Commercial Law International

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

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

Imagine being told that you could no long buy a BlackBerry or being told that the services of the one you already own will be restricted, just imagine. Think it can’t happen; well think again for this has now entered the range of possibility in the United States.

The Canadian company, Research In Motion Ltd (RIM), the maker of the ubiquitous BlackBerry, could be banned in the US if it receives and adverse ruling by the International Trade Commission (ITC). Please, please don’t panic, your BlackBerry is still safe, please note I said “if”.

Let me be perfectly clear here, it is only a slim possibility, for now, as the ITC has to date not initiated an investigation of RIM. However, there has been a complaint made to the ITC by Prism Technologies LLC (Prism) that RIM has infringed its intellectual property.

The complaint made by made by Prism is its latest move to force a settlement from RIM. The two are embroiled in hotly contested patent case since last year in federal court in Nebraska were Prism claims that RIM through its BlackBerry has violated its patents held on desktop software and servers and an authentication system. In September of this year Microsoft settled its portion of the case with Prism.

In filing the ITC complaint what Prism is in effect trying to do is force RIM to settle the patent infringement case. But how, you might ask.

Well there are two reason and all of them having to do with the characteristics of the ITC. The ITC is a quasi-judicial federal agency set up to investigate and enforce US laws as they pertain to unfair trade practices. The agencies mandate extends from anti-dumping and countervailing duties to patent infringement.

The first of the two reasons is that the ITC unlike in a lawsuit, which could drag on for year, can complete its investigation in about 15 months. If an investigation is actually launched, RIM and its lawyers will have to weigh on the one hand the probability of an adverse finding with the finding surviving the subsequent appeals that are sure to come and on the other hand settling its issues with Prism so that any ITC investigation would be rendered a moot point. The speed with which the ITC can move will defiantly put RIM a weakened negotiating position – well played Prism lawyers, well played.

The second reason is that the ITC unlike courts do not have the authority to order royalties but they do have the power to stop any importation of any new devices; prohibit the sale of devices already imported; and even bar the transmission signals originating from another country. Here again Rim and its lawyers will have to do some business-legal analysis and determine what’s in its best interest – is it better to settle now ( with only an ITC complaint) or is it better to wait and let a potential ITC investigation or even adverse finding force its hand?

The good news for RIM is that it still has time, for now there is only an ITC complaint, no investigation.

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.

By: Ainsley Brown

Anheuser-Busch, along with Labatt Brewing Co – both companies are owned by Anheuser-Busch Inbev NV – have filed suit against Brick Brewing Co claiming that Brick is violating its intellectual property.

The dispute centers on the use of the colour green and limes on the labels of Brick’s Red Baron Lime Beer.  Anheuser, the maker of Budweiser, is alleging the Waterloo, Ontario, Brick has violated the intellectual property on its own lime beer – Bud Light Lime. The suit will be essentially an exercise in  compare and contrast; like one of those games where you are given two similar images and you have to find and circle the differences.

The primary question that that has to be answered during this is whether or not any similarities between the two beer is likely to lead to confusion in the eyes of the public? Put another way is there enough of a difference between the two beers so that the consumer may make a conscious decision to chose one brand over the other?

So, how similar/different are they?

Both are sold in clear glass bottles; both labels have green and silver colours; both depict a slice of lime; Bud Light lime has BL written on it; and Red Baron Lime has its name spelt in different font than that of BL. I invite one and all go out to your nearest Beer Store or LCBO and you be the judge, alternatively you can do the same by visiting both websites.

Is this really the crux of the dispute or is there something else afoot?

I believe there is. I think the real issue here is the 25% cost differential in Ontario between the two beers. Does Anheuser – seeking to prevent Brick from using limes and beautiful scantily clad people in its advertising; unspecified monetary damages; along with $500, 000 in punitive damages – have a valid claim? I don’t know but what do know is that Red Baron Lime being 25% cheaper than Bud Light Lime in these tough economic times will be sufficient inducement to many a beer drinker to at least give it a try. That being the case Red Baron Lime could represent a substantial threat to Bud Light Lime, well at least in Ontario.

