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In a significant decision dated December 6, 2023 ([2023] EWCA Civ 1451 Case No: CA-2023-000692), the Court of Appeal of England and Wales has given a new interpretation of legal acceptance and reiterates the importance of monitoring trademark usage to avoid acquiescence.

Context: The Dual Use of the Acronym ICE

The case involved Industrial Cleaning Equipment, a British company, which sued Intelligent Cleaning Equipment Holdings, a Chinese manufacturer, for using the acronym ICE and several similar logos. Both companies had trademarks registered in the UK. The Claimant registered its logo in 2016, while the Defendant had international registrations dating back to 2015, which were recognized in the EU and subsequently in the UK following Brexit.

First instance Judgment

At first instance, the Claimant accused the Defendant of trademark infringement and passing off and the defense of statutory acquiescence was rejected by the judge.

But What is acquiescence? Acquiescence in trademark law is when a trademark holder tolerates unauthorized use of their trademark over an extended period, potentially leading to a loss of rights to challenge this use later.

In this case, it was accepted that the Claimant had knowledge of use of the Defendants’ UKTMs in the UK since around July 2014, but denied having any knowledge of registration of such marks until July 2019, when the Claimant’s solicitors sent the Defendants a letter before claim alleging trade mark infringement and passing off.

Proceedings were issued on 24 May 2021, and the judge at first instance found in favor of the Claimant. The judge held that the defense of statutory acquiescence raised by the Defendants under section 48 of the Trade Marks Act 1994 (TMA 1994), could not succeed because the five-year period only starts to run when the earlier trade mark owner has knowledge of both the use of the later trade mark, and of its registration.

The decision hinged on the EU Court of Justice’s ruling in the Budvar case (C-482/09 – Budějovický Budvar), which required knowledge of both the use and registration of the later trademark for acquiescence.

The Appeal and its groundbreaking decision

The Defendants appealed on two main grounds. Firstly, they argued that knowledge of the registration of the later trademark was unnecessary for acquiescence. Secondly, they claimed that the relevant date for calculating acquiescence should be the international registration date.

A New Interpretation of Acquiescence

The Court of Appeal conducted an in-depth analysis of the principle of statutory acquiescence, particularly referring to the Budvar decision and other EU case law.

It found that the Budvar decision was an isolated judgment and that EU courts, including the EUIPO Board of Appeal and the General Court, had interpreted the legislation differently. These interpretations focused on the requirement of a registered mark being used for five years, without necessitating knowledge of its registration.

Consequently, the Court of Appeal departed from Budvar, holding that statutory acquiescence only requires knowledge of the use of a later mark after its registration.

However, regarding the start date for calculating acquiescence, the Court sided with the Claimant, marking the date as either the acceptance by the EUIPO or the second republication date, not the WIPO registration date. Unfortunately for the Defendants, they were therefore still ultimately unsuccessful in their appeal.

The Court concluded that acquiescence only requires knowledge of the use of the later trademark after its registration, not knowledge of the registration itself.

Conclusion on the Importance of Monitoring Trademarks

This decision marks a significant shift in UK trademark law, realigning it with the broader trends in EU General Court and EUIPO case law. It underscores the importance for trademark owners to monitor not just the use but also the registration of marks that might infringe their rights. Regular checks on trademark registries are crucial to avoid unintentional acquiescence.

The ruling also highlights the nuanced distinction between use and registration in trademark law. For practitioners, this decision emphasizes the need for vigilance and proactive strategies in trademark monitoring and enforcement.

By clarifying the requirements for statutory acquiescence, it offers guidance and a renewed understanding for trademark practitioners and owners.

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In the realm of brand protection, a crucial inquiry is measuring the value or Return on Investment (ROI) of programs dedicated to monitoring and enforcement. This measurement is essential for two reasons: firstly, to justify the initial expenditure on the brand protection endeavor, and secondly, to assess its value after a certain period of implementation. Consequently, some have argued in favor of certain methodologies for calculating the ROI of brand protection initiatives. These typically include evaluating the cost associated with each active infringement and estimating the percentage of lost revenue potentially recoverable after an infringement is addressed.

However, these approaches and methodologies, are difficult to put into practice. Indeed, ROI methodologies seem to be more appropriate when it comes to counterfeiting rather than brand protection itself.

Therefore, Compliance, which focuses on what would be lost instead of what could be gained may be a more effective solution to evaluate risks and gains regarding brand protection.

1. Calculation of the ROI

Understanding ROI in Brand Protection

Return on investment calculations, in theory, would allow the brand owner to have an overview of costs, expenses and losses pertaining to the protection of his trademark.

