Faking it, or beyond suspicion? Counterfeits in transit

"Should we let him in? Are there
 grounds for suspecting that
 he's not the real Advocate General .."

If there's much more breaking news today, the IPKat will go pop, but the Opinion of Advocate General Cruz Villalon has just been published on Curia in Joined Cases C‑446/09 Koninklijke Philips Electronics NV v Lucheng Meijing Industrial Company Ltd, Far East Sourcing Ltd, Röhlig Hong Kong Ltd and Röhlig Belgium NV and C‑495/09 Nokia Corporation v Her Majesty’s Commissioners of Revenue and Customs. The first is a reference from Belgium, the second from England and Wales.

In Philips the Antwerp investigations inspectorate of the Belgian Customs and Excise Administration detained a consignment of shavers from Shanghai, wihch they suspected of infringing Philips's intellectual property rights. The customs authorities sent Philips a photograph of the ‘Golden Shaver’ and informed it that the following companies were involved in the manufacture of or trade in the detained shavers: Lucheng Meijing Industrial Company Ltd, a Chinese manufacturer of shavers; Far East Sourcing Ltd, established in Hong Kong, the shipper of the goods; Röhlig Hong Kong Ltd, the forwarding agent for the goods in Hong Kong, acting on the instructions of the declarant or consignee of the goods; Röhlig Belgium NV, the forwarding agent for the goods in Belgium, acting on the instructions of the declarant or consignee of the goods. In the customs declaration issued by the representative of Röhlig Belgium NV, the goods were declared under the temporary import arrangements without stating the country of destination. Philips brought an action before the Court of First Instance, Antwerp, seeking a ruling that its intellectual property rights had been infringed and claiming that, in accordance with Article 6(2)(b) of Regulation 3295/94 [the then-current Regulation on the temporary suspension of free movement of goods suspected of infringing certain IP rights], the Court should use as its starting point the fiction that the shavers seized had been manufactured in Belgium and should then apply Belgian law for the purposes of establishing the infringement. The Court, before ruling on the merits of the case, referred the following question to the Court of Justice for a preliminary ruling:

‘Does Article 6(2)(b) of Council Regulation ... 3295/94 ... constitute a uniform rule of Community law which must be taken into account by the court of the Member State which, in accordance with Article 7 of the Regulation, has been approached by the holder of an intellectual-property right, and does that rule imply that, in making its decision, the court may not take into account the temporary storage status/transit status and must apply the fiction that the goods were manufactured in that same Member State, and must then decide, by applying the law of that Member State, whether those goods infringe the intellectual-property right in question?’

In Nokia, Her Majesty’s Commissioners of Revenue and Customs (HMRC) stopped and inspected at Heathrow Airport a consignment of goods which had come from Hong Kong and was destined for Colombia, comprising approximately 400 mobile telephones, batteries, manuals, boxes and hands-free kits, each of which bore the trade mark ‘Nokia’. HMRC sent Nokia samples of those goods. After inspecting the samples, Nokia notified HMRC that the goods were counterfeit and asked whether HMRC intended to detain them. HMRC said it was uncertain how goods could be ‘counterfeit’ within the meaning of Article 2(1)(a)(i) of Regulation  1383/2003 [which replaced Regulation 3295/94] in the absence of any evidence that they might be diverted onto the European Union market. HMRC therefore concluded that, in the absence of such evidence, it was not lawful to deprive the owner of its goods. Nokia issued an application against HMRC, asking for the names and addresses of the consignor and the consignee together with any other relevant documents relating to the consignment in the possession of HMRC. Even though such documents were sent to it, Nokia did not succeed in identifying the consignor or the consignee of the goods, and concluded that they had both taken steps to hide their identity. Eventually Nokia commenced legal proceedings in which the judge held that the Regulation did not entitle or require customs authorities to detain or seize counterfeit goods in transit where there was no evidence that the goods would be diverted onto the market in Member States because such goods were not ‘counterfeit goods’ under Article 2(1)(a)(i) of Regulation 1383/2003. On appeal, the Court of Appeal of England and Wales referred the following question to the Court of Justice for a preliminary ruling:

‘Are non-Community goods bearing a Community trade mark which are subject to customs supervision in a Member State and in transit from a non-Member State to another non-Member State capable of constituting “counterfeit goods” within the meaning of Article 2(l)(a) of Regulation ... 1383/2003 if there is no evidence to suggest that those goods will be put on the market in the EC, either in conformity with a customs procedure or by means of an illicit diversion?’

