The European Patent Office (EPO) released the Patent Index 2020, which gives an overview of the filing activities in the EU during the past year. Despite the Covid-19 pandemic’s dramatic impact on all aspects of the economy, the number of patent applications filed only slightly declined with a 0.7% decrease compared to 2019.

In this scenario, Italy emerges as one of the fastest-growing European countries in the healthcare innovation sector, achieving an increase in applications well above the average in pharmaceutical patents. Also worth noting is a considerable growth in medical technology, which is now the fourth most relevant technical field in the country.

Medical technologies, pharmaceuticals, and biotechnology all registered strong performance overall at the EPO level as well. Healthcare innovation was the main driver of European patent applications in 2020, with medical technologies in the lead spot among all tech sectors and major growth in the pharmaceuticals and biotechnology fields.

These three fields lead the trend with growths of +2.6%, +10.2% and +6.3% respectively. Just these three technical fields alone comprise some 16.7% of all patent applications filed with the EPO in 2020.

Interestingly, the EPO Patent Index 2020 itself attributes most of the increase of patent filings in the medical technology, pharmaceuticals and biotechnology fields to the impact of the Covid-19 pandemic in encouraging innovation. In this framework, European countries maintained a share of almost half of all patent applications filed, while China (+9.9%) and South Korea (+9.2%) saw the most significant growth.

Looking more in detail at the performance of EU countries, applications from Germany, Europe’s largest country of origin, decreased by 3.0% in 2020, similarly to those from The Netherlands (-8.2%) and UK (-6.8%). Italy, on the other hand, saw a remarkable growth of 2.9% and is currently ranked 10th for the overall number of patent applications filed.

Italy registered in particular a considerable growth in the medical technology, pharmaceuticals, and chemical engineering sectors, in line with the general trend outlined above. In particular, Italy plays a key role in pharmaceutical innovation with a significant growth of over 22% compared to 2019, preceded only by the furniture and games sector. Moreover, Italy registered a 6.0% increase of applications in the medical technology sector, which is above the average increase in the top-10 countries for the sector.

Italy thus continued the positive trend in terms of innovation growth already ongoing over the past years, in particular in the healthcare sector that is one of the highlights of its industrial landscape.

Con recente sentenza n. 179 del 29 gennaio 2021, il Tribunale di Genova ha liquidato il danno da contraffazione di una privativa varietale raddoppiando l’importo calcolato con il criterio della royalty ex art. 125 CPI.

Il caso aveva ad oggetto la illecita moltiplicazione e commercializzazione, da parte di un distributore di sementi emiliano, della nota varietà di grano tenero denominata ‘Bandera’, protetta a livello europeo dal gruppo sementiero francese RAGT e gestita dalla società francese SICASOV in qualità di mandatario.

Il Tribunale di Genova, dopo aver accertato la condotta contraffattiva, ha quantificato ex art. 125 CPI il danno da lucro cessante subito dalle attrici, applicando il criterio della royalty.

L’importo così ottenuto è stato poi raddoppiato dai giudici genovesi, accogliendo la specifica richiesta formulata dalle attrici. E ciò al fine sia di indennizzare tutte le perdite effettivamente subite dal titolare della privativa e dal suo mandatario, sia di evitare che il risarcimento risultasse in qualche misura premiale per l’autore della violazione.

Infatti, applicando il criterio della royalty ‘senza correttivi’ si corre il rischio di incentivare il contraffattore, che si ritroverebbe a pagare, molto tempo dopo l’avvio della condotta illecita e solo a seguito di un procedimento giudiziario, lo stesso importo normalmente richiesto al licenziatario.

Il principio della maggiorazione della royalty è già applicato con una certa frequenza dalla giurisprudenza italiana nei casi di contraffazione di diritti IP. Generalmente, il tasso di royalty individuato caso per caso viene aumentato di due o tre punti percentuali ovvero raddoppiato, proprio per non riconoscere al contraffattore un trattamento premiale.

La sentenza in commento si segnala per essere una delle prime pronunce ad aver esteso il suddetto principio anche in materia di contraffazione di privative varietali, avvicinandosi così al criterio delineato dall’art. 18, Reg. CE n. 1768/95. Tale disposizione – applicabile esclusivamente ai comportamenti tenuti dalle aziende agricole in violazione dei limiti imposti dal c.d. ‘privilegio dell’agricoltore’ – prevede che il risarcimento del danno dovuto al titolare “comprende per lo meno un importo forfettario pari a quattro volte l’ammontare da corrispondere per la produzione soggetta a licenza di una quantità equivalente di materiale di moltiplicazione di varietà protette delle rispettive specie vegetali nella stessa zona”.

