Can the appearance of a smartphone be trademarked?

April 12, 2015

We recently reported a circular summing up Israel Patent Office policy regarding 3D trademarks. Whilst radiator caps and the like are clearly registerable, in general, the Israel Patent Office is wary of allowing trademarks for the shape of functional articles or for novel packaging and it is necessary to show that the shape is not merely functional but has acquired distinctiveness.

Smartphone

It seems that the circular was a prequel to a recently published ruling wherein the Israel Patent Office refused to allow the shape of an Apple i-phone to be registered as a trademark. The mark in question is IL 236294 as shown above. The mark covers “Handheld mobile digital electronic devices for use as a mobile phone, digital audio and video player, handheld computer, personal digital assistant, electronic organizer, electronic notepad, electronic calendar, electronic book reader, calculator, and camera, for sending and receiving electronic mail and other digital data, and for accessing the Internet; all included in class 9″. The mark was filed in March 2011 and claims priority from a Hong Kong mark filed in September 2010.

The Examiner considered the requested mark as an image of the good being sold and not a trademark showing the origin of the good and therefore refused it under Section 8a of the Israel Trademark Ordinance 1972, following the guidelines of Circular MN 61 from 2008.

The examiner considered the correct protection for that shown is as a registered design and that in order to register the design as a trademark it is necessary to show that it is neither aesthetic or functional in essence, and has acquired the trademark characteristic of indicating origin through usage.

The Applicant responded that the image was of an I-Phone 4 which was exclusively associated with Apple and was well recognized and respected worldwide, and had successfully been registered as a trademark in many countries, including Australia, the US, Ukraine, turkey, Switzerland, Japan, France, the EU, and Hong Kong. The Applicant further requested that the mark be allowed under Section 16 based on the corresponding US registration no. 3,470,983. (Section 16 allows marks having minimal distinctiveness to be registered based on a registration in Applicant’s home country).
The examiner pointed out that the issue wasn’t minimal distinctiveness or the lack of it, but rather if the requested mark is the appearance of an article that is aesthetic or functional in essence, and so upheld the refusal.

The Applecant Applicant reiterated that the mark had acquired distinctiveness and that it was identified with the applicant and brought an Affidavit from Thomas R. La Perel, Apple’s general legal counsel. In the Affidavit, La Perle stated that “The Application is for the design of Apple’s distinctive iPhone telecommunications device featuring Apple’s unique product configuration and colorful icon display”. La Perle stressed the product’s design and that “Consumers identify the get up with the product and Apple as its source. He noted that Apple had spent vast sums advertising and promoting their product and gave evidence for this.

RULING
In her ruling, Ms Bracha noted that trademarks may be 2 or 3 dimensional and are suppose to be indications by the manufacturer of the origin of the goods. In this case, the mark was not indicated as being a three dimensional mark and it is correct to assume that it is a two dimensional mark, and the applicant argued that it was a two dimensional mark of the face of the i-phone which is rectangular with curved corners, with icons in rows of four, as a feature that can be changed.
In Appeal 11487/03 August Storck KG vs. Alfa Intuit food Products LTD (Toffiffee) the Supreme Court ruled that the appearance of a good (whether 2d or 3d) may serve as a trademark but only if it is very different from that typical of the type of product, such that the consumer comprehends it as an indication of origin. This is eseentuially what the ECJ ruled in C456/01, 457/01 Henkel KGaH v. OHIM (2005) 34-39 http://curia.europa.eu/en/content/juris/index.htm which referred to August Storck KG vs. OHIM sections 25-29 to the effect that the law applies to two dimensional images of the three dimensional product.

Thus whether or not the mark is two or three dimensional, if it is a representation of the product or its wrapping, the issue is whether it is functional or aesthetic in essence, or serves as an indication of origin.

Applicant argued that the image is of the front surface and is flat, so three dimensionality and product appearance is not an issue. The deputy commissioner disagrees.

Here the Deputy Commissioner related to recently issued circular 032/2015 that replaces MN 61 and provides a certain leniency to representations of flagship products.

In this instance, the registration in the US is for the shape of the phone with specific icons in a specific pattern and the application in Israel is very much broader.

