the future of brands, november 2016, london

The future of brandsNovember 2016, London

The Future of BrandsProtecting shape & other product attributes

Bonita Trimmer, Browne Jacobson

Brands & trade mark protection

Is a brand just this?

PANGEA NET

Or this?

Brands and trade mark protection

A brand is the “intangible sum of a product’sattributes: its name, packaging, and price, itshistory, its reputation, and the way it’s advertised.”

David Ogilvy, author of ‘Ogilvy On Advertising’ andfounder of the Ogilvy & Mathew advertising agency

Protecting shape& other product attributes

An EU trade mark “may consist of any signs…inparticular words, including personal names, ordesigns, letters, numerals, [colours], the shape ofgoods or of the packaging of goods, [or sounds]…”

The EU Trade Mark Regulation (as amended) - note changes whichwill apply from 1 Oct 2017

Equivalent extended wording in the new EU Trade Mark Directive -to be implemented by Jan 2019

Shape and other ‘out of theordinary’ trade marks

Obstacles

Distinctiveness(overcoming the assumption)

Adequaterepresentation

Specific refusal/invaliditygrounds

RepresentationThe graphic representation requirement will, from October 2017, cease to apply to EUTMs to allow for “more flexibility” and technological future proofing.

The new test (Article 4 of the Amended EU TM Regulation) is:

To be registered, a sign must be capable of:

“being represented on the Register of European trade marks, in a manner whichenables the competent authorities and the public to determine the clear and precisesubject matter of the protection afforded to its proprietor”

Note also Recital (9): “… A sign should be …clear, precise, self-contained, easilyaccessible, intelligible, durable and objective”.

RepresentationNo more need for graphic representations (2016 EUTM)?

Representation

“A sound mark consisting of a selection of the noises made by a variety of birdspecies, arranged in a specific consecutive order. The sound components of thesequence comprise the noises made by the following birds: four different noises madeby the swallow, and the jay, starling, blackbird, swallow hawk and hobby. The totalduration of sound is 35 seconds”

Representation“capable of being graphically represented?”

• Société Des Produits Nestlé SA v Cadbury UK Ltd [2013] EWCA Civ 1174 (04October 2013)

• JW Spear & Son Ltd & Ors v Zynga Inc [2013] EWCA Civ 1175 (04 October 2013)

plus descriptions

Would these still fail the new test?

Representation“capable of being graphically represented?”

"The colour purple (Pantone 2685C), as shown on the form of theapplication, applied to the whole visible surface, or being thepredominant colour applied to the whole visible surface, of the packagingof the goods."

“The use of the word 'predominant' opens the door to a multitude ofdifferent visual forms…that description, properly interpreted, does notconstitute 'a sign' that is 'graphically represented’…. nor described withany certainty or precision, or at all” – Court of Appeal

Representation“capable of being graphically represented?”

“The mark consists of a three dimensional ivory coloured tile on the topsurface of which is shown a letter of the roman alphabet and a numeral inthe range of 1 to 10”

Summary judgment (TM invalid) – again “a multitude of differentcombinations” were covered. “There is no graphic representation…thatmeets the requirements of clarity, precision and objectivity” – Court of

Appeal.

Representation“capable of being graphically represented?”

Glaxo Wellcome UK Ltd (t/a Allen & Hanburys) & Anor v Sandoz Ltd [2016]EWHC 1537(Ch) - EUTM

“The trade mark consists of the colour dark purple (Pantone code 2587C)applied to a significant proportion of an inhaler, and the colour lightpurple (Pantone code 2567C) applied to the remainder of the inhaler”

“not sufficiently precise and uniform. Nor is it sufficiently clear andunambiguous” – IPEC (summary judgment on CC granted - TM invalid)

Distinctiveness (inherent)Summary of the CJEU case law

• “Average consumers are not in the habit of making assumptionsabout the origin of products on the basis of their [colour/] shape orthe shape of their packaging”

• “Only a shape mark which departs significantly from the norm orcustoms of the sector and thereby fulfils its essential function ofindicating origin is not devoid of any distinctive character”

• “In the case of a colour per se, distinctiveness without any prior useis inconceivable save in exceptional circumstances.”

NB: Cadbury relied on acquired distinctiveness.

Distinctiveness (inherent)

Inherent distinctiveness - the UK only “extra” requirement?

Distinctiveness (inherent)The UK only “extra” requirement?

It is not correct that “just because a shape is unusual for the kind of goodsconcerned, the public will automatically take it as denoting trade origin, asbeing the badge of the maker”; Bongrain SA, Re Trade Mark Application [2004]EWCA Civ 1690 (17 December 2004) – UK TM

• What “more” is needed for inherent distinctiveness?• Inconsistent with recent General Court decisions (like JLR)?

