WHAT PROTECTION IS PROVIDED FOR SO-CALLED ” WELL-KNOWN” TRADEMARKS: THE GUCCI CASE

04/11/2021

Well-known trademarks enjoy an enhanced protection which goes beyond the mere risk of confusion between products. This has been affirmed by an interesting ruling of the Italian Supreme Court concerning the famous maison Gucci.

 

With decision no. 27217/2021, filed on October 7, 2021, the Italian Supreme Court upheld Gucci’s action requesting the invalidation for lack of novelty of the registration by a Chinese company of two similar trademarks and returned the case to the Court of Appeal. The latter, which had previously dealt with the matter, while acknowledging the similarity of the conflicting signs and the reputation of Gucci’s trademarks, had rejected the invalidity actions by limiting its analysis to the risk of confusion between the signs themselves. Based on that, the Court of Appeals of Florence had observed that the high reputation of a mark not only is irrelevant for the purposes of assessing the risk of confusion, but it represents an additional argument in support of lack of confusion instead. Accordingly, it is precisely the trademark’s reputation and its imprint in the minds of consumers that exclude the possibility that the latter may be misled, “since it cannot be held that the power of attraction of the earlier well-known trademark may be compromised by a later sign (of the infringer)” incapable of causing a risk of confusion in a public of careful and informed purchasers like those of Gucci’s products.

However, the Supreme Court noted on this point that lack of confusion is “totally irrelevant for the application of the discipline of well-known marks”. Indeed, well-known trademarks, unlike non-renowned marks, enjoy a special and enhanced protection provided for by Legislative Decree 30/2005, implementing EC Directive 89/104. Therefore, in order to exclude the novelty of the later sign pursuant to art. 12 letter. f) of the Decree and allow the owner of a well-known mark to prohibit third parties from using the sign pursuant to art. 20 letter. c) is not necessary that there is a risk of confusion in the relevant public. According to the Supreme Court, it is in fact enough that “the infringer may take unfair advantage from the distinctive character or the reputation of the earlier sign, or that the use of the sign without good reason by the infringer may damage the well-known mark”, thereby generating the so-called “dilution” with reference to distinctiveness and the so-called “corrosion” with reference to the reputation of the mark. On the other hand, the “unfair advantage”, also known as “parasitism”, refers not to the prejudice suffered by the owner of the earlier renowned mark, but rather to the unfair advantage gained by the owner of the infringing trademark. This is the case where the infringer, by placing himself “in the wake” of the well-known trademark, benefits from its reputation, its power of attraction and its prestige without de facto paying any monetary compensation. As for the public of consumers, the Court observed that it is irrelevant that those who usually purchase Gucci products may not be mistaken, as counterfeited products may be consciously chosen by a number of consumers not for their intrinsic decorative or material characteristics, but merely for their strong resemblance to the “famous” products, perhaps in order to “pass them off” as originals.

It will therefore be for the referring court, on the basis of what has been established by the Supreme Court, to determine whether the use of the later trademark lacks a just cause that allows to take unfair advantage and profit from the distinctive character or the reputation of the Gucci trademark and it is detrimental to the characteristics of such trademark.  This is definitely an important decision on the issue of famous brands and is in line with other previous decisions on the matter (see, for example, the L’Oréal ruling of June 18 2009, cited by the Supreme Court in the present decision).

Margherita Corrado


ARTIFICIAL INTELLIGENCE AND INDUSTRIAL PROPERTY LAW: GRANTED IN AUSTRALIA THE FIRST PATENT ‘INVENTED’ BY A MACHINE

14/10/2021

With a groundbreaking decision of July 30, 2021 (available at https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca0879), the Federal Court of Australia has ruled – for the first time in the world – that an artificial intelligence system can be named as the inventor of a patented invention. As a result, the owner of the AI system can legitimately be named as the patent’s applicant and enjoy the exclusive rights arising from its registration.

 

The case

The dispute comes from a patent application filed by Dr. Stephen Thaler, developer and owner of an artificial intelligence system called “DABUS”, able to generate ideas by modifying the interconnections between different neural networks and to analyse the most critical consequences of such ideas. According to Thaler himself, DABUS developed entirely on its own the invention underlying the patent application, relating to a heterogeneous set of products and processes concerning containers, devices and methods for attracting enhanced attention using convex and concave fractal elements.

The patent application, filed by Dr. Thaler (among others) with the Australian Patent Office, did not name a natural person as the inventor, but “DABUS”. For that reason, the Office rejected the application on the ground that the applicable legislation was not compatible with the possibility of designating a non-natural person as the inventor of the patent. Dr. Thaler appealed this decision before the Australian Federal Court.

The decision

With the commented decision, the Australian Court, while confirming that the applicant for a patent registration must necessarily be a natural person (or a person with legal personality), excluded the existence of a valid legal ground to prevent an artificial intelligence system from being named as the inventor of the patent.