In Europe, EC Regulation 207/2009 states that:
“1. The following shall not be registered or, if registered, shall be liable to be declared invalid:

(e) signs which consist exclusively of:
(i) the shape which results from the nature of the goods themselves;
(ii) the shape of goods which is necessary to obtain a technical result;
(iii) the shape which gives substantial value to the goods;”
Regulation 3 continues to state that marks that have an acquired distinctiveness may be registered provided that they are not one of the alternatives in Regulation 1 which is an absolute bar to registration.
Citing T.C. Jehoram, C. van Nispen, T. Huydencoper European Trademark Law, p. 103 (2010(:
“In connection with the fact that the absolute ground for exclusion of Article 3(1)(e) Directive cannot be overcome by acquiring distinctive character through use, it is also relevant to asses whether or not the shape previously gave the product substantive value. The grounds for exclusion may not arise before the shape has acquired a reputation as a distinctive sign. In that case: once affected by the absolute exclusion, this exclusion always applies.
In other words, before considering whether or not the mark has acquired distinctiveness, it is necessary to address whether it is in a class of goods that can not be registered under any circumstances without the company name or the like.
The Applicant argued that the issue is not whether the design is aesthetic or functional, but if it is exclusively aesthetic or functional. Thus in cases like this where the appearance is functional or aesthetic but not exclusively so, and where the consumer would identify the appearance as a source of indication of the product, the appearance should be registerable.
The Supreme Court used the word significant functionality or aesthetic character (ממשי) where as the European court used the word exclusive (בלעדי), to the effect that as far as Israel is concerned, a significant functional / aesthetic characteristic is sufficient to prevent registration, even if the good has acquired distinctiveness.

The applicant tried arguing that since the appearance could vary somewhat, the appearance of a smartphone cannot be considered essentially functional / aesthetic and thus not registerable.

The Deputy Commissioner accepted that function could be attained differently, but considered the design as aesthetic and thus non-registerable as a trademark, though registerable as a design. She was not prepared to allow registration on the grounds that other smartphones were variations on the theme, considering the design aesthetic.

In the State of California, the I-phone was recognized as having “unregistered trade dress” and the applicant considered this fact as indicative that there was something that could be registered as a trademark. The Deputy Commissioner cited IL 169447- IL 16949 Ein Gedi Cosmetics to the effect that even in the US trade-dress is relevant to unfair competition but to trademark registerability:

Restatement of Unfair Competition (3rd):
“The term ‘trade dress’ is often used to describe the overall appearance or image of goods or services as offered for sale in the marketplace. ‘Trade dress’ traditionally includes the appearance of labels, wrappers, and containers used in packaging a product as well as displays and other materials used in presenting the product to prospective purchasers […]”
Furthermore, in the US, as far as trade dress of a product and not its packaging is concerned, one requires acquired distinctiveness.
The Deputy Commissioner considered arguments by the Applicant as beign the first to launch a product with this appearance as of relevance to the issue of design registerability but irrelevant to trademark registerability per se.
As far as the graphic user interface GUI is concerned, the Deputy Commissioner cited Rachel Stigler, Ooey GUI: The Messy Protection of Graphical User Interfaces, 12 Nw. J. Tech. & Intell. Prop. 215 (2014).http://scholarlycommons.law.northwestern.edu/njtip/vol12/iss3/3 to the effect that:
“…trade dress right only attach once the GUI becomes so distinctive that it is recognizable by a majority of consumers (i.e., achieves near-famous status)…”

In general,design registration is preferable to copyright or trade dress:

“While at least one commentator suggests that design patents should be eliminated, arguing that protection afforded by copyright and trade dress is enough, design patents provide a more clearly-defined scope of GUI protection than copyright or trade dress (individually or combined), are gaining momentum in the courts and in the software industry, and are becoming faster and cheaper to obtain.”

In conclusion, Ms Bracha considers that since Toffiffee, the Israel Court has departed from the US and considers that not only does a product shape not have inherent distinctiveness but to be registered, it cannot have a significant inherent functionality or aesthetic character.

