Using IP to Enhance a Crowdfunding Initiative
Early Certainty from Search – A New EPO
Business owners usually seek funding for a business endeavour before revenue streams are adequate to ensure prolonged sustainability. A common way of seeking funding in today’s business environment is through the use of crowdfunding, given that it is readily accessible via a substantial number of crowdfunding portals.
However, even though there are several notable success stories in disparate fields like, for instance, consumer devices, arts-and-culture, video gaming and even fashion apparel, a sizeable number of crowdfunding initiatives are still unable to achieve their funding objectives. One of the main reasons why a crowdfunding initiative is unable to achieve its funding objective relates to an inability of the business owner
to convince potential investors on the viability of the business endeavour. While crowdfunding does away with a need for the business owners to make a pitch to venture capitalists/angel investors (as was often the case in the past), it is still mandatory for the business owners to provide compelling reasons for potential investors to part with their money.
One of the ways that the business owner is able to convince potential investors to invest in the crowdfunding initiative is by filing IP applications related to the business endeavour, such as, patents, designs, trade marks and so forth, prior to embarking on the crowdfunding initiative. Even though
filing the IP applications incurs expenses for the business owner, the filing of IP applications provides the business owner
of potential investors, namely, credibility, and also provides an indication that the business owner is confident that the
IP assets are proprietary and valuable for the business endeavour. Such an approach typically enhances the appeal of the business owner's endeavour
in the eyes of potential investors, and correspondingly, may aid in inducing potential investors to part with their money.
Moreover, the increasing awareness of IP in general also means that the business owner will invariably have to address queries with regard to IP strategy
within the duration of the crowdfunding initiative, and showing potential investors that they are ahead of the curve in that aspect is certain to convey a favourable message to the potential investors.
We saw an example of IP enhancing a crowdfunding initiative with Blacksmith Group, a client of our Singapore office. After filing patent applications, they subsequently highlighted their “innovative technology” during their crowdfunding initiative on Indiegogo. Although admittedly difficult to substantiate, this may have helped them exceed their funding target of US$75,000.
In this regard, it would be highly advisable for a business owner to file IP applications prior to a crowdfunding initiative, as the likelihood of success of the crowdfunding initiative can be substantially enhanced in ways which would not be possible otherwise.
The EPO has recently launched a new initiative called “Early Certainty from Search”, with the aim of improving legal certainty on pending patent applications. Under the scheme, the EPO will aim to:
provide an applicant with an extended European search report within six months of filing; prioritise applications that are
already under examination, over new applications;
expedite grant for applications that receive a positive search report; prioritise processing of cases where substantiated observations are
filed by third parties who identify themselves; and
prioritise oppositions and requests for limitation or revocation.
This is welcome news from the EPO and should be of benefit to most applicants. Up until now it has not been unheard of for some European applications to lie effectively dormant for several years. There are even cases where a final decision has not been reached 20 years after filing. The applicant is still liable for the annual renewal fees for the application, payable to the EPO, while the application lies dormant. Whilst the conspiracy theorist might argue that this incentivises the EPO to drag its heels from time to time, it is more likely that these periods of inactivity are due simply to inefficient procedures within
with a valuable commodity in the eyes
Marks & Clerk, Singapore
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Early Certainty from Search – A New EPO Initiative cont'd
Anecdotally, the EPO appears to have a fairly good reputation worldwide, and
so stories of applications that sit around gathering dust at the EPO for years are probably as undesirable for the EPO as they are for the client. This would go some way to explain why the EPO has developed (and publicly announced) a new initiative that addresses this issue.
Obtaining an opinion on patentability in a timely manner can be of significant benefit to applicants when developing IP strategies. The aim to expedite
grant for applications that have received positive search reports will be particularly useful for those applicants wishing to use the granted claims
as the basis of a patent prosecution highway (PPH) request elsewhere,
since the PPH request filing window is relatively short.
It is not clear how this initiative and the prioritisation will work in practice.
The initiative appears to suggest that both new applications and applications already under examination will be prioritised, begging the question
as to which applications will not be prioritised. It may be that search reports on new applications will be issued towards the end of the six month target, as opposed to four or five months after filing, for example. It may also be the case that the average time between examination rounds will
actually increase, but the deviation from this average will decrease. This would
provide a more consistent approach which could give EPO examiners time to look at those cases that have effectively become dormant, while not forgetting about the 700+ new applications that are filed at the EPO every day.