This morning the Advocate General advised the Court of Justice of the European Union to rule in Philips:

Article 6(2)(b) of Council Regulation ... 3295/94 of 22 December 1994 laying down measures concerning the entry into the Community and the export and re-export from the Community of goods infringing certain intellectual property rights is not to be interpreted as meaning that the judicial authority of the Member State called on, in accordance with Article 7 of that regulation, by the holder of an intellectual property right, may take no account of the status of temporary entry or of transit of the goods in question, or, therefore, as meaning that that authority may apply the fiction that those goods were produced in that same Member State for the purpose of ruling, in accordance with the law of that State, whether or not they infringe the intellectual property right at issue

and to rule in Nokia:

Non-Community goods bearing a Community trade mark which are subject to customs supervision in a Member State and are in transit from one non-member country to another non-member country may be seized by the customs authorities provided that there are sufficient grounds for suspecting [i] that they are counterfeit goods and, in particular, [ii] that they are to be put on the market in the European Union, either in conformity with a customs procedure or by means of an illicit diversion.

Says the IPKat, so it's goodbye to the notorious "manufacturing fiction" if the AG's Opinion is upheld --and a host of problems for all IP owners in policing trade in fakes and infringements if the recommendation in Nokia is going to be left for the customs authorities and national courts of 27 EU Member States to interpret and apply in their respective ways. Anyone whose daily business consists of transporting fakes from one place to another via the EU will soon compile a chart of easy-transit destinations.

In particular, what are "sufficient grounds for suspecting"? Does this mean that there are grounds for thinking the goods are more likely than not to be counterfeit, or that the possibility that are are not genuine cannot be excluded" (the highly problematic test for 'likelihood of confusion' that already bedevils EU trade mark law), or something in between. The AG says:

"106. Now the problem is that the meaning of ‘suspicion’ in this context is inherently bound up with the facts [This seems to limit the operation of any sort of presumption in favour of suspicion based on, for example, the absence of information concerning the identity of the consignee]. It is beyond doubt that ‘suspicion’ must not be taken to mean irrefutable findings, but that criterion must be prevented from leading to total discretion for the customs authorities in their action.

107. For that reason, I consider that, for the customs authorities to be able lawfully to seize goods in transit subject to their control, they must at the very least have ‘the beginnings of proof’, that is to say, some evidence that those goods may in fact infringe an intellectual property right" [that would be great if there were common standards of evidence -- and on the assumption that the customs authorities are well enough trained to deal with these issues].

Then, at para 109 the AG says

"... in the assessing of those ‘suspicions’ particular account must be taken of the danger of fraudulent entry of goods into the European Union [What is the connection between a suspicion of what a product is and the danger of what it might do?]. Despite all the precautions entailed by the system of Community vigilance, that danger exists, inasmuch as it is not to be forgotten that, even if the external transit procedure itself is founded on a legal fiction, the goods are physically to be found in the territory of the European Union".

The IPKat suspects that the Court's ruling will be a good deal shorter than the 113 paragraphs of this Opinion.  He very much hopes that they will prove to be a workable foundation for IP owners and customs authorities to deal with those cheeky folk who send fake goods right through EU terrritory with impunity.  Merpel says, what sort of evidence supports the suspicion that the goods in transit are to be marketed in the EU? Surely a set of common rules and guidance is needed here.

