IGI IP Update

ACID’s first trade association partnership communication ip update (1) dedicated to IGI members goes out this month.  IGI has joined forces with ACID to work closely to raise awareness about intellectual property issues and to develop a keen insight into the problems which IGI members face through IP theft. Combined force means a stronger voice against design theft. We will also concentrate on IP as a positive force for mergers, acquisitions and collaborative design. ACID has negotiated a special membership package for IGI members with a valuable 20% discount off membership fees and initial joining fees.

Some Key benefits of ACID membership include:
Access to IP legal hotline for initial free advice
Free use of Design Data Bank
Unlimited use of the Membership of ACID logo to communicate your anti copying strategy
IP health checks and audits, free mediation support at certain exhibitions….

Our objective in these regular ip update communications will be to highlight intellectual property issues which we feel will be of value to IGI, interact through joint communication and establish ACID as the first port of call to raise awareness about intellectual property issues within the wall coverings sector.

RELYING ON UNREGISTERED DESIGN RIGHTS

The ACID Design Data Bank is a free register for all ACID members to deposit their new designs if relying on unregistered Design right (either UK or EU). Registering does not add to your rights but provides third party evidential proof of the date it is received by the ACID office therefore providing valuable independent evidence or “prior art”. Under UK unregistered design originators are automatically protected for 10 years. However, in the UK after 5 years a third party may approach you to manufacture the product under a reasonable licence arrangement. For those in Europe, under unregistered Community design you are automatically protected for a period of 3 years only from the date the product is first shown on the market. During the first year you have 12 months in which you can register a new design with the European Community www.oami.europa.eu ACID always recommends official registration if at all possible because the design owner will have monopoly rights and protection for 25 years. There is a new single application through The World Intellectual Property Office www.wipo.int which not only offers design protection in 27 EU member states but in a further 20 countries who have all signed up to The Hague Agreement.

IN DECEMBER IT IS HOPED THAT THE USA AND JAPAN WILL BECOME SIGNATORIES BROADENING THE SCOPE OF PROTECTION

BE PREPARED – IT’S NOT TOO LATE!

When you stroll around the fair after you have set up your booth, you may see your main competitor displaying your design; or you might see them in a meeting with your favourite distributor on the first day of the fair pulling a catalogue out of his pocket in which all your designs are shown – half price and under a brand that isn’t yours. What can you do? First of all ensure that you have tools to act swiftly and effectively in such situations. Hosea Haag from ACID Accredited law firm Hammonds in Munich gives some advice and guidelines about what you can do before the Fair

WHAT IS THE MOST EFFECTIVE LEGAL REMEDY AT HEIMTEXTIL? A PRELIMINARY INJUNCTION!

If you find someone infringing your intellectual property rights at any trade fair in Germany, what you want to achieve is a Preliminary Injunction immediately to stop them marketing and selling infringing products.

IGI members who exhibit at Heimtextil will discover that Germany is a very favourable IP legal jurisdiction in that a Preliminary Injunction may be issued by the courts only hours after it is applied for – without a warning and without an oral hearing. It usually obliges the infringer of your intellectual property rights to stop offering, distributing and displaying the infringing product immediately after it is served on the infringer by a bailiff on the fair. This includes the obligation to stop displaying catalogues, price lists, offering on the website and so forth. Any infringing products may be taken by the bailiff at the fair immediately. In some circumstances even non-infringing products maybe confiscated to secure the costs of the Preliminary Injunction proceedings.

Other remedies are not quite as effective for the fair. Any proceedings on the merits or any preparation would take more time than you have at the trade fair. They cannot stop the offering at the fair and cannot avoid that the infringer approaches your customers with copies of your products and take respective orders. Due to the territoriality of intellectual property rights, you may win proceedings on the merits in Germany but may not receive a title to interdict delivery according to an order placed at the fair if neither the infringer nor his customer is domiciled in Germany (there are exceptions to this general rule for the Community design and trade mark within the European Union). Therefore, proceedings on the merits may be a good measure to take if you want to avoid infringement without the time pressure of the fair. For the fair itself they don’t help.