I giudici genovesi, pur ritenendo non applicabile al caso di specie la norma europea (per il fatto che formalmente il convenuto non svolge attività agricola), hanno dimostrato particolare sensibilità per un’equa quantificazione del danno da contraffazione subito dai costitutori di nuove varietà vegetali. In tali casi, infatti, il costitutore ha difficoltà ad accertare l’entità della violazione: le vendite delle varietà protette – moltiplicate illegalmente – vengono spesso contabilizzate senza indicare la specifica denominazione della varietà, bensì con riferimenti generici (es. seme grano tenero/grano tenero da risemina), che non permettono una esatta determinazione del numero di semi o piante/frutti venduti. Tra l’altro, la contabilità delle aziende agricole si rivela, alle volte, lacunosa. Ciò rende impossibile un congruo ristoro del danno subito dal costitutore.

Si auspica, perciò, un utilizzo sempre maggiore da parte delle Corti italiane del principio del raddoppio della royalty nei casi di contraffazione di privative varietali, sperando di poter giungere anche alla piena applicazione dell’art. 18, Reg. CE n. 1768/95 (nei casi previsti dalla stessa norma).

Solo in questo modo si riuscirebbe – senza fare ricorso alla categoria dei danni punitivi, non contemplati dall’ordinamento italiano – a risarcire in modo soddisfacente i danni subiti dal costitutore/titolare di privative varietali e scoraggiare la contraffazione sempre più dilagante nel settore varietale.

The long awaited ‘SEPs Expert Group report’ has been published on Wednesday 10 February on the European Commission’s website (available here). As readers will recall (see here for further details and group members), the expert group was set up by the Commission in July 2018, with the task of providing economic, legal and technical expertise to assist the Commission in considering policy measures to ensure a balanced framework for the efficient licensing and valuation of standard essential patents (SEPs).

The expert group produced a massive report (230 pages), focusing on a broad range of highly debated topics, such as the need to increase transparency about SEPs and SEPs licensing, where to license in the value chain, how to establish fair and reasonable terms, when licensing conditions are non-discriminatory, how to facilitate negotiations and under what conditions injunctive relief should be available.

Interestingly, and reflecting the controversial nature of most topics, the report does not provide individual solutions (most importantly to the crucial issue of component level licensing in the value chain), and is instead more concerned about setting the framework and providing a pluralist account of the various positions (but this did not prevent one of the experts from writing a dissenting opinion – starting at page 187 of the report).

A few unanimous guidelines are nonetheless provided, as exemplified in the extracts below, confirming i.a. the centrality of the non-discrimination requirement (in contrast with a number of recent court decisions in Europe, including the UK Supreme Court decision in Unwired Planet – see here for additional details):

  • The non-discrimination (ND) commitment requires the licensor to treat similarly situated parties in a similar manner. In the EU Treaty, a similar requirement follows from Article 102(c) TFEU, which prohibits dominant firms to engage in anti-competitive discrimination. It is generally agreed that the ND commitment does not require the SEP holder to offer the exact terms and conditions to all licensees. A SEP holder should be allowed to respond to different market situations by offering different licensing terms. However, in the presence of similarly situated implementers, differences need to be objectively justified based on a holistic view of the relevant elements, such as sales volumes, certainty of royalty payments, geographic scope, etc.
  • Volume discounts, lump sum discounts and annual royalty caps are generally acceptable if offered to competitors that are similarly situated unless they greatly favor one or more licensees without any added benefits to the licensor.
  • An offer falls outside the Fair and Reasonable (FR) range if the SEP holder’s compensation exceeds the incremental value that the patented technology adds to the licensed product. The terms and conditions on offer should not reflect any hold-up value, which may result from irreversible choices made by licensees during the development or the implementation of a standard. A licensing offer also falls outside the FR range if it fails to remunerate the SEP holder for the value added created in the product implementing the standard. In other words, a FR license should not reward hold-out, i.e. the unlicensed use of the patented technology by refusing to enter into good faith license negotiations or by delaying such negotiations.

As said, the report does not provide unanimous guidelines on component level licensing (i.e. where in the value chain licensing should take place). A number of principles that could guide the licensing of SEPs in the value chain have nonetheless been set out by some of the experts and have found room in the executive summary. These principles are the following:

  • It may be more efficient if all relevant SEPs are licensed at a single level in the value chain (such level being dependent on the specific features of the vertical at stake).
  • The royalty for a license for a SEP portfolio that is fully implemented in an end-product should be the same, no matter where in the value chain licensing takes place.
  • The FRAND royalty is a cost element in the price of a component and should be passed on downstream.

A more detailed post may follow after we will all have had the time to digest all proposals. In the meantime, a number of interesting insights in the way the report was drafted and some of the considerations behind the positions taken on the main themes have already been provided by one of the group members (see here), underlining one of the main omissions in the report, namely the role and scope judicial FRAND determinations should have and the interaction between parallel court proceedings where one court has already been seized with a request for global determination.

