WIPO cooperates with the Milan Chamber of Arbitration (CAM) to promote mediation finalized to resolve IP international disputes.
Do you want to buy shares in songs?
India's IP Appellate Board fully operational at last!
The 4th amendment to China’s Patent Law will come into effect on June 1, 2021
Revised Calculation Method of Damages and New Inspection System in Japan
Attempt to Sell the Registered Trademark to the Genuine Right Owner or Threaten to Sell It Third Parties Constitute Bad Faith According to the Turkish Court of Appeals
Thailand’s DIP Revives Proposed Amendments to the Patent Act - Update
Working with the Peruvian Administrative Office in Industrial Property during the Pandemic
IPOPHL Issues Rules on Copyright Owners’ Resale Rights
Geographical Indications in the Russian Federation
Treaty on Trademarks, Service Marks and Appellations of Origin
AIPPI Central American-Caribbean Regional Group Survey and an Invitation to AIPPI Belgium’s Annual Study Day on December 3, 2020
Articles & Case Notes:
By Cristina Bianchi, AIPPI Italy
Disputes concerning intellectual property rights involve different jurisdictions and are often related to technical issues. To resolve these disputes, traders in the sector need fast but accurate, flexible and professional procedures able to satisfy their needs and their business.
Mediation can be a previous alternative step and (re-)solution to the traditional Court trials or arbitration all around the world where every day, more and more, we are witness of the transformation of the internal market in a globalized one.
Disputes involving Intellectual Property Rights and Technology are notably characterized by technical issues and other complex matters concerning, for example, the validity of the trademarks, or of the designs, or of the patents involved.
Conflicts are also about the relationship between the parties, as it particularly is the case, for example, in matters involving franchising or agency agreements, distribution contracts and licenses.
In order to help parties in finding fast and efficient solution to IP disputes, WIPO and CAM signed a deal (effective from July 2020) to promote Mediation for IP and technology issues.
Mediation helps parties preventing and resolving disputes, enabling them to find amicable solutions, facilitated by a third neutral person, in a completely confidential setting. This facilitative proceeding is generally flexible, cost effective and time saving.
As a matter of fact, the experience so far made by those who have solved a conflict in mediation confirms that an early intervention, through the facilitating dialogue between the parties, effectively prevents the insurgency of disputes in Court or in arbitration and helps them finding better ways of renegotiating their agreements, while maintaining sound commercial relations.
In particular, mediation creates the best opportunity to reach a sustainable agreement which satisfies the needs and meets the interests of the participants.
In addition to that, mediators must also have the skills to manage the emotional climate of the mediation and to help parties understand each other’s point of view.
Mediation is particularly recommended, where:
- Both parties wish to preserve/create important business or other relationships with the other side (licensor/ licensee, franchisor-franchisee, supplier-distributor);
- The issues involved are sensitive and would require disclosing trade secrets, competitive information, or testimony of management;
- The defeat in litigation would be significantly harmful;
- One or both parties prefer to avoid the economic burden of the litigation;
- The parties would only be satisfied with a resolution that a court could not grant (for example, the modification of the other side’s trademark);
- As it often is the case, the dispute has an international ramification in different markets, and the required solution that provides has to prevent litigation in multiple jurisdictions.
Moreover, the possibility of appointing a mediator who is skilled in the matters at issue, enables the parties to cope with their problem, taking into account all the necessary aspects and predictable outcomes.
In light of the above, Mediation is particularly considered suitable and effective in Intellectual Property Rights and Technology matters.
As a matter of fact, also the Unified Patent Court comprises an Arbitration and Mediation Center.
In this regards, WIPO and CAM both have a well-established expertise in managing and resolving disputes through, in particular, Mediation (and in ADR of course).
The recently officially announced cooperation between WIPO and CAM is aimed to offer joint mediation services in international cases involving one Italian party.
In particular, the cooperation consists of:
- The possibility, for the parties, to choose a mediator from a Panel of WIPO-CAM skilled professionals, having experience in helping parties to resolve disputes relating to IP rights and technology;
- The creation of ad hoc model WIPO-CAM mediation clauses and submission agreements;
- Offer the case management of the proceedings under the WIPO Mediation rules
- The undertaking of WIPO and CAM to jointly promote mediation to resolve disputes involving Intellectual Property rights and technology.
In light of the hard times we are all going through, in which the players are requested to rapidly adjust to the new global conditions, on international markets, mediation seems to be the most suitable tool to enable us to handle with the so called “new normality”.
By Disha Dewan of R K Dewan & Co, India.
Have you ever considered investing in your favourite song and becoming a part or full owner thereof? Without actually even writing or creating the song? Welcome to the world of buying and selling of royalties and equity in individual songs and song catalogues. Right from newcomer artists to the world’s most well-known stars are currently involved in this practice. In a world where subscribing to streaming services such as Spotify has become the norm, it is interesting to consider delving into the royalties’ space as an alternative investment opportunity.
