April 2021
1. General
IPONZ Trialling Short-Listed Expedited Hearings
As part of efforts to reduce the hearings backlog for both patents and trade marks, from 1st April 2021 until 30th September 2021 IPONZ will trial a system that aims to utilize spaces for hearings that become available at short notice.
Parties can settle or otherwise withdraw from a scheduled hearing prior to the hearing. Until this trial the unused hearing dates of those parties has not been readily available for use by other parties as the order of scheduled hearings had been retained.
However, the trial will give parties the option of being on a short-list of parties that can be contacted in the event that previously scheduled hearings become available or if hearings capacity is increased. Unless a party has elected to be heard on the papers all the parties will have to agree to be on the short list, and upload a signed letter to that effect to the case management system. Depending on factors such as the expected complexity of the proceedings IPONZ reserves the right to deny the entry of particular proceedings onto the short-list, and will decide which proceedings are eligible on a case-by case basis.
Once accepted onto the short-list the initiating party will have 1-month to file and serve its submissions and the responding party will then have 2-weeks to file its own submissions. Thereafter unless normal pre-hearing directions deadlines can be accommodated the IPONZ Hearings Office will correspond with both parties regarding acceptable turnaround times for remaining deadlines.
In the event that hearing dates can be reallocated the IPONZ Hearings Office will advise a chosen set of parties on the shortlist, who will be given a minimum of 20 working days notice of the allocated fixture date(s). Those parties will be expected to make every effort to take up the re-designated hearing dates, failing which they will be removed from the short-list unless there is a reasonable explanation for being unavailable.
The inclusion of a proceeding on the short-list will not guarantee that it will receive an expedited fixture date, and proceedings that are on the short-list will also retain their place in the queue on the general hearings list.
2. Patents
Incredible Claims Held to Lack Credibility
The Court of Appeal for the Federal Circuit’s (CAFC) recent decision In Re Hu 19-2104 involved consideration of whether patent applications that violated currently established laws of physics were sufficiently enabled and whether the onus of establishing their unpatentability had been discharged.
At issue were four applications filed collectively by Hu and Wu in 2007 and 2012 claiming various methods or apparatus for producing or using quantum entanglement. Quantum entanglement is considered the most defining feature that makes quantum physics incompatible with classical physics. It refers to the entanglement of quantum spins of photons, electrons and nuclei and occurs when those particles interact and become linked such that their spin, momentum or polarization remain linked with instantaneous mutual affects even when separated by distance.
A brief description of two of the applications follows. Application 11/944631 is titled Method and Apparatus for Producing Non-Local Physical, Chemical and Biological Effects. It describes a method whereby a “certain volume of a liquid, gel, gas, solid or a composition thereof such as water” is quantum entangled by being “simply left alone at a desired temperature for a certain period of time before use.” This material is then divided into the target substance in a container at location A, and an originating substance in another container at location B. The originating substance is then manipulated, and the effects are manifested in the target substance through quantum entanglement.
Application 11/670996 is titled Method and Apparatus for Producing Quantum Entanglement and Non-Local Effects of Substances. It describes using laser light to create quantum entanglement between a substances such as water in two separated vessels in the path of the laser light. It claims that subsequent to undergoing the process the generated quantum entanglements allow manipulation of the substance in one of the vessels to be used to create non-local effects on a physical, chemical or biological property or process of the substance in the other vessel.
Responses by the examiners and the Patent Trial and Appeal Board (PTAB) to the various applications involved the following objections:
- The claims and disclosure were considered to lack credibility for being incapable of functioning as claimed and so fail the utility requirement.
- The claims to changing attributes of one substance by manipulating a separate and distant substance violated the first law of thermodynamics and the classical laws of physics and are also contrary to the traditional understanding of chemistry.
- That the absence of any known scientific principles or cogent explanations in the specifications explaining how the inventions could operate as claimed, and the absence of any verifiable test data justifies the doubts about the asserted utility and operability of the claimed inventions.
- The disclosed experiments and experimental data were considered to not adequately allow a person skilled in the art to practice the invention without undue experimentation.
Hu argued that the rejections of the applications by the examiners and the PTAB were based on scepticism, speculation and ignorance and did not discharge their onus of establishing unpatentability by way of prior art, contrary knowledge or contrary evidence. The CAFC confirmed that patentability is presumed unless a prima facie case is established otherwise. While the statement of a prima facie case of unpatentability can shift the burden onto the applicant to provide evidence or argument to rebut that prima facie case, the ultimate burden is on the examiner / Commissioner / PTAB to provide a prima facie case of unpatentability before refusing grant.
