New powers to seize counterfeit goods

By Squire Patton Boggs on Posted in Copyright, Trademarks

The European Parliament has approved new laws which will extend the powers of EU customs authorities to seize counterfeit goods merely travelling through the EU.

Currently, following the ruling in the joined cases of Philips/Nokia in 2011, customs authorities may only seize fake goods which are likely to be placed on the market in the EU.  This means that they have no powers in relation to goods merely in transit through the EU on their way to a non-EU country.  Customs authorities can inspect these goods, but must let them go, with the risk that they will eventually be diverted back into Europe.

The European Parliament recently approved new laws (contained in an EU Directive) which will allow customs authorities to seize goods travelling through the EU destined for non-EU countries.  This is good news for brand owners as it is likely to make it easier for them to prevent counterfeits from entering non-EU markets and being diverted back to the EU.

The Directive has yet to be approved by the European Council (the other legislative body of the EU) which is expected to happen within the next few weeks.  EU Member States will then have 30 months to transpose the Directive into national law.

Expediting Patent Examination in Brazil

By Squire Patton Boggs on Posted in Patents

Those who have filed patent applications in Brazil have likely experienced very lengthy application pendency – sometimes even upwards of a decade. These delays are caused by a serious backlog of patent applications at the National Institute of Industrial Property (“the Brazilian Patent Office”). In some cases, strategies for expediting the examination process may be available to applicants who wish to minimize this delay.

Technology Average Time to Final Decision[1]
Pharmaceuticals 9-11 years
Mechanical 6-8 years
Electronics 9-11 years
Chemistry 8-10 years
Biotechnology 9-11 years

[1] As measured from the application filing date.

We recently met with Igor Simões and Erick Moreno, from international law firm Clarke, Modet & Co., to discuss two specific strategies for expediting examination: (1) expedited examination based upon infringement in Brazil and (2) expedited examination for “green technologies.”

Expedited Examination Based Upon Infringement in Brazil

Applicants can request expedited examination based upon alleged infringement of the claims of their Brazilian patent application. The request for expedited examination must be accompanied by a petition and some evidence of infringement, such as an invoice showing sales of an infringing product.

Requests for expedited examination of patent applications are appraised by a commission at the Brazilian Patent Office and decided by the Patent Director. The decisions are published in the IP Electronic Bulletin.

Expedited Examination for “Green Technologies”

Applicants can also request expedited examination of patent applications covering certain green technologies. Eligible technologies include those related to alternative energy, transportation, energy conservation, waste management, and agriculture. The Brazilian Patent Office has adopted the IPC Green Inventory to define those patents applications that are considered “green.”

This pilot program is limited to the first 500 applications that fulfill the requirements set forth by the Brazilian Patent Office. These requirements include, among other things, that the application have been filed on or after January 2, 2011 and that the application contain a maximum of 15 claims, with up to three independent claims.

For some companies, such as pharmaceutical companies, the long patent pendency in Brazil may be welcome, because the patent term in Brazil is no less than 10 years from the date of patent issuance. Those companies requiring Brazilian patent rights in the near term, however, may wish to consider the strategies above.

When is hyperlinking lawful?

By Squire Patton Boggs on Posted in Copyright, Technology

The Court of Justice of the European Union (CJEU), Europe’s highest court, has given its much anticipated ruling on when hyperlinking will be lawful (Svensson v Retriever Sverige AB).

The dispute

The dispute concerned four journalists who wrote for the Swedish newspaper Gӧteborgs-Posten.  The articles also appeared on the Gӧteborgs-Posten website.  Retriever Sverige (Retriever) operated a website which provided its clients with clickable links to articles published on other websites.  It included links to articles published on the Gӧteborgs-Posten website written by the four journalists.  The journalists argued that this practice amounted to copyright infringement, relying on Article 3(1) of the Copyright Directive.  Article 3(1) provides:

“Member States shall provide authors with the exclusive right to authorise or prohibit a communication to the public of their works … including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them”.

The journalists argued that, by providing links to their articles, Retriever was communicating their works to the public and that this required their prior consent.  The Swedish court asked the CJEU to interpret the scope of Article 3(1).

