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Tidbits on Patents

Tidbits on Patents

Patents are the part of intellectual property law which protect inventions and innovation. They grant exclusive rights to an invention to the owner of the patent, as a means of promoting human innovation.

Applying to critical areas like medical innovations, the issue of patents is a delicate one. It has been recorded that in the last three decades, medical technologies have improved the treatment of various diseases like HIV, that were previously ‘untreatable’. As a result of the delicate nature of the subject, policy makers have set certain criteria to be met for an invention to be regarded as patentable, in order to truly protect and promote innovation.

It is generally accepted that for an invention to be patentable, firstly, it must be novel. It must be a new innovation, different from whatever might have been before it. In recent times, there has been a rise in devices using wireless charging technology. In 2015, Qualcomm Technology Inc. patented it’s innovation that eliminated an obstacle facing wireless power, as its wireless charging technology for the first time ever was able to work with metal devices.

It is also required that for an innovation to be patented it must be Inventive. Sometimes referred to as non-obvious, it means that it must be a leap forward from whatever was already in existence, being born out of creativity or research. In December 2018, Apple was granted a patent for their development of devices that could transfer power to other devices wirelessly. This was a remarkable advancement from the existing wireless charging technology. Furthermore, for an invention to be patentable, it must be Industrially Applicable, to put it simpler, it must be useful. It is necessary that every patented invention should actually have specific use, solving a particular problem. A common example of an invention that wouldn’t meet this criterion is a perpetual motion machine, and such cannot be patented because it can’t work, hence lacks utility.

On a final note, it has become necessary for there to be regulations guiding issues like patents, because for there to a constant flow of innovation in a society, then rights to the innovation must be protected.

Written By: Oluwasegun Samuel (Research Team)

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EUROPEAN UNION DIRECTIVE ON COPYRIGHT IN THE DIGITAL SINGLE MARKET

EUROPEAN UNION DIRECTIVE ON COPYRIGHT IN THE DIGITAL SINGLE MARKET


Heard about the European Union Directive on Copyright in the Digital Single Market?
No? Alright, let’s take a stroll.
You see, one of the biggest news in copyright so far in 2019 is the “European Union Directive on Copyright in the Digital Single Market”. This law has gained serious traction, especially due to some controversial changes it proposes. The parts that have generated the most buzz are Article 11, which has been dubbed “the link tax” and Article 13, which is also known as “the meme ban”.


Essentially, Article 11 is essentially placing a restriction on how news aggregator sites such as Google News, Yahoo and Bing can publish articles on their websites. It requires such websites to pay publishers for using snippets of their articles on their platforms. In response, Google released a screenshot of what search results will look like when the laws come into place. The picture depicts a ghostly webpage with only links displayed. This is the option tendered by Google in order to avoid paying all the companies and individuals who own contents uploaded on their website for their intellectual properties. This law however, contains an exception for “legitimate private and non-commercial use of press publications by individual users”.


Article 13 requires online platforms such as Facebook, Google and YouTube to filter or remove copyrighted materials from their websites. It seems to be the most controversial, generating negative responses and severe oppositions from individuals, States and companies especially American companies YouTube and Google who have spoken out vehemently on how the new laws will affect the users of their websites. YouTube stated that they will have to remove some content that have already been up for years and block new ones that do not pass their content ID. The content ID is a mechanism already in place to prevent YouTubers from infringing on the rights of owners who had already copyrighted their properties. However, with the new laws in place, contents such as music video reactions, reviews, criticisms and video games may be affected as the algorithms are prone to mistakes. It may not recognize what has been copyrighted as a product of effort spent on existing content from the original content, which will make the use of the website cumbersome and is likely to affect the use of the website.


Finally, the problem with this law is that it will not just affect Europeans but the entire world due to the interconnectivity of the global world. Contents uploaded in European countries where the directive has been ratified into law will be subjected to the dictates of the provisions of the directive which will in turn affect consumers who can be from any parts of the world. Presently, there is no clear cut way to apply this law and we all might have to see how a court case or two flesh up the application of the laws.

