IP Report 2014/III
Court of Justice of the European Union
Reported by Professor Dr. Alexander von Mühlendahl, J.D., LL.M.
On November 18, 2014, Advocate General Yves Bot delivered his Opinion in the two cases in which Spain had challenged the Regulation establishing the Unitary Patent, and the Regulation establishing the applicable language regime (Regulation (EU) No 1257/2012 of the European Parliament and of the Council of December 17, 2012 implementing enhanced cooperation in the area of the creation of Unitary Patent protection, OJ 2012 L 361, p. 1, Council Regulation (EU) No 1260/2012 of December 17, 2012 implementing enhanced cooperation in the area of the creation of Unitary Patent protection with regard to the applicable translation arrangements, OJ 2012 L 361, p. 89. The “package” further includes the Agreement on a Unified Patent Court signed on February 29, 2013, OJ 2013 C 175, p. 1). He concludes that both actions should be dismissed as unfounded.
According to the Advocate General, the sole purpose of the regulation on the unitary patent protection is to incorporate recognition of unitary effect through a European patent already granted under the EPC. To that end the EU legislature limited itself to stating the nature, conditions for grant and effects of unitary protection, covering only the phase subsequent to the grant of the European patent without affecting the procedure regulated by the EPC. The protection conferred is regulated by the uniform implementation provisions of the regulation.
As to Spain’s claim that the content of the Agreement on the UPC affects the Union’s powers and confers on a third party the power to determine unilaterally the application of the regulation, the Advocate General takes the view that the Court does not have jurisdiction to review the content of that Agreement in an action for annulment of the regulation. He observes that the Agreement does not fall within any of the categories of acts the lawfulness of which is subject to judicial review by the Court. It is an intergovernmental agreement negotiated and signed only by certain Member States on the basis of international law. As regards the entry into force of the regulation, which depends on the entry into force of the Agreement, the Advocate General considers that this is a reasonable solution in view of the link established between the Unitary Patent Regulation and the establishment of the jurisdiction to adjudge conflicts relating to that patent.
As regards the regulation on the language arrangements, the Advocate General recalls that EU law has no principle of equality of languages. He acknowledges that persons who do not know one of the official languages of the EPO will be discriminated against and that the EU legislature has thus put in place a difference of treatment. In view of the absence of a rule requiring equality of all EU languages that discrimination is, however not contrary to primary EU law. Rather, the regulation pursues a legitimate objective and is appropriate and proportionate to the guarantees and aspects which attenuate its discriminatory effect.
The Opinion is available from the Court’s website in almost all languages of the EU, interestingly however, at the time of the writing of this Report (November 19, 2014), not in English.
A judgment of the Court of Justice should be expected within the next six months. Predictions about the outcome remain speculative, although the Opinions of the Advocate General point in the direction of a possible dismissal of Spain’s actions.
Reported by Maximilian Ernicke, LL.M.
A nullity suit is not inadmissible for abuse of law merely because the nullity plaintiff, who was one of several co-defendants of a parallel infringement suit, did not join an earlier nullity suit of one of his co-defendants but waited for the result of this earlier nullity suit.
The scope of the disclosure of a document can include steps/features which the patent claim and the description do not explicitly mention but which, from the point of view of the person skilled in the art, are evidently necessary for implementing the claimed teaching of the patent and which therefore do not need to be separately disclosed but are “read along”. However, the inclusion of evident steps/features does not allow supplementing the disclosure with the common knowledge of the person skilled in the art, but merely serves to determine the complete meaning of the disclosure, i.e. the technical information which the skilled reader derives from the document on the basis of his common knowledge.
The case at hand concerns the European patent EP 359 593 (hereinafter “the Patent”) which discloses an improved process for separating proteins from human or animal blood plasma, and in particular a process for separating the protein factor VIII which is necessary for the treatment of Haemophilia A (factor VIII deficiency). The claimed process allows producing the protein factor VIII in highly concentrated form on industrial scale.
The proprietor of the patent filed several suits for patent infringement in Germany against Octapharma AG (hereinafter “Octapharma”), its managing director and two of its affiliates. As a reaction to the infringement suits, Octapharma filed a first nullity suit (3 Ni 5/04) against the Patent. As in prior (but unsuccessful) opposition proceedings, Octapharma argued that the Patent lacked novelty over EP 0 343 275 B1 (hereinafter “EP ‘275”).
EP ‘275 was filed before the priority date of the Patent but published after this date. According to Article 54 (3) EPC, such “post published” prior art can be the basis of a lack of novelty objection, but not for a lack of inventive step objection.
Contrary to the Boards of Appeal (see T-292/02), the German Federal Patent Court came to the conclusion that EP ‘275 explicitly disclosed all features of claim 1 and therefore anticipated the claims of the Patent as granted. As a reaction, the Patentee amended claim 1 of the Patent by supplementing claim 1 with an additional feature from the description of the Patent. According to this feature, the factor VIII solution resulting from the steps of the process of claim 1 is freeze-dried.
The Federal Patent Court held that this additional step of freeze drying was neither explicitly described in EP ‘275 nor implicitly disclosed since the step was not necessary for obtaining the sought after factor VIII solution (see 3 Ni 5/04) Therefore, the Federal Patent Court upheld the patent in its amended form. In the appeal proceedings of the first nullity suit, the Federal Supreme Court affirmed this decision (see Xa ZR 10/07).
After the decision of the Federal Supreme Court, the affiliates and the managing director of Octapharma filed a second nullity suit. The nullity plaintiffs once again argued that the Patent lacked novelty over EP ’275 and presented additional evidence that the step of “freeze drying” was the only well-known process for making protein solutions durable at the priority day. The nullity plaintiffs also presented evidence that the so achieved durability was indispensable for turning the factor VIII solution into a tradable therapeutic product.
The patentee argued that the affiliates and the managing director of Octapharma could have joined the first nullity suit, that the subsequent filing of two nullity suits based on the same prior art increased the patentees cost risk, and that the second nullity suit should therefore be held inadmissible for abuse of law.
In its decision on the second nullity suit, the Federal Patent Court held the second nullity suit to be admissible but confirmed that the Patent – in its amended form – was novel over EP ‘275 and dismissed the nullity suit (see 3 Ni 32/10). In the appeal proceedings, the Federal Supreme Court again confirmed the admissibility of the second nullity suit but held all claims of the Patent invalid for lack of novelty over EP ‘275.
What regards the admissibility, the Federal Supreme Court explained that, under German law, everybody is entitled to file a nullity suit against a patent which is in force in Germany at any time and that German law does not provide for any rule forcing a defendant to file a nullity suit within a certain time period. Therefore a co-defendant of an infringement suit is entitled to wait for the outcome of a nullity suit filed by another co-defendant before filing his own nullity suit.
What regards the lack of novelty objection on the basis of EP ‘275, the Federal Supreme Court decided that the freeze-drying feature was implicitly disclosed and therefore anticipated by EP ‘275. According to the Federal Supreme Court, the skilled reader understood that the method disclosed in EP ‘275 was intended to provide factor VIII not only for laboratory or short-term therapeutic uses but also for large scale therapeutic uses. Since it was not in dispute that such large scale therapeutic use required a certain degree of durability of the factor VIII solution and that freeze-drying was the only way for achieving the necessary durability at the priority date, the Federal Supreme Court concluded that the step was “read along” by the skilled reader analyzing EP ‘275.
