Dreyfus

Although perpetually renewable, in practice the vast majority of trademarks have a limited life expectancy. They are born and they die. Yet, some experience a different type of fate fate: they resuscitate.

Needless to say, the term “zombie trademark” does not refer to the recent surge in popularity of zombie culture or the slew of trademark applications it has inspired. The term refers to the rebirth of an otherwise dead trademark. These so-called zombie trademarks are connected to the past: they are in fact former trademarks, often iconic, that have an established reputation.

Unlike patents and copyright, a trademark can exist perpetually as long as it is used and renewed every 10 years. However, a company may cease to use a mark. This abandonment can occur at any time, whether it is while the application is still being examined or even when the trademark has already been in use for some time. In terms of non-use, according to Article L 714-5 of the French Intellectual Property Code, a trademark will be abandoned when an owner stops using it for five consecutive years with no intention of resuming use of the trademark. But as we can see with the zombie trademark, abandonment is not necessarily permanent. Thus, these trademarks are defined as signs which have been abandoned but that still have marketing potential, a reputation: “residual goodwill.” The zombie trademark however, requires undeniable divestiture, that is abandonment both from a practical and a legal standpoint. The trademark will then fall into the public domain.

There are many arguments in favour of reviving zombie trademarks. They spark up nostalgia and an emotional connection with the past, and their reputation reflects consumer trust and loyalty. As the brand already has an established reputation, it also saves time and money which would otherwise be invested in marketing. As a result, the adoption of such a trademark can be less of a commercial risk.

However, some legal scholars do not speak in favour of the zombie trademark. Indeed, it would supposedly lead to an unfair advantage for the company which takes over the trademark. Furthermore, the trademark is said to  be fundamentally misleading.

If a company no longer uses a trademark, isn’t there a risk that protecting that trademark would result in a market freeze? Reuse of an old trademark by a new owner can well be perceived as being legitimate use. Furthermore, what is the advantage to keep protecting a trademark which, in any case, would remain dead and buried?

One should also be mindful of trademarks which have not been fully abandoned: for example, a trademark that is not effectively used by the owner but one that has still not reverted to the public domain. In that case, there is a risk of recovery while the trademark sign is still held by its owner. Here, we are no longer in the scope of common law but in that of counterfeit.

The notoriety of a trademark

A notorious trademark remains vivid in the consumer’s mind. The goal is that the consumer continues to associate the trademark to the goods or services of origin. The new trademark must however consist of entirely different products and services to avoid its new owner facing a lawsuit.

The reputation of the old trademark offers a twofold advantage for the new trademark. First of all, it can trigger instant demand for the new product, even if this interest is distorted because it is aimed at different products and services, not provided by the original owner. Finally, the reputation factor may reduce advertising costs for the new product and thus allow for increased profit.

Building a reputation is the very objective of any trademark. From a legal standpoint, this reputation is normally related to the trademark and to the company which registered and exploited it. But, in the context of the zombie trademark, the trademark does not symbolise the reputation of the present owner but that of the original owner.

Resurrecting a trademark therefore seems to pursue an essential goal:  making it so that consumers link the trademark to the original product.

Protection against the rise of zombie trademarks

Normally, a company who has abandoned its trademark rights cannot prevent a newcomer from bringing the dead trademark back to life. Indeed, the disputed trademark has reverted into the public domain, theoretically allowing anyone to use it freely.

An abandoned trademark is in principle, available to anyone.

In the United States, there is legal uncertainty surrounding the issue of consumer protection against zombie trademarks. Therefore, it is appropriate to turn to the US trademark law, the “Lanham Act”, effective on July 5, 1947, and the case law interpreting the Act. Three consecutive years of non-use is prima facie evidence of trademark abandonment. US federal law states however, that this is a rebuttable presumption.

