Change of policy by the CJEU: Application for par­tial renewal of European Union trademark does not contain an implicit partial renunciation

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With its decision of 22 June 2016, the CJEU, the highest European instance in trade mark matters, corrected the previously constant practice of partial renewals of European Union trade marks (EUTM) in favour of the trade mark proprietor. In the actual case in question, and contrary to the lower instances, the CJEU allowed Nissan as owner of a trade mark which was initially only renewed for some of the goods covered by the mark, to subsequently renew the mark in question for the remaining goods at a later date, but still within the six-month grace period after the renewal date. Therefore, the owner of a EUTM can file successive requests for partial renewal.

In the case concerned, Nissan initially only partly renewed its EUTM registration 002 188 118, Word/Device: CVTC. After the usual confirmation of EUIPO of the partial renewal and the notice of the cancellation of the remaining goods, Nissan – still within the six-month grace period – then applied for the renewal of the goods of class 9. After the refusal of EUIPO, Nissan was also unsuccessful before the EUIPO Board of Appeal and the General Court (GC). Although the GC rejected the official practice supported by the Board of Appeal which claims that Nissan had implicitly renounced the non-renewed classes with the only partial renewal request (Art. 50 EUTMR), the GC still held that a successive renewal is inadmissible. Referring to the English version of Art. 47 III 3 EUTMR, the Court viewed the possibility of filing a request for renewal after the end of the original deadline to be dependent on the condition that no renewal request was filed during this deadline.

In contrast, the CJEU has cleared the way for a successive renewal of a EUTM within the grace period:

  • In principle, providing for the possibility of continuously requesting renewal of a EUTM registration and the additional grace period reflects the economic importance of the protection conferred by EU trade marks to facilitate the retention by the proprietors of those trademarks of their exclusive rights.
  • Further language versions of Art. 47 III 1 EUTMR suggest that the EU legislature made the submission of a request for renewal of a EUTM during the further period conditional only upon the payment of an additional fee and not that a request for renewal has not already been filed; therefore, Art. 47 EUTMR does not give rise to a ban on requests for renewal which are filed at staggered intervals and which refer to different goods or services classes.
  • Reasons of legal certainty, linked to the erga omnes effect of registering a request for partial renewal of an EUTM from the day following the date on which the existing registration of that mark expires, do not preclude the successive requests for renewal. The EUIPO is under no obligation to register a request for partial renewal prior to the expiry of the further period. Moreover, instead of removing certain classes of goods or services from the register, EUIPO could take information measures that would enable both the right of proprietors of EUTMs and the right of third parties to be safeguarded.

The decision affects a constellation which occurs more frequently in practice than thought at first glance: a trade mark owner initially only renews a part of its EUTM. Afterwards – but still within the six-month grace period – he decides on a more comprehensive renewal of the remaining part of the trade mark or of parts of it. According to the previous practice, a request for only a partial renewal of an EUTM was seen as implicit and definitive surrender of its remaining rights. Consequently, the partial renewal led to a definite loss of trade mark rights. A “readjustment” was, thereby, excluded.

The clarification of the CJEU proprietor is as legally convincing as it is to be welcomed by trade mark proprietors. The CJEU has, thereby, put paid to the Office’s practice which curtailed the property rights of trade mark owners by way of a highly dubious interpretation as an implicit partial surrender. This disregard was presumably due to a practical convenience of the EUIPO in favour of a speedy registration of the partial renewal. It remains to be seen how the EUIPO – from a practical point of view – implements the statement of the CJEU that the Office was under no obligation to process renewal requests prior to the expiration of the grace period. This might lead to a delay of the processing of the renewal request until after the grace period. In any case, third parties – for example during the course of trademark clearance searches – have to pay more attention to the issue of the recordal of an only partially renewed EUTM.

Reform of EU Copyright Law – Proposals by the European Commission for a digital single market

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“Copyright is everywhere”: In the digital knowledge and entertainment society of today, copyright law controls the distribution and use of content. Jean-Claude Juncker, President of the European Union has also recognised this. When Jean-Claude Juncker announced his five priorities for the 2014 election to the office of President, his stated first priority was copyright law. He realised that the potential of digital technologies that know no borders must be fully exploited. “To do so, we will need to have the courage to break down national silos in telecoms regulation, in copyright and data protection legislation”. The goal: the creation of a “Digital Single Market” (DSM) within the EU.

On 14 September 2016, the European Commission presented proposals for a copyright law reform. The object of these proposals is not just an improved digital distribution of copyright protected content. The intention is also to produce a “fairer and sustainable marketplace” for creators, the cultural and creative industries and the press.

1. More choice and easier access to content

The Commission took a first step towards the better integration of the digital markets within the EU back in December 2015 when it presented a proposal on the portability of online content services. That proposal would allow Europeans to take their online content, which they use legally in their home country, for example via subscription models, with them on temporary stays abroad, on trips, for example.

The European Commission subsequently, on 14 September 2016, submitted further proposals for easier access across borders:

  • For broadcasting companies, the clearance of rights for EU-wide broadcasting of their programmes on the internet will be simplified significantly. This also includes the catch-up services of these broadcasting organisations, such as the ZDF Mediathek in Germany. In future, the country of origin principle will apply meaning that broadcasting organisations will only have to clear the necessary rights in their home country.
  • Moreover the territoriality of copyright law will be softened to the benefit of IP TV providers (e.g. Deutsche Telekom’s IPTV Entertain). They will now have the ability to obtain a licence for the simultaneous, unmodified and complete retransmission of channels originally broadcast elsewhere in the EU via collecting societies. In particular, providers of packages of channels will be able, under the new rules, to make a select package of TV channels available to the entire EU via IP TV. These licensing options shall not, however, be available for platforms which operate through the open internet, for example Zattoo.
  • These proposals are only consistent with regard to the realisation of a Digital Single Market. It remains to be seen, however, whether there is an actual corresponding demand for a Digital Single Market. The softening of the territoriality principle can also make legitimate price differentiation by rights holders more difficult or even impossible. For example premium content in professional football: the consumer prices outside the country where the league is located could increase while the consumer prices within that country remain stable.
  • In addition, the Commission also proposes a facilitation of access for museums, archives and other facilities through a new Copyright Directive. They should retain the ability to digitise out-of-commerce works (books or films) and make them available across borders.