The decision shows that the filing of successive nullity suits by several members of a company group is admissible and can enhance the chances of success of an invalidity attack. The decision also clarifies the standard for the implicit disclosure of features which are not mentioned in a document but which are part of the common knowledge at the priority date. According to this standard, the skilled person reflects about the purpose of a disclosure and “reads along” features which are (very) well known to the person skilled in the art and which are evidently necessary for realizing the objective of the disclosure.
Reported by Dr. Stefan Steinbrener
The Board of Appeal ruled that the definition and provision of a programming language per se does not contribute to the solution of a technical problem even if the choice of how it is expressed serves to reduce the mental effort of a programmer.
Pursuant to established case law of the EPO Boards of Appeal, not every computer program is patentable. The distinction between patentable computer programs and computer programs “as such” required by Article 52 EPC has been tied by jurisprudence to the existence of a “further” technical effect. Having regard to the activity of a programmer, the Enlarged Board of Appeal found in its opinion G 3/08 (“Programs for computers”) that “(…) would appear that the fact that fundamentally the formulation of every computer program requires technical considerations in the sense that the programmer has to construct a procedure that a machine can carry out, is not enough to guarantee that the program has a technical character (or that it constitutes ‘technical means’ as that expression is used in e.g. T 258/03, Hitachi). By analogy one would say that this is only guaranteed if writing the program requires ‘further technical considerations’”. The question of whether or not the provision of an intuitive programming scheme involved such “further technical considerations” had to be answered by Board 3.5.06 in a more recent case.
The underlying European application 04014708.4 (in German) was refused by the Examining Division for lack of inventive step. It related to a graphical programming language and environment that should enable a user to produce program code without requiring major learning effort or special expertise. According to the invention, different program modules were available which could be linked pursuant to pre-determined rules. The modules were represented by graphical symbols that a user could arrange and connect by lines on a visualization surface so as to form a structure diagram. Each module of the diagram corresponded to a section of the program code, and the diagram corresponded to a complete program. By manipulating graphical symbols on a computer screen a user could thus define text-based program code without directly having to enter any text. The individual modules could, however, be edited in a window by clicking on them.
In the Board's opinion, the effect of reducing the mental effort a user has to invest in programming is not technical; this is all the more so as it is to be equally achieved for all programs, no matter what purpose the programs are meant to serve. The activity of programming – in the sense of formulating program code – implies that a programmer must choose those formulations from the repertoire of a programming language that will lead to the desired result when the program is executed.
Hence, in the Board’s view, the activity of programming as such is basically a mental process, comparable to the verbalization of a thought or the formulation of a mathematical fact in a calculus, and thus lacking any “further technical considerations”. This finding should at least apply if (and in so far as) the activity of programming does not serve to causally produce a technical effect within the framework of a concrete application or environment, which is the case here.
For this reason, the Board holds that the definition and provision of a programming language or such means per se does not contribute to the solution of a technical problem.
The independent claims related to a computer-implemented method and to a computer system, respectively, and involved visualization surfaces visualizing symbols and their connections by lines in order to depict the program structure and its flow. The claimed subject matter was thus considered by the Board to be an invention within the meaning of Article 52 EPC. However, since visualization surfaces for displaying symbols of the program modules are elementary in any programming environment, and since automatic linking of those modules by lines in accordance with established program rules falls within the general approach of relieving the user from having to enter text manually, the claimed subject matter was not seen to involve an inventive step.
The decision supplements the findings of the Enlarged Board of Appeal in G 3/08 regarding the activities of a programmer. These findings apply with equal force to the definition and provision of a programming language and/or a programming environment excluding patentability “(…) if the activity of programming does not serve to causally produce a technical effect within the framework of a concrete application or environment” (translated from German by the author). Hence, similarly to specific programming code in any language, in order to make a technical contribution the programming language or environment must involve “further technical considerations”, either in respect of a concrete technical application or in respect of its specific computer implementation. A mere general provision of innovative programming schemes and their use for reducing the mental burden of a programmer in a conventional computer environment will not suffice to allow for patentability.
Reported by Dr. Stefan Steinbrener
The Technical Board of Appeal 3.4.01 has held that under the EPC the notion of invention was not linked to “tangible” (in the sense of “material”) subject-matter. Electrical signals, the intensity of which could be measured at any time, in fact fell within the definition of “physical entity”.
With the advent of modern analog and digital technology, the question arises whether or not electrical signal forms may be patented. This question has not been answered consistently in different patent systems. Whereas the US Court of Appeals for the Federal Circuit found in its (albeit not unanimous) opinion “In re Petrus A.C.M. Nuijten” of September 20, 2007 that a specifically encoded signal was not directed to statutory subject matter and denied a subsequent petition for rehearing en banc, Technical Board of Appeal 3.5.01 of the EPO held in its early decision T 163/85 (Colour television signal/BBC) of 14 March 1989 that a color television signal characterized by technical features of the system in which it occurred did not fall within the exclusions of Article 52 (2) (d) EPC and thus was to be regarded as an invention within the meaning of Article 52 (1) EPC.
In a recent French case concerning European patent application 01934083.5, Technical Board of Appeal 3.4.01 had to reconsider the issue of signal patentability. The claimed subject-matter related to a train of defibrillation pulses separated by pauses, which resulted from dissecting the electrical discharge signal of a capacitor used for defibrillating the heart of a patient. In order to avoid physiological disadvantages of regular pulse/pause cycles cut out from an exponential discharge form, the invention provided a specific modulation of the pulse train, basically by adjusting the widths of pulses and pauses, so that an electrical parameter crucial for defibrillation followed a predetermined, physiologically more preferable function, e.g., by means of such modulation the average energy of each elementary pulse/pause cycle could nearly be kept constant over the whole exponential discharge curve.
The application had been refused by the Examining Division for lack of novelty of the then claimed subject-matter. In a separate nota bene section of its decision, the Division had added that the claimed subject-matter was also not susceptible of industrial application (Article 57 EPC) because “a train of elementary pulses as defined in claims 1 to 16 constitutes a physical phenomenon which is not sufficiently tangible for being considered as a product (or a process)” (translated from French by the author).
After having confirmed that the requirements of clarity, novelty and inventive step were met by the amended independent claims submitted at appeal proceedings, the Board eventually addressed the objection of lacking industrial applicability. In the first place, the Board observed that the term “tangible” was ambiguous in that it could more broadly relate to some measurable physical magnitude or in a more restricted way to some material body as had apparently been assumed by the Examining Division.
The requirement of a “tangible” (in the sense of “material”) character for inventions was, however, foreign to the EPC: The travaux préparatoires clearly showed that the legislators intended to retain a fairly broad definition of “invention”, thereby deliberately abstaining from the formulation of any requirements concerning the category an invention must belong to. Therefore, it could also not be assumed that any binding specification of possible categories might have been introduced by Rule 43 (2) EPC which only listed product, process, apparatus or use claims (albeit in a different context).
In this respect, the concept of invention pursuant to the EPC had to be distinguished from that of other patent systems, in particular the US system, where patent-eligible subject-matter was limited to “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” (35 U.S.C. § 101).
Even if account were taken of decision G 2/88 (“Friction reducing additive/MOBIL OIL III”) of the Enlarged Board of Appeal defining basically two different types of claims, i.e., “a claim to a physical entity (e.g., product, apparatus) and a claim to a physical activity (e.g., method, process, use)”, the claimed pulse train was of concrete nature insofar as it resulted from the modulation of an electrical signal (discharge of a capacitor used for defibrillation) and was susceptible to measurement at any time. Such a signal in fact fell within the definition of “physical entity” given by G 2/88.
