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Raising funds through your intellectual property assets?

Written by Dreyfus29/07/2020

Start-ups’ executives, having difficulty obtaining loans to raise funds, may benefit from promoting their intellectual property assets, which can be used as loan guaranties or other credits. Indeed, intangible assets are among the preferred asset classes for investors seeking strong guarantees. As such, investment funds are offering more and more original solutions to fund start-ups.

 

Beyond the traditional tools of funding through intellectual property such as licenses, new ways of raising funds using intangible assets are emerging: auctions (by auction houses specializing in this field), online tradings, trusts, mortgages, etc.

 

On which assets should you base your collateral?

 

 

  • Patents

 

The patent portfolio of research companies is a valuable asset, provided it is kept under control. Under a mortgage, or a trust, the source of income, in order to be certain, requires the patent to be licensed.

 

  • Trademarks, designs

If the trademarks are licensed, they can give rise to a certain and regular income. They offer a valuable guarantee if the business is successful.  For instance, in the late 1990s DreamWorks and the Tussauds Group both granted security guarantee over their IP covering both existing and future IP[1].

 

Moreover, designs have the advantage of having a value independent from the company’s status. Therefore, they can be a guarantee of value for investors.

 

  • Copyrights

Copyrights lasts up to 70 years after the author’s death : as such, once ownership and value are proven, they provide a valuable guarantee for the investor. Thereupon, the World Intellectual Property Organization (WIPO) has demonstrated that the taking of guarantees over copyright in the film and music industries is widespread and increasing in the biotechnology and software industries[2].

The forerunner of this financial innovation in intellectual property, David Bowie, will be remembered when he sold the “Bowie Bonds” which provided him with a regular income of over $1 million per year earned on the 25 albums he recorded before 1990.

 

It is therefore important to think of your intellectual property rights as real assets, and to reconsider the way they can be used: they can become effective security interests, especially for SMEs or start-ups that are launching their business.

 

This is true all over the world. For example, in India the government has introduced loan guarantee schemes through the possibility of mortgaging your trademarks or patents in order to encourage start-ups and cover the risk of real commercialization failures based on assets mortgaged by intellectual property rights.

 

To be continued!

 

It now appears possible to raise funds through your intellectual property assets. Dreyfus, an expert in legal issues related to intellectual property since 2004, helps you protect and enhance your rights and advises you on how to best manage your assets.

 

 

[1] [1]« Taking security over IP » Fieldfisher – February 2015

 

[2] « The Challenge of IP Financing » WIPO – September 2008

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Trademark revocation action now possible before the French Trademark Office

Written by Dreyfus28/07/2020

Since April 1, 2020, it has been possible to bring trademark revocation actions directly before the French Trademark Office following the transposition of European Directive 2015/2436 commonly known as the “Trademark Package”. This transposition gives rise to an overhaul of French intellectual property law and grants new powers to the French Trademark Office.

This new competence offered to the French Trademark Office is likely to lead to a consequent increase in forfeiture actions.

 

Previously, only the courts of law had jurisdiction in forfeiture actions. Jurisdiction is now shared between the judicial courts and the French Trademark Office, the aim being to facilitate access to this procedure and to reduce the number of courts.

Thus, according to article L716-5 of the Intellectual Property Code, the French Trademark Office has exclusive jurisdiction for forfeiture actions when they are brought as a principal claim and the court has jurisdiction for counterclaims.

 

What are the grounds for action in case of revocation?

 

It is possible to act on several bases:

  • Failure to use the trademark for 5 years
  • Trademark that has become the usual designation of the product or service
  • Brand that has become misleading

 

 

How does the forfeiture procedure work?

 

First of all, the parties have to resort to a dematerialized written instruction phase.

This forfeiture procedure complies with the adversarial principle. Two months after the filing of a forfeiture action, the holder will be able to present his observations.

Once the applicant has submitted his observations, the proprietor of the contested mark will be granted a period of one month to rebut them.

The duration of the forfeiture action varies according to the number of exchanges between the parties during the investigation phase. Thus, the procedure can vary between six months and one year, with the parties having up to three contradictory exchanges to present their observations.

The French Trademark Office has three months to rule from the end of the investigation phase. This decision may be appealed to the Court of Appeal.

