CJEU: Relief of the burden of proof on the territorial scope of use of a trademark

Written by Dreyfus07/04/2020

The CJEU rendered a crucial decision in its recent Intas caseon the maintenance of Intellectual Property rights. According to the Court, it is not imperative that a European Union (EU) trademark be used in a substantial part of the EU. On the contrary, its use in a single Member State could be enough to prove genuine use.

In the matter before the CJEU for the mentioned decision, the claimant filed a trademark application before the EUIPOconsisting of the sign “INTAS” and designating goods in classes 5 and 10.

The defendant subsequently filed an opposition to this application claiming that it was similar to two of its earlier trademark registrations which both consist of the sign “INDAS” and cover goods in the same classes.

The claimant requested proof of use of the earlier trademarks. The defendant duly submitted this evidence and its opposition was accepted by the EUIPO on this basis. The claimant proceeded to appeal the decision before the EUIPO, but its appeal was dismissed. Finally, the matter was brought before the CJEU.

The territorial scope for genuine use

The CJEU examined the question of whether proof of use submitted for only one Member State for the use of an EU trademark was sufficient to support its genuine use pursuant to Article 47(2) of the EU TM Regulation.

Interestingly, the CJEU rejectedthe argument that the territorial scope of the use of an EU trademark cannot be limitedto the territory of a single Member State. The Court also rejected the argument that the genuine use of an EU trademark necessitates that the trademark be used in a substantial part of the EU.

Yet, the CJEU still admits that it is reasonable to expect that an EU trademark shall be put to use in a wider area than the territory of one Member State to show its genuine use. However, the Court underlines that it is not always imperativethat the trademark be put to use in an extensive geographic area because evaluation of genuine use is an overall assessment. It depends on all the characteristics of the related goods or service, and not only on the geographical scope of the use.

The CJEU accepts that, in certain cases, the market for the goods or services in the scope of an EU trademark can be restricted to the territory of only one Member State. In such a case, proving serious use of the EU trademark within that State may satisfy the conditions for genuine use.

Assessment of genuine use

The CJEU holds that it is impossible to determine, a priori, a certain territorial scope when assessing if the use of an EU trademark is genuine or not. Rather, an EU trademark is deemed to be genuinely usedwhere it is used in accordance with :

– its essential function of designating origin for the related goods or services ;

– the objective of maintaining or creating market sharesin the EU.

When evaluating genuine use, the following factors should be taken into account: the characteristics of the relevant market; the nature of the goods or services within the scope of the trademark; and the scale, territorial extent, regularity and frequency of use.

Impact of the Decision

This is an important interpretation made by the CJEU affecting the burden of proof when it comes to showing the genuine use of an EU trademark. The CJEU clearly sets forth that the territorial scope is only one of several factors to consider when assessing whether the trademark is put to genuine use or not.

This does not mean that the territorial extension of the trademark’s use is not important at all. However, the CJEU affirms that the geographical extension of the trademark’s use is not the only factorto take into account. This assessment depends on all the facts and circumstances relevant in determining if the commercial use of the trademark creates or maintains market sharesfor the concerned goods or services.

Consequently, the CJEU held that the assessment of whether the use of a trademark is genuine or not is an overall assessment. The territorial scope of the use is only one factor in this assessment, amongst the other factors mentioned in this article. This interpretation will probably lead to changes in the strict perception that the genuine useof an EU trademark cannot be proven with showing its use in one single Member State. It will soften the burden of proof on the trademark owners.

Resolving IP disputes through Mediation in France

Written by Dreyfus06/04/2020

Dreyfus & associés, in association with INTA, had the pleasure of organizing a breakfast debate last February.

The theme of the breakfast debate was the following:

“Resolving IP disputes through Mediation in France“.

Mediation is an alternative dispute resolution on the rise in different fields of law, notably in intellectual property law. This alternative dispute resolution is an efficient mechanism to settle disputes. In the long term, resorting to mediation in intellectual property law might encourage parties to maintain or create business relationships (licensing, distribution contract, etc).

We had the opportunity to debate on:

– What are the pros and cons of mediation relating to intellectual property disputes?

– What are the obstacles to mediation for IP disputes?

