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Reported by Dr. Christopher Brückner and Dr. Tilman Müller-Stoy
The Advocate General Yves Bot (AG) holds Regulation 1768/92/EC to be interpreted in the light of Regulation 1901/2006/EC to the effect that an SPC can be granted even if the period between filing of the patent application and grant of the marketing authorization is shorter than five years. Thus, the AG accepts the grant of an SPC with a negative duration.
On June 9, 2011 the AG proposed the CJEU tofind that Supplementary Protection Certificates (SPCs) can be granted even if less than five years have passed between the filing of the basic patent and the grant of the marketing authorization. Moreover, he proposed that the extension of the patent term should start running from the expiration of the patent, whereby the negative duration of the SPC should be subtracted from the six-month extension granted after provision of the results of Paediatric studies.
When drafting the Regulation 1768/92/EC (hereinafter the Medicinal Regulation) the legislator had no reason to worry about admissibility of a negative duration. The spirit and purpose of SPCs was to extend the term of protection of the basic patent for the product. An SPC with a negative duration is not able to reach this effect. This situation has changed by enactment of the Regulation 1901/2006/EC on medicinal products for Paediatric use (hereinafter the Paediatric Regulation). According to Article 36 of the Paediatric Regulation, the duration of an SPC can be extended by six months if the results of Paediatric studies are provided together with the request for extension. If the period between filing of the patent application and grant of the marketing authorization is shorter than fivea positive duration can finally be reached, calcu with the six months extension according to Article 36 of the Paediatric Regulation. To maintain this possibility, applicants might be interested in getting an SPC with a negative duration.
The 15th Senate (Technical Board of Appeal) of the German Patent and Trademark Office (GPTO) had submitted to the ECJ pursuant to Article 267 TFEU the following question on Article 13(1) of the Medicinal Regulation:
“Can a supplementary protection certificate for medicinal products be granted if the period of time between the filing of the application for the basic patent and the date of first authorization for marketing in the Community is shorter than five years?”
The AG reasoned his affirmative petition as follows (recitals 60 Regulation did not make a clear statement whether negative duration was admissible or not. Furthermore, the duration of an SPC was not part of the requirements in Articles 7 and 8 of the Paediatric Regulation for granting an extension. Moreover, a positive duration was not part of the material preconditions in Article 3 of the Medicinal Regulation nor was it mentioned among the formal preconditions for granting an SPC mentioned in Articles 7 and 9 of the Medicinal Regulation. Therefore, at no point a et seq.): Firstly, the Medicinal positive duration was defined as a precondition for the grant of an SPC. An approach rejecting SPCs having a negative duration would lead to harsh results. If an applicant was granted a marketing authorization five years and one day after application of the basic patent, he would be granted an extension of six months and one day when providing the results of paediatric studies. If the period between application of the basic patent and grant of the marketing authorization was five years, no extension of duration would be granted. Such an approach could finally lead to the result that pharma laboratories could be motivated to delay the grant of a marketing authorization to reach a positive duration. This clearly would not be in line with the aim of public health. Finally, on the other hand, an approach to round up negative duration to zero and to add a six-months extension would endanger the balance between pharmaceutical industry on the one hand and the health and welfare system on the other hand. The aim of the Medicinal Regulation was to pro a market exclusivity of maximum fifteen vide years and six months starting from the grant of the marketing authorization. The aim was not to extend the duration of all patents for six months.
The present preliminary question proceedings have been pending before the European Court of Justice since 09.03.2010 under Case No C-125/10 (OJ C161, 19.06.2000 10, 17). According to information provided by telephone by the Registrar of the Court of Justice, a decision is to be expected in accordance with the present usual duration of proceedings of approximately 18 months, i.e. probably in late autumn 2011. In the field of paediatric treatment, there is considerable need for action. In the absence of investigation results for paediatric uses, doctors are obliged when treating children to roughly adjust to their lower body weight the dosage of the medicinal product used. However, children are not small adults. Thus for instance, when forward. The objectives and practical effects of the Regulation should therefore, if only for this reason, be taken into account in the answer to the question referred to the ECJ.
Reported by Dr. Hans Wegner and Bastian Best
According to the present decision, software- related inventions have to pass a two-step assessment with respect to exclusion from patent protection. In this context, the German Federal Supreme Court for the first time positively identifies types of features needed for a software- related invention to overcome the exclusion.
The case to be decided in “Webpage display” related to German patent DE 101 15 895 (corresponding to US 7,296,062) which claims a method for generating a displayable presentation for relocating an information page that has been called up by a user from a homepage and which has subsequently been exited. The patent to be assessed was essentially directed to the concept of monitoring the sequence of visited (sub)pages of a complex website in order to facilitate the return of the user to a certain page of the website.
In first instance, the Federal Patent Court had argued that the claimed method was not an invention in a field of technology and was hence excluded from patent protection. The Federal Supreme Court, however, held that the claimed method indeed possessed technical character, since the claimed method steps involve networked technical devices, wherein the registering of visited Internet pages and the generating of a displayable presentation constitute typical steps by technical devices (cf. decision X ZB 22/07 – Steuerungseinrichtung für Untersuchungsmodalitäten). In this context, the Court noted that it is irrelevant whether or not the claim explicitly recites the technical devices (server, clients), since for the person skilled in the art of programming browser software it was a self-explanatory fact that the execution of the method steps necessitates the use of computers within a network.
However, the Court also held that the claimed method is still excluded from patent protection as a computer program “as such”, as stipulated in Section 1 (3) No 3 and (4) German Patent Act. In order to overcome this exclusion, a claimed teaching – besides having to possess technical character – must further include instructions for solving a specific technical problem with technical means. In the present case, the Court noted that no modification of system compo took place in the claimed method. Also the execution of the computer program used for the solution of the problem was neither found to be determined by technical facts outside the computer, nor did the program take into account any technical limitations of the computer. nents As a result, technical means solving a specific technical problem could not be identified and the Court concluded that the subject matter claimed is excluded from patent protection for being directed to a computer program “as such”.
The decision “Webpage display” of the German Federal Supreme Court is remarkable on multiple levels and systematically deviates from the current practice of the Boards of Appeal of the European Patent Office (EPO):
The EPO regards the “first hurdle” of a technical character as the only requirement to overcome the exclusion from patent protection. The additional question (“second hurdle”) whether a technical problem is solved using technical means is to be answered when assessing inventive step under Article 56 EPC – after an analysis of the closest prior art. In this regard, only novel features contributing to the solution of the technical problem are taken into account (cf. OJ EPO 11/2007, 594).
By contrast, the German Federal Supreme Court now explicitly requires a two-step approach already during the assessment of the “first hurdle”. As recited in headnotes a) and b) of the decision “Webpage display”, it is to be determined in a first step whether the subject matter claimed involves, at least in part, an invention in a field of technology (Section 1 (1) German Patent Act). Then, in a second step, it has to be assessed whether it constitutes merely an excluded computer program “as such” (Section 1 (3) No 3 and (4) German Patent Act), which is not the case if the invention comprises instructions solving a specific technical problem with technical means. Notably, this second step is performed independently from a substantive analysis of the prior art.
Although the first step can be successfully passed even if technical means necessary for implementing the claimed method are not explicitly recited in the claim – in line with the earlier decisions “Dynamic generation of documents” (decision of April 22, 2010 – Case Xa ZB 20/08 – “Dynamische Dokumentengenerierung”) and “Display of topographic information” (decision of October 26, 2010 – Case X ZR 47/07 – “Wiedergabe topographischer Informationen”) – the second step now turns out to be the challenging test for many software-related inventions.
This is since the Court for the first time defines an exhaustive list of three acceptable types of features of a software-related invention to program “as such”:
– Accordingly, a technical means for solving a technical problem is present if system components are modified or used in a fundamentally different manner. This admissible feature type assures that hardware-related inventions or inventions relating to software that is closely tied to hardware are still patentable in Germany.
– A technical means for solving a technical problem is also present if the execution of the software is determined by technical facts outside the computer. In this context the Court notes between the lines that not any sort of external technical facts are sufficient, but that e.g. “technical environment parameters” captured by suitable measurement equipment could constitute such external technical facts. It appears that this admissible feature type is e.g. directed to embedded software controlling a technical apparatus or process.
