23rd June 2017

Hot topics in brands and trade marks assessed at INTA 2017

With so many people attending from so many disparate backgrounds and jurisdictions, it might seem impossible to identify any common threads of discussion. Alongside the countless conversations between individual delegates, more than 50 official seminars and round tables were held throughout the five days on a huge range of subjects, from the specific (such as bad faith in Chinese trade mark applications) to the more general (e.g. the role of IP in M&A transactions).

With so many people attending from so many disparate backgrounds and jurisdictions, it might seem impossible to identify any common threads of discussion. Alongside the countless conversations between individual delegates, more than 50 official seminars and round tables were held throughout the five days on a huge range of subjects, from the specific (such as bad faith in Chinese trade mark applications) to the more general (e.g. the role of IP in M&A transactions).

However, three main trends did seem to emerge from the wide-ranging coverage of branding law and practice.

Anti-counterfeiting

Perhaps unsurprisingly for a trade mark conference, the number one item of concern was how to deal with brand piracy and fakes. Although the irony was not lost on some wags that this year’s closing ceremony was held at Barceloneta Beach (one of Spain's most notorious hotspots for the sale of counterfeit goods), this subject is a perennial headache for brand owners and so was given close and serious consideration.

Various strategies were discussed including targeting commercial landlords and shipping companies for either direct or contributory infringement where it can be shown that their tenants and customers have been involved in piracy. While injunctions are of course a useful remedy in many jurisdictions, damage awards hit counterfeiters where it hurts them most (and can also be used to fund further enforcement action) and criminal sanctions can be a more direct and efficient deterrent, especially in China. The role of carrots as well as sticks was also mentioned – litigation is not the only solution, and there can be room for negotiation but this does not necessarily mean accommodating fakes.

Counterfeiters are increasingly operating digitally - whether on social media, through apps or via the dark web. Brand owners may feel they are faced with a constant game of “whack-a-mole” but it is a game they need to master, utilising a combination of targeted enforcement actions on- and offline, including the use of data analysis and AI image search technology. Clever use of social media techniques and adoption of new approaches to consumer relationships can bolster a brand’s status and can lead to greater public engagement and awareness of brand value.

In his keynote opening address, Iñigo Méndez de Vigo (Spain’s Minister for Education, Culture and Sport) also discussed the vital role of education in promoting antipiracy measures by reinforcing the idea that creativity and innovation deserve protection.

Plain packaging

As an example of a ‘brand restriction’, plain packaging was the next hottest topic. With Big Tobacco fast losing the fight around the world - first in Australia, and more recently in Europe - some of the most valuable and recognisable global brands are witnessing a steady erosion of their intellectual capital. Although there may be clear health and public policy reasons for this, these brands would argue that such measures are not consistent with WTO rules or international treaties and are instead an attempt by politicians to score quick points.

An imaginative exhibition stall run by JTi (Japan Tobacco, owners of Camel and Benson & Hedges among other brands) summed up the feeling of many observers that governments are choosing to penalise brand owners rather than adopt less dramatic and more costly tactics such as public education. The stall showcased mock-ups of plain packaging as it might apply to fizzy drinks and chocolate, and highlighted various measures being taken by governments around the world against food, drink and other consumables perceived as "high risk". Although there was certainly an air of ‘siege mentality’ about the stall, it made its point effectively and drew attention to the possible domino effect should plain packaging be widely applied to other sectors such as gambling, alcohol and confectionery.

INTA positions itself as a professional rather than political organisation, but sees its remit as including engaging with administrations where necessary to protect trade marks and brands. In 2015 it adopted a strongly worded Board Resolution calling for the rejection and repeal of plain and standardised packaging measures worldwide, and its Presidential Task Force on Brand Restrictions will report back later this year, focussing on key recommendations for engaging with policy makers and stakeholders.

Brexit

Finally, there was Brexit - the elephant in the room for most British delegates. Although of most immediate concern to the UK and its EU neighbours, the impending split will have ramifications for brand owners worldwide and it was a subject of much interest for delegates from all countries. Mr Justice Arnold, Judge in Charge of the UK Patents Court, was on hand to consider what the effects might be of ending the supremacy of EU law in the UK.

Although details remain to be determined (as with so many aspects of Brexit), the Government’s primary position, set out in its white paper, is that the law should largely be the same on 30 March 2019 (i.e. two years and a day from the triggering of Article 50) as prior to that date. In other words, all legislation based on EU directives is to be incorporated into UK domestic legislation and CJEU case law will be given the same precedence as decisions of the Supreme Court.

However, while UK trade marks may remain relatively untouched, the position is quite different for EU trade marks (EUTMs) which will no longer apply in the UK post-Brexit. Mr Justice Arnold considered that doing nothing with EUTMs would be commercially unacceptable, not least because it could amount to arbitrary deprivation of valuable property rights. It would also be politically impossible for the UK to remain part of the EUTM system - Brussels has already indicated that such ‘cherry-picking’ is off the table. That leaves the UK having to adopt a unilateral position for ‘onshoring’ EUTM rights into the UK, perhaps according to one of several models which have applied in analogous situations e.g. Jersey, Tuvalu or Montenegro.

Other important aspects of trade mark law are yet to be clarified:

  • exhaustion of rights – while the UK could adopt either national or international exhaustion, it might be more pragmatic to hold to current practice i.e. exhaustion inside the EU27+UK.
  • pending applications – what will happen to trade marks which are still in the application process on 29 March 2019?
  • use – currently, use in a single EU member state can be sufficient to maintain an EUTM but this will clearly no longer include the UK. Proprietors of EUTMs may therefore have to take steps to ensure qualifying use of their marks elsewhere in the EU27.
  • enforcement – Mr Justice Arnold was of the opinion that there would be little immediate impact, except that UK courts will of course no longer have jurisdiction over EUTMs and references to the CJEU will no longer be available to judges or litigants. However, although EU law is likely to remain of at least persuasive value, in the medium-to-long term a degree of divergence between UK and EU law is likely. Indeed, we may already have seen the first signs of this with the Nestle 3D trade mark decision.

Future meetings and further discussion

Although the Annual Meeting is undoubtedly the highlight of INTA’s calendar, its work promoting and supporting owners and users of brands and trade marks worldwide continues throughout the year. These three hot topics, along with a myriad other aspects of trade mark law and policy, will be the subject of a full schedule of seminars, conferences and committee meetings leading up to next year’s 140th meeting in Seattle.

For more information about INTA and/or any of the issues raised in this article, or to discuss any aspects of intellectual property, IT and data protection law, please email Graeme on gfearon@thrings.com or call 0117 930 9557.


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