2. “Improving copyright rules on research, education and inclusion of
disabled people”

Under this heading the European Commission proposes a new exception for the use of materials in digital form to illustrate teaching, in education facilities and in online courses, which shall also apply across borders.

Moreover, the intention is to make it easier for researchers across the EU to use text and data mining technologies to evaluate larger quantities of data. In addition, a new mandatory exception will enable cultural heritage institutions to preserve works digitally. Finally, the Commission proposes further legislation for the implementation of the so called Marrakesh VIP Treaty, an international copyright agreement which aims to facilitate access to published works for persons who are blind, visually impaired or have other reading difficulties.

3. “A fairer and sustainable marketplace for creators and press”

The European Commission does not content itself merely with proposing for provisions for the improved integration of the Digital Single Market. Rather, rules for a “fairer and more sustainable market for creators, the creative industries and the press” are also presented.

The proposal for a Directive initially foresees the reinforcement of the position of right holders in negotiations with video platforms which publish user generated content and therefore play an active role in the distribution of the content. The most important example in the area of video platforms is YouTube.

Moreover, the proposal of the Commission includes a new ancillary copyright (related right) for press publishers. It will be similar to the existing ancillary copyright at European level afforded to film producers, phonogram producers or broadcasters. This would be designed to ensure that press publishers are better able to monetise their content on the internet. An ancillary copyright of this type for press publishers – in a somewhat limited scope – already exists at a German level, and the political debate surrounding the introduction of the ancillary copyright in Germany would lead one to expect that the development proposals will engender much discussion at an EU level. Therefore, in this respect, the Commission will have to consider the experiences with the ancillary copyright in Germany: in Germany, the ancillary copyright is unable to have an effect as Google, due to its market power on the search engine market in Germany, circumvents it by obtaining, upon request, free licences from press publishers.

Moreover, it is worth mentioning that the draft directive obliges players who exploit copyrighted content to inform authors and performing artists about the profits which they have earned with the author’s works or the performances of the performing artist. In addition, a mechanism will be introduced which will grant authors and performing artists an inalienable right to additional remuneration if the previously agreed remuneration is disproportionately low in light of the success of the work. This is based on, among other things, the German right to additional remuneration in bestsellers cases (Sec. 32a German Copyright Act). This is worth noting, therefore, in particular because it is the first time that European copyright law has included a regulation of general copyright contract law at a European level.

4. Conclusion and Outlook

The draft regulations and directives of the European Commission do not only contain the various rules designed to enable improved access to copyright protected works and performances across national borders within the EU. The European Commission is also taking the opportunity to regulate the markets for copyright protected works and performances. Until now the harmonisation of European copyright law has always been driven forward by the Commission using so-called directives. Directives must be transposed by the member states into national law. The Commission is now also using the instrument of the directive. At the same time, however, access to copyright protected content in particular will soon be regulated in two regulations. Regulations do not have to be transposed into national law but are rather immediately directly applicable in all member states. This shows the direction that the European Commission is taking as far as copyright law is concerned. Copyright law in Europe is moving towards a uniform set of rules in the form of a Regulation. The end result may be unified European copyright legislation and the end of national copyright law in Europe.

The “Brexit” and its Conse­quences for IP Rights

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On Thursday last week (23 June 2016), the UK voted to leave the EU, and thereby decided for what has become known as the “Brexit”. As of today, it is still uncertain what the exact implications of this decision are, including important questions such as when the UK will finally exit the EU, and what the political and legal nature of the future relationship between the UK and the EU will be like. As one of its member states exiting the EU is, obviously, an entirely unprecedented scenario, and as no statutory provisions or case-law point towards reliable answers, it is not sufficiently clear yet what effects the Brexit will have on the overall legal landscape, including the different types of Intellectual Property (IP) rights. The following, preliminary thoughts should therefore help to provide some guidance on navigating your IP rights through these challenging times:

1. No Immediate Consequences for IP Rights

First of all, and importantly, the Brexit vote, by and in itself, does not lead to any immediate legal consequences for your existing IP rights, nor for the grant of new IP rights in the near future.

While the vote is considered a political imperative, it is not a formal, legally binding trigger for the UK to exit the EU. Even though the UK government announced to accept the imperative of the vote, recent trends seem to reveal some strong resistance within the UK general public and members of the UK parliament against a continuation of the exit process.

Once (and if) the UK decides to continue the exit process, the Lisbon Treaty requires them to notify the European Council of their intention to withdraw. Prime Minister Cameron intends to do so later this year in October, whereas Council representatives already expressed expectations to receive such notification much sooner (within weeks).

Upon notice, there will be a two years’ term, jointly extendable, to negotiate a Withdrawal Agreement, containing a framework for the future relationship between the UK and the EU. Absent agreement until end of this term or unanimous term extension, all Union Treaties, rights and obligations would cease to apply in the UK. Such “cold exit” is, however, extremely unlikely to happen. As things stand, negotiations are likely to be entered into and wrapped up by 2019 at the latest, in time for the next elections to the European Parliament. However, while an intense political debate on this issue is ongoing, the exact timing and process for the UK’s exit remains speculation.

Before, and until a completion of the withdrawal process, the UK will continue to be a EU member state, so that, until then, the legal landscape for IP rights will remain largely unaffected. What the legal landscape for IP rights will ultimately look like after the UK’s exit will, to a large extent, also depend on the contents of the Withdrawal Agreement and further, bi-lateral agreements between the UK and individual EU member states. Also, it will be of importance whether the UK decides to join the European Economic Area (EEA), or not.

2. Possible Consequences for Patent Rights / SPCs

The existing (“old”) European system for Patent Rights should only be mildly affected by the UK’s exit, whereas one of the areas to be strongly affected is likely to be the current system for supplementary protection certificate (SPCs). The planned (“new”) European system of unitary patent rights and a Unified Patent Court (UPC), however, is likely to, at least, face significant delays:

(a) EP (Bundle) Patents

The existing/old European system for patent rights is based on a centralized application process through the European Patent Office (EPO), in which the „European patent“ itself, after grant, is divided in and converted to its national parts (the so called „EP Bundle Patent“).

This centralized application process is based on an international treaty between the participating nations. It is neither based on EU law, nor is the EPO an EU institution. In fact, a number of the participating nations, also today, are not EU member states.

Given the benefits of this centralized application process, it is to be expected that the UK will continue to participate in this system, irrespective of the future nature of the UK/EU relationship. Thus, no substantial consequences are expected for the EP (Bundle) Patents.

