The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy
InternKats: Rose Hughes, Ieva Giedrimaite, and Cecilia Sbrolli
SpecialKats: Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Tuesday, 31 March 2015

A Kat revisits Broccoli & Tomatoes, part deux - what does it all mean?

Fellow Kat David posted last week on the recent pair of Board of Appeal decisions G2/12 Tomatoes II and G3/12 Broccoli II (still not available in the online list of G decisions, but the previous post has links to the corresponding pdf documents).  These related to the exception to patentability in the second part (shown in bold) of Article 53(b) EPC that:

European patents shall not be granted in respect of:
plant or animal varieties or essentially biological processes for the production of plants or animals; this provision shall not apply to microbiological processes or the products thereof;

The two decisions have confirmed that the exclusion of essentially biological processes for the production of plants in Article 53(b) EPC does not preclude the grant of a product claim directed to the corresponding plant or plant material.  Thus, if an invention consists of a biological process excluded under Article 53(b) EPC, the product of that process can still be patented, provided that:

(a) claim language can be found to define it (including the possibility of product-by-process claim language where appropriate), and
(b) the claimed plant or plant material is novel and inventive in the usual manner.

It is also necessary that the claim does not fall under the exclusion of plant varieties that is also in Article 53(b) (first part of clause), but according to decision G1/98:

A claim wherein specific plant varieties are not individually claimed is not excluded from patentability under Article 53(b), EPC even though it may embrace plant varieties.

Thus, only a claim to a single plant variety is excluded under Art 53(b) (first part of clause), which was not the case in either of the referred situations.

The outcome is therefore that if an invention lies in an essentially biological processes for the production of plants, patent protection will only be entirely precluded if the product is not novel or inventive, or if the product is a plant variety as such.

Noteworthy points that stuck this Kat when reading the decisions (whose substantive contents are the same and both decisions refer to both referrals) were:

1) All of the parties, and the President, actually argued for basically the same outcome:  the President, both patent proprietors and both opponents in the Broccoli case (the single opponent in the Tomato case having withdrawn their appeal) urged essentially the answers to the questions that were what the EBA did in the end finally decide.  With so many involved parties, it appears somewhat surprising that there was so much agreement on this.  Presumably the opponents had their eye on wider issues than just the case in front of them.

2) The EBA insisted that “there is no general notion of an obligatorily restrictive construction of exceptions to patentability”, but then stated that “such a narrow interpretation might well result from applying the general principles of interpretation to a specific provision with regard to specific legal and factual circumstances.”  The EBA then indeed went on to interpret Art 53(b) narrowly.

3) The narrow interpretation of Art 53(b) was held to be deducible from:

a) the place of Art 53(b)  among exceptions to patentability in its context within Chapter I of Part II of the EPC

b) reference by analogy to rule 27(b) EPC, which stipulates that biotechnological inventions relating to plants are patentable if the technical feasibility of the invention is not confined to a particular plant variety.

4) Teleological interpretation was ruled out, since, as observed in G2/07 and G1/08 (the earlier Broccoli and Tomato cases), “the systematic context of the exclusion of essentially biological processes from patentability, namely its place in Article 53(b) EPC, does not as such indicate what the purpose of the provision is”.

5) Subsequent agreement or practice, and historical interpretation, both recognised as methods of interpreting provisions of treaties (such as the EPC), were also not found to assist in interpreting the scope of the exclusion.

6) The EBA insisted that the narrow interpretation of the exclusion that they favoured did not lead to an erosion of the exception, so that “the legislator's intentions could be frustrated by the choice of the claim category and by "skilful" claim drafting”, since the process was still excluded from patentability.  The product claim still must satisfy the other criteria for patentability (such as novelty and inventive step).

Having read the decisions, this Kat actually rather wished that he had stuck to the headnote, which pretty much says it all.

Brown epilators? There may still be one in Albania

Don't even think it ...
Some people are embarrassed at having excess hair, or at any rate at having hair where they would rather not be seen to displaying it. This is why epilators are so popular. Other people, this Kat guesses -- since felines and epilators are not best friends -- are more concerned that their domestic and personal appliances should match, or at least be colour-coordinated.  Now, epilators come in a range of colours, but a casual inspection of the Image facility of a well-known search engine suggests that they are usually pink, mauve, white, silver or (presumably to mask any spillage of blood) red -- but never brown. Imagine the excitement, then, of a prospective purchaser who is seeking a brown epilator and learns that you can get them in Albania. But imagine their disappointment too. This Kat's friends at Petosevic explain:
On January 23, 2015, the representatives of Petosevic Albania and the local customs authorities organized and witnessed the destruction of 119 fake “Brown” epilators, found to infringe trade mark rights of Braun GmbH, one of the world’s leading designers, developers and sellers of small electrical appliances.

The prior art
The Albanian Customs detained the epilators marked “Brown” on October 27, 2014. They originated in China and were intended for the Albanian market. Braun GmbH is the holder of the customs watch application for Braun stylized word mark, approved by the Albanian Customs in 2011. Guided by the risk that the epilators might infringe the IP rights of Braun, the local customs authorities informed the right holder of the detention.

