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Consumer Products Newsletter

Intellectual Property and Unfair Competition law

Below you will find the topics of the newsletter:

EUROPEAN UNION ARTICLES

NATIONAL ARTICLES

 


EUROPEAN UNION ARTICLES


EU: Trade Secret Law Reforms

The EU Trade Secret Directive required to be implemented into national law by June 2018.

Via this link, you will find a concise overview of the national trade secret law reforms, which various EU Member States have undertaken following the Directive.

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European Court of Justice On Trade Mark Law: Is the Unauthorized Use Of A Quality Testing Label For A Toothpaste A Trade Mark Infringement?

Author: Nikolas Gregor (CMS Hamburg)

In many countries, product tests published by independent testing institutes can play an important role in consumer product marketing. In Germany, for example, tests performed by well-established institutions such as “Stiftung Warentest” enjoy a high level of trust among consumers, which is why companies regularly use a positive test result in a prominent manner in their product advertising – often including the quality labels or “test seals” of the testing organisation in question.

Many testing institutes have registered their testing labels as trade marks. If a company wants to use that label for promotional purposes, it will often have to acquire a license and comply with certain conditions of use. However, if no such licensing agreement has been concluded or complied with, is the use of a testing logo for a tested product a trade mark infringement? This question was the subject of a recent decision made by the European Court of Justice (judgment of 11 April 2019, C‑690/17).

The case

The German publishing house “Öko-Test”, which performs independent product tests with a focus on the products’ environmental and social impact and publishes them in monthly magazines, is the owner of a Union trade mark covering their (in Germany: well-known) quality label.

This label was used by the company “Dr. Liebe” on the packaging of a toothpaste which had been ranked as “very good” by Öko-Test back in 2005. In that year, Dr. Liebe and Öko-Test had concluded a license agreement. In 2014, however, Öko-Test had performed a new toothpaste test which did no longer include Dr. Liebe’s product. Moreover, Dr. Liebe had meanwhile changed the product’s name, its description and the packaging design. Öko-Test therefore brought claims for breach of the license agreement and trade mark infringement.

The legal issue

The Higher Regional Court of Düsseldorf was uncertain as to whether the use of the label by Dr. Liebe was a trademark infringement under Article 9(1) of the EU Trademark Regulation and under Article 5(1) and (2) of the EU Trademark Directive, and it transferred the case to the European Court of Justice (ECJ). The issue was that Dr. Liebe had affixed the Öko-Test trade mark on a toothpaste – a product which is neither identical nor similar to the services which Öko-Test‘s tademark was registered for, inter alia “consumer advice and consumer information for the selection of goods and services”. Moreover, while the Düsseldorf Court acknowledged that the Öko-Test label has a reputation throughout Germany, it found that this reputation concerns the label as such, but not the registered trade mark.

The German Court basically asked two central questions:

  1. Did Dr. Liebe use the Öko-Test-logo only in relation to the toothpaste, hence for a product which is neither identical with nor similar to the services for which the trade mark was registered, or (also) to identify the testing services offered by Öko-Test?
  2. Can the use of the Öko-Test label by Dr. Liebe be qualified as a use of a trade mark of reputation which takes unfair advantage of, or causes detriment to the reputation of the mark, if the Öko-Test label is only well-known as a test seal, but not as a trade mark, and is used by third parties as a test seal?

The European Court’s decision

While the Advocate General still had found that the Öko-Test trade mark was used by Dr. Liebe for both the toothpaste and for the services offered by Öko-Test, the ECJ answered the first question against the testing organisation: the trade mark was used for toothpaste only. The Court argued, amongst others, that the trade mark was affixed to the toothpaste packaging for the sole purpose of drawing the consumers’ attention to the quality of those toothpastes and thus promoting the sale of Dr. Liebe products – not the services of Öko-Test.

In other words: Öko-Test may bring trade mark claims against its competitors who use the Öko-Test trade mark or a confusingly similar sign for their testing and information services. But it cannot prevent the companies the products of which are tested by Öko-Test (e.g. Dr. Liebe) from putting the Öko-Test label on their tested products (e.g. a toothpaste).

Solution: unfair exploitation of the reputation of a trade mark

Öko-Test was not completely left alone, however: with regard to the second question asked by the Düseldorf Court, the ECJ confirmed that it is sufficient if a significant part of the relevant public knows the quality label as such, but it is not required that the public is aware that the label is registered as a trade mark. Hence, Öko-Test may oppose a use of its quality label if this label is well-known and if the company using the label takes unfair advantage of, or causes detriment to, the reputation of the mark.

