PowerPoint Slides - American Bar Association

Milbank
ABA IPL MEETING,
JUNE 16-20, 2004 TORONTO, ONTARIO
DEVELOPMENTS IN INTELLECTUAL
PROPERTY
A UNITED KINGDOM PERSPECTIVE
Presented by James Tumbridge
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Milbank, Tweed, Hadley & McCloy

MILBANK
ABA IPL MEETING,
JUNE 16-20, 2004 TORONTO, ONTARIO
DEVELOPMENTS IN INTELLECTUAL PROPERTY
A UNITED KINGDOM PERSPECTIVE
Presented by James Tumbridge
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This documents aims to give a skeleton overview of four trade mark cases which have
clarified English & European law.
Topic:
• Trade Marks
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o Reed v Reed [2004] EWCA Civ 159 – A review of Trade Mark
Infringment – Likelihood of Confusion – Own name Defence – Internet
uses such as Pop up Banners & Metatags
o Henkel KGaA v OHIM conjoined cases C-456/01P & C-457/01P –
Community Trade Marks – Shape & Colour
o Eli Lilly & Co. case R 120/2001-2 – Community Trade Mark – Taste
o Shield Mark BV v Joost Kist h.o.d.n. Memex case C-283/01 –
Community Trade Mark – A Sound Mark

Reed v Reed [2004] EWCA Civ 159
The appellants were three companies of a multinational publishing group, known
collectively in the appeal as RBI. RBI had for many years published a wide variety of
business magazines and journals, which carried amongst other items advertisements for
jobs. Some adverts were placed by would be employers and others by employment
agencies.
The respondents known collectively as Reed Employment had their beginning in 1960,
when Mr. Alec Reed founded the now well known employment agency of ‘Reed.’ Since
that time they have become familiar sights in every town across the UK and are one of
the most recognised employment agencies.
Reed Employment registered the trade mark in suit in 1986, shortly after registrations
for services became possible in the UK. The mark is ‘Reed’ registered for employment
agency services in Class 35.
Class 35 which accords with the Internationally Recognised Classification of the Nice
Treaty covers; ‘Advertising, business management, business administration and office
functions.’ This covered the activities of both parties.
In 1995 Reed Employment began to use the internet as a business tool with
www.reed.co.uk. The advertisements like the traditional paper ones did not specify the
would be employer. This accorded with Reed Employment’s long policy of selectively
putting would be employees and employers in contact.
In 1999 RBI decided to expand their job-related advertisements and launched
www.totaljobs.com. The first version gave way to steadily more advanced versions. The
website included amongst other items logos of the appellants such as; Reed Business
Information & DESIGN, and Reed Elsevier & DESIGN.
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All versions of the www.totaljobs.com website were alleged by Reed Employment to
infringe their trade mark and constitute passing off. The judge at first instance found
both and held for Reed Employment.
The unanimous decision of the Court of Appeal led by Lord Justice Jacob reversed the
findings of Mr. Justice Pumfrey at first instance and reviewed the interpretation of the
European law behind the UK Trade Marks Act.
The relevant EU provisions were:
Article 5 - Rights conferred by a trade mark
1. The registered trade mark shall confer on the proprietor exclusive rights therein.
The proprietor shall be entitled to prevent all third parties not having his consent
from using in the course of trade:
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a. any sign which is identical with the trade mark in relation to goods or
services which are identical with those for which the trade mark is
registered;
b. any sign where, because of its identity with, or similarity to, the trade
mark and the identity or similarity of the goods or services covered by the
trade mark and the sign, there exists a likelihood of confusion on the part
of the public, which includes the likelihood of association between the
sign and the trade mark.
2. Any Member State may also provide that the proprietor shall be entitled to
prevent all third parties not having his consent from using in the course of trade
any sign which is identical with, or similar to, the trade mark in relation to goods
or services which are not similar to those for which the trade mark is registered,
where the latter has a reputation in the Member State and where use of that sign
without due cause takes unfair advantage of, or is detrimental to, the distinctive
character or the repute of the trade mark.
3. The following, inter alia, may be prohibited under paragraphs 1 and 2:
a. affixing the sign to the goods or to the packaging thereof;
b. offering the goods, or putting them on the market or stocking them for
these purposes under that sign, or offering or supplying services
thereunder;
c. importing or exporting the goods under the sign;
d. using the sign on business papers and in advertising.
4. Where, under the law of the Member State, the use of a sign under the conditions
referred to in 1 (b) or 2 could not be prohibited before the date on which the

