Dreyfus

The shoemaker Louboutin is well known for high heeled shoes with a glossy vivid red outsole protected by trademark rights.
Louboutin sued Yves Saint Laurent (YSL) alleging that the use of red color on high heeled shoes outsoles creates a likelihood of confusion and then constitutes a trademark’s infringement.

On August 10, 2011, the New York District Court stated that the red color, qualified as Chinese red by Louboutin, cannot be identified as a distinctive sign, which implies that trademark protection cannot be granted.

Louboutin declared that these red outsoles are an important element of the company’s image and that many figurative trademarks were entitled to trademark protection such as the Louis Vuitton logo or Burberry check.

However, the judge said that color serves ornamental and aesthetic functions in the fashion industry and red color used by Louboutin could not confer an exclusive right. Red outsoles are not considered as a distinctive sign allowing customers to identify the product. The judge added that no fashion designer should be allowed a monopoly on a color because they all need to be able to use the full palette, as it is the case for the artists.

The EU case law states that a color is entitled to trademark protection under certain conditions listed by ECJ in May 6, 2003 . It is in particular specified that a distinctive criterion has to be proved and the color must be graphically represented in a precise, easily accessible, lasting and neutral way. Nevertheless, the distinctive criterion is very rarely accepted and the European Tribunal of 1st instance rejected two trademarks claims related to colors for lack of distinctive criterion. It is interesting to note that the OHIM recently accepted the registration of a three dimensional trademark of the famous red outsoles, the description of the trademark being “high heeled shoes”, not only “shoes”.

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1. Christian Louboutin SA et al v. Yves Saint Laurent America, Inc et al., 1:11-cv-2381 NYSD August 10, 2011
2. CJEU, May 6, 2003, Libertel Groep BV contre Bureau Benelux des Marques, C104/01.
3. EGC, Nov. 12, 2010, aff. T-404/09 et T-405/09

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Part of the legal battle between George Lucas and Andrew Ainsworth over the sale of Stormtrooper helmets, made famous in the first Star Wars film, came to an end on 27 July 2011 with the judgment of the Supreme Court of the United Kingdom[1].

In 1976, Mr Ainsworth had been involved in the production of the original Stormtrooper helmets.  The helmets had been designed and put into drawing by an artist following the instructions given by George Lucas himself.  Mr Ainsworth’s role was to produce a mould prototype for the helmet on the basis of these drawings.   Mr Ainsworth went on to make 50 helmets for the film 1977 Star Wars film, using one of these moulds.

In 2004, with Ainsworth started producing and selling helmets made on the basis of these original moulds.

The legal battle commenced in the US when Lucasfilm, a company owned by George Lucas, took action against Mr Ainsworth in relation to sales of these helmets available on Ainsworth’s website.  In 2005, Lucasfilm obtained a default judgment together with a significant award of damages before the US courts, in particular, for copyright infringement.  However, Lucasfilm did not seek to enforce the judgment in the US, Ainsworth having no assets in the US, and the judgment remained unsatisfied.  Lucasfilm decided therefore to bring their claim before the English Courts, on the basis of the infringement of the copyright subsisting in the helmet both under English and US law.

Both before the High Court and on appeal before the Court of Appeal[2], it was held that any intellectual property rights existing in the helmet belonged to Lucasfilm, and not to Mr Ainsworth.

The question of whether Mr Ainsworth could be prevented under English law from making the helmets on the basis of the original designs and moulds, in relation to which he held no IP rights, depended on whether the helmets qualified as an artistic work and, in particular, a “sculpture” in which copyright subsisted.  If the helmets were protected by copyright, the manufacture and sale of the helmets by Ainsworth would constitute an infringement of these rights.  In this respect, under section 4 of the Copyright Designs and Patent Act 1988 (the “CDPA”), three-dimensional artifacts are protected under the copyright law only if the work can be qualified as a sculpture or work of artistic craftsmanship.  Furthermore, although the drawings themselves made by the artist would be protected by copyright, pursuant to section 51 of the CDPA, there is no infringement of such designs, unless the resulting work constitutes an “artistic work” and in the present case a sculpture.

