Presentaton on marketing and soft IP for the Xurias IP contracting academy

1. IP Contracting Academy
Wouter Pors
Marketing – brands, look & feel
& other stuff too
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2. Today’s presentation & approach
• What are we going to discuss?
– Prevent overlap
• What can you expect from me?
• The story is more important than the boiler plate
• Localize & customize
– Is the agreement cross-border or national?
– Does (foreign) statutory law take priority over law of choice?
– What does the partner expect?
• Culture: common law parties want extensive contracts
• How to control your lawyer
– Does he understand what you want?
– Lawyers put in too much for fear of liability
– Stacking of previously used clauses
– Do you still understand the meaning of the agreement?
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3. The power of trademarks
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4. The power of trademarks
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5. The power of trademarks
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6. The power of trademarks
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7. The power of trademarks
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8. Subject of protection - overview
• Innovation
• Technology developed by the company
• Incorporated in products or services
• Corporate identity
• Company or division as such
• Product and service look and feel
• Product or service as such
• Many different looks and feels?
• Is the message still clear?
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9. Protecting innovation
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Protecting innovation

10. Subject of protection - innovation
• Purpose
• Protecting developments
• Others will not block you from use
• Licensing portfolio
• Cross-licensing
• Create value
• Attract investors
• Means
• Patents - obtained by application and grant
• Copyright - ensues from act of creation
• Know how - dependent on confidentiality
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11. Means of protection
• Patents
• Protection of the invention, not just the actual use
• Idea behind the invention, but legal certainty for third parties
• Expires after 20 years
• New in 2016: Unitary Patent & Unified Patent Court
• 47(2) UPC Agreement: exclusive licensee can bring action (unless)
• Copyright
• Limited to the actual product or format and
• Others that make the same overall impression
• Assessed on case by case basis; national law still varies
• Expires 70 years after death of the maker
• Know how
• Scope hard to determine
• Real problem lies in proof of copying
• EU Directive in 2015 – TRIPs definition, consent of the trade secret holder
http://tinyurl.com/ld2oxlr
• Trade secrets are a hot topic
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12. Innovation v look & feel – market position
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13. Innovation v look & feel – market position
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14. Subject of protection – look & feel
• Corporate identity
• Identifying your company
• Marketing your company
• Creating goodwill (value)
• Separate from competition
• Product and service look and feel
• Identifying your company’s products and services
• Marketing your company’s products and services
• Creating goodwill (value)
• Separate from competition
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15. Means of protection
• Corporate identity
• Indication of origin - collectively, granted by law
• Trade name - through use in the course of trade
• Trade mark - application and registration
• Copyright - ensues from act of creation
• Product and service look and feel
• Indication of origin - collectively, granted by law
• Trade mark - application and registration
• Design right - application and registration
- unregistered design rights
• Copyright - ensues from act of creation
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16. Things can go wrong
Atos + Origin = Atos Origin
Atos Beleidsadvies en Onderzoek BV
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17. Brand strategy: Deutsche Telekom
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18. Image databases
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19. Brand development
• Strategy
• Choose brands
• Clear freedom to operate
• Further develop brands
• Protection
• Develop look & feel
• Obtain or create marketing materials
• Implement and educate
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20. Brand development agreement (1)
• In how far does developer need to familiarize himself with client’s
business
– Amount of time spent
– Team members involved
• Level of input by client
– Strategy, mission statement
– Specific characteristics, core values
– Nature of the products or services
– Regulatory requirements (i.e. life sciences)
– Sector jargon & standards (smartphone, blackphone)
• Concept development
• Concept approval
• Brand development
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21. Brand development agreement (2)
• Marketing materials, text writing
– Are materials developed or purchased?
– Who will clear permission for use?
– Who provides text content?