Con una recente decisione del 22 gennaio 2021, la Divisione di Opposizione dell’EUIPO ha chiarito quali siano le prove più idonee a dimostrare la notorietà di un marchio.

Fatti del procedimento

Nella primavera del 2020, un’azienda italiana, attiva nel settore fashion e titolare del segno “PLEASE”, presentava opposizione contro la domanda di marchio “PLEASE DON’T BUY”. L’opponente motivava la propria opposizione in base alla asserita notorietà del marchio anteriore azionato, ai sensi dell’art. 8, paragrafo 5, RMUE. Per dimostrare la notorietà del marchio, l’opponente depositava la seguente documentazione:

  • una dichiarazione sul livello di fatturato, sottoscritta dal direttore generale dell’azienda;
  • un catalogo;
  • circa 70 fatture;
  • estratti di articoli di stampa e inserzioni pubblicitarie.

Decisione della Divisione di Opposizione dell’EUIPO

Nell’esaminare la documentazione presentata dall’opponente, l’EUIPO ha richiamato i seguenti principi:

  • la notorietà implica la necessità di una soglia di conoscenza, da valutarsi principalmente in base a criteri quantitativi, ossia il marchio anteriore dev’essere conosciuto da una parte significativa del pubblico interessato ai prodotti o servizi da esso contraddistinti;
  • le prove vanno considerate globalmente, nel senso che ciascun indizio deve essere ponderato a fronte degli altri, mentre le informazioni confermate da più fonti in generale sono considerate più attendibili rispetto ai fatti desunti da singoli riferimenti isolati. Inoltre, quanto più la fonte delle informazioni è indipendente, attendibile ed autorevole, tanto più elevato sarà il valore probatorio delle prove.

Alla luce di tali considerazioni, l’EUIPO ha ritenuto non provata la notorietà del marchio azionato, non avendo l’opponente depositato adeguata documentazione. L’Ufficio ha infatti rilevato che l’opponente non ha presentato prove che costituiscono i mezzi i più idonei per dimostrare la notorietà di un marchio, la quota di mercato da esso detenuta o la posizione occupata sul mercato rispetto ai prodotti dei concorrenti, ovverosia:

  • sondaggi di opinione e indagini di mercato
  • indicazioni indipendenti sul volume delle vendite
  • indicazioni indipendenti sulla quota di mercato detenuta
  • riconoscimenti o premi ottenuti dal marchio
  • posizione in classifiche di brand del settore di riferimento
  • relazioni annuali sui risultati economici certificate da enti indipendenti
  • indagini di mercato da parte di enti indipendenti sulla percezione del segno presso il pubblico

In mancanza di tale documentazione, l’Ufficio ha respinto l’opposizione per mancata prova della notorietà acquisita dal marchio anteriore, ai sensi dell’art. 8, paragrafo 5, RMUE.

With decision No. T-253/20, issued on 20 January 2021, the EU General Court annulled the decision of the EUIPO Board of Appeal issued under Article 7(1)(b) EUTMR regarding the refusal of the registration of the word sign “IT’S LIKE MILK BUT MADE FOR HUMANS”.

The decision provides significant clarification on the requirements to register trademarks consisting of slogans.

Background of the proceedings

On 14 March 2019, the applicant, Oatly AB, filed an application before the EUIPO to register the word sign “IT’S LIKE MILK BUT MADE FOR HUMANS” in Classes 18, 25, 29, 30 and 32.

On 5 September 2019 the examiner, on the basis of Article 7(1)(b) of Regulation 2017/1001, read in conjunction with Article 7(2) of that regulation, refused to register the mark applied for goods related to, inter alia, dairy products, milk and beverages, i.e. all the goods claimed by the application in class 29, and the majority of goods claimed in classes 30 and 32.

The refusal was confirmed by the Board of Appeal on 7 February 2020. The Board assessed that part of the mark applied for (“it’s like milk”) indicated that the goods marketed were or contained milk substitutes and, secondly, that the second part of that mark (“but made for humans”) made clear that they were more apt for human consumption. Therefore, the sign would be understood as a laudatory promotional slogan, rather than an indication of the commercial origin of the claimed goods. In particular, the Board stated that sign “IT’S LIKE MILK BUT MADE FOR HUMANS” indicated to consumers who suffered from lactose intolerance or an allergy to milk, or were vegans that the goods covered by the sign are very similar to milk and that they are, in contrast to cow’s, goat’s and sheep’s milk, specifically made for human consumption.

The applicant filed an appeal before the EU General Court. The Court annulled the previous decisions issued by the EUIPO, and upheld the appeal on the basis of the following arguments.

