Commercial Law International

By Charles Wanguhu

Well with Ash rising over European skies causing all kinds of travel chaos, it is quite suprising and hard to fathom the impact of one volcano is having on the continent of europe and over its neighbours.

At the Jomo Kenyatta International Airport in Nairobi a stink has engulfed the main cargo centre where once freshly cut flowers and vegetables are now rotting. As of sunday a $12 Million stockpile worth  of vegetables and roses had piled in cold rooms at the airport.

But more suprising is the impact its having on Naivasha a small lakeside town  is all the more uprising. The flower industry is the main employer in the town with an approximate 50,000 employees. With one flower farmer forced to throw 6.5 tonnes of roses into a compost pit and losses being compounded day by day, nerves are already setting in with fears of unemployment rising.

The only hope is that the European airspaces will clear by the peak period of Mothers day. We all are as citizens of the world  really  interconnected.

By: Ainsley Brown

The trade skirmish that has erupted between China and the European Union over shoe tariffs has been one that I have being following very closely here on Commercial Law international. And, yes you guessed it, each side continues to exchange salvoes; the latest being China moving from the consultative stage of the World Trade Organization’s (WTO) dispute resolution procedure to the next stage, which is the request for the formation of a WTO Panel (tribunal) – click here for a break down of the WTO’s dispute resolution process.

As far as the Chinese concerned the 16.5% duty imposed by the EU violates WTO rules by being protectionist, namely the EU has not demonstrated that is shoe industry has or will suffer material damage from Chinese imports. The EU for its part has countered with the claim that its anti-dumping measures are not protectionist and are WTO compliant.

It will be interesting to see who will prevail in the end.

As an interesting aside a new front – an internal EU – has recently opened up in this battle and has to be watched closely. The Federation of European Sporting Goods Industry (FESI), the organization that represents many EU based sporting goods manufactures such as Adidas, Fila, Nike and Umbro, last month has taken the EU Commission to the European Court of Justice (ECJ). The FESI has launched suit in the belief that “the EU’s decision to extend the duties for a further 15 months in December 2009was based on inappropriate investigation and a flawed analysis of the facts,” according to its own press release.

It will be interesting to see what influences either proceeding will have other the other. For example what if the ECJ sides with the FESI, on what basis would the EU then justify the continuation of the duties at the WTO if its own internal court has ruled against it?

Lastly it will also be very interesting to watch if the Vietnamese, affected by the same tariffs, will join the Chinese in their complaint and how this would affect the recently launched EU-Vietnam trade talks?

All very interesting, indeed!

By: Omar Ha- Redeye and posted on Slaw on March 23, 2010. 

Luxury good maker Louis Vuitton Moet Hennessy (LVMH), who produces Moet & Chandon champagne and Dior perfume, claimed that Google’s advertising polices violated their trademark.  The practice in question was the use of key words related to brand names by counterfeiters, who would then link to online stores.

Based on reported coverage of the case, the European Court of Justice made several main findings in a decision released this morning:

1. Google has not infringed copyright simply for allowing companies to purchase trade mark key words
2. Google cannot be liable for advertising requests if it removes them when informed that a trade mark has been abused
3. Trade mark owners have the right to stop their use in AdWords when they suggest they are linked to the owner or create confusion about the owner
4. Companies can still claim compensation if a court rules that the misuse of trade mark damages the brand
5. Google will be liable for infringement if it does not act quickly to stop the misuse of trade mark

Both sides are claiming victory.

A copy of the decision can be found here, and a summary of the case by the court here.  Google’s blog post in response to the case can be found here, and a press release by LVMH can be found here.

By: Ainsley Brown

In move that comes as no surprise, China has launched an official complaint with the World Trade Organization (WTO) over the European Union (EU) duties on imported Chinese shoes. And I saw this one coming a mile away; see my previous post on this issue.

The duties were imposed in December of last year for a 15 month period and were a continuation of duties imposed on certain imported Chinese and Vietnamese footwear put in place back in 2006. In an earlier vote held in November, the EU members rejected the extension of the duties; a moved which I applauded and believed would be maintained in the second vote. I was wrong. In the second vote, after heavy lobbying from the EU Commission Austria, Germany and Malta changed their votes and the duties were in turn extended. That is 16.5% on Chinese shoes and 10% on Vietnamese respectively.

In launching this complaint China has initiate the formal WTO dispute resolution process. The two parties are now in what’s called the consultation phase and they have 60 days to find a mutually acceptable solution.

By: Ainsley Brown

When it comes to the hype around a new product no body does it better than Apple. In fact you could even say that Apple has made the hype surrounding a new product a large part of its advertising and marketing campaign.

However, the key to such marketing is maintaining such levels of secrecy that would make the CIA proud. This same approach was taken with all its “i” products – the iPod, the iPhone and now the iPad. With the importance of secrecy such high levels of secrecy it’s only a matter of time before the lawyers get involved.

And yes, they did get involved.

In the lead up the release of the iPad this week, Apple’s lawyers Orrick, Herrington & Sutcliffe LLP sent out a stern warning letter to a website that offered a cash bounty to any one that could produce pictures of the then unnamed iPad. The Silicon Valley gossip website, Valleywag received the warning after it offered $10,000 for a photo, $20,000 for a video and $50,000 for a video with Apple co-founder/CEO Steve Jobs holding the iPad.

Now if this was simply a joke by Valleywag, and I don’t know if it was or wasn’t, Apple and their lawyers certainly weren’t laughing. In the letter to Valleywag, Orrick, Herrington & Sutcliffe warned: “While Apple values and appreciate vibrant public commentary about its products, we believe you and your company crossed the line by offering a bounty for the theft of Apple’s trade secrets. Such an offer is illegal and Apple insists that you immediately discontinue the Scavenger Hunt.”