Outlook

The German Court will now have to assess whether these conditions are fulfilled. Chances are good for Öko-Test since the Court of Düsseldorf already made clear that the Öko-Test label is a well-known sign among German consumers. While this is good news for well-established institutes such as Stiftung Warentest or Öko-test, the ECJ’s decision is a painful setback for organisations which are less well-known – and which may therefore not prevent that companies use their testing logos for the tested products even if such logos are protected as a trade mark.

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General Court On Trade Mark Law: Adidas EU Trademark Consisting of Three Parallel Stripes Applied in Any Direction Is Invalidated by the General Court of the European Union

Authors: Aberto Colomina and Javier Torre de Silva (Partner, CMS Madrid)

On 19 June 2019, the General Court of the European Union confirmed the invalidity of Adidas’ trademark due to the lack of evidence of the acquisition of distinctive character.

In 2014, Adidas was granted an EU trademark consisting in “three parallel equidistant stripes of identical width applied on the product in any direction” on clothing, hats and shoes. In 2016 that trademark was challenged by Belgium’s Shoe Branding Europe BVBA and the EUIPO granted its application for declaration of invalidity on the ground that the mark at issue was devoid of any distinctive character, both inherent and acquired through use.

In the same year Adidas appealed EUIPO’s decision claiming that the trademark had acquired distinctive character through use, but the Board of Appeal stated that the applicant had failed to provide sufficient evidence that the trademark had acquired distinctive character through use throughout the European Union. Consequently, the Board of Appeal found that the mark should therefore be declared invalid.

As a result, Adidas applied to the General Court for the annulment of the Board of Appeal decision declaring the registration of its trade mark invalid without obtaining a satisfactory outcome, as the General Court confirmed the annulment decision and dismissed the action brought by Adidas against the decision of EUIPO.

The General Court stated that trademarks which are devoid of any distinctive character may not be registered. However, that ground for refusal does not preclude registration of a trade mark if that mark has become distinctive in relation to the goods or services for which it was registered following the use which has been made of it.

The evidence adduced by the applicant did not prove use of the trademark throughout the territory of the European Union, besides they were not sufficient to demonstrate that, by virtue of that use, the trademark can identify the goods for which it was registered, and thus to distinguish those goods from those of other undertakings.

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NATIONAL ARTICLES


Austria: Labelling of Cosmetics in a Foreign Language

Author: Egon Engin-Deniz(Partner, CMS Vienna)

As a gift for various occasions or for daily use, cosmetics have always been a big hit. When it comes to the sale of cosmetics goods, certain labelling requirements must be met. It may even be obligatory to provide information in the language of the destination, as is the case in Austria.

The legal framework

One of the main objectives of the EU is to create an internal market, where the free movement of goods enables sale of products from one EU Member State to another. Regarding cosmetics, the EU regulation (EC) 1223/2009 on cosmetic products (“EU Cosmetics Regulation”) stipulates detailed rules, which guarantees the free movement of cosmetic products.

The EU Cosmetics Regulation is applicable on any substance or mixture intended to be placed in contact with the external parts of the human body or the teeth for the purpose of cleaning them, perfuming them, changing their appearance, protecting them or keeping them in good condition (cosmetic product).

Labelling requirements

For the sake of protecting consumers’ interests as well as human health, the legal framework has left each EU Member State a regulatory scope when it comes to labelling.

Certain labelling requirements must be met to place cosmetics on the markets. Hence, the following information must be indelibly, easily legible and clearly visible on the containers and packaging of cosmetic products (Art 19 para 1 EU Cosmetics Regulation):

  1. the (business) name and address of the responsible person;
  2. the nominal content at the time of packaging, in weight or volume terms;
  3. the date of minimum durability;
  4. special precautions to be observed in use;
  5. a batch number or a mark identifying the cosmetic product;
  6. the intended use of the cosmetic product, unless this results from its presentation;
  7. a list of the ingredients. The list shall bear the heading "Ingredients".

The language of the aforementioned information shall be determined by the law of the Member State in which the product is being made available to the end user. In Austria, for instance, the Cosmetics Implementing Ordinance governs that it is mandatory to provide the aforementioned information b), c), d) and f) in German.

Consequences of non-compliance

Any violation the EU Cosmetics Regulation and the Cosmetics Implementing Ordinance are subject of administrative fines of up to EUR 50,000. Besides, non-compliance of the labelling requirements constitutes a violation of unfair competition provisions. In particular, the Viennese Commercial Court rendered a preliminary injunction due to violation of the EU Cosmectics Regulation based on an unfair competition claim of a competitor to omit such unfair practice. The appeal is pending.

