IP Newz (February 2010)
New Zealand's IP legislation update
Patents Bill report due next month
The Commerce Select Committee report on the Patents Bill is expected to be released in March.
The Patents Bill is designed to replace the Patents Act 1953. The Bill aims to update the New Zealand patent regime to ensure an appropriate balance between adequate incentives for innovation and technology transfer on the one hand and protecting the interests of the public on the other.
New copyright law dealing with internet piracy announced
In December last year, the Government announced its revised legislation to combat internet piracy.
The recommended changes to section 92A of the Copyright Act 1994 mean that:
- Copyright owners will contact account holders through internet service providers (ISPs) to report misuse of their copyright rights.
- Internet users caught illegally downloading copyright material will be given three warnings.
- The first warning will inform them that they have downloaded copyright material and that their actions are illegal.
- After three warnings, the rights holder can seek reparation costs of up to $15,000 through the Copyright Tribunal.
- Internet pirates who continue to download copyright material can also have their internet account suspended by their ISP for up to six months.
- Account holders will also have the right to request a hearing if they felt they were unfairly penalised.
Read the full set of recommendations in the Government's Cabinet paper on illegal peer-to-peer file sharing here.
Trade marks Amendment Bill awaits second reading
The Trade Marks (International Treaties and Enforcement) Amendment Bill awaits its second reading in the House following the release of the select committee report in September last year.
Click here to read the Foreign Affairs, Defence and Trade select committee report.
The Trade Marks (International Treaties and Enforcement) Amendment Bill will amend the Trade Marks Act 2002 and the Copyright Act 1994. It will give effect to Government decisions relating to various international agreements, and will allow New Zealand to join the Madrid Protocol. It will also support the enforcement of criminal offence provisions related to counterfeit goods and pirated works.
Bill proposing design amendment awaits second reading
The Regulatory Improvement Bill awaits its second reading in the House.
This follows the release of the Commerce Select Committee report on the Bill in October last year.
The Committee has proposed amendments that would provide a statutory basis for the restoration of lapsed design applications in addition to lapsed design registrations. The amendments also proposed that bibliographic details of design applications could be published by the Intellectual Property Office of New Zealand (IPONZ).
For a copy of the report, click here.
Decision in Roadshow Films v iiNett case
Introduction
In the Federal Court of Australia, the internet service provider (ISP) iiNet has successfully defended a claim that it authorised its customers to use its services to infringe copyright. The decision is significant as it is the first fully reasoned decision by any court setting out why an ISP is not liable when one of its customers uses it services to infringe copyright.
Background
iiNet is Australia’s third largest ISP. Several major movie studios gave notice that iiNet’s customers were using the ISP’s services to infringe copyright by downloading films without authorisation. The demands from the movie studios included a request that iiNet suspend or terminate the accounts of people who were infringing copyright. iiNet declined to suspend or terminate the accounts. Instead, iiNet referred the matter to the police claiming that it was not up to iiNet to determine which customers’ internet accounts should be suspended or terminated.
The movie studios (including Universal, Warner Brothers, Disney, Columbia Pictures, 20th Century Fox, and DreamWorks) sued iiNet.
Arguments
Under the Australian Copyright Act, a party infringes copyright if it authorises another party to do any infringing act. The movie studios argued that iiNet authorised the copyright infringements by allowing its customers to download films using the ISP’s services. iiNet responded by arguing that, although it was aware that some customers were using its services to infringe copyright, it was not authorising any infringing acts. It claimed that any dispute should be between the movie studio and the alleged infringer.
The decision
The Federal Court ruled in favour for iiNet. The court found that some of iiNet’s customers were infringing copyright by illegally downloading films. However, the court distinguished between providing means of infringement and authorising another party to use those means to infringe copyright.
The court held that iiNet did no more than provide an internet service to its customers. It stated that the provision of that internet service was a lawful act. The court also stated that iiNet was not responsible for the activities of its customers and could not be held responsible for customers who used the service to infringe copyright. The court found that iiNet did not sanction, approve, or countenance any copyright infringement and, therefore, could not be liable for copyright infringement.