Breaking news: competition trumps IP in footie decoder pub brawl

With so little time in which to make their oral submissions to the Court
of Justice, counsel had to resort to extreme measures to make their point

At the time of posting this item, there's no sign of the Advocate General's keenly-awaited Opinion in Cases C-403/08 and C-429/08 Football Association Premier League Ltd & Others v QC Leisure & Others, Karen Murphy v Media Protection Services Ltd. There is however this press release from the Curia. It reads as follows:

"In the view of Advocate General Kokott, territorial exclusivity agreements relating to the transmission of football matches are contrary to European Union law

European Union law does not make it possible to prohibit the live transmission of Premier League football matches in pubs by means of foreign decoder cards

The Football Association Premier League Ltd (the FAPL) is the marketing organisation for the top English football league. The FAPL essentially grants its licensees the exclusive right to broadcast matches and exploit them economically within their respective broadcasting areas, generally the country in question. In order to safeguard this exclusivity, licensees are obliged to prevent their broadcasts from being able to be viewed outside their respective broadcasting areas. To that end, each licensee is required to encrypt its satellite signal and to transmit it in encrypted form to subscribers within its assigned territory. Subscribers can decrypt the signal using a decoder, which requires a decoder card. The exclusivity agreement also imposes restrictions on the circulation of authorised decoder cards outside the territory of each licensee.

The main proceedings in the present references for preliminary rulings concern attempts to circumvent this exclusivity. Companies import decoder cards from abroad, in the present proceedings from Greece, into the United Kingdom and offer them to pubs at more favourable prices than the broadcaster in that State. This practice makes it possible for pubs in the UK to show the live transmission of Premier League football matches using a Greek decoder card. The FAPL is attempting to stop that practice by means of a judicial ruling. Case C 403/08 concerns civil-law actions brought by the FAPL against the use of foreign decoder cards. Case C 429/08 relates to criminal proceedings which have been brought against the landlady of a pub who used a Greek decoder card to show Premier League matches. The High Court has, in each set of proceedings, referred several questions to the Court of Justice on the interpretation of EU law.
Advocate General Juliane Kokott explains that the exclusivity rights in question have the effect of partitioning the internal market into quite separate national markets, something which constitutes a serious impairment of the freedom to provide services.

With regard to possible justification for the restriction of the freedom to provide services, the Advocate General examines the protection of industrial and commercial property and, in particular, addresses the question whether live satellite transmissions of football matches involve rights the specific subject-matter of which requires a partitioning of the internal market. In this connection she first states that the specific subject-matter of the rights in live football transmissions lies in their commercial exploitation. In the present cases, the live transmission of Premier League football matches is exploited, in particular, through the charge imposed for the decoder cards. Advocate General Kokott takes the view in this connection that the economic exploitation of the rights in question is not undermined by the use of foreign decoder cards, as the corresponding charges have been paid for those cards. Whilst those charges are not as high as the charges imposed in the United Kingdom, there is, according to the Advocate General, no specific right to charge different prices for a work in each Member State.

Rather, it forms part of the logic of the internal market that price differences between different Member States should be offset by trade. The marketing of broadcasting rights on the basis of territorial exclusivity is tantamount to profiting from the elimination of the internal market. Consequently, the specific subject-matter of the rights in the transmission of football matches does not justify a partitioning of the internal market, and thus also does not justify the resulting restriction of the freedom to provide services.

Advocate General Kokott further takes the view that the contractual restriction on using decoder cards in the State of origin only for domestic or private use, but not for commercial use – for which a higher subscription charge is payable – also cannot justify a territorial restriction of the freedom to provide services. The Member State concerned may, however, in principle make provision for rights which allow authors to object to the communication of their works in pubs.
So far as concerns the question whether the showing of live transmissions of football matches in pubs infringes the exclusive right of communication to the public of protected works within the terms of the Copyright in the Information Society Directive , the Advocate General explains that, as EU law stands at present, there are no comprehensive rights which protect the communication of a broadcast to the public where no entrance fee is charged.

Advocate General Kokott further expresses the view that the application of the principle of the freedom to provide services is also in line with the Satellite and Cable Directive and with European competition law. Equally, neither does the Conditional Access Directive constitute a barrier to the use of foreign decoder cards".

See also IPKat posts of 7 December 2007 here and 24 June 2008 here.

STOP PRESS: the AG's Opinion has now been posted on the Curia website here.  It's more than 250 paragraphs long ...