So how does it work? Websites such as Royalty Exchange (RE) list songs or entire catalogues, slices of which are available on sale via auction and potential buyers bid on these. It is important to note what exactly is on sale - the most common commodity on sale is a part of a royalty stream say 25% or 40%, though occasionally the entire royalty stream is also available for sale. Usually, the underlying copyright of the song/catalogue is retained by the seller. The royalty stream may be for life or for a period of 10 years or any other period described by the seller. Furthermore, there are different kinds of royalty streams. For example, there are mechanical royalties which involve the royalties paid every time there is a sale or legal download of a song. There are public performance royalties for when the music is heard in public through live concerts & gigs, at nightclubs, sports events or on the radio. There are separate royalty fees for use of songs in movies, video games and commercials. You could get royalties every time a song is streamed on say YouTube. So it is important to note which of these is up for sale, at what percentage and for what time period. Payment is made either quarterly or biannually either through RE or a third party royalty paying entity.
Examples of some artist’s songs that have been up for such transactions through Royalty Exchange include Evanescence “Bring me to Life”, Rihanna’s “Don’t stop the music”, “Nicki Minaj’s “Anaconda”, Dirty Dancing’s “Time of my Life, Drake’s “Fire & Desire”, Cardi B’s “Bodak Yellow” and Shakira’s “Dare.” Investors are also making bets on K-Pop due to its ever-increasing popularity. Royalty Exchange claims to have conducted $75 million dollars in royalty transactions as of May 2020 since its relaunch in 2016.
According to Nathan Jolly from The Music Network, the rights to Jay-Z and Alicia Keys’ ‘Empire State Of Mind’ for USD 190,500 seems at first like a wise investment, but this is only for the public performance rights, and only for a period of ten years. The last twelve-month period saw these rights net the owner USD 32,733, so assuming this rate continues, the buyer will have made USD 327,330, or a profit of USD 136,830 minus a broker fee of 15%, plus a one-off $500 payment for administration of royalties. Similarly, recently, the lifetime public performance rights for Dirty Dancing’s ‘The Time of My Life’ went for a whopping USD 493,500, but given it makes USD 47,008 in royalties every calendar year and the buyer will own the rights for the lifetime of the (still very alive) songwriters, plus 70 years according to copyright law, it seems like a sound investment. Yet another example includes the sale of a catalogue featuring songs from Sesame Street for USD 580,000 in 2017 for charity. It is important to note however, that not all royalty stream purchases are in the six-figures, many start from as low as USD 10,000.
So what’s in it for the buyers? Just like trading on the stock market, savvy investors can buy at a lower price and take a chance on a relatively unknown artist for a high payoff down the line. Or investors can buy into equity into songs of established artists expecting a steady passive income stream. There is always the chance that royalties may go up due to increased usage of a song due to events such as inclusion of a song in a TV show’s episode or movie soundtrack or the death of an artist. Holiday songs make more royalties as they are played each year usually over and over again. Similarly, if a song is reinterpreted in a new manner, both the original and new artist earn royalties. Another idea to consider is the popularity of mobile ring tones in India. Then of course, there is the simple joy of being a music lover and owning a piece of your favourite music. Royalty payments are not tied to the ups and downs of the stock market and this is favourably looked upon by investors. The buyer has the potential to further out-license an asset if they have bought the copyright to the song/catalogue. In the Indian context, it could be equitable to allow the creators of the music such as the instrument players and background singers to buy preferential shares into royalty streams at lower rates.
What’s in it for the seller? Well, according to Royalty Exchange, selling a portion of their royalty streams allows sellers to raise many years’ worth of royalty payments upfront without giving up control over their future earnings or going into debt. It hedges risk by protecting against a potential downturn in royalty streams in the future and it raises funds in the present for pursuing new projects, not to mention helping with any expenses.
As with any investment, there are advantages and disadvantages of partaking in royalty payment streams. On the upside, according to market research, royalties can bring in yields from 10-25% per year. This may be the reason for a growing trend seen of pension fund managers now jumping on the bandwagon. On the downside, the last 12-month period of royalties (which are heavily relied on for determining the auction/selling prices of royalty streams) may have been the only time the particular song or catalogue is popular and makes money so there is some inherent risk and investor discretion is advised.
While the investor is out shopping, other players in the market worth checking out include Songvest (the first song stock market) and Lyric Financial (which focuses on up and coming artists to finance them at an early stage of their career). Then there is the giant, Hipgnosis Songs Fund Limited, listed on the London Stock Exchange, and owning the rights to over 13,000 of the world’s best-known songs. Hipgnosis also keeps a list of its most popular songs i.e. its portfolio on Spotify and counts the Church of England as one of its investors. It’s a brave, new world. Perhaps, we may yet see companies carrying catalogues of evergreen artists like A R Rahman, Lata Mangeshkar and Sunidhi Chauhan or new age artists like Neha Kakkar on the Bombay Stock Exchange?
By Manisha Singh, AIPPI India
The working of IPAB remained shrouded with mystery of its being operational for certain number of years and non-operational for remaining period. The basic reason for its non-functionality is delay in appointment of the Chairman, Vice Chairman, Judicial members or Technical Members. The reason for this delay was attributed to number of petitions filed primarily to challenge the IPAB rules made for the appointment of Chairman, Vice Chairman, Judicial members and Technical members. This issue appeared to have been settled by the new Tribunal, Appellate Tribunal and other Authorities (Qualifications, Experience and other Conditions of Service of Members) Rules, 2017.
However, operation of these rules also hit by roadblock of series of petitions. Reacting to this grim situation a writ petition was filed in Mylan Laboratories v Union of India & Ors before Delhi High Court to seek intervention of the court to invoke “doctrine of necessity” to allow disposal of urgent cases by Chairman and the only appointed Member(PVRT).
The non-functioning of IPAB also came under the scanner of the Delhi High Court in Merck Sharp And Dohme Corp. vs Union Of India And Ors. on 27 February, 2020 where Justice Prathiba M. Singh observed that
- The non-functioning of the IPAB is a serious cause for concern inasmuch as cases like the present which involve patent rights which have a fix term are being unduly delayed due to non-constitution of the Tribunal itself. This position has continued for the last several years and has repeatedly been the subject matter of various writ petitions filed before this Court.
- It is matter of record with that there are more than 4000 cases including 1600 patent cases, which are pending before the IPAB and hence non-assembling and non-availability of infrastructure to the IPAB has severely dented the disposals before the IPAB, and the delays have affected substantive rights of IP owners.
Resumption of hearing in IPAB
It took almost three months for the new Chairman IPAB to adjust to the Covid created crisis, which further dented the normal hearing in the Board. In order to resume hearings post Covid lockdown three office orders were passed by the Board in May 2020 to streamline future hearings and filings during the ongoing COVID-19 pandemic. These orders of the Board in fact led to normal resumption of work as the IPAB registry resumed receiving petitions on urgent matters through e-filing. Additionally, IPAB streamlined the process to be followed in cases of urgent mentioning and requests for adjournment, by sending email to the Deputy Registrar at email@example.com in advance.
Procedure for online hearing
Video conference platform established by IPAB would help to facilitate the disposal of urgent matters now. The petitioners/Litigants who are willing to joint video conference proceedings can now forward their requests to IPAB registry through email giving details such as their names, case title, case number, date of hearing along with their contact details well in advance of the hearing date. Registry would provide link and pin for joining the online hearing along with the time slot of the hearing to the petitioners /litigants by through email.
Recent decisions of IPAB
With appointment of all technical members, IPAB is now operational and moving full throttle in conducting hearing through video conference and disposing the urgent appeal matters. With IPAB resumption of functioning, we see now series landmark decisions on the appeal cases.
Looking beyond Computer program per se
In Ferid Allani v Union of India & Ors, IPAB looked beyond computer program per se and allowed patent on computer related invention based on the ground of having technical effect. This case would also be known for being rejected by Controller on multiple times even when High Court clearly interpreted computer program exceptions should be limited to mere programs alone. The IPAB ruling on patentability of computer-related inventions demonstrating “technical effect” or “technical contribution” would perhaps break the jinx of such rejections at IPO and would give much needed relief to inventors.
In an another interesting order (Novertis AG vs Natco Pharma Limited )[OA/20/2019/PT/DEL dated 29 September 2020] IPAB questioned the virus of the post grant opposition, where insufficient fee was paid and the Controller allowed the deficient fee to paid after the expiry of the prescribed period. IPAB Ruled that
23.2 The post-grant opposition was not maintainable ab initio for lack of filing proper prescribed fee. The Controller should not have acted upon the post -grant opposition as the proper fee …………... within the prescribed time period of filing the opposition. ……………………..How come an opponent having stature of legal entity, pay a fee applicable to natural person? The balance fee was remitted on 08/11/2017 after the statutory time period expired on 30/09/2017. Therefore, the post- grant opposition itself was not maintainable and the office of the Learned Controller is expected to exercise due diligence in future. On this ground, we hold that the order passed by Controller on 16/08/2019, being an order on non- existent post- grant opposition, does not have merit to stand.
This case would be also be known for restraining the Controller to resort to hindsight analysis in novelty rejections as IPAB held that
“But for the “hindsight analysis”, it was not possible to arrive near to the structure of the instant patent. The “hindsight analysis” is not allowable under “inventive step” determination let alone “novelty” consideration. “
The Board also questioned Controller refusal of the patent by ignoring the recommendations of the Opposition to the contrary, without giving any reasons. The Board ruled
23.6 The Learned Controller ought to have considered the view of the members of the opposition board who were of the opinion that “the present opposition may be dismissed and the current patent may be allowed to stand.”
IPAB quipped that the views of members of opposition board appears very crucial and
“If at all the Learned Controller was to differ from the opinion of the opposition Board, the point of disagreement should have been annotated in the order, which is not present in the order….”
In this case IPAB granted the patents after finding also that “the other grounds such as “lack of inventive step’, objection under section 3(d) and that related to “insufficiency of disclosures” were also decided without proper reasoning.”
This is a classic case of overall examination of evidence, application of hindsight and improper interpretation of the recommendation of crucial analysis of the opposition board. This decision would go a long way to guide the future oppositions proceeding before the Controller.
Violation of the procedural fairness
In another case (Hawar Technologies Limited Vs COP 9(OA/56/2020/PT/DEL dated 12th September 2020 IPAB found clear violation of hearing principles as laid down in the patent act and rules .The board observed in relation to the violation of the hearing principle that
- “it is clear that the Patent Acts and rules framed thereunder are code in itself and prescribes the contents of the natural justice and hearing principle. The natural justice in the context of the Patents Act is not merely confined to the hearing orally which according to us in the present case was mere formality and was not done a substantial hearing. But in fact the Patent Act and rules framed thereunder also provides for the provisions of the written submissions.
The Board heavy relied on ruling of landmark Dharampal Satyapal’s case relating procedural fairness, natural Justice and hearing principles to highlighted the importance of written submission and observed that
Rule 28(7) of the Patents Rules 2003 provides as follows: (7) In all cases of hearing, written submissions and the relevant documents, if any, shall be filed within fifteen days from the date of hearing.” Therefore, the contents of the natural justice or hearing principle in the context of the Patents Act is prescribed by the delegated legislation which are rules framed thereunder in the form of Rule 28 (7). In such kind of cases, as per Dharampal (supra), the instrument has to be followed and the same cannot be ignored. Therefore, no provisions of the Act or Rules should be rendered superfluous and the interpretation, which should make the provisions workable, should be followed.
This decision would go long way to earmark the guiding principle of hearing that must be followed by the Controllers while conducting hearing of contested cases. In this case Board ruled that
If the present case is tested on the touchstone of the principles culled out above from the Dharampal Satyapal’s case, it is clear that not merely there is a violation of the reasoned decision principle which is part of the procedural fairness, but in fact there is also violation of the hearing principle as well and thus there exists a complete violation of the procedural fairness in the present case.
This case would also be known for imputing the concept of expended version of natural justice in context of patent Act where Controller is dealing with technical matters, which involve application of scientific principles along with the legal principles.
According to the Board,
“ A brief hearing of hour or so may not suffice as the evaluation of the prior arts and understanding requires extensive readings, appreciations as well as the deduction so as to form an opinion on novelty and inventive step.”
Highlighting the value of the written submissions in patent cases Board observed that
“ the rules of procedural fairness including natural justice as per the Patents Act and Rules framed there under do not end with the hearing and in fact the natural justice continues until the filing of the written submissions which is provided under the Rules dealing with the prior arts enabling the controller to have a reading, appreciation and apply the same.
Board’s finding on the violations of the procedural fairness in the present appeal lead to rule that
“the trigger for violation of the procedural fairness is both the unreasoned decision as well as the violation of the expanded hearing principle, the contents of which are prescribed under the Patent Rules in the form of Rule 28 (7) of the Patent Rules. Therefore, the said violations of the procedural fairness vitiate the impugned order warranting interference in an appeal applying the correction standard.
While remanding this case back to Controller the Board also accepted the request for change of controller, invoked 73(4) of the Patents Act, 1970, and directed that in the best interest of justice, the case may be referred to some other Controller.
The above proactive initiatives by IPAB for conducting hearing in urgent matters are welcome, as it would reduce the backlog of over 4000 cases that were pending for quite a long time. Appointment of new members, we can hope would hasten the disposal of revocation related matters as well. With finalisation of the Tribunal, Appellate Tribunal and other Authorities Rules (Qualifications, Experience and other Conditions of Service of Members), 2020 on 12.02.2020 by the Ministry of Finance, we can look forward for the IPAB to be functional uninterrupted now onwards. The timely intervention of Supreme Court brought the relief in terms of continuation of the appointed Chairman of IPAB first up to September 2020 and now up to December 2020. With operation of IPAB in full swing, we can expect more prudence in patent office decisions now.
By Xiaoling DUAN of Wanhuida Intellectual Property, Beijing, China.
On October 17, 2020, the National People’s Congress passed the 4th amendment to China’s Patent Law, which will come into effect on June 1, 2021. The main changes include 1) damages in civil litigation, 2) eligibility of partial designs, 3）patent linkage for pharmaceuticals, 4）patent term compensation, 5）administrative enforcement, 6）regulation on abuse of patent right, 7) patent exploitations/utilizations, and 8）novelty grace period.
1) Articles 71 & 74 The law introduces the punitive damages regime in the context of willful infringement, which allows the court to grant up to quintuple the actual losses suffered by the patentee as a result of the infringement, or the proceeds gained by the infringer from the infringement or the multiples of the patent royalties, in case of serious circumstances. The statutory damages is also increased to range from RMB 30,000 to 5,000,000. As for the burden of proof for the damages, it may be shifted from the patentee to the infringer provided that certain conditions are met. The limitation for instituting legal proceedings against patent infringement is amended from 2 to 3 years in line with the civil procedure law.
2) Articles 2 & 42 The protection term for design patent is extended from 10 years to 15 years, and partial designs become eligible subject matter for patent protection.
3) Article 76 The law allows the applicant for the regulatory approval, the patentee or the interested party to solve patent disputes during the drug marketing approval process. Viable options include a patent litigation before the court or a petition for a CNIPA administrative ruling. The state drug administration authority may make a decision within the prescribed time limit as to whether the drug approval process should be suspended based on an effective court judgment.
Regarding the patent linkage regime at the operational level, the state drug administration authority and the CNIPA have jointly published a Draft for the Implementation Measures for Early Resolution Mechanism of Pharmaceutical Patent Disputes (for Trial Implementation) to solicit public opinions.
4) Article 42 The adjustment of the patent term becomes available for the invention patents if unreasonable examination delay occurs during patent granting procedure. For the patents of new pharmaceuticals, it further makes available the adjustment of the protection term to compensate for the curtailment of the effective patent term as a result of the regulatory approval process. The adjustments shall be limited to no more than 5 years and thus limiting the resulting effective patent term to no more than 14 years from the date of regulatory approval in China.
5) Article 70 The CNIPA and the local patent administrative authorities are vested more powers in administrative enforcement involving patent infringement disputes. Upon the request of the patentee or the interested party, a) the CNIPA may handle patent infringement disputes of significant impact nationwide; and b) local patent administrative authorities may handle patent infringement disputes by combining cases involving the same patent right. In case of patent counterfeiting, the upper limit of imposed fines against illegal acts are also increased.
6) Article 20 The good faith principle is introduced in the Patent Law to rein in abuse of patent right. Patent applications and exercise of patent rights shall not harm public interests, prejudice others’ legitimate rights and interests, or exclude or restrict competition.
7) Articles 48-52 The law encourages patent exploitations and utilizations. An open license system is also established to serve such a purpose.
8) Article 24 In response to national emergency or extraordinary circumstances, a 6-month grace period is granted to the inventions first disclosed for the public interests, without losing their novelty for the patents. This clause is believed to be prompted by the COVID-19 pandemic.
By Hirohito Katsunuma of Katsunuma International Patent Office, Tokyo, Japan.
The Patent Act in Japan was amended in May 2019. The revised calculation method of damages for patent infringement has come into effect from April 1, 2020, and a newly established inspection system has come into effect from October 1, 2020.
1.The revised calculation method of the amount of damages
The patent infringer in Japan is presumed to be negligent (Article 103), and the patentee may claim damages. Before the amendment, the amount of damages was only allowed by multiplying the number of infringing products by the infringer's profit per unit. (Article 102, Paragraph 1 before amendment). The patentee could not claim damages beyond his/her production/sales capacity.
Under the revised calculation method of damages, in addition to damages previously allowed, the patentee is now able to claim damages for the portion of the infringing products that exceed its production and sales capacity. (Amended Article 102, Paragraph 1)
In addition, under Article 102, Paragraph 3 before the amendment, the patentee could claim from the infringer an amount of money equivalent to the amount he was entitled to receive for implementing his patent as damages. However, it was not clear whether circumstances, such as the fact that the infringer infringed the patent, the fact that the patentee lost the licensing opportunity, and the fact that the infringer worked the patent without contractual restrictions, could be considered or not. The license fees as the damages were often less than those if the parties negotiated in the event of an infringement.
The amended Patent Act states that the court can determine the amount of damages on the assumption that the patent is valid and that an infringement has occurred. (New Article 102, Paragraph 4). The equivalent amount of license fees in an infringing case likely increase.
2. Establishment of an inspection system
Before the Patent Act amendment, the court could order the submission of the necessary documents to prove infringement and to calculate the damages. (Article 105, Paragraph 1 of the Patent Act)
However, it is not easy to determine whether a patent relating to a manufacturing method has been infringed by merely examining submitted documents. In software infringement cases, it is not easy to determine whether or not there is infringement from the software submitted as evidence. Further, the source code can be easily modified, and the amount of the source code is huge.
After the amendment, an assigned neutral expert (Inspector) can enter the alleged infringer's factory, etc. to ask questions, demand documents to be presented, and carry out operations, measurements, experiments, etc. on manufacturing machines. The inspection report shall be submitted to the court to be used as documentary evidence.
The requirements for the inspection are strictly regulated (New Article 105-2, Paragraph 1, 2). The defendant can state his/her opinions on the plaintiff's request for the inspection and challenge the designated inspector. (Article 105-2-3, Paragraph 1, 2) Both parties can file an immediate appeal against the decision of the inspection (Art. 105-2, Paragraph 4).
After receiving the inspector's report, the court must send the report to the defendant' for him/her to claim the protection of confidential information (Patents Ordinance § 105-2-6 2). The court may review the contents through in-camera procedures and determine the confidential information (Art. 105-2-6(4) of the Patent Law). Both parties can file an immediate appeal against the inspection report (Article 105-2-6 5 of the Patent Law).
The amended Patent Act enacted in May 2019 allows patentees to claim damages for the portion beyond their production/sales capacities. The equivalent amount of licensing fees as damages shall be determined based on the assumption that the patent has been infringed.
Japan now has the inspection system for collecting evidence in infringement, which corresponds to the discovery system in the US, the disclosure/search orders system in the UK, the inspection system in Germany, and the Saisie contrefaçon system in France.
By Berrin Dinçer Özbey & Elif Melis Özsoy of Gun + Partners Law Firm, Istanbul, Turkey.
Mezzo Mix, 11th Chamber of the Court of Appeals, date 11.11.2019 no. 2018/5813 E., 2019/7065 K.
A recent decision of approval by the 11th Civil Chamber of the Court of Appeals (“CoA”) in Turkey demonstrates that attempts to sell the registered trademark to the genuine right owner or threaten to sell it to third parties constitute bad faith.
In the lawsuit filed before the Ankara 4th Civil IP Court in 2016, plaintiff requested the invalidation of the 5 “mezzo mix” trademarks, the earliest of which was filed back in 2011, deletion of the “Mezzo Mix” expression from the trade name of the defendant and the blocking of access to www.mezzomix.com.tr. The invalidation action was based on the genuine rights of the plaintiff, the well-known status of the plaintiff’s “mezzo mix” trademarks abroad and in Turkey, likelihood of confusion between the respective trademarks and bad-faith of the registrant.
As regards the ground of bad-faith, the plaintiff asserted that during its filings, the registrant must have been aware of the plaintiff’s “mezzo mix” registrations in various countries and before the EUIPO, with the earliest trademark registration in Germany dating back to 1979. Plaintiff submitted further evidence proving that the defendant was living in Frankfurt during the time he filed the trademark applications. Considering the fact that the logo, color scheme and stylizations of some of the trademark registrations were identical to the plaintiff’s registrations abroad, the plaintiff asserted that the evidence produced should be sufficient to deduce the registrant’s bad-faith.
In response, the defendant pleaded that it duly registered its trademarks by fulfilling its obligations as a prudent business person, and that it wrote a letter to the German branch of the company to offer the transfer of the subject matter trademarks.
These letters of the registrant were found to include statements explaining that although the registrant was negotiating about a possible trademark transfer with interested third parties, it was providing an advantage to the plaintiff by offering trademarks for sale with priority. The letters contained more coercive language, stating that companies from Arabic countries were interested with the transfer of the rights as they wished to enter the Turkish fizzy-alcoholic beverage market under these trademarks.
Due to lack of evidence proving that the plaintiff promoted its products in Turkey to the point of gaining widespread reputation prior to the filings of the defendant, the Ankara 4th Civil IP Court did not accept the plaintiff’s grounds of genuine rights in Turkey and well-known status. However, the Court accepted the blatant bad-faith of the defendant, taking into account the identicalness of the respective trademarks, the residency of the registrant in Germany (a country where the product is indeed well-known) during the time of the applications and finally considering the fact that the defendant first tried to sell the trademarks to the plaintiff and then also threatened to sell the trademarks to companies in Arabic countries if the plaintiff did not comply with its terms for a possible transfer. Under its decision numbered 2016/332 E.- 2017/454 K., the First Instance Court held for the invalidation of the trademarks and a block of access to www.mezzomix.com.tr. The defendant then appealed this decision before the Ankara District Court, and upon the dismissal of its appeal, further appealed the District Court’s decision before the CoA. In its decision no. 2018/5813 E. - 2019/7065 K., the CoA upheld the District Court’s decision dismissing the defendant’s appeal, whereby the First Instance decision became final and binding.
The decision of the Court is important since it shows that subjective facts such as the defendant’s conduct during negotiations as to sell the trademark to its genuine right owner or threaten to sell it to third parties and use it as a negotiation tool to increase the amount as well as his residency can be taken into consideration to prove bad-faith in filing.
Berrin Dinçer Özbey Elif Melis Özsoy
By Darani Vachanavuttivong, of Tilleke & Gibbins, Bangkok, Thailand.
Thailand’s Department of Intellectual Property (DIP) published its latest draft of proposed amendments to the Patent Act on September 30, 2020 with public consultations scheduled from September 30, 2020 to October 31, 2020. The proposed amendments cover both patent and design.
According to the published draft, some of the major patent matters proposed for amendment are as follows:
- Genetic Resources (GRs), Genetic Material, Derivative and Traditional Knowledge (TK): Inventions that have used such GRs or TK must disclose the source, access and benefit sharing plan in the patent application.
