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Technology Newsletter 10/2012

23 October 2012

Rise of Registrations of National Trademarks and Designs?

Since the implementation of the Community trademark system and later on the Community design system, registrations of national trademarks and designs have decreased year by year. This may change.

According to a precedent (joined cases C-446/09 and C-495/09, together the 'Philips/Nokia Decision') rendered by the Court of Justice of the European Union ('CJEU') in December 2011, the fact that goods placed under a suspensive customs procedure (such as transit and customs warehousing procedures) cannot, merely by the fact of being so placed, infringe intellectual property rights applicable in the EU. The Philips/Nokia Decision rendered by the CJEU has impeded and complicated the chances of right holders to act against counterfeits that are placed under suspensive customs procedures. Hence, counterfeits may have been allowed more easily to continue their journey to the destination outside the EU, for example, from Finland to the Russian Federation.

Prior to the Philips/Nokia Decision, Finnish courts had come to the conclusion that it was possible to take action against counterfeits that are in transit or placed in warehouse procedure by virtue of Section 4 of the Finnish Trademark Act. A respective provision had been included in Section 5a of the Finnish Registered Designs Act. The right and possibility to take such action had been granted to right holders of national trademarks or designs.

After the Philips/Nokia Decision, a holder of a Community trademark or Community design is no longer able to interfere in transit or customs warehouse procedures by virtue of such rights unless the right holder is able to show, in accordance with the requirements set forth in the Philips/Nokia Decision, that the goods are in some way aimed to EU markets. As far as mere national trademarks or designs are concerned, the situation is uncertain after the Philips/Nokia Decision.

Uncertainty around national rights diminished with the Helsinki District Court's recent decision regarding its interpretation of the issue in question. The case concerned an alleged infringement of two Community designs. The goods that were claimed to infringe these rights were in transit to the Russian Federation. According to the Helsinki District Court's decision rendered in July 2012, in order to ensure the uniform application of EU law and EU case-law, the court had to apply solely the Community Designs Regulation and not the Finnish Registered Designs Act as well, which would have, according to the court, provided a more extensive scope of protection than was possible to obtain by virtue of the provisions in the Community Designs Regulation. Thus, the court dismissed the infringement suit by virtue of the Community Designs Regulation, but the outcome could probably have been different if the case were to concern registration of a national design to which the court would have applied the Finnish Registered Designs Act instead. The Helsinki District Court's decision is final and is also in line with the earlier court praxis of the Helsinki Court of Appeal rendered prior to the Philips/Nokia Decision.

Since, on the basis of the district court's decision, it seems that national trademarks and designs may provide more extensive scope of protection than Community trademarks or Community designs can offer in transit or customs warehousing procedures, it remains to be seen whether right holders will begin to register more and more national trademarks and designs in addition to Community trademarks and Community designs in order to have better means to continue the fight against counterfeits.


Smiley Face Not Distinctive Enough to be Trademarked

The Supreme Administrative Court of Finland ruled in its recent decision that a mark consisting of a colon and a round bracket, better known as the smiley face :) did not qualify as a trademark. According to the ruling, the smiley face does not fulfil the distinctiveness requirement set out in the Finnish Trademarks Act (7/1964, as amended). The Court found that this well-known symbol is comparable to certain descriptive words expressing quality, the use of which should be free to everyone in business. As an outcome of the ruling, the trademark registration regarding the smiley face, granted earlier by the National Board of Patents and Registration, was revoked.


District Court of Gothenburg Decides that Use of Competitor's Trademark as Keyword on Google AdWords Does Not Constitute Trademark Infringement

The District Court of Gothenburg (the 'District Court') has recently ruled on a dispute between Antura AB and CANEA Partner Group Aktiebolag ('CANEA') concerning trademark infringement (T 1889-12). The proprietor of the trademark, Antura, sued its competitor, CANEA, in the District Court and asserted that CANEA's use of Antura's trademark as a keyword in its advertising on Google AdWords should be considered as trademark infringement.

The District Court began by establishing that the proprietor of a trademark has an exclusive right to the trademark and that the scope of the proprietor's exclusive right shall be interpreted in light of the case law developed by the Court of Justice of the European Communities (the 'CJEU'). The CJEU has stated, in the joined cases C-236/08 – C-238/08 (Google France SARL and Google Inc. v Louis Vuitton Malletier SA and others), that a proprietor of a trademark is entitled to prohibit an advertiser from advertising with a keyword identical with the trademark of the proprietor which that advertiser has selected without the consent of the proprietor if the goods or services are identical with those for which that trademark is registered. The CJEU found that such advertising constitutes a trademark infringement if the advertisement does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trademark or an undertaking economically connected to it or, on the contrary, originate from a third party. The CJEU stated that it is for the national courts to assess, on a case-by-case basis, whether the facts of the dispute before it indicate adverse effects, or a risk thereof, on the function of indicating origin.