Hence, the Board held that the nature of the claimed subject-matter was no obstacle to its patentability. Furthermore, the unequivocal possibility of realizing and using such a signal for defibrillation purposes warranted industrially applicability so that the requirements of Article 57 EPC were also met.
The decision clearly distinguishes the notion of invention pursuant to the EPC from that of other patent systems, notably the US patent system. Both systems are based on a contradistinctive approach since the EPC refrains from defining patent-eligible subject-matter, does however define subject-matter which is not patent-eligible. On the contrary, U.S.C. 35 101 prescribes an exhaustive list of statutory subject-matter (“process, machine, manufacture and composition of matter”), whereas not patentable exceptions derive from case law of the US Supreme Court (“laws of nature, physical phenomena and abstract ideas”). Holding that those four categories defined the explicit scope and reach of statutory subject-matter, and that a transitory, propagating signal as claimed by Nuijten was not a process, machine, manufacture, or composition of matter, the majority of the CAFC panel had affirmed the rejection of the signal claims in the above-cited opinion. In a dissenting opinion, Circuit Judge Linn argued that the signal claim was directed to a “new and useful manufacture” construed in a broader sense as appropriate for modern technology. This argument was however not accepted by the majority of the panel tying manufacture to “tangible articles or commodities”.
Under the EPC, the broadest definition of possible claim categories was given in G 2/88 referring to “physical entities” or “physical activities”. In T 533/09, the Board has interpreted “physical entity” to specifically include subject-matter that is concrete in that it results from the modulation of an electrical signal and is measureable at any time. In particular, such subject-matter cannot be considered to be of an abstract nature more or less characterizing the non-inventions listed in Article 52 (2) EPC.
Without citing T 163/85 (which may be considered regrettable), Board 3.4.01 arrives at, and thus confirms, the finding already given in the older decision, namely that the “T.V. signal as claimed would also not fall under this more general interpretation of the exclusions of Article 52 (2) and (3) EPC, because it is a physical reality which can directly be detected by technological means and, therefore, cannot be considered as an abstract entity, despite its transient character (…)”.
Since T 163/85 had already been followed by different Boards of Appeal in broader contexts (see, e.g., T 1194/97 (“Data structure product/PHILIPS”) or T 1177/97 (“Translating natural languages/SYSTRAN”), it appears save to assume on the basis of the recent confirmation by Board 3.4.01 that signals are not generally excluded from patentability under the EPC. In particular, a transitory, propagating character is not an exclusion criterion. If a signal reflects the properties of a technical system in which it occurs by being particularly structured or formatted, and thus is adapted to, and can be detected by, technical means, it should in principle be patentable.
Reported by Dr. Stefan Steinbrener
In the Board’s view, the principle of free evaluation of evidence applies, thus leading to a decision on the balance of probabilities. The Board holds that there is no legal basis for a stricter standard of proof in respect of prior art originating from the internet.
Internet publications play an ever increasing role in determining the relevant prior art and thus cannot be ignored. However, unlike conventional paper publications, internet disclosures present specific difficulties, notably in that they may have been modified in the course of time without such modifications being reliably traceable. These immanent difficulties induced Board 3.2.04 to require a strict standard of proof (“beyond any reasonable doubt” or “up to the hilt”) for public availability of internet disclosures in its decision T 1134/06 “Internet citations/KONAMI” of January 16, 2007. T 1134/06 has been affirmed by Board 3.3.04 in decisions T 1875/06 and T 1213/05 and by Board 3.3.05 in T 19/05, whereas decision T 2339/09 by Board 3.2.03, though referring to T 1134/06, relied on a standard of “balance of probabilities”. Furthermore, the “up to the hilt” standard was explicitly rejected by Board 3.3.08 as not applicable to internet disclosures in its decision T 990/09. Hence, despite the issue’s topicality, there is a sustained uncertainty arising from the existing case law in respect of proof requirements for internet disclosures.
In the recent case T 286/10 (in French), Board 3.5.06 took this issue up again and declared any specific proof requirements for internet disclosures to have no legal basis. In the Board’s view, in order to remedy the difficulties associated with internet disclosures, it was not necessary to derogate from the application of the common standard of proof according to which the existence of a prior publication is to be established by evaluating the probabilities according to the circumstances of the case. In this respect, the Board follows decisions T 2339/09 and T 990/09 under the premise of free evaluation of evidence as explained in the earlier decision T 750/94.
In order to justify a strict standard of proof for internet disclosures, T 1134/06 referred to decision T 472/92. However, T 472/92 also confirmed the constant jurisprudence of the boards of appeal, according to which the evidence was generally evaluated in accordance with what seemed most probable, and only made an exception when a prior use was alleged where practically all the evidence lay within the power and knowledge of the opponent. In the present case, the Board did not consider the circumstances of internet disclosures to be comparable to a prior use situation so that T 472/92 could not be relied on to strengthen the proof requirements.
Moreover, T 1134/06 itself distinguished cases of internet publications where in fact a decision on the balance of probabilities was to be taken, e.g. publications originating from internet sites belonging to a reliable editor of good repute who published online versions corresponding to paper publications. In such cases, the content and date of internet disclosures did not need any supplementary proof.
All in all, the Board concluded that, as a matter of principle, internet publications did not require a different standard of proof; the uncertainties associated with these disclosures had to be removed by providing a sufficient degree of probability and establishing a presumption of public availability to the conviction of the judge. There was no reason to increase the degree of probability to the extent of lack of any reasonable doubt.
In the present case, of the two internet publications A9 and A10 advanced by the appellant, article A9 was retrievable at the same internet address to this day and prima facie resulted from a known and reliable source of information. Hence, its date of publication seemed highly probable.
From the URL indicated on A10, it had to be inferred that this document had been archived by the Internet Archive on a date before the priority date of the patent-in-suit. The Board did not arrive at the conclusion of T 1134/06 that internet archives were basically not reliable. In particular, the Board held that normally the mere fact that a document had been archived at www.archive.org at a certain date, without any particular circumstance arousing suspicion, already justified the assumption that public access to the document was possible on the date of uploading it to the internet and then via the Internet Archive shortly afterwards.
The Internet Archive, a private non-profit archiving initiative, placed former internet snapshots at the disposal of the public at large. Since its creation in 1996, it has become very popular and acquired a good reputation. Even though the data volume was enormous, the Archive, of course, only comprised an incomplete collection of those former internet pages, which was, however, also the case for classical libraries and did not affect the credibility of the available information. Although the Board did not exclude the possibility of doubts as to individual entries in the Archive, it believed that the Archive itself sufficiently guaranteed the presumption of a reliable and trustworthy source of information so that an opposing party, depending on the case, had to produce evidence casting doubt on that assumed reliability and thus refuting that presumption. Consequently, a general allegation of lack of reliability of the Internet Archive was not sufficient to question the date of public access to an archived document.
As the respondent had not given any explanations as to why the presumption of public availability was not valid, the Board considered both documents to form part of the prior art and revoked the patent for lack of inventive step with respect to this prior art.
Since the importance of internet disclosures for determining the relevant prior art cannot be overestimated, a standard of proof practically excluding this valuable source of information does not appear expedient. On the other hand, the premature and light-minded acceptance of publication dates in a medium of more or less transient nature would interfere with the principles of the patent system where the requirements of novelty and inventive step are to be judged on the basis of the established prior art. T 286/10 attempts to strike a balance between these opposing demands by limiting the “up to the hilt” proof requirement of T 472/92 to the specific prior use case and relying instead on the principle of free evaluation of evidence and a standard of balance of probabilities, i.e., a principle and a standard consistently applied by the boards of appeal in other circumstances. This approach seems to be reasonable: if all the information is exceptionally in the hands of one party, that party may be seen to bear the full onus of proof. If, however, evidence from elsewhere is to be evaluated, all parties are in an equal position to comment on its persuasiveness so as to convince the board.