• Freedom to operate (third party rights; level of due diligence)
• Milestones & deadlines – changes on the go
• What will exactly be delivered at each stage
• Costs of replacement of team members
• Who will own IP rights (HR 25-10-2013, IEF13179, Vuurkorf – need contract)
– Authorisations by free lancers, etc
– Registration of IP rights – cooperation with regard to formalities
– Licensing in
– Warranties and indemnification
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22. Brand development agreement (3)
• Implementation in the company
– Brand book
– Training of staff
– Training of licensees and customers
• Market introduction
– Commercials
– Advertisements
– Social media
• Evaluation
• Adaptation, updating
• Lifecycle management
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23. Brand development – strategic asset
• Massive confidential information
• Knowledge of Strengths, Weaknesses, Threats, Opportunities
• Freedom to operate
– Strength of IP rights
– Third parties rights
– Litigation and settlement strategy
• Value sensitive information
• Confidentiality
– Impose on all people involved
– Lawyers & patent attorneys have legal privilege
– Trademark attorneys and consultants do not
– WIPO Group B+ proposal for Agreement on Client Attorney Privilege
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24. Trade secrets - confidentiality
• Traditional approach
• Definition (source: Weagree)
– Confidential Information means any information of a non-public, confidential or
proprietary nature, whether of commercial, financial or technical nature, customer,
supplier, product or production-related or otherwise, including samples, information
relating to raw materials, specifications, software, patent applications, process
designs, process models, materials and ideas, disclosed by a Party (the Disclosing
Party) to the other Party (the Receiving Party). Such information may be disclosed in
any form, provided that it is disclosed reasonably in connection with this Agreement
• Exceptions
– information which is in the public domain other than as a result of breach of this
Agreement
– information which the recipient party can demonstrate in writing was received, free
of any obligation of confidentiality, from a third party which itself was not under any
obligation of confidentiality in relation to that information
– information which the recipient party can demonstrate in writing was developed or
created independently by or on behalf of the recipient party or any member of the
recipient party's Group
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25. Trade secrets – Directive definition
• Information which is secret in the sense that it
– is not, as a body or in the precise configuration and assembly of its
components, generally known among or readily accessible to persons
within the circles that normally deal with the kind of information in
question
– has [ ] commercial value because it is secret
– has been subject to reasonable steps under the circumstances, by the
person lawfully in control of the information, to keep it secret
• TRIPs definition
• Extends to any type of information that meets these requirements
• Definitions covers traditional exceptions
• Full harmonization of definition and exceptions
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26. Trade secrets – Directive exceptions
– independent discovery or creation
– observation, study, disassembly or test of a product or object that has
been made available to the public or that it is lawfully in the
possession of the acquirer of the information who is free from any
[ ] duty to limit the acquisition of the trade secret
– any other practice which, under the circumstances, is in conformity
with honest commercial practices
– further limitations include:
• legitimate use of the right to freedom of expression and information
• revealing a misconduct, wrongdoing or illegal activity, provided that the
alleged acquisition, use or disclosure of the trade secret was necessary for
such revelation and that the respondent acted in the public interest
• disclosure by workers to their representatives as part of the legitimate
exercise of their representative functions
• protecting a legitimate interest recognised by law
• fulfilling a legal obligation [= required by law]
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27. Trade secrets – agreement options
• Obligation to install and maintain sufficient protection
• Disclosure on need to know basis
• Limitations on Dropbox, Bring Your Own Device, USB-sticks
• Chinese walls in network architecture?
• Imposing equal obligations on employees and others
– The Directive does provide for remedies in absence of consent
– Requirement of intent or gross negligence has been deleted
– Express contractual obligations are always preferable
• Any relevant issue should be reported
• Return info upon termination
• Confidentiality survives termination
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28. Trademarks - contracting
• Trademark Directive 2008/95/EC – article 8
1. A trade mark may be licensed for some or all of the goods or services for
which it is registered and for the whole or part of the Member State
concerned. A licence may be exclusive or non-exclusive.
2. The proprietor of a trade mark may invoke the rights conferred by that
trade mark against a licensee who contravenes any provision in his licensing
contract with regard to:
(a) its duration;
(b) the form covered by the registration in which the trade mark may be
used;
(c) the scope of the goods or services for which the licence is granted;
(d) the territory in which the trade mark may be affixed; or
(e) the quality of the goods manufactured or of the services provided by the
licensee.
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29. Meaning of Article 8
• A licensee does not infringe as long as the licence is not terminated
– Except if he violates a section 2 condition
– Provisions on section 2 issues should be in any agreement
– Violation outside section 2 is only breach of contract
– Trademark rights are still exhausted
– Third party who obtained goods from licensee does not infringe
• Case Study: O’Lacy
– Intergro buyer’s cooperative
• Trademark owner: Asko Group, sublicensed
– Members: Konmar, Jumbo, etc
– Van Eerd: wholesale, have made rights
– Marktkauf: third party buyer of Van Eerd
• No infringement
• Breach of contract by Van Eerd
• Competition law risk if enforced?