The decision of the EU General Court

First, the Court provided a review of the case law of the Court of Justice on trademarks consisting of slogans and advertising messages. In particular, the Court referred to the following principles:

  1. the registration of marks made up of signs or indications that are also used as advertising slogans, indications of quality or incitements to purchase the goods or services covered by those marks is not excluded by virtue of such use (C‑64/02 P, OHIMv Erpo Möbelwerk, par. 41, and C‑398/08 P, Audi v OHIM 35);
  2. when assessing a mark’s distinctive character, applying stricter criteria to slogans than to other types of signs is not appropriate (C‑398/08 P, Audiv OHIM 35 and the case-law cited, and C‑311/11 P, Smart Technologies v OHIM, par. 25 and the case-law cited);
  3. while the criteria for the assessment of distinctive character are the same for different categories of marks, the relevant public’s perception is not necessarily the same in relation to each of those categories and that it could therefore prove more difficult to establish distinctiveness in relation to marks of certain categories, as compared with marks of other categories (C‑398/08 P, Audiv OHIM 37 and the case-law cited, and T‑104/16, Puma v EUIPO (FOREVER FASTER), par. 18 and the case-law cited);
  4. in any case, advertising slogans cannot be required to display “imaginativeness” or even “conceptual tension which would create surprise and so make a striking impression” in order to have the minimal level of distinctiveness required under Article 7(1)(b) of Regulation 2017/1001 (C‑398/08 P, Audiv OHIM 39 and the case-law cited, and T‑550/14, Volkswagen v OHIM (COMPETITION), par. 16).

In light of the above case law, the Court pointed out that the laudatory connotation of a word mark does not mean that it cannot be appropriate for the purposes of guaranteeing to consumers the origin of the goods or services which it covers. Thus, such a mark can be perceived by the relevant public both as a promotional formula and as an indication of the commercial origin of goods or services. Consequently, a trademark consisting of an advertising slogan must be regarded as being devoid of any distinctive character if it is liable to be perceived by the relevant public only as a mere promotional formula.

As regards to the specific meaning of the mark applied for “IT’S LIKE MILK BUT MADE FOR HUMANS”, the Court stated that, given the presence of conjunction “but” in the middle of that mark, the consumer will perceive an opposition between the first part of the mark (“it’s like milk”) and the second part of the mark (“made for humans”). As a result, the mark applied for conveys not only the idea that the goods at issue, which are foodstuffs, are similar to milk and are intended for human consumption, but also the idea that milk itself is not.

By using the above meanings, the Court ascertained that the mark applied for calls into question the commonly accepted idea that milk is a key element of the human diet. The mark applied for conveys a message which is capable of setting off a cognitive process in the minds of the relevant public, including those consumers who avoid consuming dairy products for ethical or physiological reasons.

Therefore, the wording “IT’S LIKE MILK BUT MADE FOR HUMANS” is easy to remember and is consequently capable of distinguishing the applicant’s goods from goods which have another commercial origin.

Hence, the Court concluded that the mark applied for “IT’S LIKE MILK BUT MADE FOR HUMANS” has the minimum degree of distinctive character required by Article 7(1)(b) of Regulation 2017/1001.

As widely anticipated, the Düsseldorf Regional Court has decided to refer to the Court of Justice of the European Union (CJEU) a series of question arising from a dispute between Nokia and Daimler regarding the alleged infringement of one of Nokia’s standard essential patent (SEPs) by Daimler’s connected cars.

The dispute in suit concerned in essence whether SEP holders like Nokia can freely decide at which level of the production chain of the final products to license their patents, with Nokia wishing to license Daimler only, whilst the latter insists that Nokia should have licensed its technology to suppliers of connectivity components located higher up in the production chain. The same issue is being discussed in other parallel cases before German courts, involving Daimler and its suppliers against several SEP holders.

The questions referred to the CJEU however go beyond the hotly debated issue of component level licensing and actually seek clarification from the top EU court as to a number of major open issues dealt with by the previous case law (including by the CJEU itself in Huawei v. ZTE). The questions articulated by the German court are as follows:

A. Is there an obligation to license suppliers first?

1. Can a company in a downstream position in an infringement action brought by the holder of a standard essential patent (SEP) who has irrevocably committed to grant a license to any third party on FRAND terms, raise the objection of abuse of a dominant position within the meaning of Art. 102 TFEU if the standard for which the patent is essential or parts thereof are implemented in an intermediate component purchased by the defendant whose supplier is willing to license the patent holder, and the latter refuses to grant an independent and unlimited license on FRAND terms covering all relevant types of use relevant under patent law?

a) Does this apply in particular if it is customary in the relevant industry that patent rights be cleared by the suppliers of components implementing said patents?

b) Are suppliers at each stage of the supply chain entitled to a license, or does this only apply to the supplier immediately upstream of the manufacturer of the final product at the end of the production chain? Does this depend as well on business practices in the industry?

