedure, CJEU). The Grand Board has one specific feature which the other five ‘traditional’ Boards lack. Interested parties can submit written observations, the otherwise known ‘amicus curiae’ briefs (Article 23, Rules of Procedure of the EUIPO Boards of Appeal). In fact, in this specific instance, INTA has already expressed its position in support of the registration of the titles.

It must be observed here that when the trade marks were filed, back in March 2018, ‘Animal farm’ and ‘1984’ were still within copyright protection (but not for long). Indeed, the Estate underlines in one of its statements from July 2019 that “George Orwell’s work 1984 is still subject to copyright protection. The EUIPO Work Manual (ie, the EUIPO guidelines) specifically states that where copyright is still running there is a presumption of good faith and the mark should be registered”. While this is perfectly true, what is also important to mention here is that trade mark registration does not take place overnight, especially when it comes to controversial issues such as the question of registering book titles as trade marks.

The topic of extending the IP life of works in which copyright has expired has seen several other examples and often brings to the edge of their seat prominent IP professors, as well as trade mark examiners and Board members. Furthermore, several years ago, the EFTA court considered the registrability as trade marks of many visual works and sculptures of the Norwegian sculptor Gustav Vigeland (see the author’s photo below).

‘Angry Boy’ by Gustav Vigeland, Vigeland park, Oslo, photo by Alina Trapova

At stake here was a potential trade mark protection for an artistic work in which copyright had expired. One of these is the famous ‘Angry Boy’ sculpture shown here. The Municipality of the city of Oslo had sought trade mark registration of approximately 90 of Vigeland’s works. The applications were rejected. The grounds included not only the well-known descriptiveness and non-distinctiveness, but also an additional objection on the grounds of public policy and morality. Eventually, the case went all the way up to the EFTA court. The final decision concludes that “it may be contrary to public policy in certain circumstances, to proceed to register a trade mark in respect of a well-known copyright work of art, where the copyright protection in that work has expired or is about to expire. The status of that well known work of art including the cultural status in the perception of the general public for that work of art may be taken into account”. This approach does make good sense as it focuses on the specific peculiarities of copyright law (e.g., different to trade mark law, copyright protection cannot be renewed), but it also considers re-appropriation of cultural expression as aggressive techniques of artificially prolonging IP protection – something, Justice Scalia at US Supreme Court has labelled as “mutant copyright” in Dastar v. Twentieth Century Fox in 2003.

In the EU, the public policy/morality ground has been traditionally relied on to object to obscene expression. The focus has been on the whether the sign offends, thus tying morality to public policy (See also another Grand Board decision on public policy and morality: 30/01/2019, R958/2017-G, ‘BREXIT’). A notable example is the attempt to register the ‘Mona Lisa’ painting as a trade mark in Germany. The sign was eventually not registered, but not due to clash with public policy and potential artificial extension of copyright through the backdoor of trade marks, but because the sign lacked distinctiveness. Consequently, the EU understands the public policy and morality ground in a rather narrow and limited manner, namely linked only to offensive use.

Overlap of IPRs happens all the time: a patent turns into a copyright claim (C-310/17 – Levola Hengelo and C-833/18 – Brompton Bicycle), whereas design and copyright may be able to co-habit in the same item (C-683/17 – Cofemel). All would agree that an unequivocal law prohibiting overlaps of IPRs is not desirable from a policy perspective. Yet, you may feel somehow cheated when your favourite novel is finally in the public domain due to copyright expiring (which, by the way, already lasts the life of the author plus seventy years), but protection has been “revived” through a trade mark. Trade marks initially last for 10 years, but they can be renewed and thus protection lasts potentially forever (what a revival!). Therefore, there may be some very strong policy reasons against this specific type of IP overlap and extension of IPRs. Like the European Copyright Society has said in relation to Vigeland, “the registration of signs of cultural significance for products or services that are directly related to the cultural domain may seriously impede the free use of works which ought to be in the public domain. For example, the registration of the title of a book for the class of products including books, theatre plays and films, would render meaningless the freedom to use public domain works in new forms of exploitation”. To that end, Martin Senftleben’s new book turns to this tragic clash between culture and commerce. He vocally criticises the “corrosive effect of indefinitely renewable trademark rights” with regard to cultural creativity.

As for ‘Animal farm’ and ‘1984’, the EUIPO’s first instance did not go down the public policy grounds road. This is unfortunate as lack of distinctiveness for well-known titles such as ‘Animal Farm’ and ‘1984’ is difficult to articulate as the Board of Appeal itself underlines – the Office’s guidelines are confusing (some titles have been protected and others not). Besides, lack of inherent distinctiveness can be saved by virtue of acquired distinctiveness (something the Estate of the Late Sonia Brownell Orwell has explicitly mentioned they will be able to prove, should they need to). Considering that the rightholder here would be the Estate of the Orwell family, proving acquired distinctiveness of the titles for the requested goods and services would not be particularly difficult. On that note, a rejection on the ground of public policy/morality can never be remedied through acquired distinctiveness. Thus, it would perhaps have been more suitable to rely on public policy and establish that artificially extending the IP life of these cultural works is not desirable.

Well, the jury is out. One thing is for sure – the discussion at the Grand Board will be heated.

