Header graphic for print

LimeGreenIP News

German Supreme Court remains claimant-friendly on cease and desist orders

BGH, October 10, 2017 – I ZB 96/16, published on February 6, 2018

Another milestone for cease and desist orders has been reached in Germany. The German Federal Supreme Court has clarified in a number of decisions that defendants in cease and desist orders not only have to cease the infringing use but also have to recall all products delivered to retailers. In a recent ruling issued on October 10, 2017 (published February 6), the Supreme Court was less restrictive clarifying that in preliminary injunction proceedings the defendant generally does not have to recall but only to notify its customers that the infringing products may no longer be distributed. In practice, however, such obligation to notify will have the same effect as a recall.

Background

This matter in dispute has been highly controversial amongst the Higher Regional Courts in Germany for many years and was answered partially during the last two years by the German Federal Supreme Court in a surprisingly claimant-friendly fashion.The Supreme Court clarified in three cases that cease and desist orders in principle comprise the obligation to recall products from the retail market (see our earlier blog post covering this ruling)

Ruling

According to this new judgment, the special characteristics of a preliminary injunction proceeding, especially its provisional character and the limited defence opportunities for the defendant, make a restrictive interpretation of the cease and desist orders necessary.

For this reason, in principle the defendant would not be obliged to recall the infringing products from the retail market when being served with a preliminary injunction but would, however, still be obliged to inform customers that the sale of the products has to be halted preliminarily.

In practice, such obligation to notify will most likely lead to the same effect as a recall. The defendant has to contact its customers and actively inform them of the prohibition to distribute the products for the time being. This may in some cases lead to customers cancelling the purchase orders, especially if food products are concerned which have a short-term expiry date. If the defendant refrains from notifying his customers, he risks a penalty order by the court. He may still argue that a notification of his customers will adversely affect his commercial activities and customer relations and that the interest of the claimant in these measures does not exceed this risk. However the defendant would run the risk of a court not being convinced to refrain from ordering a penalty if the defendant has not contacted his customers.

Take away points

With the present judgment the German Supreme Court continued its claimant-friendly, wide interpretation of cease and desist orders.

The troubling fact remains that, at least in a regular court proceedings, every cease and desist order comprises the obligation to recall the infringing products from the retail market.

Although the recall-obligation may now be slightly weakened in preliminary injunction proceedings the consequences for the defendant remain severe and the claimants position strong. Because even a “mere” notification to the customers to provisionally stop distributing the products due to a cease and desist order remains an extremely burdening obligation and will in many cases have severe detrimental effects to its image and customer relationships.


IP Enforcement Focus is a series of written, video and audio posts which plug into your current enforcement issues. Click here to subscribe to IP Enforcement

Client Choice Awards 2018: Our IP partners also join the podium

We are pleased to announce that Imogen Fowler, Natalia Gulyaeva, Ruud van der Velden, Fred Ch’en and Marco Berliri  (TMT) were selected as recipients of Client Choice Awards for 2018.

Client Choice recognizes those law firms and partners around the world that stand apart for the excellent client care they provide and the quality of their service. The criteria for this recognition focuses on an ability to add real value to clients’ business above and beyond the other players in the marketwww.clientchoice.com


Imogen Fowler received the Intellectual Property – Trademarks award for Spain. Imogen works with brand owners to proactively protect and enforce their trademarks and designs across Europe and globally, from brand inception and strategy through to searching, filing, enforcement, anti-counterfeiting and commercialization. Based in Alicante, Spain, the home of the European Union Intellectual Property Office, Imogen advises clients in multiple European languages and has extensive experience in successfully navigating clients through the differences in intellectual property laws across the Europe region.

 

Natalia Gulyaeva received the Intellectual Property – Patents award for Russia. Natalia heads the firm’s IP, Media and Technology Practice Group, and the Life Sciences Practice Group for Russia/Commonwealth of Independent States (CIS). Natalia has a wealth of experience working with clients in the high tech, pharmaceuticals, and biotechnology fields. Her diverse practice encompasses portfolio management, dispute resolution, and transactional work. Natalia is praised by peers and clients for “her business sense and clear management style,” is defined as “creative, flexible, and able to guide clients through the specifics of the Russian market,” and a “tough and focused attorney”.

Ruud van der Velden received the Intellectual Property – Designs & Trade Secrets award for the Netherlands. Ruud represents companies in patent and trade secret litigation in various technological fields, with a particular focus on life sciences and high tech industries. He combines his knowledge of patent law with an understanding of the market and regulatory issues. He has specific expertise in obtaining evidence. In one particular case, he was able to obtain access to evidence seized in the Netherlands relating to patent infringements abroad even though no patent was in force in the Netherlands.