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provisions necessary to comply with this Directive entered into force in the
Member State concerned, the rights conferred by the trade mark may not be relied
on to prevent the continued use of the sign.
5. Paragraphs 1 to 4 shall not affect provisions in any Member State relating to the
protection against the use of a sign other than for the purposes of distinguishing
goods or services, where use of that sign without due cause takes unfair advantage
of, or is detrimental to, the distinctive character or the repute of the trade mark.
Article 6 - Limitation of the effects of a trade mark
1. The trade mark shall not entitle the proprietor to prohibit a third party from
using, in the course of trade,
a. his own name or address;
b. indications concerning the kind, quality, quantity, intended purpose, value,
geographical origin, the time of production of goods or of rendering of the
service, or other characteristics of goods or services;
c. the trade mark where it is necessary to indicate the intended purpose of a
product or service, in particular as accessories or spare parts; provided he
uses them in accordance with honest practices in industrial or commercial
matters
2. The trade mark shall not entitle the proprietor to prohibit a third party from
using, in the course of trade, an earlier right which only applies in a particular
locality if that right is recognised by the laws of the Member State in question
and within the limits of the territory in which it is recognised.
The Court of Appeal held:
• RBI’s marks were not identical to Reed Employment, but merely similar. The
Court considered the requirements for a finding of identity by reference to Article
5 (1) (a) of the Trade Marks Directive, and held there is a requirement for aural
and visual identity. The addition of ‘Elsevier’ to ‘Reed’ made a difference, as did,
the addition of ‘Business Information.’ The Court deciding that such additions
would not go unnoticed by the consumer.
• Lord Justice Jacob wished to make clear that additions to the mark can take a case
outside of being ‘identity’ [identical]. He considered it in the light of words
qualifying each other, his example was that ‘Harry’ qualifies ‘Potter’ and vice
versa. His Lordship drew attention to the ECJ’s move away from the UK’s old
rigid view of such matters.
• The services of RBI and Reed Employment were not identical. RBI only
provided job advertisements and Reed Employment provided employment

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agency services. Lord Justice Jacob distinguished the two by the selectivity
involved in matching parties, and the lack thereof in straight forward
advertisements of jobs.
• Article 5 (1) (b) (infringement: likelihood of confusion) was reviewed and the
Court held that the test involved assuming that the trade mark owner made ‘fair
and notional use’ of its mark across the full scope of the specification. The
comparison is not a straight forward mark for sign comparison. The Court then
must make an assessment as to whether a ‘substantial proportion’ of the relevant
consumers are likely to be confused. Whilst there is a greater likelihood of
confusion with very distinctive marks, where a mark is largely descriptive ‘small
differences’ may suffice to avoid confusion. The ordinary consumer (ECJ calls
them average consumers) is the person to be considered and they will be alert for
differences in largely descriptive marks, such as common surnames. It would be
more difficult to establish a likelihood of confusion for similar descriptive marks.
• The Own Name Defence in Article 6 (1) (a) was held to be available to
companies, such as RBI. However, Lord Justice Jacob reiterated that this defence
remains very limited. The use of a person’s own name was in accordance with
honest practices in industrial or commercial matters, even if there is some actual
confusion between the respective marks. The Court held that there would need to
be significant actual deception to take a trader outside honest practices. The test is
objective; has the defendant in fact caused significant deception, even if
innocently.
• Pop-up Banners; the Court held they did not infringe. The Court considered webusing
members of the public know that all sorts of banners appear when
searching. The Court found that a search under ‘Reed,’ would not make anyone
think that there was a trade connection between the totaljobs.com banner when it
makes no reference to Reed and Reed Employment. There was no likelihood of
confusion established. To establish infringement, once the user clicks through a
banner or link, there must be infringing use on the third party site.
• However, if this had been an Article 5 (1) (a) case (identity of marks and services)
then the Court said the position might have been different. There would be no
need to prove likelihood of confusion. The Court also added that; it may be that
invisible use of this sort is not use in the course of trade, as computers look for
patterns of 0s and 1s and there is no meaning being conveyed to anyone, - no
‘sign.’
• In regard of Metatags, the Court felt the issue was unclear in the pleadings and
grew out of control, however, there was no infringement on Article 5 (1) (b). The
Court considered how metatags work at some length and found that there is no
confusion, as the mere inclusion of a site in a search result does not suggest any
connection with another trader. The Court doubted that under Article 5 (1) (a),
metatag use counted as an indication as to trade origin. Since the computer not a

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user reads the metatag such use does not count for infringement, these tags never
convey a message to anyone.
• The claim in passing off failed for lack of misrepresentation.
The English Court of Appeal has therefore added much to our understanding of
acceptable use of Trade Marks in the medium of the internet. Of specific note: There is a
difference between the use of a trade mark in a form which users can appreciate and in
the so called ‘invisible forms’ which only a computer can read.

