Wednesday 29 October 2008

Objections to Company names

There has not, until recently, been much anyone could do about companies being incorporated under names that were similar to existing trading names, although in one recent case the High Court adopted a novel approach and allowed a claimant to pass a special resolution on behalf of the shareholders of the defendant company to change its name. The Registrar of Companies would refuse registration of a company whose name was the same as one already on the Register, but for the purposes of company law it was enough just to avoid almost identical names. Rights in trade marks – registered or unregistered – counted for nothing.
Since 1 October, there has been a right to object to company names that include trade marks or similar marks, thanks to section 69 of the Companies Act 2006 which came into force on that day. (The old provisions are also retained.) Section 70 allows the Secretary of State to appoint company names adjudicators, and these individuals form the Company Names Tribunal. The rules governing adjudications are set out in SI 2008/1738.

Company name as trade mark infringement or passing-off

It is fairly well-established in English law that registration of a company is likely to amount to infringement of a trade mark that is identical with or similar to the company name, or to passing-off. In Glaxo v GlaxoWellcome [1996] F.S.R. 388 a squatter who registered the portmanteau name in anticipation of a merger between the two pharmaceutical companies was ordered to surrender it. Direct Line v Direct Line Estate Agency [1997] F.S.R. 374 was similar. Likewise registering a domain name that is the same as or similar to a registered or unregistered trade mark, as in Global Project Management v Citigroup [2006] F.S.R. 721 where Park J granted summary judgment (on Citigroup’s counterclaim) even though the claimant had no history of cybersquatting. Often, cases involving company or domain names have been decided on the basis that the names are “instruments of fraud” where the intention is to sell them at inflated prices to the businesses who have the goodwill in the name. This was the case in British Telecommunications and others v One In A Million and others [1999] F.S.R. 1.
The Court of Justice of the European Communities took a rather different view in Case C-17/06, Céline SARL v Céline SA in which it held that merely adopting a company name might not amount to infringement, though this is not necessarily at odds with the English courts’ approach, which does require something (even if only the “instruments of fraud” element) over and above the mere act of registration. There was no evidence in the Céline case that this element was present.
It remains the fact, however, that it is often easier and cheaper to purchase the company name or domain name from the squatter than to try to use trademark rights to secure it. The “ransom” amount will commonly be set at a level that takes into account the cost of litigation or other dispute resolution.

The right to object

The new law allows objections to be made where a company name is registered that is:

  • the same as a name in which the objector has goodwill; or

  • sufficiently similar to such name that its use within the UK would be likely to mislead by suggesting a connection between the company and the objector.
Objections are made to the Tribunal. If the complaint is successful then the company will be forced to change its name.
The first limb seems to set down a similar test to that already applied by the Registrar of Companies, so small differences will probably suffice. The second limb protects names with goodwill, regardless of whether there is a registered trade mark. However, one shortcoming of the new legislation is that there is no remedy (as there is in trade mark law) where there is no likelihood of confusion but the mark has a reputation and the second user takes unfair advantage of that reputation or is otherwise detrimental to it. On the other hand, the adjudicator will be able to consider a connection suggested by a similarity in names such as an implied parent-subsidiary relationship.

Overcoming objections

A number of defences are available, amounting to presumptions that the name was adopted legitimately:

  • the name was registered before the objector began the activities on which it now relies to show goodwill;

  • the company is operating under the name, or is proposing to do so, and has incurred substantial start-up costs or was formerly operating under the name and is now dormant; or

  • the name was registered in the ordinary course of a company formation business and the company is available for sale to the objector on the standard terms of that business.
Unless the respondent is able to show one of these three defences applies, the objection will be upheld unless the name was adopted in good faith, or the interests of the objector are not adversely affected to any significant extent. But even if a defence is available, the objection will be upheld if it can be shown that the name was registered to try to obtain money from the objector or to prevent the objector registering it.

The adjudicator’s powers

If an objection is upheld, the adjudicator may set a deadline for the company to change its name to one that is not objectionable. If the deadline is not met, the adjudicator may determine a new name for the company – another significant change from the old system, where the registrar could only direct a change.
There is no way of obtaining damages under the new procedure. An action for trade mark infringement or passing-off would be necessary if the objector wanted to make a financial claim.