– Finally, if the execution of the software is specifically adapted to the technical limitations of a certain computer, it is also considered to constitute technical means for solving a technical problem.
However, software not having any features in the sense of at least one of those three types will be rejected as a computer program “as such”.
In summary, the present decision “Webpage display” appears to have considerably raised the bar for software-related inventions when it comes to the assessment of exclusion from patent protection. As a result, it is advisable for applicants to file software-related applications that may not clearly meet the above-explained criteria rather with the EPO than with the German Patent and Trademark Office – at least as long as the situation is not changed by future decisions of the German Federal Supreme Court.
Reported by Stefan Bianchin
If there are contradictions between the patent claims and the description, those parts of the description having not found an expression in the patent claims are generally not included in the patent protection. The description can only be considered as far as it can be read as an explanation of the subject-matter of the patent claim.
If the description discloses several possibilities in which way a specific technical effect can be achieved, but only one of these possibilities has been included in the patent claim, then the use of one of the other possibilities can generally not be considered as an infringement under the doctrine of equivalence.
The patent-in-suit related to an occlusion device for repairing heart defects. Such an occlusion device is made of a fabric from braided strands of a memory metal, in which the braided strands were arranged from a first end to an opposite second end of the occlusion device. In the independent patent claim 1 of the patentin- suit it was, inter alia, claimed that “clamps are adapted to clamp the braided strands at the opposed ends of the occlusion device”.
The attacked occlusion device comprised one socket only at one side of the occlusion device for receiving and securing the braided strands which were arranged in a loop-shape and were welded together before being inserted into the socket.
Both the Dusseldorf District Court and the Dusseldorf Appeal Court considered the attacked occlusion device as literally infringing the independent patent claim of the patent-in-suit. Both courts stated that, even if it was suggested in the independent patent claim, from a linguistical viewpoint, to use more than one clamp, and that the clamps were used to clamp the braided strands at opposing ends of the occlusion device, a skilled person would not stop at this mere literal understanding. The skilled person would see that the technical function of the clamps was only to bundle and protect the ends of the braided strands and that this technical function was only necessary where an end of the braided strands was in fact present, i.e. if the braided strands were arranged in a loop-shape only at the side where both ends of the braided strands were arranged. In this respect, both courts referred to a passage in the description, in which it was briefly explained that an occlusion device, according to the invention, could also be provided from a flat fabric by turning the ends of the piece of fabric together, i.e. by arranging the braided strands in a loop-shape. Since the skilled person tried to read the patent in a meaningful overall context and to understand its overall content in a way that no contradictions arise, also embodiments with such mentioned loop-shaped arrangement of the braided strands had to be covered by the patent claims.
The German Federal Supreme Court did not follow this broad patent claim interpretation based on a purely functional understanding of the claim feature in question and stated that by means of the clear patent claim wording, namely that “clamps are adapted to clamp the braided strands at the opposed ends of the occlusion device”, the patentee made a selection in that clamps should be arranged at opposite ends of the occlusion device, and that therefore two clamps must be necessarily present.
The German Federal Supreme Court explained that according to Article 69 paragraph 1, sentence 1 EPC, the extent of the scope of protection was determined by the patent claims. In order to achieve the aims of Article 1 of the Protocol on Interpretation, it was necessary to determine the technical meaning attributed to the wording of the patent claims from the skilled person’s view. In this respect, according to Article 69 paragraph 1, sentence 2 EPC, the description and the drawings had to be taken into account in order to interpret the patent claims, wherein the description and the drawings must lead neither to an extension nor to a significant limitation of the subject-matter of the patent claims. However, in case the description and the patent claims could not be brought in line, the patent claims were always authoritative. Further, the principle that the skilled person tried to read the entire patent in a meaningful overall context and tried to understand its overall content in such a way that no contradictions arise was limited by the priority of the patent claims. If, as in the present case, the clear wording of a patent claim could not be brought in line with a passage in the description, the description could not be consulted as a “correction” of the patent claims which would be a violation of the principle of the priority of the patent claims.
Finally, the German Federal Supreme Court also denied an infringement under the doctrine of equivalence. It assumed that the attacked occlusion device, which comprised only one socket, presented an alternative solution having the same technical effect to the claimed clamps provided at the opposed ends of the occlusion device and that this alternative solution had been obvious to the skilled person at the priority date. However, this alternative solution was not oriented to the patent claims. Orientation to the patent claim requires that the patent claim, in all its features, formed not only the starting point, but also the decisive basis for the considerations of the skilled person. If the patent claim, as in the present case, made a selective decision between several possibilities for providing a technical effect, the considerations of the skilled person on possible modifications must also be in line with this selective decision. In this respect, only such considerations were therefore oriented to the technical teaching protected by the patent claims which also take account of the selective decision in the patent claim. Thus, the claimed clamps provided at both ends of the occlusion device could not be replaced by a welded or other joint, even if disclosed in the description, since such a modification would not be oriented to the selection of the relevant patent claim.
The present decision of the German Federal Supreme Court confirms its earlier case law with respect to patent claim interpretation and sets a limit to some instance courts tending to overcome the wording of patent claims by a purely functional interpretation.
The decision again clarifies that a claim feature may not be reduced to its mere technical function independent or even in contradiction to the wording of the patent claim. If a selective decision between several possibilities for providing a technical effect was made in the patent claims, such a selective decision must be respected. Notably, if parts of the description are in conflict with the patent claim wording, i.e. with the selective decision, then these parts of the description cannot be read as explanations of the patent claim.
Reported by Dr. Tilman Müller-Stoy and Thomas Schachl, LL.M.
The Munich District Court had to decide on a damages complaint based on patent infringement. The starting point of the decision is the hitherto well-established case law of the German Federal Supreme Court, according to which damages calculated with the calculation method of a reasonable royalty had to be based on a royalty rate which rational business parties would have agreed upon as reasonable in the normal course of business.
However, by advancing and specifying this case law, the District Court found inter alia that rational business parties would also take into account the differences between a common license negotiation situation and a situation in which a full fledged patent litigation had to be pursued to enforce the relevant patent rights. In the latter situation, the claimant had to observe the market for products making use of the licensed patent and, as the case may be, he had to send a warning letter to the infringer, file a patent infringement action, trigger a burdensome taking of evidence, and possibly had to enforce any claims granted by the court. Furthermore, it might also become relevant whether the claim for information about the extent of patent infringement had to be separately enforced, with the risk that not all of the necessary information was (still) available and any subsequent necessary to receive financial compensation for past infringement. Finally, in such case there was also an increased risk of bankruptcy of the infringer, since the damages are only available after many years of litigation instead of a quarterly payment term as in common license agreements. Therefore, the Munich District Court assumes that rational business parties would have taken all of these factors into account in order to determine a reasonable royalty rate, and in particular also the aspect that negotiated pretrial royalty rates typically included a discount for the uncertainty of infringement and validity in the pre-trial situation. Such a situation was, however, not comparable with a situation in which a patent litigation had already delivered significant legal certainty.
In essence, the court thus found that these aspects justified a “significant” increase of the royalty rate for calculating damages over a royalty rate on which rational business partners had agreed upon contractually in a pre-trial situation. According to an oral statement by the presiding judge of the Munich District Court which had decided on this case, the reasonable royalty rate may be increased up to a royalty rate twice as high as a reasonable royalty rate agreed upon in a pre-trial situation.
The present decision is another important example of the increasing tendency of the German patent infringement courts to provide for higher damages awards for patent infringement. More specifically, it allows patentees to collect higher damages based on the calculation method of a reasonable royalty in German patent litigation. Since the court’s reasoning is very diligent as well as comprehensive and systematically fits well into the German damages concept, there is a realistic chance that other German courts will follow this example and adopt this new approach. With this new case law, it may be worth in individual cases to consider the damages calculation in accordance with the reasonable royalty rate instead of choosing the – usually much more complex and much more time consuming – alternative calculation methods of the infringers profit and own lost profits.
Reported by Dr. Stefan V. Steinbrener
Relying on recent opinion G 3/08 of the Enlarged Board of Appeal and disregarding aspects of the claims excluded “as such”, the Board held that all requests were not allowable because of lack of inventive step over the available prior art.