This is because, in the first place, there is no definition of inventor in the Australian legal context that unequivocally links that status to a natural person: in the Court’s view, the term ‘invent’ has been used to describe actions directly attributable to men only because – historically – such actions could not (yet) be performed by machines: ‘however, now that artificial intelligence systems can perform the same functions, the word [invent] can also refer to them‘.

Secondly, the Court continues, the argument put forward by the Australian Patent Office according to which an AI system could not be identified as an inventor because – being it an artificial intelligence system – it could not be considered as the owner of a title to be transferred to the applicant-physical person (in this case Dr. Thaler), cannot be accepted. In fact, Art. 15(1)(c) of the Patents Act 1990, in providing that “a patent for an invention may only be granted to a person who [… ] derives title to the inventor or a person mentioned in paragraph (b)“, when it refers to “deriving title to the inventor”, would not necessarily require an act of assignment from the inventor/AI system to the applicant/individual, since the applicant, in his capacity as owner of the AI system, would be the owner of all inventions created by that system at the very moment those inventions came into his possession.

Finally, in conclusion of its reasoning, the Court points out that extending the definition of inventor in a way of including an AI system not only wouldn’t be contrary to the applicable legislation, but would also be in line with the objective set in section 2A of the Patents Act to promote technological innovation and its dissemination: otherwise, a disincentive for investments would be generated and owners of AI systems would be forced to protect patentable inventions as trade secrets.

Conclusions

The Australian decision, which is not yet definitive being it subject to appeal, could mark a turning point in the global panorama with regard to the increasingly discussed and topical issue of the relationship between artificial intelligence and industrial property law. For the time being, however, this is an almost isolated case which, in fact, appears to be in contrast with some other decisions (most recently the one of the Court of Appeal of England rendered on September 21, 2021, available at https://iponline.cipc.co.za/Publications/PublishedJournals/E_Journal_July%202021%20Part%202.pdf), which in front of similar cases, confirm that the status of inventor of a patent can only be attributed to a natural person.

Giorgio Rapaccini


WILL THE SEARCH FOR (FAIR) COMPENSATION BE LOST IN THE CLOUDS?

07/10/2021

In his Opinion of 23 September 2021 in Case C-433/20, Advocate General Hogan considered that the fair compensation for private copying provided for in Article 5(2)(b) of Directive 2001/29/EC must also cover the provision of cloud storage space or capacity made available by a third party such as an internet service provider and used by private users to obtain and store copies of protected works. That fair compensation is, however, presumed to have already been paid by the providers of the media enabling such storage (smartphones, tablets, etc.), unless the rightholder demonstrates that that amount is inadequate, with the assessment of the merits being left to the courts of the Member State.

 

The case

The case, which has reached the Court of Justice of the European Union, originates from a dispute brought by the German society for the collective management of copyright and related rights on musical works (Austro-Mechana) for the assessment of the enforceability (and consequent quantification) of fair compensation for private copying against the German company Strato AG, a provider of virtual cloud storage services (through the service called “HiDrive”) within the Austrian territory.

According to Austro-Mechana, Austrian law provides for the payment of royalties for any type of recording media that has been placed on the market in Austria, including the provision of cloud storage space, as provided by Strato AG. On the other hand, the application of fair compensation for private copying also to “dematerialised” storage spaces (such as the cloud) was contested by Strato AG, according to which, in the absence of a physical support for the recording of the protected work, the law in question would not be applicable. Strato AG also argued that such remuneration would not be due since the rightholders would have already obtained the payment of the remuneration for private copying (i) from the manufacturers of the devices, without which it would be impossible to upload the protected content to the cloud (i.e. smartphones, tablets, etc.), and (ii) from Strato AG itself for the acquisition of the storage servers located in Germany.

The Commercial Court of Vienna dismissed Austro-Mechana’s claims, finding that the fair compensation for private copying provided by Austrian law was not applicable to the cloud storage space provided by Strato AG, because the user would not have physical access to the media for storing protected content (i.e. servers), but only the possibility to access the storage capacity in some unidentified location in the provider’s cloud. Austro-Mechana appealed the decision and the appellate court raised two preliminary questions before the Court of Justice.

The Advocate General’s Opinion

Both preliminary questions concern the interpretation of Article 5(2)(b) of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society, which provides that Member States may provide for exceptions or limitations to the exclusive right to authorise or prohibit the reproduction of protected works for reproductions made by private individuals on any medium on a non-profit-making basis, subject to the requirement that the rightholders pay fair compensation. The first question concerns the enforceability of that fair compensation by the holders of copyright or related rights against providers of cloud storage space for private users, while the second concerns the quantification of that fair compensation.