– What is the process for mediation?

– Who is the mediator?

– How much does it cost?

– Future of mediation in intellectual property law

The event featured Rémi Garros-Quinn, a Legal Case Manager at the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center, and Berengère Clady, Case Manager – Head of ADR Department, at the Centre for Mediation and Arbitration of Paris (CMAP). It was hosted by local IP law firm Dreyfus & Associés.

Find here the note published in INTA Bulletin.

Bad faith, a requirement that is duplicated between registration and bad faith use

Written by Dreyfus19/03/2020

While one generally refers to the “three criteria” of the UDRP (a trademark similar to the domain name; the absence of rights or legitimate interests of the defendant in the disputed domain name; and the bad faith of the registrant), it should be kept in mind that bad faith in UDRP matters has two aspects: the first is bad faith registration and the second is bad faith usage. Therefore, proving only one of these elements is insufficient even though it may be considered “fair” that a name used in bad faith should be transferred to the applicant.
In the present case, Great American Hotel Group, Inc. complained that its former vice-president retained the domain name <greatamericanhg.com> and changed the password of the account used to manage this name with the registrar.

It all started in 2011 when the applicant decided to adopt the name Great American Hotel Group. Its president at the time asked Mr. Greene, then vice-president of the company, to reserve the domain name <greatamericanhg.group>.
The latter did so, but – apparently without notifying his superior – reserved the domain name in his name instead of that of the company. He did, however, record the company’s postal address, and pay with the company card. In 2012, he hired an anonymity service to hide his data.

Since its registration, the name had been used for the company and Mr. Greene had always treated the domain name as part of the company’s assets.

However, following disagreements, Mr. Greene was suspended from office in 2015 and dismissed in 2016. In 2017, the name was renewed by the company’s technical teams even though Mr. Greene was no longer present. However, the latter subsequently changed the password so that the name could no longer be renewed by the company. The applicant’s counsel proceeded to send Mr. Greene a letter of formal notice, which remained unanswered, leading to the filing of a UDRP complaint.

The panellist acknowledged that the applicant had common law trademark rights through the use of the sign “Great American” and that the registrant did not have any legitimate rights or interest in the name as it was created for the applicant company.
He also acknowledged that the domain name was used by Mr. Greene in bad faith.

Nevertheless, the panellist was more sceptical regarding the issue of bad faith registration. Indeed, the name had been reserved by Mr. Greene at the request of the president of the applicant company, which, in principle, had, in fact, been a registration in good faith.

In order for registration by an employee to qualify as having been done in bad faith, the panellist specified that the employee must have, from the beginning, had “an intention to cause harm”. Therefore, the evaluation must be factual and done on a case-by-case basis.

In this case, Mr. Greene had registered the domain name in his own name. The panellist found that “this may be subject to questioning, and the fact that he did not mention the company does not constitute a good domain name management practice”, however, the president and the company seemed to be equally as uninterested in formalizing the reservation of the name.

For four years, until he was suspended from his functions, the registrant had always displayed conduct that demonstrated that he understood that the name belonged to the company. Thus, there is no reason to suppose that by reserving the name four years earlier, he had intended to compete with the applicant or to benefit from some type of tactical advantage against him.

Consequently, the plaintiff’s complaint was dismissed as the registration in bad faith had not been established. Nevertheless, the panellist specified that the applicant could turn to other avenues to try to obtain relief.

The significance of this decision, in addition to highlighting the dual condition of bad faith, is that it reiterates the need to set up an internal naming charter to avoid any dispersion of assets, both in terms of trademarks and domain names.

WIPO, Arbitration and Mediation Center, Sept. 2, 2019, No. D2019-1638, Great American Hotel Group c/ Domains By Proxy, LLC / R Greene

Claiming unregistered trademark rights on a geographical name is a difficult challenge in UDRP proceedings

Written by Dreyfus13/03/2020

While certain geographical names may, by exception, benefit from protection within the meaning of the UDRP rules, it should be remembered that they must be perceived as a trademark or service mark over which the applicant has rights. However, the mere use of a geographical name to identify certain goods and services as a territorial entity is not sufficient to demonstrate rights in a trademark or service mark within the meaning of the Guidelines, as the pannelist rightly pointed out in the present Decision.