The rules are intended to make sure that it is not unduly burdensome (in time or money) to make an objection. The Tribunal’s office is at the Intellectual Property Office, which produces the forms needed to file an objection. The applicant has to pay £400 on filing an objection: a respondent has to pay £150 on filing a counterstatement, which is highly unusual. The costs look small, but if there are numerous names to which objection is taken they could quickly mount up.
Applications and defences must be filed using the prescribed forms, and must include a concise statement of the grounds on which the application is made or opposed. Once an objection has been received, the adjudicator must send it to the primary respondent specifying the date by which a defence must be filed. The defence itself must also contain a concise statement of grounds. Either party may request an oral hearing, which will be public. The Adjudicator has wide powers to direct the form and content of the proceedings, and to dispense with a hearing. He may strike out applications and defences that he considers to be vexatious, to have no reasonable prospect of success or to be otherwise misconceived. He may also call a hearing on 14 days’ notice.
Evidence may be filed by witness statement, affidavit, statutory declaration or any other form that would be admissible as evidence in proceedings before the court, subject always to the Adjudicator’s directions.
The adjudicator may award such costs as he considers reasonable to any party at any stage in the proceedings.
Once a decision is made, the adjudicator sends written notice to the parties setting out the reasons. An appeal lies to the High Court, and the time limit for notice of appeal will be included in the Adjudicator’s decision.

Tuesday 28 October 2008

Enlarged board of Appeal to consider software patents

Following my post the other day about the recent Court of Appeal judgmentin Symbian, the IPKat reports a reference to the Enlarged Board of Appeal of the European Patent Office of the vexed question of software patents

Sunday 26 October 2008

Microsoft in China

The Telegraph reports yesterday (and a couple of days ago too, here) that Microsoft has been annoying Chinese users of counterfeit programs by causing their computers' screens to go black and display a message "admonishing" them. In response, 90 per cent of respondents in a survey by Chinese web portal said they would not buy Microsoft products again.

The emptiness of that threat was reduced somewhat by calls to develop Chinese software. It might take a while to overcome the head start that Microsoft have gained, but I dare say that China is one place where the resources to do that are to be found.

But why bother when there are acceptable alternatives to Microsoft everywhere, available for free (and therefore proof against piracy)? If Windows is really not acceptable to computer users in China, why don't they try Linux - and if they don't like it, adapt it until they do?

The problem stems from the perception that Microsoft charges too much for its products - perhaps taking advantage of the widespread use of programs like Word which use proprietary file formats and do not readily handle files created in other programs (or vice versa). The only major drawback with openOffice, as far as I have been able to discover, is that it does odd things to Word files. So when Microsoft stresses the importance of "respect for intellectual property rights", we might reasonably ask about its commitment to open file formats.

Saturday 25 October 2008

INTA's TM Topics email discussion group

I have been following the INTA listserv for many years now, occasionally contributing to discussions on the rare (and increasingly so) occasions when they did not concern purely US matters, recommending friends in other countries and a couple of times asking for recommendations when I needed an overseas associate. It is a useful group to belong to and open to non-INTA members too. I commend it to all of you who practise in the field, especially because it would be good to have some more participation from here.
The need for more input from Europe is highlighted by a recently thread in the group. It started discussing issues arising in the US when applications were based on what the Americans (sic) will refer to as European applications. It became clear that it was specifications in CTM applications that were the cause of the problem.
The originator of the thread stated that a European associate had asserted that it would be malpractice to file for anything less than all the goods or services in a class, by reference to the Nice Classification headings. I stuck my neck out and said that, on the contrary, I thought it might be malpractice to do just that.
The substantive points merit deeper consideration, and it will be interesting to hear others' views, but I'll be starting that discussion elsewhere.

Thursday 23 October 2008

Drafting trade mark specifications

The specification of goods or services for which a trade mark is registered is supposed to reflect what the mark is being used for. An application will be invalid, or partially invalid, if it is made in bad faith, and that can cover the situation where the specification (nowadays called a list) of goods or services is over-ambitious.

Moreover, a UK application embodies a declaration to the effect that the mark is being used on everything in the specification, or the applicant intends so to use it. Signing the application form is not something to do lightly.

That said, it is hard to make a false declaration. Goods or services can be described at many different levels of generality, and the Nice Classification is just the highest level of generality. An applicant could truthfully say that the trade mark would be used on clothing if he made teeshirts, although that use would be most unlikely to support the registration. The Minerva case illustrates one consequence of over-ambitious claiming.

It seems that the practice of kitchen-sink drafting (or actually non-drafting) is becoming more common. If so, it is in my opinion an abdication by lawyers of their responsibilities to their clients. Getting the widest possible protection might seem clever, and saving costs by not crafting the specification might appeal to the client, but it might merely defer the expense which could end up being much greater.

It has been suggested to me that this is a result of avaricious lawyers trying to create invalidity work for themselves. it seems more likely that it is a result of the box-ticking approach which is rife in so many areas of our professional lives.