An opposition filed by General Motors Corp against Aristide & Co., Antiquaire de marques (TTAB, Opposition, 21 avril 2008, General Motors Corp. c/ Aristide & Co., Antiquaire de Marques, n°91167007) helps us better understand the notion of the zombie trademark as well as the limitations regarding the protection of well-known trademarks which have fallen into the public domain. In the early 20th century, General Motors Corp. introduced cars under the brand “La Salle.” However, the company has not used that trademark since the 1940’s. In 2004, a company called Aristide & Co applied for the registration of the expression “La Salle” as a trademark for products in Class 12. When the application was published, the famous motor vehicles company decided to oppose it, unsuccessfully. Indeed, the “Trademark Trial and Appeal Board” (TTAB) wasn’t convinced by General Motors Corp’s arguments. It was held that after 65 years of non-use, General Motors did not have any serious intent of reintroducing the trademark. The focus here is on the parties’ intentions.

Furthermore, the TTAB did not find that there was sufficient residual goodwill attributable to the “La Salle” trademark owned by General Motors. According to the Board, the mere recognition of the trademark by car collector clubs was not sufficient evidence.

In this case, the “La Salle” trademark had not been used for many years. One might ask what happens to a popular trademark that has been abandoned for a shorter period of time, say, ten years. In that case, the transformation of the trademark seems more difficult and will depend on its residual goodwill with the public. North-American courts state that successful resurrection will depend on the popularity of the original trademark but also to what extent it is recognizable by consumers as a source indicator of the original products and services. In addition, it will also depend on arguments which courts welcome favourably.

In France, legal proceedings can be initiated on the grounds of misleading trademarks. Indeed, article L. 711-3 c) of the French Intellectual Property Code states that signs “liable to mislead the public, particularly as regards to the nature, quality or geographical origin of the of the goods or services” may not be adopted as trademarks. The former owner might also sometimes act on the grounds of passing off and unfair competition.

One can try to avoid that a zombie trademark be confusing or deceiving to the public. The new owner may duplicate the goods and services linked to the original brand, while making sure the quality remains unaltered. The new owner will also have to notify the public that he is not in any case connected with the original trademark owner. However, this is possible only if the goods and services are not protected by another Intellectual Property Right like design law, patents or copyright. Ultimately, any infringement to the original trademark will depend on the sovereign power of assessment of the courts.

Resurrecting a trademark can thus be of great interest for a business wishing to take advantage of the fame of a trademark that has reverted to the public domain.  However, some of these trademarks are not legally quite dead nor alive and one should be cautious as the French and  North-American caselaw on this issue is still rare and uncertain.

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France: in abstracto assessment of the likelihood of confusion between two trademarks is reaffirmed

Le Fournil has exclusive rights to the French semi-figurative trade-mark “La Fuette”, relating to bread and baking services and in particular, a higher quality of bread sold in bakeries with the trade name and shop sign “ La Fuette”. The company, Coup de pâtes on the other hand, is a company that sells frozen, pre-cooked bread under the name “Fusette”.

After having carried out a seizure for counterfeiting, Le Fournil proceeded to take action against the litigious company for trademark infringement and unfair competition. Coup de pâtes lodged a counterclaim requesting the revocation of the rights of Le Fournil to its trademark “La Fuette”.

The Court of Appeal of Paris ordered the revocation of the trademark. An appeal to the Court of Cassation  was then filed on the grounds that the Court of Appeal failed to apply the rules relating to revocation. In its decision, the Court of Cassation reprehends the appellate court judges and renders a very detailed and comprehensive judgement, providing information on revocation for non-use, according to Article L.714-5 of the French Code of Intellectual Property. Indeed, the holder of a trademark must be able to prove genuine use of its trademark for goods and services during a continuous period of 5 years.

The case however requires discussion given the  particular context. As it related to bakery products and services, the trademark itself could not be affixed to the products.

In light of this, the Court of Cassation takes into account the specificities of the trademark and reprehends the Court of Appeal, stating that the latter should have looked into whether the commercial and advertising evidence relating to the marketing of the products could demonstrate an actual use of the trademark.

In this respect, the Court of Cassation states: “The assessment of the genuine use of a trademark should  be based on all the facts and circumstances concerning the use of the trademark on the market.”

The Court of Appeal should have shown greater flexibility and taken into account signs and labels and all other evidence provided by Le Fournil in order to fully understand the disputed commercial operation.

Moreover, La Fuette provided evidence of the use of the word mark “La Fuette” when actually, the registration related to a semi-figurative mark. The Court of Appeal held that the trademark should be used without any alteration. This initial decision is a  hars one..

