Potato chips ..or crisps: a reader asks

I've been asked by a reader if I can refer him to a decision which he vaguely recalls, which concerns either a national design right or a registered Community right (he thinks) in respect of the shape of what we Brits call "potato crisps" but which are sometimes referred to as "potato chips" (generally by people who call what Brits call potato chips "French fries"). It might be an infringement case, or possibly a cancellation -- but the two absolutely certain ingredients are "design" and "potato crisp".

Offhand I can't think of one, but I wonder if any reader can help jog a couple of jaded, faded memories. Please!

Baena case: gnomic utterance awaited

On the right, a Community trade mark; on the left,
an apparently valid later registered Community design

"Take that expression off your face - if you want to keep your design" wrote Class 99 team captain David Musker (here), when relating the lamentable tale of the General Court's ruling in Case T-513/09 José Manuel Baena Grupo, S.A. v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) and Herbert Neuman and Andoni Galdeano del Sel. David wrote then:

"As with several earlier General Court and OHIM decisions, the citation was taken "as a whole" and no thought was given to comparing like with like - since the design has no mouth, surely the fair comparison is to compare that part of the citation without a mouth to the design? In the context of an infringement, the implication of the General Court's approach is that one could take the entirety of a design, add something and thus avoid infringement. Is that right? What do you think, dear readers?".

Since most dear readers did not take the trouble to think or -- if they did -- they didn't take the trouble to tell Class 99, the unsuccessful party has had to take the step of appealing to the Court of Justice of the European Union, whose gnomic utterance we eagerly await.

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Stop press: I've just noticed that there are two separate appeals in this case. In Case C-101/11 P the appellants are Herbert Neuman and Andoni Galdeano del Sel while in Case C-102/11 P the appellant is OHIM itself.

Take that expression off your face - if you want to keep your design

The General Court has taken its fourth substantive Community Design appeal decision, Baena Grupo v OHIM T-513/09, on these two rather angry gnomes (or "lutins grognant"as the French text has it) - here, in French (Spanish also available).
The case has had a rather erratic history. The citation, on the right, is a published Community Trade Mark (CTM 1312651), and at first instance the Community design (RCD 426895-0002, on the left) was invalidated over the citation considered as a prior right, as being a mis-use (i.e. an infringement) of the trade mark.
The Appeal Board overturned that in Decision R 1323/2008-3 (here, in Spanish), ruling that "use" of an earlier mark in this context did not cover use of something similar (in contrast to the well-known MIDAS decision?) but held it invalid nonetheless, this time on the basis of lack of individual character over the citation considered as prior art.
What did the General Court say? They reversed the Board of Appeal, despite what one might reasonably think to be the overall similarity between the two. The twin bases were: firstly, the identity of the informed user - a teenager or a younger child (the latter was quite important), and secondly, the importance of the angry facial expression (and perhaps pose also) in the citation, as being the thing which would stick in the memory of that informed user.
From a UK point of view, it therefore makes an interesting contrast with the approach in Procter & Gamble v Reckitt Benckiser, firstly because this "informed user" is not stated to be attentive or particularly interested in design issues (and is hence pretty undiscriminating), and secondly because of what seems to be quite a strong role for the doctrine of "imperfect recollection", held in P&G to have lesser significance in design cases.
As with several earlier General Court and OHIM decisions, the citation was taken "as a whole" and no thought was given to comparing like with like - since the design has no mouth, surely the fair comparison is to compare that part of the citation without a mouth to the design? In the context of an infringement, the implication of the General Court's approach is that one could take the entirety of a design, add something and thus avoid infringement. Is that right? What do you think, dear readers?