Alina Trapova

Pattern trademark do not consist exclusively of a shape whenever they are not indissociable from the product

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On March 14, 2019, the CJEU ruled on two preliminary questions submitted by the Court of Appeal of Stockholm in the case Textilis – Keskin v Svenskt Tenn (C-21/18).

josef-frank_textile-manhattan-315-linenSvenskt 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 applicable to the 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

Jacopo Ciani

Can I order a Big Mac at Burger King? Some thoughts on trademark non-use and well-known facts.

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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).

big mac

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).

big mac index

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.

Giovanni Trabucco

EUIPO Cancellation Division, Cancellation No. 14 788 C, Supermac’s (Holdings) Ltd vs. McDonald’s International Property Company, Ltd., 11 January 2019

Peppa Pig meets Tobbia – a tale of pigs and tapirs

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Peppa Pig is a children’s animated TV series that traces the adventures of Peppa, her family and friends. Peppa is actually an animal – a pig that possesses all the human traits and so do all the animals in the series – they speak, read, go to school, drive and do all we humans do. As of 2012 Entertainment One UK Ltd and Astley Baker Davies Ltd, the entities behind Peppa Pig, hold the following registered EU figurative trade mark for, among others, “clothing, footwear, headgear” in Class 25 of the Nice Agreement:

download (1)

In 2013, Mr Xianhao Pan residing in Rome (Italy) succeeded in registering the following EU figurative mark for “clothing, footwear, headgear” in Class 25 of the Nice Agreement:

download

A few years later, in 2015, Entertainment One UK Ltd and Astley Baker Davies Ltd initiated an invalidity action against Mr Xianhao Pan based on Article 53(1)(a) of Regulation No 207/2009 (now Article 60(1)(a) of Regulation 2017/1001), read in conjunction with Article 8(1)(b) of Regulation No 207/2009 (now Article 8(1)(b) of Regulation 2017/1001).

Peppa Pigs’ creators argued that considering the complete identity of the goods, the two signs are confusingly similar to the extent that the TOBBIA trade mark had to be cancelled.

Judgment of the General Court of the EU (T-777/17)

On 21 March 2019, the General Court of the EU ruled that likelihood of confusion between the two marks exists and therefore the First Board of Appeal was correct in upholding the appeal and invalidating the TOBBIA trade mark (here).

Setting aside some preliminary procedural issues the meat of the General Court judgment was the comparison of the two signs. As usual, this had to be done taking into account the visual, phonetic and conceptual similarities between the two and evaluating the overall impression that the signs produce.

The Applicant before the Court, in this case Mr Xianhao Pan, insisted that there were no similarities between the two signs emphasising the fact that the animal in the TOBBIA mark is indeed a tapir as opposed to a pig – the animal depicted in the PEPPA PIG mark.

The Court admitted that the signs at issue differ in certain figurative elements: the colour range; the fact that the TOBBIA mark animal was in trousers, while the PEPPA PIG mark animal wore a dress; the PEPPA PIG mark had a tail and its arms were positioned in a different way as compared to the TOBBIA mark animal. Yet, the Court insisted that these differences were not capable of outweighing the similarities. Considering that the relevant public is the general one, which does not proceed to analyse all the various details of the marks but perceives them as a whole, the First Board correctly assessed that the marks were visually similar. The Board held that both signs depicted an anthropomorphic animal, namely a pig. The depiction of the head and snout were nearly identical, as well as the shape of the head and further elements on the face of the animals. The differences between the two were appreciated, but nevertheless the visual similarities were more.

The discussion on phonetic comparison followed the classical lines and confirmed some degree of correlation.

As far as the conceptual analysis is concerned, the Court was clear that that the general European public would perceive the two animals as a pig and thus conceptual similarity was also present.

All in all, the identity of the goods coupled with the similarity of the signs led to a ruling in favour of PEPPA PIG and a finding of likelihood of confusion.

An interesting discussion was brought at this stage by the Applicant in relation to the type of the animal in its TOBBIA mark. It was argued that the general public would be capable of recognising the animal in the TOBBIA trade mark as a tapir, which would have allegedly sufficed in drawing the line between the two signs. Well, the Court was certainly not convinced as it stated that the assessment of the similarity between the marks would in no way be affected “whether the public identifies the graphic elements of the two marks as two pigs or two tapirs.”

One may wonder on what ground would one even think about bringing the outlandish argument that the animal represents a tapir, which is an animal particularly well known to the public. Well, seems like the Applicant (or at least, its legal representatives), resident in Rome (Italy) is a fan of the Italian TV program “Striscia la notizia”, which in line with its satirical tone, awards public figures with a price in the form of a small statute for errors, omissions to keep promises or basic embarrassing situations. Not surprisingly, this statute takes the form of a tapir and looks like this:

Tapiro d'oro

 

As entertaining as this tale of pigs and tapirs may be, the General Court was neither impressed nor convinced. It correctly pointed out the irrelevance of such argument as the relevant public at stake was the general European public (and not only the Italian one) taking into consideration the fact that the TOBBIA trade mark was a European one.

Comment

The case does not entail any ground-breaking analysis, nor particularly peculiar application of rarely raised grounds such as bad faith or intricate fiduciary relationship conundrums. Instead, it is a classic likelihood of confusion discussion comparing goods (which in the present case were even identical) and signs.