It follows from the abovementioned case that an adverse effect on the origin function of the trademark may exist if an advertiser uses the competitor's trademark as a keyword in its advertisement on Google AdWords. However, this depends on how the advertisement is presented and whether that advertisement fails to enable an average internet user (or enables it with difficulty) to ascertain whether the goods or services referred to originate from the proprietor of the trademark or from a competitor.

The District Court found that Antura's trademark was neither referred to in the advertisement nor on CANEA's website. Thus, Antura's trademark was only used as a keyword in CANEA's advertisement on Google AdWords. Based on these circumstances, the District Court stated that there were no indications that there was a connection between the companies. Therefore, the District Court decided that Antura had not made it clear that CANEA's advertisement indicated adverse effects on the origin function of the trademark. Consequently, the District Court found that CANEA's advertisement on Google AdWords did not constitute trademark infringement.


IP Court Founded in Russia

Russian court reform continues. And, as a part of this reform, a new, specialized intellectual property court will begin operating by February 2013, which will consider cases connected with creating, exercising, and protecting intellectual property rights. The new IP Court was created due to a significant increase in IPR-related disputes. The IP Court will consider cases as both a court of first and cassation instances. As a court of first instance, the court will review cases related to the provision of IPR and the validity thereof (with the exception of copyrights and related rights). As a cassation court, the IP Court will review cases related to the violation of exclusive rights to all types of IPR. Cases in the IP Court will be considered together with "specialists", a concept which is being first introduced into Russian state commercial court procedure. Specialists in this sense are considered to be experts with the required knowledge in the field of IPR, whose consultations will be considered to be one form of evidence in court proceedings (together with expert opinions). The IP Court will consist of judges from various regions who are specialized in IP disputes and IPR protection. The creation of this court will undoubtedly increase the effectiveness of the system for protecting IPR in Russia and is a step forward in Russia's fight with illegal IPR use.


EU Court: Resale of “Used” Software Licenses is Legal

The question of transferability of 'non-transferable' software licences was raised at the Court of Justice of the European Union (EUC) earlier this year in the case UsedSoft GmbH ('UsedSoft' - a company selling used software licences) vs. Oracle International Corp. ('Oracle' - a computer software company) (C 128/11). The case was concerning UsedSoft's resale of used Oracle software licences, which were stipulated in a license agreement to be non-transferable. Oracle brought proceedings in Germany against UsedSoft's resale of its software. The German Regional Court originally ruled in favour of Oracle, stating that UsedSoft was infringing Oracle's copyrights, but, following UsedSoft's appeal, the German Federal Court of Justice decided to refer a number of questions to the EUC in order to determine whether UsedSoft’s actions were legal.

The EUC ruled in UsedSoft’s favour and determined that there was no infringement of Oracle’s copyrights as 'the exclusive right of distribution of a copy of a computer program covered by such a used license is exhausted on its first sale'. The EUC came to this conclusion by giving directive EC/2009/24 (the so-called software directive) and it’s articles 4(2) and 5(1) the following interpretation: Firstly, when a customer downloads software, this is in fact a first-sale causing exhaustion, provided that the proprietor of the copyright has authorised (even free of charge) the download of that copy from the internet onto a data carrier.

Secondly, the proprietor should have also conferred a right to use that copy for an unlimited period of time in return for compensation intended to enable it to obtain remuneration corresponding to economic value. As such, in cases of the resale of software licences such as the one in question, if a software licence has been acquired in the above manner, the second acquirer of the licence as well as any subsequent acquirer can rely on the exhaustion of the first-sale and is therefore a lawful acquirer.

However, the EUC did place two limitations on resale rights, both of which apply to what UsedSoft has been doing. In cases where the 'first acquirer' had bought a licence covering more users than needed, the court ruled that they could not then divide the licence and 'resell only part of it'. Furthermore, the court stated that an original acquirer of a tangible or intangible copy of a computer program for which the copyright holder's right of distribution is exhausted must make the copy downloaded onto his own computer unusable at the time of resale.