Elvis appears in Court, which is more than can be said for the defendant

Everness released this
album in 2009: a
'Christmas Carollo'?

Elvis Presley may or may not be dead, but his intellectual property portfolio goes marching on. Elvis Presley Enterprises v Carollo (trading as Everness) is a decision of Sir William Blackburne, a retired judge sitting in the Chancery Division of the High Court, England and Wales.  Yesterday, in a decision picked up on the Lawtel subscription service, he was asked by Elvis Presley Enterprises (EPE), a business that licensed the use of the late Elvis Presley's IP to give summary judgment on a claim for trade mark infringement, passing off and breach of contract against Carollo, who was making and selling albums that carried its marks.

The background was that EPE, a US corporation, was set up by the co-executors of the estate of the late Elvis Presley for the purposes of worldwide sale, marketing and licensing of Elvis Presley products. EPE held several Community trade marks relating to the great man's name.  Carollo, a former licensee of EPE's intellectual properties in respect of various items of Elvis memorabilia, asked permission to make an Elvis album which EPE refused.  Undeterred by this trifling setback, Carollo carried on making and selling the album in the United Kingdom. Reassuringly for his customers, the album and its artwork bore EPE's marks and signature hologram, acknowledging that they belonged to EPE.

EPE sued Carollo in England and Wales; Carollo wrote to the court to dispute its jurisdiction, also arguing that he had a valid contract with EPE to make and sell the album. EPE stood its ground, also stating that it had built up significant goodwill in its trade marks and logos to the extent that a substantial body of the public, upon seeing those marks and logos, would believe those goods or services to be those of EPE and its lawful licensees.

Sir William Blackburne had no great difficulty in granting summary judgment in favour of EPE.  Carollo might have written to the court in order to dispute its jurisdiction, but in his attempt to wield the machinery of justice he hadn't pressed the right buttons, since he hadn't actually mounted a formal challenge to the court's jurisdiction so as to bar it from hearing the application [Merpel says, perhaps that's because he erroneously thought that, by doing so before the Court, he was implicitly recognising the Court's jurisdiction]. In any event, the court did have jurisdiction -- but Carollo didn't offer any proof of his entitlement to use EPE's intellectual property, so he wasn't likely to emerge victorious from this little spat. The fact that neither he nor any legal representative turned up in Court might just indicate the lack of conviction with which he asserted his position.

Says the IPKat, here we have an apparently unanswerable case, no difficult points of law to ponder, no serious defence and no-one in court to argue it: what a great way to give our retired judges a little post-retirement occupational therapy and make them feel both loved and needed.

Elvis Presley Enterprises here
More on Everness here
Why Elvis Presley still lives here

More trade mark practice laid bare

This Kat has been reviewing Amanda Michaels' (and Andrew Norris') book "A practical approach to Trade Mark Law". Already in its fourth edition the book offers 417 pages of UK trade mark law for the reader's delectation. In earlier editions called "A Practical Guide" the book is now part of OUP's 'A Practical Approach' series, which explains the change of title. The book's author Amanda Michaels is a barrister, who is, inter alia, known for her trade mark expertise. She is also an Appointed Person hearing appeals from the UKIPO. Contributing author Andrew Norris is also a barrister as well as an IP tutor - and all this knowledge and practical experience is reflected in the clear layout of the book and its non-fussy writing style.

In its 9 chapters the book covers the major trade mark law issues in a logical order: information about the trade mark system and the functions of trade marks in Chapter 1 is followed by a discussion of registrability in Chapter 2 and relative grounds of refusal in Chapter 3. Chapter 4 covers the procedure before the UKIPO in some detail as well as the procedure before OHIM and it also includes a brief overview of the Paris Convention, TRIPS and the Madrid Protocol. The book does not however discuss the Madrid System in detail. Chapter 5 sets out revocation and invalidity procedures before the UK IPO and OHIM, Chapter 6 informs the reader about the assignment and licensing of trade marks. Chapter 7 explains the UK provisions relating to trade mark infringement and the relevant defences. Chapter 8 is a definite highlight of the book with its precise and logical explanation of passing off, covering everything from the "classic form of passing off" as defined in Jif Lemon to Spalding v Gamage, as well as perennial issues such as "foreign","residual" and "shared" goodwill, celebrity endorsement and providing an understandable(!) explanation of "reverse passing off" on just half a page. Equally succinct is the discussion of "innocence, fraud or a decision to live dangerously" - again set out on just about one page of the book but feeding the reader all the relevant "sound bites". The last chapter (Chapter 9) then turns to "remedies and procedures for trade mark infringement and passing off", including the criminal provision of the Trade Marks Act and the related court procedures: this chapter provides a good overview of the main issues without going into too much detail. The information on the Company Names Tribunal is equally short but alerts you to the main points.