It will be interesting to see what effect, if any, this initiative has on proceedings before the EPO. If the initiative does
at least deliver on addressing those applications that have seen more than one leap year between examination rounds, it will be seen as a considerable improvement.
Steven Pediani firstname.lastname@example.org Marks & Clerk, Oxford (UK)
Agreement between Canada and Europe to Result in Greater Protection for Pharmaceutical Patentees in Canada
The text of the Comprehensive Economic and Trade Agreement between Canada and Europe (CETA) was finally released on 26 September 2014, almost a year after the parties reached an agreement-in-principle on 18 October 2013. This historic agreement promises, inter alia, to bring a number of important changes to intellectual property protection for pharmaceutical patentees in Canada, which will bring Canada more in line with European practice.
The full text of CETA has been made available by the Government of Canada on their website at: http://www. international.gc.ca/trade-agreements-accords-commerciaux/ agr-acc/ceta-aecg/index.aspx?lang=eng. Also available on that website is a Technical Summary report released by the Canadian Government last year on 29 October 2013, which outlines the final negotiated outcomes of the agreement-
in-principle reached earlier in the same year and therefore provides key insights into their intentions for implementing CETA.
Canada is currently the only G7 country that does not provide some form of patent term restoration (PTR) to restore part of the life of a patent consumed by clinical trials and delays due to bureaucratic approval processes. However under CETA, Canada has agreed to provide up to two years of additional (sui generis) protection for eligible pharmaceutical patents. This is a welcome change, although the cap of the period of
additional protection in the EU remains higher, at five years. Furthermore, it appears that application of PTR will not be retroactive.
Currently, Canada has a system that allows for two proceedings between the same parties relating the same drug and patent: (i) a proceeding under the Patented Medicines (Notice of Compliance) Regulations (the “PM(NOC) Regulations”) which link the patent regime to regulatory approval by Health Canada; and (ii) a patent infringement
or impeachment action. Both innovators and generics are unhappy with this system, but for different reasons.
Pharmaceutical innovators do not have an effective right of appeal under the current PM(NOC) Regulations. When a PM(NOC) decision in favour of the generic is rendered, the generic is typically issued a Notice of Compliance (i.e.
marketing approval) by Health Canada very shortly thereafter and an appeal becomes moot. Conversely, a generic can appeal an PM(NOC) decision that finds in favour of the innovator, even if the patent has expired. This situation is clearly unfair and has long been a sore spot for innovators.
However, a PM(NOC) decision in favour of the generic does not prevent an innovator from suing for patent infringement under the Patent Act. The result is the possibility of “dual litigation”. This situation creates unpredictability and has long been a sore spot for generics.
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Agreement between Canada and Europe to Result in Greater Protection for Pharmaceutical Patentees in Canada cont'd
Under CETA, Canada has made a general commitment to ensure that both innovators and generics are afforded
“equivalent and effective rights of appeal”, which gives scope for Canada to end the practice of dual litigation.
Canada rejected the EU’s request to provide 10 years of data protection, but agreed to lock in the current Canadian practice of providing eight years of market exclusivity.
Ratification of CETA is not expected until 2015, and
implementation of CETA will then require amendments to at least the PM(NOC) Regulations and the Canadian Patent Act. While these changes are still several years away,
pharmaceutical patentees will need to take them into account now, when developing their business strategies for patenting and marketing new drugs in Canada.
email@example.com Marks & Clerk, Ottawa (Canada)
Is your Claim to Priority for a European Patent Application Valid?
After a patent application is filed, the European Patent Office (EPO) provides a period of 12 months within which any person (or their “successor in title") may file further patent applications for the
same invention, but benefit from the date of the earlier-filed patent application.
Obtaining this benefit is achieved
by “claiming priority” from the earlier application.
Where the priority-claiming application and the earlier priority application are filed by the same entity, entitlement of priority for formal reasons (as opposed to substantive reasons relating to the content of the two applications) is rarely an issue. Where the entity filing the two applications is not the same, however, issues can arise. This is because any person claiming the priority of an earlier application must have the right to do so as of the date the claim is made. Priority will be lost if the right is only acquired later, after the priority-claiming application has been filed. Moreover, generally the issue is unlikely to arise before grant because priority is not normally checked during examination.
