eu commercial law 2011 iii. a. protecting ipr (patents, trademarks and designs) in the eu

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EU Commercial Law 2011

III. A. Protecting IPR (patents, trademarks and designs) in the EU

Professor Jens Schovsbo



Overview

1. Introduction to IPR and the EU2. Trade Marks3. Designs4. Patents5. Summing Up



What are IPRs (for the present purposes)?

• Exclusive rights to:

• Trademarks• “Any signs capable of distinguishing the goods or services

of one undertaking from those of other undertakings”

• Designs• “The appearance of the whole or a part of a product”

• Patents• “Any inventions, in all fields of technology, which are new,

involve an inventive step and are susceptible of industrial application”



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Why do we have IPR?

• Information is a special commodity (“public good”) which is • non-rivalrous and• non-excludable

• These qualities make it risky for companies to invest in the production of information (because of “free riders”)

• IPRs incentivize companies by creating property rights in information. This leads to innovation

• Trade marks also benefit society by furthering undistorted competition and reducing consumers’ search costs



Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee - An Industrial Property Rights Strategy for Europe (2008)

A clear regime for intellectual property rights is an essential condition for the single market and in making the "fifth freedom", the free movement of knowledge, a reality.



Protecting IPR in the EU



Territoriality and sovereignty

• Sovereignty is the exclusive right to exercise, within a specific territory, the functions of a nation-state and to be answerable to no higher authority

• By joining the EU the Members have chosen to limit (“bundle”) their sovereignty (“supranationality”)

• But IPR still follow national frontiers and the principle of territoriality still applies:

• IPR are issued and exercised according to national law• Respect for national rights• May potentially prevent intra EU imports and exports



Can IPR form barriers to trade?

• Arts. 34 and 36: Quantitative restrictions on trade• Dassonville: “Directly or indirectly, potentially or actually …”• Casis de Dijon: Legitimate restrictions

• “the protection of industrial and commercial property”

• Harmonization• “Negative harmonization”: Identifying cases where IPR form

barriers to trade and eliminating national legislation• Positive harmonization”: Streamlining legitimate barriers to

trade by “reregulation”



IPR Directives and Regulations

• Trademarks• Regulation 40/94 on the Community trade mark (”CTM”)• Directive 2008/95/EF to approximate the laws of the

Member States relating to trade marks (first Directive in 1989)

• Designs• Regulation 6/2002 on Community designs (”CD”)• Directive 98/71/EC on the legal protection of designs

• Patents:• (European Patent Convention (EPC))• Directive on the legal protection of biotechnological

inventions • (Proposal for a Regulation)



Trade marks: Basic features of the EU Trade mark System (”CTM”)

• Directive AND Regulation • National trade mark systems exist in ALL the Union countries

• CTM has ”Unitary Character”• Valid in the European Union as a whole. Impossible to limit

protection to some Member States

• CTM’s are enforced by national ”CTM-courts”• Protection is based on the TM-Regulation



What signs may constitute a CTM?

• TMR Article 4:”A trade mark may consist of any signs capable of being

represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.”

• Article 7 1. The following shall not be registered:…(e) signs which consist exclusively of:(i) the shape which results from the nature of the goods

themselves; or(ii) the shape of goods which is necessary to obtain a technical

result; or(iii) the shape which gives substantial value to the goods;



”Capable of distinguishing”

• The distinctive character of a trade mark means that the mark in question makes it possible to identify the product for which the mark is being used as originating from a particular undertaking, and thus to distinguish that product from those of other undertakings.

• That distinctive character must be assessed, first, by reference to the products or services in respect of which registration has been applied for and, second, by reference to the perception of the relevant public.

• In order to assess whether or not a trade mark has any distinctive character, the overall impression given by it must be considered.

• The competent authority may not carry out an examination in the abstract but must of necessity undertake its examination by reference to the actual situation.



What are (un)conventional trademarks?

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Obtaining CTM with OHIM

• Community Trade Marks (CTM)1. Registration with OHIM (TMR Art. 6)2. Unitary character

1. Covers ALL 27 Member Stats (as a principle CTMs can only be registered if the mark could have been registered in any Member State as a national TM).

3. Basic fee EUR 900 (e-filing)



OHIM

• OHIM is the official trade marks and designs registration office of the European Union

• An independent, self-financing, non-profit-making European agency

• Based in Alicante in Spain• Employs around 660 people and has an annual income in the

region of €200m• In 2010 it received approx. 100.000 CTM applications



The registration procedure before OHIM (the “Alicante Model”)



Grounds for refusals of an application

1. Absolute grounds for refusal (TMR Article 7)1. Including signs which are devoid of any distinctive character and

purely functional signs etc. (Art. 7(e))• Leads to automatic refusal by OHIM (article 38)

2. Relative grounds for refusal (TMR Article 8)1. Including earlier CTM or national marks which are

identical/confusingly similar to the mark for which protection is applied for

• Dealt with after grant by opposition by the holder of the earlier mark



Trade mark exclusivity (CTR Article 9)

Article 9Rights conferred by a Community trade mark1. A Community trade mark shall confer on the proprietor

exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

…(b) any sign where, because of its identity with, or similarity to,

the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;

…



Art. 9/ctd.

2. The following, inter alia, may be prohibited under paragraph 1:

(a) affixing the sign to the goods or to the packaging thereof;(b) offering the goods, putting them on the market or

stocking them for these purposes under that sign, or offering or supplying services thereunder;

(c) importing or exporting the goods under that sign;(d) using the sign on business papers and in advertising.



Designs: Basic features of the EU Design System (”CD”)

• Directive AND Regulation

• ”Unitary character”• Valid in the European Union as a whole. Impossible to limit

protection to some Member States.

• ”The design approach”• Registered CD’s AND unregistered CD’s • Neutral design definition: ”Functional designs” (”the appearance

of a product …”)• Exclusions and limitations



”Design” and ”product”

Article 3:(a) "design" means the appearance of the whole or a part of a

product resulting from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation;

(b) "product" means any industrial or handicraft item, including inter alia parts intended to be assembled into a complex product, packaging, get-up, graphic symbols and typographic typefaces, but excluding computer programs;

(c) "complex product" means a product which is composed of multiple components which can be replaced permitting disassembly and re-assembly of the product.



”Designs”



Requirements for Design Protection

DR Article 4: A design shall be protected by a community design to the extent that it is new and has individual character.

Commencement and termArticle 11: Unregistered Community design:

Three years as from the date on which the design was first made available to the public within the Community.

Article 12: Registered Community designUpon registration by OHIM, a design shall be protected ... up to

a total term of 25 years from the date of filing.



Design Rights Granted

Article 19

1. A registered Community design shall confer on its holder the exclusive right to use it and to prevent any third party not having his consent from using it.

2. An unregistered Community design shall, however, confer on its holder the right to prevent the acts referred to in paragraph 1 only if the contested use results from copying the protected design.



Patenting in EU(rope)

Basically two ways of acquiring patent rights in the EU:1. National patents

1. Not harmonized by positive EU harmonization (except for the directive on Biotec.-inventions) but by the EPC (on central issues e.g. regarding the patentability criteria and the invalidity reasons)

2. European (EPC) patents 1. The European Patent Convention (EPC)

1. Central issue (by the EPO) and national effect in the countries selected (“designated”) by the applicant.

3. For matters of completeness: An international application via the Patent Cooperation Treaty designating either the EPC or individual EPC countries

• The result in all situations is a (number of) national patent(s), i.e. patents which have to be enforced in the individual countries and which may be revoked for individual countries.



The EPC

• The European Patent Convention (EPC) signed in Munich in 1973

• A revised version of the EPC entered into force on 13 December 2007 (“EPC 2000”). The provisions of the revised Convention apply unless the transitional provisions provide for the applicability of the EPC 1973



EPC Member States (38)



2. Basic Features of the EPC The European Patent Organization (and EPO)

• The European Patent Organisation is an intergovernmental organisation that was set up on 7 October 1977 on the basis of the European Patent Convention (EPC) signed in Munich in 1973.

• It has two bodies: • a) the European Patent Office (EPO), located in Munich with a

branch in The Hague and sub-offices in Berlin and Vienna, and• b) the Administrative Council

• Applications:



Applying for a European Patent

• The European grant procedure takes about three to five years from the date the application is filed

• There are two main stages: • Formalities examination and search report preparation• Substantive examination

• Once the patent has been granted, there may be a further procedure:

• Opposition proceedings



EPC and the EU

• The EPC is NOT a part of the EU legal order• The EPC is not “piece of EU-legislation” (but a Treaty)• The EPO is not an “EU-institution”

• As a consequence:• No competence of the EU-institutions relating to EPC or

European patents • Notably not the EU Courts (ECJ and CFI)

• No political control via the EU-institutions:• Com. Working Document, April 2009: The activities of the

Community include the establishment of an internal market … A patent to which uniform protection is given and which produces uniform effects throughout the Community should feature amongst the legal instruments which undertakings have at their disposal.



European patents and national patents

• Article 2 European patent (1) Patents granted under this Convention shall be called

European patents.(2) The European patent shall, in each of the Contracting States

for which it is granted, have the effect of and be subject to the same conditions as a national patent granted by that State, unless this Convention provides otherwise.

• Article 3 Territorial effect The grant of a European patent may be requested for one or

more of the Contracting States.



EPC and the national patent systems

• The EPC only centralizes the issuing of patents.• Enforcement and validity are left to national courts.• As a consequence (from www.epo.org):

• Legal action is always cost intensive. • First instance litigation in three countries can cost over

€700,000. • No unified legal practice and patent laws. • Cases are processed at different speeds. • Damages and fees can differ significantly. • Competence of judges can be problematic when it comes to

patent rights.



Current Patent Reforms

• Towards a “Unified and Integrated European Patent Litigation System”?

• Centralized court system (national/regional 1. Instances and central Court of Appeal) to deal with both infringement and validity of European patents and Community patents.

• Towards a “Community Patent”?• 1975 Luxembourg Convention on the Community patent (failed)• Proposal for a Council Regulation on the Community Patent

(2000/2009)• Parallel to national and European patents

• Reducing Costs• The London Agreement (May 2008)• The EPC contracting states undertake to waive, entirely or

largely, the requirement for translations of European patents.



Overall conclusions

• Companies wanting to do business in the EU need to take account of both national and EU rules

• CTM and CD offer easy ways of having pan EU protection• The patent system lacks behind• The lack of a central IPR court is a major problem

eu commercial law 2011 iii. a. protecting ipr (patents, trademarks and designs) in the eu

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