To sum up, labelling requirements of cosmetic products may be strictly enforced by (public) authorities to protect consumer interests as well as competitors. Reviewing national regulatory framework and providing information in the language made available to the end user are essential before marketing cosmetic products in Austria.

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Austria: Post Sale Use of Third-Party Trademarks

Author: Egon Engin-Deniz(Partner, CMS Vienna)

European courts have an inconsistent view on the use third-party trademarks in a post-sale situation. A pending lawsuit in Austria may shed light on the issue and clarify rights of holders of exhausted trademarks.

Facts of the case

In the Austrian proceedings, the claimant is a global leader in producing, distributing and marketing of perfumes as well as cosmetic goods, all of which are regarded as luxury products. The defendant operates an online shop for perfumes and cosmetic products including original products of the claimant’s brands. The products sold are grey markets goods and thus the defendant is a parallel importer. After purchasing products in the defendant’s online shop, the ordered goods are shipped to the costumer in carton boxes on which the claimant’s trademarks are printed in a concise and mixed arrangement in addition to various other trademarks not belonging to the claimant's portfolio. Also, several designations with references to distribution by discounters are shown on the carton boxes.

The claimant took legal action to prohibit the defendant from shipping perfumes and cosmetic products in carton boxes which depict the trademarks of the claimant on the inside and outside of the carton boxes together with others and/or co-branded with discounters' slogans or other marks.

Legal basis and questions

Art 15 (2) EUTMR governs that the proprietor of exhausted trademarks has a right to oppose the distribution of goods depicted with the exhausted trademark if there are legitimate reasons to do so, in particular if the condition of the goods has changed or altered since they were put on the market.

The question now arises whether the right to advertise in a post-sale situation, as conducted by the defendant, may be derived from the exhaustion of trademarks.

According to settled case law of the CJEU, the assessment of the admissibility of the use of the trademark in this context particularly depends on the specific product reference, i.e. that the advertising may refer to the product but not to the advertising company. In addition, it also depends on whether it is a common form of advertising, whether the origin or guarantee function of the trademark is affected or whether there is an exploitation of the power or impairment of the reputation of the trademark.

Decision of the Vienna Commercial Court

In the present case, the Vienna Commercial Court has firstly issued a preliminary injunction on the grounds that the grey market trader's right to advertise only refers to specifically exhausted products. Since the defendant also used its shipping carton boxes, which were printed with numerous trademarks of to the claimant, among others, for the delivery of products of other manufacturers, the shipping carton boxes did not fulfil the requirement of product reference. Furthermore, the design of the shipping carton boxes creates the misleading impression of a business relationship between the parties.

Decision of the Court of Appeal

However, the Court of Appeal regarded affixing the claimant's trademarks on carton boxes as product-related and not company-related advertising, since the relevant public considers trademarks as distinguishing marks for goods, thus as an indication of origin for a particular product. Moreover, the design of the shipping carton boxes did not adversely affect the trademark holder’s legitimate interests, no damage of his reputation could be identified. Thus, reputation is not harmed, also the impression of a contractual relationship does not arise. With this decision, the Austrian Court of Appeal has followed the view of German courts.  

Preliminary ruling before the CJEU?

The different reasonings of the courts show inconsistent interpretation of Art 15 (2) EUTMR. Therefore, the claimant has proposed the Austrian Supreme Court via an extraordinary appeal to initiate a preliminary ruling procedure. Ultimately, only the CJEU is of the position to finally clarify the crucial question whether an advertising measure in such a post-sale situation impairs the trademark rights, whether the direct product reference is given and whether a business relationship suggested. So the story will be continued…    

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Belgium: Greenpeace Crosses the Line of a Good Parody – Making Maya the Bee Advertise Children’s Cigarettes Is Not Funny

Authors: Tom Heremans (Partner, CMS Brussels) and Lisbeth Depypere (Associate, CMS Brussels)

In Belgium, the Brussels Court recently handed down a judgment in an interesting case about the boundaries of the parody exception in copyright law and about the scope of protection of EU trade marks.

Facts of the case

The plaintiff in this dispute is Studio 100, the Belgian entertainment group that owns the rights to several well-known characters, including Maya the Bee.