You could also – perhaps because you may have had good relationships to the infringer of your intellectual property rights in the past – think about sending a warning letter first. But this also is only a real threat for the infringer if you can show that you are prepared to go to the courts, again with a Preliminary Injunction.

If the infringement or the legal situation is not clear cut, arbitration should also be considered.

Last but not least, Preliminary Injunctions are relatively cost effective in Germany. Depending largely on the complexity of the case, the average costs involved in obtaining the Injunction are probably less than 5.000 EURO. If you have done your homework – see below – it can be much less. Court fees and lawyer’s fees have to be born by the losing party according to statutory provisions in Germany. If the case is not too complex, the amounts the infringer has to reimburse to the right holder can fully compensate for the costs of a lawyer.

DO YOU HAVE THE CORRECT REGISTERED RIGHTS TO BE ABLE TO APPLY FOR A PRELIMINARY INJUNCTION?

A Preliminary Injunction can be based on any infringement of any intellectual property right. Of particular interest for the wallpaper industry may be: design rights, trade mark rights and copyright. An additional protection may derive from unfair competition law.

The easiest way to achieve a Preliminary Injunction is to assert infringement of a registered right. Of the above mentioned these are registered design rights and trade mark rights in Germany. The second, less favourable option is to show infringement of non-registered rights, for example of the so called non-registered Community design or copyright, because proving in particular the ownership of a certain right and proving the exact scope is more difficult.

WHAT STEPS CAN YOU TAKE BEFORE HEIMTEXTIL?

To have a Preliminary Injunction granted, you need a clear-cut case of infringement. If you only start acting at the fair, it may be hard to establish such a case before the fair is over. You would give up opportunities to substantially enhance your position.

BE PROACTIVE – REGISTER YOUR RIGHTS

Registration of IP rights effectively means that you have a piece of paper, a certificate which says you “own” the rights. . Of the above rights, designs and trade marks may be registered with effect for Germany. Both trade marks and design rights can be registered nationally in Germany or you can obtain a Community Trade Mark valid in 27 Member States or a registered Community Design. Trade marks and designs may also be registered internationally with the WIPO and designate the territory of Germany. The registration process in all cases requires fulfilment of only few formalities and maybe handled in a relatively short time. All necessary information can be found on the respective web pages of the German Patent- and Trademark Office (http://dpma.de/english/index.html), the Office for Harmonization in the Internal Market (http://oami.europa.eu) and of the World Intellectual Property Organisation (http://www.wipo.int). In order to get the scope of protection you actually want within a reasonable time I would nevertheless advise to consult a lawyer for registration of your IP.

KEEP RECORDS:

In all cases, keep all records – it is mandatory if non-registered rights shall be the basis for an attack. Providing a design audit trail behind new designs is key. For those relying on non-registered rights, ACID members can make use of the free Design Data Bank which can provide valuable independent evidence of the date they are received by the ACID office.

If you want to base a Preliminary Injunction on copyright in Germany, you have to show that you are the owner of the copyright. The owner of the copyright according to German law is initially only the author. Therefore you have to get all your designers to give written declarations that your company is entitled to invoke all intellectual property rights included in designs that have been developed by your company. If you cannot show for each individual design who the author is and by which declaration the copyright in the design was passed on to you by this individual author, it is not possible to get a Preliminary Injunction based on copyright.

If you want to base your Preliminary Injunction on a non-registered Community design, you will have to prove that you were the first to introduce this design into the market but no more than three years before the trade fair. Also, whereas the registered Community design gives you an exclusive right, as an owner of a non-registered Community design you must be prepared to produce evidence that the infringer knowingly copied your design and did not develop it himself.

In order to prove the validity of your rights, which may be necessary for design rights as well as copyright, you will have to show how your rights are distinctive from what designs have been on the market before. Therefore, it is advisable to keep records on what other designs have been on the market by yourself and by competitors before you developed your design. As a consequence, all design research made by your designers should be kept.

