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Brand Matters Issue 3 | December 2014

Brand Matters

Welcome to the latest edition of Brand Matters, our new e-bulletin focusing on issues that affect brand owners and advisors.

Jeremy Hertzog


Editor's Note

Welcome to the latest issue of Brand Matters, our new e-bulletin focusing on issues that affect brand owners and advisors.

Regardless of sector – from retail, fashion, sport and media, through to life sciences, finance and real estate – a brand is one of the most valuable assets that a business or an individual can own. But navigating the world of brands can be a minefield, particularly in light of technological advances and the international nature of modern business.

We welcome your feedback, so if there is anything in this newsletter that you wish to discuss further, or any ideas for future issues, please do not hesitate to contact me or any member of the team.

The fight against fake

Trade mark owners have a new weapon against counterfeiters following a recent High Court decision. In a claim brought by Richemont and its subsidiaries Cartier and Montblanc, the court has ruled that six leading internet service providers (ISPs) had to block access to certain websites selling trade mark counterfeit goods.

Until now, the English courts have only ever granted blocking injunctions for copyright infringement; for example, to block illegal file sharing sites allowing downloads of pirated films or TV programs. This latest decision is welcomed by trade mark owners and will be particularly useful in the fight to stop sales of counterfeit goods.

Richemont, whose luxury brands also include Van Cleef & Arpels, IWC and Piaget, identified a number of websites that it claimed were selling counterfeit goods to UK consumers. It had tried to contact the owners of the websites informing them of its complaint, with no result. English law contains no express right to bring claims againsts ISPs for trade mark infringement, so Richemont relied on EU law to bring this test case against the ISPs, under Article 11 of the Intellectual Property Enforcement Directive, which gives the right to apply for an injunction against intermediaries whose services are used by a third party to infringe any intellectual property right – not just copyright.

The ISPs were concerned that extending blocking injunctions beyond copyright would open the floodgates (Richemont alone have identified nearly 240,000 potentially infringing websites, 46,000 of which have been confirmed as infringing and are waiting for enforcement action) and they did not want to bear the potentially significant costs of policing these injunctions. However, the court found that Article 11 did allow blocking injunctions for trade mark infringement, and there was a substantial public interest in protecting trade mark owners and consumers against sales of counterfeit goods. In the court's view, alternatives such as direct action against the website operators, notice-and-takedown by hosts, payment freezing, de-indexing from search engines or custom seizures are simply not as effective.

In order to obtain this type of blocking injunction, certain threshold conditions must be met, including evidence that the websites are infringing the claimant's trade marks; that the ISPs must have actual knowledge of the infringement; and that the injunction is not a barrier to legitimate trade. The court also imposed a number of controls and safeguards to prevent any misuse of the right. For more information, please contact Mary Guinness.

New designer in town

Design law has had an overhaul under the new Intellectual Property Act 2014, with the most important change relating to the ownership of a design that has been commissioned. Under the new Act, the designer – rather than the person who commissions the design – will be the owner even if they were paid to produce that design.

Previously, the commissioner, not the actual designer, would own the design. Now, under the new Act (the relevant design sections of which came into force on 1 October 2014), even if you commission and pay for a design, you do not own the design rights in it and you cannot stop the designer using it in future. Nor can you bring legal action against others who copy the design.

The only way for commissioners to ensure they now have adequate protection in place to protect and exploit the designs they have paid for is to have a contract in place with the designer, ensuring that all the design rights are transferred to the commissioner. It is particularly important for any industry that has freelance designers working for them (who are not employees) to ensure such contracts are in place, otherwise the commissioner cannot enforce their IP rights in respect of those designs.

Clients who commission designs in any industry should seek expert legal advice on putting in place contracts that their designers can sign up to, in order to ensure they own the IP rights in the designs. Contact Cassandra Hill for more information.

Puzzling shape

Registering 3D shapes as trade marks can be a puzzling business. The famous Rubik's cube, which has frustrated and delighted people since the 1970s, has been doing the same to the courts. Last month, after an eight-year legal battle, the General Court of the European Union ruled that the Community Trade Mark of the cube's 3D shape is valid.

Since 2006, a German toymaker, Simba Toys, has been seeking to invalidate the CTM of the cube's "cubic grid structure" on the basis that, among other things, it performed a purely technical function and was devoid of any distinctive character. However, on 25 November, after a hard-fought dispute full of twists and turns – much like the puzzle itself – the court upheld its validity.

It held that 3D puzzles can take on a number of different shapes and it is not the norm for that shape to be a cube with a grid structure. The CTM was therefore sufficiently distinctive to imprint on the consumer's mind that this shape was a trade mark from a particular undertaking. Further, as the CTM did not show the internal mechanism that allows the Rubik's cube to rotate or indicate that it had a rotating capability, the CTM did not perform a purely technical function.

Registering 3D shapes as trade marks is complicated as there are numerous pitfalls you need to avoid, even where you have an item as famous as the Rubik's cube. For more information, please contact Victoria Leach.

Film: Interview with Lord Bilimoria

"While I was a student I came up with the idea for Cobra beer. I started working in a friend’s house in Fulham on the kitchen table. Literally - no exaggeration." Lord Bilimoria CBE DL, Chairman of the Cobra Beer Partnership, was recently interviewed on Jazz Shapers, a radio programme broadcast on Jazz FM and presented by Mishcon de Reya’s Director of BD, Elliot Moss. Click on the image above to view a short film.

Click here to view a short film.

Blog: Business Shaper - Rob Forkan

Rob and Paul’s parents were compassionate, adventurous and generous people. They wanted to raise their children with a deep understanding of the world, and came up with a plan for their family to travel the world together. This is how they came to be living in Sri Lanka when the tsunami hit on Boxing Day 2004 - the last time Rob and Paul saw their parents. Determined to try to find a positive end to the tragedy, the pair have created a brand that represents the philanthropic values their parents had instilled in them. Click here to read the full blog.

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