The CAFC found that reasonable and objective grounds for establishing a prima facie case of unpatentability had been given. The examiners and the PTAB had not disputed the concept of quantum entanglement; rather it was the application of that concept in contexts where such quantum effects had no expectation of occurring and without any credible explanation or verifiable test data for establishing why or that it had occurred that was objected to. While technological innovation can involve unusual concepts and require a degree of receptivity thereto by the PTO, the CAFC held that where scientific principles are strained the PTO is right to require heightened standards, such as reproducibility of results showing experimental verification.
3. Designs
Invalidity Decision Against Lego’s Building Blocks Held to Not Stack Up
In Lego AS v EUIPO T-515/19 the General Court upheld Lego’s appeal, finding that the EUIPO Boards of Appeal erred in considering whether Lego’s design application relating to a toy building block is invalid.
In February 2010 Lego applied for and obtained registration for a toy building block. For the design in question the top side consists of four cylindrical protrusions evenly spaced along the centre line of the longest axis of an otherwise flat rectangular block. The bottom side has larger cylindrical protrusions centred either side of the space between each pair of indents corresponding to the top side protrusions. The blocks are designed to be capable of assembly with each other to create reasonably stable structures as well as being capable of disassembly.
In December 2016 Delta Sport Handelskontor GmbH filed an application for a declaration of invalidity on the basis that all the features of appearance of the building blocks are solely dictated by their technical function. In October 2017 the EUIPO’s cancellation division rejected the invalidity application on the basis that Delta Sport had failed to show that the interconnectability function was the only factor that determined the features of appearance for the blocks. In April 2019 an EUIPO Board of Appeal upheld Delta Sport’s appeal finding the design to be invalid on account of all the features of appearance of the blocks being dictated by the functions of mutual assembly with sufficient stability and being relatively easy to disassemble.
Article 8 of the EU Designs Regulations 2002-6 has three provisions. Article 8(1) excludes from design protection features of appearance of a product that are solely dictated by its technical function. Article 8(2) excludes from design protection features of appearance of a product that must necessarily be reproduced in order for the product to be mechanically connected to or placed in, around or against another product so that either product may perform its function. Article 8(3) provides an exception to Article 8(2) where the design serves the purpose of multiple assembly or connection of mutually interchangeable products within a modular system. Before the EUIPO Boards of Appeal Lego argued that its building blocks fall within the Article 8(3) exception, but the Boards of Appeal did not address that in its opinion as Delta Sport had only pleaded invalidity in respect of Article 8(1).
On appeal the General Court had to consider whether the EUIPO Boards of Appeal should have assessed the conditions for the application of Article 8(3). EUIPO argued that Article 8(3) was not available to Lego as they only raised it for the first time before the EUIPO Boards of Appeal. However, the General Court agreed with Lego that Article 8(3) did not fall within the applicable and very specific rules of procedure for claims or requests that must be raised in due time in order to be appealable, finding that the EUIPO Boards of Appeal had jurisdiction to consider the merits of Article 8(3).
The General Court noted that features of appearance of a product may fall within both Articles 8(1) and 8(2) since they may both be solely dictated by the technical function of that product, namely to allow the connection and disconnection of that product, and constitute features of interconnection. Although, all features of interconnection for Article 8(2) purposes are not necessarily solely dictated by the technical function of the product for Article 8(1) purposes, since the interconnection of that product may not be the only factor determining the appearance of those features. Consequently, Article 8(2) covers a broader category of features of interconnection than Article 8(1).
The General Court held that where a feature of appearance falls within both Articles 8(1) and 8(2) it must be possible to apply both those provisions even if only Article 8(1) is pled by the applicant for a declaration of invalidity. Further, reliance on Article 8(3) must be possible for all the features referred to in Article 8(2), including those that overlap with Article 8(1). The application of Article 8(3) is independent of the intention of the applicant for invalidity and must be considered where a feature of appearance falls within both Articles 8(1) and 8(2). Given the overlap of those provisions for the design in question, the General Court held that the EUIPO Boards of Appeal erred by not considering Article 8(3).
