Our point of view

Technology Newsletter 09/2013

25 September 2013

Trademark Clearinghouse

Is the Trademark Clearinghouse a solution to a brand owner’s “nightmare”? With “nightmare”, in this connection, we are referring to new top-level domains that are about to be launched in the near future.

Traditionally, entities have operated in the WWW environment where the most wanted generic top-level domains have been limited to .com, .net, .org and .biz, in addition to which the entities have also registered country code domain names, such as .fi, .se and .dk. Now the situation is about to change dramatically. Due to the overcrowded existing domain name landscape, ICANN, the umbrella organisation for generic top-level domains, has decided to launch a new generic top-level domain program (the New gTLD Program). The New gTLD Program was developed to increase competition and choice in the domain name space. After the launch of the program, ICANN expected to receive some few hundred new applications, but in fact they received 1,930.

Although the number of active applications currently stands at 1,814, it is anticipated that over 1,400 new top-level domains may be launched in the course of next few years. How can a brand owner monitor the domain name system expansion? ICANN’s answer is the Trademark Clearinghouse. The Trademark Clearinghouse is an enhanced rights protection mechanism that is built into the New gTLD Program. The Trademark Clearinghouse will accept and authenticate rights information and will support both sunrise services and trademark claims services.

The sunrise services provide an opportunity for a trademark owner to register domain names before the registration is open to the public. A sunrise period runs a minimum of 30 days. A validated trademark may be recorded with the Trademark Clearinghouse, and it is the minimum requirement in order for the trademark owner to be entitled to participate in sunrise and trademark claims services in the New gTLD Program. A trademark owner whose trademark has been registered with the Trademark Clearinghouse will receive a notice when someone registers a domain name matching the trademark owner’s trademark. The system does not block or prevent anyone from registering a domain name matching a trademark and therefore the trademark owners must actively assert their rights. The trademark claims services will follow the sunrise period and will run for at least 90 days thereafter.

As the sunrise and trademark claims services are likely to be the cheapest way to block and prevent infringing domain names from being registered, brand owners should carefully consider participating in these services and register at least the most important trademarks with the Trademark Clearinghouse. As the first sunrise service is expected to open in early October 2013 and the first trademark claims services in November 2013, the trademark owners should act without delay – or preferably now.

panu.siitonen@hannessnellman.com

New IP Court As From 1 September 2013

As was said in our Technology Newsletter 03/2013, the Finnish Parliament passed an act in December 2012 centralising the settlement of IP disputes to the Market Court as from 1 September 2013. A group of experienced IP judges and experts now settle IP disputes relating to copyrights and industrial rights. In addition to the alleged IP infringements, the Market Court also settles claims made under the Unfair Business Practices Act, as a result of which, as from 1 September 2013, the right-holders’ claims regarding alleged IP infringements and breaches of the Unfair Business Practices Act may be combined and included in a single action. In fact, the very first case filed after that date, on Monday 2 September 2013, was a combined action including both such claims.

panu.siitonen@hannessnellman.com

Perspectives On Patenting Nanotechnology

Due to the novel, complex and cross-industrial nature of nanotechnology innovations, nanotechnology patents possess some distinctive characteristics when compared to other patents. Lately, there has been a trend towards early-stage patenting, for a number of reasons. Among other things, a great amount of early-stage patents may encourage inventors to apply for patents more as well as more frequently. Many of the basic ideas of nanotechnology, the so-called “building blocks”, have already been patented. Moreover, the novel nature of nanotechnology combined with a lack of experience in patent offices has resulted in the granting of relatively broad nanotechnology patent claims.

Under the technology-neutral European Patent Convention (the “EPC”), European patents may be granted for any inventions and in all fields of technology. The European patent system provides for the following basic requirements of patentability: an invention must be novel, non-obvious and susceptible of industrial application. In addition, a patent application must disclose the invention in a sufficiently clear and complete manner to enable a person skilled in the art to carry out the invention. Furthermore, inventions whose commercial exploitation would be contrary to “ordre public” or morality may not be granted.