Tuesday 21 October 2008

Symbian: Software patents come to the UK?

“IP chambers 8 New Square has scored a Court of Appeal win for technology company Symbian, in a decision that could see software patents allowed in the UK for the first time.” So The Lawyer (a paper for which I will always have a soft spot, as it featured me on its first ever front page) tells us, anyway. It will, I think, be a sad day if that happens, for intellectual property law (already seeing unwarranted extensions into areas that should be free from private monopolies) and for society as a whole. But I think it is still some way off, and with luck will never arrive. And in fact, the judgment has actually reinforced what was already happening - no broadening of the availability of patents for software, indeed a rejection of the EPO's more generous approach. Software patents were available, within tight constraints, and they remain available on the same terms. Perhaps we should not look to The Lawyer for careful legal analysis.
Back in June, I went to the inaugural meeting of the Institute of Brand and Innovation Law at the University of London, where we were treated to a fascinating (though in essence private) discussion between two learned judges and one learned former judge. It struck me at the time that it was important, but reading Symbian v Comptroller-General of Patents [2008] EWCA Civ 1066 I begin to understand why.

In that case, the Court of Appeal decided not to follow recent authorities from the European Patent Office but to stay with the four-part test it had formulated in Aerotel v Macrossan. Not that it would never follow the EPO rather than domestic authorities: that is what it did in Actavis UK Ltd v Merck & Co Inc [2008] EWCA Civ 444 earlier this year, but it had reservations about following recent case law in the software patents field.

In Aerotel, the Court considered the previous authorities from both the UK and the EPO and Jacob LJ formulated this four-stage test:

  • First, properly construe the claim. Decide what the claimed monopoly is before going on to ask whether it is excluded.

  • Second, identify the actual contribution. What has the inventor added to human knowledge? Consider factors such as the problem which the invention claims to have solved, how the invention works and what are its advantages.

  • Third, ask whether the invention falls solely within the excluded subject matter. This step deals with the "as such" qualification.

  • Finally, ascertain whether the actual or alleged contribution is technical in nature. This step might not be necessary, as it could have been dealt with in step 3, but it was included to ensure consistency between Macrossan and earlier Court of Appeal judgments.

Symbian’s patent application was for a method of accessing data in a dynamic link library, or DLL, in a computer. It claimed to overcome problems frequently encountered with DLLs, which store functions that are common to a number of programs, but are vulnerable to malfunctions when new functionality is added. The invention claimed to overcome this by splitting the DLL into two parts, one of which remained fixed while the other – the “extension” part – allowed further functionality to be added. The extension functions would be accessed not through direct links to the applications that needed to use them, but via another library or interface.

The examiner objected that the claims related to a program for a computer, and that they could not be saved by amendment, and the Hearing Officer agreed. Symbian appealed, and Patten J held that the Patent Office had taken too narrow a view of the technical effect of the invention. The Comptroller-General of Patents appealed.

The judgment of the Court of Appeal was given by Lord Neuberger (taking time off from his day job in the House of Lords). Why? He had been the chairman of that meeting of the Institute of Brand and Innovation Law, where Jacob LJ had got into a long discussion about how the Court of Appeal should deal with a conflict between a decision of the Boards of Appeal of the European Patent Office and one of the House of Lords: his view was that the CA should follow the EPO because if the case went to the HL they would just reverse the conflicting judgment and follow the EPO anyway, so his solution was cheaper. According to the notes I made of the meeting, “Sir Hugh Laddie was asking him provocative questions and the chairman of the meeting, Lord Neuberger, was looking bemused. In the middle of this rather rarefied debate, the chap sitting in front of me, a solicitor from [name of well-known law firm redacted], wrote a note to the girl next to him saying he preferred the Solicitors Wine Society.”

In the present case, it was not a matter of conflicting authorities in the EPO and House of Lords, but between the EPO and the Court of Appeal. The Court of Appeal’s last word on the subject was Aerotel but the Boards of Appeal at the EPO didn’t like it. In Duns Licensing a Technical Board of Appeal held that it was inherent in the concept of an invention that the subject matter had technical character, and that a contribution could be patentable even if it were related to the categories of matter listed in Article 52(2). Moreover, the Board of Appeal took the opportunity to criticise Aerotel as “not consistent with a good-faith interpretation of the EPC.” Strong stuff.