Data Protection: Article 29 Working Party Provides Opinion on Cloud Computing

The Article 29 Working Party (WP29) adopted an opinion in July on data protection aspects pertaining to cloud computing. The WP29 is a group consisting of data protection authorities of each EU Member State. The opinion highlights a number of data protection issues that may arise from the perspective of the EU Data Protection Directive (95/46/EC) and the e-privacy Directive 2002/58/EC (as revised by 2009/136/EC) from the deployment of cloud computing services by businesses. While recognizing the benefits of cloud computing, including enhanced efficiency and greater security, the main purpose of the Opinion is to provide guidance on the two main privacy risks in cloud computing as considered by the WP29: i) the lack of control over personal data and ii) the absence of transparency.

The WP29 clarifies that, in general terms, the relationship between the cloud provider and the client must be construed as a relationship between a data controller (client) and a data processor (provider). However, by committing personal data to the systems managed by a cloud provider, cloud clients may no longer be in exclusive control of this data. Lack of control may show itself for example as i) a lack of availability due to a lack of interoperability (vendor lock-in), ii) a lack of integrity caused by the sharing of resources, or iii) a lack of intervenability due to the complexity and dynamics of the outsourcing chain.

With respect to transparency, insufficient information about a cloud provider’s processing operations poses a risk to both cloud clients (as data controllers) as well as to data subjects since they may not be aware of potential threats and risks and thus are not able take measures they deem appropriate. This may be due to the fact that the processing involves multiple processors and subcontractors and that data are processed in different geographic locations within and outside the EEA.

In order to tackle and mitigate the aforementioned risks, the WP29 has provided some guidelines and recommendations, some of which are discussed here below.

Firstly, where controllers decide to contract cloud computing services, they are required to choose a processor which provides sufficient guarantees in respect of the technical security measures and organizational measures governing the processing to be carried out, and must ensure compliance with those measures. Therefore, the WP29 recommends that those planning to use cloud services carry out comprehensive and thorough risk analysis. This analysis must address the risks related to the processing of data in the cloud considering the type of data processed in the cloud. To facilitate this risk analysis, cloud providers offering services in the EEA should provide the cloud client with all of the information necessary to rightly assess the pros and cons of adopting such cloud services.

Secondly, although in many occasions there is no room for negotiations over the cloud contracts, according to the WP29, it is ultimately the client who decides on the allocation of part or all of the processing operations to cloud services for specific purposes and therefore the client is also responsible for ensuring that the cloud provider has adequate security measures in place. For this purpose, WP29 has outlined some key issues that need to be tackled in the cloud contract in order to achieve contractual safeguards:

  • The cloud provider’s obligation to follow client’s instructions.
  • A specification of sufficient guarantees in terms of technical and organisational security measures to be complied with by the cloud provider.
  • Access to data: only identified persons being bound by confidentiality obligations should have access to the client’s data.
  • Non-disclosure of data to non-authorised third parties: an obligation for the provider to name all subcontractors.
  • Obligation to co-operate: the provider should be obligated to co-operate regarding the client’s right to monitor processing activities and to facilitate the exercise of data subjects’ rights to access, correct and erase their data.
  • Cross-border data transfers and the location of data: The cloud provider should be able to guarantee to the cloud client that the data transfers are carried out lawfully. The WP29 points out that the sole commitment of the data importer to the Safe Harbor guidelines may not be deemed sufficient for data transfers to U.S.-based providers. The cloud provider should provide a list of locations in which the data may be processed.
  • Logging and auditing of relevant processing operations on personal data that are performed by the cloud provider or subcontractors.
  • Notifications: the cloud provider’s obligation to notify the cloud client in the event of i) any data breach which affects the cloud client’s data or ii) any legally binding request for disclosure of the personal data by a law enforcement authority, unless otherwise prohibited.

In addition, the WP29 stated that independent verification or certification by a reputable third party could be a credible method for providers to demonstrate their compliance with obligations to clients. Such certification would, as a minimum, indicate that data protection controls have been subject to audit or review against a recognised standard meeting the requirements set out in the WP29’s opinion by a reputable third-party organisation.


Article 29 Working Party Releases Opinion on e-Privacy Directive’s Cookie Consent Exemption

According to Article 5.3 of Directive 2002/58/EC (e-Privacy Directive, as amended by Directive 2009/136/EC), informed consent is required before storing any information or accessing a user’s or subscriber's terminal device. However, the same article provides that cookies and similar technologies can also be exempt from the requirement to obtain informed consent if they fulfil either one of the exemptions stipulated in the article. Exempt cookies are:

A. Cookies that are strictly necessary for the provision of an information society service explicitly requested by the subscriber or user.
B. Cookies that are used for the sole purpose of carrying out the transmission of a communication over an electronic communication network.