The judgment

The CJEU held that Retriever’s provision of links to the articles was not a communication of the articles to the public.  A communication to a ‘new public’ would be required; that is, a communication of the articles to a public that was not taken into account by the journalists when their articles were first published on the Gӧteborgs-Posten website.  As the Gӧteborgs-Posten website was freely accessible by any internet user without restrictions, the articles had already been made available to the public as a whole.  Therefore, there was no ‘new public’ to whom Retriever could communicate the articles.  As such, Retriever was free to provide links to the articles on its website without consent.  This was the case even if, when a user clicked on that link, the article appeared in such a way as to give the impression that it was appearing on Retriever’s site.

The position would be different if the links provided by Retriever had made it possible for users to circumvent some restrictions on access to Gӧteborgs-Posten website.  In that case, all users accessing the articles via the links provided by Retriever would be deemed to be a ‘new public’.  Retriever’s use of the links would have required prior permission from the journalists.  Such permission would also be required if the articles had subsequently been removed from Gӧteborgs-Posten website or access restrictions subsequently added to the Gӧteborgs-Posten site.

Implications

Squire Sanders’ intellectual property and technology specialist, Carlton Daniel, comments:

“This is a significant decision on when it will be lawful to link to, and frame, material protected by copyright.  It is a welcome clarification since the confusion on linking left by the Shetland Times case in the mid 1990s. At face value the ruling is clear – a website may hyperlink to copyright material appearing on a third party website provided that material is freely accessible.  There is also no problem with framing the material to give the impression that it is part of the linking website rather than the third party site.   

However, the practical application of the ruling may be problematic.   It is clear that a link must not make the material accessible to a public who could not have accessed it before (which the court calls a ‘new public’).  To know if the hyperlink communicates the material to a ‘new public’ you would need to know who the copyright owner originally intended to communicate his or her material to.  How should that be assessed?  Presumably, if the material is freely accessible on the third party website, the original communication is to everyone and there is no new public left for the hyperlink to communicate the material to for the first time.  However, how is ‘freely accessible’ assessed?  It is clear from the ruling that material on an access restricted website  is not ‘freely accessible’ and linking to this material to circumvent the restrictions would be unlawful.  Material on a subscription only site probably isn’t ‘freely accessible’ either (and it would appear that a ‘subscription’ need not be paid for to prevent third party access), but what about material on a site which requires certain personal details to be entered before the material can be viewed? 

What if the “manager” of a website uses geo-location tools to direct users in one territory (say the UK) to material on a .co.uk site but the link allows those tools to be circumvented so that users in the UK are taken to material on the corresponding .com domain.  The material on .com would be ‘freely available’ but the website manager would not envisage that individuals in the UK would view it.  In those circumstances, would the link be communicating the .com materials to a new public amounting to copyright infringement?  And what if the third party site has no access restrictions but its terms and conditions say that permission is required to link to material on it?  

There is also the problem of website access restrictions which fail.  Should a website owner, unaware of any restrictions, be liable for linking to material on that site?  Also, what if the material is freely accessible but has been placed on the website without the copyright owner’s consent? Would the link be unlawful?  And who should bear the risk of access restrictions being placed subsequently on what was freely available material, transforming a lawful link into a potentially unlawful one?   

The CJEU assumes that the ‘public’ implies a ‘fairly large number of persons’, but that may not be the case.  What if the copyright material is published on a freely available website but on an obscure domain name with details of its publication only being given to a select few? Would this publication be to the public as a whole (so linking to it would be lawful) or only to those select few (meaning linking to it would be a communication to a new public and amount to copyright infringement)?   

Although the CJEU seems to say that framing is fine from a copyright point of view, it remains open to a website operator to claim passing off or unfair competition (or to ask regulators to enforce legislation such as the Consumer Protection from Unfair Trading Regulations 2008 or the ASA’s CAP Code) where it is not clear that the user is viewing third party material when on another’s website. 

These unanswered questions mean that the ruling does not perhaps give websites, or copyright owners, the clarity on when hyperlinking will be lawful that they would like.”

 

 

 

US Businesses and the Australian Privacy Reforms

By Squire Patton Boggs on Posted in Data Breach, Data Protection, Privacy

Recent news has focused on the EU data protection laws and the Wikileaks and Edward Snowden incidents. However, there is another privacy law reform has occurred on the other side of the globe which is likely to have an impact on US corporations.