This being a book for practitioners, the authors have intentionally kept the book compact and digestible. Case law is included until early 2010 (including Comparative Advertising/L'Oreal Bellure and everyone's favourite: "AdWords"- albeit not the very latest cases for obvious reasons); and while the book reports about the relevant case law handed down by the ECJ, GC and the UK courts and distills the most important points, it rarely (and I would assume intentionally) discusses or criticises these decisions in much detail. And of course, there are other books readers can revert to for a more in-depth discussion and review of the case law. The book also incorporates the latest round of renumbering of Articles, such as those of the CTMR.

So what is missing or could be bettered? Given its practical approach the authors could consider including "checklists" concerning matters such as trade mark strategies, the question of likelihood of confusion, what to include in an assignment or licence document, etc. Perhaps some more information could be provided on co-existence agreements (what should be covered, is it always a good idea to have one) and the related issue of granting consent. The book also includes rather extensive appendices: the Trade Marks Act 1991, Directive 2008/95/EC, Council Regulation (EC) 207/2009, and the Trade Mark Rules 2008 are all printed in their entirety. This Kat is not quite certain that these texts add much value to the book, in particular since she herself likes to have the law text next to the reference book rather than having to thumb back and forth. Others, however, may be delighted to have all relevant information in one handy book: a matter of personal taste.

Now, is it the book for you? This book works on several levels and for readers with different backgrounds: whether you are trainee trade mark attorney who is trying to find his/her way, a part-qualified trade mark attorney or a qualified trade mark practitioner - you will find the book useful. As one of this Kat's friends has put it, the book has an understandable "non-pompous" writing style so that you can pick it up at different points in your career and be comfortable with it. Having "road tested" this book for quite some time, this Kat believes that for trade mark practitioners this is the kind of book you will use if you come across a problem in your day-to-day practice and need a quick refresher to remind you of the most important points. Sometimes further reading will be required to get to the nitty gritty details but the carefully researched footnotes will make this an easy endeavour. For students and trainees it will serve as a very solid and surprisingly comprehensive reference (and revision) book which - at a prize of under £45 - will give you a sound grounding in and understanding of UK trade mark law and practice. It might also work as basis for students' revision notes for the (current) ITMA exams. Indeed, its handy size makes it ideal for revising during your daily commute and it is affordable enough for students to be able purchase it without having to think twice. If you are a trade mark practitioner and/or trainer, or a patent attorney/lawyer (who perhaps only deals with trade mark matters on occasion) then this book is certainly a book worth having on your shelf in the office. The book may also be of interest to foreign trade mark professionals that have UK connections.

Bibliographic information: publication date 2010, 4th edition, 464 pages, paperback, ISBN 978-0-19-957968-6, Oxford University Press. More details here.

Rapture factor: relatively high - but this is a book that wants to be used.

Losing litigant's hard drive to die, but her lawyers' computer stays safe

There was no stay of execution
of the court's order ...

Three weeks ago the IPKat reported here on the litigation between Brandeaux Advisers and a former employee, Ruth Chadwick, who had cunningly but unlawfully helped herself to a large quantity of confidential information which she anticipated that she might need in the event that a pre-existing dispute between her and Brandeaux got to court. In the earlier decision the court ruled against her, since it was open to her to apply for disclosure (or 'discovery', as the Kat sometimes fondly thinks of it) of such information as she might actually need for that purpose.