 

 

Who can bring a forfeiture action?

 

The plaintiff does not have to show any interest before the French Trademark Office, unlike the case of an action brought before the court.

Therefore, the application may be made before the French Trademark Office by any natural or legal person and may relate to all the goods and services targeted by the trademark.

 

 

What about the proof of use of the trademark?

 

The burden of proof shall lie with the proprietor of the trademark whose rights are liable to lapse. The criterion of use is selected on the basis of the evidence given by the proprietor to prove that the trademark has been seriously exploited.

Thus, in order to prove genuine use of a trademark, the owner must keep and present to the French Trademark Office or to the judges, documents such as brochures, printouts of the website page, order forms, invoices or written statements, that provide evidence of use This is not an all-encompassing list.

 

Consequences of the French Trademark Office decision

The forfeiture will take place, in accordance with Article L. 714-4 of the French Intellectual Property Code, by a court decision or by a decision pronounced by the Director General of the French Trademark Office and will take effect on the date of the request or on the date on which a reason for forfeiture arose.

The decision shall be recorded in the National Register of Trademarks and published in the Official Bulletin of Industrial Property (BOPI).

 

Conclusion

The forfeiture procedure at the French Trademark Office will certainly lead to a greater number of actions, offering the possibility to act quickly and at lower cost

 

In order to offer our clients a unique expertise, necessary for the exploitation of intangible assets, we keep you informed about intellectual property and digital economy issues through articles written by Dreyfus’ legal team.

 

ABOUT THIS TOPIC…

 

– How to bring an action for invalidity or revocation of a trademark before the French Trademark Office INPI?

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Sale of the domain name extensions: .cars, .car and .auto at auction

Written by Dreyfus23/07/2020

The domain name extensions (gTLDs) “.cars”, “.car” and “.auto” are about to be auctioned on July 13, 2020. Launched in 2015, these extensions have been at the forefront of innovation in the domain name and automotive marketing. They have been used around the world by dealerships, startups and major automotive technology companies.

After a five-year partnership, and more than $11 million raised, XYZ, a company offering new domain name options, and Uniregistry, both a registrar and a domain name registry, have jointly decided to divest this investment.

 

The auction will be conducted by Innovative Auctions, an independent auction consulting firm, and all assets to be auctioned will include the extensions in question, as well as all intellectual property rights, trademarks, social network accounts and high-value domain names such as <electric.car> and <rental.car>, which are currently reserved by Uniregistry.

It should be noted that this is the first gTLD auction in which anyone can participate. Interested parties can contact cars@innovativeauctions.com for more information.

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Admissibility of the complaint against several defendants, subject to the existence of a body of evidence

Written by Dreyfus22/07/2020

Source: WIPO, Arbitration and Mediation Center, May 7, 2020, No. D2020-0491, Crédit Industriel et Commercial S.A. and Confédération Nationale du Crédit Mutuel v. Whois Privacy Service / Yassine Ahmed / Yassine Cleoo / Yassinee Cleo / Yacin Helaloa / Robert Michel

 

The companies Crédit industriel et commercial (“CIC”) and Confédération nationale du Crédit Mutuel (“Crédit Mutuel”), which belong to the same group, jointly filed a UDRP complaint against six defendants, including an anonymous service, following the reservation of 25 domain names. One reproduces the trademark CIC ( ), the others the trademark Crédit Mutuel ( ).

In theory, the UDRP Complaint should only be directed at one defendant. However, a complaint against several defendants may be admissible if it is shown, by corroborating evidence, that the domain names were most likely reserved by the same person or are under common control, despite disparities in the information communicated by the registrants at the time of registration. This is known as “consolidation of the complaint”. Of course, each defendant is given the opportunity to rebut this alleged connection by filing a response in the proceedings.

Here, the expert accepted the applicants’ request for 24 of the 25 domain names in question. Indeed, numerous elements tend to show that these names are under common control:

– they have similar structures: <credit-mutual-online-space-customer-confirmation-mobile.net>, <credit-mutual-service-security.org>, <cic-online-space-customer-confirmationmobile.com>, etc.