Also, when it comes to e-commerce marketplaces, ROI can feasibly be calculated a posteriori, ie. post-enforcement.

Data-Driven Approaches for ROI Calculation:

This calculation is based on the total numbers and value of items removed via enforcement actions as well as data caps (ex : if a market place offers millions of a same infringing item, it probably suggests that they will manufacture them on demand, not that millions of items are sitting in a warehouse). This data can be scraped by most brand protection service providers.

Similar ideas can be used to carry out ROI calculations in other contexts where the data is available. Indeed, in case of takedowns regarding social medias, mobile apps or piracy, data such as the number of followers or likes, the number of downloads or of individual sharing a copyrighted content, can be used as proxies. The standard methodologies tend to use a ROI calculation in the form of :

ROI = C x E

C is some measure of « cost », ie. the revenue difference between an infringement being active and being removed ;

E is the number of enforcements

Challenges in Applying ROI Methodologies

Several factors would need to be taken into account regardless, such as variable substitution rates (the measure of the proportion of customers who will buy a legitimate item if the infringing item is made unavailable via a takedown action), and the consideration on the long-term impact as well as on brand valuation (visibility, customer loyalty).

On another hand, a priori calculations, i.e before any enforcement, offer much less visibility, if none at all, considering that this calculation is be based on assumed numbers instead of exact data.

Therefore, a ROI is more likely to be calculated on anti-counterfeiting efforts (seizure of products, recovery of damages…) rather than on the defense of a brand portfolio.

2.The solution of compliance

Cyber risk is ever-present and is one of the major challenges a company may face. Domain names are often vectors for fraud, enabling employees and consumers to be misled by the imitation of the company’s name or trademarks.

While monitoring tools can help identify fraudulent domain names early on, calculating the Return on Investment (ROI) becomes tricky, especially after acquiring these domains and redirecting their traffic to the brand owner’s official website. This redirection is done in the hope of converting some of the traffic into revenue for the brand owner.However, this approach is not exactly viable since the data (webtraffic, connections…) is very hard to quantify.

Moreover, this vision is not sustainable as it suggests that the brand owner will keep the recovered domain name and redirect it to an active website. Both are extremely unlikely as they would negatively affect not only the Search Engine Optimization of the brand, but also the reputation of the trademark.

As it happens, a domain name used for fraud is rarely redirected to an official site. This would discredit the official site and create confusion between what is official and what is not – a rather bad idea when acting to neutralize fraudulent domain names.

Proactive Compliance Measures

Therefore, preventive actions that follow the logic of compliance seem more suited to avoid losing brand value and money, such as :

• Conducting brand audits among domain names to assess risks.
• Implementing monitoring systems for domain names and social media.
• Preemptive registrations of domain names in at-risk extensions.
• Taking proactive actions against potentially harmful domain names.
• Establishing procedures and a crisis management unit for rapid response to infringements.
• Developing or updating the company’s domain name policy, ensuring internal and external dissemination.

Ultimately, the decision between focusing on ROI or compliance in brand protection strategies should be guided by the specific needs and context of the brand. A balanced approach that incorporates elements of both strategies could be the most effective path. Nevertheless, while applicable to anti-counterfeiting efforts, ROI methodologies offer less quantifiable insights and can be challenging to implement accurately. Compliance, on another hand, provides a broader, more preventive framework that safeguards brand integrity.

For expert guidance and tailored solutions in navigating these complex brand protection strategies, consider partnering with Dreyfus Law Firm, where our dedicated team specializes in offering comprehensive legal expertise to protect and enhance your brand’s value in the digital landscape.

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In a noteworthy decision, AFNIC, the French country-code top-level domain name registrar, has transferred the rights of the domain name ‘porcelainefrancaisedelimoges.fr’ to the rightful owners of the French geographical indication (GI) ‘Porcelaine de Limoges’.

This ruling (decision FR-2023-03612) has profound implications for the protection of geographical indications in the digital realm.

Legal and factual Background of the case

The French government introduced a national system for the protection of GIs for craft and industrial products in 2014 (Law No. 2014-344 of March 17, 2014). This law led to a flurry of GI registrations, including the famed ‘Porcelaine de Limoges’. Producers of Limoges porcelain, with a rich history dating back to the 18th century, filed for GI registration on June 8, 2017, which was officially granted on December 1, 2017.

Simultaneously, an anonymous individual registered the domain name ‘porcelainefrancaisedelimoges.fr’ on February 24, 2017. This domain name, showcasing unrelated and possibly inappropriate content, prompted the Limoges porcelain producers to seek legal recourse.

