Archive | 2011, December | (5) posts

Goods in Transit: When is a Fake not a Fake?!

You are, or you represent, a holder of rights. You become aware that some goods which you consider counterfeit have entered the EU on their way to, say, Canada. The goods are only in transit at a port or an airport before they continue their onward journey.

What do you do? You want to stop the goods but they are only in transit, i.e. not destined for the European market.

Recently, the European Court of Justice (ECJ) has tried to shed some light on this. The court ruled in two joint cases:

Philips: in the port of Antwerp Belgian Customs inspected a shipment without a clearly stated destination. The cargo was from Shanghai and contained electrical shavers, similar in appearance to Philishave. Customs detained the goods and Philips brought action against the manufacturer based on Philips’ registered design rights in Belgium.

Nokia: UK Customs inspected a shipment of mobile phones and accessories for mobile phones at Heathrow Airport. The shipment came from Hong Kong and was on its way to Columbia. The goods were deemed fake by Nokia, but Customs refused to detain the shipment as the goods were in transit. Nokia brought this before the courts.

So, can the right holders, Nokia and Philips, enforce their rights against these goods? Or are they off bounds as they are not on the market in the EU?

The ECJ pondered this question for ages. Firstly, the ECJ confirmed that goods from outside the EU do not infringe IP rights in the EU when they are in transit. The exception is of course if there is marketing underway, directed against European consumers or if Customs suspects something fishy – which can later be verified. Secondly, the ECJ states that if it is 100 per cent clear that the goods are destined for a non-EU country, like Columbia, they cannot be considered counterfeit in the legal sense – (not very fortunate for the consumers in the destination market and a curious lack of consequence for IP right owners’ enforcement possibilities and costs of enforcing their rights). Thirdly – and finally – the CECJ says that any goods may still be seized by Customs if the goods violate other codes, for example if the goods pose a risk to health or safety.

Personally, I am not terribly happy with this ruling. The ECJ’s business is to interpret and that it has done. It is not to blame for the law. But – current law aside – it seems bizarrely without consequence that the EU as a champion of the protection of IP rights is not stretching this protection to the goods themselves, only to the domestic market. Counterfeit goods will damage the rights holder in Columbia too. Instead of being able to stop obvious counterfeits en route, the rights holder is now referred to spend further funds taking legal action in Columbia. This drives up the costs for enforcing the IP rights.

The ECJ has placed a huge burden on the shoulders of Customs and the rights holders. It is up to Customs and the owners to investigate and document whether the goods are actually meant for the European market. This seems out of proportion if we are dealing with clearly counterfeit goods. The same goes for the resources and time needed for such investigations.

The European Commission is currently reviewing the regulations. If the Commission is serious about protecting IP-rights it should also focus on the products. If you want to stop fake goods you will also have to make it financially difficult for the pirates. One way is not to provide cheap and easy transport routes through EU airports and cargo ports or, indeed, IP infringement immunity for the goods.

And the two cases at hand? Well, Philips is happy. The consignment did not have a clear destination and Belgian Customs and the ECJ considered this fishy enough to let Philips enforce their rights successfully. In the Nokia case there were no such extra insecurity relating to the shipment; UK Customs therefore were right in denying Nokia the right of enforcing their rights. Nokia will therefore face some unhappy customers in Columbia and possibly an unfortunate blow to its good-will there.

Thorbjørn Swanstrøm, Attorney at Law

Court of Justice of the EU confirms zero or negative duration for SPCs

On 8 December 2011, the Court of Justice of the European Union (CJEU) issued its judgment in case C-125/10 (“Merck”). This case concerns the duration of a Supplementary Protection Certificate (SPC) according to Article 13 of the SPC Regulation EG/469/2009.

Summary of the case
Merck applied for a SPC for the product Sitaglipin under conditions where the duration of the SPC as calculated according to Article would result in a negative term of the SPC, with the prospect of being eligible for a subsequent six month extension of the SPC. The application was rejected by the Deutches Patent- und Markenamt. Merck appealed this decision to the Bundespatentgericht which referred the following question to the CJEU for a preliminary ruling:

“Can an [SPC] for medicinal products be granted if the period of time between the filing of the application for the basic patent and the date of the first [marketing authorisation] in the community is shorter than five years?”

The court has now ordered that such SPC can be granted despite the fact that the duration is zero or negative when calculated according to Articles 13(1) and (2), because the same SPC subsequently may be the subject of a further six month extension provided for under Article 13(3) of the same Regulation – that is when the marketing authorisation includes all studies conducted in compliance with an agreed pediatric investigation plan (PIP) according to Regulation No 1901/2006.