  1. Does the prohibition of abuse under cartel law require that the supplier be granted its independent, unrestricted license for all types of use relevant under patent law on FRAND terms for products implementing the standard, so that that the manufacturers of the final product (and possibly the upstream levels of the supply chain) in turn no longer require their independent, separate license from the SEP holder in order to avoid a patent infringement claim if the relevant component was used under a license?
  1. If the question referred under no. 1 is answered in the negative: Does Art. 102 TFEU impose any special qualitative, quantitative and/or other requirements on the criteria according to which the SEP holder can decide against which potential infringers at different levels of the same production and value chain to request and injunction?

B. Clarification of the requirements set forth by the Court of Justice in the case of Huawei ./. ZTE (judgment of 16 July 2015, C170/13):

  1. Irrespective of the fact that the reciprocal duties of conduct to be met by the SEP holder and the SEP implementer (notification of infringement, license request, FRAND license offer; priority to the license offer to the supplier) must be fulfilled before court proceedings, is it possible to make up without prejudice in the course of legal proceedings for duties of conduct that were not met in the pre-litigation phase?
  2. Should a licensing request by the implementer only be considered relevant if, based on a comprehensive assessment of all circumstances, it clearly and unambiguously shows the willingness and readiness of the implementer to conclude a license agreement with the SEP holder under FRAND conditions, whatever these FRAND conditions (which due to the lack of a license offer formulated at that time, were not foreseeable yet) may be?

a) Does an infringer who remains silent for several months after receiving an infringement notice indicate that it is not interested in obtaining a license, so that despite a request for a license was only nominally formulated, such request shall be considered not in good faith, with the consequence that the SEP holder’s request for injunction must be granted?

b) Can it be inferred from license terms proposed by the implementer in a counter-offer that the implementer was actually unwilling to take a license, with the result that the SEP holder’s request for injunction must be granted without prior examination of whether the SEP holder’s own license offer (which preceded the implementer’s counter-offer) is actually FRAND?

c) Is the above conclusion to be avoided if the license terms of the counter-offer, from which it is to be concluded that the implementer was actually unwilling to take a license, are such that it is not obvious neither clarified by the case law of the highest court that they are not FRAND?

The referral of the above questions will provide the CJEU with the occasion for once again shaping the direction of the FRAND debate in Europe.

© UK Supreme Court

What is the impact of the recent UK Supreme court Unwired Planet judgement? What is the current status of the component level licensing debate in Europe? How do courts currently construe the non-discriminatory prong of the FRAND undertaking and what is the role of such element from an economic perspective?

These are some of the topics discussed in a recent online seminar held by Bocconi University, in the framework of their LL.M. in Law of Internet Technology, and introduced by Professor Laurent Manderieux. The high-profile panelists included Pat Treacy, Partner at Bristows and Deputy Judge at the High Court of England and Wales, Christian Donle, Partner at Preu Bohlig, and Kai-Uwe Kühn, Professor at the Centre for Competition Policy, University of East Anglia, and former Chief Economist of DG Competition of the European Commission.

The panel was moderated by Vittorio Cerulli Irelli, Partner at Trevisan & Cuonzo, who led the conversation on the various topics and started the discussion by addressing with Pat Treacy the impact on the standard essential patent (SEP) licensing environment of the recent UK Supreme Court Unwired Planet judgment ([2020] UKSC 37), which confirmed that the English courts have jurisdiction and may properly exercise the power to (a) grant an injunction restraining the infringement of a UK standard essential patent (SEP) unless the defendant enters into a global licence on FRAND terms of a multinational patent portfolio of SEPs and (b) determine royalty rates and other disputed items for such global licence of the SEP portfolio and declare that such terms are FRAND.

The discussion noted that the jurisdictional basis identified by the UK Supreme Court rests on the contractual arrangement of the SEP holder with ETSI (“it is the contractual arrangement which ETSI has created in its IPR Policy which gives the court jurisdiction to determine a FRAND licence” – Paragraph 58). As was noted, this may support standalone FRAND declaratory actions, at least on the part of those that are intended to benefit from the contractual arrangement of the SEP holder with ETSI, and at least to the extent of seeking a useful declaration as to FRAND terms in a particular commercial context (for further details, see also here).

This jurisdictional basis also potentially exacerbates the risk of overlapping proceedings and jurisdictional gaming, as we are already seeing with the mounting wave of anti-suit and anti-anti-suit injunctions across the globe (for an overview of recent major cases, see here and here). Also, it is likely that we will soon experience an increase of races to the court even within the jurisdictions of the Brussels (or, after Brexit, the Lugano) system, as it is to be expected that parties wishing to avoid the FRAND setting jurisdiction of the UK courts might seek  declaratory FRAND declarations before other jurisdictions within the Brussels (or Lugano) system with the aim of preempting and requesting the stay of the subsequent UK proceedings.

