IP Update - March 2023
Welcome to our bi-monthly IP update – the latest insight into recent cases and developments in IP law. We’ll uncover the news stories most relevant to you and provide insight into what they mean for your business.
Saddle up! The interpretation of ‘visibility’ and ‘normal use’ in design law
People have been riding horses for around 6,000 years, but it wasn’t until around 800bc that someone?realised the whole experience would be a lot more comfortable with an added seat. And so, the saddle was born.
Fast forward a few thousand years and the saddle has evolved both for the use of riding horses and to that of riding bikes. German Inventor Karl von Drais is credited with developing the first bicycle. His machine, known as the "swiftwalker," hit the road in 1817 and featured a leatherbound saddle.
Although both significantly different, the intended purpose of both the horse and bike saddle remains the same, to be sat upon for the comfort of the rider.
With that, we turn to Germany and a referral from the Bundesgerichtshof (the Federal Court of Justice) to the Court of Justice of the European Union (the CJEU) where the subject of the referral was bicycle saddles.
The referral cantered around the?meaning of the terms “visibility” and “normal use” in Articles 3 (3) and?(4) of the Design Directive. These concern the scope of design right protection for component parts of complex products, meaning products which are composed of multiple components which can be replaced allowing for disassembly and reassembly of the product.
In order to attract UK and Community registered design rights or Community unregistered design rights, a design must be new and have individual character (alternative requirements apply to UK unregistered design rights).
Article 3(3) confirms that a design will only be considered to be new and to have individual character if the component part remains visible during normal use of the product. Article 3(4) confirms that normal use shall mean by the end user, excluding maintenance, servicing or repair work.
The questions posed to the CJEU arose in the context of an application to invalidate a German registered design for the underside of a saddle for bicycles or motorbikes. The applicant claimed that the requirements for protection, as to novelty and individual character, were not met because as a component part of a complex product it was not visible during its normal use.
The German Patent Office considered that a product's normal use also includes 'disassembling and reassembling the saddle for purposes other than maintenance, servicing, or repair work' (and during which the underside of the saddle would be seen).
However, the Federal Patent Court deemed the design invalid because it was not visible to the user during its normal use, namely riding a bicycle and getting on and off one.
On appeal, the Federal Court of Justice expressed doubts about the meaning of “normal use” and referred?the matter to the CJEU for a preliminary ruling.
The CJEU held that the visibility requirement had to take into account both the point of view of the end user of the product and that of external observers; it was not limited solely to the intention of the manufacturer of the product.
The CJEU also made it clear that the visibility of a component should be assessed in light of a situation of normal use of the product. The CJEU supported a broad interpretation of the concept of normal use and accepted that in practice, use of a product often requires various acts which may be performed before or after the product has fulfilled its principal function, such as the storage and transportation of that product.
The CJEU has helpfully in this decision offered clarity as to when a component part of a complex product may be regarded as visible in the course of normal use so as to attract design rights. The case will now be determined by the German Supreme Court.
The CJEU’s ruling may increase the scope of protection for components in designs which are (for?example) visible in the transportation and storage phases of a product’s normal use. This is good news?for designers. The requirement of visibility in normal use only exists however for component parts of complex products, and not, for example, in relation to non-detachable parts of a product. The CJEU’s ruling helps to bridge the distinction between these different kinds of designs.
Hermès protects the Birkin trade mark in the metaverse?
Last month, a New York jury found against artist Mason Rothschild when it ruled that “MetaBirkins”, faux fur NFT replicas of Hermès’ iconic Birkin handbag, infringed Hermès’ trade mark rights.
Prior to this decision, it was hotly debated whether Hermès’ registrations, which covered physical handbags only and not virtual goods, digital products or NFTs, would be sufficient to prevent Rothschild?from continuing to ‘mint’ (that is to publish a unique digital asset on a blockchain so that the digital asset?can be bought, sold and traded) and sell the MetaBirkins.
However, the jury agreed with Hermès that there was likely to be consumer confusion between?MetaBirkins and the Hermès Birkin handbags. Therefore, Hermès’ trade mark registrations, and the?associated?rights, were sufficient to protect Hermès’ interests without needing to extend the scope of its?registrations to cover digital products or NFTs.
领英推荐
Earlier this month, Hermès also sought further relief from the New York court permanently to stop Rothschild?from selling, promoting, or otherwise distributing NFTs that use the “Birkin” registered trade?mark.
This included seeking an order that Rothschild transfers control of any MetaBirkins NFTs in his possession to a crypto wallet designated by Hermès. Hermès also seeks that control of the MetaBirkins smart contract, domain name and social media handles, are also transferred to Hermès. The brand has also requested that Rothschild identifies and transfers to Hermès any royalties received from the resale of MetaBirkins since the trial.