Determining the dates and content of internet disclosures may indeed present specific difficulties which have to be carefully taken into account. These difficulties, however, are not unique and may also arise with other sources of disclosure, e.g. oral disclosures or standard preparatory documents. In all of these cases, a decision on the balance of probabilities is normally taken.
Whether or not T 286/10 will close the debate on standards of proof for internet publications remains to be seen. In any case, the decision confirms the approach envisaged by the new version of the EPO Guidelines for Examination of November 1st, 2014 (cf. G- IV, 7.5.2).
Reported by Michael Kobler and Nadine Heiartz
A complaint for a (negative) declaratory judgment requires that the plaintiff has a legitimate interest (“Feststellungsinteresse”) in the requested declaratory finding by the competent court. A legitimate interest of the plaintiff in finding that a specific patent is not infringed may exist if the patent owner, despite its obligation to do so, does not respond to the question of the plaintiff whether a certain device falls under the scope of protection of the patent. In the present decision, the Dusseldorf Appeal Court clarifies that the patent owner who has filed a complaint against a company based on infringement of a different national part of a European patent generally is not obliged to answer the question by such company whether similar devices also infringe the German part of said European patent in Germany. Thus, the absence of a response from the patent owner generally does not create a legitimate interest for such company requesting a negative declaratory judgment.
In the case at hand, the patent owner had filed an infringement complaint in Turkey based on literal and equivalent infringement of the Turkish part of European Patent 1 392 575 against the manufacturer of sealing devices allegedly falling under the scope of protection of this patent. The manufacturer wrote several letters to the patent owner asking for a statement on whether its respective devices also infringed the German part of said European patent. The patent owner did not comment on the potential infringement of the German part of EP 1 392 575 but merely answered that he would not comment on any possible future activities and that he was not willing to spend money and time for the assessment of a theoretical infringement question. As a consequence, the manufacturer filed a complaint for a declaratory judgment of non-infringement against the patent owner with the Dusseldorf District Court.
As both parties declared the matter terminated before the Dusseldorf District Court had issued a declaratory judgment, the Dusseldorf Appeal Court only had to decide which party has to bear the statutory costs of the proceedings, i.e., which party would presumably have lost the case. The Appeal Court ordered that the plaintiff had to bear these costs because he did not have a legitimate interest in a declaratory judgment. Upon the appeal filed by the plaintiff, the Dusseldorf Appeal Court upheld the District Court’s decision for the following reasons:
Section 256 German Code of Civil Procedure stipulates that a complaint may be filed to establish the existence or non-existence of a legal relationship, i.e., for example the existence of a patent infringement, if the plaintiff has a legitimate interest in having the legal relationship established by a judicial ruling at the court’s earliest convenience. According to the established German case law, such legitimate interest is given if the defendant alleges to be entitled to a claim against the plaintiff.
In its grounds of the decision, the Dusseldorf Appeal Court explained in which situations such allegation by a patent owner to be entitled to a claim based on infringement providing for a legitimate interest in a declaratory judgment could be assumed. The Court distinguished between explicit allegations, e.g. in a warning letter, and so-called implied allegations (“konkludente Berühmung”), e.g., silence with respect to a question on the patent owner’s assessment of the infringement situation despite an obligation to respond. According to the Court, an implied allegation requires a behavior of the patent owner towards the plaintiff, which allows the clear conclusion that the patent owner alleges to be entitled to a claim against the plaintiff based on infringement of the patent.
Applying these principles to the case at hand, the Court stated that if the patent owner simply refuses to give a substantial answer to the question whether he regards a certain device to fall under the scope of protection of the patent, an explicit allegation is out of the question. An implied allegation would only allow a clear conclusion in the above sense if the patent owner was generally obliged to answer such question. According to the Dusseldorf Appeal Court, there is no such general obligation of the owner of a (European) patent to give an answer to such request. Following the established German case law, the Court explained that this was not only true if there were no legal relationships between the patent owner and the inquiring company prior to the inquiry, but also in case the inquiring company had already been sued for patent infringement by the patent owner and asked whether a modified device would still fall under the scope of protection of the patent.
Furthermore, the Dusseldorf Appeal Court added that there was also no obligation of the patent owner to provide an answer, even if the patent owner had already sued the inquiring company in another EPC member state based on infringement of a national part of a European patent a German counterpart of which is valid in Germany. This was easily understandable, as the Court explained, in case the wording of the claims of the national parts of the European patent in question was different which might result in a different scope of protection, or if the patent owner based his complaint on infringement under the doctrine of equivalence since the requirements of equivalent infringement depend on the respective national case-law and thus significantly vary between the different EPC member states. Therefore, filing such complaint does not allow the clear conclusion that the patent owner would automatically see himself entitled to a claim for patent infringement also in another EPC member state.
Finally, according to the Dusseldorf Appeal Court, a complaint based on literal infringement of another national part of a European patent – and refusing to answer to an inquiry regarding infringement with regard to the German part of the respective European patent – generally also does not constitute an implied allegation to be entitled to a claim in Germany. The Court explained that the mere conduct of the patent owner in one EPC member state does not constitute such implied allegation in another member state. In this context, the Court pointed to the general opinion that the European patent was a bundle of independent national patents which had to be considered individually. Only if additional circumstances were at hand, e.g. if the patent owner through respective comments or behavior showed that he deemed also the other national (here German) part of the European patent to be infringed, the plaintiff may have a legitimate interest in a declaratory judgment of non-infringement.
The present decision shows that, despite the pending referral to the CJEU regarding the requirements for successfully raising the compulsory license objection, German instance courts are still reluctant to use a less strict standard than in the “Orange-Book” decision – at least until a final decision is rendered by the CJEU. Thereby, the application of very strict requirements for a preliminary stay of enforcement measures complies with the practice of the instance courts, in this respect.
Following this approach, on the one hand, owners of SEPs presently may expect to be able to preliminary enforce a first instance judgment based on that SEP. On the other hand – in particular in view of the latest decision of the European Commission regarding Motorola Mobility’s violation of antitrust law by forcing Apple to sign an unfavourable license agreement by means of posing a threat of enforcing an injunction against Apple on the basis of a SEP – patent holders might need to consider risks of liability based on such enforcement in case the CJEU will significantly ease the requirements for raising the compulsory license objection.
Reported by Professor Dr. Alexander von Mühlendahl, J.D., LL.M.
Netto Marken-Discount AG & Co. KG requested registration in Germany of the following mark
for goods and services in class 18, 25, 35, 36. As regards class 35, the specification was as follows:
Services in the retail and wholesale trade, particularly the bringing together, for the benefit of others, of a variety of services enabling customers conveniently to purchase those services, particularly services provided by retail stores, wholesale outlets, through mail order catalogues or by means of electronic media, for example websites or television shopping programmes, in relation to the following services: in Class 35: Advertising; business management; business administration; office functions; in Class 36: Issue of vouchers or tokens of value; in Class 39: Travel arrangement; in Class 41: Entertainment; in Class 45: Personal and social services intended to meet the needs of individuals.
The German Patent and Trademark Office rejected the application as regards class 35 because of an allegedly lacking proper demarcation between the services requested and other services. The Federal Patent Court, to whim Netto appealed, considered that basic issues of service mark protection were raised by the appeal and referred the following questions to the Court of Justice:
(1) Is Article 2 Trademark Directive to be interpreted as meaning that a service within the meaning of this provision also encompasses retail trade in services?