Not challenged in the UK until this year

“at some point this question will have to be referred tothe CJEU” – Arnold J (London Taxi Company judgment)

Distinctiveness (inherent)

Distinctiveness (inherent)

JLR v OHIM (Case T-629/14) - 25 November 2015 - EUTM

Not inherently distinctive for vehicles for locomotionby land (variant of common shapes)

But inherently distinctive for vehicles forlocomotion by air and water (regarded asdeparting significantly from the norm andcustoms of that sector - note that wasenough)

Distinctiveness (acquired)Secondary meaning acquired from use (note absence of fluting)

Distinctiveness (acquired)EUTMs - secondary meaning everywhere?

Lindt & Sprüngli v OHIM (C-98/11 P)

“it would be unreasonable to require proof of suchacquisition [of acquired distinctive character]for each individual Member State”.

However this softening is patchy.

The Coca-Cola Company v OHIM (T- 411/14) – 24 February 2016

Acquired distinctiveness in the EU not established, despite surveyevidence across many Member States (10 out of 27). Appeal needed tobe brought within 2 months.

Distinctiveness (acquired)

Acquired distinctiveness – give us a break!

Distinctiveness (acquired)

The question referred to the CJEU in Societe des ProduitsNestle (C-215/14) – UK TM

Is it sufficient to prove that:

A. at the relevant date a significant proportion of the relevant class of personsrecognises the mark and associates it with the applicant's goods in the sensethat if they were to consider who marketed goods bearing that mark [andthat mark alone], they would identify the applicant; or

B. at the relevant date a significant proportion of the relevant class of personsrelies upon the mark (as opposed to any other trade marks which may alsobe present) as indicating the origin of the goods?

Distinctiveness (acquired)

CJEU’s answer (not A or B) “… the trade markapplicant must prove that the relevant class ofpersons perceive the goods or services designatedexclusively by the mark applied for, as opposed toany other mark which might also be present, asoriginating from a particular company”

???

Distinctiveness (acquired)

Nestle accepted the CJEU’s answer ruled out mererecognition/association. However, it said that the type or“reliance” required, was established where “because of” themark alone, the average consumer perceives the goods asoriginating from a particular undertaking.

What must not be required “was reliance in the sense thatconsumers had in the past gone out and made purchasingdecisions on the basis of the mark alone”.

Distinctiveness (acquired)The Judge accepted that “at least half the people surveyed thoughtthat the picture [of the mark] shown to them depicted a KIT KATproduct”. But he still thought this was not enough as:

• no evidence that the shape of the product featured in promotionsfor the goods for many years prior to the application;

• the product was sold in an opaque wrapper which did not show theshape;

• no evidence consumers used shape post purchase to check thatthey had chosen the product from their intended trade source; and

• there was likely to have been a number of similarly shapedproducts produced by others on the market leading up to therelevant date.

Nestle appealing (Spring 2017)

Specific invalidity groundsAbsolute grounds for refusal(Article 7 Amended EU Trade Mark Regulation – since March 2016)

1. The following shall not be registered...(e) signs which consist exclusively of:

(i) the shape, or another characteristic, which results from the nature of thegoods themselves;

(ii) the shape, or another characteristic, of goods which is necessary toobtain a technical result;

(iii) the shape, or another characteristic, which gives substantial value tothe goods.

Specific invalidity groundsAbsolute grounds for refusal(Article 7 EU Trade Mark Regulation – since March 2016)

A brief mention of Simba Toys GmbH & Co. KG v EU IPO (C-30/15 P) – 10 November2016

It was accepted before the CJEU that the mark represented the goods themselves“the shape of goods which is necessary to obtain a technical result”

Specific invalidity grounds

A shape - which givessubstantial value to goods?

Substantial value• Hauck GmbH & Co KG v Stokke A/S (C-205/13) – 18 September

2014 – Benelux TM

• The shape of the ‘Tripp Trapp’ chair gives it aesthetic value but italso has other characteristics (safety, comfort and reliability)which give it functional value.

• The CJEU concluded:

– the “substantial value” grounds for refusal/invalidity “may apply to asign which consists exclusively of the shape of a product with severalcharacteristics each of which may give that product substantialvalue”

Substantial valueThe relevant considerations for the “substantial value” grounds are:

• the nature of the category of goods concerned• a substantial price difference in relation to similar products• the artistic value of the shape in question• the shape’s dissimilarity from other shapes in common use on the relevant market• a promotion strategy which focuses on accentuating the aesthetic characteristics of

the product

Note the squeeze with distinctiveness from the last two:

• “only a shape mark which departs significantly from the norm or customs of thesector and thereby fulfils its essential function of indicating origin is not devoid ofany inherent distinctive character”; and

• lack of promotional efforts specifically focusing on shape often contribute to a “noacquired distinctive character” finding (e.g. Kitkat).