Yusuf Aishat

Research Team

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IP Valuation

IP Valuation

IP Valuation

IP Valuation right? Let’s see how it works

Due to the indispensability of intangible assets to companies, the valuation of IP assets remains quintessential. The value of IP assets which generally comprise of copyrights, trademarks, industrial designs, patents and trade secrets can be determined by direct exploitation via use, sale, transfer or license, or non-exploitation. IP assets fall under the category of intangible assets being the creation of human intellect or imagination. In the context of IP valuation, there must be the right of exclusive use and control in generating economic and financial benefits.


IP valuation refers to the process of determining the monetary or financial value of a particular IP asset. However, there are prerequisites for undertaking IP valuation some of which include distinct identification, legal transferability inter alia. It is pertinent to add here that there are such factors influencing IP valuation such as premise and standard of value, nature and strength of IP asset, time of valuation, method of IP valuation, purpose of valuation, reliable data, infringement, legal and compliance factors.
Strictu sensu, there are two effective methods of IP valuation, namely; market and income methods. While the former is premised on comparison with the actual price paid for a corresponding IP asset under comparable circumstances, the latter which is mostly used refers to the potential amount of income of an IP asset compared to its current value.
In business, IP valuation transcends the boundaries of mere estimation of intangible assets, as it influences companies’ human capital, legal and financial operations vis-à-vis Research and Development (R&D) prospects. Furthermore, IP valuation is vital to the formulation of an apt business strategy especially in a competitive market. In simple terms, companies with strong IP assets have the tendency to attract high investment and are less susceptible to bankruptcy.


According to the 2017 Intangible Asset Market Value Study, intangible assets rose in value from 17% in 1975 to 84% in 2015 while tangible assets fell from 83% in 1975 to 16% in 2015 during a 20-year span. Interestingly, IPR specialists and lawyers are beginning to specialize in the business of IP valuation, thus emphasizing the growing importance of the subject matter.

Femi Alonge

Image Credit: https://smallbiztrends.com/2016/03/what-is-intellectual-property.html

References

WIPO. Module 11 – IP Valuation. Accessed via https://www.wipo.int/export/sites/www/sme/en/documents/pdf/ip_panorama_11_learning_points.pdf.

Shubham B. and Neha R. India: What Is Intellectual Property Valuation? Accessed via http://www.mondaq.com/india/x/772158/Trademark/What+Is+Intellectual+Property+Valuation.

Ocean Tomo. Intangible Assessment Market Value Study. Accessed via https://www.oceantomo.com/intangible-asset-market-value-study/

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What Happens when there are no IP Laws(2)

What Happens When There are no IP Laws (2)

Sounds funny right? Doesn’t it?

There is a popular joke about how in Nigeria, we never adapt to the change in the name of a product even after the producers have changed the name numerous times. That is why Nigerians still call the electricity distribution companies NEPA (National Electric Power Authority) in 2019 even after PHCN had stopped existing in 2013. In fact, people are reluctant to call the popular cab service ‘Taxify’ by its new name ‘Bolt’, months after the product has changed its name. This is the power of branding and trade names. Similarly, there is a Nigerian inclination where products are named by the most popular of them e.g. all toothpastes called CloseUp, all seasonings called Maggi, all mayonnaise called Bama, all chocolate spreads called Nutella and so on.

On the other hand, there is a general world trend about being stuck to a particular brand and using nothing else but that brand. In fact, there are Twitter and Instagram wars over which brands product is the best even when the contents are in fact the same. Examples are wars between consumers of Pepsi and Coca-cola, Fanta and Mirinda, Android and Iphone, Nike and Adidas, Benz and BMW etc. In fact, a user of a particular brand would most times use it for life and never switch.

It is interesting to note that people do not fall in love with a brand overnight and a product does not become popular overnight too. In fact, companies spend millions on corporate and product advertising, product quality, employee satisfaction and company image to build and maintain their brands or label.