Problems can arise whenever reliance is placed on rights passing by virtue of employment, or on assignment
documents that might not satisfy formal requirements everywhere patents may be sought. Agreements to assign are not the same as actual assignments. Confusingly, practice varies between the EPO and the countries in which granted
European patents may be brought into force. Worse, the handling of such issues by the EPO appears to be inconsistent.
For example, although the EPO's Guidelines for Examination state that, in the case of joint applicants, "it is sufficient if one of the applicants is the applicant or successor in title to the applicant of the previous application.
There is no need for a special transfer of the priority right", the German Federal Patent Court has held that priority right must be transferred before it is claimed. The English High Court has also found that, in the case of joint applicants, the later filed priority-claiming application must be filed by all the applicants or their successor(s) in title. Moreover, it
is understood that French law requires priority right to be specifically assigned: not even the existence of an earlier signed and dated document assigning a priority application may be enough to save a priority claim unless the right to
claim priority was also explicitly assigned. In recent years, in decisions from the
English High Court, the French District
Court and the EPO, priority claims have been held to be invalid for such formal reasons. Surprisingly, the law under which a claim to priority may be tested may not be the law of the country of the priority application. For example, the validity of a claim to priority made by a European patent application in the name of an employer, from a US provisional application filed in the name of inventors/
employees of the inventor, may ultimately be tested under French law.
Until recently, the EPO’s clear practice seemed to be that any transfer of rights had to be valid under the relevant national law. However, it is often not clear as to which law is relevant. In any event,
it was held in the most recent decision from the EPO on this issue that priority was so important that any assignment of priority rights must be in writing and signed by or on behalf of the parties to the transaction. If this standard of proof
cannot be demonstrated, priority may be lost (and was, in the case in question).
To summarise, there may be potential problems if the applicant identified in a priority-claiming application is different to that named in the priority application. To mitigate these risks, if the entities will be different on the priority and priority- claiming applications, an assignment document should always be executed before the later application is filed,
and be signed by both entities. As much bibliographic detail of the priority application should be specified as possible and the right to claim priority should be explicitly assigned. The document should then be safely stored.
Taking these steps may later prove to be invaluable should the entitlement to the priority claim be attacked subsequently.
Donald McNab firstname.lastname@example.org Marks & Clerk, Edinburgh (UK)
UK Patent Infringement Rules Relaxed for Clinical
Accession to the Madrid Protocol in Southeast Asia by 2015?
Trials of Innovative Drugs
On 1 October 2014 amendments to the Patents Act 1977 came into force adopting a broader interpretation of the European Bolar-like exemption. The amendments narrow the scope of infringement in the United Kingdom for
pharmaceutical companies conducting specified clinical (human) or field (veterinary) trials using innovative drugs.
Before October, companies involved in certain acts for the purposes of obtaining regulatory approval of new medicinal products had an enhanced
risk of infringement in the UK compared to other EU Member States where
the European legislation had been interpreted more permissively (e.g. France, Germany, Italy and Portugal).
Following an extensive consultation by the UK Intellectual Property Office (UKIPO), the Government proposed (and accepted) that the existing UK legislation should be amended to ensure that acts involving medicinal products done for the purposes of a “medicinal product assessment” fall within the “experimental purposes” exemption that is already provided for under UK law. This will exempt from infringement activities related to the preparation or operation of clinical (or
field) trials for the purpose of obtaining or varying a marketing authorisation to sell, supply or offer to sell or supply a medicinal product; for complying with any regulatory approval; and activities carried out which are necessary
for health technology assessments
(e.g. generating data to support assessments by the National Institute for Health and Clinical Excellence (NICE)).
It is hoped that these legislative changes will make the UK a more attractive location for research-driven companies, and in which to conduct clinical trials, by reducing some of the costs and uncertainties inherent in bringing new products to market.
email@example.com Marks & Clerk Solicitors, London (UK)
As part of the wider goal of achieving
Southeast Asian market harmonisation,
ASEAN nations announced in 2010 the
objective of uniform entry to the Madrid
Protocol by 2015. Currently, the only
Southeast Asian countries that are party
to the Madrid Protocol are Singapore,
Vietnam and the Philippines.
With anticipated growth of 6.9 per cent per annum in the years 2014 to
2018, the rising Southeast Asian middle classes are expected to substantially boost consumer spending in the region. As a consequence, brand owners are increasingly looking to Southeast Asian markets to do business. Conversely, Southeast Asian entrepreneurs and brand owners are seeking streamlined trade mark registration procedures both nationally and in foreign jurisdictions.
