Trade marks vs geographical indications in light of the new Trade Mark Regulation
Trade marks and geographical indications are both in their own way identifiers of origin. As such, even if the former refer to commercial origin while the latter refer to a geographical location, it is easy to see how there is huge potential for overlap and conflict between the two.
From 23 March 2016 a new Trade Mark Directive (2015/2436) and Regulation (2015/2424) have entered into force introducing changes such as, a new system of fees called “one-class-per-fee system”, which means that applicants are going to pay a lower fee if they only apply for one class or, the elimination of requirement of graphic representability as long as the representation is in a “clear, precise, self-contained, easily accessible, intelligible, durable and objective” manner. This post, however, will focus on the absolute grounds of refusal of registration which have been extended to include, in addition to designations of origin and geographical indications, protected traditional terms for wine (art.4.1.j) and traditional specialities (art. 4.1.k).
So, what is wrong with registering geographical names as trade marks? In synthesis, such a trade mark would inevitably be either descriptive or deceptive. If a mark is descriptive or lacks distinctive character, it cannot serve as a business identifier and it makes it impossible for other traders to market their products. By the same logic, if a geographical term were allowed registration, consumers could be misled as to the geographical origin of the goods (i.e. The Greek Yogurt decision for a yogurt not originating from Greece).
Surely enough, back in 1999, the ECJ established the principle of public policy by which geographical names cannot become subject to private trade mark rights in the famous Chiemsee case. This principle was later crystalized in art. 3.1.c of European Trade Mark Directive No. 2008/95/EC. According to this article, only trade marks which exclusively consist of a geographical origin will be invalid, thereby significantly narrowing its scope of application. At the same time however, the article is broad, as it prohibits registration of any designation of a place currently associated with the category of goods concerned or, any instance when it is reasonable to believe such association may occur in the future. Worryingly, these shortcomings are not resolved by the new Directive as its art. 4.1.c reproduces the exact wording of its predecessor.
To sum up then, while the new EU regulation for trade marks aims at making the system more efficient, clearer and limiting the line between trade marks and different forms of geographical indications, it has not dealt with the existing loophole by which a combined word/device mark including a geographical name would not in principle fall within the exclusion. It seems that public interest is best served by the protection of free competition rather than property rights, and therefore unregistrability of terms descriptive of the goods should not be an exception, but an inherent limitation.
Facebook: Abuse of dominant position?
A few months ago something has changed in the profile of 1 billion Facebook users. Any of us can verify that by looking at his profile information in the "contact information" part. You will discover that our originally set mail contacts have now disappeared and they have been replaced by a brand new mail address "name.surname(number)@facebook.com".
Only a small percentage of Facebook users have perceived this change and until now many millions of people are displaying the new configuration. Thus with a very simple move Facebook has gained a huge amount of contacts for its mail service (emails come directly as messages).
While for users it is very simple to fix this small inconveniency, it is just about a couple of clicks, and restore the preferred mailing address, legal implications could be far more interesting.
This technique used by Facebook in order to instantly get millions of customers for its mail service, taking advantage of its diffusion as a social network, reminds us of a famous case in 2004, the Microsoft case.
In a landmark decision the Redmond based company had been heavily punished for including inside its operating systems default programs like Internet Explorer and Windows Media Player and in general for having acted in a way that damaged other producers of these types of applications.
As a matter of fact there is an analogy between the behaviors of Microsoft and Facebook as the latest put inside its platform a mail service automatically available to all users with probable damages for many other companies competing in the market of electronic mail services and whose address are no longer displayed on users profiles.
I will conclude with the words of then European Commissioner for competition Mario Monti:
"It is essential to have a precedent which will establish clear principles for the future conduct of a company with such a strong dominant position in the market".
Is Facebook in a dominant position in the social network market?
Transposition of the Cookie Directive into Spanish law
The Spanish “Internet Law” Law on Information Society Services and E-Commerce (Ley 34/2002, known as LSSI) has been amended by Royal Decree 13/2012, March 30, published in the official journal of March 31st to comply with Directive 2009/136/CE, amending Directive 2002/58/EC on Privacy and Electronic Communications.
This amendment, though not being a significant change, merits a description and two comments, one on what has been done and another on what has not been done.
The prohibition of the practice of sending mail for the purposes of direct marketing which disguise or conceal the identity of the sender (article 7 of the Directive) is implemented in article 20.4 of LSSI.
The obligation to provide a valid address where the recipient may request that communications cease (article 7) is implemented in article 21.2 of LSSI.