As to the trade dress issues, Ms Bracha noted that Israel law was not sufficiently clear if this is to be considered passing off, but did not consider that the design could be registered as a trademark due to its functional and aesthetic aspects.
Ms Bracha considered the acquired distinctiveness issue moot, but nevertheless argued that in this instance, the i-phone does not have acquired distinctiveness as a trademark. She did not consider Section 16 relevant.

Ruling re IL 236294 by Deputy Commissioner Ms Jacqueline Bracha, 19 March 2015.

COMMENT

apple suaceThe issue is whether the design is used to indicate Apple as the sauce source.

The problem remains that the design is identified with Apple, and is a design and should be treated as such. It cannot fairly be registered as a trademark. In my opinion, after A.Sh.I.R. torts of unjust enrichment and passing up could be brought if there is a case of passing off. Once competitor clearly writes Samsung or similar on the front of the case, I am not sure that they can’t copy the design unless it is registered.

This case is reminiscent of Interlego where Lego tried to obtain copyright for their distinctive brick design. Lego is a design and not a copyright. The appearance of the i-phone is a design and not a trademark.

The Israel Patent Office does not generally allow marks for functional or aesthetic elements, but only if they are used as an indication of origin, i.e. as a trademark. If the above image is shown on the outside of a box, is a graphic label of what is inside, or is it an image of what is inside?

The Israel Patent Office is applying its policy fairly in what is perhaps a difficult case. We understand that Apple may appeal this decision to the courts. That is the correct procedure with regards to patent office policy.


Professor Phillips Elected to the IP Hall of Fame

April 12, 2015

Top cat

This year the IP Hall of Fame welcomes leading US copyright scholar, lawyer and author Paul Goldstein; past president of the INTA and former chief IP counsel of Richemont Frederick Mostert; influential IP blogger and academic Jeremy Phillips; leading Australian IP lawyer Des Ryan; and, prolific inventor Nikola Tesla.

The IP Hal of Fame is an initiative of IAM (Intellectual Property Management), a magazine that I used to have a regular column in covering Israel IP developments, and still occasionally write for. I am delighted that Professor Phillips is being inducted into the hall of fame. I think it is very appropriate.

Tesla is presumably induced into the hall of fame. He died in 1943.

Professor Jeremy Phillips and his flagship IP KAT is an inspiration to fellow bloggers. He is also involved in a dozen other blogs and is very generous with his time and experience. Jeremy has spoken at a number of events I’ve organized in the past, and is always thought provoking and entertaining.

I think this is an appropriate tribute to one of the most prolific IP authors and trademark experts.


Israel Ranked 3rd in US Patent Filings

April 2, 2015

us patent3rd place

Israel originating patents filed in the US jumped 21 percent in 2014, according to a study by BdiCoface.

The study found that 3,555 Israel-based patents were filed in the US during 2014,which is nearly 389 patents per million Israeli inhabitants. Only Japan, with 445.6 patents per million, and Taiwan, with 524.4 patents per million, outranked Israel, which was ahead of South Korea, Switzerland, Sweden and Finland.

From 2009 to 2013, the companies filing the most US patents for Israeli inventions were IBM (674 patents), followed by Intel (435), Marvell (281), Sandisk (261) and HP (197). The top educational institutions in Israel filing US patents were Tel Aviv University (161), the Weizmann Institute (158), the Technion (137) and the Hebrew University of Jerusalem (116). These statistics are high compared to other universities abroad and is seems that Israel’s tech transfer policy is working.

Probably due to the relatively high cost, there has been a drop in European Patent Applications for Israeli inventions.

We note that the US is a preferred location for Israel inventors who may not bother filing in Israel. For fast moving industries such as telecommunications, it may make sense only filing in the US. For methods of medical treatments or after the inventor has published or presented his invention in public, there may be no alternatives. Nevertheless, we consider not filing in Israel may be a costly mistake. Often Israel has more than one company in the same technology area. Current employees may become competitors. Enforcing a patent in Israel is much cheaper than enforcement in the US and the costs of also filing and prosecuting in Israel may be minimal. Finally, with the PPH (Patent Prosecution Highway) first filing in Israel may speed up the process of obtaining a patent in the US.

We also note that patents and patent applications are not apples and oranges. The absolute numbers and even numbers per capita are statistics of doubtful value as some patents are worth billions and most aren’t worth the cost of obtaining them. That is true even if they are exceptionally well written, simply because some technologies are implemented and others are obsolete when filed.