Following Braun GmbH’s approval and with no objections from the importer, the goods were destroyed through the simplified procedure. The epilators were smashed with a hammer at the customs premises in Tirana and the leftovers were taken to a local landfill [smashing epilators with a hammer is a 'simplified procedure' too -- but the one referred to here is a simplified legal procedure].
Merpel thinks she can explain the deep and meaningful significance of there being 119 fake epilators.  Almost certainly, since even dealers in fakes are usually tidy-minded businessmen, there were 120 to begin with, but whoever was bringing them into Albania kept one for him/herself or a significant other.  Whatever happened to it? Merpel's not sure, but if you are in Albania you may find that you can hear the sound of distant screaming ...

This Kat is pleased to see that Albania is getting its act together when it comes to dealing with imported infringing goods. It's nine months now since that country became a candidate for European Union membership and it looks as though it's making progress.

Get rid of unwanted hair here
Get rid of unwanted hare here

Making available does not mean communication: still on the C More decision

A smiling TV 2 Norway
(new owner of C More) CEO
possibly pictured before the CJEU ruling
Last week this blog reported on the latest decision of the Court of Justice of the European Union (CJEU) on the right of communication/making available to the public within Article 3 of the InfoSoc Directive, this being C More Entertainment AB Linus Sandberg, C-279/13.


As readers will remember, this was yet another reference for a preliminary ruling from seemingly hyperlinking-loving Member State Sweden. 

The reference originated from proceedings that pay-TV station C More brought against Mr Sandberg. This had set up a website providing links that would circumvent C More's paywall and allow users to watch live ice hockey matches without paying the SEK 89 (approx £7) fee per match. 

Mr Sandberg was prosecuted before the Hudiksvall District Cour for offences against the Swedish Law on Copyright. 

This time no 'new public'
was at stake ...
Both Mr Sandberg and C More Entertainment appealed against that judgment before the Court of Appeal of Nedre Norrland. In 2011 this court ruled, among other things, that no copyright had been infringed since C More's works could not be considered sufficiently original [readers will remember that in FAPL, here, the CJEU held (at 98) that "sporting events cannot be regarded as intellectual creations classifiable as works within the meaning of the [InfoSoc] Directive. That applies in particular to football matches, which are subject to rules of the game, leaving no room for creative freedom for the purposes of copyright."]

Eventually C More brought an appeal before the Swedish Supreme Court. This decided to stay the proceedings and seek guidance from everybody's favourite court (this obviously being the CJEU), by referring five questions [available on the Curia website herewhich were somehow similar to those that the Svea Court of Appeal had previously referred in Svensson [Katposts here] and the German Federal Court of Justice had referred in BestWater [here]

Indeed, following the CJEU order in the latter case, the Swedish Supreme Court decided to retract all its questions but one, this being:

May the Member States give wider protection to the exclusive right of authors by enabling ‘communication to the public’ to cover a greater range of acts than provided for in Article 3(2) of the Information Society Directive?

... but rather the concept
of 'time individually chosen'
The CJEU response

The Court answered this question by looking into Article 3 of the InfoSoc Directive. First it stated [at 24] that the concept of making available to the public forms part of the "wider" communication to the public [this does not sound that obvious, since the relationship between communication and making available has always been fairly ambiguous]. Secondly the Court held [at 25] that:

"in order to be classified as an act of 'making available to the public' within Article 3(2) of that directive that, in order to be classified as an act of ‘making available to the public’ within the meaning of that article, an act must meet, cumulatively, both conditions set out in that provision, namely that members of the public may access the protected work from a place and at a time individually chosen by them."

By recalling both the explanatory memorandum to the Commission Proposal for what would then become the InfoSoc Directive and the earlier decision in SCF [here]the CJEU clarified that ‘making available to the public’ is intended to refer to interactive on-demand transmissions characterised by the fact that members of the public may access them from a place and at a time individually chosen by them.

So when it comes to live broadcasts, ie works characterised by the very fact that the public that wishes to watch them does not have the possibility of choosing when to do so, is providing a hyperlink to them an act of making available?

According to the Court: NO, since the second cumulative condition in Article 3(2) of the InfoSoc Directive would not be met.

This said, Member States can protect the broadcasting and communication to the public of transmissions made by broadcasting organisations by means of other provisions, notably those resulting from the implementation into national laws of Article 8(3) of Directive 2006/115 (the Rental and Lending Rights Directive), provided that such protection does not undermine that of copyright.

It is OK for Petronella to watch
this live broadcast via the
paywall-circumventing link
that her friend Lucius provided,
at least InfoSoc-wise 
Is this decision shocking?

Well, in a way it is, because it might suggest that, while a hyperlink to a newspaper article falls under the scope of the InfoSoc Directive, a hyperlink that - by circumventing a paywall - allows one to watch live TV broadcasts does not. Disregarding for one moment the technicalities of the law, does this sound about right from a lay perspective (not to mention a business one)? 

In any case it would appear that the Court could achieve this outcome by separating (at last?) the rights of communication and making available to the public. While to have "an ‘act of communication’, it is sufficient, in particular, that a work is made available to a public [to be intended as a 'new' public, ie a public that was not taken into account by the copyright holders when they authorised the initial communication to the public] in such a way that the persons forming that public may access it, irrespective of whether they avail themselves of that opportunity" [Svensson, at 19], to have an 'act of making available' (at least within Article 3(2) of the InfoSoc Directive) it is instead required that an act allows members of the public to access a work (1) from a place and (2) at a time individually chosen by them.