According to the Advocate General, in response to the first question, the terminology ‘reproductions on any medium’ used by the European legislature does not limit the private copying exception to physical media (CD/DVD, etc.) owned by individual private users, but also covers intangible media, such as cloud storage space or capacity, made available by a third party such as an internet service provider and used by private users to obtain and store copies of protected works. That conclusion is based on the assumption that, in itself, any reproduction of protected works constitutes an act adversely affecting the rights of the rightholder, of which the private copying exception is a limitation; consequently, according to the Advocate General, there can be no discrimination between categories of media which do not also include those resulting from technological progress. Obviously, the limit to the applicability of the compensation for private copying would be represented by the legitimacy of the acquisition of the protected work by the private individual, all forms of reproduction/abusive making available which would in themselves constitute an infringement of the rights of the owner being therefore extraneous.

Having determined that fair compensation for private copying is also payable by the rightholder to the third-party provider of cloud storage services, it is not possible, however, to quantify the exact amount of that fair compensation. Hence, the Advocate General’s conclusion, in response to the second question referred for a preliminary ruling, that no additional compensation is payable by the third-party cloud service provider, since there is a risk of imbalance between the rights of rightholders and the rights granted to private users. Only if the rightholder can show that the payment of fair compensation made by the providers of the media (i.e. smartphones, tablets, etc.) may be considered inadequate to the actual prejudice suffered by private uses, will the referring court have to verify and quantify any additional amounts due to rightholders as fair compensation.

Alessandro Bura


COVID-19: COMPULSORY LICENSING POSSIBLE IN CASE OF NATIONAL HEALTH EMERGENCY

01/10/2021

The new Article 70 bis of the Italian Industrial Property Code will allow the granting of compulsory, non-exclusive and inalienable licenses for the production of medicines and medical devices considered essential to face health emergencies, which will be valid only for the duration of the emergency period, up to a maximum of 12 months from the end of the emergency itself.

 

With the recent Conversion Law (Law July 29, 2021, no. 108) of the so-called “Decreto Semplificazioni” (Decree-Law May 31, 2021, no. 77), an important amendment to the Italian Industrial Property Code (Legislative Decree February 10, 2005, no. 30) was approved: following the proposal of the former Minister of Health Giulia Grillo, Art 56 quater as inserted in the “Decreto Semplificazioni” innovates the Italian Industrial Property Code, introducing, for cases of declaration of a state of national emergency motivated by health reasons, a case of granting of compulsory licenses for the non-exclusive use of patents relevant to the production of medicines or medical devices.

According to letter a) of paragraph I of Art. 56 quater, Art. 70 bis is inserted in the Italian Industrial Property Code, according to which it is provided that, in case of a declaration of a state of national emergency motivated by health reasons, in order to address proven difficulties in the supply of specific medicines or medical devices deemed essential, it is possible to grant, in compliance with international and European obligations, compulsory licenses for the use, not exclusive, not alienable and directed mainly to the supply of the domestic market, of patents relevant to production purposes, having a validity bound to the duration of the emergency period or up to a maximum of twelve months from the end of the same.

Such compulsory license is granted by decree of the Minister of Health, in agreement with the Minister of Economic Development, after consultation with the owner of the intellectual property rights, subject to the opinion of the Italian Drug Agency regarding the essentiality and availability of medicines, or subject to the opinion of the National Agency for Regional Health Services regarding the essentiality and availability of medical devices, always with respect to the emergency in progress.

The aforementioned decree also establishes the appropriate remuneration to be paid to the owner of intellectual property rights, determined taking into account the economic value of the authorization.

It should be noted that the system of compulsory licensing is not new to the Italian Industrial Property Code, as it is already regulated by Articles 70 – 74 of the same. However, the substantial innovation of Art. 70 bis consists in shortening the waiting time, ensuring that a patent on medicines or essential medical devices can be licensed as soon as a period of health emergency begins: in fact, compared to the common regime, in case of emergency context the procedure for granting the special compulsory license can be activated without waiting for the expiry of the period of three years from the granting of the patent or four years from the filing of the application, as happens instead, in particular, in ordinary cases of compulsory license for lack of or insufficient implementation regulated by Art. 70 of the Italian Industrial Property Code.

The introduction of Art. 70 bis in the Italian Industrial Property Code stems from the objective of encouraging the production of and access to vaccines, an objective that has been pursued so far through various measures, including the COVID-19 Vaccines Global Access Program (COVAX), the COVID-19 Technology Access Pool (C-TAP) and, in particular, the Waiver from certain provisions of the TRIPs Agreement for the prevention, containment and treatment of COVID-19 proposed by India and South Africa.

However, some of the measures taken, including the new Art. 70 bis of the Italian Industrial Property Code, may give rise to some concerns. The crucial question is whether the compression of intellectual property is actually justified and can guarantee the achievement of the intended result. Indeed, many commentators have noted that the protection resulting from intellectual property is not only consistent with the objectives of safeguarding health, even during a health emergency, but that it is itself the main driver of such safeguarding, as demonstrated by the very fact that the development of effective vaccines was achieved in a very short time.

Filippo Ponso