That said and regardless of how much weight one would give to the shared elements between the two signs (the presence of an anthropomorphic animals with identically shaped heads), one must admit that the two signs in fact bear rather minor similarities. The legal team of the PEPPA PIG trade mark would have been wise to raise further grounds of invalidity, namely to invoke Article 53(1)(a) in conjunction with Article 8(5) EUTMR, which provides famous marks such as PEPPA PIG with an extra layer of protection. In these cases lesser degree of signs’ similarity is required as compared to the classical likelihood of confusion situations under Article 8(1)(b) EUTMR. This would have guaranteed the ultimate success for the Peppa Pig creators provided that the relevant section of the public makes a mere connection between the marks, i.e. it establishes a link between them. This is a well-established principle following long-standing judgments of the CJEU in the Adidas (C-408/01), as well as the Intel cases (C-252/07).

Nevertheless, both the First Board of EUIPO and the General Court are to be complimented for having employed a very adequate level of common sense and rightly held that the TOBBIA mark shall be invalid in light of the PEPPA PIG mark. The analysis avoids crude formalistic application of dry legal principles, which may have risked resulting in a loss for PEPPA PIG as it is certainly questionable whether the similarity between the signs meets the standard required by Article 8(1)(b) EUTMR. Besides, the TOBBIA mark indeed resembles a poor copy of PEPPA PIG, which is further supported by the fact that the Applicant seems to be a trade mark squatter of children’s brands. A quick search on the EUIPO database reveals that the Applicant has unsuccessfully tried to register the following marks, which regardless of how far detached from childhood one is do certainly ring a bell:

  • Happy duck(filing number 009282161, opposed by, among others, Disney Enterprises Inc.)
  • Sponteboll(filing number 009482175, opposed by Viacom International Inc.)
  • Doggy dog(filing number 010776177, opposed by, among others, Turner Entertainment Co.)

Alina Trapova

General Court (Eighth Chamber), 21 march 2019, Xianhao Pan v European Union Intellectual Property Office (EUIPO), Case T-777/17

Two recent decisions on selective distribution and infringement of luxury trademarks from the Court of Milan

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The Court of Milan issued two recent decisions in similar cases of selective distribution of cosmetic products bearing luxury trademarks, finding in both cases trademark infringement for the sale of products by unauthorized distributors.

1. The l’Oreal case

Facts

In the first decision (Italian text here), the case concerned an urgent action brought by l’Oreal Italia and Helena Rubinstein Italia (jointly referred as “l’Oreal”), two Italian subsidiaries of l’Oreal Group, against IDS International Drugstore Italia (“IDS Italia”) for trademark infringement.

L’Oreal is the licensee of a series of luxury trademarks (e.g., Armani, Cacharel, Ralph Lauren, Diesel, Yves Saint Laurent, etc.), and set up a selective distribution system for the sale of cosmetic products. In particular, l’Oreal selective distribution was based on the following quality elements:

  1. brick-and-mortar retail: (i) location, display and fitting of the points of sale; (ii) the (necessary) presence of products bearing competitors’ brands; (iii) the way in which products are presented at the point of sale (dedicated space, cleaning, etc.); (iv) the professional qualification and standing of the staff involved in the sales, and consulting and demonstration services.
  2. online: (i) the localization and presentation of the website (graphic quality, visual appearance of the home page); (ii) the space dedicated to selective luxury perfumery/cosmetics within the website and its aesthetic quality; (iii) the online customer advice service, in as many languages as are offered by the website; (iv) professional qualification of the consultants, equal to that required for physical points of sale; (v) the conditions and terms of payment, the conditions of storage of goods, transport and shipping.
  3. L’Oreal group developed a system of product traceability to map the circulation of each product in the market, that is based on an “anti-diversion code” (“AD code”).

IDS Italia, part of Auchan Group, is a major retailer and manages a group of drugstores under the brand “Lillapois”.

L’Oreal objected to IDS Italia the sale of products bearing its licensed trademarks through its drugstores and on its own e-commerce website: products were displayed in a messy manner, with strong discounts, and placing stickers on the AD codes. Moreover, some of the products were imported from non-EEA countries.

IDS objected that: (i) they had a selective distribution agreement with L’Oreal Luxe (a luxury division of the group), that covered some of the contested trademarks; (ii) market surveys proved that Lillapois points of sale are considered premium stores by consumers; (iii) the intention of the complainants is in fact to restrict competition; (iv) all products were initially marketed in the EEA territory, as confirmed by IDS’s providers; (v) the selective distribution system could not benefit from the provisions of Reg. 330/2010 since parallel selective distribution systems were in place; (vi) they only placed anti-theft stickers.

The Court’s findings

The Court found that:

  • IDS did not prove that the products were marketed in the EEA with the trademark owner’s consent (and in particular that its suppliers purchased the products from the trademark owner or another authorised distributor in the EEA). The relevant burden of proof is on IDS. Indeed, l’Oreal applied a selective distribution and not an exclusive distribution system (only the latter would require the trademark owner to prove the absent consent to the marketing of the products in the EEA, based on Davidoff, CJEU C-414/99 – C-416/99);
  • L’Oreal set up a legitimate selective distribution according to Reg. UE 330/2010, as its relevant terms of sale define the quality and localisation of the point of sales, the characteristics of the display of the stores and the minimum professional requirements of authorized resellers. Thus, proving the objective and non-discriminatory nature of said criteria (based on Coty, CJEU C-230/2016);
  • The existence of a selective distribution may account to a legitimate reason for excluding the trademark exhaustion, if:

(a) the product is a luxury or premium item.

(b) prejudice to the premium image of the trademark occurs, due to the marketing of the products by entities not included in the selective distribution network (Copad, CJEU C-59/08), in particular based on the type of products, the volume of sales to resellers outside the selective distribution, the forms of distribution normally applied.