 

Fred Ch’en received of the Intellectual Property – Patents award for Japan. Frederick is a dual qualified solicitor (England & Wales) and U.S. attorney (California), as well as a U.S. patent attorney and U.K. chartered biologist, whose practice is focused on both contentious and non-contentious patent matters. Frederick is a registered foreign attorney in Japan and specializes in assisting international businesses operating in Japan, and Japanese businesses with IP disputes or transactions around the world. He has an undergraduate degree in biochemistry and a doctorate in Medical Sciences (cardiovascular physiology).

Marco Berliri received of the ‘IT & Internet’ award for Italy – an accolade he has received every year since 2011. Marco has worked in the IT and internet fields for over 15 years and is one of the pioneers in the legal arena on Internet-related issues in Italy. He has significant experience in information technology and advises clients on a range of issues, including: data protection, e-commerce, regulatory and ISP’s liability.

 

 

Full cross-practice Hogan Lovells listing of Client Choice Awards 2018: Continue Reading

Total Brand Care Q&A – Product labeling and packaging in Europe

Hogan Lovells Total Brand Care is our firmwide holistic approach to creating, commercializing and protecting our clients’ most valuable asset – their brands. Creative product labeling and packaging can help promote and add value to a brand but if pushed too far over the legal line then there may be resulting claims, regulatory investigations and recalls which in turn will damage a brand’s reputation and value, so it is important for Total Brand Care to review and authorise labeling and packaging in a careful but practical manner.

Thomas Salomon, partner in our Hamburg office, discusses how labeling and packaging define a brand, and how legal requirements guide what is written on a label and the way a package is designed. From bright and glossy, to refined and elegant, product labeling and packaging convey information, messaging, and claims about a brand. At the same time the labeling and packaging must also include mandatory information, guided by local, national, and regional regulations.

As more companies take their products global, they need to assess the legal requirements for each market to avoid the possibility of litigation, and of misleading customers and losing their trust.

Read the full Q&A

Geoblocking – EU Parliament approves new regulation

The regulation on measures against unjustified geoblocking is close to become binding law. After the European institutions had reached a compromise on some last open issues in last November, the European Parliament approved the revised draft regulation in its plenary session on Tuesday. The bill sailed through with 557 to 89 votes and 33 abstentions (press release). This marks a milestone in the endeavour to bring to an end willful obstacles within the Digital Single Market.

The legislative initiative goes back to a draft the European Commission, officially presented on 25 May 2016 (COM (2016) 289). It centres on the reasoned perception that the Single Market aimed at by the European Union for so long, and which is set out as one of the Union’s core goals in Article 26 TFEU, actually does not exist on the Internet (which as such stands for a borderless and global concept). This enables “geoblocking“, i.e. the differentiation by way of origin of the Internet user, to be commonplace. As a result, users are arbitrarily denied access to certain websites because of their IP address, or simply confronted with different terms and conditions than EU citizens from other Member States. For example, a car hire in Heathrow can be more expensive when booking the vehicle out of France or Germany than when accessing the site with an Italian, Spanish or English IP address. We will put this type of scenario behind us soon when the new regulation is enacted.

Banning “unjustified” geoblocking Continue Reading

Q&A: Why you should consider registering your copyright in Vietnam

Following our recent Q&A on copyright registration in China, we now turn to Vietnam where there is also a voluntary copyright registration system.

Why register?

Under the Law on Intellectual Property of Vietnam, copyright shall arise at the moment a work is created and fixed in a certain material form, irrespective of its content, quality, form, mode and language, and irrespective of whether or not such work has been published or registered.

Although registration is not a mandatory condition for copyright protection, copyright registration is recommended for the following reasons:

  • Copyright registration serves as prima facie proof of ownership. In particular, the law provides that the registrant shall not be required to prove their copyright ownership, unless the other side raises evidence to the contrary.
  • A simple certificate of copyright registration can replace tons of documents which are often required to prove copyright ownership over the work. For instance, if the work is created abroad, the documents proving the chain of creation would have be translated into Vietnamese, notarised and legalised. Having a copyright registration certificate makes things a lot easier. This is true not only for handling copyright infringement with the enforcement authorities but also for dealing with the infringer and/or the intermediary service provider by way of cease and desist letters and/or notice and take down measures.
  • Having a foreign certificate of copyright registration helps to a certain extent, but in addition to the translation, notarisation and legalisation of the foreign certificate as mentioned above, some enforcement authorities in Vietnam may not be familiar with the coverage of the foreign copyright registration. Therefore it is much more effective to have a Vietnamese copyright registration.
  • Copyright registration also facilitates licensing or assignment arrangements. In practice, many licensees/assignees would ask for copyright proof of the licensed/assigned work, especially where co-authors and/or co-owners are involved.
  • No substantive examination is required for copyright registration. The copyright registration procedure therefore is straightforward, inexpensive and relatively quick in comparison with industrial design or trade mark registration. Besides, if for some reasons industrial design and/or trade mark protection cannot be obtained, the owner may consider obtaining copyright registration to protect things like product shape, packaging design or logo.