(b) Unitary Patent / UPC

One of the areas which may be affected immediately, however, i.e. even prior to the UK’s exit, is the upcoming/new Unitary Patent Court (UPC) system.

As reported in previous B&B Bulletins, the UPC, which is set to allow both for the EPO’s grant of one unitary patent for all participating EU member states, and the enforcement of all European patent rights in a new, unified European court system, has long been anticipated and, after multiple delays, was expected to finally arrive in 2017.

The underlying agreements, however, still lack necessary ratification by the UK, as the (formerly) third largest EU member state in terms of patent filing numbers. As the agreements require ratification by “the three Member States in which the highest number of European patents had effect in the year preceding the year in which the signature [took] place”, and as signature occurred in 2013, it seems somewhat unclear whether the UK’s ratification can simply be replaced with the fourth largest EU member state in terms of filing numbers (at that time, or today), or whether this will require a formal re-draft of the agreement to allow for this result. While the majority of commentators seem to call for a re-draft, it will also need to be determined who is the EU member state stepping in – with both Italy and The Netherlands seeming similarly eligible for this role (mostly depending on whether withdrawn patents are counted in when determining the filing numbers, or not).

Also, the UPC foresees that London will host a major part of the UPC’s infrastructure, namely the part of the so called “central division” responsible, inter alia, for the economically important pharma and life sciences litigation. While the agreements are, possibly by chance, drafted in a way to allow this central division to stay in London even without the UK being a part of the UPC, most commentators suggest that this would not make any sense for neither the UPC system nor the UK. If the central division needs to be moved away from London, however, another re-draft will be necessary (plus all logistical issues to be resolved).

One possible way to avoid at least some of the aforesaid would be for the UK to still ratify the agreements, prior to its exit. As there is little to be gained from doing so for the UK (as the UK could still not become a part of the UPC system, which is only open towards EU member states), and given the overall political and economical turmoil, however, it is doubtful that the UK will do so.

Thus, considering the aforesaid, and despite all optimism and efforts currently undertaken to “make it work”, it seems likely that there will be, again, at least a significant delay on the UPC’s coming into force (i.e. to a date later than 2017). If a relevant number of participating member states should be unwilling to participate in a UPC without the UK, or if the current political process in the EU should in fact lead back to stronger nationalism, the UPC project might also be endangered as a whole.

Whether is would be possible for the UK to still participate in the UPC as an “outsider”, by way of a multi-lateral agreement with all participating EU member states, seems highly uncertain and, given, both the legal nature of the underlying agreements and the current political will (“out is out”), as rather unlikely. If the UPC will therefore, eventually, come into force without the UK, it will obviously be a weaker system in that it will not extend to (what is still expected to remain) one of the major European economies. Thus, while the system might still be attractive for some patent owners, e.g. by virtue of its extension to the eastern European countries, there is also a significant chance that things in the patent world will, for a considerable time, go back to “usual practice”, i.e. national (including via the EPO centralized application process) filings and national, “exemplary” enforcement in major European jurisdictions, such as Germany, The Netherlands, or France.

(c) Supplementary Protection Certificates (SPCs)

SPCs are currently available to extend the life of a patent beyond the usual twenty years from the date of filing for certain, limited types of inventions (primarily pharmaceutical inventions). Since it is governed by EU regulations, the SPC regime in the UK will not automatically apply to allow the grant of SPCs after the UK’s exit from the EU.

Many non-EU member states have national SPC regimes (such as Switzerland), or have adhered to the EU SPC regime through their EEA membership (such as Norway and Iceland). Considering the importance of SPCs also to the UK economy, it seems likely that the UK will enter into similar arrangements. For SPCs that are in force at the time of the UK’s exit, however, transitional provisions will need to be established.

3. Possible Consequences for Trademark Rights

First of all, UK trademarks and International Registrations designating the United Kingdom will, in principle, continue unaffected.

Certainly, in future, the laws governing national trademarks may develop independently and to some extent, differently. This will then require trademark owners, together with counsel, to monitor another set of national statutes and common-law peculiarities. We will of course monitor these developments and give further guidance in due course.

In contrast, there will likely be a significant impact on European Union trademarks (EUTM) and International Registrations designating the European Union.

With the UK’s exit, supranational rights like the EUTM and international treaties like the Madrid Protocol governing International Registrations in the European Union will cease to have effect in the UK. The UK and EU will need to negotiate (and, given the mutual benefits, are likely do so) that EUTMs continue to have effect in the UK as national trademarks, with the same priority and seniority. Conversion, transformation or continuation of effect are means available and all of them have been seen in the past. UK owners of EUTMs would then remain entitled, but will require an attorney of record or address for service within the Union.

With International Registrations, things will be more complex. Under the Madrid Union regime, it will remain possible to designate the European Union on the basis of a UK trademark. But, it will become impossible for UK companies to have an International Registration on the basis of a EUTM. They do no longer have a commercial establishment in the European Union. This could potentially put at risk trademark portfolios that are home-based in the UK to extend across the European Union. International trademark owners following this approach are well-advised to thorougly consider this as soon as possible.

As of today, while the date of a possible exit is still uncertain, and while the advise how to best prepare for the aforesaid situation is still evolving, a risk adverse strategy could include

  • the re-filing of core trademarks in the UK as an International Registration,
  • for new trademarks: the separate filing in UK, and
  • the re-locating of the home-base of European portfolios to the continent.

For purpose of monitoring conflicting trademarks, the UK should, already now, be treated as any other European country outside the Union. Similarly, a watch service for trademarks should extend to Europe instead of the European Union.

Oppositions based on UK trademarks at EUIPO will suffer a lethal defect upon the UK’s exit of the EU – such trademarks are then no longer suitable prior rights! Similar applies to those based on EUTM in the UK against national trademarks. The material point in time of validity is that of decision-making, not that of filing. The UK and EU will need to resolve this situation in their upcoming negotiations. In the interim, a review of options available to cure this likely defect in opposition proceedings is highly recommendable.

4. Possible Consequences for Design Rights

For Registered Community Designs, the same as for EUTMs will (have to) apply, so they are also likely to be strongly affected. Precautionary re-filings will not be possible outside the grace period of novelty.

Unlike the European Union, the United Kingdom did not become member to The Hague Agreement concerning industrial designs so that designs that currently extend via the EU designation may also face a similarly concerning situation.