In this last regard, the Court observed that the criteria identified by trademark owner for the selective distribution system are not the only legitimate standards to be considered (see the Chantecler case, Court of Milan, 17 March 2016, full text here, and Peak Holding, CJEU C-16/03). Similarly, cash & carry channels are not themselves contrary to a luxury image. Rather, it is necessary to demonstrate that the particular sale modalities are impairing the trademark’s prestigious image. The Court found that IDS points of sale were too similar to discount stores, with low-quality furniture, poor lightings, close-up shelves with very different products (from detergents to toilet paper). Thus, they were able to impair the prestigious image of the trademarks.

2. The Landoll case

Facts

The second case (full text, here) concerns an urgent action brought by Landoll S.r.l., an Italian hair and body cosmetic manufacturer that owns the trademarks Nashi and Nashi Argan. Landoll set up a selective distribution system for its products, which includes agents, distributors, and resellers selling Landoll products to professional clients.

Landoll objected to MECS s.r.l. the sale of its products on a third-party e-commerce platform and on its own website – ermeshop.com – without being part of Landoll selective distribution network. Previously, in 2017, Landoll already sent a warning letter to Mecs, that at that time undertook to cease the sale of Landoll products.

Mecs denied this last circumstance and objected that it purchased Landoll products in good faith from a distributor.

The Court’s findings

The Court found that:

  • Landoll set up a legitimate selective distribution according to Reg. UE 330/2010, as this system is aimed at ensuring the professional preparation and training of the authorized distributors and the proper use of products for meeting the users’ needs, thus protecting the prestigious image of the Landoll products. The qualitative criteria set out by Landoll to select the authorized distributors are coherent with the purpose of protecting the prestigious image of the products, they are applied in a non-discriminatory way and proportioned to the objective sought.
  • The existence of a selective distribution may account to a legitimate reason for excluding the trademark exhaustion, if: (a) the product is a luxury or premium item; (b) a prejudice to the premium image of the trademark occurs due to the marketing of the products by entities not included in the selective distribution (Copad, CJEU C-59/08). In this case, the trademark owner can prohibit unauthorized resellers from selling products purchased from authorized distributors.
  • As regards the prejudice to the prestigious image of the trademark, the third party e-commerce platform used by Mecs, as well as its own website, were presenting the Landoll products in the same manner as any other generic product sold in the store, even of inferior quality, and no professional advice on how to use the products was offered. The Court held that this was enough to cause a prejudice to the trademarks.
  • The good faith of Mecs was excluded, since it received a warning letter, without ceasing the marketing of the Landoll products.
  • Mecs objected that Landoll products were in fact sold by a number of third parties outside the selective distribution network. In this regard, the Court held that the alleged inactivity of the trademark owner vis a vis the sale of products outside its selective distribution network is to be excluded, as Landoll proved to have already brought other legal actions in the past.

The reasoning of the Court is similar in both cases. It fully supports the establishment of selective distribution networks, following the CJEU position, although states that the existence of a selective distribution is not enough for excluding the trademark exhaustion: actual prejudice to the trademark is to be proven. On the other hand, the Landoll case seems in line with the Coty decision, acknowledging the chance of limiting the online resale, if the website is not meeting quality standards necessary to protect the prestigious image of the trademark. And the Court has given some examples on how this can occur. As the Coty case highlighted, this issue is particularly important for marketplaces. They tend to be less exclusive in terms of brand experience. However, if they allow special windows to be created within the marketplace (or special manner of displaying and offering premium products), it might be more difficult arguing a prejudice against the prestigious image of the trademark.

Francesco Banterle

Court of Milan, decision of 19 November 2018, docket no. 38739/2018, L’Oreal Italia S.p.a. and Helena Rubinstein Italia S.p.a. v. IDS International Drugstore Italia S.p.a.

Court of Milan, decision of 18 December 2018, docket no. 44211/2018, Landoll s.r.l. v. Mecs S.r.l.

Two recent CJEU decisions (Doceram, Nintendo v Bigben) and the fuzzy border between trademarks and designs

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While no definite trend toward the approximation of trademark and design law has so far emerged in European case law, two recent decisions of the CJEU relating to designs show how fuzzy the border between trademark and design rights may be.

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In Doceram (C-395/16, ECLI:EU:C:2018:172), the CJEU had to interpret the concept of designs subsisting “in features of appearance of a product which are solely dictated by its technical function”, which are excluded from protection under Article 8(1) of Regulation 6/2002 on Community designs (RCD). The Court was asked, in particular, to state whether such exclusion applies even when alternative designs exist which can perform the same technical function, so that the features of the design cannot be considered indispensable for performing said  function.

It is a classic dilemma. As AG Henrik Saugmandsgaard Øe noted in his opinion, in Europe the Courts and legal scholars have given both negative and positive answers.

The position whereby Article 8(1) RCD and the corresponding national provisions only apply when copying the design is the sole way to achieve the technical result is commonly referred to as the “mandatory” (or “multiplicity of forms”) theory. The opinion whereby, to the opposite, it does not matter whether or not alternative designs can fulfil the same function, insofar as the function in question is the sole driver of the shape, is usually referred to as the “causative theory”. In the past the EUIPO has ruled in line with the first theory [also supported by AG Colomer in the opinion submitted in Philips v. Remington (paragraph 34); and followed by the EU General Court in Industrias Francisco Ivars (see paragraph 22)], which is much more favorable to design right holders. Recently it seems to have veered towards the latter. As far as Italy is concerned, there is probably greater support for the “mandatory theory”.