In this case, the geographical name Solothurn (‘Soleure’ in French), corresponding to a city in Switzerland, was reproduced in its entirety in the domain name <solothurn.com>. It was registered in 1997 and has not been used since except to redirect to a “pay-per-click” page.

The applicants, the City of Solothurn and two associations under Swiss law promoting mainly tourism and unsurprisingly showing a strong interest in the domain name <solothurn.com>, claimed an unregistered trademark right on the sign “Solothurn”, which has been used extensively over the years. They also claimed protection of the name as “trademark-like” within the meaning of the Swiss law on unfair competition.

In this regard, they provided several documents attesting to the use of this geographical name by tourists since 1890 and its recognition as such. The applicants inferred that the use of the sign “Solothurn” constituted a trademark used to identify tourism and other related services. They also cited several decisions of the centre concerning geographical names, which are far from having argued in their favour.

The defendant, domiciled in the United States and known for his activities related to domains specializing in “geographical” domain names, had put the domain name <solothurn.com> up for sale. The defendant cited numerous decisions on how geographical names should be assessed (including a decision about the name <rouen.com>) and on the need to fulfill the function of a trade-mark.

Faced with this case and the question of whether the applicants could validly claim an unregistered trademark right in the name “Solothurn”, the panellists carried out a meticulous examination of the case law of the decisions of the WIPO panellists (overview) in the field of geographical names.

In particular, they recalled that according to the overview, “geographical terms used only in their ordinary geographical sense, except when registered as trademarks, do not, as such, provide standing to act in UDRP proceedings”. They also noted that in UDRP matters, it has generally been difficult for affiliates or entities responsible for a geographical territory to demonstrate trademark rights over that geographical name. However, the panellists noted that the decisions cited by the applicants all acknowledged that the geographical name was used in a purely descriptive way of a geographical location and not as a trademark.

On the other hand, they took note of the fact that some panellists have indicated that an unregistered trademark right in a geographical name may be granted to an official authority in exceptional circumstances. The circumstances in question cover the increasingly rare assumption that the geographical name would be used in connection with products and services but without any connection to the geographical location to which it corresponds. The idea is that the trade name should not generate an association with a geographical location in the minds of consumers, but rather an association with products and services, as the main function of the brand requires. For example, we can mention the products of the Ushuaïa brand, unrelated to Tierra del Fuego.

In the present case, the panellists noted that the applicants had not provided any proof of use of the name “Solothurn” in connection with products and services beyond those provided by the City of Switzerland. On the contrary, the applicants merely pointed out the use of the name “Solothurn” in connection with the name of the city of Switzerland and the tourist activities offered there. Consequently, the panellists could not validly conclude that the applicants had established that they had rights in the unregistered Solothurn trademark.

The panelist added that the applicants could not rely on the protection of this name as “trademark-like” within the meaning of the Swiss law on unfair competition insofar as Article 4.a. (i) of the Guidelines expressly refers to the “trade or service mark”.

Finally, the complaint was rejected as the applicants had not provided proof of trademark rights. However, this decision seems to be qualified by the panellists, who point out that it is a decision rendered under the UDRP principles, adapted to disputes between registrants and trademark owners whereas the solution could have been different under Swiss law and in matters of unfair competition.

The “morality” of this decision is not new; the UDRP procedure is not suitable for all disputes involving domain names and should not be systematically preferred to legal proceedings, even if it does have the advantage of being faster and less costly.

WIPO WIPO, Arbitration and Mediation Center, July 25, 2019, No. D2019-1164, Einwohnergemeinde Solothurn, Verein “Region Solothurn Tourismus”, Verein “Katon Solothurn Tourismus” c/ M.A. Stenzel,

COMPUTER GRAFICS – Modification of the opposition procedure in France: an increased protection for the right holders

Written by Dreyfus10/03/2020

Modification of the opposition procedure in France: an increased protection for the right holders

Written by Dreyfus20/02/2020

Opposition is a crucial procedure to ensure the protection of trademarks. It is a way to solve potential disputes quickly, simply and with reasonable costs and time limits.