On 12 March 2014 the Australian privacy law amendments come into effect. These changes to the Privacy Act 1988 (Cth) were passed by the Australian Parliament in November 2012 with a 17-month “preparation period”. This period allows businesses to adapt and comply with the new laws before the reforms become enforceable.

As the deadline draws nearer, it is important for US businesses with Australian customers or local Australian operations to turn their minds to these reforms.

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A Looming Sea Change in Patentability Requirements Under 35 USC 112 to Limit Functional Claiming in Patents?

By Squire Patton Boggs on Posted in Patents

Over the past year, the USPTO seems to have raised the patentability bar to some degree.  Since 2013, we have perceived that applicants are increasingly required to defend their applications against examiners rejecting patent claims as “indefinite,” that is, the applicant has not presented claims “particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention” as required under the U.S. patent law. See 35 USC 112, second paragraph (“Section 112”).

This increased scrutiny of  applicants’ compliance with Section 112 patentability requirements may be a direct result of the Obama Administration’s desire to “combat patent trolls” at the Agency level.  Unlike USPTO office actions in the past, applicants claims are now routinely rejected as indefinite whenever claimed structure is even arguably only limited by a recited function, as opposed to a description of the actual structure for performing the function. Office actions issuing the rejection often present the applicant with two options: either the claim will be construed as a “means plus function claim” under Section 112, sixth paragraph, or the claim is un-patentable as indefinite.

Meanwhile, in the litigation context, the Federal Circuit’s precedent for interpreting indefiniteness under Section 112 is under review. In December the Supreme Court granted certiorari in Nautilus, Inc. v. Biosig Instruments, Inc., 2014 U.S. LEXIS 18 (U.S., Jan. 10, 2014). The case involves a dispute over whether a claim reciting a “spaced relationship” between electrodes satisfies Section 112 requirements. Applying its “insolubly ambiguous” test for definiteness, the Federal Circuit upheld the validity of the claim under Section 112, in part relying on functional claim language that provided “inherent parameters sufficient . . . to understand the bounds of ‘spaced relationship.’” Petitioners contend that the “insolubly ambiguous” standard does not properly reflect the statutory intent behind Section 112 because it disproportionately favors patentee rights over the public’s right to fair notice of what is covered under the patent.

It remains to be seen whether an increase in Section 112 rejections at the USPTO and/or the pending challenge to Section 112 legal precedent in Nautilus will have any profound impact on the use of functional language in patent claims. Nevertheless, given the potential outcome of patent invalidity for “indefiniteness,” patent practitioners should practice more vigilance to ensure patent disclosures avoid ambiguity whenever functional language is needed in claims.

The French data protection authority relaxes restrictions on whistleblowing hotlines

By Francesca Fellowes on Posted in Data Breach, Data Protection, Privacy

The French data protection authority, the CNIL, has historically placed tight restrictions on the permitted scope of reporting to a whistleblowing hotline, especially if authorisation is to be sought under the Blanket Authorisation of 2005 (referred to as AU-004). Until now, this simplified procedure could only be used to obtain authorisation for hotlines which invited reports relating to finance, accounts, banking and the fight against corruption.

Facing an increasing number of applications which did not fall within the permitted scope of AU-004 (and which therefore were required to be considered for authorisation on a case-by-case basis), the CNIL modified the scope of AU-004, in a decision dated 30 January 2014 which was published on 11 February 2014.  At the time of writing, the decision is only available in French.

According to this decision, applications may be made under the AU-004 procedure to obtain authorisation for the processing of personal data pursuant to a whistleblowing hotline which permits reports relating to the following categories, in addition to the categories previously permitted :-

  • harassment;
  • the fight against discrimination;
  • health, hygiene and security in the workplace; and
  • the protection of the environment.

The CNIL’s reference to the company’s ‘legitimate interests’, as another justification for the processing of personal data pursuant to a hotline, was also notable, in contrast to its previous position, that the processing must be required under French legal requirements (or pursuant to the reporting requirements imposed by the US Sarbanes-Oxley Act 2002 (“SOX”) and/or its Japanese equivalent).

This represents a considerable extension to the scope of permitted reporting under AU-004, which will be welcomed by those businesses which already operate a hotline in France, or perhaps have held back from doing so, due to the tight restrictions previously in place. In particular, this decision will help multi-national companies to more effectively harmonise the scope of hotlines which cover more than one European Union country.