MONITOR THE MARKET:

When the trade fair comes closer, watch the market carefully. The sooner you know about a possible infringement, the more effective an attack on infringers can be prepared. Check your competitors’ websites for advertisements of their products. Check big distributors’ websites for what they offer, possibly order products that you suspect maybe infringing your rights and maybe displayed on the fair through a dummy like your lawyer, check the exhibitors sites that want to exhibit on the trade fair and check the trade fair website. If you come across any possible infringement, talk to your specialist IP lawyers. However, as most courts in Germany do not grant Preliminary Injunctions if the infringement was known for more than one month before the Injunction was applied for, I would advise you to check for possible infringements at the earliest four weeks before the fair.

If you find an infringer, try to get all details of the company, its legal form and its legal representatives. To have this information at hand when necessary saves time and money – as is true for all the suggested steps.

Prevention is better than the cure! If you have not done any of the above so far, doing it now will help you substantially if you should suffer from an infringement of your rights. Better still would be that a fair would not have counterfeiting at all!

Hosea Haag can be contacted on 0049-(0)89-207028343 or during the exhibition by mobile 0049-(0)179-5273436 or email hosea.haag@hammonds.com

Below, Hosea Haag from Hammonds, Munich.

ACID members Halo are renowned for designing and selling high quality furniture products including their unique leather and stainless steel ‘Mars’ and ‘San Remo’ Both products are registered Community designs. Halo became aware of two identical products being advertised for sale in a competitor’s brochure (also major names within the industry). According to Patricia Jones of ACID Accredited law firm Hammonds, “Both items were clear infringements of Halo’s Community registered designs for the ‘Mars’ and   ‘San Remo’ chairs”.

Said Charlie Oulton, MD of Halo, “On this occasion we decided not to “name and shame”, as the company complied quickly with our requirements when the infringement was brought to their attention. However, Halo will be tightening up its enforcement policy and watching the market closely, and will not hesitate to shout very loudly when infringements are detected.”

Halo’s Chairs,  San Remo (top left) and Mars (above right)

• Withdraw the infringing products from sale;
• Withdraw all marketing material relating to the infringing products;
• Destroy all stocks of the infringing products; and
• Cease and desist from importing, marketing, selling or in any way otherwise dealing in or with the infringing products.

Almost immediately following the letter before action, company X agreed to all the undertakings except for the withdrawal of the marketing material. However, a proviso was agreed that the products would be described in their marketing material as “discontinued and no longer available”.

Added Charlie Oulton following the successful settlement, “I am delighted that we registered these designs and that we took such decisive action to protect our rights in the products in which we had invested so heavily to design.”

Dids Macdonald, ACID’s CEO said, “The combination of having belt and braces around a design in the form of a registered Community design shows how compelling an effective letter before action can be. ACID has come up against this company before – let’s hope that they appreciate Halo’s very positive warning shot”.

Nationally renowned ACID members Evans fireplaces, trading as Firecraft, manufacture and sell beautiful hand carved stone fireplaces and associated accessories. As an established name within their market place, Firecraft are naturally vulnerable to copying and passing off.

In 2006, Evans became aware that Focal Point Fires PLC, a heating appliance manufacturer, had registered a UK trade mark for the word FIRECRAFT and were selling a range of gas fires under the Firecraft mark supported by a major ad campaign.  Frustratingly for Evans this triggered numerous enquires from members of the public asking for one of “their” fires. In addition, Evans stockists began calling to ask about the supposed new range of fires they were now selling. 

Each time such a request was made, Evans had to explain that this was not their brand but Focal Point’s. The public were clearly confused.

Unhappy that their brand was being diluted, Evans contacted ACID Accredited Law Firm McDaniel & Co who wrote to Focal Point asking them to surrender their mark on the basis that Firecraft was distinctive of Evans and that Focal Point were clearly ‘passing off’. Focal Point refused to back down, so Evans applied to revoke Focal Point’s mark through the UK Intellectual Property Office (UKIPO) who last month found in Evans favour and declared Focal Point’s trade mark invalid. Focal Point has until the 16 December 2008 to decide whether to appeal the decision which would be made to either the Appointed Person or to the High Court. 