Lord Neuberger thought that the third and fourth stages of the Aerotel test taken together gave the same result as that in Duns Licensing, namely asking whether the contribution cannot be regarded as technical: but then went on to consider a bunch of more recent EPO authorities (including Pension Benefit (T931/95), Hitachi (T258/03) and Microsoft (T424/03)), which the court concluded were inconsistent with other decisions of the Boards of Appeal and with the current approach of the English courts (found, of course, in Aerotel).

So the question for the Court of Appeal was, should it depart from its own previous decisions and follow the EPO case law, or was it bound by its own earlier decisions? In Actavis v Merck Jacob LJ said:

... we hold that there ought to be, and is, a specialist and very limited exception to the rule in Young v The Bristol Aeroplane Company [1944] KB 718 . Spelling it out it is that this court is free but not bound to depart from the ratio decidendi of its own earlier decision if it is satisfied that the EPO Boards of Appeal have formed a settled view of European Patent law which is inconsistent with that earlier decision. Generally this court will follow such a settled view.

So Jacob LJ had left the door open a couple of inches. The Court was able to say that this was not a case in which it would be appropriate to depart from its previous decision, as there was no settled view of the Boards of Appeal. "The fact that there are now three such decisions of the Board subsequent to Aerotel which appear to support the approach disapproved in Aerotel might suggest that this court should now adopt that approach. We do not agree", said Lord Neuberger, going on:

First, there is no decision of the Enlarged Board. Not only does that mean that the view of the Board is not as authoritative as it could be; it also suggests that the Board does not consider that the time has arrived for the point to be conclusively determined. Secondly, the approaches in the four decisions since Aerotel are not identical: in particular, one of them appears more consistent with the view preferred in Aerotel. Thirdly, we are concerned that, particularly if the passage quoted from File search method/Fujitsu represents the Board's view, the computer program exclusion may have lost all meaning. Fourthly, it is not as if the English courts are alone in their concern about the approach of the Board, as the observations from the German judiciary quoted in para 30, and referred to in paras [129] to [131] of Aerotel, demonstrate. Fifthly, if this court is seen to depart too readily from its previous, carefully considered, approach, it would risk throwing the law into disarray.

As far as the Symbian application was concerned, an application of the Aerotel approach revealed that the invention did make a technical contribution and was therefore not excluded. The instructions of the invention solved a technical problem lying within the computer itself, and the benefits would be available to other devices running the program.

We must still wait for a case in which Jacob LJ has the opportunity to implement his proposed cost-saving approach and decline to follow the House of Lords. Will Lord neuberger take time out again to keep an eye on him when that opportunity arises?

Forthcoming courses

Trade marks, for Quorum Training, on 6 November, my last appearance there before the Quorum operation is swallowed up in CLT and admin moves to Sutton Coldfield.

Trade marks for shopping centres

Not new case - the judgment was handed down in July - but as I have just been looking at it, I thought a comment on Land Securities and others v Registrar of Trade Marks would be worthwhile. The judge (Floyd J) concludes that there is no reason why, if a trade mark can be registered for retail services, shopping centres cannot be allowed to build their own brands.

On the basis of the opinion of the Court of Justice of the European Communities (commonly referred to as the European Court of Justice, which assumes that the European Communities, and the Union, is co-extensive with Europe) in Case C-418/02 Praktiker Bau- und Heimwerkermärkte AG [2005] ECR I-5873 which established that trade marks should be capable of being registered, in class 35, for "retail services". Shopping centres have brands and rely on their goodwill to attract customers - which is the reason retailers take places in the shopping centres to start with.

Shopping, the judge observed, is a major leisure activity. A day out at a shopping centre is akin, I suppose, to a day out at some other attraction. But is that reason enough for another extension of trade mark protection? The law in ths area has always had to adapt to new usages of trade marks, of course, and it was the CJEC that drew the line that this case observed. But little by little the English language is being enclosed by commercial interests, and so too are graphic designs - often pretty banal ones. It just seems too easy for businesses to get trade marks these days.

Saturday 4 October 2008

Courses for Quorum Training

I have also been presenting courses for Quorum Training for many years - and have had some great times, met many wonderful people, and learnt a lot myself (though I hope the delegates have learnt much more). The next course is Exploiting IP And Licensing Arrangements on 24 October - a new course this year which has been fun and interesting to put together.

Forthcoming CLT courses

There's not much point in maintaining (however erratically) this blog and not using it to tell people about courses I am presenting. Sometimes, this might even bring in enough additional customers to make sure that the course runs - although that is not the case with my presentations on designs, trade marks and copyright for CLT in London the week after next. They are going ahead - though I'm sure there will be room for more in the audience. Not sure in what order they will appear, but I am sure that will be sorted out by the time they take place.

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