Substantial value

The squeeze with distinctiveness

Substantial value

• It was dissimilar to shapes in common in use [for cars] (inherent distinctiveness?)• The TX1 was commonly regarded as “classic” and “iconic” and by December 2006

London Taxi Company was “promoting its taxis as being iconic” (acquireddistinctiveness?)

• “It is well-recognised that car body shapes have aesthetic qualities…”

Difficulties:(a) differentiating a shape which has become attractive to consumers due to its use

and reputation, from a shape that ‘in itself’ adds substantial value(b) good (attractive) design can’t always means no shape trade mark protection?

Leave to Appeal (Summer 2017)

Substantial value

• Example EUTM perfume bottle registrations• Do these shapes give the goods substantial value?

Substantial value

For EUTMs the shape specific absolute grounds for refusal/invaliditynow applies to “other characteristics” of goods as well.

However, what “other characteristics” will add substantial value:

• An unusual and comic watch tick?• Luminous pink construction boots?• An evocatively perfumed children’s modelling dough?• Chocolate flavoured lipstick?

Out of the ordinary trade marksIn summary

• Currently challenging to obtain such marks in the UK - but it may geteasier… subject to Brexit

• Easier to obtain as an EU TM if arguably inherently distinctive• Get national marks in key EU member states as well as an EU TM, if relying

on acquired distinctiveness (at least for now)• Ensure your application is clear and precise (be careful with descriptions)• Beware the new distinctiveness/substantial value squeeze• Audit or ask your Trade Mark advisor to audit your portfolio• Monitor developments & still consider the deterrent/negotiating value of

registrations• Consider other forms of protection – registered designs and copyright

Contact us…

Bonita Trimmer - bonita.trimmer@brownejacobson.com020 7337 1042 / 07974 071690

Brands in the Digital Space

Protection and enforcement of your brandonline

Nicola Hill, Browne Jacobson

The Digital Space

89.7 % of UK adults use the Internet

4.1 billion users anticipated worldwide by 2020

New markets emerging include Africa, India and SE Asia

Approx. 51% of advertising spend is on digital advertising

“Today’s kids will be the first virtual natives”

Sophie Hackford

Today’s topics…

• User-generated content – avoiding the pitfalls

• Social media – tips re: content take-down

• Website blocking injunctions after Cartier

• Reputation 101 – when complaints go viral

User Generated Content

UGC - Crowd SourcingBurberry “The Art of the Trench” Starbucks White Cup Contest

User Generated Content

Comprehensive terms and conditions

– licence to use and modify – scope?

– Warranty and indemnity – ownership of content

– Right of removal (offensive material) (Godfrey v Demon

(1999), Delphi (ECtHR 2015))

Key risks – defamation, copyright infringement,

Social Media Content Take Down

Website Blocking Injunctions

Cracking down on counterfeit goods:

– It is estimated that 7-8% of world trade every year iscounterfeit goods

– This equates to about $512 billion in global lost sales

Cartier decision

• Online enforcement is currently “on the move”:

– Cartier International AG & Ors –v- British SkyBroadcasting Limited & Ors [2016]

(Note: this has now been appealed to the Supreme Court)

Reputation 101

Reputation 101…

Disgruntled customers … unfair online criticism…

» Defamation?» Online/private response?» Compensation?» Ignore?

Measuring the response…

• Potential responses depend on the infringement ,platform and cost benefit analysis

• Also PR Considerations…

Contact us…

Nicola Hill – nicola.hill@brownejacobson.com0115 976 6535 / 07717 058796

Distinguishing your brand:careful collaborationand the ASA

Laura Mackenzie-Mitchell, Browne Jacobson

Who should I work with & how?

• Conduct due diligence on brand/celebrity partners– What is their ASA record?– Do consumers engage in a positive way with their

campaigns?– Do brand values conflict with ASA target issues?

• Contractual provisions re approval of promotionalmaterial (but note CAP Code implications!)

• Use of separate marketing channel?

2016: spotlight on - the ASA

• Securedamendment/withdrawal of1,598 ads

• Proactive approach• Targeted approach• Increased media coverage of

rulings (2017 ad campaign)• Emerging ad technologies

Working with brandambassadors/partners

CAP Code & ambassador content

• Increased complaints

• The importance of being identifiableCAP Code rule 2.1 and 2.4

• Identification and social media

‘sponsored’ vs ‘ad’: advertorial?

• Covered by the CAP Code (i.e. #ad) if:

– Brand pays for/enters into reciprocal arrangement forcontent in editorial space; and

– exercises degree of editorial control

Alpro: an advertorial?

“FAVE summer snack vibes @Alpro_UK …#Alpro#GoOn”

‘sponsored’ vs ‘ad’: sponsored?