The CNIL also provided further clarification on how anonymous reports to a hotline should be handled. In light of foreign regulations (in particular, SOX) which impose obligations on some companies located in France to implement whistleblowing schemes which enable anonymous reporting, the CNIL has conceded that it needs to be more tolerant towards such reports.

The CNIL maintains its position that anonymous reporting should not be encouraged. The default position is that whistleblowers should identify themselves when making a report, and that anonymity will only be accepted on an exceptional basis. However, there is no longer a requirement to design the system around mandatory identification.

This increased tolerance is subject to certain conditions, which are aimed at protecting against the increased risk of abuse of the system, which anonymous reports present. Anonymous reports can be processed only if (i) the seriousness of the reported facts is established and the factual elements are sufficiently detailed; and (ii) great caution is exercised in processing the report, including a careful examination by the initial recipient to determine whether the report can be disseminated more widely.

This additional guidance and more pragmatic approach represents an important step, particularly for global corporations attempting to balance obligations imposed by both French and US law.

Please read more on the CNIL decision in our client alert.

The Other Black Gold: OzEmite Versus AussieMite – Part 2

By Squire Patton Boggs on Posted in Trademarks

In December last year we brought you the story of the OzEmite v AussieMite trade mark battle. As predicted, Dick Smith has lost his trademark on OzEmite, after IP Australia ruled that his business had not used the OzEmite trade mark between 1999 and 2011. The decision is a timely reminder that holding a registered trade mark in Australia is only the first step to protection. Australian law has a “use it or lose it” policy, where if you do not use your trade mark in Australia for three consecutive years, then it can be removed from the register by a third party.

The decision is a victory for small Adelaide based and family owned business AussieMite, which brought the action against Mr Smith’s business. The Age newspaper reports that AussieMite director Roger Ramsey said he was ‘delighted that the trademark umpire has ruled that the name AussieMite is ours’ and declared that he ‘sincerely hopes Mr Smith will respect the umpire’s decision’. As mentioned in our previous blog post, Dick Smith’s company has applied to register “Dinky Di-Nemite” as a trade mark and we expect to see this new brand hitting the shelves in the near future. Who would have known that imitations of the iconic Vegemite brand could be so controversial!

White House Announces Initiatives to Improve U.S. Patent System

By Joe Meckes on Posted in Patents
president_official

As part of its initiative to make a difference through executive action (as opposed to going through Congress), the White House announced last week that it would implement several initiatives “designed to combat patent trolls and further strengthen our patent system and foster innovation.   These include (1) “promoting transparency” in the Patent and Trademark office by requiring updated ownership information, (2) making patents “clear” by rigorously examining functional claims to make sure they “are clear and can be consistently enforced,” (3)  launching a “toolkit” for “consumers and main street retailers” to provide information for dealing with patent demands; (4) encouraging scholarship of bearing on “abusive litigation,” (5) strengthening exclusion order enforcement in the International Trade Commission, and (6) creating business incentives to use technology for humanitarian purposes.

The White House also announced the launch of an initiatives to make it easier for patent applicants, examiners and the general public to find prior art, to provide better training to patent examiners, and appoint a pro bono coordinator to assist inventors who lack representation.

The White House also called for patent reform legislation.   As readers may recall, last year the U.S. House of Representatives overwhelmingly passed H.R. 3309 (the so-called “Innovation Act”), which the Senate is now considering.  The Innovation Act included a number of aggressive measures to discourage frivolous litigation.  Given that passing the Innovation Act would be considered an important “win” for the President, it now seems that the Democratically-controlled Senate will ultimately pass the Innovation Act, or something similar.

Strategies for Protecting Biomarker Innovation in the US and Abroad

By Squire Patton Boggs on Posted in Patents

On February 19, 2014, Squire Sanders associate Django H. Andrews lead a BayBio Lunch & Learn session regarding the patent eligibility of Biomarker innovation in the US and abroad. The session focused on patent eligibility of Biomarkers in the US after the Prometheus and Myriad Supreme Court decisions, as well as patent eligibility in Europe and Japan.

More information regarding the presentation is available on Squire Patton Boggs’ website  and from BayBio.