Is the sign “La Fuette” not the dominant component of the trademark?

The landmark decision of the European Court of Justice “Sabel” of 11 November 1997 (ECJ, 11 Nov. 1997, Sabel, Case C-251/95) helped clarify the concept of the “dominant” component of trademarks. The decision explains that a comprehensive decision must be based on the overall impression generated by the trademarks, taking into account in particular, their distinctive and dominant components. The average consumer’s perception of trademarks thus plays a key role in the assessment of the risk of confusion. As it is, the average consumer only has a general impression of the trademark and does not assess each and every detail.

The Court of Cassation rightly reprehended the strictness of the decision of the Court of Appeal, according to which, the supporting documents put forward were ineffective merely because they did not include the figurative element. The Court of Appeal should have looked into whether the word mark “La Fuette” was the distinctive dominant component, meaning that its use, even without the figurative element, amounted to use of the trademark in a modified form which in turn, does not alter its distinctive character.

The primary and core function  of a trademark is to indicate to consumers the origins of the goods and/or services it covers, making it therefore possibile to differentiate between the goods and services of a company from those of its competitors.

Contrary to the decision of the Court of Appeal, the Court of Cassation, in referring to the inspection report by the National directorate for competition and consumer policies (Direction nationale de la concurrence et de la consummation) dated November 14, 2008, ruled that the term “La Fuette” was used to designate a particular type of bread whose origin was guaranteed. The disputed trademark therefore allows for the distinction of its goods and services from that of its competitors.

Paragraph 4 of Article L714-5 of the French CIP (CPI) indeed specifies that  genuine use of a trademark, either preceding or following the five-year period does not preclude its revocation if it was undertaken during the three months prior to the revocation request and after the owner is made aware of the possibility of such a request. Thus, the Court of Appeal should not have disregarded the claims relating to genuine use of the trademark solely because the evidence presented related to a time after the three-month period following the revocation request and without considering that at the time, Le Fournil was indeed aware of a potential request. This requirement necessitates a certain degree of compliance with the deadlines which must be enforced by the Court of Cassation.

Caution is therefore advised in terms of use of a trademark. It is highly important to make use of a trademark, as it it registered. Alternatively, it may be beneficial to apply for the registration of a new trademark altogether.

Read further

European Union: appreciation of evidence of use in revocation proceedings of a mark

The Specsavers vs Asda saga: genuine use of trademarks

Trademark families: consequences of Rintisch

The ‘Court of Appeal of Paris, in  a judgment on April 12, 2016, decided to validate the famous trademark “Le Petit Marseillais” for soaps in Class 3, and condemned the owner of the trademark “Le P’tit Zef” for counterfeit.

The validity of the trademark “Le Petit Marseillais”

The company owner of the trademark “Le Petit Marseillais” brought an action for infringement against the company owner of the trademark “Le P’tit Zef”. The latter raised the issue of the nullity of the trademark sign opposed to it because of its deceptive nature.

Indeed, “Le P’tit Zef”  attempted to defend itself by arguing that the trademark “Le Petit Marseillais”  seemed to be a soap from Marseille without actually being one. Article L. 711-3 of the French Intellectual Property Code states that: “Signs liable to mislead the public, particularly as regards the nature, quality or geographical origin of the goods or services may not be adopted as a trademark or an element of a trademark”.

The Court of Appeal of Paris notes that the trademark “Le Petit Marseillais” refers to a soap from Marseille in the consumer’s mind. Moreover, the latter’s goods and services actually refer to the soaps from Marseille in the Provence region. However, the company “Le P’tit Zef”  highlighted in this case that the products were not originally from Provence but from the Côte d’Or region.

The Court of Appeal thus had to assess whether the company owner of the trademark “Le Petit Marseillais”  had committed fraud by registering the trademark sign as such.

The judges held that in this case, there was no risk of confusion or error for the public. Indeed, the case outlines that: “According to the page of the online encyclopedia Wikipedia which contributed to the discussions, the term “savon de Marseille” is not a term designating protection of origin, but simply relates to a manufacturing process approved in March 2003 by the DGCCRF.”  Therefore, soaps from another country can claim to qualify as “savon de Marseille” as long as the manufacturing process includes a saponification system.