In Doceram the Court (and before the Court AG Saugmandsgaard Øe) endorsed, with little hesitation, the “causative” theory:

“if the existence of alternative designs fulfilling the same function as that of the product concerned was sufficient in itself to exclude the application of Article 8(1) of Regulation No 6/2002”, it said,

then

“a single economic operator would be able to obtain several registrations as a Community design of different possible forms of a product incorporating features of appearance of that product which are exclusively dictated by its technical function” (paragraph 30).

 That, added the Court,

“would enable such an operator to benefit, with regard to such a product, from exclusive protection which is, in practice, equivalent to that offered by a patent, but without being subject to the conditions applicable for obtaining the latter, which would prevent competitors offering a product incorporating certain functional features or limit the possible technical solutions, thereby depriving Article 8(1) of its full effectiveness” (ibidem).

By stating this, the CJEU de facto extended to designs the principles it affirmed with regard to trademarks “consisting exclusively of the shape of goods which is necessary to obtain a technical result”.

As is well known, in Philips v. Remington the CJEU stated that the relevant impediment to registration [now contained in Article 4(1)(e)(ii) of Directive 2015/2436] “cannot be overcome by establishing that there are other shapes which allow the same technical result to be obtained”: which is, mutatis mutandis, what the CJEU said in Doceram.

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Interestingly, another recent CJEU decision ended up extending the interpretation of provisions concerning trademarks to provisions concerning designs.

In Nintendo v. Bigben (C‑24/16 and C‑25/16, ECLI:EU:C:2017:724), the Court had (inter alia) to issue a preliminary ruling with regard to Article 20(c) RCD, which prevents design right holders from exercising their rights in respect of “acts of reproduction for the purpose of making citations or of teaching, provided that such acts are compatible with fair trade practice and do not unduly prejudice the normal exploitation of the design, and that mention is made of the source”.

The dispute in the main proceedings concerned the use of images of goods corresponding to EU registered designs in the advertisement of goods intended to be used as accessories to the above goods corresponding to EU registered designs. As in the following picture, which shows Nintendo Wii remote controllers, registered as EU designs, together with the charger for such controllers produced and sold by the defendant Bigben.

bigben

In addressing the issue, the Court said that Article 20(c) RCD, insofar as it refers to “acts … compatible  to fair trade practice”, can be interpreted in the light of the case law regarding uses of trademarks made in accordance with “honest practices in industrial or commercial matters” under Article 6(1) of Directive 89/104 [now Article 14(2) of Directive 2015/2436]. And it explicitly applied to designs – again: mutatis mutandis – the principles asserted in Gillette (17 March 2005, C-228/03, ECLI:EU:C:2005:177) with respect to the limitation of trademark rights:

“an act of reproduction of a protected design for the purpose of making citations or of teaching is not compatible with fair trade practice … where it is done in such a manner that it gives the impression that there is a commercial connection between the third party and the holder of the rights conferred by those designs, or where the third party, who wishes to rely on that limitation in the course of selling goods that are used jointly with goods corresponding to the protected designs, infringes the rights conferred on the holder of the design protected by Article 19 of Regulation No 6/2002, or where that third party takes unfair advantage of the holder’s commercial repute” (paragraph 80).

Riccardo Perotti

May #hashtags safely rely on trademark protection?

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In recent years, trademark offices worldwide have been assisting to a new trend: brand owners are increasingly trying to protect hashtags as trademarks. However, some substantive differences existing between these two figures suggest that trademark protection is most of the time improper – and even unnecessary. This, for a number of reasons.

  1. A hashtag can be defined as the symbol # followed by a word, a phrase or a symbol. Hashtags are used on social media in connection to a certain content to synthetically describe or comment it. They were firstly introduced on Twitter, then the main other social networks followed. It must be emphasized, even for legal purposes, that they are freely usable by anyone.

twitter

Technically, the social network indexes and groups all the contents using the same hashtag. Hashtags function as hyperlinks: by clicking on a single hashtag, the user is redirected to a page where all the contents using the same hashtag have been grouped and organized together by the social network.

From a consumers’ view, hashtags are helpful in following topics and finding contents. From a brand’s view, they are useful to control and attract online consumer traffic and enhance the brand appeal. In particular, hashtags are used in advertising campaigns to redirect users to the company website and social networks, where the consumer experience can be enhanced and the brand loyalty reinforced. From a social network’s view, they are a new way of organizing information and topics.

  1. Let’s come to trademarks. As known, besides their essential legal function of indicating the origin of the product or service covered by the trademark, they can perform, if famous (“with reputation”) other factual functions, such as that of ‘guaranteeing’ the quality of a product or service, or that of supporting advertising of, and investment on, the ‘brand’. However, it must be noted that quite often hashtags are not perceived as trademarks, as they do not perform any of the above functions.

Focusing on the distinctive function, if a sign does not have distinctive character the trademark owner shall retain its exclusive right only by proving that the sign has acquired – typically by strong advertising – a ‘secondary meaning’ – i.e.- the capacity to identify, in the eyes of consumers, the product or service as originating from a firm.

