International Intellectual Property

International Intellectual Property Profs. Atik and Manheim Fall, 2006 Trademark Ownership

Vittoria NA v. Euro-Asia (2001) • Tariff Act § 526 (grey market imports) • it shall be unlawful to import any merchandise of foreign manufacture bearing a trademark owned by a US person, and registered in the PTO, unless written consent of the owner of such trademark is produced at the time of making entry • Does Hibdon (US) “own” the Vittoria TM? “all right title and interest in the US trademark, together with the good will of the business” assigns to purchases Vittoria-branded tyres overseas and imports them into US (classic “grey market” scenario) Int'l IP

Vittoria NA v. Euro-Asia (2001) • Ownership (US) • TM cannot be assigned “in gross” (detached from underlying business interest); only “appurtenant” • Symbolic link to commercial activity; not itself property • TM is property only in connection with an existing firm • Transfer of goodwill assures TM basis - protect consumers • Transfer of assets not necessary to fulfill that purpose • Restatement (3d) Unfair Competition • Central inquiry: whether use of the mark is likely to frustrate purchasers’ expectations created by the mark • Transfer of goodwill rule helps assure those expectations • Transfer valid: VNA promotes goodwill associated w. TM Compare other intellectual property Business goodwill: a form of con-sumer trust Int'l IP

Vittoria NA v. Euro-Asia (2001) • Does US rule violate Paris 6quater? (1) When [per local law] the assignment of a mark is valid only if it takes place at the same time as the transfer of the business or goodwill to which the mark belongs, it shall suffice … that the [domestic] portion of the business or goodwill be transferred, together with the exclusive right to manufacture [or sell] in the country the goods bearing the mark assigned. (2) The foregoing does not impose upon [Union countries] any obligation to regard as valid the assignment of any mark the use of which by the assignee would, in fact, be of such a nature as to mislead the public, particularly as regards the origin, nature, or essential qualities, of the goods to which the mark is applied. Int'l IP

Vittoria NA v. Euro-Asia (2001) • Does US rule violate TRIPs Art. 21? • Members may determine conditions on the licensing and assignment of trademarks, [but] compulsory licensing of trademarks shall not be permitted and that the owner of a registered trademark shall have the right to assign the trademark with or without the transfer of the business to which the trademark belongs. • Does § 526 violate Paris Art. 2? (1) Nationals of any country of the Union shall … have the same protection as [nationals] (2) no requirement as to domicile or establishment in the country where protection is claimed may be imposed upon nationals of countries of the Union for the enjoy-ment of any industrial property rights. Int'l IP

Vittoria NA v. Euro-Asia (2001) • 19 CFR §133.23 (restrictions on GM imports) (d) Relief from detention of gray market articles. Gray market goods subject to the restrictions of this section shall be detained for 30 days .. to permit the importer to establish that: (1) The trademark or trade name was applied under the authority of a foreign trademark or trade name owner who is the same as the US owner, a parent or subsidi-ary of the US owner, or a party otherwise subject to common ownership or control with the US owner • Designed to avoid end-run around § 526 • Which doesn’t allow foreign corps to ban GM imports Int'l IP

Vittoria NA v. Euro-Asia (2001) • Are VNA & Vittoria IT under common control? • If so, §133.23 provides an exception to Tariff Act §526 • Common control(§133.23(d)(1)) • “Effective control in policy and operations” • Such as legal authority to control actions • A close business relationship is not sufficient • Could Vittoria IT avoid §133.23 via Licensing? • TM owner must assure quality control • Consumer protection theory applied here • Naked licensing constitutes abandonment of TM Int'l IP

IHT Int’l v. Ideal Std (1994) • Facts • American Standard Group (US) estab-lishes IDSA (FR) & IDG (DE) subsidiaries • Each sub registers “Ideal Standard” TM • IDSA (FR) assigns (heating) TM to SGF (FR) which assigns it to CICh (FR) • CICh (division of Nord-Est) manufactures Ideal StandardTM heating products in FR • IHT (another NordEst division) imports Ideal StandardTM heating products to DE • Ideal Standard GmbH (DE) [TM on sanitary] sues IHT to enjoin imports v. Int'l IP

IHT Int’l v. Ideal Std (1994) • Procedural Posture • IDG v. IHT (regional court) • Injunction in favor of IDG • IDG appeals to Duesseldorf Higher Regional Ct • Case Referred to ECJ • Issue • Compatibility of DE law with EEC Treaty • Art. 30 • Bars obstacles to free movement of goods within EEC • Art. 36 • Exception to protect industrial property (TM) • Strictly construed Int'l IP

IHT Int’l v. Ideal Std (1994) • Principles • Independence of TM • Rights can be assigned in 1 country and not another • Per Paris 6quater (inferred from allowance of different standards for transfer of TM) • Regional Exhaustion • First sale in 1 EEC country exhausts TM rights • If marketed by TM owner or economically linked firm • TM owner can’t oppose import in other EEC countries • Necessary rule to reconcile Art. 36 with Art. 30 • Using TM assignments so as to disallow parallel imports defies Art. 30 “community” Compare 19 CFR §133.23(d)(1) Int'l IP

IHT Int’l v. Ideal Std (1994) • Analysis of Exhaustion • Ideal Standard TMs of IDSA and IDG were under unitary control of American Standard Group (US) • But IDSA assigned TM to SGF, with which it had no economic linkage; breaking unitary control • SGF assigned to CICh; also no linkage w. IDG • Holding • CICh’s sale of Ideal Standard products in FR did not exhaust IDG’s TM rights in DE • IDG can bar parallel imports by IHT Int'l IP

Subject Matter • TRIPs Art. 15 1. Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark… Where signs are not inherently capable of distinguishing the relevant goods or services, Members may make registrability depend on distinc-tiveness acquired through use. • Nonstandard Marks • Color (white) / Shape ?? • Secondary meaning Int'l IP

Problem 4-9 • Does TTT infringe iPod? (color) (shape) • Issues: • Has white acquired a scondary meaning on MP3 players • Association by public of • Likelihood of consumer confusion? (note differences) • Distinct packaging doesn’t solve post-sale confusion • Is color functional?, such that recognizing TM would put competitors at non-reputational disadvantage Int'l IP

Philips Elect v. Remington(2002) • Facts • 1966 - Philips (NL) sells 3-headed razor • 1985 - Philips seeks UK registration • On basis of razor’s shape • 1995 - Remingon sells razor in UK • Procedural History • Philips v. Remington (High Court) • Philips TM invalid - functional shape • Court of Appeal • Refers to ECJ for preliminary ruling Int'l IP

Philips Elect v. Remington(2002) • ECJ Questions • Are there categories of valid subject matter • Which meet the distinctiveness requirement, but are • Excluded because indistinguishable from like goods? • Is shape capable of being distinctive only if it contains a capricious (non-functional) addition? • Can a shape without capricious addition acquire secondary meaning if a large % of the public • Associates the shape with that vendor (& no one else) • Has an expectancy re origin. • If an average well informed observant and circumspect consumer will identify the good as originating from the particular trader No No Yes Int'l IP

Philips Elect v. Remington(2002) • ECJ Questions • Can a functional shape be distinctive if same function can be performed by other shapes? • Functional shapes are not registerable subject matter even if same function can be performed by other shape No Int'l IP

International Intellectual Property