In May 2018, Greenpeace launched a video with images from the Maya the Bee cartoons in a supposed advertising for “Maya cigarettes”. The video showed Maya the Bee flying over flowers and grass, presenting a pack of cigarettes displaying the Maya image and the words “Cigarettes” and “Premium selected tobacco”. This was followed by a scene in which a girl is running towards her mother, who offers her a “Maya pack of cigarettes”. The girl then smilingly takes and holds a burning cigarette. During the spot, a voice-over says: “Maya presents…the only true Maya the Bee cigarettes! From now on, children can also enjoy true cigarettes! Handy: in small packages, for the small children’s hands. With the best tobacco and a delicious, soft honey taste. Maya the Bee cigarettes, quickly check Mayalight.be”. Subsequently, Greenpeace informs the public that Maya cigarettes do not exist, but that there are Maya the Bee products on the market, licensed by Studio 100, that are harmful for children. On the website Mayalight.be, Greenpeace refers that a Maya the Bee poultry sausage that is allegedly unhealthy, especially for children.

This video received a lot of attention in traditional and social media and it was clear that not everyone had understood the ironic message. Greenpeace maintained that the purpose of the video was to humorously address the fact that an animation character was being used by Studio 100 to promote unhealthy meat products to children.  Studio 100 was not amused and sued Greenpeace in court, based on copyright law and trade mark law.

Copyright law

As regards copyrights, Greenpeace logically invoked the parody exception as its main defence argument.

The Brussels Court accepted that the video was a parody as defined by the Court of Justice (in the “Suske & Wiske” case, C-201/13, Deckmyn), since (1) it evoked an existing work while being noticeable different from it and (2) it constituted and expression of humour or mockery. But, as highlighted by the Brussels Court, the application of the parody exception must also strike a fair balance between the freedom of expression of the user of a protected work and the interests of the right holders.

In this particular case, there was no fair balance between the freedom of Greenpeace to render its opinion about health and meat consumption and Studio 100’s interests in protecting its good name and intellectual property rights. Studio 100 has the right not to be associated with an especially harmful product such as cigarettes. Studio 100’s good name and intellectual property rights were disproportionately prejudiced in this case, as Greenpeace:

  • had opted for a format in which advertising was made for a particularly harmful product, i.e. cigarettes, which may not be sold in Belgium to minors and which may hardly be advertised;
  • had spread the video through the internet and did not sufficiently take into account that young children would see it as well, even though they were not the target audience;
  • had used the existing animation footage almost without changing it, as a result of which the impression was given that the video was produced by Studio 100.

The foundation established by the widow of the author of Maya the Bee (Waldemar Bonsels) was also a party in the case and successfully claimed that the moral rights of the author were violated, since Greenpeace had presented Maya the Bee – an innocent children’s character – as an illegal substance user.

Trade mark law

As regards trade mark law, the judgment makes for an interesting read too because the Brussels Court had to interpret article 129 (2) of the EU Trade Mark Regulation, which provides that on all trade mark matters not covered by the EU Trade Mark Regulation, the national courts shall apply the applicable national law.

In the Benelux, the courts can also apply article 2.20.2.d of the Benelux Convention on Intellectual Property, which gives the holder of a registered trade mark the right to prevent third parties from using a sign for purpose other than to distinguish goods or services, where use of the sign without due cause would take unfair advantage of or be detrimental to the distinctive character or the repute of the trade mark. Article 2.20.2.d offers an additional, unfair competition infringement ground that is not provided for in the EU Trade Mark Regulation.

Yet in this decision, the Brussels Court stated that a “registered trade mark” within the meaning of article 2.20.2.d is a Benelux trade mark or an international trade mark with protection in the Benelux and therefore not an EU trade mark. Since Studio 100 invoked an EU trade mark, the application requirements of national (Benelux) law were not fulfilled. Whether this interpretation is correct may be disputed, but it allowed the court to reject the trade mark argument without having to touch upon the merits of the case.

Conclusion

This judgment is especially interesting for all parties trying to push the boundaries of copyrights, of the parody exception and freedom of expression, and of EU trade mark rights. Organisations such as Greenpeace play an important role in the public debate, but they cannot use the freedom of speech argument without respecting at least the minimum of other parties’ intellectual property rights.

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Colombia: Border Measures in Colombia - Notes on the Matter With Some Comments on the Fashion Industry

Author: Karl Mutter (Partner, CMS Bogota)

Customs and other border controls play, or at least should play, a decisive role in the protection of Intellectual Property Rights (IPRs) on a global scale.