On a side note, this is not the first time that these two have tangled. In June of this year the two settled an intellectual property dispute after Labatt claimed that Brick’s Red Baron packaging was too similar to Labatt’s Brava beer. The dispute was settled after Brick agreed to change its label.

However, this time there does not seem to be any room  for such a settlement, the vitriol coming from Brick is to be believed.

By: Ainsley Brown

The Swiss pharmaceutical giant Novartis has launched suit in the English High Court against Glaxo Smith Kline (GSK) claiming that GSK has violated its intellectual property.

This new action is far from being the opening salvos of this drug war; the two have already locked horns over the same matter. GSK last year sued Novartis in both England and Belgium – the outcomes of which are yet to be decided – in an attempt to get Novartis’ patent revoked. Now interestingly enough Novartis rather than launching a counter claim has chose to bring a fresh action before the English courts.

All a bit confusing isn’t it? Don’t worry, I was confused at first myself – let me break it down for you.

This saga is more than just about patent protection or even brand protection, both of which are of great importance in and of themselves. No! This is about much more. This story goes far beyond that to include commercial awareness; business strategy; profitability; and continued sustainability.

No my friends this is no exaggeration. What this story is reveals is the growing importance of vaccines to big pharma. Yes, vaccines.

Vaccines have become the new life blood for the drug giants as they have increasingly moved away from blockbuster big name magic pills to a more diversified portfolio. This diversification has included a soften stance on generic drugs – going as far as either doing it themselves or entering into joint ventures with smaller specialist generic makers – and consumer goods. However, the cornerstone of the diversification has been a move back into the steady income generation of vaccines with investments being made in new and old diseases alike.

At the heart of this battle are a set of vaccines used to prevent childhood diseases such as meningitis. More specifically, the techniques used in making these said vaccines. According to GSK it registered its patents covering such techniques as far back as 1981 and therefore beats the Novartis patent by being the first to register. As aforementioned, GSK launched suit in both England and Belgium in an attempt to get what it claims as Novartis’ weak patent revoked. In response Novartis launched suit against two GSK subsidiaries – Smithkline Beecham and GSK Biologicals – claiming that not only is its patent firmly placed but that GSK was the one infringing on its intellectual property.

It will definitely be interesting to watch this clash between these two Titians unfold.

By: Ainsley Brown

First France, now the UK. The L´Oreal v eBay counterfeiting war goes on with yet another victory for eBay, this time in the English High Court.

In L´Oreal Takes eBay To Court I mused: While I will admit that I do not have the full particulars of the case, I just have a feeling that L’Orèal is going to win this one. But eh you never know… There is just no such thing as: a sure thing in litigation. I could not have been more wrong, well in part. I guess it’s a good thing I did the lawyerly thing by first admitting that I did not know the particulars of the case and secondly leaving open the possibility that pronouncement (read: lawyer´s educated guess, though we rare admit this point) could indeed be incorrect.

At the end of the day it would seem that eBay´s argument that it is merely a trading platform and is in no way directly involved in the sale of the goods, won the day over L´Oreal´s counterfeiting and consumer danger one. However (hey its law, there almost always is an however), if this is all you read from this judgment, you have missed two very important inter-related points.

The first is that while Judge Richard Archer did rule that eBay cannot be held responsible for its users´ actions, he did agree with L´Oreal that eBay could do more to prevent the sale of counterfeit goods. The judge went as far as suggesting, that is suggested not ordered, ten measures that eBay could take to beef up its anti-counterfeiting measures. These include requiring sellers to disclose their name and addresses in all listings and filtering auction lots before they are put on the site.

The second point, which flows from the first, is that any new anti-counterfeiting measures implemented by eBay would require a degree of co-operation from L´Oreal and other brands to be of any success. Just look at the measures suggested by the judge to see my point. This seems to be a consentient theme with these cases, as in their French skirmish, the French judge suggested this very thing.

The question now is, will L´Oreal and eBay kiss and make up or will they continues their war fought out in battles in courts all over the world?