. – three defendants have the same first name, except for a few spelling variations: Yassine Cleoo, Yassinee Cleo, Yacin Helaloa. And two of them have almost the same last name: Cleoo / Cleo;

– four defendants mentioned addresses in Madrid, Spain;

– the domain names have been reserved through the same registrar, Amazon Registrar, Inc. ;

– the reservation date is close: December 2019 ;

– all used the same anonymity service (first respondent, namely Whois Privacy Service).

On the other hand, the request for consolidation of the complaint was refused because of the 25th domain, reserved by the sixth defendant. In fact, the expert noted that the information which defines this domain name and its reserved name does not make it possible to establish a link with the other defendants:

– the structure of the domain is different: <creditmutuel.com;

– the reservee has given an address in France and not in Spain;

– the domain name was registered in January 2020 while the other domains were registered in December 2019. Thus, the expert, after analysing the complaint on the merits, agreed to the transfer of the first 24 domain names to the applicants. As for the domain name, they refused to pronounce its transfer, considering that it was not demonstrated that its registrant was linked to the other defendants. They specifies, however, that the applicants may very well file a separate complaint against this domain name if they wish so.

 

The consolidation of the complaint allows several complainants to file a joint complaint and to target several defendants at the same time or alternatively. When several defendants are involved, concrete elements that lead to the belief that the registrants are related, should be reported. In addition to elements relating to identity, one can take into account the structure of the domain names, the date of registration, the hosting providers and registration of the domain, the page that the domain points to, etc.

This possibility offered to complainants has several beneficial aspects: mutualizing costs, getting around the “trap” of cybersquatters which consists in filling in false data when reserving domain names, not to mention a considerable time saving for both right holders and arbitration centres.

 

Our commentary of the decision is available in the issue n° 7-8, July 2020, alert 54 of the review Industial Property.

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Invalidity action: assessment of the likelihood of confusion between a trademark and an earlier company name when the companies maintain economic links at the time of filing

Written by Dreyfus20/07/2020

In a decision of the Court of Justice of the European Union from April entretiennent, 2020 Gugler France SA v Gugler GmbH (Case No 736/18), the Tenth Chamber held, in the context of an invalidity action, that there is no likelihood of confusion between a trade mark and an earlier corporate name if, at the time of filing, the companies do in fact maintain economic links, and provided that there is no likelihood of error among the public as to the origin of the designated goods.

As a reminder, the Article L711-4 of the Intellectual Property Code states that it is not possible to register a trademark that could infringe prior rights, and in particular, if there is a likelihood of confusion, distinctive signs such as the company name or corporate name.

Thus, a conflict may arise when a company files as a trademark a sign that is identical to the corporate name of a company operating in the same sector of activity, creating in consequence a likelihood of confusion. The owner of the previous corporate name will then be entitled to act to cancel the trademark.

While the coexistence of a company name with a subsequently registered trademark had already been admitted (decision of the Paris Court of Appeal from February 24, 1999), it had also been affirmed that, if the use of the prior rights infringed their trademark right, the owner could request that the use be limited or prohibited (Commercial Chamber of the Court of Cassation of November 12, 1992). Therefore, the trademark right could defeat the prior right.

Thus, in case law, there is a certain prevalence of trademark rights over other distinctive signs.

In its decision from April 23 ,2020 Gugler France SA v. Gugler GmbH, the ECJ clarified the assessment of the likelihood of confusion between a trademark and an earlier company name.

 

The German company Gugler GmbH registered the semi-figurative Community trade mark “GUGLER” on August 25, 2003.

On November 17, 2010, Gugler France filed an application for a declaration of invalidity of the trade mark, in respect of all the goods and services designated, on the basis of its earlier company name.

The CJEU, seized after an application filed with the Cancellation Division of EUIPO and the filing of an appeal before the General Court of the European Union, confirmed the latter’s decision and dismissed Gugler France’s application for a declaration of invalidity.

In fact, on the day the trademark was registered, there were commercial relations between the parties, Gugler France being the distributor in France of the products manufactured by Gugler GmbH. In addition, Gugler GmbH held shares in the capital of Gugler France.

 

The Court held that the fact that consumers may believe that the goods and services in question come from companies which are economically linked does not constitute an error as to their origin.

The Court therefore rejects the argument of Gugler France that, in order to avoid the likelihood of confusion, the economic link must exist in a particular sense, namely from the holder of the earlier rights (Gugler France) to the holder of the later rights (Gugler GmbH).