It is expected that entry to the Madrid Protocol will result in at least some of these desires being met. Whilst some countries in the region have a long path to tread, the eventual uniform introduction of the Madrid Protocol in Southeast Asia is viewed by many as inevitable.
Malaysia is widely expected to be the next Southeast Asian country to
implement the Madrid Protocol. Since 2011, the Malaysian Intellectual Property Office (MyIPO) has been working to streamline the transition, including improvements to its information systems and by clearing its backlog of trade mark applications. MyIPO has also come up with a draft set of amendments to the Malaysian Trade Marks Act to facilitate entry to the Madrid Protocol. However, as this bill has not been tabled in Parliament, it is unlikely any developments will occur until 2015 at the earliest.
Thailand has also been working to implement the Madrid Protocol by 2015. In 2012, the Thai Department of
Intellectual Property drafted amendments to Thailand's Trade Mark Act to bring
it in line with minimum requirements of the Madrid Protocol. Key changes in the draft included the introduction of multi-class applications and use of the
Nice classification system. With the Thai military coup occurring in May 2014 and the Thai constitution being repealed, trade mark reform is unlikely to be high on the Junta’s agenda. Therefore, Thailand’s prospects of making the 2015 deadline appear grim.
Although the Indonesian Government has
outlined plans to amend its trade mark
law with a view to entry to the Madrid
Protocol, a number of challenges need
to be overcome so that progress can be
made. The Indonesian Trade Mark Office
does not currently have an electronic
filing system and it is facing a significant
backlog of trade mark applications.
What effect, if any, the election of a new
Indonesian Government will have on this
process remains to be seen.
Since 2011, Myanmar has embarked on a series of sweeping reforms including the liberalisation of its foreign investment laws. As a part of the reforms, Myanmar is in the process of updating its antiquated trade mark law, currently based on the Registration
Act 1908, a piece of colonial legislation providing limited remedies once a trade mark is “declared” and recorded with the Settlement and Land Records Department (usually followed by a cautionary notification in the daily newspaper). The draft regime, now in its eleventh version, is a collaboration between WIPO and the Myanmar Government. It is comparable to international standards: establishing an
intellectual property office, an opposition procedure, and an examination and registration procedure with renewals every 10 years. Although the law will operate largely on a first-to-file system, prior use evidence may be submitted if an opposition is lodged and there will
be a “bad faith” ground of opposition. The new law is a welcome step forward for the former British Colony, and it establishes a path towards accession to the Madrid Protocol.
The remaining ASEAN countries, Brunei, Cambodia and Laos, have been slower to embark upon trade mark reform
and entry to the Madrid Protocol. For Cambodia and Laos, in the process of industrialising, and for Brunei, with its limited population, these matters are not high on the respective governments’ priorities list.
Most recently, we saw India, Mexico and Rwanda acceding to the Madrid Protocol in 2013. As the end of 2014
looms, it appears that even those ASEAN countries with the best prospects to accede to the Protocol will have to work hard if they are to realise their ambition by 2015.
Marks & Clerk, Singapore
Inspiration or Knock-off?
Australian Designers Fall the Wrong Side of the Line
The Full Federal Court of Australia recently handed down a somewhat surprising decision giving clear instructions as to how copyright infringement should be assessed.
In the case of Seafolly Pty Ltd v Fewstone Pty Ltd, the Court held that City Beach had infringed the copyright subsisting in three of Seafolly’s floral fabric print designs from its Summer 2010/2011 swim wear collection (two examples of which are depicted below).
Despite the unmistakable visual differences between the Seafolly and City Beach designs, the Court emphasised that the relevant inquiry was whether, in qualitative terms, a substantial part of the design elements of the Seafolly works
were represented in the corresponding City Beach works. For example, in relation to Seafolly’s English Rose design, these elements included the impressionistic rendering, and the broadly similar shaped, styled and sized roses with similarly positioned variations of colours and highlights.
Seafolly's Covent Garden artwork
Seafolly's English Rose Artwork
City Beach's Sienna Print
City Beach's Rosette Print
City Beach attempted to defend the allegations by relying on the established doctrine that copyright protects expression, not ideas. They also stated that they had not reproduced a substantial part of the Seafolly textiles, in the sense that the objective similarity between each pair of textiles was not so strong that it was possible to still see the Seafolly works in the City Beach works. They were unsuccessful on both grounds, although it is uncertain whether the Court would have made
a finding of infringement in the absence of the additional evidence adduced in the proceedings. More specifically, Seafolly had cited circumstantial evidence that supported a finding of infringement, including evidence showing that:
City Beach had provided samples and photographs of the Seafolly garments to its designers; and
City Beach had asked its Chinese manufacturers to copy Seafolly’s Senorita design.