• NOT ads under the CAP Code if:

– Brand pays for/enters into reciprocal arrangement forcontent in editorial space; BUT

– Leaves editorial control entirely with creator

Label before engagement …

text “J2O SPRITZ #BlendRecommends”.Text below stated “80s vogeuing [sic] xyoga @Houseofvoga. More of my#BlendRecommends with @drinkj2o Spritzto come! #sp”.

Use of separate channel

Beauty Recommended

In summary…

• Conduct due diligence on your partner/ambassador• Be clear (from the outset) when you have editorial

control• Avoid #spon, ‘in association with’ etc

& watch for increased reputational risk of publicisedASA complaints…

Contact us…

Laura Mackenzie–Mitchelllaura.mackenzie-mithcell@brownejacobson.com0121 237 3959 / 07799 768754

Cutting a Sponsorship Deal

Alex Watt, Browne Jacobson

Introduction

• Sponsorship is the future– We have our own ad-blockers– Engagement is the answer

• How do we cut a Sponsorship Deal– A million ways - but we shall deal with three:

Classic Sponsorship Agreement Endorsement Deals Co-Branding Deals

Sponsorship Agreements

• Sponsorship Agreements keep the world turning– Sponsorship of established events– New or Bespoke Premium Brand Opportunities

Why are they different?

• What do they look like?– World Record Attempt– Festival– Film– Sporting Event

Standard Sponsorship Terms

• The usual terms will apply – but with a twist:• What?

– What are you getting?– What exposure – really drill down (tickets, links, where, social)

• Term?– Needs to cover more that the event you are sponsoring – think:

social, payment, website, videos and follow up, what otherbenefits – location access etc

– Option? Is it a new event? Remember – risk and reward?

Intellectual Property

• IP Licence– Licence of your brand to the rights holder to use

Provide the brand guidelines Prior written approval of all use Needs to cover copyright as well as trade marks

– Licence back Where can you use it? (cards, emails etc.) Usual indemnities

Exclusivity and Price

• Exclusivity– The whole point is association– Exclusive what?– Exclusive where?– Restrictions on similar brands in other categories?

• Price– When / how much (is there a production element?)– Is it variable? Was it a record? did they win?

Alcohol

• Important – has its own Code: The Portman Group’s Alcohol Sponsorship Code

Drinks companies must not:– sponsor individuals under the age of 18;– Not sponsor a team, band or group which that has less than 75% of its members being

under 18;– Fail to include drinkaware or similar terminology;– Sponsor events that appeal to people under the age of 18;

Drinks companies must:Provide a recognisable commitment to promoting responsible drinking and/or supportingdiversionary/ community activities; taking into account the size, scale, reach, and length ofthe sponsorship.

Termination

• Managing Risk– When can you terminate?

Standard terms – material breach etc. etc. Add - failure to secure: an alcohol licence, celebrity,

location or other vital element.

– Cancellation Rights At will – with variable loss.

Endorsement Agreements

• A more intimate deal – selling ‘stardust’– Even more powerful now with an audience

• What are they doing?– Describe in detail – more if anything: travel / hotels?– Social – what platforms and what minimum?

• Reputation– The ‘morality clause’– Reputation is key – studies have shown huge loss

The Morality Clause

• When can you terminate / distance the brand:– Two reputations – distinguish– Any damage to brand reputation – what discretion?– Certain actions – varies: their reputation v. actions

Arrested / charged of criminal behaviour Certain actions relating to their profession Governing bodies – conduct and rules

• Can you claw back?• Don’t agree to an arbitration clause!

Intellectual Property

• Same as Sponsorship BUT note:– In the UK – there is no such thing as ‘Image Rights’– Position varies around the world– In the US it varies state by state

• Do they have a trade mark / logo– Again – need an indemnity (no own name defence)– Check who owns the marks!

Corporate Vehicle

• Is the IP correctly licensed?– Ask to see the licence agreement

• Often a surprise – is it a deal breaker?– No.– BUT check:

Is it a new company? Is there an employment / services agreement? Is there a letter of guarantee?

Social Media

• What? Total clarity on what is provided:– Which Platforms– What?– What frequency – what minimums?

• Advertising Standard Authority CAP Code– Clarity on sponsored tweets– Do you have a # you need to have used?

Other Issues:

• Reverse Morality Clauses

• Force Majeure – bear in mind the power of theseclauses when you are dealing with an individual

• “Death, Disablement, Disgrace Insurance”– covers lost costs - but does not save reputation.

Co-branding (the “Partnership” deal)

Effectively Joint Sponsorship of a Bespoke Event• Who owns the IP?

– Bear in mind the costs?– Bear in mind the value.

• What are you really doing? Joint venture? OR– Jointly sharing your audience?

Do you want to share your audience? Can you – or are there Data Protection issues?

Contact us…

Alex Watt - alex.watt@brownejacobson.com0207 337 1008 / 07887 754824