June 2018

1. Trade Marks

Australia

IP Australia Encourages Consideration of Trade Mark Insurance
Following a competitive tender process IP Australia has authorised BMS Risk Solutions Pty Ltd to provide insurance products in relation to Australian Trade Mark applications and registrations.

Trade Mark Protect is an insurance product designed to help applicants and registrants cover the costs of defending their trade mark. There are two types of insurance cover, providing protection either before or after registration. Trade mark oppositions cover is designed to help with legal expenses in the event of third party challenges before registration. Registered trade mark cover helps with legal expenses in the event of a non-use action. As with other insurance providers they also offer cover for infringement either by others or of others intellectual property. Visit www.trademarkprotect.com.au for further details and costs of the products. Apart from authorising the service, IP Australia is not otherwise involved in the process and receives no benefit therefrom. Potential customers need to purchase directly through BMS Risk Solutions Pty Ltd.

Europe

Guidence Given on Determining Similarity Between Services and Goods
In Emcur v EUIPO the opinion of a General Court of the EU gives some guidance on when services are sufficiently similar or complementary to goods for trade mark opposition purposes.

Emcure Pharmaceuticals Ltd’s application for EMCURE covering healthcare, medical and veterinary services and related services in classes 35, 41, 42, 44 and 45 was opposed by Emcur Gesundheitsmittel aus Bad Ems GmbH on the basis of their EU and German registrations for EMCUR in classes 5 and 10. The EU registration covered Salt and products containing salt(s) for medical use and nasal douches, while the German registration generally covered pharmaceutical and veterinary products, preparations for health care, dietetic substances for medical purposes and food supplements. The Opposition Division and the Second Board of Appeal had only upheld the opposition in respect of pharmacy advice services in class 44.

The General Court confirmed that the relevant factors in assessing the similarity of goods and services are their nature, their intended purpose, their method of use, whether they are in competition with each other or are complementary and other factors such as the distribution channels. Regarding whether goods and services are complementary this requires there to be a close connection, in the sense that one is indispensable or important for the use of the other, with the result that consumers may think that the same undertaking is responsible for manufacturing those goods or providing those services.

The class 35 specification includes the organisation of exhibitions, trade fairs, seminars and other events for commercial or advertising purposes in the field of health care. The applicant argued that the use of the name EMCURE in relation to such events would lead target consumers to think that it is closely connected to, or even be about, preparations for healthcare or pharmaceutical products with the almost identical name EMCUR. Given that trade fairs and seminars in the field of healthcare seek to provide information concerning particular diseases or disorders and their corresponding prevention and treatment the applicant argued that the services and goods are at the very least complementary.

The class 41 specification includes the providing of training and education in pharmaceutical and medical field; publication of magazines, journals, books, guides and databases in the medical and pharmaceutical field; exhibition for cultural and educational purposes in the field of health care; conducting and organising workshops; provision of health club facilities. The applicant similarly argued that it is very likely that consumers will consider that training courses in the pharmaceutical field offered under the name EMCURE are linked to the pharmaceutical product EMCUR.

However, like the lower Courts, the General Court also held that the respective goods and services have a different nature and purpose, involve different distribution channels and are not in competition with each other. Regarding being complementary, the General Court noted that seminars and workshops in the field of healthcare, as well as training services, may relate to the therapeutic or side effects of pharmaceutical products, their features, their manufacturing process or their use. However, that such services have pharmaceutical products as their subject was held to be insufficient ground for establishing a complementary connection between those goods and those services. The use of pharmaceutical products is not indispensable or important to the provision of services for the organisation of an event such as a trade fair, a workshop, a seminar or training services. Conversely, providing those services is not indispensable or important for the use of those pharmaceutical products. Similar findings were made in relation to publication services in the pharmaceutical and medical fields and the provision of health club facilities, leading to the conclusion that none of the class 35 and 41 services are similar or complementary to the goods in issue. Due to lack of pleadings, the Board of Appeal’s finding on the class 45 services also was not annulled.