Yet, still in Svensson, the CJEU did not appear to have in mind such a sharp distinction between the two rights when it stated - yet within the meaning of Article 3(1) of the InfoSoc Directive - that "the provision of clickable links to protected works must be considered to be ‘making available’ and, therefore, an ‘act of communication’".

Following C More, Article 3(2) of the InfoSoc Directive does no longer seem the place for broadcasting organisations to seek protection of their live broadcasts. While other provisions may help repress unauthorised linking to this kind of works, it would seem that in this respect at least the InfoSoc Directive may be no longer considered as providing such a "high level of protection", as per Recital 4 in the preamble thereof.

In any case, the meaning of C More is that while a link to an article of, say, The Times which circumvents its paywall is not OK under the InfoSoc Directive, the link to a live broadcast of a Premier League match that circumvents Sky's paywall (and for whose TV rights Sky and BT paid something like £10m per game) is.

Monday, 30 March 2015

Never too late: if you missed the IPKat last week

Here's the 39th Never Too Late compilation of short notes on all those Katposts that you might have missed last week.  Once again this list has been masterminded by our dear friend and colleague Alberto Bellan. Many thanks, Alberto! May you, and indeed all our readers, have a great Easter!  The 40th compilation will of course note the posts you might have missed on account of a little rest and relaxation.

Last week's Katposts lined up like this:

Merpel writes an open letter to the European Patent Office (EPO) Administrative Council (AC), trying to help its members to focus with greater facility on the matters that appear to her to be most in need of their attention in these hard times. 

* The CJEU Hyperlinks Trilogy: Part III, C-279/13 C More Entertainment

Tom pens a summary of the Court of Justice of the European Union's decisions on linking and copyright. 

* As Loginov gets logged out, a Kat mewses: are the new gTLDs a friend or foe?

Emeritus Kat Catherine Lee takes a look at some of the less enjoyable aspects of the new generic top-level domains that are exciting the greed creativity of so many good souls.  

* Impulse trade mark registration: no sweat, as AG gives his view

Jeremy reports on the Opinion of Advocate General Wahl in Case C‑125/14 Iron & Smith Kft v Unilever NV, a request for a preliminary ruling by the CJEU from the Budapest Municipal Court. The questions posed to the CJEU relate to trade mark reputation, genuine use and the eligibility for a non-registered trade mark to preclude the registration of a later confusingly similar sign. 

* AMBA speaks - with a brand new website

AMBA is the Association of the Members of the Boards of Appeal, and has just launched a brand-new website, writes Merpel. 

* Digital exhaustion: a debate and a (policy) scandal

The Intellectual Property Lawyers Organisation (TIPLO) has just hosted another fun event entitled  "Digital Exhaustion: Can downloads be sold second-hand without a licence from the copyright owner?". Eleonora and Hugo Cuddigan QC attended a lively discussion chaired by the Hon Mr Justice Arnold. The very same Eleonora tells how it went. 

* BREAKING: CJEU says that live broadcasts are not communication to the public within InfoSoc Directive but Member States can protect them

Here's another insightful take by Eleonora on the surreal CJEU decision in Case C-279/13 C More Entertainment, a reference for a preliminary ruling from seemingly hyperlink-loving Member State, Sweden, which was supposed to address linking and copyright. 

* G 3/14: Clarity from the Enlarged Board

The EPO Enlarged Board has issued its decision in G 3/14, addressing (i) the true significance of "amendments"; (ii) T 301/87 (conventional) v T 1459/05 & T 459/09 (diverging) approach; (iii) lack of clarity "arising out of" an amendment. A big decision from a big Board, says David. 

* Broccoli & Tomatoes, part deux: more from the Enlarged Board

David's back to report on EPO Enlarged Board's decisions in cases G 2/12 (Tomatoes II) and G 2/13 (Broccoli II), both relating to the exclusion from patentability under Article 53(b) of the European Patent Convention for plant or animal varieties or essentially biological processes for the production of plants or animals. 

 * BREAKING: EPO staff union to win formal recognition?

The President of the EPO and Chairman of the Administrative Council (AC) have just published a joint statement following the recent AC meeting. Merpel is pleased to see that the AC is at last starting to address the crisis in staff relations that has developed in recent years and which has come to a head in recent months. 

* TVCatchup heads back to Luxembourg for a second preliminary ruling

The sage that gave rise to the lovely CJEU's decision [noted by the IPKat here] promises other delicatessen, writes Jeremy. 

* When the translation is the prior art: or is it?

Translations and copyright have a long history -- "but what about patents?" Neil wonders. 

* The European Patent Office: a Message from Merpel

Merpel looks back to what has happened so far and forward for better news to come from the wonderful world of Eponia. 

* Taste of nature in court as plant growers slug it out over red radish patent

After tomatoes and broccoli [on which see David's Katpost, here],  it's now the turn of patented red radishes, which the District Court of Hague addressed in a recent decision covered here. 

* Polo not the same as football, but Royal Berks give Yanks a partial whipping

Jeremy pens of Case T 581/13 Royal County of Berkshire Polo Club v OHIM - Lifestyle Equities (Royal County of Berkshire POLO CLUB), a decision rendered last Thursday by the General Court of the European Union in another POLO-related tradebmark dispute involving many, many horses. 