The “cookie rules” of the Directive (article 5 of the Directive) allowing storage of information or the gaining of access of information already stored in the terminal equipment of a subscriber or user on condition that this subscriber has given its consent, having been provided with clear and comprehensive information, can be found in article 22.2 of LSSI.
Spanish regulation ads that this consent can be obtained automatically if the web browser of the recipient is already configured to give this consent, provided that the recipient has been able to do so expressly.
The amendment that merits the comment is article 31 LSSI, concerning the persons or legal entities entitled to bring legal proceedings on infringements regarding unsolicited communications.
Following Directive 2009/136, electronic communication service providers wanting to protect their legitimate commercial interests or those of their clients are entitled to a cessation action.
This means that any company whose products have been offered or trademarks used on such communications unsolicited communications are now entitled to such cessation action. Under Spanish civil procedure law (Ley de Enjuiciamiento Civil) this action is brought under the simplest procedure available, known as “juicio verbal”. This is a positive amendment since it widens the scope of natural and legal persons that can bring a cessation action through a simple procedure.
What has not been done relates to administrative sanctions on infringements. According to an established principle on sanction law, the conducts sanctioned have to be described. The issue arises when the prohibitions introduced by this amendment are not introduced in the description of the sanctioned conducts, thus raising the question about whether the infringement on these new prohibitions can be sanctioned.
As usual after an amendment, the debate is open.
Grid connection in Spain: is there a better way?
This is the second article in our series on the administrative obstacles that developers of renewable energy projects in Spain face when seeking approval for their projects.
At the end of our last article, we posed two questions regarding the requirement to place a financial guarantee prior to commencing the application process. Firstly, assuming the application is successful and the guarantee is cancelled, the effective application fee is €0. How then do the authorities recover their costs? Secondly, is it fair or desirable to require an entity that voluntarily desists with an application to forfeit the entirety of the guarantee?
In this article, we explore these questions.
The obvious answer to the first is that the authorities take a cut of the revenues derived from the electrical system. Red Eléctrica de España, for example, charges an ‘operations fee’ of approximately 1.05% of the final cost of electricity provided (the final fee will depend on the precise nature of the consumer and their location in the grid). This fee is charged to every consumer of the electricity, and is designed to cover REE’s costs incurred in operating the transportation network. This means that consumers are, in part, subsidizing the costs that REE has incurred in processing connection applications – both successful and unsuccessful. Similar fees are charged by the operators of the distribution networks (which, as we discussed in our earlier article, follow broadly the same administrative rules as REE).
If we were using a ‘user pays’ model, the obligation to pay for the application costs would properly fall upon the owner of the plant whose application has been processed. The current system clearly results in certain entities – for example, households and other end users – subsidizing the costs of both authorities and producers through higher electricity prices. Similarly, one would assume that the bank guarantees forfeited by unsuccessful applicants go some way in compensating the authorities for the costs involved in the application process; also resulting in a violation of the ‘user pays’ principle (unless in the unlikely event that the amount of the bank guarantee equates exactly to the amount of costs incurred in processing the unsuccessful application). At a conceptual level, then, we need to more to the second question: why should end users and unsuccessful applicants be required to subsidize successful applications?
One possible answer is that only sufficiently-qualified entities should be making applications in the first place. If a guarantee is executed against an unsuccessful applicant, this is an indication of that applicant’s unsuitability. Whilst we can understand this argument – and indeed, in some cases it is probably fair – it fails to take into account situations in which a project starts off being viable but later, for reasons unrelated to the applicant, ceases being so. In these circumstances the project owner has to decide whether to keep going with a sub-optimal project or accept the loss of the guarantee. Given the guarantee represents a lot of money, it is logical to expect that various projects continue with the application process even though they are not optimal. This is clearly a perverse outcome caused by the current system.
Another answer is that end users are the ones actually consuming energy, so they should be responsible for bearing the costs of the application processes for successful applicants. Although we have some sympathy for this line of thought, it neglects to consider that the producers themselves make money (sometimes, lots of money) from the production of electricity. This money ultimately comes from end users. Why, then, should the end user be required to pay not only for the product, but also for the producer’s costs incurred in creating that product? A fairer solution would be to make the project owner solely responsible for paying the application costs, costs which they can then recover through the operation of their plant. Going one step further, producers will already recuperate their costs from consumers via the sale of their energy on the wholesale market; why, then, should producers not have to cover their own application fee costs?
In our next article in this series, we explore the application processes in two other jurisdictions and ask whether these models could work in Spain.
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