The class 42 specification includes chemical research; chemical analysis; biological and pharmaceutical research; bacteriological research; biological research; scientific and technological services and research. While the services were again found to be different in nature to the goods they were nonetheless found to be complementary, given that pharmaceutical companies are involved in research and development activities. In making that finding the General Court declined to follow the Boards of Appeal who applied the EUIPO’s Guideline that these goods and services are dissimilar as the pharmaceutical companies that are involved in research and development do not usually provide those services to third parties. The General Court noted that while pharmaceutical companies do not generally provide those services to third parties that does not preclude them from doing so. It was also noted that pharmaceutical companies promote and administer pharmaceutical studies for consumers and undertake research and development activities in cooperation with third parties.

The class 44 specification is for medical services; pharmacy advice; dentistry; healthcare services; veterinary services and veterinary assistance. The EUIPO’s Guidelines had similarly influenced the Board of Appeal’s overall finding that the differences between the class 44 services and the class 5 and 10 goods outweighed the similarities. However, the General Court reversed that, finding that the goods and services are aimed at the same consumers, pursue the same aim of treating diseases, can share the same distribution channels and are complementary in as much as the services can be important or even indispensable for the use of the goods.

New Zealand

Evidence Threshold for Evidence of Use over the Internet Considered
In the recent revocation decision Target Australia Pty Ltd v Target New Zealand Ltd the Assistant Commissioner applied a high standard in determining what can constitute evidence of use, particularly in relation to claimed use over the internet.

From 2004 until 2015 Target NZ used the following blue and red device mark in relation to the wholesaling and retailing of furniture and furniture accessories and also has a registration for that mark in relation to those services dating from 2004. In 2015 they changed the branding on their website to the following white and red device mark, following which Target AU notified Target NZ of their consumer confusion concerns that they considered would arise.
  
Target AU has New Zealand trade mark registrations for the word mark TARGET and the following word and device and device only marks in relation to goods covered by the class headings for classes 24 and 25. Two-weeks after receiving Target AU’s letter, Target NZ applied to revoke Target AU’s registrations on the basis of non-use. A little over a month after that they applied to register the word mark TARGET and the following white and red device mark in classes 20, 21, 24, 35, 37, 39, which subsequently had Target AU’s six registrations covering classes 24 and 25 cited against them.

Target AU does not operate a sales outlet in New Zealand, but claims use in New Zealand on the basis of: (a) Target AU’s website and sales via that site; (b) Sales of sheets through Kmart stores in New Zealand; (c) Use on newsletters sent to customers with .nz email addresses; and (d) Negotiations with TradeMe to sell goods in New Zealand.

In outlining the principles that apply to non-use cases the Assistant Commissioner noted the principle that advertisements placed in foreign publications will not be sufficient to constitute local trade mark use if those publications are not aimed at consumers in the local market. Similarly, using a trade mark on a website that can be accessed worldwide does not amount to use of the mark in every jurisdiction in which the site can be accessed. Rather, to amount to trade mark use in a foreign jurisdiction, the websites need to be specifically directed to or targeted at that jurisdiction and allow successful completion of orders placed through it. Regarding preparatory use the owner will not be considered to have used the mark unless its actions go beyond investigating whether to use the mark to the point where it objectively can be seen to have committed to using the mark.

Given that Target AU’s website included the statement “We only accept orders from mainland Australia and Tasmania”, the Assistant Commissioner held that it could not be used to establish use in New Zealand. Nonetheless, there was evidence of sales via the website to customers with New Zealand IP addresses. While noting that it is possible for a New Zealand IP address to be used outside New Zealand, the Assistant Commissioner accepted that some orders would have been placed by people within New Zealand. However, the Assistant Commissioner found that those orders either would have had an Australian address as a final destination, or would have been on-forwarded to New Zealand from a friend’s or relative’s address in Australia. In the former case they did not enter the New Zealand market, while in the latter case they were not ‘in-trade’ when the entered the New Zealand market. The Assistant Commissioner also went on to note that it would be a perverse result if Target AU could claim the benefit of unauthorised use in New Zealand while also not being held liable for any infringements resulting from such unauthorised use. Evidence that there were several thousand subscribers to Target AU’s emailed newsletters having email addresses ending in .nz was similarly found not to amount to use of Target AU’s marks in New Zealand. The emails were found not to be targeted at New Zealand consumers and would again lead to perverse infringement findings. 