Following the transposition of the « Trademark reform Package » into French law, modifications were made to the opposition procedure, ensuring right holders a broader protection against the infringement of their rights.

The first major change is the expansion of prior rights that can serve as the basis for the opposition before the French Trademark office. So far, it has only been possible to file an opposition on the basis of a prior trademark application, a prior registered or well-known trademark in the sense of article 6bis of the Paris Convention; an appellation of origin or a protected geographical indication; the name, the reputation or the image of a territorial collectivity.

From now on, article L712-4 of the French Intellectual Property Code, modified by the ordinance of November 13, 2019, allows for the opposition of the registration of a trademark on the basis of :

a prior trademark (French, of the European Union, or international designating France or the European Union; a well-known trademark; a trademark that enjoys repute in France or, in the case of a European trademark, a reputation in the European Union, subject to certain conditions);

a company name or a corporate name if there is a risk of confusion in the mind of the public,

a trade name, commercial sign or a domain name, the scope of which is not only local if there is a risk of confusion in the mind of the public,

an appellation of origin or a protected geographical indication,

the name of a territorial collectivity or the name of a public establishment for inter-municipal cooperation,

the name of a public entity if there is a risk of confusion in the mind of the public.

This new legal provision also makes it possible for the opponent to invoke, if need be, several rights to form the opposition.

The second important transformation concerns the opposition process.

As in the former procedure, the opponent has a 2 month deadline from the date of publication of the trademark application to file an opposition. However, they now have an additional month to present their observation as well as the documents necessary to prove the existence and the scope of their rights. It will be qualified, firstly, as a “formal” opposition, as in the procedure before the EUIPO, until the statement of case on the merits is filed and, secondly, in the event that the Parties have not settled their dispute amicably in the meantime.

The adversarial phase of the opposition, during which the Parties exchange documents and their arguments in writing, subsequently begins. The parties may request an oral hearing at this time. However, no new pleas or documents may be presented during the hearing.

Depending on the number of exchanges between the Parties, this first phase of investigation may last anywhere between 6 months and a year. At the end of this period, the director of the French office must render a decision within 3 months.

The changes made by the transposition of the European directive into French law provide greater protection for rights holders. This new procedure is more precise because it has been limited by the stipulation of short and non-extendable deadlines. Furthermore, it makes it possible to base the opposition on a larger number of prior rights, thus putting the protection of holders at the forefront of this procedure.

This new opposition system applies to all trademark applications filed from December 11, 2019.

Dreyfus can assist you in the management of your trademarks portfolios in all countries of the world and accompany you in your opposition proceedings. Do not hesitate to contact us.

FABA/FBA Paris Fashion Law and Innovation Conference, October 4th 2019

Written by Dreyfus01/10/2019

The Federal Bar Association, in collaboration with the French American Bar Association, is organizing the 2019 Fashion Law and Innovation Conference. This event will take place on Friday, October 4 at 8:30am at the Maison du Barreau in Paris.

Programming will feature a notable group of law experts and industry representatives who will discuss recent developments and current challenges from both the French and US perspective.

Nathalie Dreyfus will speak at 9am for a conference about The Five Senses: The growth of non-traditional brands in the fashion industry.

For more information and registration, please click here.

*Note that this conference is organized in collaboration with the French American Bar Association so it will be in English.

Information

Where: Maison du Barreau, 2 Rue de Harlay, 75001 Paris

When: October 4th, 8 :30am – 12 :30pm

RDAP replaces WHOIS

Written by Dreyfus11/09/2019

The WHOIS protocol now appears to be outdated due to the evolution of technical requirements in the digital era. Indeed, this tool, provided by registrars, is inter alia not capable of working with either encoding or with non-latin characters. Consequently, since 2015, ICANN in collaboration with the Internet Engineering Task Force (IEFT) has been working on the replacement of WHOIS through the RDAP (Registration Data Access Protocol), in compliance with the Temporary Specifications and the GDPR.

Like WHOIS, the RDAP provides registration data, although its implementation is different since it allows standardization, security data access and enquire response formats. As a result, it will be possible to search all the registration data available from various registrars, unlike WHOIS that is limited to the database being searched. It also takes into account the internationalisation of domain names.