Scale And Miniaturisation

Under the EPC, an invention is considered novel if it does not constitute a part of the state of the art. As characteristics of a matter in nanoscale may differ substantially from those observed in larger objects with the same composition, the size of a matter in nanotechnology invention is very relevant in the patenting process. Scaling down a matter to nanoscale is not sufficient as such for making difference to the prior art. According to the Guidelines for Examination in the European Patent Office (the “EPO Guidelines”), a broader numerical range of the prior art is considered novel, if each of the following three criteria is satisfied:

(a) the selected sub-range is narrow compared to the known range;

(b) the selected sub-range is sufficiently far removed from any specific examples disclosed in the prior art and from the end-points of the known range;

(c) the selected range is not an arbitrary specimen of the prior art, i.e. not a mere embodiment of the prior art, but another invention (purposive selection, new technical teaching).

For example, if there is a technical effect that is enhanced in a selected sub-range, according to the European Patent Office (the “EPO”), the device may be new and not just a part of the prior art. In addition, size matters when assessing the inventiveness of an invention, e.g. miniaturisation can be considered inventive, if there is a new technical advantage which could not be found in the prior art, and it is not obvious for a person skilled in the art. Since the size is very relevant, the patent application should include a clear and sufficiently precise description of the nanotech invention in order to be successful, especially if the same matter in a size larger than nanoscale is already regarded as state of art.

Non-Obviousness

When examining the non-obviousness, EPO examiners may use the “problem-and-solution approach”, in accordance with the EPO Guidelines. They determine 1) the “closest prior art”; 2) the “objective technical problem” to be solved; and 3) whether or not the claimed invention, starting from the closest prior art and the objective technical problem, would have been obvious to a person skilled in the art.

Making a distinction between an invention and a discovery may turn out to be challenging in the field of nanotechnology. It is clear that finding a previously unknown natural element occurring in nanoscale is not patentable as such, since it is considered a mere discovery; e.g. finding a new property of a known element or substance is a discovery, but the use of nanoparticles to create a coating that renders other materials water-resistant can be patentable, since inventions can include the use of processes of nature to achieve a technical result.

To satisfy the disclosure requirements under the EPC, it is necessary that the invention is described not only in terms of its structure but also in terms of its function, unless the functions of the various parts are immediately apparent. Sufficient disclosure performance of the invention cannot be left to chance. An invention should be successfully replicable. Even though it would be accompanied by a proportion of failures, the disclosure requirement may still be fulfilled if a successful replication can ultimately be ensured.

Cross-Industrial Nature

As a cross-industrial technology, nanotechnology lacks standardised terminology, which may turn out to be problematic in a patenting process. This emphasises the importance of the requirement of clear and sufficient disclosure of an invention. Nanotechnology patents cover different fields of research and science, which may describe the same object or process by diverging terminology. Because of such ambiguity, competitors may not always be certain of the scope of a patent protection and their freedom to operate. Hence, there is a need for cross-industrial expertise in the field of nanotechnology among patent examiners in patent offices in order to avoid granting of terminologically arbitrary or overly broad patent claims.

juli.mansnerus@hannessnellman.com

New Danish Injunction Rules

The Danish rules on injunctions have been amended and revised as of 1 July 2013. The amendments have been implemented with the intention to ensure further qualified legal review of the complex intellectual property matters, which are often dealt with in injunction matters.

Injunctions

An injunction is the only legal remedy available in order to quickly and efficiently stop counterparties from going ahead with any violating or infringing conduct. In particular in intellectual property cases, the need for immediate relief is often of utmost importance. This may be so for instance in the case of counterfeit medicinal products, in which dangerous and unsafe products may cause permanent and irreparable harm and damage to intellectual property right holders if the infringing sales are not stopped immediately.

More Qualified Legal Review

Prior to 1 July 2013, applications for injunctions were filed with the Danish enforcement courts, which would urgently process such cases and render decisions based on the assessment by one bailiff. If an injunction was granted in connection with various types of intellectual property rights, the plaintiff would then have to file for a confirmatory action with the Danish Maritime and Commercial Court, in which both specialized and lay judges as a collegial court would assess the case once again.

Given the fact that injunction cases are often rather complex and evidence-based, new rules were proposed in order to ensure a greater level of protection of the legal rights of both the intellectual property right holders and their competitors, already in the first instance.

Following the changes to the Danish injunction rules, a plaintiff must now file for an injunction directly with the ordinary city courts or the Danish Maritime and Commercial Court, which enables the use of collegial courts with lay assessors in the first instance as well as ensures a greater assessment of evidence in general.