According to the Court, the mere existence of a single point of control within a group in respect of products manufactured by one of them and distributed by another may be sufficient to exclude any likelihood of confusion as to the commercial origin of those products.

 

By this solution of the Court, the essential function of a trade mark right, which is the function of guaranteeing the identity of origin of the marked goods or services, is also indirectly recalled. The trade mark thus serves to distinguish the goods or services of one company from those offered by another company. Therefore, in this case, the commercial links between the two parties made it possible to consider that the goods had the same commercial origin.

 

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Figurative trademarks: be aware of the extent of your protection

Written by Dreyfus17/07/2020

The judges of the Paris Court of Appeal, ruling on a referral from the Court of Cassation, adopted a strict approach to similarities between a figurative trademark and a later , semi-figurative trademark in a dispute between two companies specialized in ready-to-wear clothing.

 

The company Compagnie Financière de Californie (“Compagnie de Californie”), which specializes in street wear chic clothing, is the owner of the trademarks on the sign, in particular for clothing products.

In 2013, the company noted that International Sport Fashion, also active in the fashion industry, had registered and used a trademark that it believes to be similar to its own:

 

The signs in question have the shape of an eagle’s head, without detail, reproduced in black and white within a circle.

In order to obtain compensation for the damage it considers to have suffered, Compagnie de Californie brought an action for infringement.

 

After having been dismissed at first instance and on appeal, the company turned to the Court of Cassation, which referred the case back to the trial judges after partial cassation.

The referring Court of Appeal first compared the trademarks in question. Its analysis is rigorous, particularly from a conceptual standpoint: it considers that the trademark of Compagnie de Californie refers to “the dark side of the bird of prey while the other refers to the image of a much less aggressive bird” (certainly due to the presence of a closed beak).

 

The court points out, among other things, that visually, these birds’ heads are not facing the same direction and that one has the beak closed and the other open.

 

On the phonetic level, the court notes, unsurprisingly, that the mark at issue will be pronounced “Eagle Square” in reference to the verbal element it contains, which will not be the case for the earlier mark.

 

The court, therefore, considers that there is no likelihood of confusion between the marks.

 

Next, it examines the question of the exploitation by International Sport Fashion of its mark for clothing products. The Court takes into account all possible elements such as the packaging which contains the goods. The name “EAGLE SQUARE” is affixed to the packaging; it, therefore, considers that there is no likelihood of confusion in the minds of consumers.

It also states that the contested sign which appears by itself on some of the articles is each time bicoloured, “inducing a caesura in the sign”, which gives an overall impression, very different from the earlier mark.

 

The court, therefore, did not grant the applications of Compagnie de Californie.

 

Thus, with respect to figurative marks, it is necessary to meticulously estimate the chances of success of an infringement action, since great similarities are generally required to recognize the likelihood of confusion.

This case shows that even marks with a comparable style (presence of a bird in a circle, with only the head entirely painted black) can coexist in the market.

It is questionable whether the Court of Appeal would have taken a different approach had International Sport Fashion affixed the only black and white eagle head to its products. The question also arises as to whether the outcome might have been partially different had  California Company also registered, as a trademark, its coloured eagle (which can be found in red on its official website https://www.compagniedecalifornie.com/).

 

Therefore, in addition to a detailed analysis of the chances of success before bringing an action, it is also necessary to protect the trademark as exploited, taking into account its variants, so as to benefit from the widest possible scope of protection.

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Questions and answers about the new opposition procedure before the French trademark office INPI

Written by Dreyfus15/07/2020

Since December 11, 2019, the French opposition procedure has evolved. We provide an update on the changes and questions.

 

Key elements about the French opposition against trademarks

Typically, as soon as a trademark application could infringe a prior trademark right, it is possible to prevent its registration by opposing said trademark application directly before the French Trademark Office INPI.

This was the case before the reform and it hasn’t changed since: an opposition can be filed against a French trademark application or an international trademark designating France.

The time limits to act remain unchanged and are as follow:

– Regarding the registration of a French trademark application, an opposition must be filed within two months of the publication of said application in the French Official Bulletin of Industrial Property (BOPI).

