Service providers and their liability – an EU Court decision

The European Court ruled in case C‑521/17 Coöperatieve Vereniging SNB-REACT U.A. v Deepak Mehta. The case concerns the following:

SNB-REACT is a body established in Amsterdam (Netherlands), whose purpose is to ensure the collective representation of trade mark proprietors.

It has brought proceedings before the Harju Maakohus (Court of First Instance, Harju, Estonia) against Mr Mehta, seeking an injunction terminating the infringement of the rights of 10 of its members and preventing any future infringement of those rights, and seeking damages in respect of the loss caused by Mr Mehta.

In support of that application, SNB-REACT submitted that Mr Mehta had registered internet domain names which were unlawfully using signs identical to trade marks owned by its members, together with websites unlawfully offering for sale goods bearing such signs. Furthermore, SNB-REACT has argued that Mr Mehta is the owner of IP addresses corresponding to those domain names and websites. Lastly, it maintained that Mr Mehta’s liability is incurred by reason of the unlawful use of the signs at issue by those domain names and websites which, it claimed, had been brought to his attention on several occasions.

In his defence, Mr Mehta has claimed that he had neither registered the domain names and websites challenged by SNB-REACT nor used in any way signs identical to the trade marks owned by the members of that body. Furthermore, whilst acknowledging his ownership of 38 000 IP addresses, he stated that he had rented them only to two third-party companies. Lastly, he stated that, in the light of that activity, he was to be viewed solely as offering a service providing access to an electronic communications network, together with an information transmission service.

The Harju Maakohus (Court of First Instance, Harju) dismissed the action brought by SNB-REACT, ruling, first, that the latter had failed to show that it had standing to bring an action in its own name seeking to enforce the rights of its members and to recover compensation for the loss caused by the infringement of those rights. In that regard, that court found that SNB-REACT did not itself own any rights over the trade marks concerned by its application, before holding that Article 60¹(2) of the Law on trade marks had to be interpreted as meaning that a body such as the applicant did not have standing to bring legal proceedings for purposes other than the representation of its members.

Secondly, the Harju Maakohus (Court of First Instance, Harju) found that the evidence adduced by SNB-REACT served to establish that Mr Mehta was the owner of the IP addresses linked to the internet domain names unlawfully using signs identical to the trade marks owned by the members of that body, and to the websites unlawfully selling goods bearing such signs. By contrast, it took the view that that evidence demonstrated neither that Mr Mehta was the owner of those domain names and websites, nor that he himself had unlawfully used the signs at issue. In the light of those findings, that court concluded that Mr Mehta’s liability could not be established as a result of the unlawful activity of persons operating those domain names and websites, in accordance with Article 8(1) of the Law on information society services.

In the appeal which it has brought before the Tallinna Ringkonnakohus (Court of Appeal, Tallinn, Estonia), SNB-REACT submits, first, that it is possible to interpret Article 60¹(2) of the Law on trade marks as meaning that a collective representation body has standing to bring, in its own name, an action to defend the rights and interests of its members. Secondly, it submits that the court of first instance erred in excluding all liability on the part of Mr Mehta for the services that he provided to persons operating domain names and websites in the context of online sales of counterfeit goods. It is submitted that the limitation of liability set out in Article 8(1) of the Law on information society services applies in fact to service providers who act only as neutral intermediaries, but not to those who, like Mr Mehta, are aware of the infringement of intellectual property rights and play an active part in such infringement.

In its decision to refer, the Tallinna Ringkonnakohus (Court of Appeal, Tallinn) states that, bearing in mind those arguments and the doubts which it entertains as to the compatibility of national law with EU law, it considers a preliminary ruling from the Court to be necessary on two points.

In the first place, it is unsure whether a body such as SNB-REACT has standing to bring, in its own name, an action to defend the rights and interests of its members. For that reason, it requests the Court to interpret Article 4(c) of Directive 2004/48, in order to allow the referring court to determine, in full knowledge of the facts, the scope which should be given, in the case in the main proceedings, to the combined provisions of Article 3(2) of the Code of Civil Procedure and Article 60¹(2) of the Law on trade marks.