For Unregistered Community Designs, the legal basis will be gone but UK laws know unregistered design rights protecting against copying of the design in the United Kingdom. The latter may become a recourse for those who lost the protection of registered designs due to Brexit.

5. Possible Consequences for Other IP Rights

There may be further consequences for other IP rights and the European IP regime, such as:

(a) Consequences for Copyright and Database Rights

As copyright law in most EU member states, including the UK, is still strongly influenced by national legislation, copyright law should not be overly affected. Similarly the EU concept of database rights has been fully incorporated into UK law years ago, and may remain unaltered with only minor changes in its language (primarily to reflect for the new situation of the UK not being called a „EU member state“ anymore). All current and future harmonization efforts on an EU level, however, would not be automatically applicable in the UK, so greater scrutiny will be required as regards the national peculiarities of copyright and database right legislation.

(b) Consequences for Plant Variety Rights

Similar to the SPC regime, Plant Variety Rights in the UK are governed by EU regulations, so these rights would cease to exist after the UK’s exit from the EU. Also here, however, it is to be expected that the UK legislators will find an appropriate solution, either on a national or EEA route. As with SPCs, right owners who rely on these rights in the UK will need to pay special attention to transitional provisions and their future filing strategy.

(c) Consequences for Exhaustion / Customs Detention

With likely limitations on the free movement of goods (depending also of whether the UK joins the EEA) the question may occur whether and to what extent the existing regime on exhaustion of rights and border detention will be maintained, or whether there will again be customs detention of IP infringing goods at the “UK/EU border”. The strategic implications of these developments need to be assessed at a later stage, when more details become available.

(d) Consequences for Licensing

While the UK’s exit from the EU is expected not to fundamentally change general licensing practices, future licensing agreements will need to account for this fact, and will need to include appropriate wording to reflect for both the changed geographical situation and the necessity for obtaining and observing national rights in the UK (as further outlined above). If not drafted in such open manner, it may already now be time to review and, possibly, even re-negotiate your contracts.

6. Concluding Remarks

Obviously, for every type of IP, right holders cannot accept loopholes in protection and cannot simply wait for an undefined period of time. While not binding yet, the Brexit should – right now – cause IP owners to consider options and seek advice on how to move forward.

Boehmert & Boehmert is of course closely monitoring all of the aforesaid developments. All of our partners are available for follow-up questions and to discuss any of these or any related issues also in relation to your company’s individual IP portfolio.

No Supplementary Protec­tion Certificates for Medi­cal Devices

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The German Federal Patent Court refused to grant a Supplementary Protection Certificate (SPC) for aminosilane-coated iron oxide nanoparticles which were authorized for the European market as a medical device. Although the decision clearly refuses an analogous use of the SPC regulation for most medical devices – only the EU legislator could introduce a new medical device SPC – the court still leaves open whether at least implantable medical devices containing active pharmaceuticals might be subject of an SPC under the current regulations.

Supplementary Protection Certificates (SPCs) provide additional patent term for medicines or plant protection agents after the expiry of the basic patent. Since gaining approval to place a new medicament on the European market requires a cumbersome and time consuming administrative procedure, a large proportion of the standard 20 year patent term passes by without providing any benefit for the patent owner. With the regulation (EC) No. 469/2009 (“SPC regulation”) the European Union (EU)-legislator intended to compensate the loss in effective patent term and to allow companies to recoup their investment in clinical trials and administrative procedures. SPCs grant up to 5 additional years of patent protection for approved medicines or plant protection agents. Up to the present day many SPCs have been granted in Europe for medicinal products containing chemical compounds as active ingredients. Still unclear is, however, whether therapeutic medical devices, or devices containing therapeutically active ingredients, can also be subject of an SPC.

The market authorization procedure for medical devices is regulated in Directive 93/42/EEC and Directive 90/385/EEC (the latter for active implantable medical devices), whereas medicines are approved according to Directive 2001/83/EC. Although approval of medical devices, in particular if they are implantable and contain pharmacological active ingredients, also involves extensive preclinical and clinical testing, the authorization procedure is not identical to medicines. For example the responsible institutions for granting a market approval for medicines are public institutions such as the European Medicines Agency (EMA), whereas medical devices are approved by specialized qualified private organizations.

The German Federal Patent Court now decided on an appeal filed by an applicant for an SPC for the medical device “aminosilane-coated iron oxide nanoparticles” (case no. 14W (pat) 45/12). The SPC was filed on basis of the European patent EP 0 636 111 and an EC design examination certificate as first market authorization granted for the product NanoTherm AS1. The German Patent Office had previously rejected the SPC application with the argument that the nanoparticles are not a medicinal product in the sense of Article 1 of the SPC regulation, but a medical device according to EU Directive 93/42/ECC. In appeal proceedings the applicant explained that although the nanoparticles are a medical device, they are likewise a medicinal product according to the SPC regulation as they provide a therapeutic effect. The appellant further stated that the EC design examination involved extensive clinical testing which lasted for about 11 years until the product could be placed on the market. The patent owner thus suffered from a loss of effective patent term comparable to the situation of innovative medicines, and that therefore an analogous application of the SPC regulation for medical devices is justified.

The 14th senate of the German Federal Patent Court in the decision 14 W (pat) 45/12 did not share the view of the applicant. With reference to the recent decision of the Court of Justice of the EU (CJEU) in Forsgren (C-631/13 dated 15 January 2015) the senate argued that SPCs may only be granted for medicinal products containing an active ingredient or combination of active ingredients with own pharmacological, immunological or metabolic effects. Thus the senate analyzed the question whether the nanoparticles have a pharmacological, immunological or metabolic effect on their own. During a cancer therapy the nanoparticles are administered to cancerous tissue in a patient and then activated by applying an alternating electromagnetic field which induces heat locally at the targeted site to destroy or weaken tumor tissue. The therapeutic effect of the nanoparticles is therefore produced solely by physical means and is not of a pharmacological, immunological or metabolic nature.

Following the senate’s understanding of the CJEU decision in Forsgren with respect to the interpretation of the term “active ingredient” in Article 1b of the SPC regulation, the patent court’s negative decision is probably not very surprising. Interesting is, however, that the judges still comment on the possibility of an analogous application of the SPC regulation for medical devices. The judges specifically deny analogy for “medical devices that do not contain an active ingredient in the sense of regulation (EC) No. 469/2009” (emphasis added). Applying the SPC regulation to medical devices would constitute an inadmissible expansion of the scope of the regulation. Although the judges agree with the applicant’s argument that the marketing of medical devices requires extensive clinical testing, only the European legislator and not the courts could provide relief to the unsatisfactory situation. The senate indicates that the legal SPC framework does not exclude additional regulations allowing SPCs for medical devices.