The claimed invention aims at reducing the number of user interactions and the amount of sensitive information to be sent over the Internet when purchasing an item online, e.g. in a shopping cart implementation. Both objectives are achieved by displaying a “1-click” ordering button along with the selected item. Clicking on this button sends an order for the item accompanied by a code identifying the registered purchaser. The server then uses the code to reference the purchaser's address and payment details. Thus, in a single action, the item is ordered and the purchaser is identified.
The European patent application claiming an earliest priority of September 12, 1997 was refused by the Examining Division for lack of novelty and/or inventive step over a prior art document numbered D1, disclosing different ways of implementing a shopping cart. In the subsequent appeal proceedings, the Board considered that the subject matter of claim 1 of the main request differed from D1 in that the purchaser's identification information was not in-putted when ordering the item, but looked up in a customer table using the client identifier received from the client, and that the single action indication was only sent if it was enabled.
These features could be seen to solve the two above-mentioned problems, namely to reduce the number of user interactions and the amount of sensitive information sent over the Internet. In the Board's view, the skilled person would have tried to solve these problems because they were both explicitly mentioned in D1.
The Board then argued that in order to read the sensitive data from the database, one would need a key that identified the purchaser in question. In the Board's view it would be self-evident to use the user identifier or cookie already available in D1 to do this. The Board thus considered that the skilled person would have been led to modify an embodiment of D1 to dispense with the need to input these data for every order and arrive at the claimed single action to order an item. Moreover, at the priority date, it was also known from other documents to use an indexing function of cookies to keep track of purchaser-specific data.
Concerning the enabling of the single action, the Board noted that the feature covered a statement of self-evidence in that the single-action order was not enabled if there was not enough information about the purchaser available to perform a single-action order. Even if the decision not to enable might depend on security considerations, e.g. on whether the purchaser's computer was used by other people who should not be allowed to order items on the computer owner's account, such a decision related to forms of human behaviour and thinking that fell under mental acts which, in accordance with G 3/08, could not contribute to inventive step. Finally, the Board noted that the invention was not a situation of long-felt want, but more an immediate application of the cookie feature proposed shortly before the invention was made. Even if claim 1 were seen to be further distinguished over D1 by omitting confirmation steps in an ordering process, such steps related to a method of doing business and could also not contribute to inventive step.
Hence, the subject matter of claim 1 of the main request was considered obvious to a skilled person.
Claim 1 of the first auxiliary request qualified the client identifier and the sensitive information in claim 1 of the main request, and added a login feature and a feature relating to combining orders. In the Board's view, these qualifications did not add anything, and the use of a login so that the identity of the purchaser could be verified was a matter of routine design. Concerning the feature of combining orders, the problem addressed was one of reducing shipping costs, which was considered nothing more than the direct expression of an administrative rule and thus could not contribute to inventive step.
The second auxiliary request differed from the previous request by displaying an indication that the order for the requested item could be cancelled within a predetermined time period. Again, this feature was not related to any technical problem, as it amounted solely to the presentation of administrative information.
Accordingly, the subject matter of claim 1 of all requests did not involve an inventive step, so the appeal had to be dismissed.
Amazon's 1-click application has received considerable public interest on an international scale. Patents were granted in some jurisdictions, and cases relating to both the application and granted patents were heard before various national courts, inter alia in the United States and Canada. In the US, the validity of claims equivalent to their European counterparts was challenged by the Court of Appeals for the Federal Circuit vacating a preliminary injunction ordered by the District Court for the Western District of Washington on the ground that the alleged infringer had raised substantial questions as to the validity of the patent (opinion No 00-1109, dated February 14, 2001). The patent (US-A-5 969 411) was also re-examined by the USPTO, the re-examination resulting in a limitation by additional features of a shopping cart. In Canada, equivalent claims were considered obvious by the examiner of the Canadian Commissioner of Patents, were found obvious and/or relating to excluded non-technical subject matter. The latter finding was, however, overturned by the Federal Court (Canada) on appeal, for such exclusion was not seen to have a basis under Canadian law (judgment 2010 FC 1011, dated October 14, 2010).
The European case relates to a divisional application derived from and essentially identical to the European parent “1-click” application, which was withdrawn. There are still two other divisionals pending at the EPO, one was remitted to the first instance by the same Board after opposition appeal proceedings and one still remaining unexamined. So, the present decision is not necessarily the end of the story in Europe.
Reported by Dr. Stefan V. Steinbrener
Technical Board of Appeal 3.2.06 holds a request inadmissible under Article 12 (4) RPBA if added subject-matter held unallowable during proceedings before the opposition division is not removed at least by way of an auxiliary request filed in these proceedings, but only by way of a request filed during the appeal proceedings.
The Rules of Procedure of the Boards of Appeal (RPBA) codify a not inessential portion of procedural law lacking in the EPC. They may play an increasingly formalistic role in proceedings before the boards of appeal, in particular with respect to the room available for manoeuvre regarding amendments, and should therefore be taken seriously. Whereas Article 12 (4) RPBA generally gives the impression that everything presented by the parties early enough in appeal proceedings will be taken into account by the Board, this Article has been provided with a caveat: the Board may hold facts, evidence or requests inadmissible “which could have been presented or were not admitted in the first instance proceedings”. Amendments filed later on in appeal proceedings are put at risk by Article 13 RPBA.
In the present case, the appellant patent proprietor filed an appeal against the revocation of a patent relating to elevator technology at the end of oral proceedings before the opposition division. The division considered a feature of claim 1 of all requests (termed “space requirement” feature in the following) to contravene Article 123 (2) EPC since in their view it had only been disclosed in the context of another feature (termed “flat drive machine” feature in the following). The “space requirement” feature had been introduced for the first time into claim 1 by the patent proprietor about one month before the oral proceedings as a response to the provisional opinion of the opposition division annexed to the summons. Before announcing its decision, the patent proprietor was asked by the chairman of the opposition division whether it would file any further requests to overcome the ground of opposition under Article 100 (c) EPC, which was however answered in the negative.
Together with the grounds of appeal, the appellant filed a new main request and new first to third auxiliary requests. Whereas claim 1 of the third auxiliary request still included the “space requirement” feature, but not the “flat drive machine” feature held necessary by the opposition division, the “space requirement” feature had been deleted in the main request and in the first and second auxiliary requests. When the Board indicated that it considered the latter requests inadmissible under Article 12 (4) RPBA, the appellant filed fourth and fifth auxiliary requests, whereby claim 1 of the fourth auxiliary request also lacked the “space requirement” feature. In claim 1 of the fifth auxiliary request, instead of the “flat drive machine” feature another feature was added to the “space requirement” feature. Finally, during the oral proceedings before the Board, a sixth auxiliary request was filed by the appellant, claim 1 of this request now including both of the controversial features.
The appellant inter alia argued that the division's objection had come as a complete surprise at the oral proceedings, and the reasons why the opposition division had reached its conclusion were unknown to the patent proprietor so that it had no real chance to react in a proper way, which would have meant to completely revise its defence strategy. Moreover, since any request “could” have been filed in the first instance proceedings, the restrictive use of Article 12 (4) RPBA to prevent the proprietor from filing amended claims in appeal proceedings would lead to a situation where claims could not be forwarded which had not already been forwarded in the first instance.
The Board did not follow these arguments and did not admit
– the main request, the first, second and fourth auxiliary requests under Article 12 (4) RPBA since the “space requirement” feature could already have been deleted in the first instance proceedings,
– the sixth auxiliary request under Article 12 (4) RPBA since the “space requirement” feature could already have been supplemented by the
“flat drive machine” feature in the first instance proceedings, and
– the fifth auxiliary request under Article 13 (1) RPBA since it was not prima facie allowable. Finally, the third auxiliary request was refused under Article 123 (2) EPC since the division's finding was confirmed, with the overall result that the appeal was dismissed.
In the Board's view, the simple removal of the “space requirement” feature could evidently have been done by way of presenting a request to this effect during oral proceedings before the opposition division so as to overcome the division's objection. This was in particular so in the light of the fact that the chairman explicitly asked the proprietor whether it would file a request to overcome the objection. Although the proprietor argued that it was a complete surprise to be presented with an Article 123 (2) EPC objection, this did not provide an overriding reason for not filing corresponding requests since the division may depart from its preliminary opinion in view of argumentation by the parties and amendments made to the claims in the meantime.