As noted by Vittorio Cerulli Irelli, initial indications of the possibilities for challenges under Article 29 and 30 of the Brussels Regulation (recast) have been popping up in recent years, the most recent being the judgment of Mr. Justice Mann in Philips v. TCL (see here) and the only stay so far being the one granted by the Irish High Court in Vodafone v IV ([2017] IEHC 160), with a reasoning that interestingly mirrors the one given in obiter by Mr Justice Briss in IPCom v Vodafone ([2019] EWHC 1255: “The argument that the issues were related seemed to me to be a strong one. […] The point is that, in essence, the FRAND obligation operates as an international contract enforceable by any relevant implementer — let us say, Vodafone — against the party giving the undertaking. Part of the problem is that the contract has no choice-of-forum clause, so it is at least possible for closely related actions to arise in different courts around the world. After all, the FRAND obligation itself is entirely international. There is, therefore, an obvious potential risk of irreconcilable decisions”).

The relevance of such issues will only increase after the UK Supreme Court decision in Unwired Planet and this should further advise the parties wishing to secure a favourable FRAND jurisdiction to act pre-emptively, including within Europe.

The discussion then moved to the major issue of whether the FRAND undertaking generates an obligation for SEP holders to licence their portfolio upstream, to component manufacturers. Christian Donle provided an overview of the current litigation landscape in Germany, where the issue of component level licensing is currently being debated before the infringement and antitrust courts (with the Mannheim and Munich courts having excluded such a duty and the Düsseldorf court soon to decide whether the issue should be referred to the CJEU).

Kai-Uwe Kühn also joined the discussion, assessing possible theories of competitive harm in the context of refusals to licence at component level under Article 102 TFUE, with a particular focus on the potential for exploitative abuses, in particular when the refusal to licence upstream is shown to generate excessive returns for the SEP holder – with a related risk of a reduction of innovation incentives for the companies operating in the affected value chain – and to increase transaction costs.

The discussion then moved to the last topic addressed in the seminar, regarding the relevance of non-discrimination in a FRAND setting, in particular from an economic perspective. The debate with Kai-Uwe Kühn revolved around the recent case law decisions dealing with the interpretation of the contractual FRAND obligation that excluded a “hard edge” approach to non-discrimination (i.e. similar situations must be treated alike and different situations differently, with the practical consequence that a SEP owner would be required to grant licence terms equivalent to the most favourable licence terms to all similarly situated licensees) in favour of a “general” non-discrimination obligation (where the non-discrimination element is to be read as part of a single, unitary obligation to licence on terms which are “fair, reasonable and non-discriminatory”, and to comply with that obligation, the licensor would simply be required to offer a royalty rate set by reference to the true value of the SEPs being licenced). The issue of whether there is a need for further guidance under Article 102 TFUE in respect of non-discrimination in a SEP environment was also explored at length, with interesting deviations on the problems that will increasingly be faced in IoT industries. In this latter respect, the role for valuation mechanisms that focus on use patterns in the various sectors (e.g. shared data volumes, etc.), rather than end pricing, was also discussed.

As often occurs when discussing SEPs and FRAND issues, the debate was lively and sparked more questions than it answered, confirming that there is still a long way to go for legislators and courts to resolve all open issues.

The customs enforcement of intellectual property rights in the EU is governed by Regulation (EU) No 608/2013, which provides that, where Customs Authorities suspect that goods under their supervision infringe intellectual property rights, they may suspend the release of or detain the goods whether at their own initiative or upon application.

Regulation (EU) 2020/1209, published on 21 August 2020, introduced some amendments to the forms to be used to submit an application requesting that Customs Authorities take action with respect to goods suspected of infringing an intellectual property right.

The application requesting that Customs Authorities take action and request for extension of the period during which the Authority are to take action in accordance with a previously granted application must be made by using the standard forms provided for in Regulation (EU) No 1352/2013. More specifically, this Regulation provides three Annexes, regarding respectively:

  • Application for action (Annex I);
  • Request for extension (Annex II);
  • Notes on completion of the two previous forms (Annex III).

Regulation (EU) 2020/1209 has replaced the two forms provided for by Annexes I and II and partially amended the notes on completion provided for by Annex III.

More specifically, the new Regulation takes into account the introduction of the EU Customs Trader Portal for the electronic submission of the forms, thus providing that the Economic Operators Registration and Identification (EORI) number is included in a mandatory field in the box for the applicant and the representative in the forms. The new Regulation also updates the references in the forms to the Data Protection provisions, following the entry into force of Regulations (EU) 2016/679 and (EU) 2018/1725. This new Regulation will enter into force on 10 September 2020 and it will apply from 15 September 2020.