Here the 14th senate specifically rejected an analogous use of the SPC regulation for medical devices without active ingredients. The question thus remains whether there is a possibility for an analogous use of the SPC regulation for a medical device containing an active ingredient. But even if the question could be answered in the affirmative, there is unfortunately another hurdle in Article 2 of the SPC regulation. Market authorizations for medical devices are exclusively granted under the European medical device directive and not via the administrative procedures for the authorization of medicines under EU directives 2001/83 and 2001/82. In the case Hylan A and Hylan B (15 W (pat) 28/08) the 15th senate of the German Federal Patent Court previously rejected an SPC for a medical device on the ground that Article 2 of the SPC regulation would require a market authorization by an “administrative” procedure, which the senate did not recognize in the procedures for the authorization under the medical device directive. As mentioned before, it is currently mandatory to apply for market authorization for a medical device under the medical device directive and thus the Hylan A and Hylan B decision shuts the door for any analogous use of the SPC regulation for medical devices. Although the case was open to a legal revision by the Federal Supreme Court, the applicant did not file an appeal.

Contrary thereto, other European courts granted SPCs to medical devices containing active ingredients in the past. The Dutch court in the case Genzym vs. Bureau voor de Industriele Eigendom decided that an analogy between the procedures for market authorization for active implantable medical devices and medicines is fully justified. Even the 14th senate of the German Federal Patent Court – then in a different composition – granted an SPC in the case Yttrium-90 glass microspheres (14 W (pat) 12/07) on the basis of an authorization pursuant to the medical device directives. Obviously the national case law is not harmonized and one may hope that this question will finally find its way up to the CJEU for a clarification whether active implantable medical devices can be subject of an SPC under the current regulations.

Swiss-Type claims cannot be changed to Com­pound-For-Use claims

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In a recent decision, the Technical Board of Appeal of the European Patent Office ruled that Swiss-type claims pertaining to the use of a known medicament in the treatment of a further disease cannot be changed to Compound-for-Use claims.

The original European Patent Convention (EPC) from 1977 did not contain a specific regulation for inventions pertaining to the use of a known medicament in the treatment of a further disease (second medical indication). To fill this gap in the EPC the Enlarged Board of Appeal in their decision G 3/85 introduced by legal fiction the possibility to obtain a patent for a second medical indication using the so called Swiss-Type claim, which is drafted in the form: “use of a compound x in the manufacture of a medicament for the treatment of disease y”. Since the revision of the EPC in 2007, Article 54(5) EPC explicitly allows claims to second medical indications when using the claim wording: “compound x for use in the treatment of disease y” (Compound-For-Use claim). There was much debate in the field about whether Swiss-Type claims and the new Compound-For-Use claim for second medical indications confer an identical or a different scope of protection. In previous decisions regarding the problem of double-patenting the Technical Board of Appeal (TBoA) indicated that the scope of both claim formats are most likely not identical, because it is an established understanding that method and use claims have a smaller scope compared to product claims – a fairly cursory analysis of this question.

Now in the decision T 1673/11 the TBoA decided a case where a patent proprietor during opposition proceedings amended the granted claims by changing from Swiss-Type to Compound-For-Use claims, while maintaining all remaining claim features with respect to the compound and the medical indication. Whereas the opposition division allowed the amendment and maintained the patent in amended form, the TBoA decided that a change of claim format in the direction Swiss-Type to Compound-For-Use constitutes an inadmissible extension of scope of protection of a patent according to Article 123(3) EPC. The patent was revoked.

The outcome is not overly surprising, since in previous cases the TBoA indicated that there indeed is a difference in scope of protection between Swiss-Type claims and Compound-For-Use claims. However, the exact nature of this difference was not discussed until today. Under item 9.4 of the decision the Board reasoned that a so called off-label use of a packaged medicament in a patented indication falls under the scope of protection of a Compound-For-Use claim, while a Swiss-Type claim would not cover such a use. Whether this analysis will be reiterated in national infringement courts or in the upcoming Unified Patent Court is questionable. There are already national court decisions which analyse the issue of off-label or skinny-label uses differently and with more appreciation for the complexity of the problem (LG Hamburg 327 O 67/15; Warner-Lambert Company, LLC v Actavis Group Ptc EHF & Others [2015] EWHC 72 (Pat)).

Nevertheless, the decision underlines that applicants for European patents more than ever should include Compound-For-Use claims during examination proceedings in their claim sets to protect their second medical indication invention exhaustively. A later conversion from the Swiss-Type format to Compound-For-Use during opposition or limitation proceedings is not possible at the EPO.

Compulsory Information on Online-Dispute Reso­lution from EU-Directives and EU-Regulation

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Online sellers have to cope with the introduction of dispute resolution procedures for consumer transactions. This applies on a national level and to cross-border trade in goods and services on a European level. The dispute resolution procedure should provide consumers with a cost-effective and uncomplicated alternative to the judicial procedure.

When consumers have a problem with a trader regarding a product or service they bought, they can settle their dispute out-of-court through an Alternative Dispute Resolution or Online Dispute Resolution (ADR / ODR) procedure. As such procedures are an alternative to resolving disputes before a court they are called Alternative Dispute Resolution (ADR). When they are carried out online, they are called Online Dispute Resolution (ODR). Resolving disputes through ADR/ODR, in general, is easier, faster and less expensive than resolving disputes before a court. In the European Union, ADR/ODR procedures can take different forms and they can have different names, e.g. arbitration, mediation, ombudsmen, complaints boards.

The legal basis of the online-dispute resolution is the Directive 2013/11/EU on alternative dispute resolution in consumer matters (ADR-Directive) as well as the EU-Regulation No. 524/2013 of the European Parliament and the Council of 21.05.2013 on the online dispute resolution in consumer matters (ODR-regulation).

1. Future Duty to Inform arising from the ADR-Directive

The ADR Directive ensures that consumers have access to ADR for resolving their contractual disputes with traders. Access to ADR is ensured no matter what product or service they purchased (only disputes regarding health and higher education are excluded), whether the product or service was purchased online or offline and whether the trader is established in the consumer’s Member State or in another Member State.