The further argument that the proprietor did not know the reasons why the opposition division had reached its conclusion and that this meant the proprietor had to completely revise its defence strategy was also found unconvincing in relation to why no further request was filed during opposition proceedings, since objections against the inclusion of new features at a late stage of the proceedings should have been expected.
Although it was clear from the very wording of Article 12 (4) RPBA that such omitted requests could be held inadmissible, it was up to the Board to exercise its discretion having regard to the particular circumstances of the case. It was certainly not so that any request not filed in the first instance proceedings should not be admitted into the appeal proceedings, as might be seen from the fact that the Board had indeed admitted a new request, the third auxiliary request, into the proceedings.
Since the applicability of Article 12 (4) EPC was not restricted by the time limit for filing the grounds of appeal or any reply thereto, the fourth auxiliary request filed shortly before the oral proceedings and being devoid of the “space requirement” feature had also to be held inadmissible under Article 12 (4) RPBA.
Claim 1 according to the sixth auxiliary request now including the particular combination of features was a claim which, in view of the objection made by the opposition division during oral proceedings and the offer to file amendments, could have been filed during opposition proceedings in order to overcome the Article 123 (2) EPC objection, and thus shared the same fate under Article 12 (4) RPBA.
Claim 1 of the third auxiliary request included the “space requirement” feature together with other amendments, but – contrary to the original disclosure and in disregard of the division's objection – did not require the presence of a “flat drive machine” unit so that also in the Board's view the requirement of Article 123 (2) EPC was not met.
If this strict application of Article 12 (4) RPBA is to become the general line of dealing with new requests by the boards of appeal, then there will be two important consequences:
(i) The possibilities of precluding amendments in appeal proceedings have considerably been extended since those possibilities do not only relate to the behaviour of the parties in the appeal proceedings proper (which are said to be wholly separate and independent from the proceedings at first instance, see “Case Law of the Boards of Appeal of the European Patent Office”, 6th edition 2010, VII.E.1), but to a possibly detrimental extent also to the behaviour of the parties in first instance proceedings. Whereas late filings may be penalized in appeal proceedings under Article 13 RPBA, reprehensible omissions in first instance proceedings, in the sense of possible reactions that should have been expected under the circumstances, may have a proactive effect amounting to abandonment since they regularly will lead to non-admittance in appeal proceedings. A shift of the function of the boards of appeal to that of a mere review instance seems to be underway.
(ii) Representatives will be obliged to carefully assess their options for amendments at possible forthcoming appeal proceedings already during first instance proceedings, in particular whether those options might be affected by acting (or failing to act) reprehensively. Even if the Board agreed that Article 12 (4) RPBA should not be understood to preclude the filing of any amendments not forwarded at first instance proceedings, the extent of reprehensible behaviour may not be easy to foresee. In any case, it would be wise to add further auxiliary requests that overcome objections raised during first instance proceedings, in particular if prompted to do so.
Reported by Dr. Alexander von Mühlendahl, J.D., LL.M.
L’Oréal SA, Lancôme parfums et beauté & Cie SNC, Laboratoire Garnier & Cie and L’Oréal (UK) Ltd sued eBay International AG, eBay Europe SARL, eBay (UK) Ltd and seven named individuals alleging trademark infringement through the offer and sale of counterfeit products, of original products offered from outside the EU, and of so-called “testers” through eBay’s auction site. As regards eBay, they were accused of infringing through the use of AdWords purchased so as to appear on Google search results as paid advertisements, and of infringing through the offering of infringing goods on their auction site. Finally, L’Oréal claimed to be entitled to relief pursuant to Article 11 of the IP Enforcement Directive 2004/48.
The case, referred by the High Court of Justice (England & Wales) in August 2009, was heard by the Grand Chamber in June 2010, and the Advocate General Jääskinen presented his conclusions in December 2010. The long list of questions referred reads as follows:
(1) Where perfume and cosmetic testers (i.e. samples for use in demonstrating products to consumers in retail outlets) and dramming bottles (i.e. containers from which small aliquots can be taken for supply to consumers as free samples) which are not intended for sale to consumers (and are often marked “not for sale” or “not for individual sale”) are supplied without charge to the trademark proprietor’s authorised distributors, are such goods “put on the market” within the meaning of Article 7 (1) of [Directive 89/104] and Article 13 (1) of [Regulation No 40/94]?
(2) Where the boxes (or other outer packaging) have been removed from perfumes and cosmetics without the consent of the trademark proprietor, does this constitute a “legitimate reason” for the trademark proprietor to oppose further commercialisation of the unboxed products within the meaning of Article 7 (2) of [Directive 89/104] and Article 13 (2) of [Regulation No 40/94]?
(3) Does it make a difference to the answer to question 2 above if:
(a) as a result of the removal of the boxes (or other outer packaging), the unboxed products do not bear the information required by Article 6 (1) of [Directive 76/768], and in particular do not bear a list of ingredients or a “best before date”?
(b) as a result of the absence of such information, the offer for sale or sale of the unboxed products constitutes a criminal offence according to the law of the Member State of the Community in which they are offered for sale or sold by third parties?
(4) Does it make a difference to the answer to question 2 above if the further commercialisation damages, or is likely to damage, the image of the goods and hence the reputation of the trademark? If so, is that effect to be presumed, or is it required to be proved by the trademark proprietor?
(5) Where a trader which operates an online marketplace purchases the use of a sign which is identical to a registered trademark as a keyword from a search engine operator so that the sign is displayed to a user by the search engine in a sponsored link to the website of the operator of the online marketplace, does the display of the sign in the sponsored link constitute “use” of the sign within the meaning of Article 5 (1) (a) of [Directive 89/104] and Article 9 (1) (a) of [Regulation No 40/94]?
(6) Where clicking on the sponsored link referred to in question 5 above leads the user directly to advertisements or offers for sale of goods identical to those for which the trademark is registered under the sign placed on the website by other parties, some of which infringe the trademark and some [of] which do not infringe the trademark by virtue of the differing statuses of the respective goods, does that constitute use of the sign by the operator of the online marketplace “in relation to” the infringing goods within the meaning of 5 (1) (a) of [Directive 89/104] and Article 9 (1) (a) of [Regulation No 40/94]?
(7) Where the goods advertised and offered for sale on the website referred to in question 6 above include goods which have not been put on the market within the EEA by or with the consent of the trademark proprietor, is it sufficient for such use to fall within the scope of Article 5 (1) (a) of [Directive 89/104] and Article 9 (1) (a) of [Regulation No 40/94] and outside Article 7 (1) of [Directive 89/104] and Article 13 (1) of [Regulation No 40/94] that the advertisement or offer for sale is targeted at consumers in the territory covered by the trademark or must the trademark proprietor show that the advertisement or offer for sale necessarily entails putting the goods in question on the market within the territory covered by the trademark?
(8) Does it make any difference to the answers to questions 5 to 7 above if the use complained of by the trademark proprietor consists of the display of the sign on the web site of the operator of the online marketplace itself rather than in a sponsored link?
(9) If it is sufficient for such use to fall within the scope of Article 5 (1) (a) of [Directive 89/104] and Article 9 (1) (a) of [Regulation No 40/94] and outside Article 7 (…) of [Directive 89/104] and Article 13 (…) of [Regulation No 40/94] that the advertisement or offer for sale is targeted at consumers in the territory covered by the trademark:
(a) does such use consist of or include “the storage of information provided by a recipient of the service” within the meaning of Article 14 (1) of [Directive 2000/31]?
(b) if the use does not consist exclusively of activities falling within the scope of Article 14 (1) of [Directive 2000/31], but includes such activities, is the operator of the online marketplace exempted from liability to the extent that the use consists of such activities and if so may damages or other financial remedies be granted in respect of such use to the extent that it is not exempted from liability?
(c) in circumstances where the operator of the online marketplace has knowledge that goods have been advertised, offered for sale and sold on its website in infringement of registered trademarks, and that infringements of such registered trademarks are likely to continue to occur through the advertisement, offer for sale and sale of the same or similar goods by the same or different users of the website, does this constitute “actual knowledge” or “awareness” within the meaning of Article 14 (1) of [Directive 2000/31]?