Intellectual property laws come in by protecting this effort and sweat through the protection called “Trademarks” or “Service marks”. These marks are words, phrases, symbols, designs, logos or marks that distinguish a product or service from another. They constitute intellectual property as they are intangible assets but valuable works of creation anyway. While you can save your money or gold in the bank, your brand logo cannot exactly be physically saved but it also important that people do nor falsely use it as theirs. Here, intellectual property comes in to ensure that no one deceptively uses your trade or service.

Now for a second, try to imagine there was no law protecting trade or service marks. Tomorrow, you can start up your fashion company called ‘Gucci’. Of course, you know there is an already existing respected brand called Gucci that sells very expensive clothes all over the world but choose to sell yours at a cheaper price in Nigeria with lower quality. On this false name representation, you get a lot of customers and sell millions of products. Few weeks later, ten other Gucci clothing stores open and sell at even cheaper prices and ridiculously poor quality. You are angry at the insult and you of course lose customers, as Nigeria being the second poverty world capital after India would most likely go for the cheaper ones. On the other hand, people who can afford the real Gucci are disappointed at the reduction in quality without realizing that they are fakes. The result is a ruined reputation for the whole Gucci brand as a whole and a drastic reduction in their profits.

It is therefore apparent that trademark laws are necessary to protect a company’s reputation, distinguish them from their competitors and maintain the company’s value. Trademark unlike other forms of IP protection do not expire as long as they remain distinct forever. Mercedes first registered as a trademark in 1900, Pepsi-Cola in 1896 and Quaker in 1895. Over a hundred years later, these brands are still recognized and respected today. Trademark laws in fact go a step further to ensure that registered brands in the same category do not use similar names to prevent consumer confusion. Thus, local fashion brands like “Nika”, “Guccy”, “Fendy” aimed at deceiving the public are guilty of infringement.

Today, trademark infringement is fraudulently on the rise with local brands in Nigeria making inferior versions of popular brands or using similar logos of popular brands. It is so difficult to distinguish original from fake that only few stores are trusted and patronized. The extent of the danger of this act goes beyond economic implications to the original companies in the case of edible products. It could in fact cause death or serious consequence to human life where infringers replace the content of edible products and fail to use care.

In conclusion, trademark protection has proven to be one of the most important form of copyright protection and without these marks distinguishing products, the result can be catastrophic. It is therefore important for local businesses to respect the service or trademarks of existing products and instead start their own brands afresh. Similarly, new companies should duly register their marks as early as possible as trademark laws protect the first in time.

AKINKUOLIE Precious

For the Research Team, IPTLCUI

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What Happens when there are no IP Laws(1)

What Happens When There are no IP Laws (1)

Maybe you don’t know?

When I was a kid, the kinds of movies I loved best were the 20-in-1 movies. For as low as #70, I could watch enough movies a day. When they were scratched or incomplete, I would curse the producer in pain and regret wasting my money for biscuit. It took many years for me to realize that kind of movies were pirated and that Tyler Perry, Jackie Chan and Steven Seagal movies should not all logically be in the same CDs.

Today, I belong to the Intellectual Property Club in School and I would never download a song without paying for it and almost never stream movies from illegal download sites. With literacy comes a stark reality and responsibility to never be a part of a system that kills innovation or destroy the hard work of others.

In order to understand what would happen without Intellectual Property Laws, you need to understand why these laws where created. From the word “Intellectual Property”, a plain definition could be “a work of the intellect”. Still from this word, you can decipher that it relates to what you can create in the mind. Indeed, this is true. Intellectual property laws were created to protect whatever you could innovate, discover, design or invent by your own self and with your own mind. But there is only one catch, this creation must not just be in your mind. You are expected to produce it in a fixated form and even a drawing on paper is fine.

If you are wondering why, let me explain. Three men can all create a shoe that makes you fly in their mind. They may all plan to use the same method of putting hot coal into iron shoes and applying gravity and space air etc etc. However, there is no way any of them can prove they thought it up first if they don’t have this idea properly drawn out and designed. The first to turn the thought to reality will get protected. It is therefore apparent that intellectual property laws where created by man to not only protect ownership of ideas but also give the creators an incentive to continue to create more and solve more problems.