The Dispute and legal proceedings

Asserting that the domain name infringed upon their rights, the claimants approached SYRELI, an alternative dispute resolution (ADR) system operated by AFNIC. The plaintiffs argued that the domain name registration was executed in bad faith, leveraging the pre-existing reputation and impending GI registration of ‘Porcelaine de Limoges’, widely covered by French media.

AFNIC’s Decision

AFNIC noted that the domain name closely resembled the registered GI, differing only in the addition of ‘French’. Consequently, AFNIC deemed the domain name as misappropriating and diluting the ‘Porcelaine de Limoges’ GI, leading to the transfer of the domain to the claimant.

Commentary and Implications

This case is remarkable for two reasons: the posteriority of the GI to the domain name registration and the basis of the dispute on a GI right.

The case raises significant questions about the applicability of ADR procedures when a GI is registered after a domain name. How should ADR panels weigh the reputation and recognition of a GI that was informally established but not legally registered at the time of domain name registration? Should the evidence of pre-registration reputation and intent to register the GI be considered sufficient grounds for transferring or revoking a domain name?

ADR panels might need to be equipped with more nuanced criteria for evaluating the ‘good faith’ intentions of domain name registrants, especially in cases where the registrant could reasonably have been aware of a well-known but yet-to-be-registered GI.

Secondly, domain name ADR systems in the EU and the UDPR system have not accommodated GIs, focusing mainly on trademark rights. However, France’s progressive posture in the protection of crafts and industrial products within domain names and has set a precedent. The Regulation (EU) 2023/2411now include provisions recognizing registered GIs in domain name disputes and explicitly protect GIs from cybersquatting.

This development is not just a technical adjustment in legal procedures; it reflects a broader shift in recognizing the value and significance of GIs in the global economy and digital world.

It recognized that a geographical indication, “Porcelaine de Limoges”, deserves the same level of protection as trademarks and company names in domain name disputes. This is a big deal and puts France at the forefront of internet protection, especially concerning intellectual property in the digital domain.

As legal practices continue to evolve, this case will serve as a critical reference for domain name and intellectual property law practitioners. Stay tuned!

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In a significant ruling by the French Supreme Court on September 27, 2023, (Cour de cassation, ch. com., 27 septembre 2023, 22-10.777, Akiva SARL c. Gaiatrend SARL et M.), judges clarified the concept of disparagement in cases involving the sending of formal notices to retailers accused of trademark counterfeiting.

Background

The case revolved around a company specializing in the manufacturing and marketing of electronic cigarette liquids, which owned two European Union trademarks, namely FR-M. The company’s manager also held two EU trademarks, FR4 and FR-K. They initiated legal proceedings, alleging infringement, unfair competition, and parasitism, against a competitor producing electronic cigarette liquids labeled as “FS-M” and “FS-4.”

Disparagement Allegation

The defendant company argued before the Court of Appeal that the formal notices sent by the plaintiff company to their resellers constituted acts of disparagement. Their argument hinged on the absence of an explicit mention of an infringement action against their products. According to them, this omission discredited their products, thus constituting disparagement.

Court Decisions

Both the Court of Appeal and the Court of Cassation rejected the disparagement claim, even in the absence of explicit mention of an ongoing infringement action. The courts ruled that the purpose of these letters was to inform resellers about the infringing nature of the products, indirectly indicating the existence of an infringement action. The Court of Cassation affirmed that the plaintiff company had not intended to misrepresent the letter but had made a simple drafting error.

Strict Interpretation of Disparagement

The French Supreme Court’s decision highlights the strict interpretation of disparagement. The formal notices were not intended to damage the defendant company’s reputation. Instead, the plaintiff company aimed to inform resellers about the counterfeit products and put an end to the disturbance. Furthermore, the information in the letter was accurate and not misleading, ensuring that resellers understood the true purpose: to establish that the defendant’s products were counterfeit.

Conclusion

This legally sound and welcome decision reinforces the protection of trademark law. It underscores the importance of intent in disparagement claims and the need for clarity in communication. Trademark owners can take this ruling as a precedent to protect their intellectual property rights more effectively.

For comprehensive guidance and assistance on trademark-related matters, please contact our experienced legal team at Dreyfus Law Firm. We are here to help you navigate the complex landscape of intellectual property protection.

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In the realm of intellectual property law, the protection of olfactory trademarks presents a unique challenge. Unlike traditional trademarks, which rely on visual representation, olfactory trademarks are based on scents, making them subjective and difficult to standardize. This complexity is vividly illustrated in the case of the German Patent Court’s decision in 29 W (pat) 515/21.