In the second place, the referring court is unsure whether Mr Mehta’s liability cannot be established, even if he has not used signs in breach of the rights held by the members of SNB-REACT, inasmuch as he has provided services to persons who operate the domain names and websites which use those signs unlawfully, by renting the IP addresses which he owns under conditions allowing those persons to operate anonymously. The referring court also states that the answer to that question depends on the meaning of Articles 12 to 14 of Directive 2000/31, which were transposed into national law by Articles 8 to 10 of the Law on information society services.

It is in those circumstances that the Tallinna Ringkonnakohus (Court of Appeal, Tallinn) decided to stay the proceedings and to refer to the Court the following questions for a preliminary ruling:

‘(1) Is Article 4(c) of [Directive 2004/48] to be interpreted as meaning that Member States are required to recognise bodies collectively representing trade mark proprietors as persons with standing to pursue legal remedies in their own name to defend the rights of trade mark proprietors and to bring actions before the courts in their own name to enforce the rights of trade mark proprietors?

(2) Are Articles 12, 13 and 14 of [Directive 2000/31] to be interpreted as meaning that even a service provider whose service consists in registering IP addresses, thus enabling them to be anonymously linked to domains, and in renting out those IP addresses, is to be regarded as a service provider within the meaning of those provisions to whom the exemptions from liability provided for in those articles apply?’

The Court’s decision:

1.  Article 4(c) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as meaning that the Member States are required to recognise a body collectively representing trade mark proprietors, such as that at issue in the case in the main proceedings, as a person entitled to seek, in its own name, the application of the remedies laid down by that directive, for the purpose of defending the rights of those trade mark proprietors, and to bring legal proceedings, in its own name, for the purpose of enforcing those rights, on condition that that body is regarded by national law as having a direct interest in the defence of such rights and that that law allows it to bring legal proceedings to that end, these being matters for the referring court to verify.

2. Articles 12 to 14 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) must be interpreted as meaning that the limitations of liability for which they provide apply to the provider of an IP address rental and registration service allowing the anonymous use of internet domain names, such as that at issue in the case in the main proceedings, inasmuch as that service comes within the scope of one of the categories of service referred to in those articles and meets all the corresponding conditions, in so far as the activity of such a service provider is of a merely technical, automatic and passive nature, implying that he has neither knowledge of nor control over the information transmitted or cached by his customers, and in so far as he does not play an active role in allowing those customers to optimise their online sales activity, these being matters for the referring court to verify.

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What should we know about trademark oppositions?

It is a widespread opinion that protection of a trademark requires its registration before the Country’s Patent Office. Even though this is true it is not the end of the story when it comes to trademark protection. Why?

The main reason for this is the fact that the legislation in most of the countries around the world doesn’t require from Patent Offices to stop every new trademark application even in a case that it is identical or similar to already registered one. This responsibility is given to the trademark owner who can file an opposition against such new marks if and only if he wants to do this.

But if the owner misses out on filling an opposition on time, the new mark will be registered and the following options for its cancellation could be more expensive and time-consuming.

So all in all every trademark holder has two main variants to support its already registered mark:

1. To monitor the Patent Office’s trademark bulletins by himself – it has to be noted here that although everyone can assess identical marks for identical goods and services (a mark X for a good Y is a mark X for a good Y), the situation is much more complex when it comes to similarity, which requires in-depth knowledge regarding trademark legislation and case law.
2. To subscribe for different software decisions which will alert him in case of new identical or similar marks and after that to discuss the results with a trademark attorney.

In any case, it is vital such monitoring to be carried out on a regular base and oppositions to be filed on time in order for the trademark protection to be maintained properly.

The EU Court gave clarifications for obtaining an SPC

The European Court ruled in the case C‑121/17, Teva UK Lt v Generics (UK) Ltd, which concerns the following:

Gilead is a pharmaceutical company which markets an antiretroviral medicinal product indicated for the treatment of persons infected with HIV, under the name TRUVADA. That medicinal product contains two active ingredients, tenofovir disoproxil (‘TD’) and emtricitabine, which have a combined effect for that treatment. It was granted a marketing authorisation (‘MA’) on 21 November 2005 by the European Medicines Agency (EMA).

