September 2017

1. General

Europe

European Commission Publishes Position on IP Rights in light of Brexit
The European Commission has now produced a position paper on IP rights in light of Brexit, restricting its focus to existing rights and so does not consider the effect of Brexit on the plans for a Unitary Patent.

The position paper states that the UK’s withdrawal should not undermine the protection enjoyed by IP rights holders, including transitional provisions for recognizing such things as priority and seniority rights for applications pending at the withdrawal date and that exhaustion of rights remains so after the withdrawal date. In particular, EU IP rights should be automatically recognised and remain enforceable within the UK at no cost and minimal administrative burden to rights holders.

In the case of EU trade mark rights it is acknowledged that the current right extends to the UK even when the mark does not have any reputation in the UK. The position paper recommends determining genuine use of such rights in the UK should not take into consideration any non-use before the withdrawal date and so should at least temporarily continue to have effect in the UK.

2. Patents

Canada

Canada Introduces Patent Term Extension
On 21st September 2017 regulations allowing for Supplementary Protection Certificates (SPCs) which can extend the term of qualifying patents entered into force. Allowing for SPCs is part of a wider package of reforms brought about by the terms of the Free Trade Agreement between Canada and the European Union.

To be eligible for an SPC the patent claim must be for a medicinal ingredient or combination thereof, where the claim is in a product, product-by-process or use format. More particularly, either:

• the patent contains a claim for the medicinal ingredient or combination of all the medicinal ingredients contained in a drug for which the authorization for sale set out in the application for a certificate of supplementary protection was issued; or
• the patent contains a claim for the medicinal ingredient or combination of all the medicinal ingredients as obtained by a specified process and contained in a drug for which the authorization for sale set out in the application for a certificate of supplementary protection was issued; or
• the patent contains a claim for a use of the medicinal ingredient or combination of all the medicinal ingredients contained in a drug for which the authorization for sale set out in the application for a certificate of supplementary protection was issued.

The maximum extension of term available is an additional two years and is only available where the authorisation for sale issued on or after 21st September 2017. Along with the above subject matter criteria, applications for an SPC need to be filed within a 120 days of the later of the issuing of the authorisation for sale or the granting of the patent.

The medicinal ingredient or combination of medicinal ingredients must not have been the subject of a previous authorisation for sale in Canada. Further, the substance must not have been the subject of an application for marketing approval in the EU (or a member state), Switzerland, USA, Japan or Australia more than 12 months before the Canadian application for marketing approval (although this period is 24 months for SPC applications filed by 21st September 2018).

Medicinal ingredients contained in drugs will be treated as being the same medicinal ingredient if they differ from each other only with respect to:

• a variation in any appendage within the molecular structure of a medicinal ingredient that causes it to be an ester, salt, complex, chelate, clathrate or any non-covalent derivative;
• a variation that is an enantiomer, or a mixture of enantiomers, of a medicinal ingredient;
• a variation that is a solvate or polymorph of a medicinal ingredient;
• an in vivo or in vitro post-translational modification of a medicinal ingredient; and
• any combination of the above variations.

Europe

EPO Produces Unitary Patent Guide
The EPO has now produced a Unitary Patent Guide. The Guide has a procedural focus with practical advice on obtaining, maintaining and managing unitary patents. It does not attempt to be a substitute for the primary legislation, and so questions of law should still involve consultation of the latter.

The Unitary Patent system is promoted as providing cost savings on account of not requiring validation, renewal and recordal of in numerous states. The Guide indicates that on average a unitary patent is likely to be a cost effective option when used in relation to 4 or more states.

Current EPC member states are all of the EU member states as well as the majority of other states in the European region. Upon commencement the Unitary Patent system will only be available for EU member states, although Spain and Croatia have yet to join the Unitary Patent. It is noteworthy that, regarding Brexit, the Guide states:

"Should the United Kingdom’s withdrawal from the EU become legally effective, EU Regulations No 1257/2012 and No 1260/2012 creating the Unitary Patent will cease to apply there. This will not, however, lead to a loss of patent protection in the United Kingdom for Unitary Patent proprietors. Appropriate solutions that avoid any loss of rights or legal uncertainty can be expected. The protection of acquired rights and the preservation of legal certainty are general principles of law respected throughout Europe."