(2) If the answer to the first question is in the affirmative: Is Article 2 Trademark Directive to be interpreted as meaning that the content of the services offered by the retailer must be specified in as much detail as the goods that a retailer markets?
(a) Does it suffice for the purposes of specification of the services if
(i) just the field of services in general or general heading,
(ii) just the class(es) or
(iii) each specific individual service is indicated?
(b) Do these indications then take part in determining the date of filing or is it possible, where general headings or classes are stated, to make substitutions or additions?
(3) If the answer to the first question is in the affirmative: Is Article 2 Trademark Directive to be interpreted as meaning that the scope of trademark protection afforded to retail services extends even to services provided by the retailer itself?
As regards the first question, the Court has no difficulty in finding that the service of bringing together third-party services for clients may constitute itself a service within the general terms of class 35. The Court applies the principles developed with regard to “retail services” for goods in Case C-418/02 (the so-called PRAKTIKER case) where it held:
The concept of ‘services’ referred to by First Council Directive 89/104/EEC of December 21, 1988 to approximate the laws of the Member States relating to trademarks, in particular in Article 2, covers services provided in connection with retail trade in goods.
As regards the second question, it is no surprise that the Court did not go into details but limited its findings to the requirement of sufficient clarity and precision, as established in Case C-307/10 (the so-called IP TRANSLATOR case), leaving it to the competent authority to make the required determinations. The Court indicated that the list supplied by Netto when referring to class headings may not comply with that requirement.
As regards the third question, the Court recognises that this is an entirely hypothetical question as the only issue before the referring court is the question of registrability, and the “scope of protection” is not in issue.
The Court recognises the relevance of the underlying issue, namely whether a service mark for bringing together services may also be granted when these services are the applicant’s own services. The Court appears to take the view, although this is not entirely clear, that assembling the applicant’s own services may not a service within the meaning of class 35. The Court concludes however that the mere possibility that the services could be the applicant’s own services does not suffice for the rejection:
 However, even though the assortment of services offered by Netto Marken Discount could include services provided by itself, that in no way casts doubt on the fact that the supply described in its application for registration, by means of the words ‘the bringing together, for the benefit of others, of a variety of services enabling customers conveniently to purchase those services’, is capable of being categorised, for the reasons set out in paragraphs 34 to 37 of this judgment, as a service. At the risk of depriving the applicant in the main proceedings of the possibility of having that sign registered as a trademark with respect to that bringing together service, its application for registration with respect to Class 35 of the Nice Classification cannot be rejected on the sole ground that the assortment of services which it intends to provide to the consumer could also include services offered by itself.
The Court gives the following answers to the first and second question:
1. Services rendered by an economic operator which consist in bringing together services so that the consumer can conveniently compare and purchase them may come within the concept of ‘services’ referred to in Article 2 Trademark Directive.
2. The Trademark Directive must be interpreted as imposing a requirement that an application for registration of a trademark with respect to a service which consists in bringing together services must be formulated with sufficient clarity and precision so as to allow the competent authorities and other economic operators to know which services the applicant intends to bring together.
The availability of service mark protection for enterprises bringing together a number of different services, in parallel to the availability of service mark protection for retail (or wholesale) services relating to goods, appears as a logical extension of the Court’s PRAKTIKER decision, where the Court had accepted the latter category of service mark, provided that the goods with regard to which the service was rendered are properly identified. The Court did not consider it necessary to decide or discuss the question of whether services brought together as described amounted to “retail” services. Indeed, it seems questionable whether the concept of wholesale and retail can be applied to the rendering of services.
As regards services relating to the applicant’s owns services, the scepticism in the present case contrasts with the ease with which the Court accepted that “retail services” with regard to goods may also be provided in relation to the applicant’s own goods, as decided on the same day (July 10, 2014), in the Apple Store case, C-420/12.
The decision in the Apple Store case, Case C-421/13, subject of a reference by the Federal Patent Court of the same day as the present reference, is the subject of a separate Report.
Reported by Professor Dr. Alexander von Mühlendahl, J.D., LL.M.
Apple Inc. requested extension of an international registration pursuant to the Madrid Protocol, based on a U.S. registration, inter alia to Germany. The mark is represented as follows:
Protection was requested for retail services in class 35 as follows: “retail store services featuring computers, computer software, computer peripherals, mobile phones, consumer electronics and related accessories and demonstrations of products relating thereto”. The German Patent and Trademark Office (“DPMA”) rejected the requested extension on grounds of lack of distinctiveness. The Federal Patent Court, to whom Apple appealed, considered the requirement of distinctiveness to be met, but had doubts as to the registrability of the sign and doubted also whether Apple could obtain registration of the mark for retail services rendered in relation to its own goods. The Court referred the following questions to the Court of Justice:
(1) Is Article 2 Trademark Directive to be interpreted as meaning that the possibility of protection for the ‘packaging of goods’ also extends to the presentation of the establishment in which a service is provided?
(2) Are Articles 2 and 3 (1) Trademark Directive to be interpreted as meaning that a sign representing the presentation of the establishment in which a service is provided is capable of being registered as a trademark?
(3) Is Article 2 Trademark Directive to be interpreted as meaning that the requirement for graphic representability is satisfied by a representation by a design alone or with such additions as a description of the layout or indications of the absolute dimensions in metres or of relative dimensions with indications as to proportions?
(4) Is Article 2 Trademark Directive to be interpreted as meaning that the scale of the protection afforded by a trademark for retail services also extends to the goods produced by the retailer itself?’
The Court analysed the first three questions together. It considered that the mark, being a two-dimensional design, complied with the requirement of graphic representability in Article 2 Trademark Directive, without any need to indicate dimensions or proportions, and without it being necessary to examine whether the mark can be taken as equivalent to the “packaging” of goods:
 (…) Consequently, such a representation satisfies the first and second conditions referred to at paragraph 17 of this judgment, without it being necessary either, on the one hand, to attribute any relevance to the fact that the design does not contain any indication as to the size and proportions of the retail store that it depicts, or, on the other hand, to examine whether such a design could equally, as a ‘presentation of the establishment in which a service is provided’, be treated in the same way as ‘packaging’ within the meaning of Article 2 Trademark Directive.
The Court then referred to the requirements of distinctiveness and combined the outcome of the analysis in the following answer:
Articles 2 and 3 Trademark Directive to approximate the laws of the Member States relating to trademarks must be interpreted as meaning that the representation, by a design alone, without indicating the size or the proportions, of the layout of a retail store, may be registered as a trademark for services consisting in services relating to those goods but which do not form an integral part of the offer for sale thereof, provided that the sign is capable of distinguishing the services of the applicant for registration from those of other undertakings; and, that registration is not precluded by any of the grounds for refusal set out in that directive.
One of the issues in the case was whether Apple would be able to obtain registration of the store layout for retail services rendered in relation to its own goods. The Court had raised that issue in the Hearing and answered as follows:
 In this regard, it must be held that, if none of the grounds for refusing registration set out in the Trademark Directive preclude it, a sign depicting the layout of the flagship stores of a goods manufacturer may legitimately be registered not only for the goods themselves but also for services falling within one of the classes under the Nice Agreement concerning services, where those services do not form an integral part of the offer for sale of those goods. Certain services, such as those referred to in Apple’s application and clarified by Apple during the hearing, which consist of carrying out, in such stores, demonstrations by means of seminars of the products that are displayed there, can themselves constitute remunerated services falling within the concept of ‘service’.