Based on the circumstances, it was therefore clear that the individuals responsible for creating at least one of the designs had access to Seafolly’s original design and were instructed to take inspiration directly from it. Consequently the Court upheld its findings in Clothing Pty Ltd v Cotton On Clothing Pty Ltd whereby it made clear that it does not look kindly on companies that use their competitors’ graphic designs in
any way, and that once it has been proven that a designer was given a copy of the competitor’s artwork, it becomes very difficult to escape liability on the grounds argued by City Beach, since the defence is considered tainted.
Seafolly was awarded damages of over AU$250,000 representing lost profits and damage to reputation, as well as an injunction preventing City Beach from manufacturing, selling and promoting the infringing swimwear and fabric designs.
The decision has a number of commercial implications for manufacturers:
Avoid the temptation to ride on the “coat tails” of successful designers or well-known labels; Be mindful of inadvertent infringement of copyright. Significant visual differences between the works as a whole will not necessarily result in a finding that no infringement has taken place; Keep records of your design process (including drawings, photos and timelines), so as to prove that the design was independently developed by you; and Do your research and don’t accept designs from third party contractors without assurances that they own the IP in the work.
firstname.lastname@example.org Marks & Clerk, Melbourne (Australia)
Actavis UK v Eli Lilly & Co – A Declaration of Non-Infringement with Effect Outside the UK
Earlier this year, the UK High Court handed down its judgment in Actavis UK v Eli Lilly & Co, a case concerning claim construction and procedure, and the effect of UK declarations of non- infringement in other European jurisdictions.
Eli Lilly holds two patents, the first for Pemetrexed – a cancer treatment (expiring December 2015) the second for Pemetrexed disodium in combination with Vitamin B12 (expiring June 2021).
Actavis wanted to launch products containing pemetrexed diacid, pemetrexed dipotassium or pemetrexed ditromethamine and applied to the UK courts for declarations of non- infringement (“DNIs”) for the French, German, Italian, Spanish and UK validations of the second patent.
Following an earlier jurisdictional battle as to whether the UK court could determine the question of infringement of foreign patents – the judge, Arnold J and the Court of Appeal holding that it could – Eli Lilly attempted to thwart the jurisdiction of the UK court by seeking, and obtaining, a decision from the German infringement court in Dusseldorf that Actavis’ generic products would infringe the second patent. As a result, Actavis discontinued its UK claim for a DNI in respect of the German validation of the second patent.
In the main proceedings in the UK, Eli Lilly contended that the national law of each country should be applied to establish whether Actavis had good standing to apply for and, if appropriate, obtain DNIs. Arnold J, disagreed, stating that UK law
should be applied as the action was seized by the UK court.
Nonetheless, Arnold J also stated that Actavis would have been entitled to apply for DNIs under each national law in any event.
Although the patent only claimed pemetrexed disodium, Arnold J had to decide whether it should be construed so as to include the compounds in Actavis’ various products on the basis that they are “equivalent” to pemetrexed disodium. He therefore considered the so-called “doctrine of equivalents” and noted that it was often cited when the patentee was trying to avoid the consequences of having taken a particular decision to limit or exclude certain matter during prosecution.
It was clear from the prosecution history that Eli Lilly had consciously limited the claims to pemetrexed disodium in response to objections of the examiner at the EPO. It followed that pemetrexed disodium could not be considered equivalent to the proposed active ingredients in Actavis’ products. Arnold J had little sympathy with Eli Lilly, reasoning that it had had opportunities to correct or appeal the EPO’s objections and decisions during prosecution. Arnold J therefore granted Actavis the DNIs that it had sought in respect of each of the validations by applying the appropriate substantive patent law on claim construction from each country.
Arnold J also dismissed various allegations that Actavis had abused the process of the Court because it had
commenced the action in the High Court while earlier actions were still pending, and had not properly complied with procedural requirements in some of the other countries in issue.