* Trade mark trolls in Cuba: will 'General Washington' come to the aid of US brands?

Jaime Ángeles (Angeles & Lugo Lovatón, Dominican Republic) gives an account of the problems faced by US brand owners in Cuba, following a decades-long embargo.



Never too late 38 [week ending Sunday 22 March] - Escalating prices of generic drugs in the US | EU Patent Package is not that dangerous | Hollywood screening rhythm | GC on 'Greenworld' trade mark in T - 106&14 | Spanish life after Google Tax | Africa and IP | GC on 'Smart Water' in Case T-250/13 | 'EPO does not violate fundamental rights', says EPO | Coca-Cola look-alike trade mark in GC's decision T-3284/13 | International Women's Leadership Forum | Acronyms in descriptive trade marks | Albert Maysles tribute | UK visits Eponia | EQE Pre-exams results | X-Factor New Zealand and image rights | CJEU is Magnetic in C-182/14. 
Never too late 37 [week ending Sunday 15 March] - EPO v EPO’s staff | EPO’s Board of Appeal’s reform | Unitary Patent’s fees | Pinterest’s Community Trade Mark pinned down | Australian compulsory licences | Is COMFYBALLS trade mark offensive? | Oprah Winfrey and OWN YOUR POWER trade mark | EPO December Administrative Council Meeting | Blurred Lines | Again on Actavis v Boehringer | Is the EU Patent Package diminishing the EU’s powers? | EPO Administrative Council and Board of Appeal’s removal.

Never too late 36 [week ending Sunday 8 March] - EPO's Enlarged Board of Appeal (EBA) says Chairman can disobey | OHIM is too rich to be true | eLAW’s TM infringement checklist | Human right and IP | Again onWarner-Lambert v Actavis | Seiko and Seiki in Singapore | The politics of US patent law reform | Haribo v Lindt Goldbear wars | Patent trolls | Private copying | Wu-Tank and copyright | CJEU on private copying in Copydan | Breakdown in management-staff relations at EPO | New plant variety reference reached the CJEU | Cindy Crawford’s picture copyrightwise | CJEU on ebook’s VAT means something copyrightwise | A patent Kat investigate soft IP world | David Couture v Playdom. 

Never too late 35 [week ending Sunday 1 March] – EPO v SUEPO | Supreme Petfoods Ltd v Henry Bell & Co (Grantham) Ltd | UK IPO on EPO | Scents and copyright | GIs under scrutiny | UPC test-drive | Is UK failing to protect innovation? | Dutch Minister and EPO immunity | CJEU and droit de suite in Case C-41/14 Christie's France | Warner-Lambert Company, LLC v Actavis Group Ptc EHF & Others | Pangyrus Ltd v OHIM, RSVP Design Ltd | China and smartphone patents | UK against groundless threats to sue for IP infringement | Polar bears | Patent needs strictness, complexity and fuzziness.

Onward march to Nagoya - UK and EU draft implementing regulations

The Nagoya Protocol entered into effect for the EU on 12 October 2014 (see IPKat post here).  On that day, the "Regulation No 511/2014 on compliance measures for users from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization in the Union" entered into effect, as did the Council Decision adopting the Protocol - 2014/283/EU.

Nagoya has four Cat Cafes ...
A brief background.  The Nagoya Protocol follows from the Convention on Biological Diversity (CBD), signed at the Earth summit in Rio de Janeiro, Brazil in 1992. The CBD enshrined the principle that countries have sovereign rights over their natural resources, and are permitted to control access to their genetic resources, and to share in benefits deriving from their utilisation. ("Genetic resources" refers to anything that contains ‘functional units of heredity’, including cells, seeds and whole organisms.)  But the CBD contained no sanction or enforcement mechanism to give it legal effect. Thus, an international treaty on ‘Access to genetic resources and the fair and equitable sharing of benefits arising from their utilization’ was signed in 2010 – the Nagoya Protocol.  You can read a more detailed overview in a piece that this Kat wrote for Chemistry World.

As the IPKat has reported previously (see post here and links back), the EU Regulation places a significant burden on researchers within the EU who conduct research involving genetic material. The most onerous provisions of the Regulation on due diligence and user compliance - Articles 4 (obligation to exercise due diligence to ascertain that genetic resources and traditional knowledge associated with genetic resources which they utilise have been accessed in accordance with applicable access and benefit-sharing legislation or regulatory requirements), 7 (obligation to declare compliance with due diligence obligation on receipt of funding and provide evidence of compliance at the final stages of development of a product), and 9 (checks on user compliance) - do not come into effect for a further year, that is on 12 October 2015, because both EU and national further implementing regulations are required which clarify exactly what is expected of "users" (defined basically to mean researchers) of genetic resources.

The draft EU implementing Regulation does not seem to be available online, but you can see it here, with its annexes here.  The major part of the Regulation concerns the "Register of Collections" (if material is obtained from such a collection it is deemed to be Nagoya-compliant) and certification of "Best Practice" (if a researcher follows "Best Practice" this may be sufficient to show the "due diligence" required under the Nagoya Protocol and the Regulation that genetic resources have not been accessed in contravention of the Nagoya Access and Benefit Sharing requirements).