It is expected that the city courts as well as the Danish Maritime and Commercial Court will continue to pursue a fast administrative procedure, ensuring that proceedings commence within days or at the longest within a few weeks from the plaintiff filing for an injunction.

No Confirmatory Actions

Since an injunction is now obtained from the ordinary courts, it is no longer a requirement that the case is followed up by a confirmatory action in a higher court. One may say that an injunction is now considered a “part” of a main court case, and once the question of the injunction is settled, the treatment of the merits of the case as well as claims for damages will in due course be continued in the same court.

Jurisdiction Of The Court

Prior to 1 July 2013, proceedings to obtain a preliminary injunction could only be initiated at the place of the violating party’s domicile or place of business. Consequently, the initiation of injunction proceedings against the display of infringing products e.g. at design fairs was difficult.

As a result of the review of the rules, it is now possible to file for injunctions in accordance with the regular civil court rules on available venues. This for example opens up the possibility to file for injunctions at the place in which the infringing actions took place.

Furthermore, the Maritime and Commercial Court, which is the official Danish EU court based in Copenhagen, is given the right and duty to be more flexible and mobile in order to live up to the new amendments. It is expected that the court will prepare for and attend major fashion or industrial fairs held elsewhere in Denmark.

Mandatory Injunctions

Lastly, the changes have made it possible to request a mandatory injunction, i.e. an injunction requiring the performance of a specific act.

Earlier, mandatory injunctions were sometimes ordered by enforcement courts, but only in order to ensure that a specific injunction was complied with and the special practice was not regulated under Danish law. With this additional right it is expected that more plaintiffs will bring actions against infringers, and it will be interesting to see where the line for such mandatory injunctions will be drawn by the courts.

mette.huss@hannessnellman.com

Prohibition Against The Use Of The Expression “Fastest” In Marketing

DNA Oy, a Finnish mobile operator, advertised its mobile network and its broadband services e.g. in newspapers and television in early 2013. In its advertisements, DNA used statements that for example implied that the DNA mobile network or the broadband services are the fastest ones in Finland. According to the Market Court, DNA used the superlative “fastest” in a manner making the advertisements comparative advertising.

The arguments that DNA used in its marketing were not sufficiently supported by comparative research. DNA also could not otherwise prove that the promotional phrases and arguments of its marketing were based on facts.

On these grounds, the Market Court found that DNA’s comparative marketing had been misleading and was not based on facts. The Market Court prohibited DNA from using the expression “fastest” in its marketing under a penalty of a fine of EUR 150,000.

kaisa.fahllund@hannessnellman.com

Consumer Ombudsman Takes A Promotional Game Campaign To The Market Court

According to the Finnish Consumer Ombudsman (the “CO”), SCA Tissue Finland, which manufactures Lotus branded kitchen towels, paper handkerchiefs and toilet paper, has used aggressive methods in its marketing campaign.

According to the CO, the value of the main prize of the promotional game, EUR 100,000, was exceptionally high in comparison to the articles commonly used as prizes in promotional games. In addition, the likelihood of winning the first prize was extremely low, only one in 2.4 billion, when for instance in the Lotto organised by the state monopoly Veikkaus, the odds of hitting the main jackpot are about one to 15 million. According to the CO, the size of the prize and the poor odds of winning led to a situation in which the promotional game inappropriately influenced the discretion and decision-making of consumers, influencing them to make their decision based on emotion. According to the CO, such marketing can be considered an aggressive practice, which has been forbidden in Finland since 2008.

The CO feels that it is important to get a ruling from the Market Court on the matter. The CO has primarily requested the Market Court to order SCA Tissue Finland to abstain in the future from giving an erroneous impression that a consumer can win the main prize in a promotional game when winning is in fact extremely unlikely. Secondarily, the CO requests that the company be prohibited from marketing that uses promotional games, related prizes, and enticements in such a way that the consumer's attention focuses on them instead of the actual product that is being offered.

kaisa.fahllund@hannessnellman.com

Marketing: Ruling Of The Court Of Justice Of The European Union (“CJEU”) On The Definition Of 'Advertising'

On 11 July 2013, the CJEU delivered its judgment replying to a request for a preliminary ruling by a Belgian (Civil) Highest Instance Court requesting the CJEU to assess whether registration and use of a domain name as well as placement of meta-tags in a website’s metadata could fall within the definition of “advertising” under the provisions of the EU Directives 84/450/EEC (concerning misleading advertising), 2005/29/EC (aimed at preventing unfair business-to-consumer commercial practices) and 2006/114/EC (governing misleading and comparative advertising).