Now, as concerns hashtags, it seems all too evident that, except when the word component is wholly or in part of coincident with a trademark already known on the market (e.g. #cokecanpicks or #CokeZeroSugar, as in the below example), it is indeed hard to say that a hashtag is inherently distinctive: in such cases, it would be normally necessary to prove secondary meaning to secure a valid registration.

coke

In this respect, hashtags shall be considered as a mix of domain names and slogans. As for the top level domain names such as “.com” or “.it”, the symbol “#” is considered as not capable of conferring to the sing any distinctive value. Therefore, if the word or the phrase composing a hashtag are not per se distinctive, the presence of the symbol # cannot save the trademark from being prevented registration for lacking of distinctive character. On the other hand, hashtags are often composed by small phrases and shall, therefore, be compared to slogans. As for slogans, the proof of the existence of a distinctive character is more difficult than for ordinary trademarks, as slogans are usually not perceived as source indicators. Against this background, it seems more efficient to try to secure registration to a phrase or word, and not to the same in the form of a hashtag.

Further, their functional character may prevent hashtags registration as trademarks. The functionality doctrine, based on the ‘imperative of availability’ (“the need to keep free”, “Freihaltebeduerfnis”) prevents to use trademark law for inhibiting legitimate competition by allowing a single company to claim a monopoly either on a descriptive term or a useful product feature. And a product feature is considered functional if it is essential to the use or purpose of a good. Now, as hinted, hashtags function as hyperlinks and tags, to group contents. This function is essential for their success.

In the light of the considerations just submitted registering a hashtag as trademark could be quite difficult. That said, provided that a company succeeds in obtaining trademark registration, its enforcement towards third parties could be difficult for a number of reasons:

a) in most cases, hashtags are not perceived as trademarks. As said, they are typically a form of metadata or tag, through which a word or a phrase becomes a searchable expression on a social network. On the one hand, therefore, it is inevitably that the hashtag registered as trademark is used by all social network users willing to do so. Such users would likely not perceive the hashtag as a trademark, a source indicator, but more likely as a descriptive text or as a tool having a specific function.

Obviously, though, trademark owners have an interest to control the use of their hashtag, if registered as trademark, in order to protect it from dilution and/or consumer confusion with a similar trademark. Here lies one of the most strident paradoxes of hashtag registration as trademarks: as trademark registrants, hashtag owners are encouraged to enjoin unauthorized third parties from using their registered sign. At the same time, it is their interest to encourage social network users to make use of the hashtag for commercial benefits — expand brand awareness, ‘lock in’ consumers, and so on. More precisely, brand owners use hashtags in social media contexts for marketing purposes, often in a way that results detrimental to their distinctive character (and, as a consequence, to their possible enforcement). They convert the hashtag into a means through which the public is encouraged to comment, share and ‘talk’ about the brand and its products or service, while gathering information and data about consumers tastes, preferences and so on. Thus, again, notwithstanding a possible registration, even registered hashtags are hardly used as indicators of origin, but merely as collectors of data and comments (of course not possibly subject to any monopoly).

b) Even when hashtags are used and perceived as trademarks, descriptive use, functionality, legitimate use play in most cases play a crucial role in excluding the existence of a trademark infringement.

Here, the constitutionally ranking principle of freedom of expression would play a role in determining where there is a legitimate use of a hashtag. If people are encouraged to use a hashtag to get involved in a topic and participate to a discussion, their use of the hashtag, as such, shall be considered indeed legitimate under the principle of freedom of expression.

c) Therefore, the sole relevant case when the use of hashtags could be protected under trademark law seems that of competitors adopting hashtags confusingly similar to a hashtag that includes (or corresponds to) a registered trademark. This position seems reflected by the main social networks policies, preventing the use of third parties trademarks when such use creates confusions for consumers.

But even in such a case, there is room to affirm that the use of an identical or similar hashtag by a competitor is legitimate. Considering that the hashtag is a means to tag and categorize contents, the well-known case law on keyword advertising could well apply to a third party use of a registered hashtag. In this context, if the use a third party hashtag by a competitor enhances competition and offers consumes an alternative or a wider range of offer, this use could be considered fair according to the keyword advertising case law.

One last remark. Trademark law is just one of several laws that are relevant to the use of hashtags. Among others, privacy law, consumer law, licensing, image rights and advertising are strictly connected to hashtags use and shall be carefully considered by all users adopting hashtags.

Maria Luigia Franceschelli

Shape trademarks: the Court of Florence’s innovative interpretation of “substantial value”

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The Court of Florence recently expressed an interesting view on the interpretation of absolute grounds of registration invalidity provided for signs constituted by the shape of a product, and, in particular, substantial value.

The case concerned the shape of the world wide famous Hermes’ “KELLY” and “BIRKIN” bags, the shape of which was registered as 3D trademark in Italy and before the EUIPO.

Capture

Hermes alleged the infringement of its famous trademarks by an Italian company offering for sale bags highly similar to the ones protected with Hermes shape trademarks. The alleged infringer resisted claiming, as usual in these cases,  that the above trademarks were invalid since, besides other things, they consist of a shape giving substantial value to the bag.

The Court of Florence dismissed such claim, excluding the existence of a substantial value with an unusual (and deeply interesting) interpretation of this prevention.

Firstly, the decision (available here) defines substantial value as a real and concrete aesthetic plus-value – relevant per se to the product, being instead irrelevant the existence of any particular decoration or added part – that cannot be separated from the product itself and is capable of prevailing on the product’s shape features that are necessary to its function.

