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Good news / BAD news – February 2023

John Coldham, Charlie Bond, , Zoe Pearman and Hannah Barnett

Welcome to the fourth edition of the “Good News/BAD News” blog!

Our BAD Team (that is, our Brands, Advertising and Designs Team) serves as trusted advisers to some of the most valuable brands in the world and in this blog series, we share our recent experiences to help brand owners navigate the ever-changing landscape.

We have summarised some of the things we think you should know about right now…

‘Buy this product, save the world’ – advertising claims and greenwashing

We flagged that so-called “greenwashing” was high on the agenda for both the Advertising Standards Authority (“ASA“) and the Competition Markets Authority (the “CMA“) in the first edition of this blog last March – and that position hasn’t changed.

We have seen a number of ASA rulings in this area and the CMA announced it is starting investigations in the fashion sector – focusing on broad/vague language, such as “responsible edit” and a low bar for including products in such collections – with other sectors to follow.

As it remains high on the regulators’ agenda, brand owners need to be careful that any green claims they are making are legitimate and not misleading to avoid the consequences of being investigated or disciplined by the regulators. 

In our experience, the number 1 issue over the past year or so is when brand owners are using broader, more general language or absolute claims. Terms like ‘green’, ‘sustainable’ or ‘eco-friendly’, especially if used without explanation, are likely to be seen as suggesting that a product, service, process, brand or business as a whole has a positive environmental impact, or at least no adverse impact. Unless a business can prove that, it risks falling short of its legal obligations.

If you would like to find out more and/or discuss your environmental claims, please do contact our advertising team, led by Dan Smith. Our team has lots of experience in advising on ‘greenwashing’, clearing environmental claims and can provide training on the issue. 

Ready? Set? Advertise!

As explained by John Coldham, Charlie Bond and Regina Damigou in their recent article, sporting events, such as the 2021 Rugby League World Cup (which took place in October and November 2022), create significant marketing opportunities that official partners, sponsors and other businesses are looking to utilise to boost their image. 

However, there are some considerations to keep in mind when publishing promotional materials:

  1. beware of using logos created for sporting events, as this type of use may amount to trade mark infringement;
  2. limit references to the title of the sporting event to what is necessary. The use of descriptive terms may be an effective way of avoiding infringing third party rights;
  3. be very careful with ambush marketing strategies; and
  4. seek legal advice before publishing marketing and/or promotional materials.

Copyright in characters

The English courts recently found that fictional characters are protectable by copyright for the first time, as well as finding passing off rights were infringed by the same actions. Shazam v Only Fools and Horses[1] sets out the basis on which fictional characters can acquire copyright protection. We examine what this means for the commercial use of characters, for authors, screenwriters, and script writers, as well as adaptations, parodies and tributes.

This case involved an interactive theatrical dining experience, Only Fools The (cushty) Dining Experience (the”Dining Experience“), in which actors performed characters based on those from the TV show, Only Fools and Horses (the “TV Show“). This included ‘Del Boy’, who the parties focussed on for the purposes of this case.

How can characters gain copyright protection?

In assessing whether Del Boy could attract copyright protection, the Court opted to apply the two-stage Cofemel[2] analysis. This requires that in order to gain copyright protection, a work must be both original and identifiable (i.e. the expression must be fixed in some way).

The character must have sufficient originality

Finding that Del Boy was an original work, the judge pointed to evidence that partial inspiration for the character had come from observations by the author, John Sullivan, of traders while working at Hildreth Market, Balham, as a teenager.

The layers of the character were highlighted. Careful consideration was given to his self-expression, the complexities and intricacies of the character and his background, his use of jumbled French language showing his aspirational side, and his phraseology, much of which is used today in reference to the character. These elements all contributed to its originality. Highlighting Del Boy’s many identifiable traits, it was found that he was a “highly distinctive and original character“.

Is it individually identifiable? Separating the actor from the character

It was feared that the expressions, physical appearance and voice of Sir David Jason, who played Del Boy in the TV Show, would render the character inseparable from the actor, and therefore not identifiable in its own right. Yet the judge was impressed by the extent of the character within the content of the TV Show’s scripts. He pointed to several extracts detailing Del Boy’s appearance, traits and relationships. He also noted that the character was objectively fully formed in early episodes of the TV Show and had been clearly expressed in an identifiable way by its creators.

Finding that the work was both original and identifiable, the Court held that the character was  protectable as a literary (and not a dramatic) work. This aligned with similar decisions in Germany and the US where the characters Pippi Longstocking,[3] Sherlock Holmes and Dr Watson, [4] were also identified as protectable literary works.

Infringement of the character by the Defendants

In order to prove that the copyright work (i.e. the fictional character) had been infringed it was necessary to show that a substantial part of the work had been copied. In making this assessment, the judge looked at the Dining Experience brainstorms and scripts, their performances, and witness evidence.