– In the case of an international trademark application designating France, the opposition request is filed within two months of the publication of the registration in the WIPO Gazette of International Trademarks.

 

This procedure has evolved since December 11, 2019, offering a new opposition process.

 

In which situations does the new opposition procedure apply?

– Applicable to French trademark applications filed as of December 11, 2019, for trademarks published in the BOPI as of January 3, 2020.

– Applicable to French designations of international trademark applications, published in the WIPO Gazette as of December 11, 2020.

 

What is the purpose of this reform?

This reform was implemented in order to reinforce the adversarial principle, by allowing the parties to exchange and compare their arguments throughout the procedure, on the one hand; and on the other hand, to support the analysis of evidence of use of the earlier trademark.

 

What are the changes brought about by this new opposition procedure?

If you wish to oppose a trademark application filed after December 11, 2019, you can now :

– Base your opposition on other rights than trademark rights (which were not previously taken into account) such as well-known trademarks, company names or corporate names, trade names, signs or domain names;

– Invoke several previous rights in the same opposition (provided they belong to the same owner) ;

– Ground your opposition within one month by filing the statement of grounds on which the opposition is based. At the end of this period, the opposition is notified to the opposite party. However, it is impossible to extend the scope of the opposition during this period, either to other goods or services referred to in the initial application, or to other prior rights.

 

 

  • On the rights and grounds that can be invoked

What are the rights and grounds for the opposition?

Prior to the reform, the rights and grounds on which an opposition could be based were as follows:

– Earlier trademark;

– Geographical indication or application for a geographical indication;

– Infringement to the name, image or reputation of a local authority.

With the reform, the following previous rights are added:

– Well known trademark;

– Corporate name;

– Trade name, sign and domain name ;

– Infringement to the reputation of a public establishment of a public establishment for inter-municipal cooperation;

– Name of a public entity ;

– Trademark registered by an agent without authorization.

 

Is the examination of evidence of use deeper?

Genuine use, or proper reasons for non-use, must be reported for each good and service invoked in support of the opposition. Thus, the earlier trademark will only be deemed to be registered for the goods or services for which this demonstration has been made. The INPI is now in charge to carry out said examination. In the past, only the courts were in charge.

 

As far as domain names are concerned, since the GDRP the Whois records are anonymized. How can it be justified that the person who made the domain name reservation has the right to file an opposition?

If the Whois record is anonymous, then in addition to the anonymous Whois record, any document establishing the existence and identity of the domain name holder can be provided. It can be for example the certificate from the Registrar or an invoice showing the reservation of the domain name.

 

  • About the procedure

Which are the changes in the course of the procedure?

A phase of exchanges, also known as the “instruction phase” is set up. It starts with the notification of the opposition to the applicant. This instruction may include up to three phases of exchanges between the parties.

From now on, the procedure is no longer confined to a 6-month period. It is however subject to the principle of « silence is tantamount to rejection », within a period of 3 months. This means that if the INPI has not ruled within 3 months following the end of the exchange between the parties, the opposition is rejected.

The duration will therefore vary according to the number of replies from the parties, but in any case may not exceed 13 months.

 

What are the cases of suspension of the procedure?

Suspension is possible in several cases:

– When one of the rights invoked in support of the opposition has not yet been accepted or is subject to a legal action;

– At the initiative of the French trademark Office, the INPI.

The entire procedure is suspended when the opposition is based on several rights, even if the suspension concerns only one of the rights invoked.

The duration of the suspension in the event of a joint request by the parties is extended to 4 months and renewable twice, i.e. 12 months in total, instead of 6 months in the past.

 

  • On the role of the INPI

Does the French Trademark Office INPI have more power in the new procedure?

This new opposition procedure greatly strengthens the role of the INPI.

Before the new procedure, the role conferred on the INPI in the examination of proof of use was limited: apart from cases where the lack of use was proven, the opposition procedure was not closed.

At present, where the applicant requests proof of use of the earlier trademark, it is up to the INPI to decide on the genuine nature of the use of the earlier trademark for each of the goods and services invoked in support of the opposition.

 

This reform reinforces the adversarial principle and, consequently, the protection of the rights of trademark owners.

 

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Control your trademarks, domain names, copyrights, software. Make it a growth accelerator!