The possibility of granting different accesses to the registration data is being considered. For instance, access for anonymous users could be limited whereas authenticated users could have full access to all data.

While some elements still have to be worked out, registrars are required to implement the RDAP service prior to August 26, 2019.

This brief was published in the July-August 2019 issue of the French magazine “Propriété industrielle”.

The respondent has a licence on a trademark corresponding to a disputed domain name

Written by Dreyfus09/09/2019

WIPO, Arbitration and Mediation Centre, March 11, 2019, No. D2019-0035, Pharnext versus Wang Bo, Xiang Rong (Shanghai) Sheng Wu Ke Ji You Xian Gong Si

On numerous occasions, we have noticed that even those complainants who are represented in UDRP proceedings, could have been better informed about the nature and extent of the rights on which the respondent may rely. Detailed research is an essential prerequisite to filing a complaint, otherwise, the success of the complaint is jeopardised.

On January 7, 2019, the French company Pharnext, whose main activity is in the biopharmaceutical industry, filed a UDRP complaint seeking the transfer of the name <pharnex.com>, which had been registered by a Chinese company.

The complainant contended that it had trademark rights in PHARNEXT through ownership of its “PHARNEXT” logo protected by an international trademark since 2013 and used on its website located at www.pharnext.com.

The respondent had registered the domain name <pharnex.com> in October 2017. At the time the complaint was submitted, the disputed name connected to a website in both English and Chinese indicating that PHARNEX is a platform to help medical companies set up operations in China.

The complainant claimed that the respondent must have had the “PHARNEXT” trademark in mind when registering the domain name, because in May 2017, its partnership with Tasly, one of the most recognised pharmaceutical companies in China, had been announced. The complainant also said there is no plausible explanation for the Respondent’s registration of the Domain Name. It also claimed to have done searches which revealed no evidence that the respondent had any right or legitimate interest in the name.

However, the respondent, Xian Rong (Shanghai), firstly, proved that it had a licence on the “PHARNEXT” trademark for financial services, and secondly pointed to its active use of the trademark since December 2017. Although the ownership of a trademark does not automatically confer a legitimate interest or rights on the respondent, the complainant bears the burden of proof throughout the complaint.

In the present case, the expert was “convinced that the PHARNEXT trademark was registered in good faith”. She further noted that the domain name was used, before the filing of the complaint, in connection with a genuine offer of goods and services. Hence, though the domain name was confusingly similar to the complainant’s trademark, the complaint could not be accepted.

The expert stressed that “her findings are made in the limited boundaries of the UDRP; any matters outside the scope of the Policy may be handled by the parties in a relevant court of law.. Quite simply, the complainant had not proved that the disputed domain name had been registered and used in bad faith.

This decision once again highlights that it is essential to carry out research on all aspects of the proposed complaint; including the respondent and the sign from which the disputed domain name has been derived. For example, researching the “PHARNEX” sign on the Chinese databases would have made the complainant aware of the existence of the word mark “PHARNEX” on which the respondent relied. This would have alerted the complainant to a potential weakness in its case and enabled it to consider alternative strategies. It is essential to think of every possible defense a respondent may raise and be prepared to counter any such defense.

This brief was published in the July-August 2019 issue of the French magazine “Propriété industrielle”.

Enterprise names and Trademarks in China

Written by Dreyfus04/09/2019

The Asian giant – hitherto invisible – has become one of the countries where most patent and trademark applications are filed. It is not surprising that companies from all over the world want to have a presence in China. However, several factors must be taken into account when setting up these companies’ such as the features that must be contained in their corporate names.

One of the first steps for foreign companies is to decide on a suitable name for the Chinese market. The main pieces of legislation governing this issue are the Regulations on Registration and Management of Enterprises Name and the Implementation Measures on Registration and Administration of Enterprise Names, which detail how the name of Chinese companies should be structured and what information should be included.

In China, company names must be composed, according to these regulations in a specific format, and must be composed of i) Administrative Division, ii) Trade name, iii) Industry and iv) Organizational form, except as otherwise provided by law

Other regulations restrict the content of names, prohibiting the use of content that could mislead consumers or jeopardize free competition, or injure or contradict national unity, politics, social ethics, culture, or religion. Special characters, such as Arabic numerals, foreign symbols or alphabets, are not allowed, and certain words such as “China,” “Chinese,” “national,” “State,” or “international” may only be used on rare occasions.