Although National Legislators have not stringently stipulated an obligatory participation in an alternative dispute resolution procedure for online sellers, they have, irrespective hereof, standardised a general duty to inform for sellers.

In Germany, for instance, an online seller is generally obliged to provide information on his website and in his terms and conditions about the possibility to participate in a dispute resolution procedure before a consumer arbitration entity (§ 36 Sec. 1 German Consumer Dispute Resolution Act). Excluded from this are merely small businesses with a size of fewer than 11 employees (§ 36 Sec. 3 Consumer Dispute Resolution Act).

Member States will establish national lists of bodies offering ADR procedures (ADR bodies). All ADR bodies included in those lists will have to comply with binding quality requirements. In order to facilitate the transposition of the ADR Directive, the Commission has established an Expert Group composed of national ADR experts.

2. National Regulations on the Basis of the ADR-Directive

The ADR-Directive is already in force in most EU member states such as France, Italy, Spain, Austria, Great Britain and Poland.

The ADR-Directive was supposed to be implemented into German Law by the Federal Government by July 2015, but the Consumer Dispute Resolution Law (Verbraucherstreitbeilegungsgesetz – VSBG) has only been adopted in February 2016. The regulations of the Consumer Dispute Resolution Law will come into force at the end of February 2017.

According to the ADR-Directive, Member States must ensure that out-of-court resolution entities are created for domestic and cross-border disputes between consumers living in the EU and companies based in the EU arising from sales and service contracts. The dispute resolution procedure is not intended for disputes between companies, as it is imperative that a consumer is involved. The Directive standardises the minimum requirements for the dispute resolution procedure as well as the organisation and layout of the independent and impartial resolution entities. The resolution procedure should, in addition, be organised transparently, effectively, speedily and fairly and be made available to the consumer free of charge or for a low fee. The resolution entities must have the required specialised knowledge at its disposal; they must not be bound to the instructions of the disputing parties and should be paid irrespective of the result of the procedure. Access to the resolution entities is to be ensured via the internet as well as other ways (for example by post), and the procedure should not last longer than 90 days. In addition, consumers have the possibility to break off the resolution procedure at any time and to take ordinary legal action. Regarding online-sellers, Member States can include an obligatory participation in the procedure and the compliance of the resolution judgement in its national law. However, for instance, Germany has not included this in the Consumer Dispute Resolution Law.

Resolution entities which are already active or were recently set up and which correspond with the requirements of the Directive should be registered with the EU-Commission by the Member States so that a list of all recorded resolution entities can be published (complete list for all member states under:
ec.europa.eu/consumers/archive/redress_cons/schemes_en.htm). According to the passed version of the Consumer Dispute Resolution Law, online-sellers can offer an alternative dispute resolution on a voluntary basis, they are, however, not obliged to do so.

3. European Regulations arising directly from the ODR-Regulation

The ODR-Regulation stipulates the setting up of a European online dispute resolution platform by the EU Commission and regulates its cooperation with the national resolution entities according to the ADR Directive.

The online dispute resolution platform consists of a website which is available as a central contact point for consumers and businesses in particular for disputes arising from purchase and service contracts which were completed online. Alongside general information about out-of-court dispute resolution according to the ADR-Directive, it also offers the possibility of filing dispute cases via an online form for the purposes of resolution with an appropriate resolution entity. The platform will then determine the appropriate resolution entity in terms of the ADR-Directive and forward the dispute case to this entity. Further functions of the online dispute resolution platform consist of an electronic case processing application for the parties of the dispute and the appropriate dispute entity as well as the automatic translation of all information which is exchanged via the platform. This way, the platform will make it easier for all European consumers and online sellers to access out-of-court dispute resolution concerning online contracts, also beyond the borders of Member States. The online dispute resolution platform is available free of charge in all official languages of the EU. An obligation of the online sellers to get involved in an online dispute resolution procedure does not, however, exist, as long as the Consumer Dispute Resolution Act or another implementation act does not standardise such an obligation. The online dispute resolution platform is available since February 2016.

4. Future Duty to Inform arising out of the ODR-Directive

Just like the ADR-Directive, the ODR-Regulation also stipulates general duties of the online sellers to provide information in order to make consumers aware of the alternative resolution methods. Contrary to the ADR-Directives, the duties to inform of the ODR-Regulation apply to every online trader, irrespective of whether he is obliged to use same according to the stipulations of the regulation and the implementation act of the relevant Member State.

With the coming into force of Sec. 14 ODR-Regulation as of 9 January 2016, every online seller is obliged

  • to set up a link on his website to the online dispute resolution platform which is easily accessible for consumers and
  • to provide easy access to his email address.

For online suppliers who have agreed to the use of further (national) alternative dispute resolution entities or who are obliged to do so (e.g. energy providers), there are further duties to inform according to Art. 14 Sec. 2 ODR-Regulation, for example in terms and conditions, directly in online contract or offer-emails.

As the European online dispute resolution platform is already available, the regulation makes the linking obligatory. The corresponding information should be indicated on the website either under terms of use or in the imprint. The reference should be directly included in the final clauses of the terms and conditions.

The reference text could read as follows:

“Information on online dispute resolution according to Art. 14 Sec. 1 ODR-Regulation:

The EU Commission has provided an internet platform for the online resolution of disputes (“online dispute resolution platform”). The online dispute resolution platform can serve as a contact point for out-of-court resolution of disputes arising from online purchase contracts or service contracts. The online dispute resolution platform is available via the internet address http://ec.europa.eu/consumers/odr

5. Consequences of Infringements

Whether the duty to inform arising from the Consumer Dispute Resolution Act and the ODR-Regulation represent market behaviour regulations in terms of European unfair competition rules (in Germany:§ 3 a Unfair Competition Act new version – § 4 No. 11 Unfair Competition Act old version), is up to now not clear. However, those who have hitherto commented, assume so.

The duties to inform are comparable with the regulations on supplier identification arising from the e-commerce-Directive 2000/31/EG, which are already recognised as market behaviour regulations in terms of European unfair competition rules. Corresponding violations against these legally required duties to inform could, therefore, be subject to warning (cease-and-desist) letters with costs from organisations (for example consumer protection organisation) or from competitors as being anticompetitive.