According to a recent survey of the Organization for Economic Cooperation and Development (OECD) and the Intellectual Property Office of the European Union, international trade of counterfeit and pirated goods represented 2.5% of the world trade, some 461 billion dollars, which is equivalent to the GDP of a country like Austria. The most counterfeited goods worldwide are footwear, apparel, textiles, watches, jewelry, (fashion industry products) along with pharmaceutical products, liquor and automotive spare parts.

Counterfeiting is associated to other transnational crimes such as counterfeit money, credit card fraud, drug trafficking and software piracy and are related to specialized criminal gangs, which put at risk not only public health and fiscal security, but even the national security of countries affected when linked to terrorist organizations.

Colombia: The Customs Office and the Protection of Intellectual Property

In Colombia, in regard to border measures, there is a list of IPRs registered before the Customs Authorities. When the officers in charge of inspecting the shipment feel that there is something wrong, they notify the IPR owners. It is then possible for us acting on behalf of the companies, to check the contents of the shipment, and if we see there is a basis for that, may request the suspension of the procedure. If so, it is then compulsory to file the corresponding infringement actions, whether civil or criminal.

Now, TM registrations are the main basis for any kind of infringement action, so if a company wants to move forward protecting their rights in the country, they need to protect their rights in the country[HM1] .

In Colombia in 2018 there were 45,875 trademark applications. Of these there were 4,256 applications filed by foreign companies, such as big fashion houses, that claimed protection in specific classes to cover cosmetics, sunglasses, jewelry, watches, luggage, purses, and apparel – around 10% of the total.

On the other hand, customs operations on imports in Colombia involve 400,000 containers each year.

In 2017, there were 17 requests from IP rights owners to apply border measures, and of these, 8 had a positive result. This is 0.0042% of the size of the imports operation and is less than 1 positive operation per month.

Another interesting figure is that during 2017 in just one of the most important maritime ports (Buenaventura in Pacific Coast), 140 containers were stopped or seized for IPR-related infringements for goods related to the Fashion Industry, mainly pirated clothing and footwear. This is 0.04% of the size of the import operations of the country.

When you remember that black market and fake products make up approximately 2.5 or 3% of the global market of goods, you see that there is a long way for improvement.

However, the above results may be based not only on performance of the Customs Authorities but also on lack of engaging by IPR owners. For a long time, Colombia was not an attractive market for this industry. Fortunately, because of the improvement of the conditions of the country this has changed. We need to wait and see if that improves the figures on border measures control.

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France: IP Disputes and Disparagement

Authors: Jean-Baptiste Thienot (Counsel, CMS Paris) and Audrey Lémery (Associate, CMS Paris)

Communications with respect to the infringing character of competing products is particularly risky under French law.

On 9 January 2019, the French Supreme Court (the “Court of cassation”) ruled that a company should be held liable for unlawful disparagement (unfair competition) when such company had sent emails to customers in order to inform them that an action had been initiated against a competitor based on IP rights infringement.  Such information was not based on sufficient factual grounds as it was merely relying on the commencement of a legal proceeding without a decision having been rendered by a court (Court of cassation, Commercial section, 9 January 2019, No. 17.18350).

In this decision, the Court of cassation recalled that any information aiming at discrediting the products commercialized by a third-party, even if there is no direct competition between the parties, constitutes disparagement unless, (i) the information at stake concerns a subject of general interest, (ii) the information is based on sufficient factual ground and (iii) it is expressed in a measured manner.

Consequently, when a company intends to communicate publicly on (potential) IP rights infringement by a competitor, the balance between the risk of disparagement and the right to freedom of expression should be assessed very carefully.

The risk of being found liable for disparagement is very high if the communication is made (i) before the commencement of any proceedings, (ii) during the proceedings and (iii) when a court order is not final (e.g., if an appeal of the decision is pending).

The IP rights holder may however legitimately communicate on a final decision sanctioning a third-party for infringement of its IP rights if some precautions are taken, i.e., notably if the communication is made without (i) maliciously shortening the decision, (ii) accompanying the decision with disparaging comments, (iii) communicating on the decision several years after the trial or (iv) giving a higher impact in terms of publicity of the decision than the actual terms of the court order, e.g. communication through social media (Court of cassation, Commercial section, 18 October 2017, No. 15-27136).

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France: Reform of Unfair Trading Practices

Authors: Virginie Coursiere-Pluntz (Counsel, CMS Paris) and Nathalie Petrignet (Partner, CMS Paris)

France has long had a fairly comprehensive legislative arsenal to combat unfair trading practices (UTPs). It is in particular via UTP rules that it is tackling the practices of supermarket chains and their buying alliances through actions taken not by suppliers but by the Minister for Economy.

