The European Community Trademark and BREXIT

THE EUROPEAN COMMUNITY TRADEMARK

 

The European Community Trademark is a system whereby a trademark owner may file one trademark application with the Office for Harmonization in the Internal Market (OHIM), in one of the designated language, which, once registered, gives the trademark owner rights in all countries of the European Union. Under European Council Regulation (EC) No. 40/94, a single application submitted to a central office will result in a registration valid in all the Member States of the European Union.

 

OHIM, located in Alicante, Spain, first began accepting Community Trademark applications on January 1, 1996.

 

The Community Trademark does not abolish national trademark protection but allows registrations which coexist with national trademarks.   The Community Trademark is often a cost effective and simplified means of obtaining protection in European countries rather than seeking registrations in various European countries individually. An applicant files only one application and pays the costs of prosecuting only one application, rather than prosecuting applications for each separate country.

 

The Community Trademark is available to European companies and non-European companies alike.   With some limited restrictions, nearly everyone is eligible to file for a Community Trademark.  Only non-European, non-Paris Convention and non-World Trade Organization (WTO) member states that do not accord reciprocal rights to foreign applicants are excluded.

 

The Official languages under which a Community Trademark may be filed are English, French, German, Italian, and Spanish. The language requirement may pose a problem for applicants whose native language is not one of the five official Community Trademark Office languages.

 

Businesses who already own a trademark registration in one of the European Union countries may claim a priority registration date in that mark provided that the protection sought is no broader than that provided by the earlier national registrations.  Given this priority, once the Community Trademark application is granted, the national registration can be allowed to lapse, as the earlier national priority will be embodied in the Community Trademark registration.  Likewise, a Community Trademark application, if objected to by various EU countries, can be converted into a national registration in an individual EU country, while retaining the priority date of the CTM application.

 

Once important aspect of having both national and CTM registrations existing simultaneously is that an applicant should conduct a Trademark Search both of the CTM register as well as the registers of each individual EU countries.  Prior registrations, whether identical or confusingly similar to the applicants mark, both in individual countries and on the CTM register, can serve to block registration of a company’s trademark.

 

Once a Community Trademark application is filed, a search report is generated listing various similar or identical registered and pending marks, giving the applicant the opportunity to withdraw the application. Other European member states conduct their own searches and notify the Office of any conflicting registrations found.

 

USE OF THE MARK

 

While trademark rights in general are perpetual, in the United States and most other countries, to keep a trademark in effect the mark must be used in commerce.  Failure to use the mark for a certain period of time will lead to its abandonment.  Under the Community Trademark system, use in only one of the member states constitutes use in the entire Community sufficient to keep the mark in effect.

 

Five years’ nonuse of a mark renders a registration vulnerable to cancellation, although as indicated above use in one EU member state is deemed use in all of them.

 

OPPOSITIONS

 

 

Oppositions may be brought on the basis of other Community Trademarks, national registrations or applications, and other prior rights.  A benefit to opposers is that a single opposition proceeding can affect the entire Community Trademark filing, rather than having to oppose in each individual country.

 

Applications may be opposed within three months of publication for opposition for opposition purposes.  An opposer can file in any of the five languages of the Office, but must provide translation at his own expense if he does not choose one of the two languages of the application in question. Applications that are opposed successfully, or are otherwise refused, may be converted into national applications retaining the original priority date.

 

Where for a period of five years, the proprietor of an earlier national registration has acquiesced in the use of a later CTM in the member state in which the earlier trademark is protected, there shall be no basis for invalidating or opposing the CTM. This does not apply to use of the CTM in the other member states.

 

RENEWAL

 

A Community Trademark Registration is renewable every ten years.   The renewal in all countries covered by the Community Trademark may be accomplished through a single filing.  The costs and administrative benefits of a single renewal filing with a single fee, versus many filings and fees, are great. .