Infringement of the TV Show’s Scripts

The similarity of the scripts, combined with witness accounts, demonstrated the Defendants’ intention to create the same look and feel as the TV Show. The judge highlighted that “at least some of the actors were superfans…with deep knowledge of the Scripts“. In fact, the Defendants had watched clips and entire episodes during the development of the script, and used Del Boy’s vocabulary and phrases from the TV Show. This, the judge noted, was in fact an infringement of the separate copyright in the TV Show’s scripts.

Imitation vs parody/pastiche

If the Dining Experience had been held to be parody or pastiche, as was pleaded in the defence, it would have fallen under an exception to infringement.[5]

It was concluded that parody constitutes an expression of opinion, and therefore mere impersonation will not suffice. Although the Dining Experience contained humour, that humour already subsisted in the TV Show’s material. This may therefore mean that relying on the parody defence will be more difficult when the dispute relates to an already humorous subject.

The judge confined pastiche to where (i) the style of a work is imitated (or where various pre-existing works are assembled); and (ii) the product is noticeably different from the original work. He examined marketing and internal planning materials of the Dining Experience as well as its reviews, none of which interpreted it as a pastiche. He also assessed the intention of the show. Wholesale reproduction of the characters did not fall under pastiche, as it did not purely imitate the style.

Competition with Shazam’s exploitation of the character

Shazam’s exploitation of its rights through a license to the BBC, which included a prequel and sequel to the TV Show, and promotional merchandise, were noted, as was their investment in the West End musical Only Fools and Horses the Musical, and the fact that the Dining Experience was launched in parallel to this. A risk of diversion of trade as a result of the Dining Experience was all that needed to be shown to raise a potential conflict with Shazam’s legitimate interests in the character.

Judgment

The judge found there was infringement of the copyright in the TV Show scripts and the characters, as well as passing off in relation to the name Only Fools and Horses and the main characters.

The future of protection for characters

Going forward, anyone creating characters (such as authors, screenwriters, and script writers) can take comfort in the fact that layered, distinctive, well-developed characters are eligible for copyright protection. It may be beneficial to keep records of any conceptual planning around character development, storyboards, and records of character arc, as well as giving plenty of detail in scripts or other instructions to actors in relation to the expression of the character.

Those using others’ characters commercially, or producing adaptations, parodies, or tributes, should be aware of the distinctions between parody, pastiche, and imitation. If your work expresses opinion, or imitates only the style of another, it may not infringe. If it is a pure re-reproduction of another’s character, it may be considered infringement under the Only Fools and Horses decision.

A good bargain or an infringement?

A recent preliminary ruling of the Court of Justice of the European Union (the “CJEU“) concluded that an operator of an online marketplace may be found liable for trade mark infringement in relation to third-party listings of infringing goods on their platform. The final decision on infringement has been referred back to the national courts in Belgium and Luxembourg.

The case concerned the unauthorised sale of red-soled shoes by third party vendors on an online sales platform. While the online sales platform was not itself selling the unauthorised goods, it was involved in the distribution, storage and advertising of the products.

The courts in Belgium and Luxembourg stayed their respective national proceedings and referred the following questions to the CJEU for a preliminary ruling:

  1. Does an operator of an online marketplace use a trade mark itself when it displays advertisements of independent sellers’ listings?
  2. Does an operator of an online marketplace use a trade mark itself when it delivers goods to end customers at the request of third party vendors?

The CJEU considered that the referred questions had to be answered in the positive. The CJEU stated that “the operator of an online sales website incorporating … an online marketplace may be regarded as itself using a sign which is identical with an EU trade mark of another person …“. This finding amounts to a significant departure from earlier cases which established that online intermediaries were not liable for trade mark infringement in respect of products offered by third parties.

While the CJEU’s preliminary judgment does not amount to a finding of infringement by the operator of the online marketplace, this decision does indicate that operators of online marketplaces may be directly liable for third parties selling unauthorised products on their platforms. All there is to do now is wait for the final decisions of the national courts in Belgium and Luxembourg.

It’s all in the name

Kate Swaine, Charlie Bond and Regina Damigou’s recent article on the Company Names Tribunal highlighted the numerous benefits that make this forum an attractive mechanism for brand owners who wish to enforce their intellectual property rights in the UK.

So why the Company Names Tribunal?

  1. Applications filed at the Company Names Tribunal can offer a way of resolving trade mark disputes at a preliminary stage.
  2. Proceedings before the Company Names Tribunal have shared similarities with trade mark opposition and infringement proceedings, which enable brand owners to run “passing off” or trade mark infringement claims in parallel to an application to the Company Names Tribunal;
  3. The Company Names Tribunal is generally a quicker and cheaper mechanism than court trade mark and “passing off” proceedings; and
  4. Where an application is successful, the Company Names Tribunal will order a change of company name and can exercise powers to force Companies House to change the infringing name.

In essence, the Company Names Tribunal is a useful forum that can be relied upon by brand owners to deal with companies which have registered a company name that is identical or confusingly similar to existing brands.

I’m using it!