The Court goes on to state that “the designation “le petit marseillais”  cited by the three disputed trademarks cannot, in the eyes of the public, point to the geographical origin of the goods covered by these trademarks, given public awareness on the products’ nature.”

Thus having justified its decision with reference to Wikipedia, which may seem surprising, the Court found that “le Petit Marseillais”  was not misleading. However, it is not certain that the majority of consumers are aware of the origin of the appellation “savon de Marseille”.

“Le P’tit Zef” copies “Le Petit Marseillais”

Having found that the trademark “Le Petit Marseillais”  was valid, the Court of Appeal of Paris had to rule on whether the trademark “Le P’tit Zef” had copied the above.

By way of a decision on March 25, 2014, the commercial chamber of the Cour de cassation highlighted the fundamental principle according to which trademark infringement and the likelihood of confusion are assessed in relation to their overall similarity.

Indeed, the European Court has outlined on several occasions that the average consumer views a trademark as a whole and does not scrutinise its various details.

Hence, the judges should base their decisions on the overall impression created by these trademarks visually, aurally or conceptually, taking into account their distinctive and dominant features.

The overall form of a trademark as well as the wording are indeed assessed visually. The trademarks can be confusing aurally for a consumer who does not see both signs at the same time.

It is undeniable that there are common factors between the two trademark signs, whether in terms of  its imagery or its wording. The opposing trademarks indeed bear a strong similarity. The words “Le Petit” and “Le P’tit”  are similar.

However, from a global visual and aural appraisal of the two trademarks, one might conclude that “Marseille” and “Zef” are sufficiently different to reject any likelihood of confusion.

Finally, the Court analysed the conceptual aspect of the trademarks’ perception. In fact, distinctinve trademarks can be conceptually mistaken since the consumer who would have the first trademark in mind, would then associate it with the second one.

The Court of Appeal considered the appellation “p’tit zef” as a variation of a Breton expression meaning “le vent de chez nous” and referring particularly to a person originating from the city of Brest. The disputed trademark signs then represent, for the jugdes, “strong conceptual similarities, each referring to a child originating from a major French port city: Marseille for the earlier trademark and Brest for the other trademarks.”

The public may thus possibly perceive “Le P’tit Zef” as a Breton variation of “Le Petit Marseillais”.

The Court of Appeal has decided here not to refer to the reputation which might be attributed to the trademark “Le Petit Marseillais” in order to describe the likelihood of confusion, which might seem surprising.

Furthermore, the analysis made by the judges is akin to that of the validity of protecting such trademarks, this however not being an aspect which can be protected. In order not to lose what has already been achieved, the court considered the possibility of trademark variation, instead of proceeding more accurately by associating points of similarity and concluding with an overall assessment.

Moreover, the court’s reasoning with respect to its assessment of consumer knowledge may be surprising. On the one hand, the court held that consumers are capable of knowing that the statement “savon de Marseille” does not imply that the products originate exclusively from Marseille but rather, that they refer to the manufacturing process and on the other hand, held that the consumers cannot differentiate between the two signs.

However, the judges are determined to condemn the owner of the trademark “Le P’tit Zef” for trademark infringement because of the likelihood of confusion between the two trademark signs.

This is an interesting ruling which confers a particularly wide scope for the protection of trademark rights.

Read more

Trademark infringement and overall similarities: LinkedIn and Colink’in

According to the OECD and European Union Intellectual Property Office report published on April 18, 2016 on the impact of imports of counterfeit and pirated products in international trade (“Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact, imports of counterfeit goods”), the import of counterfeit goods amounts to US $461 billion, accounting for about 2.5% of imports globally. At European level, counterfeiting constitutes up to 5% of products imported into the EU territory, which equals 85 billion euros.

No category of product is free from counterfeiting

The report also points out that counterfeiting may affect any product protected by intellectual property law. Luxury goods such as watches, perfumes or leather goods are those affected the most. Business to business goods such as chemicals or spare parts, but also general commodities such as toys, medicines or cosmetics are affected by counterfeiting. Even more striking, there have been customs seizures on counterfeit goods such as strawberries, bananas and cinnamon.