Comments ACID accredited lawyer, Andrew Lee of McDaniel & Co, ‘The UKIPO was required to consider what would have been a fair and normal use of the mark and not rely solely on what actually happened at the filing date. The evidence which Focal Point gave showed that they did not promote the mark in the same manner prior to the national advertising campaign in 2006.  However, the fact that the Focal Point mark was identical to the Evans mark and used on goods sold side by side to the type Evans produced, meant that it was inevitable that people who associated Firecraft with Evans would assume that a range of Fires under the same mark came from or was authorised by Evans” 

Bill Evans, Owner of Evans Fireplace Centre and Firecraft says: “It’s a relief to get the whole thing over with and get our name back. We have been building Firecraft since 1991 with a solid reputation for quality and service. It is not very nice to know someone can come along and ride off the goodwill we have worked hard to develop, for their own benefit, without our permission or knowledge.  I would like to thank everyone that gave us their support, including those that provided witness statements.”

Adds Dids Macdonald, ACID’s CEO, “Although Focal Point had registered their mark in 2000 and the instances of confusion did not come to light until 2006 onwards, Firecraft’s case proves it is better late than never to take action. It also proves the point that “first to file” is not necessarily a sound defence if there are grounds for invalidation, as was proved in this case.” 
 

Is a bad rip off a defence in a trade mark infringement? Evidently not.

According to a recent decision of the Court of Appeal in the case of R v Boulter (Gary) –  a victory for brand owners over counterfeiters! Police had seized from Boulter a stock of counterfeit and pirated goods including CDs and DVDs (no less than 1640 feature film DVD’s, 457 pornographic DVD’s and 232 compact discs), all of which featured identical copies of the EMI registered trade mark. 

Boulter was convicted under section 92 TMA which makes it a criminal offence to sell goods which bear (including on the packaging) a sign identical to, or likely to be mistaken for, a registered trade mark.  Boulter appealed against his conviction.  His argument was that the quality of his counterfeit goods was so poor that consumers would not actually think that they originated from EMI.  Because consumers were not likely to be confused about the origin of his goods, there was no likelihood of confusion as required by section 10(2) TMA.  In the earlier case of R v Johnson, the House of Lords had decided that to be convicted of an offence under section 92, there must first be trade mark infringement under section 10.  Boulter argued that, as there was no likelihood of confusion about the origin of his goods, there was no trade mark infringement under section 10(2).  Therefore, there could be no offence under section 92.

The decision

The Court of Appeal dismissed his appeal.  They said that it was section 10(1) that was relevant in this case as Boulter had used a sign which was identical to EMI’s registered trade mark on goods which were identical to those for which the mark was registered.  Likelihood of confusion was not a requirement of section 10(1).  There was trade mark infringement under section 10(1) and so Boulter could be convicted under section 92.  The court went on to say that even if section 10(1) had required a likelihood of confusion, Boulter could not rely on poor quality counterfeiting as a means of showing that likelihood of confusion was not a possibility.  There was no foundation for this under trade mark law and it would open the door to people like Mr Boulter selling his wares as genuine fakes. 

The decision in this case is likely to have been motivated by the courts distaste of counterfeiting activities and Boulter’s attempts to mount a spurious argument to avoid culpability.  It marks a victory for brand owners in the ongoing fight against counterfeiters and those attempting to trade on the back of their hard earned goodwill.

Patricia Jones, of ACID Accredited law firm Hammonds said, “Under the Trade Marks Act 1994 (TMA), a trade mark will be infringed where a third party uses in the course of trade, a sign which is either identical to the registered trade mark for identical goods or services (section 10(1)); or identical to the registered trade mark for similar goods or services or similar to the registered trade mark for identical or similar goods or services where there exists a likelihood that consumers will be confused about the origin of the third party’s goods or services.  Consumers must be confused into believing that the third party’s goods or services originate from the trade mark owner (section 10(2)).”

Patricia Jones Phd, Hammonds

Following the recent change of Vat rate from 17.5% to 15% we have had to restructure our accounting procedure.  Any member that has paid their subscription for 2009 prior to December 1^st will still be able to claim back the full Vat amount as usual.

However, those of you that are paying after December 1^st will pay at 15% Vat and our computer system has been adjusted to accommodate this.  If anyone does mistakenly pay at the old rate you will be refunded the difference and issued with a credit note.  This will create a lot of extra administrative work for us so we would appreciate you adjusting your payment prior to sending it to us. To help you make payment, below is a list of the new subscription rates for 2009 at 15% Vat.  The Vat receipt that you receive from us will show your subscription payment at the correct rate.