On September 3, 2020, a groundbreaking application was filed for a German trademark in class 28, covering “sports articles.” The application was unusual; it sought to register an “olfactory mark,” described as “the scent of honey from the nectar of common heather flowers (Calluna Vulgaris) on golf balls.” This application challenged the conventional boundaries of trademark law, venturing into the relatively uncharted territory of olfactory marks.

The German Patent and Trademark Office, however, found the application lacking. They rejected it on the grounds that the scent was not represented in a manner allowing authorities to determine its scope of protection precisely. This rejection brought to light the pivotal requirement of representability in trademark law, an aspect often taken for granted in more traditional applications.

The applicant’s appeal brought forth further insights. The German Patent Court maintained that for a mark to be registrable, it must meet stringent criteria: it should be clear, precise, complete, accessible, intelligible, durable, and objective. These criteria, known as Siekmann’s criteria, are now a cornerstone of the EU Trademark Regulation (EUTMR), specifically Article 3, paragraph 1. The applicant’s description, while creative, failed to meet these stringent standards.

Moreover, the Court pointed out that descriptors like “bitter,” “strong,” and “aromatic” are inherently subjective and do not provide the objective clarity required by law. The Court’s decision serves as a vital reference point for future applicants, illustrating the nuanced requirements of non-traditional trademark registrations.

Interestingly, the Court also discussed various unsuccessful methods of representing olfactory marks, such as chemical formulas and color codes used in the perfume industry. These methods, while innovative, fell short of the legal standards for clarity and objectivity.

This case exemplifies the gap between current legal frameworks and technological advancements. The EU’s trademark reforms theoretically allow for the protection of olfactory marks, yet the technology to represent scents precisely and objectively is still evolving. This scenario presents an intriguing paradox where the law, typically seen as reactive, is ahead of technological capabilities.

The future, however, holds promise. With digital scent technology progressing rapidly, there is hope that reliable odor reproduction could soon make olfactory trademarks a practical reality. This advancement would mark a significant leap in intellectual property law, opening new frontiers for trademark protection.

At Dreyfus Lawfirm we stay at the forefront of these developments, ensuring our clients are well-equipped to navigate the complex landscape of trademark law, whether traditional or cutting-edge. In a world where legal precedents and technological innovations constantly redefine the boundaries, our expertise becomes your asset in safeguarding your intellectual property rights.

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In an information notice (information notice No. 26/2023), WIPO has announced a number of amendments to the Regulations under the Protocol Relating to the Madrid Agreement concerning the International Registration of Marks.

These amendments, which have been in force since 1 November 2023, provide clarity for right holders and their representatives.

1. Indication of the start and end date of the period for replying to a provisional refusal

Although an international trademark is registered through a one-stop shop, once the international phase has been completed, the application is forwarded to the offices of the designated countries for examination in accordance with their national legislation. It is during this examination that any objections or provisional refusals are issued.

Until recently, the deadlines for responding to provisional refusals could lead to confusion, as many national or regional offices did not indicate either the deadline for responding or the dates on which said deadline was calculated.

To overcome this issue, national or regional trademark offices will now be required, when issuing a provisional refusal, to indicate the deadline for response, as well as the start and end dates of the deadline, unless the time limit starts to run on the date on which WIPO transmits the provisional refusal to the holder. In this case, it will be up to WIPO to indicate the start and end dates of the period in its notification.

As a security measure, in the rare event that an electronic communication does not reach the intended recipient (due to a faulty e-mail address or a full inbox, for example), WIPO will also send a copy of the notification of provisional refusal by post.

2. Introduction of a minimum time limit for responding to provisional refusals

Until recently, WIPO did not impose any minimum time limit for examining and responding to provisional refusals. These deadlines, determined by the national/regional intellectual property offices, ranged from 15 days to 15 months.

Sometimes very brief, they were therefore a real source of difficulties for trademark right holders and their representatives.

To alleviate this problem, a minimum period of two months (or 60 consecutive or calendar days) is now allowed for filing a request for review, an appeal or a response to a provisional refusal.

In addition to this minimum two-month period, WIPO will calculate and communicate to right holders a specific date for responding to provisional refusals.

While the initial deadline for compliance with this new requirement is February 1st, 2025, Contracting Parties that require additional time, especially to adjust their legal framework, can choose to further postpone the implementation of this obligation.

Conclusion

These changes, which industrial property law practitioners have been advocating for several years, are to be greeted with applause.

A positive development, which shows that WIPO is listening to the voice of its users.