What most interests this Kat however is Articles 7 and 8 of the draft Implementing Regulation. These relate to Article 7 of the main Regulation that states:
1.   The Member States and the Commission shall request all recipients of research funding involving the utilisation of genetic resources and traditional knowledge associated with genetic resources to declare that they exercise due diligence in accordance with Article 4.
2.  At the stage of final development of a product developed via the utilisation of genetic resources or traditional knowledge associated with such resources, users shall declare to the competent authorities referred to in Article 6(1) that they have fulfilled the obligations under Article 4 and shall simultaneously submit:
(a) the relevant information from the internationally-recognised certificate of compliance; or
(b) the related information as referred to in Article 4(3)(b)(i)-(v) and Article 4(5), including information that mutually agreed terms were established, where applicable.
Many observers, including this Kat, thought that "research funding" in para 1. above meant on receipt of public funding.  But not so.  What the draft Implementing Regulation says is:
Article 6 Due diligence declaration at the stage of research funding
1. Recipients of research funding involving the utilisation of genetic resources and/or traditional knowledge associated with them shall make the declaration of due diligence requested by Member States and the Commission pursuant to Article 7(1) of Regulation (EU) No 511/2014 upon first receipt of research funding.
2. In case a recipient has not yet obtained the genetic resources and/or traditional knowledge associated with genetic resources involved in their utilisation upon first receipt of research funding, the declaration of due diligence requested by Member States and the Commission pursuant to Article 7(1) of Regulation (EU) No 511/2014 shall be made when the recipient has obtained the genetic resources and/or traditional knowledge associated with those resources.
3. The declaration of due diligence referred to in paragraphs 1 and 2 shall be made by submitting the completed template set out in Annex III to this Regulation.
4. Where research funding is provided from both public and private sources, a separate declaration for the privately funded part shall not be requested.
5. Where a Member State determines that the declaration is not to be made directly to the competent authority responsible for the transmission pursuant to Article 7(3) of Regulation (EU) No 511/2014, the designated addressee of the declaration shall transmit a copy of the declaration to that competent authority without undue delay.
6. Where research funding is provided by both the Union and by one or several Member States, the declaration shall be made to the competent authority of the Member State in whose territory the recipient of research funding is established.
7. Where research funding is provided exclusively by the Union, the declaration shall be made to the funding institution which provided the research funding. That institution shall transmit a copy of the declaration to the competent authority of the Member State in whose territory the recipient of research funding is established.
8. Where research is funded exclusively by private sources, the declaration shall be made to the competent authority of the Member State in whose territory the recipient of research funding is established.
9. For the purposes of paragraphs 1 to 7, where the recipient of research funding provided by the Union and/or by one or several Member States is not established in the Union the declaration shall be made to the funding institution. This funding institution shall transmit a copy of the declaration to the competent authority of the Member State in whose territory the funding institution is established.
10. For the purposes of this Article, 'research funding' means any financial contribution by means of a grant, including non-repayable financial or in-kind contribution, to carry out research, whether from commercial or non-commercial sources. It does not cover internal budgetary resources of private or public entities.
Paragraph 10 clearly shows this is any kind of funding, including private.