I do recommend that my Israel based clients seriously consider filing in Israel. Apart from odd Judaica related inventions and other niche products, most file in the US.  China is taking over from Europe as a primary destination, but Europe, Korea and Japan are all popular. Australia and India are also on the patent map.

The correct strategy of where to file and indeed of what to file is very case specific and depends on a number of variables including but not limited to budget, business plan, technology field, the centrality of the patent to the company, the size of potential and actual markets and where competitors are domiciled.

 


PCT Direct

March 31, 2015

DIrect

The Israel Patent Office has announces an experimental service called “PCT Direct”.

PCT Direct is intended to make the process more efficient and to increase the value of the International Search Report (ISR) and International Preliminary Examination Report (IPER) that the Israel Patent Office produces as a Searching and Examining Authority of the PCT (Patent Convention Treaty).

The service is aimed at PCT applications claiming priority from an Israel Application and the system is designed to help respond to the Notice Prior to Examination of the Priority Application

The Applicant will be able to relate to all issues in the Notice Prior to Examination. The response is, however, not part of the PCT request. It seems that the idea is to file a PCT request as a response to a Notice Prior to Examination, submitting a marked up and clean copy, details of other prior art known to examiner and details of first publication.

If the art cited by the Applicant is of value, half the search fees will be refunded.

The PCT response and interaction will be considered as a response to the prosecution of the priority document if not yet allowed.

Apparently the Israel Patent Office is only the second authority, after the EPO, to offer this exciting new service.

 

COMMENT

I am confused as to the point and purpose of this development.

abbreviation

I have an aversion to abbreviations.  PCT, IPER, ISEA, ISR – at least the Talmudists had the excuse that scribes wrote by hand and parchment was expensive. Nevertheless, WIPO (World Intellectual Property Organization) uses them, so I suppose we must conform.

The EPO’s description of the PCT Direct service may be found here.

More substantively, The PCT application should be filed within 12 months of priority. Israel Applications publish automatically at 18 months, so one wonders what first publication is being considered here.

I think that this initiative is designed for applications that are made special and examined immediately, either due to them being green applications that are environmentally friendly, or due to applicant petitioning based on age, suspected infringement and the like. It is possible that this has ramifications for a PCT application claiming priority from an earlier PCT application.

It also seems that the applicant need not actively file PCT responses in the parent file but can rely on the system doing so automatically.

Not too long ago, the search report of the PCT was considered as something of little value and was often ignored by examiners who examined to grant patents.  Then came the Patent Prosecution Highway, and then the Superhighway. I think this further development is designed to demonstrate that the Israel Search and Examining Authority, is willing to grant patents based on their PCT work, as is, apparently, the EPO and to create additional trust in the system. Hopefully this will translate into less duplication and a faster, more efficient, high quality service.

This is, however, speculation.

Readers who can briefly summarize what PCT Direct is all are about are cordially invited to do so.


Patent Office Closures for Pesach

March 26, 2015

pesach cleaning

The Israel Patent Office will be closed from 3rd April 2015 to 11 April 2015 for Pesach (Passover), and will open again for business on 12 April 2015.

Deadlines falling during the period that the Israel Patent Office is closed are automatically extended until 12 April 2015.

However, trademarks and PCT Applications may be filed on line during the festival and will receive the date that they are filed. Notwithstanding this, according to discussion with Dr Michael Bart, the USPTO now accepts PCT applications that are filed late due to Israel Patent Office closures.


