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Michael Luckman: Intellectual Property is always changing, it's always right at the forefront of developments and technology and branding.
IP partner Kate Swaine examines some of the changes that General Counsel need to be aware of.
Well, Kate, adwords seem to be causing big problems for big brands. What are they and what issues are they causing?
Kate Swaine: Yes, adwords are an advertising system. Essentially you bid on a word, and the combination of the amount you bid on that word and the quality of your bid
so its relevance to the consumer who is searching using that particular word - dictates whereabouts your ad then appears on the results page.
And adwords result in sponsored advertisements appearing on search engine results at the top of the page, the bottom of the page, also the right hand side of the page.
Michael: So, does using adwords constitute trademark infringement?
Kate: Yes they can, and that's the real problem, because a lot of the words that are being bid on are trademarks, and if you think about it, it makes sense.
Amongst a lot of companies, they want their advertisement to appear when one of their competitors' names is searched for. They want to be up there and in the consumer's mind
The courts however are really wrestling with this and they're gradually having to shoe-horn what is a new environment for the use of trademarks into the existing legislation,
which actually was created at a time when there was no internet in mind.
So yes, it is causing a lot of problems.
Michael: There must be some juicy examples out there. Can you give us any?
Kate: There are. There have been a lot of cases, particularly going through the Court of Justice in Europe,
and where we've got to essentially at the moment is that the courts have concluded that the use of adwords is used in the course of trade - as required for trademark infringement.
They've also held that it is use in relation to the relevant goods and services, where it's been used for the same ones as the owner of the trademark,
and then what they're trying to work out is to what extent does that damage the trademark itself.
So where we've currently got to is that if you use an adword and that in doing that the reasonably observant user of the internet has difficulty ascertaining - or cannot ascertain -
the origin of the goods being used in that ad, then you can have damage to the trademark.
And we have a very great and recent example of this being actually extended a little bit further, because we've had lots of cases all about Google and about the search engines,
but most recently we've had a case between Lush cosmetics and Amazon, where Amazon has been found to infringe through its use of words in its own search engine online.
So that's a very interesting development for brand owners.
Michael: We've been hearing quite a lot lately about exotic marks. What are they and are they a good thing?
Kate: Well, exotic marks are how they sound: they are exotic, they are different.
They are not your standard word and logo marks, so they can be smells, they can be sounds, they can be colours, they can be shapes.
They sound great and in a time when I think we as consumers are much more familiar with the idea that a smell, a sound, a shape, a colour can indicate the origin of goods, for instance BP - green and yellow.
The problem comes however in how do you define it? How do you put the parameters down? How do you record a smell? How do you record a colour and how it will be applied?
So the courts have been wrestling with these parameters for the use of these exotic trademarks, and we've recently had a whole raft of decisions, a lot of them revolving around chocolate, I have to say:
Cadbury and the colour purple, and whether simply stating that the colour predominantly used is purple is enough to grant a trademark. In that case, the answer was no.
The kit-kat, the shape of the kit-kat, could that actually function as a trademark? Again, the conclusion was no.
So exotic trademarks are great, but getting them is a little bit more of a challenge.
Michael: What are the points then that general counsel needs to take account of when thinking about these exotica then?
Kate: I think you need to be aware that it's not impossible to get one of these exotic marks, but that if your marketing team is consistently coming to you with inventive and innovative ideas
that they think can be trademarked, you need to remind yourself that actually the level of distinctiveness that those shapes, marks, smells, colours are going to have to achieve,
well that bar is a lot higher than it is for your standard graphic representation.
Michael: I've heard of a new IP enterprise court. What is it and what does it do?
Kate: Well, until last October it was called the Patents County Court and it was introduced as a way of dealing with IP matters
that perhaps weren't quite so substantial, either in terms of the complexity of the issues or in the costs associated with them.
And it provides a forum for small and medium enterprises to actually battle out their disputes over IP in a forum where there is a little bit more financial certainty than there is for example in the High Court.
The main two aspects of that are that costs are capped in the Intellectual Property Enterprise Court at £50,000.
Now you can spend as much or as little as you want on your case, but you will only ever be able to recover a maximum of £50,000.
And the same principle is applied to damages. In the case of damages the maximum that can be recovered is £500,000 and the idea is that for the small,
the medium-sized enterprises who can't afford to bet the business, it gives them some certainty as to what their exposure will be in the event they lose,
and therefore allow them to make a decision as to whether or not they choose to enforce, or whether or not they choose to defend, an intellectual property claim.
Michael: We've been hearing for the last few years now about a unified patents court. That seems to be coming closer, but what effect will it have on my business?
Kate: Well if you've got a patent portfolio, it's potentially going to be quite far-reaching.
The unified patents court is going to come in in tandem with the unitary patent, which is going to give a truly unified single system patent right across Europe.
At the moment we have European patents, but whilst they are administered and dealt with from the European Patent Office in Munich, what they give you is a series of national rights within that European patent.
So at the moment you could have a European patent that could be valid in the UK but it might not be valid in Germany. The unitary patent, however, will stand and fall as one right.
So if it was declared invalid in Germany, then it would be deemed invalid across the whole of Europe. It would fall away entirely.
If you wanted to obtain an injunction, there is an argument that your injunction would be Europe-wide, it wouldn't simply be in one particularly European country,
so in terms of your tactics, how you use your patents, how you invest in it, that could make a significant difference,
and also patent portfolio owners are going to have to decide well, do I go for a unitary patent or do I go for a European patent?
Can I afford the risk of the entire patent falling away across the whole of Europe, even though it's hoped the unitary patent system would be considerably cheaper than the current system we have.
Michael: And do we have a date yet for when this new Unified Patents Court will come into effect?
Kate: Well that's a good question and it's a moving feast, I'm afraid. We've just recently heard that the projected start date is now the end of 2015.
Thirteen countries have to ratify the agreement. So far three have done so, but I have to say the end date keeps being pushed back.
The hope is the end of 2015 is the last time that will happen.
Michael: Well there's certainly a lot going on in the field of intellectual property, but what should general counsel be concentrating on in relation to IP right now?
Kate: I think understanding your IP portfolio. I think having a regular audit of what it is you own, have you got the right rights protected and have you got them covered in the right countries?
Have you got IP on your books that actually you no longer use, you no longer need and that you're spending valuable money on?
And have you got an understanding of where your unregistered rights lie as well?
I think all of this talk that we've heard today has been about the registered rights, but those unregistered rights are also extremely important and a lot of companies forget about those,
they aren't fully aware of them, and they don't have the information that they need about those rights so they can actually take action and use those rights when they need to.
Like understanding who created something, when did they create it and have you got the evidence to support it?
Michael: Thank you, Kate, very good.
Kate: Pleasure.