In June 2012, the Article 29 Working Party, an independent advisory body composed of representatives from the European Data Protection Authorities, adopted an opinion on the types of cookies which may be exempted under the two criteria above, provided that they are not used for additional purposes. According to the analysis by the WP29, the following cookies are exempt from the requirement to receive informed consent under certain conditions:

1) User input cookies (session-id) for the duration of a session or persistent cookies limited to a few hours in some cases.
2) Authentication cookies used for authenticated services for the duration of a session.
3) User centric security cookies used to detect authentication abuses for a limited persistent duration.
4) Multimedia content player session cookies, such as flash player cookies, for the duration of a session.
5) Load balancing session cookies for the duration of session.
6) UI customization persistent cookies for the duration of a session (or slightly more).
7) Third-party, social plug-in content-sharing cookies for logged in members of a social network.

The WP29 also provides guidelines that can be drawn from the cookie use scenarios above. Firstly, when applying criterion A, it is important to examine what is strictly necessary from the point of view of the user, not the service provider. Secondly, if a cookie is used for several purposes, it can only benefit from an exemption to informed consent if each distinct purpose individually benefits from such an exemption. Finally, first-party session cookies are far more likely to be exempted from consent than third-party persistent cookies. However, the purpose of the cookie should always be the basis for evaluating if the exemption can be successfully applied rather than a technical feature of the cookie.


Using Third Party Characteristics in Advertisements in Denmark

Recently, three cases have been delivered by Danish courts concerning the use of a third party’s characteristics in advertisements. The cases have shed new light on an important area of intellectual property law, namely the use of a third party’s characteristics in advertisements in Denmark.

The World’s Best Restaurant

An advertising agency, Mikkelsen Media ApS, was hired by its customer, Homeenter AB, to create an Internet ad in order to increase the awareness of Homeenter’s 'Club Chocolate-membership-program'. In order to attract attention, the main content of the ad was a competition which gave any new member of the club a chance to win a dinner at the famous Danish restaurant Noma, which was crowned the world’s best restaurant.

The heading of the ad stated: "Win a dinner at the WORLD'S BEST restaurant!” and as a subheading it stated that Noma was crowned the world’s best restaurant. Noma brought an action against Mikkelsen Media and Homeenter before the Maritime and Commercial Court claiming that the ad violated their rights according to the Danish Trademark Act as well as the Danish Marketing Practices Act.

Firstly, the court stated that Noma (even in 2009) was a particularly well-known trademark and that Noma therefore enjoyed extended protection. Thus, the court found that the motivation for using Noma in the ad unquestionably had been to attract greater attention to the ad, and that it was clear that Mikkelsen Media had intended to create a link to the value of Noma’s name. When evaluating the ad, the court found that the main visual attraction of the ad was Noma, because 'THE WORLD’S BEST' was written in red and partially enhanced, whereas the words 'Club Chocolate' and 'Homeenter' were toned down extensively. Secondly, the court stated that, since the pictures used in the ad did not derive from Noma, and since the winner of the competition could not immediately gain access to a table at Noma (a table was not actually reserved beforehand), the ad was in fact misleading and could negatively affect Noma’s reputation.

Consequently, the court found that Mikkelsen Media as well as Homeenter had violated the Trademark Act as well as the Marketing Practices Act. The court went on to award damages and, more interestingly, the court found that Mikkelsen Media was the responsible party. Mikkelsen Media was ordered to exempt Homeenter from any and all claims Noma may have against Homeenter. The fact that Homeenter had approved of the ad did not change the outcome.

Danish Games, English Odds

In 2008, all gambling in Denmark was controlled by a single national gaming monopoly known as Danske Spil A/S. In the same year, Danske Spil filed a lawsuit against the UK bookmaker Ladbrokes Betting & Gaming Ltd. claiming that Ladbrokes had violated its trademark rights in connection with its 'Danske spil (Danish games), Engelske odds (English odds)' TV advertising campaign. As indicated, Danske Spil means 'Danish games' and, while the Maritime and Commercial Court denied that the name enjoyed trademark protection, the Supreme Court found that Danske Spil had acquired trademark protection through use.

The Supreme Court went on to evaluate Ladbrokes' slogan 'Danske spil (Danish games), Engelske odds (English odds)' by initially stating that the words 'Danske spil (Danish games)' were used as a generic term for games with a connection to Denmark. The Supreme Court did, however, find that 'Danske spil', although the second word did not start with a capital letter, was also capable of suggesting Danske Spil’s trademark 'Danske Spil', which the Supreme Court found had been intended by Ladbrokes. Notwithstanding this, the Supreme Court did not consider this a violation. The average consumer would not regard the ad as originating from Danske Spil. Furthermore, the court did not find that Ladbrokes' slogan constituted an improper exploitation of Danske Spil’s reputation and goodwill.