What can be registered? Continue Reading

Europe: Can new “hate speech” legislation set the mould for the Copyright Directive?

The phenomenon of so-called “Hate Speech” has been in the public eye for a while now, but particularly in German news. Hate speech denotes verbal attacks and accusations based on personal attributes such as race, religion, ethnic origin, sexual orientation, disability, or gender. Victims of such disgraceful conduct can be individuals or groups of individuals. One essential feature of hate speech is that the originator of the communication hides behind the anonymity of the Internet.

In Germany, we have seen some activity at the legislative end lately. The new Act to Improve Enforcement of the Law in Social Networks (“Network Enforcement Act”, see our German blog post) has been enacted. This highly controversial piece of law came into force on 1 January 2018. In general terms, it obliges social media platforms to delete or block unlawful user-generated content. One month into the year, it is still too early to fully assess the impact of the new law, however, voices can be heard calling for a European solution in this respect.

An example is Austria where law similar to the German Network Enforcement Act is currently in the process of being enacted. In addition and irrespective of this legislative development, the Austrian Supreme Court has addressed the CJEU with the following three questions:

  1. Does Article 15 of the E-Commerce Directive preclude a national court from making an order that obliges a host provider who has failed to quickly remove unlawful content not only to remove the specific content but also other content that is identical in wording in the future? If no, does Article 15 limit the order to a deletion or blocking of content only in the member state or can the obligation be worldwide? And would it only apply to content by the specific user and if yes, limited to the member state or worldwide?
  2. If the CJEU negates the first question, does this also apply to content that is not identical but similar in meaning?
  3. And does this also apply in cases where the social media company has actual knowledge of the content?

These questions are of enormous importance for ISPs. It may be assumed that the CJEU will hand down a decision that will stamp the future standards of review to be applied in cases of hate speech. One can only hope that the judges will get the balance right.

So, can these developments influence the wider strategy to implement a Digital Single Market? As part of the proposed new Copyright Directive we find Article 13, an article dealing with preventing copyright infringements and content recognition technologies where the role and liability of ISPs is also being scrutinized. This article has caused much concern already and both the European Parliament as well as the Council struggle at the time being to form their final position on this issue. At least, an internal document suggests that we will have to show slightly more patience here. No wonder, given that the question involves a clash of interests of various stakeholders who each can refer to solid arguments. In contrast, those intentionally circulating hate speech stand to lose all right to speak up and the task ahead is to find a prudent way to silence them and see if useful precedents are set for developing the Copyright Directive.

.IE registration rules to relax in March

In our earlier post we commented on IEDR´s (the Irish Registry for the .IE country code Top Level Domain) Public Consultation with a view to relaxing the registration policy for .IE domain names.

Indeed, up until now, applicants for .IE domain names had to meet the following registration requirements:

1. A connection to Ireland (via Irish nationality, an Irish address, a company based in Ireland, a trade mark affording protection in Ireland, or proof of trade with Ireland);

2. A “claim to the name” (a valid reason for applying for the domain name was necessary – for example the domain name had to match the company or trade mark name).

In its Public Consultation, the Registry proposed relaxing the registration requirements by  dropping the “claim to the name” requirement, which limited the possibilities for registering .IE domain names.

The proposition having received positive feedback, the Registry has announced that the policy change will be implemented in March. Continue Reading

Hogan Lovells Moscow Life Sciences team secures major win in a precedent patent case for Novartis against a generic producer in Russia

Led by partner Natalia Gulyaeva, the Hogan Lovells Moscow team represented Novartis in a precedent case for pharma business proving that one can obtain an injunction using patent rights against a generic in Russia before the generic starts sales.

It is well known that, in the past, permanent injunctions were granted by Russian courts in patent disputes only upon actual commercialization of the infringing generic product.

Given this, when, in this Novartis case, a generic producer started taking certain steps for obtaining a marketing authorization for its generic product seven years before Novartis’ patent expiration, the Hogan Lovells team chose to base the case on a concept of threat of patent infringement, without waiting for  generic sales to happen.