 

LICENSES AND ASSIGNMENTS

 

A License to use mark is an effective way for a trademark owner to utilize its rights in the mark.  The license gives a third party the right to use the mark under the terms and conditions laid out by the licensor.  A license can be either exclusive or non-exclusive, and can lay out the territories in which it is effective.  Payment of a royalty is usual in connection with obtaining a license.  Recordal of a license at the Community Trademark Office is required to be effective against third parties. The benefit of this is that, like with renewal, only one recordal in Alicante is necessary. Assignments must also be recorded to be effective against third parties.

 

INFRINGEMENT

 

Actions for infringement, and appeals therefrom, are brought in the individual member states in courts specially designated to hear Community Trademark matters, which will apply EU law, rather than national law.

 

CONVERSION INTO NATIONAL APPLICATIONS

 

Under the Regulation and Rules, a party whose Community Trademark application is rejected, either based on prior rights or for other reasons, can convert the application into separate national applications that retain the Community Trademark application priority date.

 

BREXIT

 

In June of 2016 the people of the United Kingdom voted to remove themselves from the European Union.  Under Council Regulation (EC) No 40/94 of December 20 1993 and Council Regulation (EC) No 207/2009 of February 26, 2009, there is nothing stated about what would happen to European Community Trademarks if a member of the community were to leave.  However, given that the United Kingdom has left the Union, it is likely that European Community Trademarks will no longer be recognized in the United Kingdom.  Trademark owners could thus lose all of their rights.  More than likely however, after negotiation with the European Union, the United Kingdom will reach some resolution for converting European Community Trademarks into United Kingdom national trademarks.  It remains to be seen at this time what form of agreements will be reached to prevent Community Trademark owners from losing their rights in the United Kingdom, while at the same time keeping some continuity in the harmonization of how the use and registration of marks are treated under the various laws.

 

CONCLUSION

 

The European Community Trademark is a streamlined and cost-effective mechanism for obtaining trademark rights in the European Community.  Through one filing and one filing fee an applicant can obtain a registration covering all of the countries of the European Union.  This can be particularly beneficial for U.S. companies doing business in Europe.  Further, the requirement that use of a mark must only be made in one country of the EU, allows US companies to be able to focus on only those European countries of interest to them under their mark, while allowing room for them to expand their products or services to other EU countries covered by their trademark.

 

 

 

The Miami Law Offices of Michael D. Stewart can assist you in these and a variety of other issues.  You may contact us at Michael D. Stewart, Esq. * Law Offices of Michael D. Stewart * 200 SE 1st St., Suite 701 * Miami, Florida 33131 *

 

http://www.themiamilaw.com

 

1-305-590-8909 Telephone * 1-866-438-6574 Toll-free

 

© Copyright 2016 Michael D. Stewart

 

 

 

 

 

New Federal Trade Secret Law

The Federal Defend Trade Secrets Act was signed into law on May 11, 2016.  Prior to this act, victims of trade secret theft had to rely on state court trade secret remedies, which are generally mirrored on the Uniform Trade Secret Act.  Under the new trade secret law, to be a trade secret, the information must get independent value “from not being generally known to, and not being readily ascertainable through proper means by another person who can obtain economic value from the disclosure or use of the information.”  To constitute a trade secret, reasonable measures must be taken to protect the information.  Examples of trade secrets are customer lists, non-public financial information, cost and pricing information, plans designs and computer software.

Under the new law, misappropriation of a trade secret is the acquisition, disclosure or use of a trade secret of another without consent, by a person who knows or has reason to know that the trade secret was acquired by improper means or mistake or under circumstances giving rise to a duty to maintain the secrecy of the trade secret.

One of the most important provisions of the new federal trade secret law, other than that it opens the federal courts to this type of claim, is that it allows ex parte seizures of property on application to the court in “extraordinary circumstances” where the seizure is necessary to prevent the dissemination of the trade secret.  There are, however, provisions for wrongful or excessive seizure of property.