(10) Where the services of an intermediary such as an operator of a website have been used by a third party to infringe a registered trademark, does Article 11 of [Directive 2004/48] require Member States to ensure that the trademark proprietor can obtain an injunction against the intermediary to prevent further infringements of the said trademark, as opposed to continuation of that specific act of infringement, and if so what is the scope of the injunction that shall be made available?
As regards the first series of questions, dealing with “exhaustion” of rights relating to goods offered on eBay’s auction site, the ECJ refers to its case law, which has dealt with most of the aspects, and answers as follows:
1. Where goods located in a third State, which bear a trademark registered in a Member State of the European Union or a Community trademark and have not previously been put on the market in the European Economic Area or, in the case of a Community trademark, in the European Union, (i) are sold by an economic operator on an online marketplace without the consent of the trademark proprietor to a consumer located in the territory covered by the trademark or (ii) are offered for sale or advertised on such a marketplace targeted at consumers located in that territory, the trademark proprietor may prevent that sale, offer for sale or advertising by virtue of the rules set out in Article 5 of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trademarks, as amended by the Agreement on the European Economic Area of May 2, 1992, or in Article 9 of Council Regulation (EC) No 40/94 of December 20, 1993 on the Community trademark. It is the task of the national courts to assess on a case-by-case basis whether relevant factors exist, on the basis of which it may be concluded that an offer for sale or an advertisement displayed on an online marketplace accessible from the territory covered by the trademark is targeted at consumers in that territory.
2. Where the proprietor of a trademark supplies to its authorised distributors items bearing that mark, intended for demonstration to consumers in authorised retail outlets, and bottles bearing the mark from which small quantities can be taken for supply to consumers as free samples, those goods, in the absence of any evidence to the contrary, are not put on the market within the meaning of Directive 89/104 and Regulation No 40/94.
3. Article 5 of Directive 89/104 and Article 9 of Regulation No 40/94 must be interpreted as meaning that the proprietor of a trademark may, by virtue of the exclusive right conferred by the mark, oppose the resale of goods such as those at issue in the main proceedings, on the ground that the person reselling the goods has removed their packaging, where the consequence of that removal is that essential information, such as information relating to the identity of the manufacturer or the person responsible for marketing the cosmetic product, is missing. Where the removal of the packaging has not resulted in the absence of that information, the trademark proprietor may nevertheless oppose the resale of an unboxed perfume or cosmetic product bearing his trademark, if he establishes that the removal of the packaging has damaged the image of the product and, hence, the reputation of the trademark.
As regards the purchase and use of AdWords by eBay, the ECJ, referring to its March 2010 judgment in the Google France cases (Joined Cases C-236, 237, 238/08), concludes as follows:
4. On a proper construction of Article 5 (1) (a) of Directive 89/104 and Article 9 (1) (a) of Regulation No 40/94, the proprietor of a trademark is entitled to prevent an online marketplace operator from advertising – on the basis of a keyword which is identical to his trademark and which has been selected in an Internet referencing service by that operator – goods bearing that trademark which are offered for sale on the marketplace, where the advertising does not enable reasonably well-informed and reasonably observant Internet users, or enables them only with difficulty, to ascertain whether the goods concerned originate from the proprietor of the trademark or from an undertaking economically linked to that proprietor or, on the contrary, originate from a third party.
Regarding the question whether eBay is itself also “using” the trademarks which are used by the persons offering goods on the auction site, the ECJ, again following its Google France judgment, concludes that this is not the case:
5. The operator of an online marketplace does not ‘use’ – for the purposes of Article 5 of Directive 89/104 or Article 9 of Regulation No 40/94 – signs identical with or similar to trademarks which appear in offers for sale displayed on its site.
As regards eBay’s liability on grounds other than “direct” trademark infringement for infringing goods offered on its site, the ECJ first deals with the liability limitation found in Article 14 of the E-Commerce Directive (Directive 2000/31) for “neutral” Internet Service Providers (ISPs), i.e., those providers which are not actively involved in the material available from their website. The liability limitation is not available if the ISP plays an active role. Even if the ISP would be able to rely on Article 14 of the Directive, it would still be liable if it had knowledge of the infringing activity and did not act expeditiously to remove the infringing material or if it “should have realised that the offers for sale in question were unlawful”:
6. Article 14 (1) of Directive 2000/31/EC of the European Parliament and of the Council of June 8, 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) must be interpreted as applying to the operator of an online marketplace where that operator has not played an active role allowing it to have knowledge or control of the data stored.
The operator plays such a role when it provides assistance which entails, in particular, optimising the presentation of the offers for sale in question or promoting them.
Where the operator of the online marketplace has not played an active role within the meaning of the preceding paragraph and the service provided falls, as a consequence, within the scope of Article 14 (1) of Directive 2000/31, the operator none the less cannot, in a case which may result in an order to pay damages, rely on the exemption from liability provided for in that provision if it was aware of facts or circumstances on the basis of which a diligent economic operator should have realised that the offers for sale in question were unlawful and, in the event of it being so aware, failed to act expeditiously in accordance with Article 14 (1) (b) of Directive 2000/31.
Finally as regards liability under the IP Enforcement Directive, the relevant text in Article 11 reads as follows (emphasis added):
Member States shall ensure that, where a judicial decision is taken finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement. Where provided for by national law, non-compliance with an injunction shall, where appropriate, be subject to a recurring penalty payment, with a view to ensuring compliance. Member States shall also ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to Article 8 (3) of Directive 2001/29/EC.’
The ECJ considers that the remedy against such third parties (“intermediaries”) must be effective and dissuasive, but it also must be proportionate, must not interfere with legitimate trade, and must not be of a nature of requiring the intermediary to pre-screen all offers. However, the measure must also be taken to prevent future infringements, and not only to deal with past infringements. The conclusion reads as follows:
7. The third sentence of Article 11 of Directive 2004/48/EC of the European Parliament and of the Council of April 29, 2004 on the enforcement of intellectual property rights must be interpreted as requiring the Member States to ensure that the national courts with jurisdiction in relation to the protection of intellectual property rights are able to order the operator of an online marketplace to take measures which contribute, not only to bringing to an end infringements of those rights by users of that marketplace, but also to preventing further infringements of that kind. Those injunctions must be effective, proportionate, and dissuasive and must not create barriers to legitimate trade.
The judgment in the L’Oréal v eBay case was awaited with great expectations, not only because of the fact that it presented circumstances somewhat differing from those already judged in 2010 in the Google France cases, but above all because this was the first opportunity for the ECJ to interpret the somewhat cryptic language in Article 11 of the IP Enforcement Directive. There is some precedent for this provision in Article 8 (3) of Directive 2001/29 (the Directive on the harmonisation of certain aspects of copyright and related rights in the information society), which reads as follows: “Member States shall ensure that right holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.”
Under a restrictive reading, this provision would apply only to bring an end to ongoing infringements. The ECJ however takes a broad approach and reads Article 11 as requiring measures to be taken also to prevent future infringements. Clearly, the notice-and-take-down approaches by ISPs do not suffice in this regard.
The ECJ also does not deal with the basis of such liability. This would leave it for the Member States to consider such ISPs as “indirect” or “contributory” infringers, or also allow them to be held liable for interfering with an ongoing business, under general tort rules. The Directive specifically requires that injunctive relief must be available, which would not even require actual knowledge or negligence on the part of the ISP. The Directive is silent on the question whether the ISP may also be liable for damages.
In any event, if the ISP can rely on the liability restriction in Article 14 of the E-commerce Directive, knowledge or “reasons to know” would have to be shown before applying the relief required under Article 11 of the IP Enforcement Directive.
The judgment will surely be welcomed by trademark owners who have often felt that they fight like Don Quixote with windmills when seeking to prevent the slow erosion of their markets through the offer and sale of infringing or counterfeit goods available on auction sites. While the business model of auction sites is not itself being put in doubt by the judgment, inventive claimants with sufficient resources to protect the goodwill of their valuable brands are likely to continue to litigate with sites like eBay in order to force them to have an effective prevention mechanism in place – there are no limits to the imagination in devising such systems, within the confines of the most recent judgment of the ECJ. Attention will be paid to how the judgment will be implemented by the High Court.
Reported by Dr. Alexander von Mühlendahl, J.D., LL.M.