The Unitary Patent system will commence once the Unified Patent Court Agreement enters into force. Unitary Patents will be litigated before the Unified Patent Court, although Spain, Croatia and Poland are currently not part of and so not subject to the rulings of the Unified Patent Court. Non-Unitary Patent EPC patents will also be litigated before the Unified Patent Court, but not during the transitional period of seven-years after commencement, and even then not if they have been opted out from being subject to the Unified Patent Court. Opt outs can be withdrawn at any time, provided an action before a national Court has not been initiated.

Once the Unitary Patent system has commenced the Unified Patent Court’s jurisdiction in respect of a given unitary patent will only extend to states that were members of the Unified Patent Court Agreement on the effective filing date of that patent.

3. Trade Marks

New Zealand

Monster Energy Unable to Tame the Beast
In 2017 NZHC 2393 Monster Energy Company v Ox Group Global Pty Ltd the Judge rejected Monster Energy’s appeal of an Assistant Commissioner’s decision that allowed Ox Groups device mark to proceed to registration.

In 2014 Ox Group applied via the Madrid Protocol to register its device mark in New Zealand in relation to energy drinks and some other non-alcoholic beverages in class 32. The device mark prominently features the word OX above the split phrase UNLEASH THE POWER with the entire mark angled upwards at about 25 degrees. This was opposed by Monster Energy on the basis of their class 32 beverages registration for the phrase UNLEASH THE BEAST!

The Assistant Commissioner had found there to be insufficient visual or phonetic similarity between the two marks and that the weak conceptual similarity was outweighed by the significant visual and phonetic differences. Hence, despite the goods being the same and likely to be purchased by customers in low-involvement transactions, the Assistant Commissioner held there was unlikely to be deception or confusion amongst a substantial number of persons.

In its appeal Monster Energy contended that the Assistant Commissioner should have considered the phrase UNLEASH THE in isolation on the basis that it is an essential feature of their mark that is subsumed within Ox Group’s mark. While the phrase is not the dominant element, they contended that it can still function as a distinctive element that can give rise to a material degree of similarity when subsumed within another mark. However, the Judge reiterated the precedential principle that regard must be had for the mark as a whole and noted that consumers would observe UNLEASH THE as an incomplete phrase. Just as BEAST! is an important element of Monster Energy’s mark, the Judge also held the OX element to be important to evaluating the distinctiveness of Ox Group’s mark. However, the Judge went on to hold that even when stripped of the OX element and device form UNLEASH THE POWER is phonetically and visually dissimilar to UNLEASH THE BEAST.

In regards to conceptual similarity Monster Energy argued that BEAST is a colloquial term for power, and that this conceptual similarity is particularly reinforced by the raw power alluded to by the inclusion of the word OX. However, the Judge considered that the average consumer of the products is unlikely to engage in the process of analysis and approximation that Monster Energy proposes, and that even so any such conceptual similarity would not outweigh the significant visual and phonetic differences.

In earlier High Court proceedings Monster Energy had been allowed to add lack of intention to use the mark as a ground of appeal. The Judge noted that the act of filing creates a presumption of intention to use (if not already in use), but that this can be displaced by evidence showing, on the balance of probabilities, no intention to use the mark on the relevant goods. Monster Energy attempted to infer a lack of intention from Ox Group only distributing drinks bearing the mark UNLEASH THE POWER without the OX mark until November 2016. However, the Judge accepted Ox Group’s evidence that its non-use of the OX mark was intended to be temporary as they preferred to achieve registration before using on account of possible litigation from Red Bull. Hence, Monster Energy was held not to have displaced the presumption that Ox Group intended to use the OX mark they applied for.