This does not seem like a promising prospect any time soon, no matter how much the legal and better yet commercial sense it makes. Evidence: legal proceedings continue in both Spain and Germany.

By: Ainsley Brown

I have been wanting to do an Australian themed story for a long time, not least because of the global mandate of the site but also I am just a big fan of the land of Auz – I guess it´s just the rugby player in me but truth be told I am a bigger fan of New Zealand. However, I digress.

This story at its simplest can be boiled done to the difference between a Vo-Vo and just plain old Vo? What indeed?

A Vo-Vo, what on earth is a Vo-Vo or a Vo for that matter? Well for my non-Australian readers, the Australian ones I am sure know what I am talking about – that is if I have any Australian readers left after my rugby confession – a Vo-Vo is a popular Australian cookie. The strips of pink icing and jam sprinkled coconut of the Vo-Vo is much beloved by Australians, you could even go as far as saying it has cultural significance as evidenced  by it  garnering a mention in the victory speech of Prime Minister Kevin Rudd.

Now given the iconic status of the Vo-Vo, to say nothing of the commercial value of the brand to the Sydney based Arnott´s Biscuit´s it would come has little surprise that they would fiercely defend their intellectual property. Arnott´s after all has put a lot of time, human capital and money in the branding and marketing of the Vo-Vo, as demonstrated by its success. The Vo-Vo has been with Arnott´s very long time, it has held the registered trademarks to the Vo-Vo, Iced Vo-Vo and Iced Vo Vo names since 1906.

Here enters the American doughnut shop icon, Krispy Kreme, with their Vo. Yes a Vo. The Krispy Kreme Vo, instead of being a cookie is a doughnut that is, and get this, filled with raspberry jam and topped with pink icing and coconut.  As far as Krispy Kreme is concerned the public can easily tell the difference between a cookie and a doughnut and is not violating any laws.

Given the similarity, despite Krispy Kreme´s claim´s to the contrary, Arnott´s has told the American based company to stop violating its intellectual property rights or else it will be forced to take legal action to protect those rights. And I say rightfully so. Krispy Kreme can fool itself all it wants, the truth is that is was trying to cash in on the iconic status of the Vo-Vo without asking or having to pay the rightful owners for such a right. I if were representing Krispy Kreme I would take the out offer by Arnott´s and simply just stop making the Vo rather than risk going to court.

Krispy Kreme now finds itself in a lose, lose, lose situation. Before I go any further let me confess that I am not versed in Australian law nor am I well versed in common law based intellectual property law but I do know a little and I also know a little about the commercial consequences of legal action. As the site´s tag line exclaims Commercial Awareness Is Global.

Why a lose, lose, lose situation? Well, if it ends up in court Arnott´s stands a very good chance of proving its case, the Krispy Kreme Vo is, despite it being a doughnut, is far too close in name and substance to the Vo-Vo and violates Arnott´s rights. In this situation not only would Krispy Kreme have to pay over damages to Arnott´s it would also have to endure the spectacle of a public trail with its ensuing damage to its commercial reputation. Now even if it wins, you just never know which is why litigation is such a risky proposition at times, it still loses. It may not be liable for damages but it still would have suffered damage to its commercial reputation. It has take on an Australian icon, now even if Australians don’t readily associate Vo-Vo, Vo, Iced Vo or whatever else you want to call it, with Arnott´s, the do proclaim the name to be theirs .Now through the use of legal tricks an outsider – an American company – has come to our country and stolen our name – a part of Australia. Am I over playing it a bit, maybe, but it seems to me that the Australia people are a very proud people and guard what they deem to be their heritage very jealously.

Lastly, and incidentally the best situation for Krispy Kreme – though it still represents a loss – is to take up Arnott´s offer and just stop making the Vo.  This could quickly, as outlined above, turn into Australia vs. Krispy Kreme rather than an Arnott´s vs. Krispy Kreme.

Krispy Kreme should just admit that it got caught with its hand in the cookie jar and move on. It would be far better for it.