In certain circumstances, a company could use an enterprise name without including the administrative division. This may be by the approval by the State Council, or when the share capital value is at least CNY 50 million. Such authorization can be granted by the State Administration for Market Regulation.

It seems clear that the strongest feature in choosing a company name in China is the trade name. Similar company names can co-exist, unless exactly the same trademark has previously been registered, in which case a trade name challenge could be attempted by the trademark’s proprietor.

The JINGKE Case illustrates the conflicts that may arise between trade names and trademarks.

On November 29th, 2010, Shanghai Precision & Scientific Instrument Co., Ltd. (PI) sued Shanghai Jingxue Scientific Instrument Co., Ltd. (Jingxue) and Chengdu Kexi Complete Sets of Instruments Co., Ltd. (Kexi) in Shanghai Pudong New Area People’s Court.

Shanghai Precision & Scientific Instrument Co., Ltd. complained that the defendant maliciously registered and used plaintiff’s business name in the abbreviated form of “精科” (JINGKE in Chinese).

They said that because it is well known in the industry, as a trademark; its use by the defendants constituted acts of unfair competition causing serious prejudice to the plaintiff’s legitimate interests.

They therefore asked for injunctive and compensatory relief against the two defendants.

The defendants contended that Kexi is the owner of the registered trademark JINGKE, and that its use of the trademark is protected under the law. They also counterclaimed against plaintiff for trademark infringement in using SHANGHAI JINGKE in connection with its products and packaging.

The court found that before the mark JINGKE was applied for registration, “Shanghai Jingke” and “Jingke” had been used as abbreviated business names, attaining a degree of notoriety and becoming in effect plaintiff’s trade names, and therefore deserving protection as such.

Accordingly, the Court held:

Firstly, that the defendant Kexi,by securing the trademark registration of, and by using plaintiff’s abbreviated trade name JINGKE (already in use), and secondly, that the defendant Jingxue by using the JINGKE mark on its products via third parties by permission of defendant Kexi, both infringed plaintiff’s rights to its corporate business name, and were thus guilty of unfair competition.

The court then granted an injunction against the defendants for unfair competition, and awarded damages.

Both defendants appealed to Shanghai No.1 Intermediate People’s Court. The Court of Appeal held that abbreviated business names can be considered to be corporate names if they have gained some notoriety in the marketplace, become well-known to the relevant sectors of the public, and have in fact been used as trade names.

When others later use such well-known abbreviated business names without permission in such a way as to be likely to cause confusion in the market among relevant sections of the public Art.5, Cl. 3 of the Unfair Competition Law governing the legal protection of the corporate names shall apply. For this reason, the appeal was rejected and the judgment of the court below was confirmed.

A more recent case, which also dealt with such conflicts, arose between Chengdu Huamei and Shanghai Huamei. In 2017, Chengdu Huamei sued Shanghai Huamei, on the grounds that: (1) Shanghai Huamei had been using the trade name ‘Huamei’ without Chengdu Huamei’s authorisation, thus committing acts of unfair competition; and (2) Shanghai Huamei had infringed Chengdu Huamei’s exclusive trade mark rights by frequently and prominently using phrases such as ‘Huamei’, ‘Shanghai Huamei’, ‘Huamei Dental’ and ‘Huamei Plastics’ in their business premises. In this case, however, he decision of first instance, subsequently upheld on appeal was that:

“Merely having an identical trade name would not lead to the conclusion that Shanghai Huamei committed unfair competition or acted as a free rider. Secondly, most of the uses of ‘Huamei’ or ‘Shanghai Huamei’ for publicity purposes fell within the scope of fair use of Shanghai Huamei’s own trade name. However, when it came to the use of the signs containing ‘Huamei Dental’ ‘Huamei Plastics’ and ‘Shanghai Huamei’ that were similar to the trade marks at issue, the court found that it could easily cause confusion among members of the public and thus amounted to trade mark infringement”

Dreyfus can assist you in the management of your trademarks portfolios in all countries of the world. Do not hesitate to contact us.

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