Both the High Court and the Court of Appeal held that the helmets were not sculptures on the grounds that their purpose was primarily utilitarian, and not artistic.

Furthermore, the Court of Appeal also held that the English courts did not have jurisdiction to rule on an action for infringement of a US copyright.

Lucasfilm appealed this decision before the UK Supreme Court.  The Supreme Court concurring with the lower courts held that the helmet did not qualify as a “sculpture”, and as such was not protected by copyright.  In support of this finding, the Supreme Court held that the helmet was utilitarian in the sense it was an element in the process of production of the film and the Star Wars film itself was the work of art.

However, in relation to the question on jurisdiction, the Supreme Court held, overturning the Court of Appeal’s ruling on this point, that an English court would have jurisdiction, in circumstances such as those at hand, to try a claim for infringement of US copyright.  This ruling accordingly opens the way for Lucasfilm to bring proceedings in relation to the infringement of its US copyright before the English courts.

This approach to determining whether a creation is protected by copyright is in stark contrast to the rules applicable in France.  Indeed, in France, the author is simply required to establish that the work is original, i.e. is an expression of the author, to benefit from protection available under copyright law.

[2] [2009] EWCA Civ 1328

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With the emergence of smartphones and tablet computers, the development of mobile applications is a booming business.  In order to showcase their own and third party applications, several companies have put into place mobile application distribution platforms, including Google’s Android Market, Apple’s App Store or R.I.M.’s Blackberry App World.  More than 20 billion applications have been downloaded via these platforms, which propose several thousand new applications each day.  To date, there are approximately 40 such platforms, the number of which is constantly increasing.

Both the applications themselves and the pages on the platforms are susceptible to infringe IP rights.  Among the most frequently identified violations, which are susceptible to constitute infringement or unfair competition:

• reproduction of a trade mark in the title of an application
• reproduction of a trade mark in the application itself
• development of clones of existing applications
• reproduction of trade marks in wallpaper and other personalised aspects of the terminals

These types of breaches are not new in the IT world.  However, the specificity of the apps markets are so that they create a concentration of these breaches and increase their effects by segmenting the search results (principle of vertical search engines).  Accordingly, an infringing application can be well ranked on a platform on which the number of applications in the same category or associated with the same key words is not very high.  Furthermore, the content of the platforms is not necessarily indexed on the principal search engines. Therefore, a watch of the principal search engines will not necessarily identify these breaches.

The liability regime applicable to these downloading platforms will depend on the facts of the case.  Indeed, according to the French Supreme Court[1], authors of titles and hyperlink texts qualify as editors, as defined by French press law, if they determine and check the content of the site, and play an active role, having knowledge and control over the data stored.  Conversely, the platforms may benefit from the limited liability regime applicable to hosting providers, if their role is neutral, in the sense that their conduct is merely technical, automatic and passive.

In the case of the applications market, the titles and the content of the applications and the corresponding pages are determined by the developers (in accordance with the platforms’ T&Cs).  In terms of control of the content, each platform applies its own policy. For instance, App Store, App World and Android Appstore have all put into place procedures for checking new applications, the scope of which varies greatly.  These platforms could accordingly qualify as editors, making them liable for the content of the applications which they propose.

In any case, during the sole month of February, Android Market received 206 notifications half of which involved trade mark rights.  Thirty-one notifications came from Facebook, further to the reproduction of its trade mark in the title or the icon of a third party application[2].

Rights holders are therefore well advised to monitor on a constant basis these new platforms in order to identify any unauthorised use.

[1] French Supreme Court, 17 February 2011, Mr O.X. v. Bloobox.net

[2] http://www.chillingeffects.org/weather.cgi?WeatherID=648

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Cobrason sells top of the range video and audio equipment, inter alia, via its website. Home Cine Solution sells the same goods also via its own website. Cobrason discovered that when it conducted a search against its name on Google, a sponsored link to its competitor, Home Cine Solutions, appeared instead. In an application for judgment in expedited proceedings Cobrason attempted to obtain the suppression of the disputed sponsored link. It subsequently brought legal proceedings on the merits against Home Cine Solutions, Google France and Google Inc. Before the Paris Commercial Court , Google was held liable for unfair competition in respect of its Adwords referencing service. Google was also held liable for misleading advertising in accordance with Article L. 121-1 of the French Consumer Code. This decision was appealed before the Paris Appeal Court.