There is no word of if Valleywag was moved by the warning but it is important to note that the iPad was released without incident to the joy of Apple.

By: Ainsley Brown

“Old pirates, yes they rob I.”

The opening words to Redemption Song are as hard hitting now as they were when first bellowed by the iconic musical legend – Bob Marley - years ago. These words however may be taking on a new meaning in this era digitization and globalization where information is king. This era is all about IP – Intellectual Property – and the right to access, control and exploit for ones own benefit the concepts encapsulated within creativity.

As a matter of course the Brand – how you package and sell your IP, in fact branding itself becomes a form of IP – in this era becomes of great import. In fact one could argue that brand is not the everything but is the only thing. Consumers no longer simply buy a product or service – no, no – rather they are buying a brand.

Now this brings me to the House of Marley. The heirs of Bob Marley – the holders of the exclusive rights to the reggae superstar’s image – are drawing clear battle lines in the IP war on whom can access, control and exploit Marley’s iconic status. They have enlisted the aid of Canadian private equity firm Hilco Consumer Capital to package, manage, market, sell, monitor and protect the IP that is Bob Marley through the products sold under the new House of Marley brand.

Rather than attack the hawkers of existing wears, which would result in a multiplicity of protracted legal battles spread-out across the globe, Hilco and the House of Marley have instead embarked on a branding campaign. It is quite simple, the House of Marley will be authentic and all other comers will only be imitators – a potentially very lucrative strategy, if it can be pulled off.

According to reports, the Marley brand – name, sound and image – are estimated to generate $USD 600 million in a year and this is on the bootleg side alone. On the legal side, the brand generates a profitable but substantially smaller $USD 4 million a year.

With numbers like those no wonder the Marley heirs sought out and gained a partner like Hilco with a proven reputation in IP generally and branding specifically?

While I applauded this new venture, I can’t help but how long will it be before we see a court case or two? Maybe a few Anton Piller orders – best described but somewhat inaccurately as a civil search warrant, that feature so prominently in IP cases – or maybe the odd Mareva injunction – a court order freezing assets -?

The reason why I am thinking this is that it is impossible to escape the fact that branding – intellectual propertization – eventually means not only the allocation of exclusive rights but also the enforcement of those rights.

By: Ainsley Brown

The European Union (EU) voted this week to continue the anti-dumping duties it put on certain Chinese and Vietnamese footwear imported in the EU.

In a previous post, I speculated that the EU would vote to discontinue the tariffs – boy was I ever wrong. And the EU’s decision has not gone unnoticed in the EU and elsewhere.

The 16.5% and 10% tariff on Chinese and Vietnamese respectively, originally imposed in 2006, will be further extended for another 15 months. According to the EU its traditional shoe manufacturers, many of which are located in southern EU countries, need the continued protection of the anti-dumping duties in order to continue their adjustments to new market realities, largely through the implementation of new technologies.

The decision has pitted so-called retail nations (e.g. Britain and Sweden) against so-called manufacturing nations (Italy and Spain) against each other. The manufactures clearly want the duties continued and retailers do not – but if it were only that simple? While the retail/manufacturer split is best seen as a term of art it also reflects official policy groupings, a clash between traditional artisan and consumerism cultures, and a north/south geographic split within the EU. All of these “splits” have caused serious discord, in this and on other issues, within the EU and therefore have to be taken seriously.

However, this split should not be over stated because it is not absolute. There are for example elements within the manufacturing nations that would have been happy to see the duties done away with. Likewise, in the retail nations there are those that are pleased to see the tariff extended.

The EU decision has not gone unnoticed and has brought a swift response from China. The Chinese are have threatened to take the EU to the World Trade Organization (WTO) in what no doubt it will see as a usurpation of its rights.

By: Ainsley Brown

Shoe Duties Dumped?

The European Union (EU) last week rejected a plan that called for the extension of duties placed on Chinese and Vietnamese footwear.

While a bit of a setback for Trade Commissioner, Baroness Ashton, the vote was far from a clear rebuke of her wishes to see the duties extended for a further 15 months. The Anti-dumping Committee voted 15-10, with two abstentions not to extend the duties imposed in 2006.

Baroness Ashton, however, will have another shot at convincing EU members to extend the duties as there will be another vote on the matter some time later this month. This will be an uphill battle for the Trade Commissioner, as EU members will be mindful of increasing protectionist tension between the EU and China.

I will go on the record as right now and say that I believe that the second EU vote will confirm the first. How large the margin of victory will be, that I cannot predict. However, it is imperative that the EU quell trade tensions with China, especially in these times of economic crisis, and not extending these duties would send the right signals. This is not to say that the tension would magically end over night – not at all, that would require countless hours of diplomatic negotiations – but it would greatly aid in getting the ball rolling.

By: Ainsley Brown

EBay was fined yesterday €1.7 million by the Paris Commercial for violating an injunction prohibiting the sale of LVMH products on the online auction site.

The injunction was imposed on eBay last year after it was taking to court by LVMH for allowing the sale of its products on its site. LVMH, the world’s largest luxury good group, with such brands as Louis Vuitton, Christian Dior, Moet Hennessy, and Givenchy, to name a few, had  exclusive sales and marketing contacts with specialist retailers.  In an effort to protect its brands, including of course its exclusive sales arrangements LVMH – and other luxury band companies such as L’Oreal – has taken aggressive steps against eBay and others.

These legal battles are not just simply about LVMH or L’Oreal wanting to prevent counterfeits of their brand entering the market, though this is part of the story. No! It is also, if not more about brand management – who has the right to develop, market, sell and ultimately who right to profit from such efforts.  All of this, it must not be forgotten, is being done in the context of the era of globalization and the internet.