Sony Clamps Down on Pirate Computer Games

March 26, 2015

Pirate
Sony Entertainment sued Azam Gever claiming copyright infringement and unjust enrichment, alleging that Gever’s computer shop “McKan Computers” on the main road through Osefiya sold fake disks with games for the Sony Playstation console.
In his defense, Gever claimed to be ignorant of the fact that the disks he was selling were not originals. If Gever could successfully convince that he was unwittingly distributing fake disks, he would not be held responsible. If, however, this defense collapsed, he would be held responsible for damages.
Sony claimed to have copyright in the Playstation and Playstation 2, and in software for the Playstation. They also claimed to own trademarks 95025 and 95026 for Playstation. Sony Entertainment Europe was responsible for distributing in Europe, the Middle East, Africa and the Pacific Rim and franchised distribution rights for the software within those territories, including Israel.
Playstation programs can only be played using the Playstation interface due to special encryption. Any copying, burning to disk of a Playstation game will, inter alia, include copying of the encryption which is copyright infringement of Sony’s copyright. Sony claimed that they are in a perpetual war to prevent their software from being pirated, and that they have spent enormous sums in advertising and promoting the console, They have copyright notices on the disks, on the packages, and appearing on screen.
The defendant did not deny selling pirate CDs but denied knowing that they were pirate copies. Sony sent a private investigator to the shop to see what was being sold. The private investigator and his son testified that they were both independently told that the programs were copies, and that the owner had shown a box of bundles of 50 disks, containing 3 or 4 copies of each game. The private investigator testified that he bought five different games at 10 shekels ($2.50) each, paid 50 Shekels and received a tax invoice for 50 Shekels that indicated thatit was for Sony II disks. The private investigator filmed the visit and submitted the footage as an exhibit. The games purchased included Beyond Good and Evil, Dragon’s Quest, God’s hand, Spy Hunter, and Fifa 2013.
The Plaintiff alleged that inspection of the disks showed clearly that they were fakes that infringed Sony’s Copyright since they were not in cardboard packages with shrink-wrapped cellophane or new DVD boxes and did not include instruction booklets. Unlike the originals, the disks did not have pictures on them and were not stamped with Sony’s logo and copyright notice. Sony sent a Cease & Desist letter and asked for the pirated disks to be handed over and for accounts to be produced for calculating profits and infringement revenue. The parties were, however, unable to come to an amicable settlement and so this case was filed. In the statement of case, Gever was accused of copying or creating fraudulent copies, selling or offering to sell these in the course of his business, offering to sell and holding fake copies thereby infringing the copyright, without permission of Sony and without compensating Sony.
In addition to the copyright charges, Sony alleged unjust enrichment under the law of Unjust Enrichment 1979 and various trade related torts for damaging Sony’s reputation.
Sony sued for compulsory damages of 100,000 Shekels per infringement under Section 56a of the Copyright Law 2007. Claiming years of fraud, Sony requested increased damages of 150,000 Shekels and also applied for an injunction against Gever to prevent him from selling fake disks directly or indirectly.
Gever laconically acknowledged ownership of the shop and that he’d sold programs against the tax invoice, but denied selling or trading in fake software. Gever further alleged that he’d bring expert witness that the software was genuine.
In the preliminary hearing, Gever repeated that the disks were genuine and that he was unaware of “the material”. In a second preliminary hearing he again requested to examine the disks. After the parties held a brief discussion, the attorney for the plaintiff stated that the defendant claims that he sells computers, disks is a mere sideline that produces at most, 1% of income and that if it should transpire that the disks are indeed fake, he was unaware of this. In Gever’s own statement under cross-examination, he complained that he wasn’t warned, that he only sells a handful of disks each month and never claimed that they were originals. His lawyer clarified that the intention was to state that his client was unaware that the disks were not real. Meanwhile, the private investigator testified that there were a number of disks with the name of the program marked in permanent ink and that when discussing Playstation 3, the vendor had stated that copying it was problematic. Gever claimed that there weren’t more than 30 disks and that this wasn’t a commercial number. He admitted selling computers for 13 years and that he had sold Playstations for at least a decade, but claimed to sell very little software.
Under cross-examination, Gever claimed to obtain and sell original software on a request basis and to sell a handful of fakes each month. Some his brother supplied, some a friend, not sure from where, some he’d copied himself. He denied selling 60 a year, or 600 over the decade. He considered this non-commercial as he had a limited range of maybe 20 games.
The plaintiff requested to correct the statement of case to request 250,000 Shekels damages, alleging that even at the rate of 5 disks a month, this adds up to hundreds of disks over a decade. (I feel a lawyer joke coming on. It seems that neither the judge, not the attorneys were able to do the calculation).
The defendant objected to the sum being corrected. He also alleged that for sales prior to the new copyright law coming into effect in 2008, the maximum statutory damage is 10,000 Shekels (or 20,000 Shekels for willful infringement.