The Court added, in analyzing the fourth question, the following:
 As is clear from paragraphs 26 and 27 of this judgment, the Trademark Directive does not preclude the registration of a sign for services which are connected with the goods of the applicant for registration.
As regards the fourth question itself, with its peculiarly worded English version using the word “scale” (the original German used the word “Schutzumfang”, i.e. “scope of protection”), the Court declined to give an answer because the facts of the case, involving exclusively registrability on absolute grounds, did not provide any reason to raise or answer an abstract question as to the scope of protection:
 The question as to the scale of the protection granted by such a trademark, on the other hand, as Apple and the Commission have submitted, manifestly bears no relation to the subject-matter of the main proceedings, which are concerned exclusively with the refusal by the DPMA to register the sign reproduced in paragraph 9 above as a trademark.
 Consequently, in view of the Court’s settled case-law, according to which a request for a preliminary ruling from a national court must be rejected where it appears to be quite obvious that the interpretation of Union law sought bears no relation to the facts or purpose of the main proceedings, the fourth question must be declared inadmissible.
The registrability of visual representations of the store layout, whether of so-called “flagship” stores, or of other establishments, such as restaurants etc., has led to long discussions particularly in Germany where there were differing opinions also within the German Patent and Trademark Office and the Federal Patent Court. The discussion revolved around two separate issues. First, there is the issue of registrability of such layouts as complex “signs”, which were often considered to lack in “unity” (and thus assimilated to colour composition marks). As regards such combinations, the Court had held in 2004, in Case C-49/02, Heidelberger Bauchemie, that colours or combinations of colours which are the subject of an application for registration as a trademark, claimed in the abstract, without contours, (…) may constitute a trademark for the purposes of Article 2 of the First Council Directive (89/104/EEC) of December 21, 1988 to approximate the laws of the Member States relating to trademarks where:
- it has been established that, in the context in which they are used, those colours or combinations of colours in fact represent a sign, and
- the application for registration includes a systematic arrangement associating the colours concerned in a predetermined and uniform way.
As regards registrability, the doubts of the Federal Patent Court appear understandable but inappropriate in the setting of the case: Apple was the owner of a U.S. 3D mark for the same services which served as a basis for the Madrid registration and thus the claim for protection in Germany. Under Article 6 quinquies of the Paris Convention, the German Patent and Trademark Office and the German Patent Court did not have the authority to challenge the mark because of its “form” – it must be accepted “as is” (tel quel). The Paris Convention issue did not appear to have been considered by the Court of Justice. The Court however found an easy solution: The mark is a “figurative” mark, even though claimed as a 3D mark, and devices such as the representation in the present case are registrable, without any need for more specificity, by description or otherwise. Naturally, the requirement of distinctiveness must be met, but here we know from the referring court that it appeared that this was not considered to be an obstacle.
The second issue was whether registration as a mark for retail services in class 35 may be obtained also for the proprietor’s own goods. Why the second question was ever raised in the present case is difficult to understand because an applicant will not claim protection for retail services limited to goods made by himself. Apple in the present case had a description of goods which fitted its own products, but did not limit the specification to its own goods. The reference of the Federal Patent Court sought to deal with that “non-issue” in its fourth question, but the wording was so opaque, focusing on “scope of protection” rather than “subject matter”, that the Court had no difficulty in dismissing the question as inadmissible. It made however an effort to address the issue of “own goods” anyway, and concluded that there was no obstacle to obtaining a service mark registration for retail services rendered in relation to the applicant’s own goods.
The debates concerning retail service marks are not concluded with this judgment, which addresses actually only a marginal point. The current debate centers on the question of what actually is meant with “retail services” and how they can be distinguished from other services (e.g., transportation of goods, insurance, etc.) and with the question whether and to which degree retail services relating to particular goods are similar to the goods when examining conflicts between marks. Case law is developing.
As regards the notion of “retail services”, the Court in this context makes another one of its sibylline statements, namely that these services must not be an “(…) integral part of the offer for sale”. The reason for this is clearer than the meaning of “integral part”: The sale of goods is not itself a service. Protection for the “sale of goods” may be obtained only by registering he mark for the goods in the goods classes. The issue may become relevant only once the registered mark must be used in order to be maintained, and the question then arises whether the mark was actually used for “retail services”.
As regards use issues, with the statements of the Court on the “own goods” question it appears settled that if after five years the trademark proprietor uses his retail services mark only for his own goods, this will be sufficient provide the use is genuine.
The Court decided another retail services issue the same day, in Case C-420/13, Netto Marken-Discount, a reference also made by the Federal Patent Court, on the same day as the present reference, which is the subject of a separate Report.
Reported by Professor Dr. Alexander von Mühlendahl, J.D., LL.M.
Reber Holding brought an opposition against Wedl & Hofmann’s Community trademark application
for coffee and sugar in class 30, based on its German trademark “Walzertraum” registered inter alia for chocolate goods in class 30. When the applicant requested proof of use, Reber Holding provided evidence of use of the mark for hand-made pralines produced and sold in its shop in Bad Reichenhall, a small city in the Bavarian Alps, with sales of 40 to 60 kg per year, and Internet advertising. The Opposition Division considered this proof of genuine use and rejected the application because of likelihood of confusion. OHIM’s Fourth Board of Appeal reversed, Case R 623/2008-4, concluding that the evidence of use was not sufficient to show genuine use. Reber Holding appealed, and the General Court dismissed the appeal (Case T-355/09). Upon Reber Holding’s further appeal, the Court of Justice dismissed the appeal.
The decision is not noteworthy because of its outcome – the Court of Justice almost always (in more than 90 % of all appeals on points of law) confirms General Court judgments, may they appear contestable or not. The principal reason for this is that the Court of Justice considers most of the decisions based on factual findings which it must accept, unless the evidence has been distorted. We are not aware of a single trademark case where the “distortion of evidence” succeeded. It is also not noteworthy for the manner in which it was decided, namely by a three-judge panel (the Seventh Chamber, made up of Judge da Cruz Vilaça, President of the Chamber, and Judges Arestis, Rapporteur, and Bonichot), without an Advocate General. (Nowadays, a large proportion of these appeals is decided by reasoned Order when found manifestly inadmissible or manifestly unfounded). Not noteworthy either is the fact that the judgment is available only in the language of the proceedings, German, and French, the language used by the Court. This has become the norm in many cases – although the unavailability in other languages, notably English, does not facilitate the spreading of the knowledge of the Court’s judgments.
Noteworthy is the judgment for the legal conclusions it makes on some important issues of genuine use.
First, the Court states that “commercial use” is not in itself sufficient to be genuine (our translations):
 Contrary to the Appellant’s opinion the examination of genuine use of an earlier mark cannot be limited to mere finding of a use of the mark in the course of trade, because the use must in addition be genuine within the meaning of the wording in Article 53 (2) Trademark Regulation. Furthermore the evaluation of “genuine use” of a mark depends from the characteristics of the respective goods or services on the respective market. Therefore, not any proven commercial use can be classified as genuine use of the mark in question.
Many had understood the Court’s leading cases – Ansul and La Mer – as actually standing for the principle that “genuine” means actual use in a commercial sense, regardless of the volume and scope of use, at least for a national mark, while size of the market and territorial scope might become relevant for Community trademarks. It is troubling for the owners of earlier marks, which are actually used even though at a small scale, that they may not be enforceable vis-à-vis later Community trademarks.