End of the road for Evets

Old musos will remember Danelectro's classic guitars - the mark has been in use for over 60 years now. But the ECJ (Decision C-479/09 P), supporting OHIM's hard-line policy on restitutio in integrum, has recently cancelled this old and valuable mark for failure to pay the renewal fee, on grounds that appear to put applicants in a very precarious position - on the basis of a legalistic interpretation approach that, we have argued in the past, is focussed on OHIM themselves and opposed to commercial reality and the needs of the marketplace.
In the Danelectro cases, the applicant adopted the practice (near-universal in large companies) of handling renewals through an agency. OHIM's correspondence, however, went to the appointed representative. The issue was, when was the "cause of non-compliance" removed? Was it when the representative heard from OHIM, or when the client (or the renewal agency) were told? The Court's mechanistic approach was simply to quote the rules which put the representative in the shoes of the client for OHIM's purposes. Thus, the relevant two-month time limit started to run when the representative got the letter from OHIM, even though the representative was completely out of the renewal loop and had no authority from the client to act on renewals. The same logic would apply even where, in reality, the representative had no further authority to act, if OHIM had not yet been notified of that fact.
When applying a highly penal provision, can it really be right to ignore the reality behind the rule, which is that, where it is the applicant who failed to comply with a deadline, the removal of non-compliance must also be referred to the applicant? Should a 60-year old mark be lost, in a first-to-file system, where the applicant is not at fault? The answer seems self-evident to us.
Our concern on Class 99 is that, since the Community Design provisions are identical to those for CTMs, and the reasoning of the Court is so mechanistic, they will apply the same approach to design renewals. The results would be disastrous. A trade mark can be re-filed, and unless someone else has acquired intervening rights, will be re-registered. But any design, by renewal time, will have been published by OHIM so that a re-filing would lack novelty and the design would be irrevocably lost.
Is it too much to hope that the Court might issue a divergent opinion for designs? Well, it remains at least a theoretical possibility. One of the suggestions raised by the appellant was that EPO case law under the identically-worded EPC provisions should be followed. OHIM and the Court, at all instances, refused to do so. One of the reasons given by the Court of First Instance (now the General Court), in their decision T 20/08, was that:
...even if Article 78 of Regulation No 40/94 was drafted on the basis of a patent law model, there is nothing to suggest that the respective provisions must be interpreted identically, since the interests at issue in the two areas may differ. The legal context of patent law is different, and the provisions governing patents seek to regulate procedures different from those applicable in the area of trade marks (Case T‑136/08 Aurelia Finance v OHIM (AURELIA) [2009] ECR II‑0000, paragraph 21)."
Well, following that reasoning, designs are different to trade marks - in fact, as to the novelty issue, they are much more like patents. So ... is anyone prepared to try to tell the Court to apply their own words to designs, and follow the EPO's more applicant-friendly approach where the consequences of failure are so much more penal than for trade marks?
In the meantime, what about resuming the filing of authorisations at OHIM - specifically limited to exclude renewal business? We might try that ourselves, if no one else can be found to do so.
Please do keep us informed of any restitutio cases in the pipeline, as we have had widespread expressions of concern from applicants since our last item on this topic.

S T R E T C H E D credibility

It is one thing to rip off a competitor.  But filing your own lookalike design in their home market surely stretches the bounds of credibility.  We are indebted to Dr Mark Schweitzer, of Meyer Lustenberger (sorry, "meyerlustenberger"!) and even more so to Mareike Hunfeld of Hogan Lovells, for drawing our attention to German Federal Court of Justice Decision of 22 April 2010, I ZR 89/08 (Stretched limousines).  Here is a link to the excellent Hogan Lovells newsletter report of the case.
By a spooky coincidence it features the S Class stretch limo, which we covered incidentally in our "leaks" posting last week.  However, that posting concerned the updated S Class.  The German case concerned infringement of the original S Class stretch limo registration, RCD 000173166-0007.  This was applied for in May 2004 under "deferred publication" to keep it secret until the 2005 launch.  It must therefore have surprised DaimlerChrysler to see that Centigon, a competitor for limos and armoured vehicles, had applied in January 2007 to register pretty much the same thing as German design 40700389.  Perhaps unsurprisingly they sued for infringement, and, perhaps unsurprisingly, they succeeded.  The prior art cited included Daimler's own earlier models, but they overcame the kind of issues that sunk them in Sweden back in the day, and were upheld on validity. 
We have suggested several times recently that design infringement is on the up in the auto market, see here and here.  So far, the automakers seem to be winning these spats, where they have registered their designs. 

Sudden Death in Alicante

We note two recent OHIM design appeal decisions which demonstrate their remarkable, and regrettable, unsympathetic attitude towards design owners on renewal fee payments. 

In R 1011/2009-3 and R 1012/2009-3, the proprietor (an EU subsidiary of Korean company who have made substantial inward investments into Europe) had transferred representation for the designs concerned from one reputable firm of attorneys to another and, unfortunately, it seems that amongst other cases, in error the wrong file was sent over and the right file was not.  The recipients had the correct number of files and therefore didn't chase the missing one, or take over responsibility at OHIM, and the senders didn't resign responsibility at OHIM. 