RULING
Despite Regulation 92 of the Civil Court Procedures 1984 allowing extensive corrections to the statement of case to enable the point of contention to be clarified, correcting the sum after the hearing and before ruling is not allowed as it does nothing to clarify the legal issues and will merely protract the proceedings. The plaintiffs alleged that Gever had sold tens if not hundreds of fakes over a period of years and nothing had changed, so the maximum sum claimed remains 150,000 Shekels.
Judge Weinstein ruled that merely selling fake disks was insufficient to be responsible, but the seller had to be aware that they were fakes. In this instance, some he’d scanned himself, others were supplied from an unknown source so it seems clear that he was aware. Furthermore, a computer seller would be expected to be able to differentiate between originals and fakes. The price of 10 Shekels a game was also a fair indication that they were fake.
The private investigator’s footage showed boxes of 50 or more games, and this was a commercial number. The private investigator’s testimony was sufficient to indicate that the vendor was aware that the goods were fake. However, the issue is moot as during cross-examination he admitted copying some of the programs himself.
The problem, was, as always, the burden of proof required. After humming and hawing about the need to warn others not to copy, the admitted sales of small amounts over time and the evidence of 5 separate games, Ms Weinstein ruled damages of 50,000 Shekels and costs of 10,000 Shekels.
52260-01-14 Sony vs. Gever, Ruling Judge Weinstein 16 March 2015

COMMENT
The disks were sold in Osefiya by Shfaram. In the past, a DVD copying factory was discovered in Kiryat Ata.
Personally, I am inclined to believe that Gever sold very little software. Why should anyone not picky about purchasing originals pay 10 shekels if blank DVDs cost half a shekel and everyone has a disk burner?
Not allowing the sum claimed to be increased is one thing, but I think that on the burden of evidence and not requiring actual damages, but statutory damages, Ms Weinstein had sufficient evidence to rule the 150,000 Shekels damages. Not unreasonable for a sideline operating 10 years.


Israel Patent Office Circular on 3D Trademarks

March 18, 2015

The Israel Patent Law 1967 is unequivocal in that three dimensional trademarks are registerable.

In the past, attempts to register the shape of objects and containers as trademarks was frowned upon by the Israel Patent and Trademark Office. Then, in 11487/03 August Storck KG vs. Alfa Intuit Food Products LTD, the Supreme Court ruled that the shape of the distinctive Toffiffee toffee and chocolate coated hazelnut snack could be registered as a design.

Since then, there have been a number of rulings (for and against) concerning trademark applications for  distinctive packaging, particularly for liquor and perfume bottles, and for various other objects such as Rubik’s cube.

The Israel Patent Office has now published a Commissioner’s Circular (no 032/2015) that attempts to provide clarity to this issue.

Essentially, three dimensional packaging or product shape should be protected with design registrations.

Consequently, inherent distinctiveness is insufficient grounds for registration.  However:

  1. if the three dimensional image serves as a trademark,
  2. is not significantly aesthetic or functional, and,
  3. through use, has acquired distinctiveness, it may be registered.

Since trademark registration does not provide protection to different elements of a composite mark, if a three dimensional representation includes the company’s name prominently, this may be used to enable registration without consideration of the three requirements above.

If allowable, the fact that the image is three dimensional will be stated.

The Circular comes into immediate effect and cancels previous circular MN 61, from 29 April 2008.

COMMENT

As guidelines, these are very sensible. However, one imagines there will be lots of arguments as to whether in specific cases, a three dimensional image serves as a trademark or not. Whether something is ‘significantly aesthetic or functional’ leaves a lot of grey areas, and the concept of acquired distinctiveness is also a difficult issue to quantify.

Substantially functional marks are related to in a decision concerning rifle sights. In a controversial ruling, the Rubik Cube was registered. In another ruling that I was less than happy with, the Crocs beach clog was registered.

Many rulings relate to bottle designs. For example the Kremlyovskaya vodka bottleEnergy Brands, Contreau, Fanta and Absolut Vodka. Also see here. Rulings for other containers include one for a cigarette box.

I suspect that we haven’t heard the last word on this subject.


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