With the decision No. T-156/19, issued on 13 May 2020, the EU General Court confirmed the refusal of the registration of the wordmark “we’re on it” under Article 7(1)(b) EUTMR. The decision provides significant clarification on trademarks consisting of slogans, advertising messages, idiomatic expressions, and indications of quality or incitements to purchase the goods or services which they designate.

Background of the proceedings

On 14 July 2017, the plaintiff, Koenig & Bauer AG, filed a trademark application for the wordmark “we’re on it” for a large number of classes (1, 2, 3, 4, 7, 9, 11, 16, 35, 36, 37, 38, 39, 40, 41, 42), with particular reference to printing machines and related services (such as installation, maintenance and repair of printing machines).

On 20 April 2018, the EUIPO examiner refused the application, considering the mark as devoid of any distinctive character pursuant to Article 7(1)(b) EUTMR. The refusal was confirmed by the Board of Appeal on 19 January 2019. The Board assessed that the sign consisted in a generally used expression, neither rare nor complicated. According to the Board the expression “we’re on it” does not possess a certain originality or resonance and it does not trigger in the minds of the relevant public a cognitive process or requires an interpretative effort.

The applicant filed an appeal before the EU General Court. The Court confirmed the previous decisions, and dismissed the appeal on the basis of the following arguments.

The decision of the EU General Court

The Court referred to case law of the Court of Justice on trademarks consisting of slogans and advertising messages. Indeed, previous rulings of the Court of Justice stated that (i) the registration of a mark made up of signs or indications that are also used as advertising slogans, indications of quality, or incitements to purchase the goods or services covered by that mark is not excluded as such by virtue of such use  (27/05/2018, FEEL FREE, T‑362/17, EU:T:2018:390, p. 28 and case law cited); (ii) when assessing a mark’s distinctive character, applying stricter criteria to slogans than to other types of signs is not appropriate (12/07/12, C-311/11 P, Wir machen das Besondere einfach, EU:C:2012:460 and case law cited); (ii) the lack of distinctiveness cannot be justified by the lack of the element of imagination, of an additional element of originality, or of any conceptual tension which would create surprise thus delivering a striking impression (24/04/2018, WE KNOW ABRASIVES, T‑297/17, EU:T:2018:217, p. 33 and case law cited).

Hence, the Court affirmed that a mark consisting of a commercial slogan is deemed to convey a message about the goods and services for which protection is sought. In the case at issue the sentence “we’re on it” will be understood by the relevant public as “we will take care of it” which is a message that may be used by any supplier on the market in order to incite consumers to purchase goods or services.

The Court held that the idiomatic expression “we’re on it” is too simple and is generated in general terms. Moreover, it has a clear and precise semantic content, whose interpretation does not require considerable mental effort on the part of the relevant consumer. The fact that, as claimed by the plaintiff, the expression at issue could be interpreted in a number of ways, or that it could have several meanings, does not alter its non-distinctive nature. Therefore, the expression “we’re on it” will not be perceived by the public as an indication of the commercial origin of the goods or services claimed, but rather only as a promotional message.

Therefore, the Court concluded that the commercial slogan “we’re on it” lacks distinctive character (pursuant to Article 7(1)(b) EUTMR) and it is not capable of identifying the commercial origin of those goods and services.

 

In view of the 2026 Milan-Cortina Olympic Games, Italian legislators have been revisiting the legislation currently in place and have brought into force some additional and useful measures to protect official advertisers of the Olympics against the so-called ‘ambush marketing’.

On 13 May 2020, Law 31/2020 came into force amending and converting the Law Decree of 11 March 2020, no. 16, which set out urgent provisions relating to the organisation and holding of the 2026 Milan Cortina Winter Olympic and Paralympics Games and the 2021-2025 Turin ATP finals, as well as for the prohibition of parasitic activities.

The origin of the term ‘ambush marketing’ is rooted in the activities which took place around the 1984 Olympic Games in Los Angeles where Kodak sponsored numerous TV programs on the Olympic Games as well as famous American athletes. Kodak thus managed to fill the ‘gaps’ left by the official sponsor, FUJI, thereby giving the impression that it too, was an official sponsor of the Games, although this was not the case. Since then there have been various examples of similar activities both relating to sporting events in Italy as well as during almost all Olympic Games. Famous examples include the Barcelona Olympic Games in 1992, officially sponsored by Visa, whilst however American Express ran a number of TV ads using the tagline ‘You don’t need a Visa to visit Spain’.