UK: High Court judgment means online retailers must review how they use third-party brand names

By Squire Patton Boggs on Posted in Advertising, Trademarks

Following last week’s High Court ruling in the claim brought by Lush against Amazon, online retailers targeting the UK should review how they use brand names on their websites and as search engine keywords to generate sponsored adverts, or risk liability for trade mark infringement.  

The claim

Lush, the well-known UK cosmetics company, owns a Community Trade Mark for the word ‘LUSH’ and sells cosmetics, including its colourful soaps and ‘bath bombs’, under this brand name.  Significantly, Lush did not allow its products to be sold on amazon.co.uk, fearing that this might damage its reputation for ethical trading.  However, Amazon was using the LUSH trade mark in its business, both as a search engine keyword to generate sponsored adverts and on its website.

Amazon had purchased LUSH as a keyword so that when a consumer typed this into a search engine, Amazon’s sponsored links would appear.  Some of the links included the word LUSH and others did not, but all links took consumers who clicked on them to the amazon.co.uk site and a page displaying goods which were of a similar nature to Lush products.  There was no overt message in the link or on the page that Lush products were not available to purchase from Amazon.

Consumers going directly to amazon.co.uk could type LUSH into the search box to search for Lush products.  After ‘lu’ had been typed, a drop down menu would appear automatically and various options offered, including ‘lush bath bombs’ and ‘lush cosmetics’.  A consumer who clicked on one of these options would be taken to a page displaying goods of a similar nature to Lush products, but they were not told that genuine Lush items could not be purchased on the site.  Consumers who chose not to use the drop down menu but to type LUSH in full, would also be presented with a page displaying goods of a similar nature to Lush products.  The word ‘LUSH’ would also be displayed on the page, including in the search box (showing what the consumer had typed in), just beneath the search box (as confirmation of the consumer’s request), and in the related searches section (indicating those searches for Lush goods carried out by other consumers).

Lush considered that all of these uses of LUSH amounted to trade mark infringement by Amazon, and issued proceedings.

The judgment

The UK High Court held:

  • Use of LUSH as a keyword to generate sponsored adverts which included the word LUSH was trade mark infringement.  The test formulated in the Google France case applied, meaning there would be infringement where ‘the average consumer may erroneously think that the goods advertised emanate from the trade mark proprietor’.  That was the case here.  The average consumer seeing Amazon’s sponsored adverts would expect to find Lush products available on Amazon.  They would believe Amazon to be a reliable supplier of a wide range of products and not to be advertising Lush products if they were not available for purchase.
  • However, there was no trade mark infringement in respect of sponsored adverts not including the word LUSH.  Online consumers were sufficiently sophisticated to expect an advert for Lush products to include a reference to the Lush name.  The average consumer could not fail to appreciate that those adverts not including the name were just more adverts from a supplier offering similar products to those requested by the searcher.
  • Use of LUSH in the drop down menu options was trade mark infringement.  The average consumer would understand from those options that by clicking on the option they could find Lush products on the site.  Because there was no overt message that Amazon did not sell Lush products, consumers would not know that the goods to which they were directed did not originate from Lush.  Amazon was using ‘Lush’ as a generic indicator of certain types of cosmetic products and, as such, this also damaged the advertising function (attracting custom) and investment function (reputation for ethical trading) of Lush’s trade mark.
  • Use of the word LUSH on the page displaying equivalent goods was also trade mark infringement.  Whilst there was no infringement by LUSH appearing in the search box (this was not use of the trade mark by Amazon as consumers had typed this term in), it was infringement for LUSH to be repeated just beneath the search box and in the related searches section.  The average consumer would think that these were links to Lush products, helpfully provided by Amazon and were intended by Amazon to aid sales of non-Lush cosmetics.

Implications

What should online retailers take from this judgment?   The key issue in this case was that Amazon did not sell Lush products but was using the brand name to point consumers to similar products. Where a brand name is to be used in this generic sense, online retailers need to take steps to minimise the risk of liability for trade mark infringement. They can continue with their current search engine keyword strategy and can display a page of similar products when a consumer types the brand name into the search facility on their website.  However, they should make it clear in sponsored links which include the brand name, and on the page which displays the similar products, that products bearing the brand cannot be purchased on the site.

As a footnote to this dispute, Lush has registered the name of Amazon’s Managing Director, Christopher North, as a UK trade mark and is currently selling shower gels under this brand name.

Of course, everything depends on the facts of the case.

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