The due diligence at the "final stage of development of a product" under Article 7(2) of the main Regulation is more onerous, as it requires evidence, and not simply a declaration.  What is proposed for that is as follows:
Article 7 Due diligence declaration at the stage of final development of a product
1. For utilisation of genetic resources and/or of traditional knowledge associated with genetic resources, users shall make the declaration referred to in Article 7(2) of Regulation (EU) No 511/2014 by submitting to a competent authority the completed template set out in Annex IV to this Regulation.
2. The declaration referred to in paragraph 1 shall be made once when any of the following events occur:
(a) market approval is sought for a product developed via the utilisation of genetic resources and/or traditional knowledge associated with genetic resources;
(b) a notification required prior to placing for the first time on the Union market is made for a product developed via the utilisation of genetic resources and/or traditional knowledge associated with genetic resources;
(c) placing for the first time on the Union market a product developed via the utilisation of genetic resources and/or traditional knowledge associated with genetic resources, for which no market approval or notification is required; subsequent placing on the Union market of identical products does not require the declaration referred to in paragraph 1;
(d) the result of the utilisation is sold or in any other form transferred to a natural or legal person within the Union in order for that person to carry out one of the activities referred to in points (a), (b) and (c);
(e) the result of the utilisation is sold or in any other form transferred to a natural or legal person outside the Union.
3. A voluntary declaration pursuant to paragraph 1 may also be made where the utilisation has permanently ended without finalising the development of a product or where the user considers that the stage of final development of a product has been reached.
4. For the purposes of this Article, 'placing on the Union market' means the supply by any means, irrespective of the technique used, for distribution or use as part of a commercial activity, whether in return for payment or free of charge. It does not cover pre-commercial trials, including clinical, field or pest resistance trials, as well as the making available of unauthorised medicinal products in order to provide treatment options for individual patients. 
Article 11 of the main Regulation requires that "Member States shall lay down the rules on penalties applicable to infringements of Articles 4 and 7 and shall take all the measures necessary to ensure that they are applied."  The UK has now released a Statutory Instrument that was laid before Parliament on 23 March 2015 and whose main  provisions will come into force on 12 October 2015, at the correct time to provide the required penalties.  The associated Explanatory Note reveals:
These Regulations implement, within the United Kingdom, compliance measures for users of genetic resources or traditional knowledge associated with genetic resources resulting from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilisation to the Convention on Biological Diversity (“the Protocol”). The Protocol aims to promote the conservation and sustainable use of biodiversity by ensuring the benefits from the use of genetic resources and traditional knowledge associated with genetic resources are shared fairly. Regulation (EU) No 511/2014 of the European Parliament and of the Council on compliance measures for users from the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilisation in the Union (OJ No L 150, 20.5.2014, p 59) (“the EU Regulation”) requires users to exercise due diligence that they only utilise genetic resources or traditional knowledge associated with genetic resources that have been accessed in accordance with the Protocol. Users are also required to make a declaration confirming due diligence at the final stage of development of a product.  
Part 2 deals with the allocation of functions to the Secretary of State as competent authority for the EU Regulation and as member State under Articles 5, 7(1) and 13 of the EU Regulation. Regulation 6 provides that the Secretary of State must take any other administrative or policy measures that are necessary to provide that genetic resources or traditional knowledge associated with genetic resources are utilised in accordance with the Protocol.  
Part 3 and the Schedule enable the Secretary of State to impose civil sanctions. Compliance with requirements to exercise due diligence under, or to fail to make a declaration of due diligence in accordance with, the EU Regulation is made subject to civil sanctions, but will not directly be made an offence. Variable monetary penalties may be imposed in relation to offences under the Regulations.  
Part 4 deals with enforcement. Regulations 9, 10 and 11 confer entry, inspection and seizure powers on inspectors. Regulation 12 makes provision for documents which are the subject of legal professional privilege or its equivalent in Scotland.  
Part 5 sets out offences and penalties. Regulation 13 provides for offences for failure to comply with compliance or stop notices, as well as requirements to keep information under the EU Regulation. Regulation 14 makes it an offence to obstruct an inspector.  
Part 6 requires the Secretary of State to review the operation and effect of these Regulations and publish a report within five years of the enforcement and penalty provisions coming into force. 
There is also an associated Explanatory Memorandum, which is rather longer.  This explains the legislative and policy background, and the consultation procedure (see IPKat post here) that was conducted. Gratifyingly, it seems that pleas to the effect that criminal sanctions would be draconian have been heeded.  The main sanctions for non-compliance with the due diligence obligations are civil sanctions in Part 3 of the SI.  While criminal sanctions are set out in Part 6, these are only for failure to comply with a compliance notice or a stop notice, or for failure to comply with Article 4(6) of the EU Regulation (obligation to keep information for 20 years after utilisation) - and for this last the maximum penalty is a £5000 fine.  For the more severe criminal sanctions to apply, it would have been necessary to have been found non-compliant and have disregarded the notice.  This seems a reasonable balance (since the existence of sanctions is required by the Regulation and the UK cannot unilaterally disregard this).

While the powers and responsibilities in the SI vest within the Secretary of State, it has been announced that these functions will be carried out by the National Measurement Office (see post here).

This Kat welcomes that the UK SI requires monitoring at least every five years as to whether it is achieving the Nagoya objectives.  He has always rather suspected that the bureaucracy and record-keeping required under Nagoya and the Regulation will serve no useful purpose at all.  He looks forward to finding out whether this is so.

Litigation with friends: a Scramble for Scrabble in the Court of Appeal

It occasionally happens that an important case comes along for which there isn't an available Kat to write a blog-post. Conflicts of interest can take their toll. So it was here, that last week the Court of Appeal for England and Wales handed down a big and keenly-awaited decision in a dispute which, the blog team felt, required a more objective eye and cooler head -- so it was with delight that the IPKat was able to call upon our former feline guest colleague Darren Meale and ask him to do the honours for us.  Thankfully, Darren was able to oblige. This is what he wrote:

Litigation with friends: a Scramble for Scrabble in the Court of Appeal 
This case is about trade marks, and infringement thereof. Mattel makes everyone’s favourite word-forming board game, Scrabble (although this ex-Kat prefers Bananagrams). Zynga, the online social games company, operated SCRAMBLE and SCRAMBLE WITH FRIENDS, games sharing the essential elements of Scrabble. Mattel sued Zynga for trade mark infringement and passing-off. 
Zynga’s sign
Mattel’s Community trade marks (CTMs)
(and unregistered rights in SCRABBLE)
The rights in play are shown above. This was all about similarity (or otherwise) of marks and signs: Mattel’s registrations clearly covered what Zynga was using its sign for – electronic games. 
At first instance, covered by the IPKat here, Peter Smith J (English judges usually only get a surname – unless there is another judge around with the same one, like, in this case, Sir Andrew Smith) dismissed almost all of Mattel’s claims: there was no infringement of Mattel's two SCRABBLE marks (and no passing off) by the use of SCRAMBLE or SCRAMBLE WITH FRIENDS. Although Mattel's SCRAMBLE mark was infringed, it was invalid and/or liable to be revoked, because it consisted of a sign which may serve in trade to designate a characteristic of the goods, had become customary in the language or in the bona fide practices of the trade and had become the common name in the trade for a product in respect of which it was registered. The only success for Mattel at first instance was in respect of Zynga’s logo – the twisted “m” made the logo look like a “b”, said the trial judge, meaning that it read SCRABBLE, so it was an infringement of Mattel’s SCRABBLE CTMs. Overall, a win for Zynga.
Both sides appealed. On Friday, Floyd LJ gave the leading judgment (with which Patten and Tomlinson LJJ agreed) in JW Spear & Sons Ltd & Others v Zynga Inc [2015] EWCA Civ 290. This time, Mattel came out on top, with a review of the trial judge’s judgment that could readily be described as excoriating. The validity of its SCRAMBLE CTM was reinstated and the finding of infringement by Zynga’s SCRAMBLE and SCRAMBLE WITH FRIENDS signs stood. There was still no infringement or passing off so far as SCRABBLE v SCRAMBLE was concerned, however. Zynga’s consolation prize was a finding that, in fact, its twisted “m” logo did not infringe on Mattel’s SCRABBLE rights.
In justifying its interference with the trial judge’s findings, the Court of Appeal stated that 
“By focusing, almost to the exclusion of everything else, on the attitudes and actions of the two protagonists to the dispute, it seems to me that there is force in Mr Silverleaf's submission that the judge has lost sight of the underlying exercise which the jurisprudence of the CJEU required him to undertake… perhaps the most telling indication of the extent to which the judge had not fulfilled his basic task is the length of Zynga's respondent's notice, which invites the court to uphold the judge's judgment on the basis of a long list of matters about which the judge made no factual findings at all”.
The following five questions were addressed in the appeal judgment:
1.       When considering infringement, can a trade mark owner rely on contextual matter extraneous to the mark?
2.       Is there a minimal threshold of similarity required before the Court is empowered to consider whether there is a likelihood of confusion?
3.       Was SCRAMBLE descriptive or generic?
4.       Was there infringement of the SCRAMBLE CTM by SCRAMBLE and SCRAMBLE WITH FRIENDS?
5.       Was there infringement of the SCRABBLE CTMs by SCRAMBLE and SCRAMBLE WITH FRIENDS?
I deal with each below, but first, a few facts.
A few facts
SCRABBLE launched in the EU in 1954. By 2010 over half of UK households owned a SCRABBLE game. Half a million people outside North America play Scrabble on Facebook. 2.4 million people have downloaded the SCRABBLE app for iOS. Zynga started in 2007 and is now the world’s largest social gaming company. SCRAMBLE launched in 2007 as a Facebook game and evolved over time. SCRAMBLE WITH FRIENDS arrived in June 2012 by which time it was very similar in game-play to SCRABBLE.
1.       The context question
When considering infringement, can a trade mark owner rely on contextual matter extraneous to the mark? Only to an extent, holds the Court of Appeal.
It was common ground that the context in which the allegedly infringing sign is used has to be taken into account: see Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 24. But what about the context in which the proprietor’s mark is used?
Mattel wanted to rely upon features such as the fact that they had used SCRABBLE together with tiles, numbers and premium word scores and a "woodland green" background colour (which sounds like a hybrid trade mark and passing-off claim), and it was rejected by the Court of Appeal. The idea had already been so rejected in L'Oréal v Bellure [2007] EWCA Civ 968, but in a referral by the Court of Appeal in Specsavers, the Court of Justice of the European Union (CJEU) held that where a mark registered in black and white had been used in a particular colour combination and the public had become aware of such colour combination, it would be illogical to disregard that awareness when assessing likelihood of confusion. Thus some extraneous matter, beyond the mark as registered, could be taken into account. Floyd LJ described the Specsavers principle as allowing consideration of the use that had been made of the mark itself in a colour or colour combination. Mattel sought to develop the Specsavers principle further, to include what Floyd LJ described as “matter which has been routinely and uniformly used "in association with the mark”. No, said Floyd LJ, that was to take Specsavers too far.
2.       The threshold question
Is there a minimal threshold of similarity required before the court is empowered to consider whether there is a likelihood of confusion? No, holds the Court of Appeal.
This came up because Peter Smith J had held that SCRABBLE was not similar to either SCRAMBLE or SCRAMBLE WITH FRIENDS, a decision which seemed odd to me. How can two words differing by just one letter, in the middle, not be similar at least to some degree?
Back in L'Oréal v Bellure NV [2006] EWHC 2355 (Ch), the High Court had held that there was no minimum threshold of similarity. It was a question of degree. The Court of Appeal reviewed four CJEU decisions which Zynga said cast doubt on L'Oréal: Riha Weser-Gold, Ferrero, Lufthansa Airplus and Kaul. Those cases did not change the conclusion reached in L'Oréal. Instead they suggested the following (paragraphs 58 and 59 of Floyd LJ’s judgment):
“Thus I do not consider that any of these cases provides direct authority which suggests that there is a minimum threshold of similarity. The cases suggest instead that overall similarity is a binary question. Where there is some overall similarity, even faint, then it is necessary to carry out the global assessment, taking account of all relevant circumstances. Moreover, in such cases, the enhanced distinctive character of the mark may play a role in increasing the likelihood of confusion.