On July 14, 2011 (the French national holiday!), the Court of Justice of the European Union rendered a decision in a conflict involving the famous appellation of origin “COGNAC” and two Finnish trademark registrations containing that appellation and translations thereof (KONJAKKIA) filed in 2001 and registered in 2003 for alcoholic beverages in class 33.
The registrations are the following (images copied from the website of the Finnish National Board of Patents and Registration). The goods for which the marks are registered are, in Finnish, “Konjakit”, which translates as “Cognac”, and “Konjakkia sisältävät liköörit”, which translates as “Liqueur containing Cognac”.
No 226350 “Konjakit”
No 226351 “Konjakkia sisältävät liköörit”
The Bureau interprofessionnel du Cognac brought oppositions against the two registrations. By decisions of September 10, 2004, the first one, against No 226350, was rejected, while the second one, against No 226351, was successful. Both parties appealed, and the Appeal Board of the Patent and Registration Office, by decisions of October 22, 2007, confirmed the first decision and reversed the second.
An appeal to Finland’s Supreme Administrative Court (Korkein hallinto-oikeus) followed. That court, more than two years later, referred the following questions to the ECJ for preliminary ruling:
“1. Is Regulation [No 110/2008] applicable to the assessment of the conditions for registration of a trademark, containing a geographical indication protected by that regulation, which was applied for on December 19, 2001 and registered on January 31, 2003?
2. If the answer to Question 1 is affirmative, is a trademark which inter alia contains a geographical indication of origin which is protected by that regulation, or such an indication in the form of a generic term and a translation, and which is registered for spirit drinks which, inter alia in terms of their manufacturing method and alcohol content, do not meet the requirements set for the use of the geographical indication of origin in question, to be refused as contrary to Articles 16 and 23 of Regulation No 110/2008?
3. Regardless of the answer to Question 1, is a trademark of the type described in Question 2 to be regarded as liable to mislead the public for instance as to the nature, quality or geographical origin of the goods or services, in the way referred to in Article 3 (1) (g) of [Directive 89/104], which has now been replaced by [Directive 2008/95]?
4. Regardless of the answer to Question 1, if a Member State has, on the basis of Article 3 (2) (a) of Directive 89/104, provided that a trademark is not to be registered or, if registered, is to be liable to be declared invalid, if the use of the trademark can be prohibited by virtue of legislation other than the trademark law of the Member State in question or of the Community, is the view to be taken that, if the trademark registration contains elements which infringe Regulation No 110/2008, on the basis of which the use of the trademark can be prohibited, such a trademark is not to be registered?”
Regulation No 110/2008, mentioned in the first question, is “Regulation (EC) No 110/2008 of the European Parliament and of the Council of January 15, 2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks and repealing Council Regulation (EEC) No 1576/89”. This Regulation has replaced the earlier Regulation of 1989, also providing for protection for “spirit drinks”. Both under the old and the new Regulation, “COGNAC” belongs to the category of protected appellations of origin (in the present Regulation, the term “geographical indication” is used, while in other EU texts a distinction is made between what others call “appellation of origin”, but which is in EU-English “protected designation of origin”, also abbreviated as PDO), and “protected geographical indications”, abbreviated as PGI).
Article 14 of Regulation No 110/208 provides that protected geographical indications must not be translated on labels or presentations of the beverage. Article 16 provides protection, inter alia, against any use of the indication for goods not covered by the specification which are comparable, or even for other goods when the reputation of the geographical indication is “exploited” (Article 16 [a], as well as against any misuse, imitation or evocation, Article 16 [b]).
Article 23 of Regulation No 11o/2008 provides for the refusal or invalidation of trademarks where their use would lead to any of the situations covered by Article 16, saving only trademarks applied for or used in good faith prior to the protection of the geographical indication in the country of origin, or before January 1, 1996 (the date when the TRIPS Agreement became effective in the EU).
The ECJ first holds that Regulation No. 110/2008 is applicable also for marks registered prior to its effective date (February 20, 2008). The proprietor could not invoke reliance or protection of legitimate expectations because “COGNAC” was already protected under previous legislation and that legislation had been amended with effect from January 1, 1996 requiring Member States to be in compliance with Article 23 of the TRIPS Agreement which provides, inter alia, for absolute protection of geographical indications for wines and spirits, requiring the refusals or cancellation of trademarks registered for goods not having the respective origin.
As regards the requirement to cancel a trademark the use of which would violate one of the situations described in Article 16 of Regulation No 110/2008, the ECJ holds that “comparable products” includes drinks which “(…) regardless of their various categories (…) covers drinks which have common objective characteristics and which are consumed, from the point of view of the relevant public, on occasions which are largely identical. Furthermore, they are frequently distributed through the same channels and subject to similar marketing rules.”
As regards “evocation”, the ECJ concludes: “The use of a mark containing the element ‘Cognac’ for spirit drinks which do not meet the relevant specifications may therefore be categorised as an ‘evocation’ for the purposes of Article 16 (b) of Regulation No 110/2008.”
Finally, in view of the unequivocal provisions of Regulation No 110/2008, the ECJ considers that it is not necessary to answer the question regarding the application of Directive 89/104 (the Trademarks Directive).
The answers of the ECJ are summarised in the “holdings” as follows:
“1. Regulation (EC) No. 110/2008 of the European Parliament and of the Council of January 15, 2008 on the definition, description, presentation, labelling and the protection of geographical indications of spirit drinks and repealing Council Regulation (EEC) No 1576/89 is applicable to the assessment of the validity of the registration of a trademark containing a geographical indication protected by that regulation, where registration took place before the regulation entered into force.
2. Articles 23 and 16 of Regulation No 110/2008 must be interpreted as meaning that:
– the competent national authorities must, on the basis of Article 23 (1) of Regulation No 110/2008, refuse or invalidate the registration of a mark which contains a protected geographical indication and which is not covered by the temporary derogation provided for in Article 23 (2) of that regulation, where the use of that mark would lead to one of the situations referred to in Article 16 thereof;
– a situation such as that referred to in the second question referred for a preliminary ruling – that is to say, the registration of a mark containing a geographical indication, or a term corresponding to that indication and its translation, in respect of spirit drinks which do not meet the specifications set for that indication – falls within the situations referred to in Article 16 (a) and (b) of Regulation No 110/2008, without prejudice to the possible application of other rules laid down in Article 16.”
The judgment comes as no surprise. It now will have to be implemented by the Finnish court.
The first trademark, registered for Konjakit, cannot be maintained because it contains a translation of “Cognac”. This infringes Article 14 of Regulation No 110/2008. The product indication “Konjakit” in the specification raises the interesting issue, not dealt with by the referring court, whether a specification for a product protected by a geographical indication may contain a translation of that product name. This question is relevant in particular for “Cognac” and
“Champagne”, which are frequently translated, such as in Finnish (“sampannja”).
The translation also appears on the second label. Also, the specification raises the same problem as the indication for the first mark.
In addition, the second mark raises the similarly interesting question of whether it is lawful, and under which conditions, to market a product which is made with or contains a product protected by a geographical indication, in the present case a “coffee liqueur” containing “Co-gnac”. We are familiar with “Irish Coffee” mixes made with “Irish Whiskey”, confectionary filled with “Cognac” or other brandies. Regulation No 110/2008 does not deal with this issue, but it seems obvious that the marketing of such products is lawful, provided the ingredients are properly indicated and there is no likelihood of deception as to the nature of the product. In trademark law we would analyse this issue under the aspect of exhaustion of rights. But it seems that no clear doctrine of exhaustion of rights in geographical indications has been developed so far.
Reported by Dr. Alexander von Mühlendahl, J.D., LL.M.