Second, as regards the argument made by Reber Holding that the genuineness of its use should be measured in regard of the goods for which it had actually used the mark (hand-made pralines), and not for the broader category of goods for which the mark is registered (chocolate goods), the Court rejects this, as follows:
 In the present case it is established that the national word mark Walzertraum is registered for “pastries, confectioneries, chocolates, sugar goods” and not for “pralines”. The Court thus correctly started from the position that the goods of the earlier mark of the appellant are “chocolates”.
 In the evaluation the examination carried out by the Fourth Board of Appeal of OHIM the court thus correctly considered the German market for chocolates, which means that the alleged error of an infringement of the obligation to state reasons must be seen as unfounded.
This is also a disturbing approach because it is (or perhaps we should say: was) generally assumed both for national and for Community trademarks that what is relevant are the goods (or services) for which the mark is actually used, not what the registration says. When the use is not made for all the goods for which the earlier mark is registered, only the actually used goods are taken into account. In fact, Article 42 (2) CTMR, also applicable to national marks, provides so explicitly:
If the earlier (…) trademark has been used in relation to part only of the goods or services for which it is registered it shall, for the purposes of the examination of the opposition, be deemed to be registered in respect only of that part of the goods or services.
The Court in our opinion disregarded this explicit mandate. Further appeals are not available. But perhaps this decision will in the end remain unnoticed, if only for the availability in German and French only.
Reported by Dr. Philipe Kutschke
Since 1956 the German publisher Langenscheidt distributes its printed dictionaries in a specific yellow color, since the 1980s it also markets other products in this color. After having proven in application proceedings that its mark had acquired distinctiveness through use, Langenscheidt’s obtained a German color mark registration for “printed bilingual dictionaries” in January 2010 (claiming priority of March 7, 1996). In 2010, the U.S. company Rosetta Stone started distribution of its language-learning software in a yellow packaging in Germany, also using the yellow color for its promotions and marketing, e.g. on its website. Langenscheidt sued Rosetta Stone, arguing that use of the yellow color infringes its trademark rights. The Cologne District Court and the Cologne Appeal Court found the accused products to infringe the claimant’s trademark rights. The further appeal of the defendant before the Federal Supreme Court remained unsuccessful.
The Cologne District Court and the Cologne Appeal Court both ordered the defendant to, inter alia, refrain from use of the yellow color for its language-learning software, because it infringes Langenscheidt’s registered color mark. Rosetta Stone filed a cancellation request against the mark-in-suit with the German PTO, arguing that the mark was devoid of intrinsic distinctive character, and that the mark allegedly also did not acquire distinctiveness through intensive use. The German PTO and the Federal Patent Court both rejected the cancellation request. An appeal on points of law was pending before the Federal Supreme Court. Despite these pending cancellation proceedings, the Federal Supreme Court (as already the Appeal Court had done before) rejected defendant’s request to stay the infringement proceedings until a final decision in cancellation proceedings will be rendered. The Federal Supreme Court’s standard of staying an infringement action while an invalidity action is pending requires „ … a certain degree of probability for the cancellation which justifies the delay following from a stay.” This requirement was not met. The Court maintains this view while taking into account the recent judgment of the ECJ that the burden of proof in cancellation proceedings regarding the question whether a trademark acquired distinctive character through use lies with the trademark holder (ECJ, decision of June 19, 2014, Joined Cases C-217 & 218/13 – Deutscher Sparkassen- und Giroverband/Banco Santander – Sparkassen-Red, reported in IP-Report 2014/II) and the argument of the appellant that thereby the chances of success in the invalidity action were higher. The German Supreme Court had previously held that the burden of proof lies with the person challenging the validity. The Court finds that this ECJ decision does not affect its evaluation of the defendant’s chances of success in the cancellation proceedings. According to the Federal Supreme Court the impact of this ECJ decision on German practice remains “open”, because the ECJ based its decision on the incorrect assumption that Germany had not exercised its right to make use of the option in Article 3 (3) of the Trademark Directive to provide that a trademark shall also not be declared invalid on the grounds of absence of distinctiveness or descriptiveness if it has acquired a distinctive character after the date of application for registration or after the date of registration (cf. Section 37  German Trademark Act).
As regards the requirement that the infringing sign must be used “as a trademark”, courts in general argue that consumers perceive the coloring of a product rather as a decorative element and not as a trademark. Only under specific conditions consumers may find a color to demonstrate the origin of the products. In the present case, the Court agrees with the lower court that when taking into account the perspective of average users of the respective products, the requirement of trademark use is met. The claimant has made extensive use of the color yellow since 1956, and today it holds a significant market share in the field of bilingual dictionaries. Its most important competitor extensively uses a specific green color for its products. Trademark use applies not only to the claimant’s products, but also for defendant’s yellow-colored products. Finally, the fact that the claimant and the defendant besides using the yellow color also use other marks for their products does not change consumer’s perception of the yellow color “as a trademark”.
The Federal Supreme Court confirms the Appeal Court’s assessment that dictionaries on the one side and language-learning software on the other are complementary goods and, thus, the conflicting goods are highly similar. In view of the longstanding intensive use of the yellow color by the claimant, which nowadays includes dictionaries in 33 languages, the Court found that the Appeal Court correctly came to the conclusion that the mark-in-suit enjoys an average scope of protection. As regard the conflicting yellow colors, the Federal Supreme Court again agrees with the Appeal Court’s finding that they are highly similar. Consequently, there exists likelihood of confusion.
The decision follows established principles in cases involving infringement of so-called “abstract” color marks, i.e. marks consisting, as here, of a single color without any figurative addition.
Noteworthy is the simultaneous pendency of infringement and invalidity case involving the same mark and the almost simultaneous decisions in both cases. In the co-pending cancellation action, the Federal Supreme Court dismissed the appeal on October 23, 2014 (Case I ZB 61/13), i.e. only one month after the decision in the infringement action. The reasons for the dismissal of the invalidity claims are not yet available at the time the writing of this Report (November 19, 2014). It will be interesting to see how the German Supreme Court will take into account the recent Sparkassen-Rot judgment of the Court of Justice, which is, at least as regards fixed percentages for finding acquired distinctiveness, in obvious contradiction with the German court’s requirement of acquired distinctiveness by at least 50 % of the relevant public.
Reported by Xavier Fàbrega Sabaté, LL.M.
Carolina Herrera Limited (“Carolina Herrera”) and Puig France S.A.S. (“Puig France”) produce perfumes under the trademarks CAROLINA HERRERA, 212 (in the name of Carolina Herrera), PACO RABANNE, BLACK XS, ULTRAVIOLET, 1 MILLION, LADY MILLION, NINA RICCI, LOVE IN PARIS, PREMIER JOUR, NINA and RICCI RICCI (in the name of Puig France). Antonio Puig S.A. (“Antonio Puig”) markets these perfumes in Spain. The marks are either protected as Spanish, Community or international trademarks.
Cataleg de Serveis Integrals S.L. (“Cataleg”) distributes perfumes which imitate the smell of the fragrances produced by Carolina Herrera and Puig France. Equivalenza Retail S.L. (“Equivalenza”) markets these smell-alike perfumes in corporate outlets and by means of several franchises. The defendants use comparison or equivalence lists which link the numerical references of the smell-alike perfumes with the trademarks of the original products. The smell-alike perfumes are sold in bottles that bear the sign EQUIVALENZA and that are clearly different from those of the imitated fragrances, at a substantially lower price.
In May 2012, Carolina Herrera, Puig France and Antonio Puig brought a lawsuit against Cataleg and Equivalenza for trademark infringement and unfair competition. The Community Trademark Court No. 1 of Alicante, in a decision taken on January 28, 2014, held in favour of the claimants.