This means that when the period between the filing of a patent application and the date of the first marketing authorisation is less than five years but more than 4½ years, applicants could benefit from between one day and six months in addition to the normal 20 year term of the basic patent.

The applicant of an SPC must observe the time limit for filing an SPC which according to Article 7(1) of the Regulation is six months from the later of the grant of the patent or the date of the first marketing authorisation of the product in question. At that time there might not be an pediatric extension of the regular patent term, but if the product were to be the subject of a pediatric study in accordance with Regulation 1901/2006 there is provisions for a further six months term of the SPC.

Sidsel Hauge, European Patent Attorney

A visit to the Copenhagen office

This week has so far been one of the most interesting weeks in the Specialist programme (soon to be renamed to the Trainee programme). Topics of the week include infringement, opposition and sales training, not to mention a trip to the Copenhagen office. The latter definitely being one of the highlights of the week.

The Copenhagen office is situated in the eastern part (Østerport) of the city in an old genuine building. The topic of the day was foreign filing which turned out to be a very interesting subject. Acceptance date, PPH (Patent Prosecution Highway), heavy prosecution countries and restriction requirements were all new expressions for the most of us. We found out that there is a lot more to know than EPC and Swedish patent law. Strategic decisions, for example using utility models instead of patents, were especially interesting. And although we didn’t get a hold of any Danish pastry, we had the pleasure to enjoy a Grøn Tuborg.

To analyze claims from another perspective – like when to file an opposition – was the topic of today. Arguing why a claim should not be valid instead of the opposite differed from what we are used to and resulted in many intriguing discussions. Hopefully, it will be more time to deal with oppositions in the upcoming practice period.

Soon, it’s time for sales training and I’m convinced that it will be as instructively as always.

Oskar Kronsell, Associate

Changes in the Taiwanese Patent Act

Further to our information relating to the Taiwanese Trademark Act, the Legislative Yuan on November 29, 2011, passed the draft amendment to the Patent Act proposed by the Executive Yuan. The date on which this Act takes effect will be decided by the Executive Yuan. It is estimated this Act will come into force one year after ratification of the President.

The main points further improving the Taiwanese patent system are summarized below. 

  1. The applicant can claim a grace period of six months prior to the filing date, due to own disclosure through printed publication.
  2. It will be possible to apply for reinstatement if the applicant unintentionally failed to claim priority, pay issue fee, or pay annuity fee within the statutory time.
  3. The applicant may file a divisional application within 30 days from when the notice of allowance is rendered.
  4. It will be possible to apply for a compulsory license to produce pharmaceuticals and export them to developing countries to solve their public health problems.
  5. Additionally, it will be possible for an applicant to file an invention patent application and a utility model application at the same time. However, TIPO will ask the applicant to select one of the applications when the patent application is allowed, and the unselected one does not exist ab initio.

The amendment to the Patent Act is aimed at encouraging and protecting inventions and creations in order to promote the development of various industries. This includes the encouragement of invention patents, utility model patents and design patents.

Magnus Nilsson, European Patent Attorney

Changes in the Taiwanese Trademark Act

The following amendments to the Taiwanese trademark Act has been announced by the authorities. The effective date is however still to be set by a further order.

Any distinctive identification may be registered as a trademark, including inter alia three dimensional laser tags and the boot screen of a mobile phone. 

Exclusive trademark licenses and non exclusive licenses are clearly differentiated. The holder of an exclusive license has the right, within the scope of the license, to prevent others (including the trademark owner) to use the trademark, to sublicense the trademark and to initiate proceedings against infringements in its own name. The above cannot be done by the holder of a non exclusive license without the consent of the trademark owner.

 The provisions for a deemed trademark infringement has been amended as follows:

  •  It is deemed to be a trademark infringement when using words included in a well known registered trademark as a company name since this will be deemed to be likely to dilute the distinctiveness or reputation of the well known trademark.
  • However the provision that it shall be deemed to be a trademark infringement to use word included in a trademark as a company name will be deleted. The deemed infringement will only apply to well known trademarks.
  • It shall be deemed as a trademark infringement to sell, display, hold, produce, export or import the packaging containers, tags, labels and/or other things related to the service, knowing that the same may be used for infringing acts.

Acts typically constituting use of the trademark has been specified as follows:

  • Utilizing the trademark on commercial documents or advertisements related to the goods and/or services
  • Utilizing the trademark on things related to the provision of service
  • Utilizing the trademark on the goods, or on the packaging containers for the goods and to hold, sell, display, import or export the goods in question

The above indicates that the Taiwanese authorities want to broaden the scope of possible trademarks and clarify some issues that previously might have been ambiguous.

Peter Hermansson, Attorney at Law