Arnold J mentioned the Dusseldorf decision on infringement explaining his rationale in coming to a different conclusion on infringement under UK law as compared to the German Court. Arnold J relied on a number of differences between the UK and German actions to support his finding, including, inter alia, the evidence that was adduced, the lack of cross examination of the witnesses in the German proceeding, differences in arguments raised before the Court and differences in approach to the interpretation of the claims.
Arnold therefore found that:
the UK Court had jurisdiction to grant the declarations of non-infringement in the UK and the other jurisdictions; despite finding that it was appropriate to apply the UK law in assessing whether the Actavis had standing to seek DNIs, Arnold J also found that Actavis had standing to apply for DNIs under the laws of each of the countries for which a DNI was sought; it was appropriate in this case to refer to the prosecution history of the patent; by applying substantive UK, French, Italian and Spanish patent law of claim construction, the DNIs should be granted; and
there had been no abuse of process by Actavis.
This is the first case before the UK Court which has positively determined the importance of the prosecution history of a patent. It signals a caution for all patentees. It will also be interesting to see whether any aspects of this decision are appealed, and also whether courts in other jurisdictions will consider granting declarations of non-infringement that will have effect outside their jurisdiction.
email@example.com Marks & Clerk Solicitors, London (UK)
Agency and Distribution Agreements – What Are You Getting into?
Businesses that do not have the expertise, profile or resources to target any given market sector or territory often appoint agents or distributors to help them. Agents acquire customers for the principal and the principal sells products to those customers. The agent’s remuneration usually comes in the form of commission, based on a percentage of sales revenue, paid to it by the principal. Distributors operate differently; they buy the goods from the principal and then resell them to the customer in their own name, making their profit from the mark-up. As with licensees of IP, agents and distributors may be allocated different territories and/or markets and their rights may be exclusive (i.e. they
will be the only party with those rights) or non-exclusive (in which case others may be operating in the same space).
Both arrangements work well but they also share a particular risk. In many countries agents and distributors
are protected under local law by rights which cannot be contracted out of. These may include the right to compensation if the agreement is terminated and the right, if the agreement is terminated without justification, to claim for wrongful termination. In such circumstances
the agent or distributor could claim for
damages and, if entered on the relevant country’s register at the Trade Ministry (or equivalent), block de-registration. This would make it impossible for the principal to appoint a replacement while the dispute was unresolved and it might therefore be forced to concede.
Agents meeting the relevant criteria in the EU are entitled to compensation, calculated as a percentage of past commission, in the event of termination of the agreement other than for breach. This right cannot be excluded, although it can be limited by careful drafting. Companies appointing agents in the EU therefore need to take legal advice before doing so, both on whether the agent in question is covered by the relevant regulations and, if it is, on how liability can be capped. Most agents in the EU now know their rights and will not hesitate to invoke them if they think that they are being short-changed.
Other countries, particularly in Southeast Asia and the Middle East, give agents and distributors similar or even more
far reaching rights. As has been said, it may not be possible to exclude these rights, whatever the contract
says. Making the agreement subject to English law and jurisdiction therefore may not be enough. Notable examples of states in which such rights exist are
Indonesia, the UAE, Egypt and Turkey and there are many others. Seeking local legal advice in such circumstances is therefore always advisable if one does not wish to sleepwalk into unanticipated liability or, at worst, litigation. Agency and distribution agreements which do not take into account and minimise potential liability under local law can also be a deterrent to potential buyers of or investors in a business.
In conclusion, companies may have to face up to the fact that terminating an arrangement with an agent or distributor, even an under-performing one, may be impossible without paying some sort
of compensation. A practical way of getting round this is only to appoint non- exclusive agents or distributors. That way, under-performing or problem ones needn’t be subjected to termination because there will be alternative ones to rely on anyway. Of course, this solution won’t always work; in some sectors agents and distributors aren’t interested in taking on the job unless they can
be guaranteed exclusivity. Again, legal advice should always be sought on what the best option might be.
Marks & Clerk Solicitors, Cambridge (UK)
New UK Rules for Online Sales to Consumers
A range of UK regulations apply to the conduct of online sales and the seller’s responsibilities are enhanced in the case of sales to consumers. Additional requirements were imposed on businesses engaged in such activities in June of this year when the Consumer Contracts (Information,
Cancellation and Additional Charges) Regulations 2013 came into effect. The key changes these Regulations implement are as follows:
The list of pre-contract information to be provided to the consumer has been expanded and now includes a model cancellation form for use when the consumer has a right to cancel the contract.