- Grace Period: The disclosure of subject matter of an invention within twelve months before the date of a patent application will not be deemed a defeating disclosure if the disclosure was due to, or made in consequence of, the subject matter having been obtained unlawfully or the disclosure of the subject matter was made by the inventor, the patent applicant or persons authorized by the inventors or the applicants.
- Introduction of Two-time Publication in the Patent System: Patent applications will be published twice. The first publication will be made within 18 months from the application’s filing date in Thailand. The second publication will be made after the substantive examination is completed and the patent is granted. The opposition period is 90 days from this second publication date.
- Divisional Application: Division of a patent application can be requested by the applicant before the second publication of the patent. In the current Patent Act, divisionals are not allowed and dividing a patent application is at the discretion and on the instruction made by the patent examiner only.
- Reduction of Time to Request Substantive Examination of a Patent: Permissible time for requests for substantive examination of a patent application will be reduced from the current five years from the publication date to three years from the filing date in Thailand.
- Increase of Time to Request Substantive Examination of a Petty Patent: Permissible time for requests for substantive examination of a petty patent application will be increased from the current one year to six years.
By Maria del Carmen Arana Courrejolles, National Group Reporter, AIPPI Peru
Currently, in this time of a pandemic, applications for Patents, Trademarks, Industrial Designs, Utility Models, as well as different actions to defend industrial property rights (opposition, cancellation due to lack of use, nullities, infractions) are filed electronically in INDECOPI's virtual parts table.
The examiners carry out their work remotely in accordance with the provisions of the Sixth Final Complementary Provision of Legislative Decree 1511.
In the Patent Office, after the review and approval of the technical examination, this is notified electronically to the corresponding email address of the applicant. The Direction of Inventions and New Technologies forwards the document, with the notification remotely.
The Direction of Distinctive Signs, after reviewing and approving the trademark registrability examination, issues and sends the applicant electronically the Resolution granting or denying the registration of the trademark applied for.
It should be noted that in all procedures, the applicants must state their express consent to receive electronic notification of administrative acts.
The notification is received in the email address of the applicant, it is understood to have been validly made when INDECOPI sends the communication, but takes effect the day after the email is sent. The applicant is responsible for ensuring the availability and correct functioning of the electronic address.
It should be noted that there is an email address firstname.lastname@example.org where you can make inquiries about any patent case. For the issue of trademarks, you can consult the email email@example.com and for brands with actions in defense of industrial property rights, the email firstname.lastname@example.org
The infringement procedure is the only one that is mixed, since the inspection process is carried out with the presence of the parties to view the goods and count them, but the Administrative Authority is present remotely through the video call system.
 Sixth. Special provisions for notification
During the National Health Emergency declared by Supreme Decree No. 008-2020-SA, as well as the National Emergency State established by Supreme Decree No. 044-2020-PCM and their extensions, notifications of administrative acts and other actions issued by INDECOPI within the framework of the administrative procedures that are initiated and those that are in progress, are carried out via email or other digital means.
For the purposes of the provisions of the preceding paragraph, the companies send a communication to INDECOPI, in which they provide an electronic address and contact telephone numbers with the number of the file being processed or indicate them at the beginning of the administrative procedure. Failing that, INDECOPI may request these data directly by any other means.
By Ma. Sophia Editha Cruz-Abrenica, of Villaraza & Angangco, Philippines.
In order to protect artists and other gifted people in relation to their intellectual property and creations as mandated by the Philippine Constitution and in order to clarify the rights of artists to proceeds of subsequent transfers or resale, the Intellectual Property Office of the Philippines (“IPOPHL”) issued on July 2020 Memorandum Circular No. 2020-023 covering the Implementing Rules and Regulations on Resale Rights.
The new rules on copyright owners’ resale rights apply to the sale or lease of an author’s original works, subsequent to the first disposition thereof by the author, notwithstanding that the works may have been made before the effectivity of the rules. The rules cover authors who are citizens of the Philippines as well as other member states of the Berne Convention having resale rights provisions in their national copyright legislation. The rules are not applicable to prints, etchings, engravings and works of applied art and similar kind wherein gains are derived from proceeds of reproductions. The rules are also not applicable to subsequent sales made directly between private individuals with no participation of an art market professional, nor to sales made by individuals to public museums.
Authors of original works of painting or sculpture or writers of manuscript or composers of music, whether done independently or pursuant to a commission, shall be entitled to resale rights which are transmissible to the heirs upon the author’s death. For joint authors, the rights shall be co-owned in equal shares, or as may be agreed upon in writing and signed by or on behalf of the parties. A presumption of authorship is created when a name purporting to be that of the author appears on the work at the time it was created, subject to contrary proof.
The resale right shall subsist during the author’s lifetime plus fifty (50) years after his death. For jointly authored works, the resale right shall subsist until after fifty (50) years from death of the last surviving author. The resale right shall be inalienable such that it cannot be taken away from nor given away by the author, except in cases of succession or other legal circumstances. Neither can the resale rights be sold or waived. Hence, any charge, encumbrance, assignment, waiver, nor any agreement to share or repay the resale right shall be void.
