FOREWORD BY EDITOR, ANDREW CHILVERS
Intellectual property and the challenges of globalisation
When the US Supreme Court recently ruled that Booking.com could trademark its domain name, the decision was a game changer for online businesses the world over.
The court decided by an 8-1 ruling that adding a “.com” combination to a generic word is no longer restricted under US trademark law. The US Patent and Trademark Office had initially denied the registration by Booking.com, arguing generic names were ineligible for trademark protection. However, this was overturned by the court which stressed consumers did not view booking.com as a generic term but as a brand offering online hotel reservations. Following the ruling, Booking.com said the decision was a good example of how the legal system can evolve to reflect the complexities of the digital age, heralding the successful conclusion of the case as a victory for any brand owner who has invested to build a global, digital brand.
Although the ruling will have a huge impact on trademarks far beyond the borders of the US, global intellectual property legislation remains a patchwork of interlinked bilateral and multilateral agreements that work in tandem with national laws in different jurisdictions.
Do you see any emerging trends or potential upcoming developments in your country’s trademark law?
On a German as well as on an EU level, recent legal reforms brought significant change for the benefit of our clients. The requirement for graphic representation of trademarks has been removed, giving forward-thinkers the possibility to create innovative forms of trademarks, such as new sound marks. Additionally, national certification marks were introduced in view of the growing market of quality ensuring labels. In procedural matters, since May 1, 2020, revocation actions for non-use and invalidity can be brought before the German Patent and Trademark Office (GPTO) directly. Previously, such claims could only be filed before regular courts. This offers our clients a more cost- and time-efficient way to pursue their rights, as the procedural fees are lower and the proceedings can be conducted without oral hearings.
Furthermore, the consequences of Brexit are still moving our clients. EU trademarks and international trademarks designating the EU will no longer be valid in the UK after the end of the Brexit transition period on December 31, 2020 and UK rights will replace these rights immediately and automatically. According to the UKIPO, the replacement causes only minimal administrative burden for the rights holders. Nevertheless, some questions remain open in view of the unclear future relations between EU and UK. Thus, the transition into national UK rights and its impact need to be handled and observed with particular diligence. In view of the fact that UK lawyers may no longer administer EU trademarks after Brexit, we overtake EU trademark portfolios in close cooperation with former representatives.
An emerging trend is the use of trademarks within digital spaces. Virtual reality is becoming more important – be it that VR allows companies to train their staff effectively in less time or to create entirely new businesses, such as virtual city tours. Protecting Intellectual Property not only in analogue but also in virtual reality is a matter that raises new legal questions. We regard ourselves as advisors who accompany innovators.
In your jurisdiction, what options are available to a trademark holder when applying rights or enforcement rights? What protection is there for unregistered names and/or brands?
Rights holders can rely on a variety of claims against trademark infringement. This comprises cease and desist, damages, broad claims of disclosure of information and further destruction or recall of unlawfully marketed products. Additionally, the infringer may be requested to publish the judgment in the rights holder’s favour to address the issue of potential market confusion.
Case law acknowledges three different calculations for the rights holder to determine the damage incurred:
• Reimbursement of a specific loss, such as the loss of profits
• Profits generated by the trademark right infringer
• Payment of royalties that the infringer would have paid if he had requested a license beforehand.
Punitive damages, however, do not exist under German Law.
Furthermore, cancellation actions may be filed against infringing trademarks.
With regard to the enforcement of trademark rights, we recommend that trademark holders take the following measures in order to pursue their claims: The first step is to send a warning letter to the infringing party in which the trademark holder demands to cease and desist from the infringing behavior. In case the infringer declines to sign a cease and desist undertaking with penalty clause, a claim for preliminary injunction should be filed at a court competent in IP. This provides for very quick and competent handling and ensures effective protection.
In view of unregistered names and brands, there is protection only under certain circumstances. Trademark Law requires proof that the sign has been used in commerce and that it has acquired public recognition as a trademark within the relevant trade circles. For older brands in particular, it is hence important to collect and store evidence of use.
How is global innovation and digitalization shaping the advice you give your clients and what should they be aware of?
We believe that Legal Tech will turn the legal world upside down – to the benefit of our clients. SKW Schwarz is one of the pioneers amongst the medium-sized law firms in the field of Legal Tech. The SKW Schwarz @ Tech GmbH, founded in 2018, bundles Legal Tech activities across all practice areas. The company works on numerous specific Legal Tech projects for clients and conducts a considerable number of in-house workshops. We conducted an internal “Legal Tech Hackathon”, which resulted in the development of specific tools such as a legal know-how platform for the entire M&A process or a tool for shortening the processing time of “pre-screenings”, a trade secret tool.
To qualify our lawyers for the legal world of tomorrow, Legal Tech is firmly integrated into the training programme at SKW Schwarz. In cooperation with Bucerius Law School the firm offers its employees advanced training on topics such as workflow analysis, project management, legal design thinking or coding for lawyers. In 2020/2021, the firm will again increase its investments in the development of Legal Tech tools for both internal and external use.
In terms of globalisation, global supply chains enhance the cross-border dimension of trademark infringement. According to the EUIPO “2020 Status Report on IPR Infringement” nearly 7% of the goods imported to the European Union are counterfeits1 . This is why it is important to look at Trademark Law not only on the European, but also on a global level.
The Covid-19 pandemic further strongly boosted the digitisation of the world. Online and digital businesses have become more important. IP practices need to acknowledge that change. One example is virtual trade fairs, which raise legal questions for instance as to the applicable jurisdiction. Lawyers need to be attentive to such developments in order to advise clients in that regard, maybe even before they are aware of the issues.