The court also noted that iiNet did not need to rely on the safe harbour provisions in the Australian Copyright Act in order to avoid a finding of infringement. The court made this ruling on the basis that the scheme of notification, suspension, and termination of customer accounts is not a power to prevent copyright infringement under the Act.
As yet the plaintiffs have not advised whether they will appeal the decision.
However, because the case is so significant an appeal seems likely. In the meantime, ISPs in Australia will be relieved that they are not considered to authorise infringement where they do no more than provide an internet service to their customers.
NZ trade mark cases: 2009 in review
Last year was largely 'business as usual' for trade mark developments in New Zealand. The number of Court decisions was consistent with previous years, but there were fewer trade mark hearings before the Intellectual Property Office of New Zealand (IPONZ). Despite this, there were still some interesting decisions.
The approach of the Courts is becoming more consistent. This probably reflects that the Trade Marks Act has now been in force for over five years and the jurisprudence is more settled.
IPONZ seems to have an increased willingness to let similar marks co-exist where the goods or services are not strictly overlapping, and for contentious marks to be allowed through. This contrasts with a firming up on procedural issues where some applicants have been punished for missing deadlines.
Some recent cases that illustrate these points are discussed below.
Comparing trade marks
Here are some examples of trade marks that were compared during 2009:
- Atspec's trade mark was considered too similar to LG's mark, but the differences between "electrical appliances" (LG) and "diagnostic services, and testing services for electrical appliances" (Atspec) meant the marks could co-exist.
- Johnson & Johnson's K-Y SENSUAL SILK was held sufficiently different to Geneva Marketing's SYLK.
- Elan Polo's OMEGA THE POWER OF PERFORMANCE was held too similar to Omega's OMEGA.
Click here to read the full table of comparisons made in 2009.
Extensions of time
In THE MUIR ELECTRICAL COMPANY PTY LIMITED V THE GOOD GUYS GROUP LIMITED HC AK CIV-2009-404-4965 18 December 2009, it was confirmed there is no discretion to grant extensions of time under regulation 32(1) to file evidence in a trade marks hearing, if the request for the extension is filed after the deadline has expired.
It was also commented that an oversight by Counsel to file a request for an extension would not amount to an "exceptional" circumstance anyway.
This judgement has been the subject of discussion amongst the profession and it is likely to have some influence on future IPONZ decisions and practice, particularly around what is and is not an "exceptional" circumstance. Some practitioners fear it could lead to a more restrictive approach to the granting of extensions of time in non-contentious matters.
Shape marks
IPONZ has also confirmed its reluctance to allow three-dimensional shapes to be registered as trade marks. Noms de Code's bottle shape was held not to be registrable.
Although frustrating for owners of shape marks, this is largely in line with recent overseas cases. It will be difficult to convince IPONZ that a bottle shape is distinctive without being able to show significant evidence of distinctiveness acquired through use. Applicants for these kinds of marks should prepare themselves for a time-consuming battle.
Registrability of numbers
In Her Majesty the Queen in right of New Zealand acting by and through the Commissioner of Police; New Zealand Fire Service Commission; The National Rural Fire Authority; and St John Emergency Communications Limited [2009] NZIPOTM 29 (7 December 2009), it was held that the number "111" was factually distinctive of "one particular group of emergency service providers - Fire, Ambulance, and Police (as represented by the applicants) for a particular type of emergency situation". Registration of 111 as a trade mark was therefore allowed.
This is an interesting case because of the incredible low level of inherent registrability normally associated with numerals. It is also interesting because the decision allowed the application despite the fact that emergency services are broken down into different providers, ie Fire, Ambulance, and Police.
Click here to read a summary of selected Court decisions in 2009.
Click here to read a summary of selected IPONZ decisions in 2009.
Pending EPO rule changes
The European Patent Office (EPO) is introducing new patent rules from 1 April 2010. What are the new rules and how will they affect your pending - and future - European patent applications?