On the other hand the cases do show that the General Court has said that where there is (a) average visual and phonetic similarity, but no conceptual similarity (Wesergold), or (b) a number of visual and phonetic features which precluded the signs from being perceived as similar (Ferrero), or (c) no visual or phonetic similarity but a low degree of conceptual similarity (Lufthansa), or (d) a common suffix (Kaul), there may yet be no similarity overall between mark and sign. I have no difficulty with these conclusions: it is only overall similarity which counts.”
3.       Was SCRAMBLE descriptive or generic?
Zynga argued that the SCRAMBLE CTM consisted of a common word in English meaning (i) to move with urgency or panic (ii) to struggle eagerly or unceremoniously for possession of something and (iii) to get or gather something with difficulty or in irregular ways. Secondly, it was asserted that it had been commonly and extensively used by third parties, both before and after the date of registration, in relation to a range of physical and electronic board games where the user is required to make one or more words from scrambled letters. As Floyd LJ put it, there were two alleged meanings of SCRAMBLE, "the rushed activity meaning" and "the jumbled letters meaning".
At first instance, Peter Smith J invalidated the SCRAMBLE CTM because, he held, it was descriptive of what was required in the Zynga game - namely a scramble for words made up by letters in a fixed period of time and because "SCRAMBLE" was in common use for word games in apps for these types of game.
Floyd LJ addressed the two alleged meanings. He looked at evidence of the use of the term “word scramble” in the United States. He looked at an American game SCRAMBLE!, a 1977 book which detailed a pen and pencil game could “Scramble” and a 1975 book talking about “Word Scrambles”. But overall he was not convinced, and concluded that “Although there is quite a degree of descriptive allusion in the mark SCRAMBLE, I do not regard its impact as being so far towards the descriptive end of the spectrum that it was unregistrable” as being descriptive. So far as it having become a customary or common term was concerned, he held that the evidence did not come near to establishing that, as of 2007, there was any customary use or established practice in relation to "scramble" in the EU.
With those findings, the Court of Appeal reversed the first instance decision and upheld the validity of the mark. It is always easy to say such a thing as a commentator, but for my part I do not understand how Peter Smith J could have found, on the evidence before him, that SCRAMBLE had become a customary or common term for word games. The descriptive allusion is there, but it is far weaker than it needs to be to render the mark invalid.
The Court of Appeal agreed with Peter Smith J. This one was a no-brainer: confusion was not just likely, but inevitable. The addition of WITH FRIENDS would not be adequate to avoid confusion. With Mattel’s CTM now back to life, Zynga infringed it.
The Court of Appeal agreed with Mattel that Peter Smith J’s conclusion that SCRABBLE and SCRAMBLE were not similar “cannot be supported” [at this point Merpel sighs “That’s a relief!”, as does just about every trade mark practitioner in the EU]. Instead, held Floyd LJ, there was an obvious degree of visual, phonetic and conceptual similarity between the two marks.
However, he was not moved to find a likelihood of confusion. He reviewed all of Mattel’s evidence in this regard, much of it coming from the Internet – tweets and game reviews/comments in which people appeared to mix up SCRAMBLE and SCRABBLE. One example was "My mistake – Scramble IS the right word for the game I was thinking of … thought it was Scrabble". But he also took into account the extent of side-by-side use of mark and sign. Zynga's use of SCRAMBLE had been extensive and pervasive. Floyd LJ said that there was an obvious argument that, if there was real likelihood of confusion between mark and sign it would have come to light by the time of the trial to a very great extent. In the end, this argument convinced him, and he concluded:
“I am not persuaded that it gives sufficient support to Mattel's case to justify allowing the appeal on infringement of the SCRABBLE mark. The principal reason for that conclusion is that the extent of side by side use would be expected to have produced far more abundant evidence of confusion by the date of trial.”
Floyd LJ also held that there was no infringement in respect of the twisted “m” in the SCRAMBLE WITH FRIENDS logo. Peter Smith J had employed a “quick glance” test, holding that “it is possible (as some of the evidence showed) that a quick casual look would give the impression that the word is not "Scramble" but "Scrabble" with a B on its side”. That was not the test, held Floyd LJ. If the average consumer really read the “m” as a “b”, there should be more evidence of actual confusion. In its absence, he overturned Peter Smith J and found no likelihood of confusion.
He then went on to dismiss quickly Mattel’s claim based on its reputation for SCRABBLE as he was not persuaded that Mattel had proved that unfair advantage had been taken of, or detriment to the distinctive character or repute had been caused to, the SCRABBLE CTM.
A note on Mattel’s “tile” CTM
This was originally relied upon by Mattel alongside its word marks, but by the time the case came to trial it had been separately declared invalid by both the High Court and the Court of Appeal.
A final remark or two
There’s nothing particularly ground-breaking about this dispute. The Court of Appeal declined to push the boundaries of the contextual analysis permitted by Specsavers. It also reversed several of Peter Smith J’s more surprising findings, including that SCRAMBLE and SCRABBLE are dissimilar, a decision which I wouldn’t expect any self-respecting trade mark lawyer in the land would agree with. Ultimately, Mattel won the case because it had a CTM for SCRAMBLE covering electronic games and Zynga used the sign SCRAMBLE for electronic games. Shame it took the parties three years, 14 court days and no doubt hundreds of thousands of pounds in costs to work that out.
Something unsatisfactory remains about the Court of Appeal’s decision –- most trade mark practitioners, if asked, would advise that SCRAMBLE used for electronic games would infringe a CTM for SCRABBLE used for electronic games -- the marks are obviously orally and visually very similar, with some conceptual differences known to English speakers, but not many throughout the EU, and the goods are identical. While Mattel appears to have won overall, it probably ought to have won on this point as well, particularly given the enhanced protection available to a mark with reputation.
Thanks, Darren!

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