In the case, the main proceedings in Belgium were between Belgian Electronic Sorting Technology NV (BEST) and Visys NV, who both are producers, manufacturers and distributors of sorting machines and sorting systems incorporating laser-technology. In 2007, Visys registered the domain name “www.bestlasersorter.com”. Visys also used metatags like “Helius sorter”, “LS9000” and “Genius sorter” for its website, which words refer to the product names of BEST. This led to a situation that when the words “Best Laser Sorter” were entered in the search engine, the second search result to appear, directly after BEST’s website, was a link to the website of Visys.

The CJEU first reminded that according to the Directives currently in force, “advertising” refers to “the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations”.

In its judgment, the Court held that the mere registration of a domain name does not automatically mean that it will actually be used to create a website and that consequently, it will be possible for internet users to become aware of that domain name.

According to the Court, the domain name user instead influences the customers by using a carefully chosen domain name, intending to encourage the greatest possible number of internet users to visit that site and to take an interest in its offer. That kind of use of the domain name is intended to promote the supply of the goods or services of the domain name holder, and is therefore considered to fall under the definition of “advertising”.

As regards the use of metatags, the metatags consisting of keywords (i.e. keyword metatags) determine site rankings in relation to submitted search terms and are capable of impacting the surfers’ on-line behaviour as well as diverting the natural display results to the advantage of metatag users. Therefore, the Court concluded that the way in which the metatags were used by Visys was a promotion strategy in that it aims to encourage the internet users to also visit its site when the user is searching the competitor’s site and to take an interest in its goods or services.

On these grounds, the Court ruled that the Directives must be interpreted as meaning that the term “advertising” covers, in a situation such as the one at issue in the main proceedings, the use of both a domain name and metatags in a website’s metadata. By contrast, the registration of a domain name, as such, is not encompassed by that term.

CJEU’s judgment in Case C‑657/11 is available here.

erkko.korhonen@hannessnellman.com

Telecommunication: Commission Adopts Regulatory Proposals For Electronic Communications

The European Commission adopted, on 11 September 2013, regulatory proposals to complete and build a single market for telecoms.

While successive waves of reform by the European Union have helped transform the way telecoms services are delivered in the European Union, the sector still operates largely on the basis of 28 national markets. To address these problems, the main elements of the new package are:

  • Simplifying the EU rules by a single authorisation for telecoms operators by offering the operators a chance to operate in all countries through a single EU authorisation, and an opportunity to deal with that one authority on other licensing issues.
  • Removal of roaming charges with the effect that for example the incoming call charges while travelling in the EU would be banned from 1 July 2014.
  • Coordination of spectrum use for wireless broadband, e.g. by harmonising the timing of spectrum release and harmonising the duration of rights.
  • Removal of international call premiums within Europe. The proposal would mean that companies could no longer charge more for a fixed intra-EU call than what they charge for a long-distance domestic call.
  • Ensuring legal protection for open internet (net neutrality) by banning any blocking and throttling of Internet content and by setting clear rules for traffic management which has to be non-discriminatory, proportionate and transparent.
  • New consumer rights. All rights harmonised across Europe and introduction of new rights such as the right to plain language contracts with more comparable information, greater rights to switch provider or contract, the right to a 12-month contract if you do not wish to have a longer contract, the right to walk away from your contract if promised internet speeds are not delivered, and the right to have emails forwarded to a new email address after switching internet provider.

As a next step, the Commission’s proposed reform package will be discussed and negotiated between the EU Parliament and the Member States. You will be kept updated on any relevant developments in the following issues of the HS Technology News.

erkko.korhonen@hannessnellman.com

Data Protection: Update On The EU Data Protection Reform

A brief update on our previous article on the data protection reform, which was published in the HS Technology Newsletter 03/2013:

At the beginning of the year, the objective was that LIBE, the lead European Parliamentary Committee, would vote on the draft proposals in April or May. However, this vote has already been postponed twice and the current aim is that the vote would take place in October 2013. As soon as the vote has finally gone through, formal negotiations between the European Parliament, Commission and Council can take place.