The Body Bike

In the latest case, Dansk Supermarked A/S used an exercise bike (a Body Bike) as a prop in an ad for workout wear and sportswear not originating from Body Bike. Body Bike International A/S claimed that the ad violated their rights according not only to the Trademark Act and the Marketing Act but also the Copyright Act. The Maritime and Commercial Court stated that the trademark was not well-known and, even though the trademark was visible, the trademark did not enjoy any protection in this situation since the shop making the ad did not sell bikes or similar goods. Moreover, the court found that Body Bike did not enjoy any trademark protection as a three-dimensional mark, nor did it constitute a 'work' or enjoy copyright protection.


When viewing the three cases in context, they manifest that well-known trademarks enjoy rather extended protection in advertising matters. The Noma case indicates that any use of well-known trademarks in ads may be trademark infringements in Denmark.

The Supreme Court did not discuss whether 'Danske Spil' was a well-known trademark, although the trademark is generally known in Denmark. Going forward, it will be interesting to see whether the extended protection also applies to well-known generic trademarks. According to present case law, this may be presumed, but it is questionable - especially considering the impact it could have on the market and the advantages it would give to well-known trademark owners.

The Body Bike case further shows a distinction in the protection served by a trademark versus a copyright in respect of the use in advertising material. In the Body Bike case, the court did not find a trademark violation. Notwithstanding this, the merits of the case indicate that, had the bike enjoyed copyright protection, the ad in question could very well have been a violation of Body Bike’s copyrights.

Last but not least, the Noma case underlines that advertising agencies must be careful going forward, as they are liable for the contents of ads created and delivered to customers.


Proposed Amendments to Clinical Trials Regulation in the EU

The conduct of clinical trials in the EU is strictly regulated in the Clinical Trials Directive (2001/20/EC, hereinafter the 'Directive'). The Directive has been criticised by patients and researchers within the industry for its rigorous regulatory requirements. Such requirements have contributed to high costs and a lack of harmonisation of the applicable rules essential for multinational clinical trials. This has resulted in a significant decline of clinical trials in the EU. Between 2007 and 2011, the number of clinical trials conducted in the EU fell by 25 per cent. The number of clinical trials applied for declined from 5,000 in 2007 to 3,800 by 2011.

To mitigate the problems arising out of disproportionately strict regulatory requirements, the Commission is proposing new legislation to bring patient-oriented research back to Europe. The objective is to restore the EU’s competitiveness in clinical research and the development of new and innovative treatments and medicines for the ultimate benefit of patients. The proposed amendments aim at facilitating conduct of multinational clinical trials while increasing transparency in clinical trial settings:

  • A simplified authorisation procedure allowing for a fast and thorough assessment of the application by all concerned Member States resulting in one single assessment outcome. Such a procedure allows the individual Member State to appoint the body or bodies in charge of the assessment on the condition that it is fully independent and has the necessary expertise.
  • Simplified reporting procedures which spare researchers from submitting largely identical information on the clinical trial separately to various bodies and Member States.
  • The possibility for the Commission to conduct controls in Member States and other countries to make sure the rules are being properly supervised and enforced.
  • The risk to subjects participating in clinical trials varies depending on whether the trial is to test a new medicine or to compare existing medicines. In this respect, the proposal intends to increase flexibility by introducing the concept of a 'low-intervention clinical trial' that specifically addresses clinical trials in which the additional risk for a patient is negligible in comparison with normal clinical practice treatment. In these cases, the regulatory requirements would be less burdensome and the timeline for authorisations shorter.
  • There is a trend towards increased clinical trials in areas with emerging economies where the legal and ethical surveillance might be inferior to the EU. The proposal therefore includes rules for clinical trials which are conducted outside the EU but referred to in a clinical trial application within the EU. In these cases, the proposal provides for compliance with regulatory requirements at least equivalent to those in the EU, including rules on transparency.
  • Transparency on the conduct and results of clinical trials helps to overcome problems of duplication and redundancy. It allows for making even clinical trials with unfavourable results public, thus avoiding 'publication bias'. The proposal strengthens the rules on transparency further by ensuring that information on whether recruitment for a clinical trial is still ongoing is publicly available. Hence, it provides patients an opportunity to find out about clinical trials in which they may wish to participate.

It was proposed that the new legislation take the legal form of a Regulation with the objective of ensuring that the rules for conducting clinical trials are identical throughout the EU. This is essential, as Member States should base their practice on equal rules and principles in authorising and supervising the conduct of a clinical trial. The legislative proposal is currently being discussed in the European Parliament and in the Council and it is anticipated to come into force in 2016.


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.