 OECD countries most affected

The countries most affected by counterfeit trade are the United States (20% of counterfeit goods), Italy (15%), France (12%) and Switzerland (12%). Consequently, French trademarks are among those most affected. French Customs specifies that “France is particularly at risk due to its famous brand names and the creativity of its artistic firms.”

“Originating economies”

“The countries of origin are the producing countries and the countries which have transit points for international trade. Most counterfeit products originate in China, which is the largest counterfeit producer (more than 60% of counterfeit products in the world) and more than 20% originate from Hong Kong. China is far ahead of Turkey (3.3%), Singapore (1.9%), Thailand (1.6%) and India (1.2%). Middle-income countries and emerging economies are the main players on the international markets.

The negative impact on the e-commerce boom

Trade routes taken by counterfeiters are developing very rapidly. There are different intermediary transit points. Some, such as Hong Kong or Singapore are considered important platforms for international trade. Others, such as Syria or Afghanistan on the other hand, make use of weak governance and the presence of criminal or even terrorist networks.

Historically, means of transport used by counterfeiters included planes, boats and freight cars. Because of the increasing importance of e-commerce, delivery by post is today the primary delivery method of counterfeit goods. Selling online has considerable benefits for counterfeiters because it helps them to sell their goods in the least costly and most efficient way. Moreover, this delivery method significantly reduces the risk of being caught and getting fined.

Following long court battles between eBay and large commercial groups, LVMH and L’Oréal have decided to collaborate with the online trading company in order to “protect intellectual property rights and fight against the online sale of counterfeit products”. No sector has been spared and anti-counterfeiting remains a priority nowadays for many economic stakeholders.

Dreyfus & associés can assist you all over the world by choosing the best strategy for promoting and protecting your rights.

Read more on this topic:

WCO reports tremendous increase in counterfeit goods: trademarks and individuals take the hit

The long awaited reform of trademark law or as it is more commonly known, the “trademark package”, was finally adopted by the European Parliament on 16 December 2016. In an effort to upgrade and adapt the present European legislation with the Internet, this Directive allows Directive 2008/95/CE to be rebuilt.

A trademark is an essential component of the business strategy of a company and it should therefore be protected. The Court of Justice of the European Union recalls in a judgment of the 12 November 2012 that the essential concept of trademark use is to in fact guarantee consumers the true origin of a product or service. (CJEU 12/11/2002 Arsenal Football Club v. Matthew Reed).

Nonetheless the protection of the trademark should not interfere with principles such as the freedom to provide services.

The classic revocation of rights due to non-use

As per Article 16 of Directive 2015/2436 the proprietor of a trademark who, without good reason, has not put the trademark to genuine use in connection with the goods and services in respect of which it is registered for an uninterrupted period of five years, may find the trademark revoked for non-use. However this provision does not apply if there are good reasons for non-use of the trademark.

This is also clear from Article L. 714-5 of the French Code of Intellectual Property, which further provides that “the revocation may be sought in court by any interested person.”

The administrative procedure: an innovative Directive

The Directive (EU) 2015/2436 brings about significant developments in trademark law and revocation of rights arising from non-use. Article 45 provides that: “Without prejudice to the rights of the parties to appeal to the courts, Member States shall provide for an efficient and expeditious administrative procedure before their offices for the revocation or declaration of invalidity of a trade mark.”

The administrative procedure for revocation on the grounds of non-use was already in place in a number of European Union countries. However, other countries such as France simply allowed for the bringing of an action before a court of law.

Following this reform, the National Institute of Industrial Property (NIIP) will now have jurisdiction to decide on a claim for revocation or invalidity of the trademark. Clearly the parties still have the opportunity, if they wish, to bring action before the court.

Until now, revocation for non-use could be invoked before the NIIP only by the defense in opposition proceedings under Article R. 712-17 of the French CPI. To challenge this defense, the opposing party was not required to demonstrate before the INPI that it had made genuine use of the trademark for all the goods invoked in the opposition (Article 712 R -17 para. 2 of the French CPI). It was enough to simply demonstrate genuine use during the last five years of only one of the goods.