Intellectual Property protection comes in various forms. Today’s article will consider only one and subsequent episodes of this article will attempt to rationalize the existence of other forms of IP protection. The first form is Copyright which protects artistic or literary creations like writings, drawings, music, songs etc. The word “Copyright” does not actually mean the right to copy in the literal sense as the plain interpretation of the word may seem but rather ‘the right to the copies’. That is, it protects the owner or author from the duplication of the work by someone unauthorized. It is notable that copyright does not protect ideas, theories or concepts but an original work in a tangible form.

Copyright protection is a necessity in order to prevent chaos and anarchy in our world today from my point of view. A very relatable illustration would be this article I am writing today. Imagine I woke up tomorrow morning and found another name attributed as the author of this article, I would definitely be angry. The effort, time and brain power imputed in this article would be someone else’s glory. Now let’s imagine further that Harvard saw this article and wants to give the writer a special recognition for it, the wrong person will get the credit and I may either decide never to write again or just go ahead and fight the person who stole my work. Then the society would lose one of two things – a great mind or the life of the thief.

However, thanks to Copyright laws in all countries of the world today, the moment you create your artistic or literary work in a fixed format, you are attributed ownership to it. You can sue anyone who uses it without your permission over the next 70 years and get compensated for such.

If today, you still use people’s lines without acknowledging they own it or duplicate people’s paintings as yours or use another persons’ lyrics without authorization, permission or fair use, I would just like to clearly state that you are a thief and that is stealing. You are also most likely guilty of copyright infringement and should stop taking credit for other people’s work. Forms of copyright infringement you should stop are using someone’s picture from the internet without crediting the photographer, downloading music and movie files from illegal websites, plagiarizing another’s work etc.

The easiest way to know if you are infringing is when you find legal sites to pay for a work alongside an illegal site where it is offered for free. Most likely, the book or movie or music you are trying to download was created to create profit by the owner. I recently learnt that people justify copyright infringement on the argument that the owner is most likely rich and thus would not be affected If he loses the one thousand naira for the work. My response is this, imagine a million people had this same opinion then the owner has lost a billion naira. What happens if this owner gets bankrupt – the people employed under the chain would lose their jobs. Congrats, you just made someone poor and caused unemployment.

In fact, the negative effect of copyright infringement in Nigeria as a country would now be proved in figures. In 2018, Punch Newspaper reported that Nigeria loses $3billion to piracy annually and the annual revenue from the movie industry is just about $590 million according to PWC Media and Entertainment Outlook. The facts speak for themselves.

In conclusion, if you have never heard of the word “IP”, this is an attempt to teach it in the simplest way and sensitize as many people as possible that IP Laws are a necessity and to stop belittling the effort of others starts from understanding the consequences of such action. We believe that after reading this article you would leave the league of persons that wait weeks for a movie to be leaked to download it on the internet rather than paying to see it at the movie. You really have no right to complain about the standards of Nollywood movies if you have never paid to see one. We need IP laws and we need you to stop breaking them.

Precious AKINKUOLIE

For Research Team, IPTLCUI

Picture Credit: Shutterstock

Does Intellectual Property law protect robots?

Does Intellectual Property Protect Robots?

Want to know a secret?

About seven decades ago, we considered only humans as possessing specific forms of higher intelligence. However, the narrative has changed as machines now possess the ability to communicate in decipherable speech. These machines make decisions without human intervention, express emotions, compose and sing songs and process much more information than humans. This ability is generally regarded as Artificial Intelligence (AI). Siri, Alexa, and Google Assistant are relatable examples of AI.

Robots are proliferating as a major form of AI. Accordingly, the International Data Corporation (IDC) revealed that robots import all over has increased from 100,000 in 2000 to 250,000 in 2015. The share of jobs requiring AI has also increased by a mind-blowing 450% since 2013 as shown by Adobe. Moreover, according to Juniper Research, global spending on AI is also estimated to grow from $2 billion in 2018 to $7.3 billion in 2022.