The law also includes protections for whistleblowers in the confidential disclosure of trade secrets.  Under the law, employers are required to include information concerning this whistleblower immunity in their contracts.  Failure to do so subjects the employer to a waiver of exemplary damages of up to two times the amount of compensatory damages and an award of attorney fees in any action against an employee who was not provided the required information.

On of the biggest reasons for the new law is the recognition that there is significant economic espionage coming from non-US companies and governments.  Hackers, rogue inside employees and nation states represent a significant threat to United States prosperity and security.

Vita Coco Sued over Born in Brazil

All Market Inc., owners of Vita Coco coconut water are being sued in a class action lawsuit in the Southern District of Florida.  The lawsuit alleges that the term “Born in Brazil” on the packaging of the product is misleading to consumers as the company no longer solely uses Brazilian coconuts but now produces from Sri Lanka, the Philippines and other countries.

The company claims that the term is not misleading and is merely refers to the company’s origin.  The company claims that no reasonable consumer would believe that the term indicates that the product is only made in Brazil.  This is particularly so as the company’s website describes the origins of the product, where the product is made is disclosed in press releases and events, and each container of the product indicates the country of origin of the product.

This lawsuit follows in the steps of lawsuits filed against Anheuser-Busch InBev (AB InBev) claiming that it had “committed unfair and deceptive practices and has been unjustly enriched by marketing and selling beer in a way that misleads consumers into believing that Beck’s Beer is German, still imported from Germany, claiming that Beck’s Beer ‘originated in Germany’ with ‘German quality’ while ‘brewed under the German Purity Law of 1516.”  The lawsuit claims that consumers paid a premium price over what they would have paid for a different beer given the labeling of the product.

The actual Beck’s beer is now brewed in St. Louis, Missouri, and the fine print on the labels state that it is made in America.  Nonetheless, a settlement was reached in which consumers of Beck’s beer were entitled to refunds for beer purchased under this ‘deception’.  Those who did not keep receipts have a refund capped at $12.00.   The company also agreed to change its labeling to more prominently display that the product is brewed or made in the United States.  While Anheuser-Busch InBev settled the suit, they denied any wrongdoing.

AB InBev also settled a claim involving Kirin beer where it was claimed that consumers were led to believe that the beer was from Japan.  Similar suits have been filed against other companies.  Coors Brewing Company was sued in Miami-Dade County on the basis that Coors claims that the beer is brewed in the Rocky Mountains, even though it is also brewed elsewhere.  Further, the company has slogans promoting “Proudly brewed in the Rocky Mountain tradition”, “Our Mountain is brewing the World’s most refreshing beer”, and “Born in the Rockies”.  Other lawsuits claiming certain beers are “craft” beers have been less successful.

A lawsuit filed against Blue Moon Brewing, a division of MillerCoors, claimed that consumers were misled by the claim that the beer was “Artfully Crafted”, while hiding the fact that it is made by one of the largest brewers in the world.  MillerCoors successfully argued that there is no legal definition for “craft beer”.  The court in that case also found that there was no reason for MillerCoors to list its company name on the bottles or cans as the fictitious company set up by MillerCoors to sell Blue Moon, Blue Moon Brewing Co., is sufficient to allow consumers to ascertain that MillerCoors is the actual maker of the beer.

ADT Loses Trademark Infringement Appeal

ADT, the security company from Florida, appealed against a jury ruling denying it damages for trademark infringement against another security company, APT.  ADT had alleged that APT was taking its clients by claiming it was time to renew their security systems.  The company argued under the initial confusion doctrine that even though customers knew before they purchased the APT security service that they were not purchasing from ADT, the name and actions still constituted trademark infringement.

The United States Court of Appeals for the Eleventh Circuit ruled that it does not accept the initial interest confusion doctrine.  The court stated “The Eleventh Circuit has not yet decided whether a trademark infringement claim based on ‘initial confusion’ is actionable under the Lanham Act.”