No registration require­ment for a license to use a EUTM

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On February 4, 2016, the CJEU confirmed with its Judgment in Case C-163/15 that a licensee may bring proceedings alleging infringement of a European Union Trademark (EUTM) which is the subject of a license, despite the fact that the license has not been entered in the Register of European Union Trademarks.

In the main proceedings in Germany, the holder of a license to use a EUTM took court action against a third party because of trademark infringement. Under the license agreement, the licensee is not only entitled but also obliged to enforce the trademark rights of the licensor and proprietor in its own name. The license is not entered in the Register of European Union Trademarks.

The request for a preliminary ruling of the Higher Regional Court Düsseldorf, Germany, concerns the interpretation of Article 23 (1) EUTMR (European Union Trademark Regulation), according to which legal acts concerning a EUTM, such as a license (Article 22 EUTMR), shall have effects vis-à-vis third parties only after entry in the Register of European Union Trademarks. However, contrary to the wording of the relevant legal provision, the CJEU found that there is no registration requirement for a license to use a EUTM in order to bring proceedings alleging trademark infringement before EU-trademark Courts. It is held that it follows from a systematic and teleological interpretation of the European Union trademark regulation that licensees, in general, can enforce the right to use the EUTM vis-à-vis infringers without entry in the Register.

In this relation, the CJEU puts forward the following observations: Firstly, according to the first sentence of Article 22 (3) EUTMR, the licensee’s right to bring proceedings for infringement of a EUTM is subject only to the proprietor’s consent thereto. Secondly, a provision such as Article 17 (6) EUTMR, which explicitly prescribes the requirement of registration in the event of transfer of a EUTM, would serve no useful purpose if Article 23 (1) EUTMR had to be interpreted as precluding reliance, vis-à-vis all third parties, on all of the legal acts referred to in Articles 17 (transfer), 19 (rights in rem) and 22 (licensing) EUTMR as long as they have not been entered in the Register. Finally, the purpose of the rule laid down in the first sentence of Article 23 (1) EUTMR, namely third party protection, does not come into play in case of trademark infringement.

The judgment improves legal certainty and clarity for licensees, proprietors and assignees. Further, it is likely that the findings of the CJEU can also be applied with respect to rights in rem (Article 19 EUTMR) and since Article 33 CDR (Community design regulation) is a corresponding provision to Article 23 (1) EUTMR, there are good reasons to say that the same applies with respect to Community designs.

Nevertheless, it is still highly recommendable to enter a license to use a EUTM in the Register of European Union trademarks. The following two scenarios should be borne in mind: After granting an exclusive license which is not entered in the Register, a trademark proprietor could grant another exclusive license to a third party which is entered in the Register with the unfavorable result that the “earlier” license could simply vanish. The same applies in the relevant case if a EUTM, which is subject to a non-exclusive or exclusive license, is assigned to a third party. Without entry in the Register, it should be difficult for the licensee to furnish proof that the assignee was actually aware of the license to use the EUTM (second sentence of Article 23 (1) EUTMR).

News on the Unitary Patent

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In our Bulletin, we report regularly (most recently on the renewal fees in the December 2015 issue) on the route to a unitary European patent system. The recent progress comprises in particular the surprising decision of Italy to participate, the enactment of the procedural regulations for the Unitary Patent Court, and the abandonment of the opt-out fees.

The unitary European patent (sometimes also referred to as Community Patent) shall for the first time create a unitary patent protection for the European Union including a new judicial system which allows to enforce patents or declare them invalid on a pan-European basis.

For a long time, Italy was very critical of the plans for a unitary patent. The Italians were particularly bothered by the fact that Italian will not be an official language of the new patent system, and since 2011 had even been trying, together with Spain, to stop the unitary patent before the European Court of Justice. But Italy stayed absent from Spain’s second lawsuit, which failed in 2015. Now, Italy has finally completed the U-turn and joined the unitary patent system as the 26th member state on 30 September 2015. This is great progress for the unitary patent and its acceptance, as Italy represents an economic heavyweight which lies in fourth place in the list of patent validations Europe-wide (behind Germany, Great Britain and France). Spain and Croatia are now the only EU states which are still missing.

The establishment of the unitary patent system and new judicial system have also progressed considerably. The eighteenth draft of the code of procedure for the Unified Patent Court was accepted in October as the final draft. In December and February, a series of agreements relating to the court fees, the budgetary and financial rules and the distribution of the renewal fees between the EPO and the participating member states have been passed. As part of these agreements, it was decided to suppress the opt-out fee. This fee – formerly proposed at Eur. 80 per patent – would have become due during a transitory period for opting out of the new system in favour of the established national courts, or to opt-in again. The abolishment of these fees, which could have added up substantially for large patent portfolios, will allow patent holders a free and unrestricted choice between the established and the new system, and hence is a welcome development.

Some court buildings have already been designated across Europe. Work on the sophisticated IT infrastructure of the new court is progressing. The recruitment of the legally and technically qualified judges has meanwhile begun as well.

In order that the agreement on the Unitary Patent and the Unitary Patent Court can finally come into force, the ratification by 13 member states is required. Up to now, nine states have ratified, most recently Finland in January 2016. While the threat of a Brexit might conceivably result in further delays, currently we assume that the Unitary Patent will become reality in 2017 – almost fifty years after the first initiatives!

Uniform protection for trade secrets in the EU is in the offing

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The upcoming EU directive on trade secrets will provide enhanced protection for trade secrets almost on a par with intellectual property rights.

For some three years now there has been discussion among the parties affected of a proposed EU Commission directive concerning the protection of confidential know-how and confidential business information (trade secrets) against unlawful acquisition, use and disclosure (COM (2013) 813 final dated 28 November 2013). In December 2015 the EU Council, together with representatives from the EU Parliament, came to a provisional agreement on this Directive. On 14 April 2016 the EU Parliament returned the Directive to the trilogue process with only minor changes so that its adoption may be anticipated shortly. It is likely to be implemented in national law within two years at the most.