Given the ingenuity and capital that characterizes the production of AI in its entirety, the protection of these inventions by relevant Intellectual Property laws are non-negotiable. These protective laws are twofold namely: laws protecting AI invention and production of Artificially Intelligent machines on one hand and the protection of possible creative works, ideas and inventions that may be put forward by AI machines on the other hand.

The Intersection of AI and IP: Patents, Trade Secrets, Industrial Designs and Copyrights

Robots, more or less, are inventions and as such their production are protected under IP laws. It is noteworthy that in protecting their financial and intellectual interests, robotics companies employ multifarious Intellectual property approaches. Developers of robotic technology can register their distinctive technology under local patent laws. Therefore, they possess exclusive rights to the use and reinvention of the Artificially intelligent machine.

Patent protection enables the developers to get regulatory approval on one hand. On the other hand, they can secure their investment interests and invention strategy after commercialization of the machine. As stated by WIPO, this has its advantages and disadvantages.

According to WIPO, many robotics companies use patent documents to figure out latest technological developments and gain insights about competitor strategies. This invariably means that each competitor in the industry can spy on the latest inventions and the scientific methods involved in reaching such end products. While this increases competition, spying on other companies patents can also allow for altering of the processes and reverse engineering. Moreover, the United States Supreme Court decision in Alice Corp. v. CLS Bank International 573 U.S. 134 S. Ct. 2347 (2014) made it evident that not all abstract technological concepts or processes are patentable.

Many robotics industries, therefore, seek a better IP instrument to protect inventions namely Trade secrets. Article 39 of the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement regard trade secrets as secret information so long as such information:
(a) 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;
(b) has commercial value because it is secret; and
(c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

Trade secrets are preferred because they are better means of protection and are cost-effective. However, they possess their own demerits as they are susceptible to leaks by employees. Other IP instruments used to protect robotics research and development include Industrial designs that protects the shape and form of robots, computer codes and copyrights protecting software.

Does IP Protect  creative works and inventions of Robots?

The event and possibility of a robot producing independently or in conjunction with a human an invention, an idea or any intellectual property raises a bigger question. Can such intellectual property receive protection in favor of the robot?
In answering these questions, jurisdictional differences ought to be taken into account. Currently, the general trend in most nations is that inventions by robot cannot be patented. This is because only human creations are allowed to lay claim to patents under relevant IP laws. Flowing from this, an Australian court ruled in Acohs Pty Ltd v Ucorp Pty Ltd [2012] FCAFC 16 that a work generated with the intervention of a computer could not be protected by Intellectual Property law because it was produced independently of human intervention.

However, countries like Japan and Korea are making laws to make IP rights extend to robots. In New Zealand, the 1994 Copyright Act allows patent rights to extend to robots even though they considered such invention as belonging to the human owner of the robot. Arguments have been raised in support and against robots possessing IP rights to their inventions or creative works. These arguments include bolstering technological advancement and the possible disintegration of human intelligence respectively.

Finally, if Artificially Intelligent Machines are bestowed with rights to own patents for invention, will they also be liable if other intellectual properties are infringed upon? A European Parliament Resolution titled Civil Law Rules on Robotics considered this question and answered in the affirmative thus suggesting the legal personality of robots. Complexities come hand in hand with innovation and as disclosed in a 2018 article by the World Economic Forum, the fact that these questions have arisen at a point where the position of the law is yet unsettled, relevant stakeholders should prospectively consider these challenges and propose a system that efficiently and effectively provide solutions.

Adebanjo Olamilekan Olamide

For IPTLCUI Media Team

 

 

 

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IP and Aba Made Products

Does this sound familiar?

The term “Aba Made” is a popular Nigerian expression to mean “Fake or inferior products”. However, this interpretation has not always been so. The history of the popular Aba trade market can be traced to the Ngwa clan of the Igbo people of Nigeria which developed to be a major trade settlement in Nigeria. This market was constantly described as the “Japan of Nigeria’ due to the existence of its renowned commercial operations revolving around textiles, garments, crafts, shoe production, bags and spare parts market. Consequently, the Aba trade market was prosperous and thrived until its collapse due to what is described by Techpoint Africa as ‘a complete breakdown in infrastructure’.