Provided that there are no further delays or slippages in the coming months, the original timetable could still be met and the adoption of the regulation could take place prior to the European Parliament elections in May 2014. If this ambitious goal can be reached, the new regulation is likely to enter fully into force in 2016.

anssi.suominen@hannessnellman.com

New EU Regulation On Data Breach Notification

The Commission Regulation (the “Regulation”) No. 611/2013 on the notification of personal data breaches came into force on 25 August 2013 and will now have direct effect in all EU Member States.

The new Regulation, which lays down more stringent obligations on providers as compared to the current legislative regime, aims to ensure consistent information and notification requirements across the EU in case of personal data breaches. Prior to the Regulation, providers in the EU have been obligated to notify national regulators of any data breaches in accordance with national laws implementing the e-Privacy Directive (2002/58/EC, as amended).

The new Regulation applies to telecommunications operators, internet service providers, VoIP providers and all other providers of publicly available electronic communications services (the “Providers”), and it provides how and when the Providers must notify both regulators and individuals of personal data breaches.

Under the Regulation, the Providers must notify a personal data breach to the competent national authority no later than 24 hours after the detection of the personal data breach. When the personal data breach is likely to adversely affect the personal data or privacy of a subscriber or an individual, the Providers shall, according to the main rule, notify, without undue delay, the subscriber or individual of the breach.

The competent national authority and/or individuals must be supplied with a range of information detailed in the Annexes to the Regulation (e.g. the date and time of the incident, circumstances of the breach, nature and content of the data concerned, measures applied to mitigate the consequences). In Finland, the competent authority is the Finnish Communications Regulatory Authority (Ficora/Viestintävirasto).

The Regulation requires that competent national authorities provide a secure electronic means for the Providers to notify of personal data breaches in a common format so as to enable all Providers within the Union to follow a similar notification procedure. In this connection, the Commission aims to facilitate the implementation of the secure electronic means by convening meetings with the competent national authorities where necessary.

The Commission has presented a proposal for a regulation (the “Data Protection Regulation”´) to replace Directive 95/46/EC as part of the comprehensive reform of EU data protection (also referred to as the “Data Protection Reform” in this newsletter). The proposed new Data Protection Regulation would introduce an obligation for all data controllers to notify of personal data breaches. It is, however, likely that the Providers will remain subject to more stringent notification obligations under the Regulation than other data controllers under the proposed Data Protection Regulation (e.g. the above-mentioned 24-hour period as opposed to the proposed 72 hours for other data controllers).

Link to the Regulation here.

anssi.suominen@hannessnellman.com

New Public Camera Surveillance Act In Sweden

On 1 July 2013, the new Public Camera Surveillance Act (the “PCS Act”) entered into force in Sweden. The new PCS Act contains all provisions relating to camera surveillance in both public and private spaces. The new PCS Act will replace the previous Public Camera Surveillance Act and prevails over the Personal Data Act (SFS 1998:150), (the “PDA”).

The County Administrative Board will still handle the permit applications, notifications and operational oversight of surveillance carried out for places which can be accessed by the public and therefore the general rule is that an authorisation by the County Administrative Board is still required for the monitoring. However, according to the new PCS Act, a single application to the County Administrative Board should be sufficient for mass surveillance, e.g. in shops, ATMs, train stations and car parks.

The new PCS Act provides for two different options to obtain permission for camera surveillance in places where the public has no access. According to it, camera surveillance should be allowed, firstly, if the interest in monitoring outweighs the individual’s interest in not being monitored, or secondly, if the person to be monitored consents to such monitoring.

The Swedish Data Inspection Board will remain in charge of the operational oversight of surveillance of places to which the public has no access. According to the new PCS Act, the Swedish Data Inspection Board has the main responsibility for all camera surveillance and it has the right to appeal the County Administrative Board’s decisions regarding issues of camera surveillance aiming to protect the public interest. Prior to the new PCS Act, the Attorney General was responsible for issues concerning appeals. Further amendments implemented in the new PCS Act are that the camera surveillance materials are more confidential than before and that a specific provision on damages has been included in the new PCS Act.

The Swedish Data Inspection Board has been given a great responsibility to ensure that companies that are using camera surveillance act in compliance with the new PCS Act.

caroline.avall@hannessnellman.com

Disclaimer: Hannes Snellman Technology Newsletter is intended for information purposes only. It should not be relied upon as legal advice nor should it be used as a basis for any action or final decision without specifically verifying the applicability and relevant issues on their merits in each individual case.