The Paris Appeal Court ruled on the appeal on 11 May 2011, in a decision which would appear to go against recent rulings of the CJEU.

Indeed, on 23 March 2010 , the CJEU handed down a judgment further to three references for preliminary rulings in relation to Google Adwords’ referencing service. In this judgment, the CJEU held that advertisers using this service could be held liable for trademark infringement if it is established that there is likelihood of confusion on the part of the average internet user on the origin of the trademark holder’s goods and services and those of the advertiser. The CJEU however considered that Google could not be held liable for trademark infringement for its Adwords referencing service as there was no use of the key words provided under this service as a trademark. Furthermore, in view of the CJEU’s judgment, Google, within the scope of its Adwords service, should in principle qualify as a hosting provider as defined in the Electronic Commerce Directive (2000/31/EC), provided that it does not play an active role in giving it knowledge or control over the key words stored under this service. The consequence of the CJEU judgment is that it is now difficult to obtain a judgment holding Google liable.

Although the national courts are required to comply with judgments handed by the CJEU, the Appeal Court would appear not to have applied the findings in the Adwords ruling. This is the first decision in France to have held Google liable since the CJEU’s 23 March 2010 judgment.

In order to uphold the judgment at first instance, the Appeal Court reiterated that the basis for an action in unfair competition is Article 1382 of the Civil Code. In order to establish liability on this basis the claimant must establish a fault. Home Cine Solutions had used the company name Cobrason and the domain name www.cobrason.com as key words. The Appeal Court held that such use gave necessarily rise to a confusion on the part of potential customers between their respective websites. Consequently, the Appeal Court held that Home Cine Solutions was liable for unfair and parasitic competition insofar as it had effectively unfairly poached Cobrason’s customers and piggybacked off the latter’s investments. Furthermore, the Appeal Court also held Google liable on the grounds that it had contributed, by providing technical means, to the confusion generated on the part of the public by presenting the key word Cobrason in the Adwords programme and by displaying the said key word on the search page. The Appeal Court held that Google was in breach of it duty of commercial loyalty and also held that it was liable for misleading advertising.

It is too early to comment on the consequences of this decision and indeed this could be a one-off decision. However, it is clear that the Appeal Court failed to examine whether Google in providing the Adwords service qualified as a hosting provider and whether as such Google could benefit from the restriction of liability of such service providers as set out in the Electronic Commerce Directive (2000/31/EC). We will have to wait and see if the French Supreme Court clarifies the situation, and only if, of course, this decision is appealed.

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On May 14th, ICANN unveiled the appointment of Professor Alain Pellet as an Independent Objector (IO) for the new gTLD’s[1]. In the light of his academic background and his experience before the International Criminal Court, we cannot but agree that he deserves this appointment. The French Professor will speak in the public interest as far as new gTLD’s are concerned. His appointment follows ICANN calls for applications launched in November 2011. Thanks to lobby discussions and the help of a recruiting firm, ICANN decided to release the name of the French Professor.

The Independent Objector is one of the pillars foreseen by ICANN for the objection period for the new gTLD’s.

The narrowness of the power given to the IO does not diminish the utmost importance of his role. The IO is empowered to file an objection before the International Chamber of Commerce (ICC) if a candidature is detrimental to the public interest or to the Community. If a candidature is “highly objectionable”, the IO is entitled to file such an objection. The IO is supposed to be entirely independent; no member of the ICANN can exert pressure of any kind on him. Two types of objections can be filed by the IO:

1. Limited Public Interest Objections:

-This objection can be filed if a candidature for a new gTLD goes against morals or public order-

2. Community Objections :

-If a significant part of the Community targeted by the gTLD candidature rises up against said candidature, the IO will file an objection on behalf of the Community.