In its judgment, after acknowledging the high reputation of the asserted trademarks, the Court stated that there is no likelihood of confusion on the part of the public. Nevertheless, the Court declared that the use of the plaintiffs’ trademarks in the comparison or equivalence lists amounts to trademark infringement, since such use creates a link between the trademarks and the equivalent smell-alike perfumes, and takes unfair advantage of the reputation of the claimants’ trademarks. Consequently, the defendants try to exploit, without paying any financial compensation, the marketing effort expended by the proprietors of the reputed trademarks, with the aim to obtain an unfair advantage of their distinctive character and reputation.
The Court rejected the main argument raised by the defendants, i.e. that the plaintiffs’ trademarks are being used for descriptive purposes in the equivalence lists, and that such use is thus allowed under Article 12 Community Trademark Regulation. In this respect, the Court affirmed that the use of the plaintiffs’ trademarks is not necessary in order to indicate the purpose or the characteristics of the defendants’ products. In particular, the defendants may explain the characteristics of their perfumes by describing them as floral or fruity, for instance, but it is not necessary to compare them expressly with any well-known fragrances by using the trademarks under which the well-known fragrances are sold.
Furthermore, the Court considered that the use of the plaintiffs’ trademarks in the equivalence lists is not in accordance with honest practices in commercial matters. Consequently, such use constitutes unlawful comparative advertising and amounts to unfair competition.
Equivalenza and Cataleg filed an appeal against the judgment of the Community Trademark Court No. 1 of Alicante, which was dismissed by the Community Trademark Court of Appeal of Alicante on June 13, 2014. In this decision, the Court of Appeal confirmed the amount of the compensation for damages awarded to the plaintiffs in first instance, as well as the order to remove and destroy the defendants’ advertising material, in particular the equivalence lists.
This is the first case in which the Spanish courts have had the opportunity to follow the landmark judgment issued by the European Court of Justice on June 18, 2009 in Case C-487/07 (L’Oréal v Bellure; cf. BARDEHLE PAGENBERG IP REPORT 2009/III). Not surprisingly, this judgment is expressly invoked by the Community Trademark Court in its decision.
As in the L’Oréal/Bellure judgment, the decision of the Community Trademark Court No. 1 of Alicante states that the use of well-known trademarks in comparison or equivalence lists is unlikely to mislead the public, and will probably not damage, dilute or tarnish the reputation or the distinctive character of the relevant trademarks. However, such equivalence lists create a link in the mind of the public between the plaintiffs’ reputed trademarks and the smell-alike perfumes. Furthermore, by using well-known trademarks in their comparison lists, the defendants attempt to ride on the coattails of those trademarks in order to benefit from their power of attraction, their reputation and their prestige.
Finally, and also in line with the L’Oréal/Bellure judgment, the Community Trademark Court No. 1 of Alicante and the Community Trademark Court of Appeal conclude that the marketing of smell-alike perfumes as imitations or replicas of fragrances bearing well-known trademarks constitutes unlawful comparative advertising and is contrary to honest commercial practices.
Reported by Dr. Henning Hartwig
This case concerns registered Community design No. 70438-0002 (“contested design”) intended to be applied to “skirting boards” (Class 25-02 of the Locarno Classification) and represented as follows:
On September 11, 2007, an application for a declaration of invalidity with regard to the contested design was filed on the grounds of Article 25 (1) lit b Community Designs Regulation (“CDR”), i.e., asserting lack of novelty (Article 5 CDR) and lack of individual character (Article 6 CDR). The applicant argued that the contested design was not new, because identical designs had been placed on the market already in 1999. In support of its application, the applicant produced, inter alia, selected pages from a catalogue. By decision of May 31, 2010, the Invalidity Division of OHIM upheld the application for a declaration of invalidity, on the ground that the contested design was not new. It based its assessment on one of the representations from that catalogue reproduced below (“earlier design”):
On November 8, 2012, the Third Board of Appeal of OHIM dismissed the appeal against the decision of the Invalidity Division. It held, in essence, that the contested design was invalid owing to its lack of novelty and individual character. More specifically, the Board of Appeal found that the contested design was part of a complex product and that the only part of that design visible during normal use (see Article 4  [a] CDR) was the flat surface of its base part (interestingly, it seems to suffice, according to the Court, if “part of the design” remains visible, in spite of the more explicit language in Article 4 (2) [a] CDR, that the “component part once it has been incorporated into the complex product” must remain visible). Since the flat surface of the contested design was the same as the flat surface of the earlier design, the Board of Appeal concluded that the two designs were identical and that, consequently, the contested design was not new. Likewise, the overall impression produced by each of the designs at issue on an informed user was identical according to the Board of Appeal. The General Court of the European Union annulled the decision of the Board of Appeal, upholding the design holder’s plea that the Board of Appeal was wrong to conclude that the contested design had no novelty or individual character.
In support of this conclusion, the Court, firstly, found that the contested design must be categorized as a “component part of a complex product”. According to the Court’s findings, the contested design constituted a component part of a complex product “where it is intended to cover a recess in a skirting board and, incidentally, a recess in a wall or floor”. In this respect, the Court held that “although potential uses of a design should not be ruled out, it should none the less be pointed out that a purely hypothetical use of the contested design cannot be taken into account (…)”.
Secondly, when determining the “visible features of the component part during normal use”, the Court started under the presumption that the “(…) only use of the contested design which can be taken into account for the purposes of the present analysis is its use as an insert to cover a recess. (…) Consequently, the visibility of the contested design’s features must be assessed solely in the context of its use as an insert to cover a recess in a skirting board or wall.” As a consequence, the Court agreed with the Board of Appeal’s conclusion that “(…) the only visible feature of the contested design during normal use would be its front surface (…)”. In this context, the Court clarified that normal use does not include the regular disassembly and inspection of the insert.
Thirdly, and lastly, in assessing the overall impression of the earlier design, the Court clarified that Community design law “(…) does not require the graphic representation of a design in respect of which registration has been sought or that of a design which has already been made available to the public to include a perspective view (…).” Following from that proposition, the Court addressed the issue of whether the earlier design is visible during normal use and found, on the grounds of the submitted catalogue, that the earlier design was not visible during normal use of the complex product of which it is a part. The Court continued to hold (at  – ):
“Since a design constituting a component part of a complex product which is not visible during normal use of that complex product cannot be protected under Article 4 (2) [a] CDR, it must be held, by analogy, that the novelty and individual character of a Community design cannot be assessed by comparing that design with an earlier design which, as a component part of a complex product, is not visible during normal use of that product. Therefore, the criterion of visibility (…) applies to the earlier design. OHIM also acknowledged at the hearing that the same criteria had to be applied to both the designs at issue.”
As a consequence, the General Court concluded that an application for a declaration of invalidity cannot be based on an earlier design which, as a component part of a complex product, is not visible during normal use of that product.
This case is noteworthy – apart from the underlying facts, constellation and outcome. It is more in a fundamental sense that the Court’s decision is truly remarkable because the Court – rather generally – confirmed, applied and even extended what we have called the concept of reciprocity in European design law.
The key sentence is the one reproduced in para. 51 and 52 of the judgment, quoted above, and it is remarkable that OHIM as the defendant party agreed. Irrespective of the specifics of this case (and any other), the Court basically found that it is not allowed to treat the contested design and the prior reference differently, i.e., if a design constituting a component part of a complex product which is not visible during normal use of that complex product cannot be protected, an earlier design which, as a component part of a complex product, is also not visible during normal use of that product cannot serve for a proper comparison of the respective overall impression under Article 6 (1) CDR.
More decisions must be awaited to see whether other courts will follow that path.