    1. German law has long recognized the protection of trade secrets in civil law. While the relevant standards in the Act Against Unfair Competition (Secs. 17, 18) are criminal law standards, it has long been acknowledged that violations of these standards may also be subject to civil law action. However, this protection under civil law contains some gaps and is not easy to enforce. In addition to these unfair competition law provisions, there are also the usual non-disclosure agreements / confidentiality agreements customary in international dealings, which can also be enforced under civil law in the event of violations, even if violations are often difficult to prove.
    2. The concept of the EU directive extends far beyond this; it places trade secrets and their protection on the same level as intellectual property rights and their enforcement. This is not without problems, since trade secrets are even less tangible than intellectual property rights, and often there is inadequate definition of the scope of protection, which may be unclear to the infringer. It remains to be seen how the lawmakers in the European countries will implement the corresponding standards of the directive. For instance, it is not clear whether the German lawmaker will pursue the path of a separate complex of standards, since as criminal standards, Secs. 17, 18 of the Act against Unfair Competition are not covered by Reason 9c of the directive.The definition of infringing acts goes significantly beyond the existing scope of Secs. 17, 18 and encompasses the illegal acquisition, use and disclosure of business secrets, including the infringement of a confidentiality agreement.
    3. First, the definition of a business secret (Art. 2 I of the Directive) is important. It must be information that is confidential in that it is not known or easily accessible, in whole or in its exact structure, to persons that usually handle this type of information. Furthermore, the information must have a commercial value and be subject to appropriate confidentiality measures.The other feature, known from the Technology Transfer Group Exemption Regulation, i.e. that the information can be identified, for example, that they are set forth in an Annex, is not required at first sight. However, for proof of any infringement it is advisable, that written identification be undertaken. Finally, it is noteworthy that the Directive (as opposed to existing German law) does not require an explicit wish for secrecy; however, the requirement for confidentiality measures should ultimately be attainable easier than before.
    4. The Directive contains several restrictions to protection, of which only an overview can be presented here. As long as the business secrets were acquired in a way that is “consistent with good business practice,” there will be no infringement. Also, the customary regulations known from confidentiality agreements, such as disclosure without infringement, disclosure for legitimate interest, as well as for media interest or to cope with labour law requirements, are excluded. It is interesting that the exception for reverse engineering, for example the disclosure of a single product design, which the previous draft version did not contain, has been deleted. That is appropriate, for it is possible to have contractual obligations that preclude reverse engineering. However, they have no absolute effect, which means that in the chain of agreements and when products are passed on, the party that is not contractually bound to these restrictions does not have to comply with this regulation.Other exceptions are provided to protect the freedom of the press, the mobility of workers, and whistle blowers.
    5. Along with the usual claims in the event of infringement (cease-and-desist), the Directive also contains further regulations that will impact products and compensation provisions.
    6. In practice it will be important to examine existing contractual regulations not only in confidentiality agreements, but also especially in know-how agreements, as to whether they still comply with the Directive’s requirements, especially with regard to the definition of what is a business secret and how its existence can be proven in a given case. Only then will it be possible to pursue infringement also with the help of the Directive and the requirements contained therein.

Reform of the Community Trademark Regulation

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The long debated reform of the European Union Trademark System has finally led to a new Regulation on the Community Trademark as well as new Directive for the EU member states concerning the national trademarks. Whereas the member states have basically three years to implement the Directive into their national trademark law, most of the provisions of the new Regulation on European Union Trademark will enter into force on March 23, 2016. From a practical point of view, the following changes of the Regulation are most relevant.

1. New terminology

The current Community Trademark (CTM) will be renamed as “European Union Trademark” (EUTM). The name “Office for Harmonization in the Internal Market” (OHIM) will be replaced by “European Union Intellectual Property Office” (EUIPO).

2. New fee structure

A “pay-per-class” system will provide for a new structure for the application fees: Today, an applicant pays a flat fee for covering up to three classes. Under the amended Regulation, one fee per class will apply. While this will make single-class applications more cost-efficient, the fees for applications covering more than two classes will increase.

In regard to renewal fees, the very same fee-per-class system will be introduced which means a significant reduction of fees for the trademark owners compared to the current fees regime. The new, lower renewal fees will apply to any EUTMs due to expire on or after March 23, 2016. The office will refund any excess fees already paid.

3. Clarification of specification of “old” CTMs

Prior to the IP Translator decision of the ECJ in the year 2012, it had been the practice of OHIM to interpret the claim of all class headings of the Nice Classification as covering all goods or services listed in the alphabetic list of the Nice Classification for such respective class (“catch-all”). IP Translator ended such practice by underlining that specifications must be sufficiently clear and precise to enable the public to determine the extent of the protection (“means what it says”). If an applicant seeks to cover goods or services beyond the literal meaning of the class headings, he must therefore specify whether its application covers all or any specific goods or services included in the alphabetical list of that class.

Against this background, the amended Regulation, codifying the ruling of IP Translator, provides for a transitional period ending on September 24, 2016, during which owners of EU trade marks filed before 22 June 2012 (the date of the IP Translator decision), and still registered in respect of the entire heading, may declare that their intention on the date of filing had been to seek protection in respect of goods and services beyond those covered by the literal meaning of that heading (e.g. “vehicle tires” are not covered by the literal meaning of the class headings in class 12 “vehicles; apparatus for locomotion by land, air or water”), provided that such goods or services are contained in the alphabetical list of the Nice classification for the relevant class which was valid at the date of filing. Such declaration shall indicate clearly and precisely the goods and services, other than those covered by the literal meaning of the class headings, originally covered by the owners intentions. After September 24, 2016, all trademarks containing class headings will be interpreted according to their literal meaning.

4. Counterfeit goods in transit

Under the current regime, counterfeit goods in transit which are destined for countries outside of the EU, may not infringe EU trademarks. The amended Regulation will drastically change this concept: It is now considered an infringement where goods in transit bear a mark that is either identical or “cannot be distinguished in its essential aspects” from the respective EUTM, unless evidence is provided by the importer of the goods that the owner of the EUTM is not entitled to prohibit the placing of the goods on the market in the final destination. Overall, this amendment has strengthened the position of trademark holders to prevent – by means of customs enforcement – accordingly labeled goods from passing through the EU.

5. Further changes

Concerning the registration procedure, the requirement of graphic representation is removed. The EUTM will have to have a representation on the Register in a manner which enables to determine the clear and precise subject matter of the protection sought. This might open the registry to more non-traditional trademarks, i.e. signs that cannot be seen (such as sounds or smells).

The opposition period for EU designations of International Registrations will – instead of currently six months – already start one month after publication.

As clarification, the scope of protection of an EUTM will extend to trade names or company names. The “own name” defense is explicitly restricted to the honest use of a natural person’s name and not any longer for the use of a company name.

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