However, the Assistant Commissioner was satisfied that Target AU had used its brand in relation to bed sheets through sales in New Zealand Kmart stores, which are also owned by Target AU’s owner.

During the relevant non-use period Target AU was in negotiations with TradeMe regarding sales of goods through the TradeMe website. However, on the evidence available, the Assistant Commissioner found that Target AU had only established that it was going to sell third party rather than its own branded goods. At best, Target AU had only established preparatory use of the word mark TARGET in relation to retail services, but even that was only at an investigatory level rather than being a commitment to do so.

Consequently, the Assistant Commissioner ordered that Target AU’s class 25 trade marks be revoked in full and that their class 24 trade marks have their specifications restricted to bed sheets.

2. Copyright

United Kingdom

Supreme Court Clears Innocent Intermediaries of Liability for Compliance Costs
In 2018 UKSC 28 Cartier International AG v British Telecommunications Plc the Supreme Court had to consider who should pay the cost of complying with the order when an injunction is obtained against an innocent intermediary to prevent the use of their facilities by wrongdoers for unlawful purposes.

In 2014 Cartier and other luxury goods parties obtained injunctions requiring various ISPs to block or attempt to block access to specified “target websites”, their domains and sub-domains and any other IP address or URL notified to them whose purpose is to enable access to a target website.

Complying with such website-blocking orders has implementation costs for ISPs, which vary according to the technology employed and the ISP’s business model. However, broadly speaking they fall under five heads: (i) the cost of acquiring and upgrading the hardware and software required to block the target sites; (ii) the cost of managing the blocking system, including customer service, and network and systems management; (iii) the marginal cost of the initial implementation of the order, which involves processing the application and configuring the ISP’s blocking systems; (iv) the cost of updating the block over the lifetime of the orders in response to notifications from the rights-holders, which involves reconfiguring the blocking system to accommodate the migration of websites from blocked internet locations; and (v) the costs and liabilities that may be incurred if blocking malfunctions through no fault of the ISP, for example as a result of over-blocking because of errors in notifications or malicious attacks provoked by the blocking. The ISPs do not complain about having to bear the costs under heads (i) and (ii), but challenge the trial Judge’s ruling (upheld by the majority of the Court of Appeal) in line with previous precedent that they must bear the costs under heads (iii) to (v).

The justifications given in the previous precedent and the Court of Appeal judgment in this case were that:

• ISPs are commercial enterprises that make a profit from the provision of the services which the operators and users of [the target websites] use to infringe copyright. As such, the costs of implementing the order can be regarded as a cost of carrying on that business; and
• It is implicit in the EU Directives which require member states to make website-blocking injunctions available.
• The compliance costs are part of the price which the ISPs must pay for the immunities which they enjoy under the directives.

However, the Supreme Court found no basis for those justifications. Rather, the relevant recitals in the Directives refer the terms of an injunction against an intermediary to national law without any indication one way or the other of what it would be appropriate for national law to say about them, which indicates that a diversity of national solutions may be equally consistent with EU law. Consequently, there is no basis for the quid pro quo argument. Hence, in this case, the issue of compliance costs is a matter for English law, within the broad limits set by the EU principles of effectiveness and equivalence, and the requirement that any remedy should be fair, proportionate and not unnecessarily costly. The Supreme Court found that the ordinary principle of English law is that unless there are good reasons for a different order an innocent intermediary is entitled to be indemnified by the rights-holder against the costs of complying with an order. It was further noted that like other common law systems (with the significant exception of the United States), English practice on the incidence of costs generally depends on the legal distribution of risk as found by the court. In this respect it differs from many civil law systems, in which losses arising from litigation lie where they fall, absent some specific legal entitlement.

While ISPs may indirectly profit from infringers’ activities, there is no moral or commercial responsibility in the absence of a legal one. Although wider public benefits are the principle reason why intellectual property rights exist, the public interest in their enforcement is not wider or different from the private interest of the rights-holders.