ADT also argued that acronyms should be entitled to more significant protections as they are more likely to be confused, an argument that was also rejected by the Court of Appeals.

Initial interest confusion was most commonly associated with internet domain names, metatags and other internet related activities where it was being argued that companies were attempting to steal their competitor’s clients by leading them to their own websites rather than the competitors using domain names, or metatags similar or the same as their competitors.  Under initial interest confusion, trademark infringement was found  when a consumer was initially interested, attracted or distracted by the, e.g., metatag.  In recent years the initial interest confusion doctrine has seemed to be going out of style and more and more companies need to distinguish themselves on sites such as AMAZON.COM.  Indeed, AMAZON has won lawsuit filed against it for brining up results from companies other than the company trademark searched for.

It seems that in this case the court was more interested in actual confusion, which would have occurred at the point of sale.  According to APT, it clearly laid out to customers that it was not associated with ADT.

While ADT might have had a better argument for unfair competition, the ruling seems correct as the purpose of trademark law is to prevent consumer confusion in the marketplace.  The ADT jury found that consumers were not confused and that APT explained to them that it was not associated with ADT.

Whether the Eleventh Circuit will eventually accept this doctrine remains to be seen.  Circumstances where it should apply, however, would be when a competitor specifically uses a confusingly similar or the same mark to divert customers from its competitors websites to its own.  This is similar to what is covered under the World Intellectual Property Organization (WIPO) Uniform Domain Name Dispute Resolution Policy which covers situation in which competitors in “bad faith” register domain names of their competitors to unfairly compete with them.

 

Hulk Hogan Right to Privacy – Gawker

Hulk Hogan, real name Terry Bollea, the famed professional wrestler, has won a verdict against the media website Gawker for $115 million in a Florida Court.  The case was based on Mr. Bollea’s right to privacy.  Gawker had published a sex tape video of Mr. Bollea, which it claimed had constitutional protection.  Mr. Bollea was awarded $55 Million in economic damages and $60 Million for emotional distress.  There is also the potential for punitive damages.  Mr. Bollea was originally only asking for $100 million.

Gawker is the owner of other websites, including Gizmodo, Lifehacker, Deadspin, Kotaku, Jezebel, and JalopnikThe lawyers for Gawker argued that the sex tape was newsworthy and protected under the First Amendment, while the lawyers for Mr. Bollea argued that the sex tape was an invasion of privacy and had no news value.  The lawyers for Gawker claimed that since Bollea spoke publicly about his sex life, the tape was fair game.  According to Michael Sullivan, a lawyer for Gawker, “He has chosen to seek the spotlight,” and “He has consistently chosen to put his private life out there.”  He added that looking into the details of celebrity is what journalist do, regardless of whether the details are less than savory.  Editors for Gawkers claimed that it was relevant commentary concerning celebrity sex tapes.

It is likely that Gawker will appeal the decision. Gawker’s founder, Nick Denton, stated “We feel very positive about the appeal that we have already begun preparing, as we expect to win this case ultimately.”  Gawker Media stated “We’re disappointed the jury was unable to see key evidence and hear testimony from the most important witness… Hulk Hogan’s best friend Bubba the Love Sponge—who made the tape and offered up his wife in the first place—originally told his radio listeners that Hulk Hogan knew he was being taped. The jury was only able to hear a questionable version of events. Bubba should have been required to appear in court and explain what really happened.”  There is a question of whether Gawker can financially survive the award, even if they appeal.  If there is an appeal there will be an initial bond of at least $50 million, though the lawyers can argue to have this lowered.

According to Samantha Barbas, a law professor at the University at Buffalo who focuses on these issues,  “For a jury to say that a celebrity has a right to privacy that outweighs the public’s ‘right to know,’ and that a celebrity sex tape is not newsworthy, represents a real shift in American free press law.”