Divisional applications
Currently a divisional application may be filed at any time while its preceding application is pending. A divisional application may be filed from a previous divisional application, meaning the disclosure from an original application can be continually maintained in a live application.
Under the new rules, a divisional application can only be filed from an earlier application within two years of either:
- the first communication issued by the examining division of the EPO regarding the earliest (European) parent application; or
- a specific objection to there being multiple inventions (if this was the first time the specific objection was raised).
The new rules apply to new divisional applications filed on or after 1 April 2010.
For currently pending applications, if the two year period under the new rules has expired or is due to expire before 1 October 2010, an extension of the time limit for filing divisional applications will be given to 1 October 2010.
The present practices of filing divisional applications at any time while an application is pending and filing multiple applications in series over time (so called "daisy-chaining") will no longer be available. Pending applications should be reviewed early to identify any need to file corresponding divisional applications so that action can be taken by 1 October 2010. For new applications, divisional application filing strategies should be determined early in the life of the application.
The search procedure
European patent applications must usually include only one independent claim of a given category (eg, product, process, apparatus or use).
Currently, this requirement is not enforced until the examination procedure.
Under the new rules, where there are multiple independent claims of the same category, the applicant will be invited to choose the independent claim on which the EPO search is to be conducted. The applicant will be given a two month period in which to choose. It will not be possible to amend the claims at this point. If the applicant fails to respond to the invitation, searching will be conducted for the first independent claim of each category appearing in the claims set. As a result the claims for examination will be limited to those searched only. A divisional application would need to be filed to pursue protection for those claims not searched.
Therefore, when filing a European patent application it is now even more important to review the number of independent claims in each category. Where there is more than one independent claim per category, the most important independent claim should appear first in the list of claims to mitigate the risk of searching - and therefore also examination - being conducted on claims of lesser importance. Preferably time should be spent tailoring claims to meet EPO requirements prior to filing a European patent application.
Response to search opinions
Currently an applicant is not required to take any action in response to the search opinion issued by the EPO. Instead, under present rules applicants can wait until an examination report issues before responding to any negative opinion.
Under the new rules, it will be mandatory to respond to the search opinion within a six month deadline. Failure to respond will result in the application being deemed to be withdrawn. The new rules will apply for all applications where the search report has not been issued before 1 April 2010.
Further rule changes apply where the EPO has been used as the international searching authority. However, this is generally not applicable to New Zealand and Australian applicants who do not use the EPO as the international searching authority.
The new rules effectively bring forward the examination process.
Voluntary amendments
At the moment it is possible for an applicant to voluntarily amend a European application at any time between receipt of the search report and the issuance of the first examination report.
Under the new rules, voluntary amendments may only be made:
- as part of the required response to the search opinion as outlined above; or
- within one month of a communication issued shortly after filing the regional phase entry of an international (PCT) application.
Conclusion
The new rules are significant as they require applicants to change how they manage their European applications. The new rules generally support the EPO¡¦s desire for applicants to take early action to advance examination of applications. It is, therefore, important to understand the full effect of the new rules to ensure the best possible patent protection for your invention. For more details, talk to your A J Park contact.
Changes to patent marking rules in the USA
Patent marking is a prudent practice of including on a label or on products themselves a reference to a US patent or patents that may cover some aspect of the product. Patent marking of products sold in the United States of America (USA) - or anywhere in the world - is essential to ensure full damages can be obtained against an infringer of any patent identified in the marking. Conversely it is an offence to falsely claim that a US patent does protect some aspect of a product.
USA patent marking in the past
Until recently, the practice has been to mark any product with all patents that might cover some aspect of a product. These may include:
- the product itself
- new processes developed to produce the product
- other improvements to the product or processes to produce the product.
Later improvements to an innovative device can also be independently patented from the patent on the device itself. This evolutionary process can result in a raft of patents covering some aspect of the device - and consequently a long list of patents on the product's label. A common label might read:
"This product is protected by one or more of the following USA patents (followed by a list of several patent numbers).¨
Usually as a new patent was obtained on improvements (to the product or device) another number was simply added to the list. In the past, the long list of patents on a product¡¦s label was not a concern as long as at least one patent in the list met the test of relevance by protecting some aspect of the product or device.
