Intellectual Property: Industry News_1st quarter of 2019

In this issue, you can read about the latest high-profile disputes and unexpected decisions of Ukrainian and world courts on intellectual property issues, as well as about the most recent changes of legal regulation, namely: 

• The Supreme Court resolved the issue of courts’ jurisdiction over the case in a dispute concerning the protection of IP rights infringed on the Internet;
• The Supreme Court clarified the right to a prior use of the trademark;
• The EUIPO abolished the McDonald's right to “Big Mac” trademark;
• Facebook bears responsibility for links posted by users to an unlicensed content;
• The EU changed trademark regulation.

Ukrainian Court Practice

The Supreme Court ruled on the issue of jurisdiction over the case in a dispute, concerning the protection of IP rights violated on the Internet

The reform of the court system in Ukraine resulted in cases relating to the protection of IP rights being subject to jurisdiction of the High Intellectual Property Court (as provided in para. 2 of art. 20 of the Code of Commercial Procedure of Ukraine), including claims on protection of exclusive material author’s rights similar to the case No. 918/186/17. Considering that the specialized court has not yet taken up his seat, statement of claims are filed in accordance with general rules of territorial jurisdiction: at the place of a defendant’s residence, or his registered office. Yet, it is often rather challenging to determine the defendant in cases relating to the protection of IP rights, especially in cases where a violation of such rights occurs on the Internet.

In the aforementioned case, the Supreme Court established which commercial court is an appropriate forum for submission of a claim relating to violation of the IP rights on the Internet. Thus, should the violation of the IP rights take place on the territory of two or more geographical administrative divisions of Ukraine, the claimant may choose the jurisdiction of any commercial court taking into consideration only the place of discovery of violations of IP rights. 

Particularly, the courts of first instance have started to adhere to legal position of the Supreme Court, thus, helping to avoid a controversial issue of territorial jurisdiction of courts over the cases. 

The position of the Supreme Court on a right to a prior use of a trademark

It is a popular presumption among trademark owners or sole representatives of trademark goods where a trademark is owned by a non-resident, that the IP rights are violated where third parties distribute non-counterfeit goods bearing such original trademark by means of sale without authorization of a TM owner. Such presumption was considered in a case No. 910/22001/17.

In the present case, the Supreme Court reaffirmed that an offer for sale of previously imported to Ukraine goods, indicating someone’s else trademark, shall not be deemed an unlawful use of such trademark. Furthermore, the defendant who has been reselling such goods until the date of the claimant’s filing of the application for a trademark registration, is entitled to an uncompensated use of the trademark and is qualifies as prior user in accordance with art. 500 of the Civil Code of Ukraine.

Source: the Supreme Court resolution dated 22.01.2019 in a case No. 910/22001/17, LLC “Farmlink” against LLC “Onkomedika” and LLC “UAPROM”, over the dispute on termination of introduction into civil commerce on the territory of Ukraine and seizure of goods, indicating “HAIDA”. Electronic source:  http://reyestr.court.gov.ua/Review/79429953.

World Court's Practice

The European Union Intellectual Property Office (EUIPO) cancelled the right of McDonald’s to a trademark “Big Mac”

Supermac’s, an Irish fast-food chain, requested the EUIPO to cancel the exclusive right of an American corporation McDonald’s to use a trademark “Big Mac” registered in 1996, for the purpose of releasing production and opening its restaurants in the EU countries. 

In January 2019, the EUIPO ruled that McDonald’s failed to prove his true usage of the “Big Mac” trademark, and commencing with the date of registration, haven’t exercised his right to open a restaurant under this brand. Following the consideration of the case, the right of McDonald’s to use the “Big Mac” trademark for the purpose of opening its restaurants was prematurely terminated. 

Drawing the parallel with the Ukrainian legislation (para. 4 of art. 18 of the Law of Ukraine “About the protection of rights to trademarks for goods and services”), if during 3 years following the date of publication the trademark is not used in Ukraine fully or in relation to a part of goods and services indicated in the certificate, any person is entitled to request the court to terminate prematurely the effect of the certificate fully or partially. 

Facebook bears responsibility for its users’ posting links to unlicensed content 

The Court of Rome (Tribunale di Roma, sentenza 3512/2019) found Facebook liable for failure to act in the capacity of a passive hosting provider, namely, to remove the illegal content from its server timely. In this case, on the Facebook page, a user posted links to video excerpts from the animated series on YouTube, such video excerpts constituting unlicensed content, along with the defamatory comments about those series.

Of particular interest about the decision is that the court refused to apply art. 14 of the EU Directive No. 31/2000, which excludes the responsibility of a hosting provider for third parties’ actions. The reason for that, the court explains, is the awareness of Facebook of the violations from the complaints of copyright owner and from his requests to delete the links to an illicit content, which he submitted to Facebook. 

Therefore, in accordance with this decision, even passive hosting providers must be careful and provide assistance to owners of IP rights, in particular copyright, when considering the complaints about violations of their rights. 

Legal News and Events in the world

Reforms in the EU regulation of trademarks 

On 15 January 2019, the deadline, set for the implementation of the EU Directive No. 2015/2436 by the Members-States into their national legislation, passed. The Directive provides for a range of important changes in the field of regulation of trademarks, especially relevant to market participants, who want to receive appropriate protection in the EU. These are some of the most notable changes:

• The requirement to depict the mark in graphic form when applying for a trademark registration was abolished. This means that it will be easier to register non-traditional marks, such as sounds or smells;
• A new principle regarding the classification of goods and services in accordance with the Nice Classification was introduced: from now, trademarks’ owners must specify the amount of protection within a single class. This also applies to all trademarks that are already registered;
• Indications of origin, geographical indications, and rights to plant varieties were included in the list of absolute grounds for refusal of trademark registration;
• The requirement to involve the trademark owner in the case on violation of IP rights, initiated by the licensee, was excluded. However, a licensee may bring proceedings only with the consent of a TM owner. 

The afore provided list of changes is not exhaustive.

By Daryna Demchuk, Associate Integrites