Gilead is the holder of the European patent (UK) EP 0 915 894 (‘the basic patent at issue’). The patent application, filed on 25 July 1997, had a priority date, for the purposes of Article 88 of the EPC, of 26 July 1996. That patent was granted by the European Patent Office (EPO) on 14 May 2003 and expired on 24 July 2017. The description of the invention contained in that patent indicates that the patent covers, in general terms, a series of molecules which are helpful in the therapeutic treatment of a number of viral infections in humans and animals, in particular HIV.

That description gives a series of pharmaceutical formulae which may be envisaged for the compounds claimed, without referring specifically to individual compounds or to any particular use for those compounds. Claim 25 of the basic patent at issue expressly mentions TD as one of the claimed compounds.

That description also mentions the fact that those compounds may, if necessary, be associated with ‘other therapeutic ingredients’. The words ‘other therapeutic ingredients’, however, are neither defined nor explained in the basic patent at issue.

In that regard, claim 27 of the basic patent at issue states:

‘A pharmaceutical composition comprising a compound according to any one of claims 1-25 together with a pharmaceutically acceptable carrier and optionally other therapeutic ingredients.’

In 2008, Gilead obtained an SPC on the basis of claim 27 of the basic patent at issue and the MA (‘the SPC at issue’). That SPC relates to a ‘composition containing [TD], optionally in the form of a pharmaceutically acceptable salt, hydrate, tautomer or solvate, together with Emtricitabine’.

The order for reference states that there is no evidence that at the priority date of the basic patent at issue, emtricitabine was an effective agent known to the person skilled in the art for the treatment of HIV in humans. The EMA did not approve emtricitabine until 2003.

The applicants in the main proceedings, who intend to market generic versions of TRUVADA on the UK market, brought an action before the referring court, the High Court of Justice (England & Wales), Chancery Division (Patents Court), seeking to challenge the validity of the SPC at issue.

In support of their action, the applicants in the main proceedings submit that the SPC does not meet the condition laid down in Article 3(a) of Regulation No 469/2009. They point out that to meet the requirement in that provision, the product in question must, in accordance with the judgment of 24 November 2011, Medeva (C‑322/10, EU:C:2011:773), be ‘specified in the wording of the claims’. Where there is a functional definition in the relevant claim relating to the product, that claim must ‘relate, implicitly but necessarily and specifically’ to that product, in accordance with the terms used by the Court in the judgment of 12 December 2013, Eli Lilly and Company (C‑493/12, EU:C:2013:835). The applicants in the main proceedings submit that emtricitabine is not specified in the wording of claim 27 of the basic patent at issue and that the expression ‘other therapeutic ingredients’ used in that claim does not specify any active ingredient, whether structurally or functionally. The TD/emtricitabine combination cannot therefore be considered to be protected by a basic patent in force, within the meaning of Article 3(a) of Regulation No 469/2009.

By contrast, Gilead contends in essence that, in order to check whether Article 3(a) of Regulation No 469/2009 is satisfied, it is necessary and sufficient that the product in question falls within the extent of the protection conferred under at least one claim of the basic patent. It submits that the expression ‘other therapeutic ingredients’ used in claim 27 of the basic patent at issue relates implicitly but necessarily to emtricitabine, in accordance with the judgment of 12 December 2013, Eli Lilly and Company (C‑493/12, EU:C:2013:835). The TD/emtricitabine combination therefore, it argues, satisfies the condition laid down in that article.

The referring court takes the view that, notwithstanding the judgments delivered by the Court on interpretation of Article 3(a) of Regulation No 469/2009, the meaning to be given to that provision remains unclear.

That court states that, admittedly, it is clear from the Court’s case-law that the concept of a ‘product protected by a basic patent’ within the meaning of Article 3(a) of Regulation No 469/2009 refers to the rules governing the extent of protection, not the rules governing infringement. Furthermore, it follows from paragraph 28 of the judgment of 24 November 2011, Medeva (C‑322/10, EU:C:2011:773), that to be considered ‘protected by a basic patent’ within the meaning of that provision, the active ingredients should be specified in the wording of the claims of the patent in question.