Direct Debits for New Members who joined between 1^st February 2008 and 30^th November 2008 will still be calculated at 17.5% Vat, as once the first payment has been received a tax point date has been created for the whole of that subscription.  However, the next renewal in 2009 will be calculated at 15% Vat, which may carry over after the Vat rate has increased again, so there will be a benefit there. New members joining throughout the year in 2009 and using the Direct Debit facility will also benefit from this system.

However, existing members who are carrying on their subscription for 2009 by Direct Debit and therefore have a 1^st January 2009 renewal date, will receive new payment schedules at the reduced Vat rate shortly and all payments taken will be at 15% Vat.

We apologise for the complexity of this system and would ask for your cooperation and understanding.  We are sure that many of you too will be finding the sudden change in Vat rate a huge inconvenience.

If you have any queries regarding subscription payments please telephone the membership office on 0845 644 3617 or e-mail info@acid.uk.com

Click here for the new renewal rates for 2009.

therefore – leading product design consultants and members of ACID like to ensure their exciting, innovative and original designs have sufficient intellectual property ‘belt and braces’ to deter copyists.  The multi award winning team of designers and engineers are briefed by many of the worlds most successful consumer brands to create pre-eminent products – design which puts inspiration back into innovation. As a result, many of therefore’s technology driven products require a high level IP protection and where appropriate include patent applications, applications for registered designs and maximum exploitation of the powerful ACID brand. 

therefore’s competitors know the consultancy has a zero tolerance of design theft – the ACID logo is used on therefore’s marketing material and web site and the consultancy logs its original design drawings in the ACID design data bank ensuring 3^rd party  proof of ownership if there is ever a dispute regarding origination.

therefore’s international clients include major brands like Tom Tom , Samsonite, NAIM and Orange but latterly the team has used their vast expertise to launch their own innovative products  including the sugarspoon – the container that thinks it’s a spoon. The sleek, tubular hand held dispenser may be lightly tipped to release the equivalent of a spoonful or sugar or lightly shaked to dispense a sprinkle – a simple, hygienic and sophisticated solution to sweetening hot drinks and food.

Says therefore’s creative director, Patrick Hunt, ” Creating innovative solutions for leading brands is our life’s blood but we are also channelling our creative talents into designing and producing our own cutting edge products – the susgarspoon is an inspired household and catering essential and could represent significant volume business.  With the benefit of ACID membership we are determined to maximise the sugarspoon’s IP potential to enhance the products mass market commercial value.”

Imagine sending your precious original designs unwittingly to a less than scrupulous buying department.  Then imagine doing this with no IP protection.  Handing your sweat equity, your creativity and original work on a plate to a buyer who is seeking the fast track to market by copying does not make commercial sense.  Although 9 times out of 10 retail buyers have integrity, occasionally we hear of ACID members who have fallen foul of the buying process.  It happened to Dids Macdonald, ACID’s CEO, many years ago, who was ripped-off by a major high street retailer – and it is still happening now!

The powerful ACID brand is your brand of deterrence.  All ACID members are encouraged to use the ACID logo on their marketing materials and to take advantage of ACID’s branded deterrent merchandise when they are releasing prototypes to buyers.

When you open up a computer programme you are automatically entering into a license agreement… and it’s just the same when the ACID license parcel tape is used. The tape has been created to work in conjunction with the reusable ACID License Tape Agreement – together they offer a formidable message of deterrence.  The recipient is warned by the wording on the packing tape not to open the parcel without agreeing to be bound by the terms of the license agreement which is attached to the outside of the pack. The act of breaking the seal of the tape and opening the package indicates their acceptance of the terms, which prevents the recipient from making any use of the designs enclosed without the sender’s prior consent.

Says Jane Stephenson, ACID’s Membership Development Manager, “Our tape is a really low cost, hi-impact means of protecting designs when they go out to market.  For extra protection we advise our members to take a photocopy of their completed license agreement and send it to us in case additional proof is required as to who, when and where prototypes or samples were sent. These products are a real benefit to ACID members -normally a license fee similar to the one ACID produces would cost around £250!”