Written by Dreyfus09/07/2020

Webinar start up on July 9, 2020 :

  “Strategic advices to protect and defend yourself, both in the real and virtual world.”

 

When a company starts a business, why should it invest in protecting its trademarks, domain names, designs and software?

 

How does an IP strategy facilitate your international expansion, reassure your investors and customers, and protect your innovations? How does a protected right generate revenue?

 

When legislations become more  restrictive for companies, compliance requirements tend to be even more stringent. How can you make sure your company complies with the law? What are the risks of not integrating Internet into your compliance plan?

 

Webinar replay

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All concerned: works generated by artificial intelligence

Written by Dreyfus09/07/2020

Legal issues relating to the ownership of inventions and works created using artificial intelligence (or “AI”) are at the forefront for a variety of businesses.

The first step is to define what artificial intelligence is.

Artificial intelligence is the implementation of a number of techniques aimed at enabling machines to imitate a form of real intelligence. Artificial intelligence is present in a large number of fields of application. It is now used in some cases to create works through algorithmic processing. Such is, for example, the case of the robot painter named E-David, developed by a German university, whose calculation algorithms allow it to paint canvases that are very similar to those painted by humans.

 

Positive law: the importance of human beings

Intellectual property law was primarily designed to protect the fruits of human intellectual labor, therefore it has had difficulty adapting to the new tools that have emerged as a result of digital evolution.

 

AI has further blurred the distinction between creator, tools and creation. For some, it is only a tool, for others it has a fundamentally innovative character to which the law should adapt.

In France, the Intellectual Property Code imposes a condition of originality for the works to be protected by copyright. In addition, the works must reflect the expression of the author’s personality. These criteria imply that a work can only be created by a human, possibly assisted by a machine which then serves as a tool in the creation of the work.

 

Thus, if the work is only created by an AI, the qualification of work cannot be used and copyright protection is not applicable. The same will be true for an invention generated by a machine that cannot be patented.

European law requires the copyright to reflect the “author’s own intellectual creation”. However, in European countries there is no universal approach to the requirement of a human author. The United Kingdom, for example, provides protection for computer-generated works and the author is the person who arranges for the creation of the work, so the authorship is attributed to the programmer.

 

Thus the inventor cannot be a company or a machine. There is therefore a discrepancy between the obligation to identify the real inventor and the person supposed to be the inventor. It is thus affirmed that decisions regarding the dissemination of the invention will be made by “the owner of the AI machine”.

 

American copyright law is still strict regarding works made with AI. For example, it has been stated that “the Office will not register works produced by a machine or simple mechanical process that operates randomly or automatically without any creative contribution or intervention by a human author” (Compendium of US Copyright Office Practices of 2014).

 

Additionally, in a decision of April 22, 2020 concerning an application mentioning an AI tool, DABUS, as the sole inventor, the USPTO recalled that the inventor must be a human.

 

Are we heading towards an evolution of law, more in line with technological developments?

 

The question is whether it would be appropriate to modify the intellectual property system in the light of technological developments or to create a sui generis right of AI.

A WIPO meeting on law reform in this area, which will provide an opportunity to discuss the above-mentioned issues will take place in July 2020,

In addition, the European Commission published a White Paper on February 19, 2020 after presenting the ethical guidelines for trustworthy AI on 8 April, 2019. It defined AI, as well asits global guidelines in the regulation of artificial intelligence.

It had already adopted the “Civil Law Rules on Robotics – European Parliament Resolution of 16 February 2017”.

The latter stressed that “considering that, now that humanity is at the dawn of an era in which increasingly sophisticated robots, intelligent algorithms, androids and other forms of artificial intelligence appear to be on the verge of triggering a new industrial revolution which is likely to affect all strata of society, it is of fundamental importance for legislators to examine the legal and ethical consequences and effects of such a revolution, without stifling innovation”.

 

In addition, a legal personality for machines (electronic personality) could be recognized which would amend the copyright.

Let us recall that currently the only solution, in innovative fields, is to refer to industrial secrecy to preserve the innovations made by AI.

Thus, a reform or clarification of the law to respond to new issues in a more secure manner would be welcome.

To be continued!