The filing of an objection on the grounds of public interest does not prevent the IO from filing another objection concerning the very same candidature as before, through the Community Objections channel. Before filing an objection on behalf of the Community, the IO is entitled to launch a public consultation within the Community targeted by the new gTLD. When the said consultation has ended, the IO scrutinizes the results and if nobody opposes the candidature, the IO will not be entitled to file any objection. We can highlight here that the IO cannot file an objection for a new gLTD candidature if an objection was already filed using another procedural path, notwithstanding the Applicant Guidebook specification that in exceptional cases the IO can file for such an objection in parallel.

The IO is not the only person who can file an objection on the two aforementioned grounds (namely the Public Interest and the Community). However, the inception of the IO was motivated by the fact that this person can increase the number of objections lodged against new gTLD candidatures for the safety of Internet users. Xenophobe or homophobic candidatures will be set aside thanks to the IO.

The IO must issue public reports which will mirror accurately the work done thus far and the time spent accordingly. Given the number of candidatures, this work can be assumed to be highly time-consuming.

Some authors pointed out that the role of the IO is vague and that only practice can shed some light on the relevance of his role. Given the background of the French professor, this paves the way for work we can assume to be both fruitful and brilliant. We congratulate Professor Alain Pellet whose sagacity will enlighten us on highly significant points of law.

EC Regulation no 1383/2003 is a means for right holders to prevent the importation or export of goods suspected of infringing certain intellectual property rights.

However, in order to benefit under this procedure, it is necessary for the right holder first to file an application for action with the appropriate Customs authorities. The application for action remains in force for one year and can be renewed at the right-holder’s request indefinitely, provided, of course, the intellectual property right remains in force.

Whenever customs detain goods, which they suspect to be counterfeits, they immediately contact the right-holder or its representative and then send him an official notification. The goods are then detained for a period of 10 working days, which can be extended for a further 10 working day period (a non-extendable period of three working days in the case of perishable goods).

This period is intended to allow the right-holders to inspect the goods and confirm whether or not there are counterfeits.
If the right-holder indicates that the goods are genuine or does not confirm within the 10 day period that the goods are counterfeit, they are immediately released.

However, if the goods are counterfeits, the right holder must, in principle, either file an application before the competent court for precautionary measures or bring legal action before the civil or criminal courts, within the ten day period failing which the goods will be released.
According to the provisions of EC Regulation no 1383/2003, the Member States have the possibility to put into place a simplified procedure for obtaining the destruction of counterfeit goods, without having to bring legal action or to apply for precautionary measures.

The procedure enables customs authorities to destroy the disputed goods without it being necessary to establish under the national law that there has been an infringement of the intellectual property rights concerned.

This procedure is only applicable if certain conditions have been fulfilled.

The right-holder must seek the written agreement from the declarant, the holder or the owner of the goods to the destruction of the disputed goods. Such agreement will be presumed if the declarant/holder has not expressly opposed the destruction within the allowed time period. The goods are destroyed at the right-holder’s expense. Prior to such destruction a sample of the goods are taken which can be used as evidence in case of any subsequent legal proceedings.

If the declarant or holder opposes the destruction, the right-holder has the possibility file an application before the competent court for precautionary measures or bring legal action before the civil or criminal courts.

Currently, this simplified procedure has not been implemented in France. Indeed, once the right-holder has confirmed the goods are counterfeit and if it does not wish to bring legal proceedings, French customs are entitled under their customs powers to seize and destroy the goods. However, during a working group of French Customs held on 09 July 2010, the latter indicated that they would be favourable to the introduction of such a simplified procedure, provided that a more secure legal framework is put in place.

The advantage of introducing a simplified procedure into French law is that it should enable right-holders to obtain the identity of the holder or declarant from Customs, which is not possible currently, unless the right-holder undertakes to bring legal action. We hope, however, that the introduction of a simplified procedure in France will not call into question the French Customs’ current practice of seizing and destroying goods, a simple and cost-efficient way for right-holders to make sure that counterfeit goods are not put on the market.

Customs border detention orders can be a very efficient tool in the fight against counterfeiting, provided that they are used properly.
Dreyfus & associés would be delighted to assist you in putting in place a Customs border detention order to help protect your IP rights.

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