Then, the Court expressly excluded that the mere ornamental attitude of the product’s appearance could be of relevance in the evaluation on the existence of a substantial value. Differently from the main case law on this ground of refusal (see decision of 15 February 2012 of the Court of Venice on Crocs shoes or decision of 16 June 2015 of the Court of Milan on Flou’s Nathalie bed), the decision essentially denies that substantial value consists in the capability of the shape to influence the consumer’s choice of purchase, so to be itself the main reason why the product is in fact chosen and bought. In the Court’s view, this capability of the object’s shape to catch the consumers’ attention is connected only with trademark reputation.

Only when the aesthetic appearance of the product’s ornamental shape is so relevant to give a particular aesthetic value inseparable from the product itself trademark registration is prevented. Having this interpretation of substantial value in mind, the Court affirmed that “KELLY” and “BIRKIN” bags where valid trademarks as their shape trademark may be separated from the product itself and does not merely consist in the standard appearance of bags.

This decision interestingly tries to plot a demarcation line between substantial value and trademark reputation/distinctiveness that are often overlapped in the context of the discussions on substantial value. The distinction proposed by the Court of Florence could indeed be of help in drafting a clear and new definition of substantial value, whose interpretation is still not crystal clear when applied to real cases. As a matter of fact, and as actually noticed by the Vespa case (see here), the current interpretation of this condition often leads the trademark owner to deny the attractiveness and distinctiveness of the shape of a product when substantial value is under discussion on the basis that an actual recognition of the shape of the product on the market may lead to the assertion of the existence of a substantial value.

The interpretation of the Court of Florence would not fall into this trap and appears to be more logical in the overall context of the trademark protection, as it denies any relevance of the trademark distinctive character in the context of absolute grounds of registration invalidity provided for signs constituted by the shape of the product. This interpretation, although interesting, is however new and currently isolated. While certainly providing food for thought, it downplays the meaning, and legal sense , of the requisite of substantial value as a reason to attract consumers. If only reputation is attractive, what is the meaning, and sense, to verify the occurrence of a substantial value? ‘Substantial’ to what effect?!

Maria Luigia Franceschelli

Court of Florence, case No. 5850/2010, 31 January 2017, Hermes International Scpa, Hermes Sellier SA, Hermes Italie SpA vs. Papini Paolo & C. Snc and Corsini Giorgio di Gianna e Paola Corsini Snc.

The Court of Appeal of Milan and the active role of the ISP in selling infringing services via the e-marketplaces White Pages and Yellow Pages

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The liability of the Internet Service Providers (ISPs) is still an unsettled area of the case law both at European and national level, with a lot of recent cases that deal with ISPs and the unauthorized online distribution of audio-visual contents (see CJEU case C-610/15 and Court of Appeal of Rome – case Break Media – and Court of Turin – case Delta TV). Anyway, there is also another side of the case law on the liability of ISPs that deals with the selling of goods and services which infringe IP rights via e-marketplace (the leading case of the CJEU is case C-324/09 L’Oréal Vs eBay). In a recent decision, the Court of Appeal of Milan (here) shed light on the joint liability of the ISP and the professional users of its services.

The case at stake is based on the alleged infringement of the trademarks of some major manufacturers of domestic appliance (Electrolux, Candy, Ariston, Bosch, Hoover, Smeg and others, collectively the “Claimants”) by the company ABB, with others (the “Defendant”) via some adverts on the Italianonline’s websites White Pages and Yellow Pages. ABB offered maintenance and support services for domestic appliances – on the White Pages and Yellow Pages edited by Italiaonline – using the ABB’s registered trademarks “Boschexpert”, “Candyexpert”, Aristonexpert” and so on. The Court of Milan in first instance held that ABB’s trademarks were void and found ABB liable of trademark infringement and unfair competition against the manufacturers, since the consumers were misled by the use of ABB’s trademarks on the real origin of the support and maintenance services. Italiaonline has been found jointly liable of such IP violations and both ABB and Italiaonline have been ordered to jointly pay damages to the Claimants. Italiaonline reached a settlement with the Claimants while ABB appealed the Court’s ruling of first instance.

The Court of Appeal of Milan has confirmed the ruling of the Court of first instance in terms of determination of the illicit conduct and quantification of the damages but has clarified the position of Italiaonline as ISP whose electronic means have been use for committing an IPR infringement. Indeed, in the first instance Italiaonline has been fully indemnified by ABB since ABB had a preeminent role in the illicit conduct. This seemed to ABB inconsistent, since Italiaonline has been declared jointly liable for the same illicit conduct. According to ABB, Italiaonline as a technical ISP is the sole responsible of the search engine for the adverts on the websites White Pages and Yellow Pages, which results are misleading and determining confusion to the consumers.

According to the Court of Appeal, Italianonline’s websites can be considered Information Society Services pursuant to E-commerce Directive (despite the fact the White Pages and the Yellow Pages are published both in paper and in electronic form). This leads to the fact that Italianonline can be considered a host provider pursuant to Article 14 of the E-Commerce Directive for the websites White Pages and Yellow Pages, since it technically hosts on such websites the adverts of its professional clients, such as ABB. More in detail, in this case the ISP cannot invoke the safe harbour provision pursuant to Article 14 of the E-Commerce Directive due to its active role for the third-party adverts in return for payment, where Italiaonline does not merely technically process third party adverts but also edits promotional messages coupled with the third-party adverts and identifies the key-words for its search engine. While playing this active role – according to the Court of Appeals – the ISP is responsible for lack of control and for not having expeditiously removed the infringing adverts after the notices of the Claimants (the earliest ones dated 2003).