Two years later, the renewal fee wasn't paid.  The Loss of Rights notice went on 17 November 2008 to the previous representatives, who forwarded it to the new representatives on 5th December.  That was the first point at which the "true" representatives became aware of the position, and therefore the very first point at which the applicant could have complied with the renewal payment.  The application for restitutio in integrum was filed two months later, on 4th February 2009, two months from the point at which the applicant was able to comply and therefore, from the point of view of the applicant, in time.

OHIM took a different view.  They held that since the change in representation had not been recorded, the date of sending to the old representative triggered the two month period, which therefore expired on 18 January.  The application for restitutio was therefore out of time.  The Appeal Board upheld the first instance.

We beg to differ.  It is not that OHIM's reasoning is illogical.  Mechanistically, one can follow their logic.  But these decisions, together with a host of others, fly in the face of reality and fairness to the proprietor.  The analysis is from OHIM's point of view, not that of the proprietor, and the proprietor here has done nothing wrong.  They registered their IP rights at OHIM.  They selected attorneys on OHIM's list, people who OHIM accepts as, and holds out to be, fit for purpose (and who are, to my direct knowledge, perfectly suitable).  They did not want their rights dropped, and they instructed their attorneys to renew them.  So why are they punished?

The underlying notion is that the acts of the agent are attributed to the principal, which is the whole basis of agency.  But:

1. It is stretching that notion to say that unintended, uninstructed, and unauthorised errors of the representative should be attributed to the principal. 
2. In this case, the errors in question were at least partly those of a person who, from the principal's point of view, was no longer their agent. 
3. As far as the principal knew, the previous agent should already have withdrawn in favour of the new one.

The statute is quite clear that it is the removal of the cause of non-compliance that is the issue.  That is a factual issue, and to give a deemed date (when the previous representative got the letter) rather than a real one (when the proprietor actually became aware of it) is to supply a fictional answer to a factual enquiry.

More generally, errors occasionally occur, even in the best-run machine.  If OHIM themselves never made an error, they might be in a moral position to impose extremely high standards on their users - but believe me, dear reader, they make plenty, and this case would certainly have been decided differently if the Board of Appeal applied OHIM's own error rates.

If intellectual property rights are, in general, a public good (and we have to start from that assumption, or else there is no logic in the existence of OHIM) then the underlying public policy should not be to try to kill them off on formalistic grounds.  Who benefits by this kind of logic-chopping?  Certainly not the applicant, who has done nothing wrong, and has in return lost their rights for ever.  Not, we presume, the public in general which benefits in general from the existence of creativity and its protection.  Not OHIM - they lose future fee income on this case.  Not the poor representatives, whose only sin was to make a slip.  Not the other clients of their insurers, who ultimately pay higher premiums, raising the cost of IP protection generally.  Perhaps one might assume that competitors benefit from the untimely death of a duly registered design - but in this case, they certainly have lost no legitimate expectation, since the application for restitutio was on file very shortly after two months from the lapse notice - long before anyone could have inspected the file and concluded that the rights were irretrievably lost.  And, of course, the statute itself would explicitly protect any such legitimate expectations.

These are, so far as anyone knows, valuable intellectual property rights.  The applicant has spent money at OHIM getting them registered.  It will often be possible to re-file a lost trade mark, but these designs can never be re-filed - they would lack novelty over their own publication by OHIM - and so they are lost for ever.   We strongly urge OHIM to drop the doublethink, to see matters from a real-world point of view, and to protect their users' investments in valuable IP rights from these arbitrary and disproportionate extinctions.

Poland in the Alicante spotlight

Poland is the country under the spotlight in this month's country-by-country review of registered Community design activity in OHIM's Alicante News. News from Poland is encouraging, at least when viewed from a deckchair one of Alicante's sunny beaches. Says the review:

"With more than 9,200 registrations since 2003, the registered Community design has been consistently popular with Poland undertakings. There were around 2,600 RCD filings last year with classes 6, 25 and 9 in highest demand.

Once again, the majority of Polish filers prefer the online route, with over 93% now using e-filing. Around 4% of designs come by mail, and 2% by fax".

The feature also lists Poland's most prolific Community design applicants -- and the Top Ten firms of representatives of Poland-based applicants.