Lego also appealed the EUIPO Board of Appeals finding under Article 8(1) that all features of appearance of the building block are solely dictated by its technical function. Lego claimed that the Boards of Appeal failed to consider whether the smooth surface on the top side either side of the protrusions is a creative feature. At the appeal hearing the Boards of Appeal argued the smooth surface to be a technical feature as the absence of protrusions in those areas allowed for a greater range of connections.
The General Court noted that if at least one feature of appearance of a product is not solely dictated by function, then Article 8(1) is not applicable as that provision requires no freedom for the presence of arbitrary features. The General Court found the smooth surface to be a specific feature of appearance and not the mere absence of protrusions and that the onus was on the applicant for the declaration of invalidity to show that it was solely dictated by technical function. By not identifying all the features of appearance for the design in the contested decision the Boards of Appeal was held to have failed to establish that all features of appearance of the design are dictated by the technical function of the building block.
4. Trade Marks
Something More Than Parody Needed for Bad Faith
In Swatch AG v Apple Inc 2021 EWHC 719 the Judge held that the Hearings Officer was wrong to find that Swatch’s trade mark application for a phrase used by Apple was made in bad faith on account of its potential parodic use.
In the Hearings Office proceeding Apple opposed Swatch’s applications for ‘SWATCH ONE MORE THING’ and ‘ONE MORE THING’ for goods in classes 9 and 14, including watches and consumer electronic products. Apple claimed to have reputation in the phrase ‘One More Thing’ as the late Steve Jobs was known within the industry for using the phrase ‘but there’s one more thing’ after seeming to finish a keynote speech at an industry presentation and then announce the launch of a new product. Apple did not claim that Jobs coined that phrase, and it was most likely that Jobs use of the phrase was inspired by the fictional TV detective Columbo, popular in the 1970s and 1980s who used the phrase ‘there’s just one more thing’ before revealing the evidence that solved the crime.
In the Hearings Office decision the Hearings Officer held that Apple’s reputation in the phrase in the United Kingdom was insufficient for it to act as a distinguishing sign. Similarly, while some people in the United Kingdom might be caused to wonder if Swatch used the phrase that was found to be insufficient for establishing deceptive use for passing off purposes.
However, Apple had also put bad faith in contention. At the hearing Apple contended that Swatch had no intended use for the phrase and that it was most likely made as a blocking application given Swatch’s awareness that Apple had some reputation in that phrase and the context of other disputes between the parties. However, Apple’s pleading of bad faith in its notice of opposition contended aspects of bad faith that are incompatible with the ‘blocking’ argument. Consequently, Apple’s bad faith opposition was restricted to the three pled arguments of parody, diversion of trade or making use of the reputation – all of which involve use by Swatch, rather than mere blocking. In light of the Hearing Officer’s above findings on deception and reputation Apple was found to be only left with parody as a basis for a finding of bad faith.
Given the context of the wider disputes between the parties including Swatch’s application around the same time to register TICK DIFFERENT despite Apple’s reputation in THINK DIFFERENT, the Hearing Officer found support for the application being a retaliatory measure where parody may be used to raise the stakes. While acknowledging that there is a place for parody in commercial communications, the Hearings Officer held that by applying to register the phrase and thereby obtain exclusive rights in a rival’s marketing signs Swatch had fallen short of the standards of acceptable commercial behaviour and so found bad faith to be established.
On appeal the Judge first confirmed that the bad faith ground is freestanding in the sense that it does not depend on any enforceable right and so was not precluded by the adverse findings on reputation and deception.
Swatch argued that the Hearings Officer had gone beyond inferential findings and indulged in speculation regarding Swatch’s intended use of the mark. The Judge agreed finding that the Hearings Officer should not have inferred from the application being likely to upset Apple that it was therefore made with parodic intention. While Swatch had led no evidence on how they intended to use the mark an applicant is not required to know that at the application date as revocation for non-use can at the earliest be made 5-years from registration.
Swatch had also argued that even if parodic use was established this was insufficient to satisfy the high threshold required for a finding of bad faith. The Judge agreed noting that not all parodic or humorous activity by a business transgresses the boundaries of honest business practices. The Judge considered the Hearing Officer was not entitled to object to Swatch attempting to obtain exclusive rights in a rival’s marketing signs as that depended on the unavailable ‘blocking’ basis for bad faith rather than having anything to do with parody. The Judge considered that without a clear idea of the type or level of parodic use that Swatch intended to make of the mark the Hearings Officer was not entitled to conclude that Swatch had transgressed the boundaries of honest business practices.