With regards to the relation between the infringing activity of ABB and the cooperation of Italialonline, the Court of Appeal found that, even if jointly liable, ABB had effectively a preeminent role in terms of relevance and wilfulness of the conduct and that the joint liability must be evaluated according to Article 2055 of the Italian Civil Code, pursuant to which, where two or more parties are held jointly liable, the party paying the damages can recover from the other parties the pro quota of damages attributable to the level of wilfulness and to the consequences of the conduct of the other parties (so called, right of recourse). The request raised by Italianoneline for indemnification of the damages determined by ABB is considered by the Court of Appeal as a right of recourse aimed at clarifying the pro quota  of responsibility of Italiaonline. The right of recourse is applicable pro quota also to ABB as party paying the damages. In light of this interpretation, the Court of Appeal awarded also to ABB a recourse against Italiaonline equal to the 30% of damages to be paid to the Claimants.

This precedent seems of interest because the Court of Appeal of Milan, while making clear application of the principles set forth by the Court of Justice in the leading European case law L’Oréal Vs eBay (an e-marketplace cannot invoke the safe harbour provisions under E-Commerce Directive if it plays an active role by optimizing and promoting the selling of infringing products or services), has even moved forward by clarifying a possible criterion for the attribution of responsibility between professional users and e-marketplaces. It would be of interest verifying whether the same approach could be adopted by other foreign jurisdictions, since the regime of joint responsibility under tort law seems to be matter of domestic jurisdiction.

Gianluca Campus

Court of Appeal of Milan, case No.  1076/2014, 14 December 2016, Italiaonline Spa Vs ABB Srl and Others (President of the Court: Hon. A.M. Vigorelli; Judge-Rapporteur Hon. F. Fiecconi)

The shape of the worldwide famous Vespa obtains protection in Italy under copyright law

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Piaggio, the Italian company producer of the world wide famous Vespa scooter, was recently sued by the Chinese company Zhejiang Zhongneng Industry Group (“ZZIG”) in a quite complex case.

ZZIG offered for sale three scooters named “Revival”, protected by a Community design registration no. 001783655-0002, “Cityzen” and “Ves”, the shape of which was not covered by any registered IP right in Italy or in the European Union.

Capture ZZIG

As to Piaggio, the company owns the Italian 3D trademark no.1556520 claiming priority of the Community trademark no. 011686482, filed on 7 August 2013 and registered on 29 August 2013.

Capture Vespa

When Piaggio obtained the seizure of the three above motorbike models in the context of a Fair held in Milan, the Chinese company started an ordinary proceeding on the merits before the Court of Turin against Piaggio, seeking the declaration of non-infringement of Piaggio Vespa 3D trademark by its “Revival”, “Cityzen” and “Ves” scooters. Besides, it asked a declaration of invalidity of Piaggio’s Vespa trademark, based on the fact that it was anticipated by their design and thus not novel. Also, it held that the 3D trademark was void, as it does not respect the absolute ground for refusal established by the law.

Piaggio resisted and asked the Court of Turin to reject the above claims, declare that the Vespa shape is protected under copyright law, trademark law and unfair competition law and that those rights were infringed by ZIGG three models of scooters. As a matter of fact, Vespa was offered for sale by Piaggio since 1945.

First of all, the Court of Turin declared that the Vespa trademark does not lack of novelty, as it reflects a model of Vespa marketed since 2005, before the commercialization of ZZIG first scooter, i.e. “Cityzen”. Moreover, the Court of Turin excluded the existence of any absolute ground for refusal, stating that its shape was not technical nor standard and not even substantial as the reason why consumers chose the Vespa were not merely aesthetical. Based on these findings, the Court finally affirmed that only the “Ves” scooter constitute an infringement of Piaggio trademark.

This  said, the Court of Turin further held that the Vespa shape is eligible for protection under copyright law, as it is since long time worldwide recognized as an icon of Italian design and style, shown in advertising and movies, presented plenty of times at museum and exhibitions and part of many books, articles, magazines and publications. All considered, safe and sound evidence show that the shape of Vespa is unequivocally believed to be an artistic piece of designs by the main communities of experts worldwide. Nevertheless, the Court held that, again, only Ves scooter infringed Piaggio rights vested on its scooter as it presents features similar to the ones protected both under the Vespa trademark and copyright.

The decision (full text here) is indeed interesting as it critically examines the similarities and differences between the “original” good and the ones that are claimed to be infringing products and, while asserting the eligibility for protection of the Vespa shape both under trademark and copyright law, it excludes infringement for two products through a detailed and careful examination. This narrow approach is indeed interesting because it affirms the principle that the infringement of designs protected under copyright law shall be evaluated with an analytical examination similar to those applied in cases of trademark infringement.

A doubt might remain about the overlapping of trademark and copyright protection. Since the former never expires as long as the product is on the market (plus the subsequent five years, according to Italian law), one might ask what advantage for the right holder might subsist by ‘adding’ a protection limited in time, such as copyright’s. The answer might be: the dual protection functions as a ‘parachute’ for the case that one of the two, in a subsequent Judgement (Appeal or High Court: Cassazione in Italy) should be successfully challenged by a competitor.

Maria Luigia Franceschelli

Court of Turin, case No. 13811/2014, 6 April 2017, Zhejiang Zhongneng Industry Group, Taizhou Zhongneng Import And Export Co. vs Piaggio & c. S.p.a..