It is on the basis of these rules that the Minister for Economy has just summoned Eurelec and its French component to appear before a commercial court, asking for a fine of 117 million euros to be imposed for practices considered abusive in negotiations with suppliers.

While most European Union countries are seeking to strengthen their UTP rules, the reform of the Commercial Code (Order No. 2019-359 of 24 April 2019) was aimed at simplifying the existing legislative arsenal for those who complain about UTPs and at bringing clarifications particularly with regard to legal remedies and the imposition of civil sanctions.

As a result of this simplification, the express list of practices engaging the civil liability of their author has been reduced from 13 to 4 practices (Art. L.442-1 and L.442-2 new C. com.), and the list of invalid clauses or contracts from 5 to 2 (Art. L.442-3 new C. com.).

Practices that were previously expressly covered by the law do not become lawful, but must be assessed under one of the three grounds left in new Article L.442-1 of the French Commercial Code:

  • obtaining or attempting to obtain an advantage without consideration in the context of the conclusion and performance of the contract, but also during the pre-contractual phase.
  • the significant imbalance, the scope of which is undeniably extended by the inclusion of the pre-contractual phase and by the removal of the notion of "trading partner" in favour of the "other party". The sanction of a significant imbalance still implies the demonstration of the submission or attempted submission of the other party.
  • the sudden termination of established commercial relations.

Invalid clauses and contracts

The initial list of the 5 clauses and contracts which were automatically prohibited as unfair is refocused on 2 prohibited clauses (Art. L.442-3 new C. com.). Thus, clauses or contracts remain null and void where they have the possibility of benefiting from:

  • retroactively, discounts, rebates or trade cooperation agreements;
  • automatically more favourable conditions granted to competing companies by the contracting partner (most-favoured-nation clause).

Legal action and sanctions (new Article L.442-4 C. com.)

The reform clarifies who can request what in court between the victim of the practice, the person justifying an interest and the Minister for Economy.

For the sake of clarification, the new text specifies that the ceiling of the civil fine, the imposition of which may be requested by the Minister for Economy, may not exceed the higher of the following three amounts: five million euros or three times the amount of benefits unduly received or obtained or 5% of the annual pre-tax turnover in France by the author of the practices.

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Italy: The Court of Bologna Grants Protection under Copyright Law to the “Ferrari 250 GTO” Car Model

Author: Paola Nunziata (Partner, CMS Rome)

On June 13th, 2019, the Court of Bologna ruled that the Ferrari car model named “Ferrari 250 GTO” is entitled to get protection under the Copyright Law.

The decision was issued at the end of an urgency proceeding started by the company Ferrari S.p.A. against the company Ares Design Modena S.r.l., liable for having advertised on a magazine the rendering of a car model (soon-to-be launched into the market), that replicated the distinctive shapes of the abovementioned Ferrari model.

In particular, according to Ferrari, the adverse party’s conduct constituted an infringement of (i) the Ferrari IP rights arising from the EU shape trademark and design registrations covering the car model “Ferrari 250 GTO”, (ii) the copyright related to such a model, and (iii) the provisions contained in Article 2598 of the Civil Code concerning unfair competition acts.

Consequently, Ferrari asked the Court of Bologna to issue ad interim injunctions against Ares, aimed at preventing any further circulation of the rendering, as well as the production, marketing and advertising of car models based on the same rendering.

At the end of the second instance phase of the above proceeding, the Court of Bologna, by overturning the first instance decision, found Ares liable for having infringed the claimant’s IP rights as well as the Civil Code provisions concerning unfair competition acts, and granted the car producer’s requests.

In particular, with reference to the protection under Copyright Law claimed by Ferrari, the Court observed as follows.

Pursuant to Article 2, point 10, of the Copyright Law, the works of industrial design that have a creative character and an artistic value fall within the Copyright Law scope of protection.

However, the existence of the creative character and of the artistic value is subject to a case by case assessment to be carried out, in relation to the peculiarities of each case, according to parameters as much as possible objectives, such as (i) the recognition that the work of industrial design has received from cultural and institutional environments regarding the existence of aesthetic and artistic qualities; (ii) the display of the work in exhibitions and museums; (iii) the publication of the work in specialized magazines; (iv) the awarding of prizes; (v) a market value that goes beyond the value related to the product functionality and (vi) the fame enjoyed by the designer.

Furthermore, the artistic value is not excluded in case of series production.