This decision closely follows the ruling of the European Court in the Juventus FC case in summer 2022. In that case, Juventus FC sought an injunction that would prevent Blockeras from selling NFTs, which included an image of former Juventus player, Bobo Vieri, and the club’s name and famous black and white?jersey design.
Blockeras, which had secured consent from Bobo Vieri, but not from Juventus FC, attempted to argue?that the injunction should not be granted because Juventus’ trade marks were not specifically registered?for use on “downloadable virtual goods”, so would not cover NFTs. The court rejected this argument, finding that the existing trade mark classification included use in connection with “digital downloadable?publications”, which sufficiently extended to NFTs.
The Juventus FC finding, much like the MetaBirkin ruling, indicates a willingness by the courts to allow brand owners to enforce their trade marks on NFTs and virtual goods.
Brand owners should in any event consider the protection of their intellectual property rights not only in the physical world but also in the metaverse. From 1 January 2023, the Nice Classification system for trade mark applications has been extended to include digital goods authenticated by NFTs as a separately protectable class of goods. Specifically, "downloadable digital files authenticated by NFTS" have been added as a newly protectable category within class 9. Brands exploiting their rights in the metaverse should therefore choose to ensure their brand names and logos are protected as trade marks using this new class of registration.
To date, there has not been any case involving the unauthorised minting of NFTs in the English Courts. However, the Hermès and Juventus decisions should provide brands with some comfort that IP portfolios covering physical goods may also offer a mechanism against the unauthorised minting of NFTs which reproduce their physical goods in the metaverse.
IP landgrab by universities?–?fair or unfair?
The case centres around a claim initially brought by Oxford University’s technology arm, Oxford University?Innovation Limited, (collectively the?University) for royalties owed by the defendant company, Oxford Nanoimaging Limited (ONI), totalling ￡700,000. ONI contested the claim on the basis that the licence was?void since Mr Jing, ONI’s co-founder and director, was entitled to the patents under licence rather than the University.
Between February 2013 and September 2013, Mr Jing was employed by the University as an intern to?develop a microscope known as the “Nanoimager” under the supervision of Professor Kapanidis in his?physics laboratory.
From October 2013, Mr Jing commenced a DPhil in Condensed Master Physics studying the same microscope in the same laboratory. Under both Mr Jing’s contract of employment and his Dphil contract,?the IP rights in any development work carried out by him transferred to the University and Mr Jing was granted certain benefits in return.
With respect to the employment contract, the Judge found that the University was entitled to any inventions?created during the course of Mr Jing’s internship by virtue of section 39(1) of the Patents Act 1977. So?far, so straightforward.
However, it was the second part of ONI’s claim that merits special attention. ONI argued that Mr Jing was a consumer (for the purposes of the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR)1) of services supplied by the University and that the transfer of IP to the University pursuant to a contract?for such services (namely Mr Jing’s Dphil studies) was unfair.
The judge conducted a thorough examination of the case law and set out lengthy reasons for determining that undergraduate students and most postgraduate students will typically be consumers for the purposes of UTCCR, including because:
Turning then to whether the IP provisions in the Mr Jing’s Dphil contract with the University were unfair?under UTCCR, the court found that it was common practice for universities to acquire the IP rights of their students and that this was in line with the position under employment law2.
In return, Mr Jing was able to benefit from the financial and practical support of the University in prosecuting the patents and forming the spin-off company ONI (which was owned 50% by the University, 25% by Mr Jing and 25% by Professor Kapanidis upon formation) and he had been granted a 22.5% share in royalties generated by the patents (which he had contributed to). Overall, this was thought, by the court, to have put Mr Jing in at least the same position, if not a better position, than he would have been in had he been entitled to retain ownership of the IP or had he been a junior employee working in industry.
Whilst the particular IP provisions in issue and the way they were enforced in practice were found to be fair, the court did acknowledge this would not always be the case. Additional wording concerning?ownership of IP which was developed “incidentally” to a student’s studies was too broad and likely unfair,?although such wording had since been removed from the University’s template contract.
This is the first time student contracts have been interrogated in the UK courts from the perspective of consumer legislation. Whilst universities and other higher education institutions will not be entirely surprised by the decision3, they may be disappointed by the court’s finding that most of their student body?are classed as consumers. Accordingly, such institutions will need to ensure that the terms of their student contracts are fair (when considered in context) and, in particular, that they do not seek a landgrab on IP that rightfully should be owned by the students.
On the other hand, the court’s finding that Oxford University’s IP provisions were broadly acceptable?should bring some relief to higher education providers, many of whom have already modernised their IP practices to meet the demands of increasingly IP-savvy students.
Keep in touch
If you have any questions about the updates or any IP issues or challenges you’re facing, please contact?Melanie McGuirk or Sarah Bazaraa.