Nevertheless, the judgments of 12 December 2013, Actavis Group PTC and Actavis UK (C‑443/12, EU:C:2013:833), of 12 December 2013, Eli Lilly and Company (C‑493/12, EU:C:2013:835), and of 12 March 2015, Actavis Group PTC and Actavis UK (C‑577/13, EU:C:2015:165) imply that the principles described in the preceding paragraph are not sufficient for the purposes of determining whether a ‘product is protected by a basic patent in force’ and that it is also necessary to take into account the ‘subject-matter of the invention covered by the patent’ or the ‘core inventive advance’ of the patent. The referring court takes the view that it is not clear from that case-law whether those requirements are relevant for the purposes of the interpretation of Article 3(a) of Regulation No 469/2009.

According to the referring court, there are also divergent decisions in a number of Member States concerning the issue, before the court in the present case, of the availability of an SPC for the TD/emtricitabine combination and, more generally, concerning the interpretation of Article 3(a) of Regulation No 469/2009.

In those circumstances, the High Court of Justice (England & Wales), Chancery Division (Patents Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘What are the criteria for deciding whether “the product is protected by a basic patent in force” in Article 3(a) of Regulation No 469/2009?’

The Court’s decision:

Article 3(a) of Regulation No 469/2009 of the European Parliament and of the Council of 6 May 2009, concerning the supplementary protection certificate for medicinal products, must be interpreted as meaning that a product composed of several active ingredients with a combined effect is ‘protected by a basic patent in force’ within the meaning of that provision where, even if the combination of active ingredients of which that product is composed is not expressly mentioned in the claims of the basic patent, those claims relate necessarily and specifically to that combination. For that purpose, from the point of view of a person skilled in the art and on the basis of the prior art at the filing date or priority date of the basic patent:

–        the combination of those active ingredients must necessarily, in the light of the description and drawings of that patent, fall under the invention covered by that patent, and

–        each of those active ingredients must be specifically identifiable, in the light of all the information disclosed by that patent.

Apple lost a battle against Swatch in Singapore

Apple failed to stop a trademark application for ‘Tick different’ applied by the Swiss company Swatch in Singapore for class 9 and 14.

The opposition was based on an earlier mark  ‘Think different’ owned by Apple for class 9. The US company argued that the Swatch mark is confusingly similar and filed in a bad-faith.

The Patent Office, however, wasn’t impressed and dismissed the opposition. According to the Office, both signs are not similar due to the differences in their first words which convey different meanings. On top of that, some of the goods weren’t similar too.

Source: WIPR.

The trademark reform in Mexico is now a reality

Some important changes to the Trademark law in Mexico came into force on 10.08.2018. According to them:

• non-traditional marks are allowed for protection;
• consent letters and coexistence agreements will be accepted by the Patent Office;
• refusals based on lack of distinctiveness will be overcome by acquired distinctiveness;
• the Patent Office will issue decisions on trademark oppositions;
• all Office actions will be published in its official gazette;
• there will be a 10% reduction in office fees for online applications for trademarks;

In addition to this: “In particular, for all trademarks filed or granted after 10 August 2018, submision of a declaration of actual and effective use will be required once the trademark becomes subject to use (the declaration needs to be presented within 3 months once 3 years have elapsed since registration of the trademark).”

Furthermore: “Another important change brand owners have to be aware of is that trademarks can no longer be filed for a broad range of goods and services but only for the specific goods and services of interest.”

Source:  Bernardo Herrerias Franco, Alfredo Pineda Nieto and Valentina Schmid (Hogan Lovells) on Lexology.

WIPO Magazine issue 4

WIPO published the 4th issue of the WIPO Magazine, where you can find the following:

• GII 2018: energizing the world with innovation
• COCOpyright and the value of moral rights
• The role of IP rights in the fashion business: a US perspective
• Strengthening Africa’s audio-visual sector: market intelligence is critical
• Ethics, technology and the future of humanity

For more information here.

New fees for international trademarks targeting South Korea

WIPO reports about a change regarding the individual fees payable in case of designation of South Korea in international trademark applications. The new fees which will come into force on 07.09.2018 are as follow: