Archive | 2016, January | (5) posts

Moncler secured victory with a substantial Damages Award

Italian brand Moncler secured victory against Chinese infringer with a substantial Damages Award

In a so-called “landmark” decision by the Beijing IP Court, luxury down jacket maker Moncler secured a victory against Beijing clothing company Nuoyakate Gourmet Co.
Nuoyakate was marketing jackets bearing marks similar to those of Moncler’s registered marks, and it registered numerous trademarks similar to those of Moncler’s marks and they also registered and used the domain name “mockner.com”.  Moncler took out a trademark infringement and unfair competition action with the Beijing IP Court, which accepted the case in December 2014 and rendered the judgment in April 2015.
Moncler was awarded a sum of 3 million yuan (US$470,100) as damages and reasonable expenses. 

For years, the amount of damages awarded by Chinese courts in intellectual property infringement cases had, for various reasons, been on the comparatively low side. The Moncler case has frequently been commented on as being a breakthrough where even though there is no evidence of Moncler’s loss of profit or Nuoyakate’s gain, the Beijing IP Court was willing to take into account all evidence of the case and allowed the full sum claimed by Moncler.
The maximum statutory damages of 3 million yuan was newly introduced by the current Trademark Law in May 2014.  While this approach of the Beijing IP Court in determining the amount of damages may be regarded as a sign of progress and reform in the right direction, it is noteworthy that the high amount in the Moncler case is determined by a number of factors including, for example, the reputation of Moncler’s marks, the seriousness of the infringement, the blatant bad faith of the infringer and the high selling prices of the infringing products.  Furthermore, this case was one of the cases being highlighted to demonstrate how China has been strengthening the protection of intellectual property rights by way of awarding higher amounts of damages.
However, this approach might backfire on foreign brand owners.  In the New Balance case in April 2015, we note that the US New Balance did not have a PRC (People’s Republic of Chinatrademark registration for the Chinese name it had been using in China while a Chinese company had secured trademark registrations and has allegedly used the same Chinese name on shoes.  The Chinese company sued.  The US New Balance’s defences of fair use and earlier use failed.  It was ordered by the Guangzhou Intermediate People’s Court to pay a record high of RMB98 million as damages for trademark infringement.

It is reported that the US New Balance has filed an appeal, and we will continue to watch out for further progress on this case.

Rhonda Tin, Counsel

Exclusive competence of the UPC – is it time to develop opt-out strategies?

The Agreement on a Unified Patent Court (UPCA), “the Court”, will enter into force four months after the 13th Contracting Member State has deposited its instrument of ratification. This date has been gradually moved forward from the beginning of January 2014. It is now anticipated for early 2017.
Immediately upon its entry into force of the Agreement, the Court will begin to settle disputes relating to European patents and European patents with unitary effect. A European patent is a patent granted under the provisions of the European Patent Convention (EPC) which does not benefit from unitary effect.

The UPCA thus automatically applies not only to the European patents with unitary effect, but also to all European patents which have not yet lapsed at the date of entry into force of the Agreement. The UPCA also applies to all European patents granted after that date, as well as to all European patent applications pending at that date or filed after it.

This means that even if you as a proprietor do not request unitary effect, your patent will still be within the exclusive competence of the new Court. Another important aspect worth considering is that the patents that have already been granted by the EPO will be also prosecuted before the new Court.

However, Articles 3 and 83 of the Agreement  offer relief to proprietors and applicants which do not wish to have their European patents brought before the new Court. During a transitional period of seven years after the entry into force of the UPCA, an action for infringement or revocation of a European patent may still be brought before a national court or other competent national authority.

This must be requested, by opting out from the exclusive competence of the Court, by notifying the Registry and paying the prescribed fee (currently EUR 80). The proprietor or applicant may, of course, withdraw their opt-out at any time unless national court proceedings have begun.

The opt-out will only take effect upon entry into the register. Patent portfolios should therefore be reviewed during the second half of 2016 in order to be properly prepared before the Agreement enters into force and to be able to quickly file a request to opt out.

It is ultimately up to the proprietors and applicants to decide on the patents, applications and SPCs for which they want to opt out. However, bearing in mind that the UPC is a new court, without any case law to rely upon, it might be anticipated that opt-outs will be requested for important patents and applications for which unitary effect will not be sought, at least until the case law from the Court develops.

It is now also possible that there will be a ‘sunrise period’ during which patent holders may file the opt-out request with the Registry before the Court opens by the signing of the Protocol to the UPC Agreement on October 1st 2015.

Sofia Willquist, European Patent Attorney

Reform of the European Trademark System

After some years work on aligning and improving the European trademark system a new legislative package on trademarks has finally been accepted by the EU Parliament at the end of 2015. The new Trademark Directive is already in force, but needs to be implemented as national legislation within the next three years. The further course of the Directive into new national trademark laws thus follows national routes from now.

The new regulation on the European Trademark (EUTMR) will enter into force on 23 March 2016. The basic legislation is available, but the implementing regulation and official guidelines on practical issues are not yet final. Thus, we expect more information and many details over the coming months.

The most visible change with the reform is the change of name. What has been a Community Trade Mark (CTM) will become an EU Trademark. And OHIM (Office for Harmonization of the Internal Market) will change name to EU Intellectual Property Office (EUIPO).

But there are more changes on the way. Another very visible change is of the fee structure. So far, a basic application fee covers up to three classes. As of 23 March 2016 it will cover only one class. Thus, companies planning to file trademarks this year should already now consider their strategy and if it will be more advantageous to file now or await the new fee structure. If your sole interest is selling goods that belong to one class, like vacuum cleaners, then it would be cheaper to file the application after the 23 March 2016. But if you produce goods that belong to more than one class, like shoes and leather bags, it will be cheaper for you if you file now before the changes takes effect.

The change of fee structure also applies to renewals of trademarks, but for renewals the lowering of the fee is so significant that you will gain no matter what compared to today’s fees. Trademarks may be renewed 6 months in advance of their expiry date. The practical implementation of this is currently being considered by EUIPO. It has relevance in situations where e.g. a trademark expires after the 23 March 2016, but is renewed before, which fee is applicable? Awapatent will of course follow this closely and keep you informed.

Another big practical change will be the possibility of amending the list of goods and services for once’s trademark registration, if it was filed before 22 June 2012 and if it covers the class heading of a Nice class. Awapatent will inform you in a separate blog and via emails on this topic.

Awapatent will closely follow the implementation of the new regulation and will keep the Awa IP blog (www.awaipblog.com) updated on the most important or interesting changes. If you have any questions to how the reform might affect your trademarks, do contact your Awa IP Lawyer.

Anette Rasmussen, Attorney at Law and Line Wittendorff, Trademark Attorney, Awapatent

Potential market size for Unitary Patents is 25% larger than for US patents and 90% larger than for traditional European patents

As you might already know, a European patent application is examined by the European Patent Office (EPO). If a patent is granted, it does not result in a patent that is valid in the whole of Europe. Instead, the patentee needs to validate the patent in each state where protection is to be obtained, resulting in a bundle of national patents. This of course means several fees to be paid to the national patent offices, costs for translations of the patent text, and in some cases a need to use different national agents. In addition to this, each national patent has to be renewed annually.

      JVM_IPBlogg1
(EPO=European Patent Office, NPO=National Patent Office)

Due to the costs involved, many patentees choose to protect their innovation in just a few countries, maybe four or five, leaving their innovation completely unprotected in the rest of Europe and available for exploitation by their competitors.

In the Unitary Patent system, which will hopefully be up and running at the beginning of 2017, the patent application is still examined by the EPO. If a patent is granted and unitary effect is requested, the patent becomes a true European patent. The term unitary effect means that the patent is valid in all participating member states. Presently, approximately 25 states have undertaken to join the Unitary Patent.

JVM_IPBlogg2

Looking at the potential market sizes for a US patent, a traditional European patent and a Unitary Patent, it is interesting to compare populations. The three most common states in which a traditional European patent is validated are France, Germany, and United Kingdom, which in total have a population of about 210 million (1). The US has about 320 million inhabitants, while the member states of the Unitary Patent have a total population of 400 million. In other words, a Unitary Patent may provide an exclusive right to an innovation on a 25% larger market than a US patent and a 90% larger market than a traditional European patent.

Julia Mannesson, European Patent Attorney and Swedish Authorized Patent Attorney


1 International Monetary Fund, 2014

The fight against fake drugs in Africa

About 100,000 deaths a year in Africa are linked to the counterfeit drugs trade, according to the World Health Organisation (WHO). Sometimes counterfeit medicine kills directly, as in 2008 when 84 Nigerian babies given a teething mixture called ‘My Pikin’ were killed (the standard glycerin had been replaced with cheaper – and poisonous – diethylene glycol). More frequently, counterfeits kill by simply being ineffective. Reports tell that every third malaria pill sold in African countries is counterfeit or substandard, and very often contains no active substance at all.

Dysfunctional and corrupt governments lack the capability of combating the illicit trade, which combined with widespread low literacy and a desperate need for medicine makes poor people in African countries an ideal target market for unscrupulous entrepreneurs. In Nigeria, where I recently had the privilege of living as an expat trailing spouse, decades of political instability, widespread corruption and an ever increasing and very poor population facilitate the trade with counterfeit drugs.

Attempts to resolve the problem on an international level have been hampered by a lack of consensus on an internationally recognized definition of counterfeit drugs. Counterfeits are often confused with generic medicines. This has flawed the debate and caused generic drug companies to raise worries that they would fare with accusations of counterfeiting if harsher regulations were instituted. However, commercial patent infringement disputes should not be confused with disputes related to fake versions of branded and approved medicines. Counterfeits are not by definition infringing patents, but they are by their nature at high risk of being ineffective and not meeting recognized quality standards. Counterfeits are therefore a threat to global health, and not primarily a question of infringement of intellectual property rights.

So, what can be done? Maybe technology can put an end to the problem. One promising example is cell phone authentication, which is a recently developed high-tech alternative using scratch-off labels with a unique ID number for verification. The purchaser can text the ID free of charge to a number on the box, and receive an answer saying whether the product is fake or real. By using an encrypted system, counterfeiters will face quite a lot of troubles when trying to put fake verification labels on products.

The government in Nigeria recently launched a campaign for cell phone authentication of malaria medicines. The authentication system was publicized with TV spots and posters, and verification is now required for all malaria medicines. According to the Nigerian National Agency for Food and Drug Administration and Control, this has drastically reduced the counterfeiting of anti-malarial drugs from 40% to 3.6%. The system also turned out useful for tracking stolen goods – when 3,000 doses of the anti-malarial drug Lonart DS were stolen on its way to retail stores in Nigeria, the manufacturer set the ID numbers on those boxes to respond to texts with “stolen: please call in”. Within a few days, the company had enough responses to find the products and identify the wholesaler involved.

International agreements, effective regulation and strong institutions should of course be the ultimate goal in the fight against counterfeiting. However, while waiting for that to happen, high-tech solutions may as we have seen provide an efficient alternative. Technology empowers people to take matters into their own hands when the international community and their governments fail. Better still, it might empower people to put pressure on their leaders and bring about real change in the society.

Pontus Falk, Associate