When claiming revocation, the trademark owner will not be able to defend himself by merely demonstrating use of only one of the goods and this is due to the combination of Articles 19, 21 and 45 of Directive 2015/2436.

Moreover, Directive 2015/2436 states that the transposition by Member States of the provisions on the administrative procedure for revocation and invalidity benefits from an extensive deadline. Indeed, it is explained in the preamble of the Directive that in order to promote efficiency, “Member States should provide for an administrative procedure for revocation or declaration of invalidity within the longer transposition period of seven years.” Member States must therefore make the necessary changes before 14 January 2023.

With Regard to European trademarks, the EUIPO (formerly “OHIM”) has the jurisdiction to receive applications for revocation by the EU trademark holders. This administrative procedure has already shown its advantages such as its efficiency, speed and cost effectiveness.

Undoubtedly, this development will play a major role in the future with respect to the defense of trademarks.

See our other articles on the topic: European Union: appreciation of evidence of use in revocation proceedings of a trademark

A case of unfair competition may arise if a competitor registers the domain name of a company which it no longer uses. This is the case when the confusion was deliberately maintained by the competitor and if it causes prejudice to the former holder according to the Commercial division of the Cour de cassation on February 2, 2016 (Cass. com., 2 février 2016, n° 14-20.486, « Sté Les Vents du Nord c/ Sté Cuivres et bois »).

A company selling and restoring wind instruments which operated a store under the name, the logo and the trademark “Les Vents du Nord”, was the holder of the domain name ” lesventsdunord.fr “, a website under construction.

The company Cuivres et Bois, which was in the same business and which operated a nearby store, bought the domain name “lesventsdunord.com” the day after it settled back in the public domain.

Les Vents du Nord served a formal notice to Cuivres et Bois to stop using the sign “Les Vents du Nord” and to transfer the disputed domain name to its name.

The right to a domain name is not expressly recognized by the French Code of Intellectual Property. However, a domain name is a distinctive sign. To maintain this right, it is compulsory to pay a renewal fee to the registry, often via the registrar. The penalty for non-payment is the loss of the right of the sign.

Thus, Article 6.7 of the Naming policy of AFNIC provides that “once deleted, the domain name re-enters back into the public domain and can be registered by a new applicant”.

The effective operation of the “website under construction”

The mere registration of the domain name is not enough for its defense. Effective use is also required. It is then necessary that the website under that name be open and running. Established case law states that the protection of a domain name can only be acquired through its operation. (Cass. com., 13 December 2005, n° 04-10.143, « Locatour »).

Despite this, although the website still bears the words “website under construction” on its landing page and has limited operations, the French Supreme Court deemed, as did the appellate judges, that since the landing page included the company logo, address, telephone number, its schedules and the purpose of its activities and was inserted as a link on other websites, there existed an effective and public operation of the domain name “lesventsdunord.fr “.

Purchase of expired domain name: an obvious abuse of right

Confusion between the two companies is bound to arise in the eyes of the public if a competitor purchases the disputed domain name on the day after it settled back in the public domain Additionally, the Court noted that both companies practiced exactly the same highly specialized activities in nearby locations.

The High Court states that the acquisition of this domain name by Cuivres et bois allowed it to capture the clients of Les Vents du Nord, including through links which automatically redirect the user to the company’s website.

The French Supreme Court concludes that Cuivres et bois committed acts of unfair competition. The situation between the parties has in fact harmed the attractiveness of Les Vents du Nord’s website and led to it being downgraded by search engines. In addition, the reputation of the latter has been affected by the confusion maintained by Cuivres et bois and this decreased the attractiveness of the sign “Vents du Nord.”. The High court approves the Court of Appeal decision to have ordered Cuivres et bois to pay 15, 000 euros in damages, resulting from acts of unfair competition on its part.

There is little case law penalizing an abuse of a non-renewed domain name, which is why this judgment is important. It allows for a clarification of the circumstances under which the registration of a non-renewed domain name may or not be lawful. Furthermore, this judgment clarifies the concept of operation of a domain name, which has been given a wide interpretation in this particular decision.

On June 23rd, 2016, UK citizens will vote on whether or not to remain part of the European Union. In case of a Brexit, the United Kingdom will have to leave the European Union within the next two years.