In light of the principles set up above, according to the Court of Bologna, the “Ferrari 250 GTO” car model is entitled to get protection under the Copyright Law. Indeed, such a model, thanks to its prestigious design, has been awarded with numerous prizes, has been published in several magazines and has been reproduced through other forms of artistic expressions (such as sculptures), periodically displayed in international events and museums. Moreover, its designer is the famous “Maestro Scaglietti” and the price of the few car models put on the market (only 39) goes beyond the value related to the product functionality. In this last respect, the Court reported that the a “Ferrari 250 GTO” has been sold at a Sotheby’s auction for 41 million euros.

The decision issued by the Court of Bologna is noteworthy because for the first time copyright protection has been granted to a car model. However, it must be noticed that the decision is based on principles already widely expressed by the Italian Courts and recently reasserted also by the Court of Appeal of Turin that, confirming the first instance decision issued by the Court of Turin, granted copyright protection to the design of the “Vespa” motorbike.

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Poland: Revolution in IP Enforcement: Specialized IP Courts to be Established Shortly

Authors: Marek Oleksyn (Partner, CMS Warsaw) and Aleksandra Kuźnicka (Senior Associate, CMS Warsaw)

The Polish Ministry of Justice has published a draft bill on the amendment of the Act of 17 November 1964 - Code of Civil Procedure with respect to matters concerning intellectual property rights and unfair competition.

The major changes concern the introduction of a new type of specific proceedings - namely proceedings in Intellectual Property Cases and the establishment of specialized IP courts solely competent to examine those cases.

The bill introduces a definition of an ‘intellectual property case’, which is a case concerning protection of copyrights and related rights, inventions, utility models, industrial designs, trademarks, geographical indications, topographies of integrated circuits, and protection of other non-material property rights. Matters concerning prevention and combating of unfair competition, and protection of moral rights in certain cases, will also be deemed ‘intellectual property case’ under the new law.

Four specialized district courts in different Polish cities and two appeal courts will be competent in those matters, namely the District Court in Warsaw, Gdansk, Poznan, and Katowice, and the Appeal Court in Warsaw and the Appeal Court in Katowice. However, the District Court in Warsaw will have exclusive jurisdiction in intellectual property matters concerning computer programs, inventions and utility models, topographies of integrated circuits, plant varieties, and technical business secrets.

According to the bill, in general the representation by attorney, attorney-at-law or patent attorney will be mandatory unless the value of the dispute does not exceed a specific amount.

According to the new law, counter-complaints are admissible, as an alternative to proceedings before the Patent Office, in matters concerning invalidation and/or declaration of revocation (expiration) of a trademark protection right, as well as invalidation of a right in registration of an industrial design. Patent validity will still need to be challenged only before the Polish Patent Office.

The upcoming law will give the IP courts the right to assess the amount of the claim if it is impossible or excessively difficult to substantiate it for the party. This amendment should facilitate IP disputes in this respect.

Finally, the new bill will replace and regulate more specifically the relevant Polish legislation concerning information disclosure and preserving evidence, which transpose the IP Enforcement Directive 2004/48/EC. These regulations are currently set out in the Polish industrial property and copyright laws.

It follows from the governmental declarations that the changes will enter into force on 1 January 2020.

For more information on the upcoming significant changes in IP enforcement in Poland, please contact one of our local CMS experts.

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Turkey: Draft Customs Law Sets Out New Procedure Applicable to Small Shipments and Covers the Import of Counterfeit Goods Through Small Shipments

Author: Dr. Döne Yalçın (Partner, CMS Istanbul)

On 20 February 2012, the European Commission proposed the Union Customs Code (“UCC”) and it was accepted by the European Union on 9 October 2013. Following the enactment of the UCC, Turkey has adopted the approach of drafting a new customs law (“Draft Customs Law”) consistent with the terms introduced under the UCC, instead of the rather preferred option of amending Customs Law No. 4458.

The Draft Customs Law regulates, among other things (such as customs procedures and temporary storage activities), a new procedure applicable to small shipments sent by mail or express mail.

According to the Draft Customs Law, the customs authority is entitled to intercept and retain any small shipments that are suspected of violating intellectual property rights. The size and characteristics of small shipments subject to such interception and retention will be determined by the Council of Ministers.

Following any interception or retention decision, the relevant customs authority shall notify the declarant or the person who was the possessor before the retention of the shipment regarding the decision. The retained shipment shall be destroyed by the customs authority in case (i) the relevant declarant or possessor responds to the customs authority’s decision and approves the destruction process, or (ii) no response is received from the declarant/possessor within ten (10) business days upon receipt of the decision of the customs authority. The owner of the relevant intellectual property right (the “IP Owner”) shall also attend the destruction process.