Henkel KGaA v OHIM conjoined cases C-456/01P & C-457/01P
Cases at first instance were T-335/99 and T-336/99
This case was an appeal against a decision of OHIM, the Office of Harmonisation for the
Internal Market (the body which grants Community Trade Marks). The marks in
question were Shape and Colour marks intended primarily for washing machine and dish
washer products. The two marks were known respectively as; ‘rectangular tablet, red &
white,’ and ‘rectangular tablet, green & white.’
Two articles of Council Regulation (EC) No. 40/94 were at issue:
Article 4
‘A Community trade mark may consist of any signs capable of being represented
graphically, particular words, including personal names, designs, letters, numerals, the
shape of goods or of their packaging, provided that such signs are capable of
distinguishing the goods or services of one undertaking from those of other
undertakings.’
Article 7
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1. The following shall not be registered:
(a) signs which do not conform to the requirements of Article 4;
(b) trade marks which are devoid of any distinctive character;
(c) trade marks which consist exclusively of signs or indications which
may serve, in trade, to designate the kind, quality, quantity, intended
purpose, value, geographical origin or the time of production of the
goods or of rendering of the service, or other characteristics of the
goods or service; trade marks which consist exclusively of signs or
indications which have become customary in the current language or
in bona fide and established practices of trade;
The OHIM examiner had refused the applications because he considered them ‘devoid of
distinctiveness’ and therefore could not be registered on account of Article 7 (1) (b).
The Board of Appeal stated that a three-dimensional shape had to be sufficiently unique
to imprint itself easily on the mind and stand out from whatever is normal in trade.
The Court of First Instance agreed with this conclusion and refused registration relying
on Article 7 (1) (b).

The European Court of Justice found that Article 4, which permits shape and colour to
constitute Community Trade Marks, required:
1. The Sign Must Be Capable of Distinguishing Goods or Services
2. Of One Undertaking From Those of Other Undertakings.
However, the Court held that being ‘capable of distinguishing’ was not enough; the sign
must have distinctive character.
Distinctive character was to be assessed by a two stage test:
1. By reference to the products or services in respect of which registration has been
applied for, and
2. By reference to the perception of them by the relevant public.
The ECJ further clarified that the more closely the shape for which registration is sought
resembles the shape most likely to be taken by the product in question, the greater the
likelihood of the shape being devoid of any distinctive character for the purposes of
Article 7 (1) (b) of Regulation No. 40/94. Only a Trade Mark which departs significantly
from the norm or customs of the sector and thereby fulfils its essential function of
indicating origin, is not devoid of any distinctive character for the purposes of that
provision.
On a secondary note the ECJ affirmed the Court of First Instance’s sole right to
determine findings of fact and secondly that appeals must rely upon the pleadings of first
instance.
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Eli Lilly & Co. case R 120/2001-2
The applicant sort to register;
As a gustatory mark for;
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THE TASTE OF ARTIFICIAL STRAWBERRY FLAVOUR
Class 5 – Pharmaceutical Preparations
The appellant offered a description of the mark only in the following terms; ‘The mark
consists of the taste of strawberry flavour.’
The applicable law was again:
Article 7
1. The following shall not be registered:
(a) signs which do not conform to the requirements of Article 4;
(b) trade marks which are devoid of any distinctive character;
(c) trade marks which consist exclusively of signs or indications which may serve, in
trade, to designate the kind, quality, quantity, intended purpose, value,
geographical origin or the time of production of the goods or of rendering of the
service, or other characteristics of the goods or service; trade marks which consist
exclusively of signs or indications which have become customary in the current
language or in bona fide and established practices of trade;
The examiner made the following criticisms of the mark:
1. The mark is not capable of graphic representation, it is too indefinite, and is
therefore ineligible for registration under Article 7 (1) (a).
2. The mark is devoid of distinctive character because in relation to pharmaceutical
preparations strawberry as a flavour is too commonly used as a mask for
unpleasant products. In relation to sanitary products not used for buccal hygiene
the mark will be wholly overlooked because there is no reason for consumers to
taste the products. The mark is therefore ineligible for registration under Article 7
(1) (b).
3. The mark appeared to be descriptive of characteristics of pharmaceutical
preparations, which is specifically barred under Article 7 (1) (c).