Whilst we are currently witnessing a harmonization of European patents and trademarks,  a Brexit would have a significant impact on intellectual property law in Europe. If ever there were to be a  “Brexit”, both British and European intellectual property title holders would suffer alike.

What are the implications for trademark owners?

The new EU Regulation No 2015/2424 regarding Community trade marks, which entered into force on March 23rd this year, brought about certain amendments; in particular, it changed the term “Community trade mark” to “European Union trade mark”. The European Union trademark, the only one of its kind in existence for the protection or trademarks across 28 member States of the European Union, will be significantly affected if a Brexit were to occur. In fact, the Regulation will no longer have any legal effect in the United kingdom.

The current holders of European Union trademarks would lose their rights to a trademark in the United Kingdom. Entities wishing to register a European Union trademark would not benefit from the automatic protection of their trademark in the United Kingdom. Consequently, they would need to file two trademark applications: one for the European Union trademark before the EUIPO and a specific application in the United Kingdom before the IPO. An application therefore may be a domestic one but can also be made on the basis of an international trademark.

In order to appease potential case law divergence, Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trademark (CTM), imposed an obligation on each Member State to designate courts at both first and second instance who would have jurisdiction in cases of community trademark infringement. In the event of  aBrexit, the European Union trademark courts in Britain would no longer have that jurisdiction.

What are the consequences for patents?

On the one hand, if Britain were to eventually leave the EU, the European patent with unitary effect would no longer apply to the United Kingdom given that one of the conditions of the effect, is to be a Member State.

Despite this, there are two possible scenarios for the Unified Patent Court (UPC) if the British vote in favor of a Brexit. The first, is the setting up of the UPC without the United Kingdom being part of it. The second and less likely scenario, is that the United Kingdom’s exit from the European Union in turn, prevents the implementation of the JUB.

For the UPC to be set up, the agreement signed by 25 countries had to be ratified by at least 13 countries and mandatorily by France, Germany and the United Kingdom. Italy would therefore replace the United Kingdom since it is the country with the highest number of valid European patents in 2012 after Germany, France and the United Kingdom. An addendum to the agreement will therefore be required. Even where the United Kingdom did leave the EU, it is unlikely that this would prevent the setting up of the UPC: rather, its entry into force would be simply delayed throughout the EU.

What are the consequences for trademark and patent licenses?

The jurisdiction covered by licenses for intellectual property rights will also be affected if the United Kingdom leaves the EU. This is an issue of contract interpretation. Parties should ensure that licenses still cover the same territory and thus include the United Kingdom. This also applies to co-existence or franchise agreements.

A change to the principle of the exhaustion of rights

Moreover, we must not forget that if the United Kingdom leaves the EU, the scope of the exhaustion rule would also be amended. According to the exhaustion doctrine, goods can freely move across the territory of the EU or the EEA after an initial trading in the market made by the rights holder or with his consent. Consequently, the owner of a trademark or patent would not be able to oppose the use of any patent or trademark for goods which have been traded for the first time in the EU or EEA with his consent. If the UK were to leave the EU as well as the EEA, trademark and patent owners could prohibit the export of UK goods to Europe and vice versa.

Transitional Mechanisms for European trademarks

In order to ensure the protection of existing EU trademarks, the implementation of transitional mechanisms is essential. In light of the uncertain legal consequences, certain companies will register trademarks both on a domestic and European level so as to ensure maximum protection.

At present, it is possible to convert the registration of a European trademark to a domestic one (Articles 112-114 of Council Regulation (EC) No 207/2009) but the above requires a reconsideration of the application process and payment of taxes.

Additional legal consequences

Other legal consequences, going beyond intellectual property can be expected.

By leaving the European Union, the United Kingdom would no longer have a representative in the European Parliament nor in the European Council, and there would no longer be a British judge in the Court of Justice of the European Union (CJEU).  EU legislation and the CJEU’s cases would inevitably be affected by a Brexit.

While this is an extreme scenario, alternative arrangements can of course be considered, such as the negotiation of special arrangements through the European Economic Area (EEA), the European Free Trade Association (EFTA) or the World Trade Organisation (WTO).