Kosan Gas A/S, successor to BP Gas A/S, is exclusive licensee for Denmark of the rights relating to a 3D trademark protecting the shape of a refillable lightweight bottle for liquid gas. These bottles are sold to customers, filled with gas, and when refilling the customer gets another bottle, filled, while returning the empty one. Viking Gas is operating a refilling service and refills Kosan bottles with its own gas, affixes its own trademark as refiller on the bottle, which also carries Kosan marks and names. Kosan’s predecessor, BP Gas, sued Viking for trademark infringement, and won in first and second instance (in 2005 and 2006 respectively). The Danish Supreme Court (Højesteret), three years later, referred the following questions to the ECJ for preliminary ruling:
“(1) Is Article 5, in conjunction with Article 7, of [Directive 89/104 = Trademarks Directive] to be interpreted in such a way that company B is guilty of an infringement of a trademark if it fills gas bottles which originate from company A with gas which it then sells, where the following circumstances apply:
(a) Company A sells gas in so-called ‘composite’ bottles with a special shape, which is registered as such, that is to say, as a shape trademark, under a Danish trademark and a Community trademark. Company A is not the proprietor of those shape trademarks but has an exclusive licence to use them in Denmark and has the right to take legal proceedings in respect of infringements in Denmark;
(b) On first purchase of a composite bottle filled with gas from one of company A’s dealers the consumer also pays for the bottle, which thus becomes the consumer’s property;
(c) Company A refills the composite bottles by a procedure under which the consumer goes to one of company A’s dealers and, on payment for the gas, has an empty composite bottle exchanged for a similar one filled by company A;
(d) Company B’s business consists in filling gas into bottles, including composite bottles covered by the shape trademark referred to in point (a), by a procedure under which consumers go to a dealer associated with company B and, on payment for the gas, can have an empty composite bottle exchanged for a similar one filled by company B;
(e) When the composite bottles in question are filled with gas by company B, adhesive labels are attached to the bottles indicating that the filling was undertaken by company B?
(2) If it may be assumed that consumers will generally receive the impression that there is an association between companies A and B, is this to be regarded as significant for the purpose of answering Question 1?
(3) If Question 1 is answered in the negative, may the outcome be different if the composite bottles – apart from being covered by the shape trademark referred to – also feature (are imprinted with) the registered figurative and/or word mark of company A, which is still visible irrespective of any adhesive labels affixed by company B?
(4) If either Question 1 or Question 3 is answered in the affirmative, may the outcome be different if it is assumed that, with regard to other types of bottle which are not covered by the shape trademark referred to but which feature company A’s word and/or figurative mark, company A has for many years accepted, and continues to accept, the refilling of the bottles by other companies?
(5) If either Question 1 or Question 3 is answered in the affirmative, may the outcome be different if the consumer himself goes to company B directly and there:
(a) on payment for the gas, obtains, in exchange for an empty composite bottle, a similar one filled by company B, or
(b) on payment, has a composite bottle which he has brought filled with gas?”
The ECJ concludes that the rights in the 3D mark are exhausted as a result of the sale of the bottles. The refilling of the bottles by third parties cannot be prohibited unless there are good grounds for objecting to their use, as provided for in Article 7 (2) Trademarks Directive.
The answer to the questions therefore is:
Articles 5 and 7 of [the Directive] must be interpreted as meaning that the holder of an exclusive licence for the use of composite gas bottles intended for reuse, the shape of which is protected as a three-dimensional mark and to which the holder has affixed its own name and logo that are registered as word and figurative marks, may not prevent those bottles, after consumers have purchased them and consumed the gas initially contained in them, from being exchanged by a third party, on payment, for composite bottles filled with gas which does not come from the holder of that licence, unless that holder is able to rely on a proper reason for the purposes of Article 7 (2) of Directive 89/104.
As regards the “proper reasons”, which the national court will have to determine, the Court makes the following significant observations which are meant to aid the national court to decide the case:
37 The Court has therefore already held that such a legitimate reason also exists when the use by a third party of a sign identical with, or similar to, a trademark seriously damages the reputation of that mark or when that use is carried out in such a way as to give the impression that there is a commercial connection between the trademark proprietor and that third party, and in particular that the third party is affiliated to the proprietor’s distribution network or that there is a special relationship between those two persons (see, to that effect, Case C 558/08 Portakabin and Portakabin  ECR I-0000, paragraphs 79 and 80 and the case-law cited).
38 Although it is the task of the national court to assess whether, having regard to the circumstances of the case in the main proceedings, such a legitimate reason exists, it is however necessary to provide that court with some guidance in respect of that assessment, in particular as regards the specific matters on which it seeks a ruling from the Court.
39 In that connection, it must be stated that, in order to answer the question whether the commercialisation of the composite bottles refilled by Viking Gas is carried out in such a way as to give the impression that there is a commercial connection between that undertaking and Kosan Gas which would entitle Kosan Gas to oppose that commercialisation, it is necessary to take into account the labelling of those bottles and the circumstances in which they are exchanged.
40 The labelling of the composite bottles and the circumstances in which they are exchanged must not lead the average consumer who is reasonably well informed and reasonably observant and circumspect to consider that there is a connection between the two undertakings at issue in the main proceedings or that the gas used to refill those bottles comes from Kosan Gas. In order to assess whether such an erroneous impression is precluded, it is necessary to take into account the practices in that sector and, in particular, whether consumers are accustomed to the gas bottles being filled by other dealers. Furthermore, it appears to be reasonable to assume that a consumer who goes directly to Viking Gas either to exchange his empty gas bottle for a full bottle or to have his own bottle refilled is more readily in a position to be aware that there is no connection between Viking Gas and Kosan Gas.
41 As regards the fact that the composite bottles bear word and figurative marks made up of the name and logo of Kosan Gas which remain, according to the findings of the national court, visible in spite of the labelling affixed by Viking Gas to those bottles, it must be pointed out that this constitutes a relevant factor in so far as it seems to rule out that labelling from altering the condition of the bottles by masking their origin.
Most exhaustion cases decided by the ECJ over the years have involved pharmaceutical products and concerned the degree to which the “parallel importer” is permitted to change the packaging by repacking, de-branding, re-branding and co-branding, etc. Interestingly, in the present case, which involves refilling of bottles protected as 3D trademark, the ECJ does not refer to a single one of these decisions but only to decisions not involving pharmaceuticals.
The judgment could be expected: In balancing the interests of the trademark proprietor (here: exclusive licensee) and those of the purchasers of the bottle, the latter’s interest prevail, the more so as otherwise the competition in the sale of gas would have been distorted. Also, it seems reasonable to assume that an average consumer of gas, when having his bottle refilled by Viking and not by Kosan, will not assume that the gas sellers are the same or economically related.
The present case should be seen in relation to the specific market – liquid gas. It would not appear appropriate to “transfer” the finding to other possible cases of “refilling”, such as beverages, without taken into account the specific circumstances. As far as Germany is concerned, there are some interesting earlier cases, among them the following: The Federal Supreme Court decision of May 16, 1952 seemed to start from the premise that refilling of fire extinguishers by third parties was illegal; in the actual case, however, the maker of the extinguishers had explicitly “renounced” the right to be the only source of refill. In a case involving the refilling of bottles with beverages, the bottle shape being protected by a 3D mark, the Court of Appeal Zweibrücken, in a judgment of January 8, 1999 concluded that refilling these bottles by “outsiders” (the bottle was protected for the cooperative of German mineral water producers) constituted trademark infringement.
Reported by Dr. Stefan Abel
Prior rights agreements usually contain commitments not to use a trademark and no-challenge clauses. Commitments to cease and desist and no-challenge clauses may be considered a restriction of competition and fall under the prohibition of Article 101 (1) 1 of the Treaty on the Functioning of the European Union (TFEU). The German Federal Supreme Court confirms the liberal approach taken in an earlier decision of the Court of Justice of the European Union and outlines more precisely the scope of competition law prohibiting agreements restricting competition with regard to prior rights agreements in trademark law.
Along with the Court of Justice of the European Union (judgment of January 30, 1985, Case 35/83 – Toltecs/Dorcet II) the Federal Supreme Court confirms that prior rights agreements and trademark law in general are not restricting competition under Article 101 (1) TFEU. The Court considers that the restrictive impact of prior rights agreements is usually relatively low since it does not affect the trade of goods but only the possibility to promote goods by using a trademark. In addition, the Court considers that prior rights agreements in general rather encourage competition by providing legal certainty, encouraging investments in a trademark.
However, according to the decision of the Federal Supreme Court, prior rights agreements are considered to restrict competition and are therefore prohibited under European competition law if, at the time the parties entered into the agreement, there was no serious reason to presume that the commitment to cease and desist corresponds to a justified legal claim.