By the time of the appeal the examiner had waived his objection under article 7 (1) (a)
but remained firm on the grounds set out under Article 7 (1) (b) & (c).
The Board of Appeal reviewing the appeal held:
• The objection under Article 7 (1) (b) was well founded.
• The purpose of Article 7 (1) (b) to (e) is to prevent signs which any trader may
legitimately wish to use from being reserved to the exclusive use of a single
undertaking by means of registration as a trade mark.
• The Board followed the rulings of the ECJ which have made clear the public
interest does not want undue restriction of goods or services.
See case C-104/01 Libertel v Benelux-Merkenbureau (CTM for the colour
Orange).
• The Board considered it the right of those making pharmaceutical products to be
able to add flavouring to their products to disguise unpleasant taste. If the
appellant were to be given exclusive right to use such a sign under Article 9 that
would interfere unduly with the freedom of the appellant’s competitors.
Note:
Whilst the Board did not technically rule on the ability of the appellant’s application to
satisfy the requirement that a sign be capable of graphical description they did comment:
The use of a ‘gustatory sign’ required more than a mere description in words.
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Shield Mark BV v Joost Kist h.o.d.n. Memex case C-283/01
Article 2 of Directive 89/104 permits sounds to be registered as Trade Marks.
Article 2 - Signs of which a trade mark may consist
A trade mark may consist of any sign capable of being represented graphically,
particularly words, including personal names, designs, letters, numerals, the shape
of goods or of their packaging, provided that such signs are capable of
distinguishing the goods or services of one undertaking from those of other
undertakings.
The relevant national jurisdictions have however, not all permitted sound marks in the
past.
This action originated in the Kingdom of Belgium, the Grand Duchy of Luxembourg and
the Kingdom of the Netherlands, who collectively legislate on Trade Marks.
Their legislation on Trade Marks is known as LBM, and its administration was entrusted
to an organisation termed BBM.
When LBM was amended to take account of European Directives in 1995, Articles 2 & 3
were not directly transposed in to the LBM.
Since a decision of the Gerechtshof te’s Gravenhage (Regional Court of Appeal)
(Netherlands) of May 27 th 1999, the BBM has refused to register sound marks.
The simplified facts of this case:
Shield Mark holds fourteen marks, registered with BBM. Four of those marks consist of
a musical stave, two of which state; SOUND MARK. Four marks consist of the first 9
notes of Für Elise.
Shield Mark launched a radio campaign in 1992 using the first 9 notes of Für Elise in
every advert. In 1993 Shield Mark also issued news sheets describing their services, and
where they were displayed the same signature tune was heard each time a news sheet was
removed from the stand. Shield Mark also publishes software and every time a disk is
used a cockcrow is heard.
Mr. Kist is a communications consultant, in particular in advertising law and trade mark
law, he organises Intellectual Property seminars. During an advertising campaign in
1995 he used the first 9 notes of Für Elise and sold a computer program which emitted a
cockcrow when it started up.
The Netherlands Appeal Court (Hoge Raad der Nederlanden) referred two questions to
the ECJ:
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1. (a) Must Article 2 of the Directive be interpreted as precluding sounds or noises
from being regarded as trade marks?
(b) If the answer to question 1(a) is in the negative, does the system established by
the Directive require that sounds or noises must be capable of being regarded as
trade marks?
2. (a) If the answer to question 1(a) is in the negative, what requirements does the
Directive lay down for sound marks as regards the reference in Article 2 to the
need for the sign to be capable of being represented graphically and, in
conjunction therewith, as regards the way in which the registration of such a trade
mark must take place?
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(b) In particular, are the requirements referred to in (a) satisfied if the sound or the
noise is registered in one of the following forms:
- musical notes;
- a written description in the form of an onomatopoeia;
- a written description in some other form;
- a graphical representation such as a sonogram;
- a sound recording annexed to the registration form;
- a digital recording accessible via the internet;
- a combination of those methods;
- some other form and, if so, which?
The ECJ held:
1. The wording of Article 2 does not exclude ‘Sound Marks’ and the list of
permissible marks is not exhaustive.
2. The Court agreed with the intervening Governments and Shield Mark that sounds
were capable of registration.
3. Consequently Article 2 is to be interpreted as permitting the registration of sound
marks.
4. Consequently Member States cannot preclude the registration of sound marks.
5. The Court declined to rule on how a mark in the form of a sonogram, a sound
recording, a digital recording or a combination of those methods should be
graphically represented. Regarding acceptable forms of graphical representation
the ECJ felt it was for the national court to determine, on a case by case basis.
However, the ECJ added the following advice:
a. The mark should state it is a ‘Sound Mark.’

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b. The graphic representation must be precise; it is not enough to state the
sound is ‘a cockcrow,’ and onomatopoeian language does not assist as the
phonetics across the community vary too greatly.
c. The ECJ recommends a stave be used to represent sound. A stave divided
into bars, with clefs, and notes as appropriate.