A recent EUIPO decision annulled a previous decision to revoke McDonald’s household “BIG MAC” mark on the grounds of insufficient evidence of use in a dispute with an Irish fast-food chain.

As explained by our very own Jasmine Lalli in a recent World Trademark Review article, this decision is an important reminder to brand owners that they must be able to demonstrate genuine use of their trade mark through “solid and objective evidence“. The EUIPO’s recent decision further indicates that, in some instances, the Board of Appeal may be prepared to give appellants a second chance to submit evidence of genuine use.

Our comments on this decision have been published in the World Trademark Review.

Sustainable design

In November 2022 we proudly hosted our 10th annual event as a partner of the London Design Festival, where our head of Brands & Designs, John Coldham, chaired a discussion on sustainability in design with an incredible panel of speakers from the design world.

The panel recorded a podcast as part of the event, which you can listen to here.

Change is afoot…

On 28 November 2022, the European Commission (the “Commission“) published proposals to revise the EU designs regime through a new Regulation (EC) 6/2002 and Directive (98/71/EC).

The Commission’s proposals follow the Intellectual Property Action Plan adopted in November 2020, where the Commission announced that it would revise the EU legislation on design protection, following the successful reform of EU trade mark legislation. The Commission’s Action Plan aims to boost the uptake of IP by companies and, in particular, by SMEs by improving the protection and enforcement of IP rights. In essence, the aim of the proposals is to make design registrations cheaper, quicker and more predictable in the EU.

We have summarised the main legislative changes that you should be aware of:

  1. The definitions of “design” and “product” are broadened and clarified. Under the proposals, “design” will include the appearance of whole or part of a product including “the movement, transition or any other sort of animation of those features”, while the definition of “product” is clarified to recognise graphical user interfaces and to cover an item “whether it is embodied in a physical object or materialises in digital form”. In essence, these amendments are carried out in response to technological advances and seek to increase the scope of protection to cover digital designs.
  2. The proposals abolish laws providing unregistered national design rights and prevent such national rights from being created in the future. In practice, this amendment is not expected to have a significant impact in the EU design regime, as unregistered designs only existed in the UK and will remain unaffected due to Brexit. If you would like more information on the UK design regime, please see our Designs for Life guide.
  3. The proposals clarify that designs do not need to remain visible in normal use to be protectable. Instead, only features that are visible in a design application are subject to protection.
  4. The proposals extend design protection to address illegitimate 3D printing by granting right holders the power to authorise or prohibit the “creating, downloading, copying and sharing or distributing to others any medium or software recording the design” which would enable the design to be 3D printed. This amendment would offer right holders a recourse against individuals that enable the illegitimate printing of designs by creating a specific printable electronic file. This is a significant amendment as, previously, right holders could only pursue individuals that 3D print the design itself.
  5. The proposals introduce a new exclusive design right for goods in transit which will entitle right holders to enforce their rights against goods that have not been released into free circulation in the EU.
  6. The list of permissible uses will be amended to include “acts carried out for the purpose of identifying or referring to a product as that of the design right holder” (i.e. referential use) and “acts carried out for the purposes of comment, critique or parody“. This amendment would, in practice, harmonise the EU design regime with the Comparative Advertising exemption so as to permit the reference of third party designs in marketing.
  7. Under the proposals, design protection will not extend to component parts of complex products where the component can be used to repair that complex product.
  8. The proposals introduce a designs registration symbol which will consist of a letter D enclosed within a circle, similar to that used for copyright.

The Commission’s proposals include some important changes that will modernise the EU designs regime and enable it to address technological developments by, for example, offering protection for non-traditional designs.  John Coldham, who chairs the CITMA Working Group on Designs and Copyright, prepared a position paper on the changes (with help from Regina Damigou) and submitted this to the Commission on behalf of CITMA.  Please get in touch if you’d like a copy of CITMA’s submission.

International – Crocs Canada, Inc. and Crocs Inc.

Crocs has successfully asserted an industrial design that covers its MAMMOTH line of clogs, establishing infringement by Double Diamond’s knock-off Fleece Dawgs products in Canada.

On October 21, 2022, the Federal Court of Canada issued its 56-page decision. The Court found that Crocs successfully established infringement of its design. The Court also confirmed the validity of Crocs’ design, dismissing Double Diamond’s counterclaim for invalidity. The Court awarded Crocs an accounting of Double Diamond’s profits, along with pre- and post- judgment interest, as well as costs of the action.

This decision illustrates the value of industrial design rights as an important asset in protecting novel products in Canada. It also provides welcome guidance and analysis to Courts and practitioners on the issues of validity and infringement of an industrial design, which has seen relatively little jurisprudence in recent years.

Footnotes

[1] [2022] EHC 1379 IPEC

[2] Case C-683/17 Cofemel v G-Star Raw [2020] ECDR 9

[3] Re Pippi Longstocking [2014] ECC 27

[4] Klinger v Conan Doyle Estate, Ltd. 755 F.3rd 496, 498 (7th Cir. 2014)

[5] Copyright, Designs and Patents Act 1988, section 30A

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