Alternatively, in case the declarant/possessor rejects to the destruction notification, the IP Owner shall be notified and in case of an absence of a submission for an interim measure or a seizure decision within a ten (10) day period, the customs procedures will proceed as requested by the declarant/possessor.

As a result, the provisions of and the procedure introduced by the Draft Customs Law will hopefully constitute a deterrent against IP right violations made through small shipments once it enters into effect, which is expected by 2020, the end of the transition process to be compliant with the UCC.

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UK: #Ad: Working with Influencers

Author: Kaisa Patsalides (Senior Associate, CMS London)

The UK regulatory framework

Consumer Protection from Unfair Trading Regulations 2008 (the CPRs): The CPRs prohibit “unfair commercial practices”, which includes using editorial content in social media to promote a product where the influencer has been paid for the promotion, without making this clear. They are enforced by the Competition & Markets Authority (CMA).

The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (the CAP Code): The CAP Code applies in addition when a brand also has any form of editorial control over the content of a post. It is enforced by the Advertising Standards Authority (ASA).

What counts as “payment”?

The regulatory framework applies to commercial communications that are directly connected with the supply of goods, services, opportunities or gifts, or the solicitation of donations. This definition is very broad, and can include:

  • Any form of reward, including money, gifts of services or products, or the loan of a product, whether it was solicited or not;
  • Other types of benefits or ‘perks’, such as a free holiday, access to an exclusive event or the use of studio space;
  • The promise or expectation of a future benefit;
  • An ongoing commercial relationship, even if a specific post has not been separately or individually paid for.

The CAP Code does not apply to free gifts with ‘no strings attached’ provided the brand has no control over the content of the resulting post. However, the CMA still expects influencers to disclose if they are posting about a product that they have received as a gift.

What is “editorial control”?

This could include:

  • Approval of posts;
  • Supplying key messages or content that must be included in the post;
  • Any other directions about what the influencers must post, in what way, how often, etc.
  • Restrictions on the influencer’s ability to post about other products / brands.

Even if the brand does not have editorial control over the content of every individual post, a post could still be perceived as forming part of a broader commercial relationship between the influencer and the brand (see here for an example of an ASA decision on this point)

Impact

The ASA (jointly with CMA): issued guidance in 2018 setting out guidelines on how the CAP Code applies to influencer marketing where there is both payment and editorial control by the brand. This includes detailed guidelines on how paid-for posts should be identified. Their the primary aim is to ensure that if an influencer has received or been promised any form of payment or other incentive, this should be clearly stated in a way which is transparent, easy to understand, unambiguous, timely and prominent. The use of hashtags such as #Ad or #Advert is encouraged, but should not be relied on as the sole means of identifying paid-for posts if their presentation and content is otherwise ambiguous.

Despite this detailed guidance and a series of recent decisions relating to influencer posts, the ASA has received criticism for still not being clear enough on the labelling of ads. In particular, there are calls for more uniformity on the use of hashtags and disclosures. The CMA has also issued its own set of guidelines on the application of the CPRs, following an investigation in late 2018 which led to a number of social media stars and influencers having to give formal undertakings to the CMA to change their practices. Both regulators are continuing their investigations, with further enforcement action (potentially to be extended to social media platform operators) expected in the future.

All those involved in influencer marketing should take great care to ensure that the commercial nature of any paid-for influencer posts is made clear to consumers in line with the CMA and ASA’s guidelines.

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Authors

Virginie Coursiere-Pluntz
Virginie Coursiere-Pluntz
Counsel
Paris
Lisbeth Depypere
Lisbeth Depypere
Senior Associate
Brussels
Picture of Egon Engin Deniz
Egon Engin-Deniz
Partner
Vienna
Tom Heremans
Tom Heremans
Partner
Brussels
Mrs Aleksandra Kuźnicka
Karl Mutter
Karl Mutter, LL.M.
Partner
Bogotá
Picture of Paola Nunziata
Paola Nunziata
Partner
Rome
Nathalie Pétrignet
Nathalie Petrignet
Partner
Paris
Picture of Marek Oleksyn
Marek Oleksyn
Partner
Warsaw
Jean-Baptiste Thiénot
Jean-Baptiste Thiénot
Counsel
Paris
Picture of Javier Torre
Javier Torre de Silva
Partner
Madrid
Picture of Döne Yalçın
Döne Yalçın
Managing Partner Turkey
Istanbul
Kaisa Patsalides
Kaisa Patsalides
Senior Associate
London
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