Dreyfus & associés is proud to announce that founder, Nathalie Dreyfus has been named Trademark Attorney of the Year (France) by Lawyer Monthly’s Women in Law Awards 2016.

A full-page article covering her and her team’s expertise and active role in various international IP organisations and associations has been published online and can be viewed here.

http://www.lawyer-monthly.com/wp-content/uploads/2016/04/LMWILA16_17.pdf

To view all the winners, please click on the following link

http://womeninlawawards.lawyer-monthly.com/2016-winners/

Margot Frohlinger, Principal Director for Patent Law and Multilateral Affairs at the European Patent Office (EPO) has announced that the Unified Patent Court (UPC) could finally be operative in the spring of 2017.

The Agreement on the Unified Patent Court was signed by 25 Member States of the European Union on 19 February 2013. However, it needs to be ratified by at least 13 states, including France, Germany and the United Kingdom, to enter into force.

A Simplified Process

The advantage of the European patent with unitary effect is that only one application will have to be filed, leading to a single patent being obtained and thus to the payment of a single annual fee. This patent will initially be valid in thirteen countries before being applicable to all European Union countries.

The Unified Patent Court will have exclusive jurisdiction for litigation relating to European patents and European patents with unitary effect. It will be possible for the holders of European patents to opt-out for a transitional period (of up to seven years), thus allowing them to continue to benefit from the current system. This is subject to one condition: no action should have been brought before the unified court.

The UPC will comprise a Court of First Instance, composed of a central division (with seat in Paris and two sections in London and Munich) and local and regional divisions in each Member State as well as a Court of Appeal and a Registry.

Eight ratifications so far

So far, the agreement has been signed by France and eight other states. The ratification of Germany and the United Kingdom is still amiss. The United Kingdom is clearly committed to ratifying the agreement in the summer of 2016. The German parliament meanwhile could ratify the agreement at the end of 2016 according to Mrs Frohlinger. The European patent with unitary effect and the UPC could therefore be born in the spring of 2017.

Preservation of national sovereignty

The adoption of the European patent with unitary effect and the Unified Patent Court is a step forward in the harmonization process of intellectual property law.

Although the trend is towards growing harmonization, Member States will always retain some of their sovereignty. Indeed, the substantive law as well as the procedure relating to the European patent with unitary effect will be harmonized while all issues relating to ownership and taxation would still depend on national legislation.

“Brexit”: what will the consequences be for the UPC?

Should the UK decide to leave the European Union, this would not be without consequence since membership to the European Union is one of the requirements to be part of the UPC. If the English vote to leave the EU in June 2016, two scenarios are possible:

• Either the European patent and the UPC will come into effect without the United Kingdom being included,
• Or the UK’s exit from the EU will prevent the European patent with unitary effect and the UPC to come into effect.

Ms. Frohlinger assured that the consequences of a possible “Brexit” would not be as dramatic as that as because of the UK’s significant involvement in the development of the UPC, ratification of the agreement should not be a problem.

As for Benoit Battistelli, EPO President, he appears confident and considers that “we are now ready from a legal, technical and operational point of view, to issue unitary patents. The only remaining steps are the setting up of the unified patent court and the finalisation of the ratification process at national level”.

Following a notification from the Intellectual Property department of the Ministry of Science and Technology, the Lao People’s Democratic Republic establishes the filing of multi-class trademarks.

A trademark could not be filed in several classes until recently in Laos, such that it was required to file several different trademarks.

Extended protection across the Asian market

Laos finally adopted the multi-class filing system on 1 February 2016, in order to comply with the practice of most of the other countries.

It should be kept in mind that the multi-class system provides many advantages.

As such, this system particularly provides:

• Declining rates with regards to the taxes of additional classes
• Simplified management and administration of filing of trademarks
• Reduced analysing period for the filing of trademarks
• Easy follow-up and renewal procedures of trademarks

Through their membership to the multi-class system, worldwide trademark owners may extend their protection to the significant Asian market by means of simplified and inexpensive proceedings.

Dreyfus & associés can assist you in any filing procedure for trademark registration while ensuring the best enforcement strategy and protection of your rights.