Further, even when relevance was in doubt, the penalty was considered to be light - a maximum fine of US$500 irrespective of the number of articles sold.
USA patent marking in the future
A recent court decision has changed this. First, all patents listed on a product must now meet the test of relevance. Second, the penalty can be applied on a per article basis.
The penalty of up to US$500 can then be ordered by a court to be paid for each product. For example, if 1,000 products are sold, the penalty can be up to US$500,000. The level of penalty will ultimately be at the discretion of a court. This would normally depend on the facts of each case. Still, we cannot rule out that a court will impose penalties of the maximum¡Xor close to it.
What should be done?
The patent marking of all products sold in USA should be checked for relevance. The test is whether one or more claims in an identified patent cover some aspect of the product.
If you would like help with this, talk to your A J Park contact.
Ambush marketing and the Rugby World Cup 2011
Gabrielle Wilson
Major sporting events can capture the heart of a nation. In New Zealand, rugby does this on a regular basis. With just over 18 months to go, many businesses are thinking about how they can benefit from the Rugby World Cup 2011.
Sponsoring major sporting events like the Rugby World Cup can generate great publicity for a business. It can draw attention to your products, and shape and strengthen your brand by associating you with the reputation and the values of the event or competing players or teams.
The usual way to generate an association with these events is to enter into a sponsorship arrangement.
Some businesses try to avoid entering into these arrangements and attempt to gain the benefits of sponsorship without paying the fees—this is sometimes referred to as ambush marketing.
Passing off and the Fair Trading Act
The law of passing off and the Fair Trading Act 1986 prohibit conduct that implies a trader is an official sponsor, or for some other reason has authority to refer to the event, when this does not actually exist.
Trade marks and copyright
Using any registered trade marks or copyright works relating to the event or using substantially or confusingly similar works will infringe someone’s rights. This is may include the names and logos for the event and for the competing teams.
Major Events Management Act
The Major Events Management Act 2007 (MEMA) provides a new layer of protection to combat unauthorised exploitation of these events. The extra protections are:
- prohibitions on making any representation that there is an association with the major event, without the authorisation of the event organiser. In particular, certain words, or emblems can be declared "off limits";
- prohibitions on street trading in clean zones, which are defined areas around the venues;
- prohibitions on advertising within clean zones, or in areas that can be seen from clean zones, around the event venue;
- prohibitions on advertising on clean transport routes, which are certain defined roadways;
- prohibitions on pitch invasions;
- employment of enforcement officers to undertake enforcement of the Act;
- border protection measures;
- ticket scalping provisions.
The Rugby World Cup 2011 is one of the events protected by this legislation. Businesses must avoid the following.
- Making any representation that would indicate an association with the event.
- Using any protected words or emblems.
- Undertaking street trading activities, including giving away goods or services, in clean zones.
- Advertising in clean zones or transport routes, or advertising that can be seen from clean zones.
What happens if you break these rules?
If these rules are breached, action can be taken against you to stop you doing the activity, and you could be liable for damages or an account of profits. You could even be subject to criminal sanctions.
Other considerations
There are other ways to stop unauthorised exploitation of these events. For example, some event holders place conditions on tickets that will render them void if they are offered as prizes, or bundled with other products or services as part of a promotion by unauthorised traders.
As tempting as an event like the Rugby World Cup 2011 can be, the broad new protections can quickly and effectively stop you taking advantage of an event. Businesses seeking to be part of such events need to be careful and should seek legal advice before using the event in their marketing.
A J Park news: Peter Luxford retires
After 40 years with A J Park, trade mark partner Peter Luxford retired from the partnership at the end of 2009. A J Park is pleased to announce that Peter will remain with the firm as a consultant.
Peter has been a partner for 35 of his 40 years with the firm. During that time, he represented the interests of many global clients in New Zealand, including Coca-Cola, McDonalds, and Kellogg Company.
The partners and all A J Park staff wish Peter a very happy retirement. They look forward to working with him in his new role from April.