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30. Trademark rights - Directive
• Article 5: infringement – similar sign, similar goods/services
– If use adversely affects or may affect a function of the trademark (origin,
quality, communication, investment, advertising – see CJEU Interflora)
• Article 6: limitations
– Own name or address
– Indications concerning the kind, quality, quantity, intended purpose, value,
geographical origin, the time of production or other characteristics
– Trademark if necessary to indicate the intended purpose of a product or
service, in particular as accessories or spare parts
• Article 7: exhaustion
– Consent for the Union (EEA)
– Burden of proof on alleged infringer, each individual product (CJEU Davidoff)
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31. Case study: termination of licence
• CJEU 19-9-2013, C-661/11, Martin y Paz v David Depuydt
– Cooperation between two companies, but one is “formal” trademark
owner
– Trademark owner has granted “irrevocable” consent to use the
trademark
– But claims this consent can be withdrawn
– Belgian Court assumes permission cannot be terminated under
national law
– Referral: does this mean that the owner cannot invoke his trademark?
– Are injunctions for ever impossible?
– Or should there be another sanction?
– Referring Court: this is not a licence
– Advocate General: for all practical purposes, this is equal to a licence
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32. CJEU Martin y Paz v David Depuydt
• CJEU gives a far-reaching ruling on the issue
– Articles 5 – 7 Trademark Directive provide full harmonization
– Except as provided in Article 8, a national Court cannot limit the trademark
owner’s rights beyond Article 5 – 7
– Permission as granted leads to exhaustion under Article 7
– However, only for products put on the market before permission was revoked
– A national Court can impose a sanction for unlawfully revoking permission,
such as compensation of damages
– Sanction cannot lead to continued use of the trademark for indefinite period
– Conclusion: permission to use a trademark can always be revoked
– Former licensee only protected by rules on exhaustion
– Agreement could provide for sanction in case of termination on short notice
– Maybe fallback notice period of less than one year?
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33. Further licensing issues
• Co-ownership (disaster?)
– Alternative: joint IP holding
• Security for licensee
– Usufruct – perfect, but too inflexible
• Can probably only be granted once
• Only in some countries
– Pledge – no right to use, just claim to some money
– US Bankruptcy Code section 365(n)
• Proposal Dutch AIPPI working group on Q241
• Authority to update licensing policy – obligation to comply
• Licensee prohibited from registering IPR’s and domain names
• Act in best interest of the IP rights
• Sublicensing
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34. Coexistence agreements
• It is not illegal not to invoke a trademark
• Right holder is not required to attack each infringer
• Some agreements are anti-competitive
– Artificial market division
– Pay for delay (life sciences)
– However, full coexistence is by definition not anticompetitive
• Agreement of limited coexistence may be a problem
– More possibilities in case of settlement of true conflict
– Basis in scope of rights
– Limit to existing business; or further limitation
– Non usus, CJEU IP Translator
– If based on claim of infringement, reasonable chance of success
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35. Copyright - Moral rights
• Non-transferable
• Enforceable by heirs, if provided in last will
• Right to prevent publication – unless transferred
• Article 25 Copyright Act
– acknowledgement of name or other indication as author (waiver)
– resist alteration of the work, subject to reasonableness (waiver)
– right to change or update the work (waiver)
– communication under a name other than his own, any alteration in the name
of the work (limited waiver)
– distortion, mutilation or other impairment of the work (limited waiver)
• Case law:
– Supreme Court 1-7-1985, NJ 1986/692, Frenkel v KRO, right to publication
– Contract may provide for resolving, or exclude duty to publish
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36. Litigation
• Arbitration of ordinary court?
• Which venue?
– Specialized court
– Speed of litigation (UK, DE, NL)
– Possibility to keep court files confidential (US, UK, NL)
– Confidentiality club (US, UK, NL)
– Preliminary injunctions (NL)
– Injunction based on application (IT)
– Translations
• Translation of evidence required?
• Translators admitted to hearing?
– Legal costs
– Costs orders
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37. Discuss and draft?
Wouter Pors
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