As regards prior rights agreements that are not limited in time, the Court finds that a change in the case law does not render prior rights agreements inadmissible. So if a trademark was considered to be confusingly similar to the prior mark at the time the parties entered into the agreement the commitment to cease and desist from using the mark would not become illicit and invalid if, according to subsequent case law, the trademark could no longer be found confusingly similar with the prior one. However, the Court points out that other subsequent changes of the legal situation, in particular the prior mark loosing its validity, the commitment to cease and desist in the prior rights agreement may be considered restricting competition and become invalid.
The parties of prior rights agreements often agree that the agreement should be valid “world-wide” whereas the owner of the prior trademark often does not have prior rights in each and every country of the world. Such prior rights agreements may be invalid if no prior rights exist in other countries. However, according to the Federal Supreme Court, it is sufficient if the later trademark conflicts with the earlier trademark in a number of countries and if it may be expected that the conflicting situation could occur also in further countries in the future.
As regards the agreement not to challenge the respective trademarks, which is considered to restrict competition in the field of patents, the Court finds that no-challenge clauses are not in breach of European competition law if agreed upon within the context of prior rights agreements on trademarks. The Federal Supreme Court holds that no-challenge clauses on trademarks are typical and essential for prior rights agreements in order to provide legal certainty.
Finally, the Federal Supreme Court holds that clauses in prior rights agreements that go too far and are therefore to be considered to restrict competition, are not totally invalid but may be replaced by a clause going less far so that the scope of an illicit clause may be reduced to what is allowed under competition law. As a rule, agreements that fall foul of European competition law are invalid in total and must not be replaced by another clause that is still within the scope of what is allowed under competition law. However, the Federal Supreme Court makes an exception in this regard for prior rights agreements in the field of trademark law.
The decision of the Federal Supreme Court represents a significant contribution to legal certainty in the field of competition law and prior rights agreements.
Reported by Dr. Henning Hartwig
On May 12, 2011, and eagerly awaited, the Advocate General rendered his Opinion in PepsiCo v Grupo Promer. The contested judgment was handed down by the General Court of the European Union on March 18, 2010 in Case T-9/07 (see BARDEHLE PAGENBERG IP Report 2010/I).
The following summary may be considered to be the nucleus of the Opinion which contains a grand total of 90 paragraphs:
1. The Advocate General held that the “informed user” (Article 10  CDR) is “not the average consumer to whom reference must be made in order to apply the rules on trademarks, who needs to have no specific knowledge and who, as a rule, makes no direct comparison between the trademarks at issue; nor, however, is the informed user the sectoral expert referred to for the purposes of assessing a patent’s inventiveness.”
2. The Advocate General also elaborated extensively on the specific relation between the design’s scope of protection and the degree of freedom of the designer in developing the design (Article 10  CDR). The Advocate General states: “Where designs are characterised by significant constraints on the designer’s creative freedom, small differences may, generally, be sufficient to produce a different overall impression.” Furthermore: “(…) the constraints on creative freedom to be taken into consideration (…) are exclusively those constraints which are dictated by the need for the goods to fulfil a certain function (…). On the other hand, any ‘standard’ features which the market expects, but which are not technically necessary, cannot be regarded as constraints on the designer’s freedom. This is because of the purpose of the rules on designs. Those rules are, in fact, basically intended to reward the developers of innovative goods, by providing them with a system of protection.”
3. Turning to the standard of comparing two conflicting designs according to their respective “overall impression” (Article 10  CDR), the Advocate General concludes that “in some situations” it would be “impracticable” for an informed user to make a direct comparison of the goods characterised by the designs at issue, for example, in case of “designs relating to goods which – because of their large size or because they have to be placed far apart – can never, generally speaking, be set alongside one another” (the opinion refers, by way of example, to boats or “large items of industrial equipment”).
4. Lastly, the Opinion confirmed, apparently in line with neighbouring Community trademark law, that the assessment of the constraints on the designer’s degree of freedom in each specific case was a finding of fact. Likewise, as regards the informed user’s specific perception of the designs, the assessments made by the General Court would fall entirely within its own jurisdiction to assess the facts. Finally, as regards the manner in which the informed user perceives the designs and the impression that the user gleans from them, this, again, was a matter for the General Court alone to decide, as it is simply a question of fact, says the Advocate General.
According to the Advocate General, “(…) this case offers the first opportunity to clarify a number of points which are crucial for the purposes of defining the limits and conditions attaching to review by the European Union judicature of decisions taken by the Office for Harmonisation in the Internal Market (‘OHIM’) in relation to Community designs.” However, as the underlying conflict was between a prior and later Community design, this case is, above all, about the proper standards of a Community design infringement test – and, thus, regularly to be decided by national infringement courts. Therefore, the weight of the Advocate General’s opinion is far from being limited to OHIM practice and decisions. It will be interesting to see whether, and to what extent, the Court of Justice and, moreover, national bodies will follow the Advocate General’s path. A decision by the Court of Justice should be expected some time in the fall of this year.
Reported by Dr. Henning Hartwig
The General Court of the European Union was called upon to decide on the validity of a registered Community design, intended to be used for watches, against a single piece of prior art. The Community design is represented on the left side, the prior art design on the right side:
Different from other cases, the contested design was represented by solid and dotted lines. While the Community Design Regulation does not include any information on the meaning and impact of solid and dotted lines, paragraph 11.4 of the Examination Guidelines for Community Designs provides that “dotted lines may be used in a view either to indicate the elements for which no protection is sought or to indicate portions of the design which are not visible in that particular view, i.e., non-visible lines.”
The Court, firstly, followed the Guideline and held that elements indicated by dotted lines “do not form part of the elements that are protected by the contested design. That finding means that the degree of freedom of the designer with regard to those elements is irrelevant in this case.”
The Court, secondly, also found that the fact that the lanyard of the prior design was represented in black was not significant, given that no colour had been claimed for the contested design.
Apart from that the Court, thirdly, held that since the contested design represented a promotional item, it was reasonable to expect that, when used, it would carry a trademark. Consequently, the Court held that the presence of a mark in the prior design would not amount to a “significant difference”.
Furthermore, the General Court, fourthly, confirmed the concept of informed user developed and explained before (cf. Case T-153/08 – Shenzhen Taiden v OHIM – Bosch Security Systems). In this case, the Court added that both the contested and the prior design were “promotional items”. In relation to such items, the concept of informed user would include both a “professional who acquires them in order to distribute them to the final users and (…) those final users themselves” so that the informed user should be held to be both the “average consumer” and the “professional buyer”.
Finally, and fifthly, the Court provided guidance on the applicability of Article 7 (2) CDR in the context of invalidity proceedings. According to that provision, a disclosure of a prior design made by the designer or his successor in title within one year preceding the filing or priority date shall not be taken into consideration as “prior art”. The Court added that, in order to apply this provision, the holder of the contested design must establish that he is either the creator of the prior design or the successor in title to that creator.
While the guidance provided in lessons No 1-3 and 5 seems to be both consistent and helpful (and, hopefully, will be adopted by Community design infringement courts rather sooner than later), there remains some doubts as regards the issue of the double-faced informed user (in fact, it appears to be questionable whether it is indeed appropriate that this key notion is determined on a case-by-case basis rather than providing practitioners with some overall guidance). It remains to be seen how the Court of Justice will interpret the notion of the informed user (soon it will have the chance, when deciding PepsiCo v Grupo Promer; see the opinion of the Advocate General, above).
Reported by Dr. Stefan Abel
The Internet Corporation for Assigned Names and Numbers (ICANN) approved, on June 20, 2011, a new top level domain system. Whereas top level domains in the past were limited to country code top level domains such as .de and 22 generic top level domains such as .com almost any sequence of signs in any language or script may now be used at the top level of an Internet address. Organizations may now run Internet addresses under generic terms as .shop or .cars but also under trademarks and geographical indications like .mercedes or .berlin.
Organizations that wish to run domain names under new top level designations will have to pay an application fee of USD 185.000 to ICANN and further substantial annual fees. A dispute resolution system will be set up for top-level-domains conflicting with third party rights.
Nevertheless, the new domain name system will multiply opportunities to abuse of third party rights, in particular on the second-level of Internet address names e.g. www.mercedes.shop, www.mercedes.cars, www.mercedes.spareparts etc. A dispute resolution system will also be in place for conflicts on this level, which, however, has largely been criticized as insufficient. Trademark owners wonder how to cope best with this situation.