ACID License Parcel Tape: Price per roll £2.75+ vat

ACID License Tape Agreement: £50.00+ vat

NOTE: A glossary of legal terms is available on the ACID website or by emailing help@acid.uk.com. It is strongly recommended that before using any of the above reusable agreements you call the ACID legal hotline for advice.

The French Senate has given the thumbs up to establish a law which will deal effectively with internet users who repeatedly flaunt the law by downloading copyright music, films or video games.  This crack down has been backed by  the “3 strikes and you’re out system” which is a 3 stage process – warning email, warning letter then if they still persist their internet connection will be cut off for a whole year.

Unfortunately, The European Parliament was not persuaded to follow suit and will not support a final “cut off”.  Says Dids Macdonald, “This really does demonstrate the power of the music lobby which has managed to persuade Nicholas Sarkozy to influence the law makers in an extra parliamentary initiative. This will put France in a heads on with the rest of Europe.”

A recent BBC report on an ISP survey of 1500 UK consumers showed that 75% of music pirates could be deterred by warnings from their internet service provider.  The research examined consumer digital habits and found that the abundance of online music services was changing the copying culture. Many of those surveyed did not to want to flaunt the law but just over half confirmed that they downloaded music legally.  Adds Dids, ‘Music industry groups really have got their act together, it’s a shame that others within the creative industries are not so organised’.

According to Russell Hart, CEO of Entertainment Media Research, “It is quite evident that an ISP-led strategy has bite, because illegal downloaders are fairly convinced that ISPs are currently monitoring their activities and are more likely to act against them than the courts”.  

ACID readers may remember reportage of a previous excellent initiative by the fashion industry in France: The French already lead on several IP initiatives - to date we have seen a move within the fashion industry to ban journalists from fashion shows, thus allowing the catwalk creations to have a steal on the look-alikes. Under the French IP Genesis scheme to help companies evaluate their IP worth, the French Government provides free help and expert advice from IP experts which identifies the rights they should be protecting.

Naming a company can be as important as naming a child.  It’s your passport to getting noticed in commercial life, to waving your flag and reflecting the credentials of your organisation.  In the same way there are hundreds of Zoe’s, Zacs’s and Henry’s in the UK, when you choose your new company’s name you could be in direct conflict with an established business who has had the same name registered for many years.  Research and care taken now could save considerable hassle and expense later should an objection be raised.

The UK-IPO has recently appointed a Company Names Adjudicator to make life a little easier. The role will include providing efficient links between the various regulatory bodies and  providing a framework for objections to “opportunistic” company name registrations.

By creating a link to the register of company names and the UK register of trade marks together Business Link   new businesses can carry out an initial fast track research into existing use of a proposed company name. Hopefully this will provide SME’s with the tools to research the choice of a new company name quickly and efficiently avoiding future conflict.

Says ACID’s CEO, Dids Macdonald, ‘ Whilst the Business Link search tool is excellent for the initial weeding out process, if a new company is serious about using a particular name it is always advisable to instruct a trade mark expert to carry out a more detailed search. Just because your chosen name may be available it does not necessarily mean registration will not be without challenge. So, setting budget aside to check and double check the presence of an existing trade mark could save stress later on down the line when sweat equity and investment has been put into building your brand.”

Further research should also include using search engines within a specific industry category or service area because anyone using a similar name may have built up “goodwill” which would influence their rights in name usage. Similarly a quick domain name search is also a good idea ensuring that you can develop the brand with internet usage and this will eliminate certain names which have already been purchased and which may be already in use.

Conversely, what can you do if you discover that someone else is using your name or a similar name and by its use could mislead others i.e. indicating a connection between the two of you? In the first instance ACID members may call the ACID legal hotline 0845 230 5742 and be put through to one of the ACID Accredited law firms who will provide initial free advice. Readers may also find out more about the UK IPO company names adjudicator  http://www.ipo.gov.uk/cna/cna-factsheet.htm

Point of warning – the Tribunal is limited to what the UK-IPO describes as “opportunitnistic” company names registrations. For more information click below.

sections 69(1)(a) and (b) of the Companies Act 2006 .