In the second ruling, Brandeaux v Chadwick [2011] EWHC 58 (QB), not yet available on BAILII but efficiently noted by Lawtel, the court (Sir Raymond Jack, sitting in the Queen's Bench Division of the High Court, England and Wales, only a couple of weeks after he officially retired) had to decide on the precise form of the order. In his view

* No case could be made for a general injunction to stop Chadwick divulging the confidential information in her possession. Brandeaux had not made out any case that Chadwick had at any time intended to divulge the information to anyone except her lawyers -- or possibly to a regulatory authority (not surprising, since was was the company's compliance officer).

* An order for delivery up should do the trick, including destruction of Chadwick's data-laden hard drive,

* If Chadwick's solicitors were subject to the same delivery up process, they would lose their own computers while it was carried out -- which would obviously create a major problem. For this reason, it would be sufficient to accept the undertakings not to disclose the information which they had offered since there was no real risk that the solicitors would do anything with the information.

* Both Chadwick and Brandeaux had behaved unreasonably in relation to the claim for delivery up, standing their ground when commonsense would have dictated a solution. In terms of costs, this meant that Brandeaux, as victors, were entitled to their costs in relation to those issues upon which they were successful, but Chadwick's conduct was not so unreasonable as to justify the imposition of indemnity costs in Brandeaux's favour.

* Chadwick's work -- for which she had not been paid -- had a value to Brandeaux, which should be taken as the amount which Brandeaux was paying her. However, since the basis upon which Brandeaux's loss was to be assessed was capable of argument to the contrary effect with a real prospect of success, the company should be allowed to appeal on that issue.

This all seems sensible enough to the IPKat, who is relieved to learn that law firms' computers are safe, at least for now, from delivery up for removal of confidential information the nature of which is of no direct concern to them.  But how far would this common sense extend? Would the court take the same view if the data was held by an independent company to which a legal practice subcontracts routine document storage and processing, for example?

How to kill your computer here and here

Feeling sick and tired? Why not try some spam!

The IPKat's reaction to spam was dramatic,
if predictable (photo of Elvis, courtesy of
Ignacio Marques, Baker & McKenzie)

Every so often the IPKat gets an email which makes him chuckle. Usually they offer him a chance to get rich quick, quantities of "herbal viagra" (sic), replica Rolexes [Merpel wonders, if the plural of "index" is "indices", shouldn't the plural of Rolex be Rolices?], doctoral degrees from "prestigious unaccredited universities" and dodgy offers from the heirs of cash-rich cancer-ridden villains.  The email below wasn't even sent to him, being forwarded by a reader.  It goes like this:

"----- Original Message -----
From: "Alan Albright"
To:
Sent: Wednesday, February 02, 2011 1:48 PM
Subject: PatentDrafting.co.uk

Would you like to secure hundreds of extra orders every month at zero ongoing cost? [This Kat is content with his humble crust, but might just be tempted ...]

The domain PatentDrafting.co.uk that we have for sale is ready to drive substantial traffic and new business to you that would have cost you tens of thousands of pounds a year to replace by instead purchasing expensive Google AdWords.[but how much would it cost to get a descriptive term like 'patent drafting' to the top of the "organic" hit list via search engine optimisation, particularly when patentdrafting.com is already in pole position?]

Most of our clients (who include Microsoft, HM Government, American Express, the Royal Bank of Scotland, Renault UK and Deutsche Telekom) are now finding that prime keyword domains pay for themselves within weeks rather than months by virtue of the extra business that they drive to their websites by means of type in traffic and greatly enhanced search engine positions. [The imagine of a Renault driving through the traffic flashes into the mind ..]

Please feel free to get in touch if you’re sick and tired of getting fleeced by greedy Google! [The Kat has heard this sentiment over recent months and years, though the signatory of this email is the first person who seems to be addressing it, alas] Why pay through the nose for traffic that you can now have for free? [... assuming that people really still use domain name type-ins rather than finding the sites they want in less than a second via ... Google]

Best regards,

Alan Albright
eBarclays.com [not to be confused with Barclays, of course]"

Thanks, Sang Nkhwazi (Mancunium IP) for forwarding this.

Men who harass me: Sally's partial collection