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The lovelinesss of the European Union: to obtain in one Member State a declaration of counterfeiting for acts committed in another Member State

Written by Dreyfus06/07/2020

CJEU – September 5, 2019

AMS Neve Ltd, Barnett Waddingham Trustees, Mark Crabtree c/. Heritage Audio SL, Pedro Rodríguez Arriba,

 

It is possible to bring an actionbefore a national court with the purpose proving an infringement of the EU trademark in that Member State, even if the third party has advertised and marketed his goods in another Member State.

That is the answer given by the Court of Justice of the European Union to the preliminary ruling question concerning the interpretation of Article 97(5) of Council Regulation (EC) No 207/2009 of February 26, 2009 on the European Union trade mark.

That reference was made in the context of a dispute between the parties:

– The applicants : AMS Neve, a company founded in the United Kingdom, for manufacturing and marketing audio equipment, represented by its director Mr Crabtree.  Barnett Waddingham Trustees “BW Trustees” is the trustee;

versus

– The defendants : Heritage Audio, a Spanish company also marketing audio equipment, represented by Mr Rodríguez Arribas

 

concerning an infringement action for alleged infringement of rights conferred, inter alia, by an European Union trade mark.

The applicants are the owners of the European Union trademark and of two trademarks registered in the United Kingdom.

Having discovered that Heritage Audio was marketing imitations of AMS Neve products bearing or referring to a sign identical or similar to the said EU and national trademarks and was advertising those products, they brought an action for infringement of an EU trade mark before the Intellectual Property and Enterprise Court in the United Kingdom.

In order to prove the infringement in the United Kingdom, the applicants provided the documents in support of their action, including in particular the contents of Heritage Audio’s website and its Facebook and Twitter accounts, an invoice issued by Heritage Audio to an individual, resident in the United Kingdom.

Then, in order to prove the  infringement in the European Union, they provided screen shots from that website showing offers for the sale of audio equipment bearing a sign identical or similar to the European Union trademark. They underlined the fact that these offers are in English and that a section entitled “where to buy” is available on the website, listing distributors in various countries. In addition, they argued that Heritage Audio accepts orders from any Member State of the European Union.

While the Court agreed to rule on the protection of national intellectual property rights, it found that it lacked jurisdiction to rule on the infringement of the EU trade mark at issue.

 

The appellants appealed against that judgment to the United Kingdom Court of Appeal, which decided to enforce a stay on proceedings and to refer the following questions to the Court for a preliminary ruling:

– Does a national court of a Member State A have jurisdiction to rule on an action for infringement of the EU trademark on account of its advertising and marketing of goods carried out in Member State B?

– If so, what criteria should be taken into account in determining whether the company has taken active measures regarding the infringement?

 

The answers given by the CJEU are as follows:

 

– the plaintiff, depending on whether he chooses to bring the infringement action before the EU trademark court of the defendant’s domicile or before that of the territory in which the act of infringement was committed or threatened to be committed, determines the extent of the territorial jurisdiction of the court seized ;

 

o when the infringement action is based on Article 97(1), it shall cover acts of infringement committed on the territory of the Union (where the action is brought before the court of the defendant’s domicile or, if the defendant is not domiciled in the European Union, in the State in which he is professionally established);

o when it is based on paragraph 5 of the same Article, it shall be limited to acts of infringement committed or threatening to be committed within the territory of a single Member State, namely the Member State of the court seized ;

 

– in order to ensure that the acts of which the defendant is accused were committed in the EU , it is necessary to determine where the commercial content was actually made accessible to consumers and professionals for whom it was intended. Whether such advertising and offers subsequently had the effect of purchasing the defendant’s goods, is on the other hand, irrelevant.

 

In the present case, the advertisements and offers referred to by the applicants were aimed at consumers and/or professionals, in particular in the United Kingdom.

In those circumstances, the Court considers that the applicants have the right to bring an infringement action against that third party before a EU trademark court of the Member State within which the consumers or traders to whom that advertising and those offers for sale are directed are located, notwithstanding that that third party took decisions and steps in another Member State to bring about that electronic display.

This possibility of bringing an infringement action before any competent national court  to rule on acts of infringement committed in any Member State is very useful in particular to optimise the costs of proceedings, depending on the national regulations. France, for example, offers irrefutable methods of collecting evidence, such as a bailiff’s report, to establish facts of infringement, at attractive prices.

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