In an attempt to contain this phenomenon, the International Olympic Committee guidelines requested future hosting countries to adopt special preventative measures. The issue was first tackled by Italian Legislators with Law 167/2005, issued in view of the 2006 Turin Winter Olympic Games, and now with the recently issued Law 31/2020. The new Italian regulation is fully in line with legislation adopted by other hosting countries to regulate not only the protection of Olympic symbols and investments of official sponsors, but also the organisational and economic aspects of the Games.

Law 31/2020 provides at Art. 10(1) for the prohibition of all parasitic, fraudulent, deceptive or misleading advertising and marketing activities carried out in relation to the organisation of sporting events or exhibitions having national or international resonance, which are not authorised by the organisers and are aimed at obtaining an economic or competitive advantage.

For the first time multiple types of conducts which could amount to parasitic advertising and marketing activities (ambush marketing) are then specifically defined at Art. 10(2):

  1. the creation of an – even indirect – link between a trademark or other distinctive sign and one of the events referred to above, likely to mislead the public as to the identity of the official sponsors;
  2. the false representation or declaration in its own advertising that an entity is an official sponsor of an event referred to above;
  3. the promotion of one’s own trademark or other distinctive sign through any activity, not authorised by the organiser, which is likely to draw the attention of the public, carried out in the context of one of the events referred to above, and likely to generate in the public the mistaken impression that the advertiser is a sponsor of the sporting event or exhibition itself;
  4. the sale and advertising of products or services unlawfully branded, even only in part, with the logo of a sporting event or exhibition referred to above, or with others distinctive signs likely to mislead the public about the logo itself, and to create the mistaken perception of any connection with the event or its organiser or entities authorised by the latter.

Art. 10(3) specifically excludes from the scope of ambush marketing all activities carried out within the performance of sponsorship contracts concluded with individual athletes, teams, artists or authorised participants to an event referred to in Art. 10(1).

The above prohibitions take effect as of the date of registration of the logos, brands and official trademarks of the events referred to in Art. 10(1) and remain in force until 180 days after the end of such events.

Fines for violations of the above provisions can range from Euro 100,000 to Euro 2.5 million, and the enforcement of the new rules is to be carried out by the Italian Competition Authority (AGCM).

Leaving aside the question on whether strictly defining unlawful conduct might be the right approach to regulate the phenomena of ambush marketing, it is worth noting that the formulation of Art. 10(2)(c) requires two conditions to be satisfied by the ambush marketing activities falling under its scope. It requires that the conduct be both:

  • likely to draw public attention; and
  • likely to generate in the public the erroneous impression that the author is sponsor of the event.

This significantly lowers the threshold of protection for organisers. In fact, it potentially enables ambushers to carry out ambush activities lawful merely by using disclaimers specifying they are not the official sponsors of the event at stake.

Critics of the new law also highlight the risk represented by Article 10(3). By establishing that ‘the conducts carried out within the performance of sponsoring contracts with individual athletes, teams, artists or authorised participants to an event referred to in Art. 10(1) do not amount to parasitic activities’ the risk is that of weakening the scope of Article 10 (1) by offering ambushers an easy path to claim that they are carrying out lawful activities by sponsoring e.g. individual athletes. This is precisely what happened in the above-recalled first episode of ambush marketing at the 1984 Los Angeles Olympic Games: a competitor of the official sponsor was indeed sponsoring individual athletes managing to appear in the eyes of the public as a sponsor of the event.

Among the positive aspects of the new regulation, it is worth noting that by protecting the interests of official sponsors, the goal sought by Law 31/2020 is that of boosting the attractiveness of investing in major sporting events, which contribute heavily to the survival of the major sport events such as the Olympic Games.

Furthermore, the extension of the protection period up to 180 days after the end of the events (up from the 90 days’ window set forth by the previous regulation) and the provision that the new rules will be enforced by the Italian Competition Authority through a hopefully fast administrative procedure are seen as improvements in terms of expected effectiveness over the previous attempts at regulating the issue.

However, it is worth bearing in mind that the peculiarities of the phenomenon at stake, in particular creativity and irony characterizing effective ambush marketing campaigns, render any legislation around the issue very delicate and complex. Not surprisingly, a successful and clever ambush marketing campaign often meets the favour and sympathy of the public, so that unless the issue is handled with care the official sponsor risks to be identified and labelled as the ‘aggressor’ even though it is merely attempting to protect the exclusivity rights.

To conclude, Law 31/2020 represents a worthy attempt to meet the instances of official event sponsors and organisers by prohibiting unfair commercial practices that jeopardize the attractiveness of the related investments.

Some critics point out that the Italian legislator was actually too timid and missed the chance to regulate ambush marketing in a comprehensive manner suitable to include all its possible forms of expression and for all kinds of events: on this point, we will have to wait for the first applications of the new rules to see how broadly they will be interpreted by courts. In the meantime, a careful and effective business communication still remains the best weapon to react to competitors’ attempts of ambush marketing.