Even if the first transfer is not made for a consideration, the subsequent transfer shall be regarded as a resale provided (i) it involves a professional party or intermediary and (ii) the work is enrolled and registered in the Registry of Qualified Works to be maintained by the IPOPHL’s Bureau of Copyright and Other Related Rights. For lease, the same should be for a period of more than one (1) year and covered by a written agreement.
The resale royalty rate is up to Five Percent (5%) of the gross proceeds of the subsequent sale or lease, computed in accordance with a percentage rate table based on the gross selling price for the work, as provided in Memorandum Circular No. 2020-023. The resale royalty shall be paid to the author or his heirs within sixty (60) days from the date of the sale or lease of the work.
Claims or disputes arising from the application of the rules shall be filed with the Office of the Director of the Bureau of Copyright within one (1) year from the cause of action and shall be considered as filed upon payment of the required filing fee. The Director General of the IPOPHL shall have appellate jurisdiction upon filing by the aggrieved party of an appeal within thirty (30) days from receipt of the decision of the Director of the Bureau of Copyright. The decision of the Director General on the matter appealed to it shall be final.
This article is intended for informational purposes only and should not be construed as legal advice.
By Vladimir Biriulin, President of the AIPPI Russian National Group.
Russia has plans for joining the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration, its Geneva Act. This yet another reason to introduce geographical indications in the law. According to the Lisbon Agreement “appellation of origin” means the geographical denomination of a country, region, or locality, which serves to designate a product originating therein, the quality or characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors. The last version of the Agreement is known as Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications. It expands the scope of protection to geographical indications…
Appellations of origin have always been on the list of protectable subject matter in Russia. Geographical indications were not. This omission caused a number of refusals by the patent office. Perhaps one of the most familiar cases was Napa Valley. It was filed as an application for an appellation of origin. According to the Russian law (Article 1517 of the Civil Code) appellation of origin may be registered in Russia if it is registered as such in the country of origin. There are also other conditions.
Napa valley is not registered in USA as an appellation of origin but as a certification mark. A certification mark in USA is a type of trademark used to show consumers this or that product meets certain standards. Obviously, this is not an appellation of origin as understood by Russian law so that the patent office had formal reasons to refuse registration. Besides, in order to obtain registration for appellation of origin that appellation should conform to a number of strict requirements. E.g. it is important that all stages of production should be carried out in a given territory. Requirements for a geographical indication are more lax. Thus, at least one of the stages of production important for the characteristics of the product should be carried out in that territory. It is clear that this affords more opportunities for registration of a geographical indication.
Russia has plans for joining the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration, its Geneva Act. This yet another reason to introduce geographical indications in the law. According to the Lisbon Agreement “appellation of origin” means the geographical denomination of a country, region, or locality, which serves to designate a product originating therein, the quality or characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors. The last version of the Agreement is known as Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications. It expands the scope of protection to geographical indications.
An application for an appellation of origin may be filed by an individual entrepreneur or by a legal person(s). Here also, the law gives more opportunities for filing: Article 1518 of the Civil Code provides that aside from the aforementioned persons also associations or other unions of persons may file an application provided that setting up and activities of such associations are consistent with the law of the country of origin.
The bottom line from the above is that the law has become more friendly to all kinds of applicants who wish to market their products to Russia.
By Vladimir Biriulin, President of the AIPPI Russian National Group.
Several countries of the Eurasian Economic Union were discussing the issue of a common trademark for a number of years. It was necessary to coordinate positions of all participating countries therefore multilateral talks took much time. Finally, on February 3, 2020 the Treaty was signed in Moscow. As on September 2020 no translation in English is available. The treaty allows applicants to obtain trademark registration simultaneously on the territories of all countries – members of the Eurasian Economic Union. These countries are: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia. There will be one registration included in the common Register…
It will be possible to file a Eurasian trademark application or file a national trademark application and subsequently transform it into a Eurasian trademark application.
Priority may be claimed if the trademark application is filed during 6 months after the original application. The application will be published if it meets the requirements set out in Article 4 of the Treaty. Any interested person will have the opportunity to submit his observations if he considers there are grounds to refuse registration. The Receiving office (the office to which the application was filed) will send out the application to other patent offices of EAEU which will conduct expert examination of the application. If any of the patent offices finds that there have been filed identical or similar application to the Eurasian application the Eurasian application will be refused. Or, if there are earlier similar trademarks or claimed designations for similar goods the applicant of the Eurasian application will have to provide letters of consent from the owners/applicants concerned.
Each patent office, after conducting expert examination of the trademark application will send their conclusions to the Receiving office. If there are no objections from the national patent offices the Receiving office issues a decision of the registration of the Eurasian trademark and sends a certificate of registration to the applicant. The registration will be entered into the Unified Register of Trademarks of the Union to be kept up by the Eurasian Economic Commission.
The Treaty will become effective when the Eurasian Economic Commission receives the last notification to the effect that the required domestic procedures are implemented by the member states.