The Russian court of first instance confirmed that the chain of consecutive actions by the generic producer (including conducting bioequivalence study, obtaining marketing authorization for pharmaceutical substance, obtaining marketing authorization for pharmaceutical product and state registration of wholesale price) proved the threat of patent infringement and justified a permanent injunction in this case.

On 21 December 2017 the Russian court of appeal confirmed the position of the court of first instance and the permanent injunction came into force.

This case proves the ability of Russian court system to demonstrate international standards for injunctive relief in pharma patent litigation and confirms that successful patent enforcement is possible in Russia.

Hong Kong seminar review: What to say and what not to say – navigating the increasingly complex advertising laws

On 30 January 2018, our Hong Kong office hosted an interactive discussion on the increasingly complex legal landscape of advertising activities in Hong Kong and China. Partner Eugene Low and our guest speaker, Dr. Albert Ho, practising barrister and former Assistant Commissioner of the Hong Kong Customs and Excise Department, provided their insights on some hot topics in this area of law.

Businesses are increasingly looking for innovative ways to advertise their offerings and catch the attention of consumers. At the same time, consumer rights are on the rise globally and the laws are increasingly complex and stringent on what advertisers can and should say. For instance:

  •  When can traders use superlatives to say they are the “Best” or “No.1” in the trade? Can one ask bloggers or KOLs to write favourable reviews on its products without disclosing the sponsorship connections?
  • Is there increased awareness on stereotyped advertising?

We shared some examples of what has been happening around the world, e.g. FTC tightening controls on influencer marketing and the UK ASA clamping down on gender stereotypes.

There were lively discussions on the enforcement trend of unfair trade practices under the Trade Descriptions Ordinance in Hong Kong, as well as cases and controversies about China’s Advertising Law (which underwent some major amendments in 2015). Our speakers also shared practical tips on contents compliance and on suitable contractual protection when dealing with advertising agencies, endorsers and the like.

We regularly publish on advertising law topics in Hong Kong and China, and will provide further updates as developments arise.

Europe: The General Court agrees – it’s genuine!

Judgment of 17 January 2018 in Case T-68/16 Deichmann v EUIPO – Munich

The General Court (GC) upheld the Board of Appeal’s (BoA) finding that evidence showing minor differences in a cross device nevertheless clearly constitutes genuine use of the cross device as registered.

What happened at EUIPO?

Deichmann filed a revocation action (based on lack of use) against Munich’s figurative EUTM no. 2923852 registered for “sports footwear”:

The Cancellation Division (CD) revoked the mark. It held that the various uses shown in the evidence do not show the mark as registered. Firstly, it held that the mark at issue was figurative and so restricted to that precise depiction (including the shoe outline). Moreover, even if Munich’s mark could be construed as a position mark, the CD considered that the evidence did not show use of such a mark. Instead the CD said that the evidence showed the cross device in different colours of different precise lengths and thickness of the bands and that the bands crossed each other at different angles. The CD highlighted the below specific examples which, it stated, show a sign which was impermissibly different to the cross device as registered. However, at appeal, the BoA overturned the CD’s decision.

What did the General Court say?

The GC essentially agreed with the BoA in overturning the CD’s decision. It confirmed that the evidence adduced by Munich showed genuine use of the cross device as registered. This was in particular true in relation to the below examples:

The Court first dismissed the argument that Munich’s mark must be construed as a figurative mark (and thus as necessarily incorporating the visual of the shoe outline).  The Court held that the mark at issue was defined by its graphic representation and that it cannot “be dissociated from the shape of a part of the goods in respect of which it was protected“. The mark type selected when filing the application (Munich ticked the box “figurative” as opposed to “other” on the application form), was held to be irrelevant in the present case. This was in particular because there was nothing in the applicable legislation in force at the time of filing the application, which would have obliged Munich to select the mark type “other” in order to obtain protection for a position mark.

The Court also turned down Deichmann’s arguments that the uses of the mark shown are impermissible variations of the mark as registered. Instead, the Court considered that examples shown in the evidence (such as in the examples above), constitute genuine use of the mark as registered because they only differ from the mark as registered in negligible aspects.

What is the impact?

This judgment provides further comfort to trade mark owners who have applied for marks prior to the new EU Trade Mark Regulation coming into force and at a time when many currently existing mark types were not defined by the legislation. In particular, the judgment confirms that a figurative mark cannot strictly be reduced to the visual shown in the graphic representation. Instead, a common sense approach of construing the mark must be adopted by the relevant authority. This must take into account the goods and services at issue as well as the legislation which existed at the time of filing the application.