The period during which the consumer may cancel the contract and return the goods has been extended from seven days to fourteen days.
Goods must be delivered without undue delay and certainly within 30 days.
Express consent must be obtained where extra payments are charged and consumers will not be liable for payments not flagged up to them in advance. Such payments can
no longer be surreptitiously added by means of pre-ticked boxes.
The point at which payment will be authorised must be denoted much more clearly.
Additional information must be supplied upfront if digital content is being supplied.
These are the main changes but there are others and, overall, the new provisions are extensive and complex. All businesses to which the regulations apply are strongly advised to review the purchasing procedure on their website and their standard terms of sale in order to ensure compliance.
Trading Standards will doubtless be on the look-out for recalcitrant traders who may also be reported to them by aggrieved consumers (and opportunistic competitors). Non- compliance could result in contracts with consumers being unenforceable, an investigation by Trading Standards and even criminal prosecution so full and prompt compliance is clearly the best course of action.
Marks & Clerk Solicitors, Cambridge (UK)
Trade Mark Practice in China – An update
The amended China Trade Mark Law and the corresponding Implementing Regulations came into force on 1 May 2014.
While some promised changes have not appeared (e.g. an
e-filing system) and the benefits of some new procedures are uncertain (the multi-class filing system), the China Trademark Office (CTO) has imposed some new filing requirements that are giving rise to a degree of anxiety among rights’ holders and practitioners. Some of these issues are discussed below:
Unprecedentedly strict formality requirements:
An original signed Power of Attorney (PoA) and a photocopy of the applicant’s Certificate of Incorporation (CoI) is now required for every procedure (trade mark applications; assignments; renewals; changes of name/ address; etc.) before the CTO. In the case of opposition proceedings, an opponent must now submit two original signed PoAs. The original signed PoAs must be submitted at the time of filing; no extension is available. The new practice, exacerbated by short deadline periods in China, is a headache for all concerned, while no obvious benefits result. It is hoped that the CTO will see sense and relax these onerous filing requirements in time. In the meantime, clients may authorise our firm to sign standard form PoAs on their behalf in order to meet filing deadlines.
Arbitrary dismissal of applications:
Rather than issuing notices of amendment requiring correction of informational defects, the CTO can now issue a notice of dismissal of the application if it contains a formality fault. In late August 2014, the CTO identified 25 circumstances that could give rise to dismissal – these
include inconsistency between the name on the application form and the CoI; no CoI at the time of filing; absence of
an original signed PoA, etc. The reality is proving even more arbitrary. Applications filed shortly after 1 May 2014, and for which filing receipts have still not issued (the delay caused by a time-consuming update of the CTO system since late April 2014), face possible dismissal for formality imperfections that were unannounced at the time of filing.
Narrow review of descriptions of goods/services and a single opportunity for amendment:
Since May the CTO has implemented a rigid approach in its assessment of what constitutes acceptable terminology in the specification of goods/services. To an even greater
extent only standard terminology selected directly from the local classification guidebook is proving acceptable to CTO examiners. Many practitioners are encountering difficulties persuading examiners to accept non-standard descriptions of goods/services, even supported with detailed explanations and illustrations. It is said that this inflexibility may be a result of the recruitment of fresh examiners operating under newly-introduced statutory time limits (e.g. 9 months to complete examination of new applications) whose inclination is to adopt a conservative approach
with little scope for the exercise of any discretion. The problem is compounded by the fact that applicants are now afforded only a single opportunity to amend the specification in response to an official notice.
If the proposed amendment does not satisfy the examiner, a notice of dismissal of the application will issue. The
risk-free practice is to confine proposed amendments to standard acceptable descriptions that may be less than ideal in some circumstances.
Indivisibility of Multi-Class Applications:
Multiple-class applications have been available in China since May, but the system is not fully developed. One imperfection is that it is not possible to divide out a multi- class application unless it is in response to an official notice of partial refusal of the application. It follows that if a multi-class application encounters a third party opposition and the challenge affects only some goods/services
or class(es), the applicant does not have the option to split the application to allow the unchallenged portion to proceed to earlier registration. Another potentially
complicating factor is that a partial assignment is not yet available in China, which means that the transfer of the entire multi-class application/registration is compulsory, even when only some of classes are preferred for assignment. In light of these limitations, brand owners may prefer to file separate single-class applications to retain flexibility until the system becomes more developed and predictable.