Today, the phrase ‘Aba Made’ is no longer used to depict the past glory of the Aba trade market but rather pirated or inferior products made in Nigeria as a counterfeited copy of an original product. Products specially branded with this name are generally used to derogatorily describe goods that are fake imitations of high-end brands like Gucci, Fendi and the likes. Notably, Guardian Newspaper reports that Aba produces 800,000 shoes and 90,000 bags per day.


The relationship between Aba Made Products and Intellectual Property is one that revolves around the concept of Counterfeiting. Counterfeiting is simply unlawfully copying or imitating an item without proper authorization with an intention to deceive or defraud by presenting such item as genuine. This in fact defines the present reality of Aba Made Products in Nigeria today. It is said that a large number of Aba shoe and bag makers use names of popular brand labels like Balenciaga, Nike, Adidas amongst others aimed at deceiving or confusing the public as the original. These fakes are sold to unsuspecting customers who cannot distinguish the original from the fakes and end up ripped off.


In addition to this, the use of false geographical indication labels and appellations of origin by Aba Made products is one that is highly prevalent in Nigeria. With shoes and clothes tagged “Made in Italy or China” and the likes, unwitting consumers pay more for such items with the expectation that they were imported from foreign stores. Of course, a geographical indication in IP are signs used on products with a specific geographical origin while appellations of origin is a special kind of geographical indication used on products that have a specific quality exclusive or essentially due to the geographical environment where the products are produced.


The overall effect of using false geographical indications and brand names on these Aba Made Products is that it affects the valuable reputation companies or locations have acquired over the years and instead misrepresents the true origin and quality of such products. Apart from this, the current situation is a pointer to the absence of confidence in Nigerian Made products. By deceiving the public to buy a somewhat worthless imitation of a genuine product, damage is done to the reputation of businesses and this is what IP aims to prevent. It can then be seen that Aba Made Products jointly infringe on trademarks and geographical indication protections.


The reality is that the problem is not with the products or the way they are made but rather the use of deceitful labels to convince consumers otherwise. It has been restated numerously that Aba made shoes are strong, durable and cheap while Business day further reports that one million pair of shoes are produced by more than 80,000 leather makers in Aba each week with about 48 million pairs produced each year. This is commendable in itself and shows strongly the presence and existence of hardwork in this Nigeria trade order.

However, the future for an Aba made framework that does not entail Intellectual property infringement or anti-counterfeiting is one that chooses to own the tag “Made in Aba”. Consequently, the way forward is educating artisans and craftsmen on the implication of infringing on other businesses’ trademarks and the geographical indications of countries. Asides this, rebranding this system is the best step to end this menace and this is by deliberately building unique individual brands labelled as Nigerian Made with innovative creations and respect for the built brands of other fashion companies. The moment we begin to accept that “Made in Aba” is something worthy of pride, then IP would be more valued.

Akinkuolie Precious

For the Research team, IPTLCUI

Picture Credit

https://www.nairaland.com/3615669/get-aba-made-shoes-very

When Your Trademark is not distinctive

WHEN YOUR TRADEMARK IS NOT DISTINCTIVE: A CASE OF ADIDAS

It is a given that intellectual property protects creativity especially trademark. Of course, it does so rather strictly and without bias of any form. We have heard cases of minnows trumping bigger fries in IP disputes like Already LLC defeating Nike in a dispute over the patterns on Nike Airforce 1 Shoes. Last year, Nestlé also lost a long-running court battle to trademark the four-finger design of its chocolate bar KitKat.

Three weeks ago, the IP world recorded another landmark decision. In 2014, the Belgian Company Shoe Branding Europe brought the original case prior to this decision. The company owns a brand called Patrick. Patrick’s products are branded with two stripes that slope in the opposite direction to those of Adidas. That year, the EU Intellectual property authorities approved of Adidas’ three stripes trademark. However, the Belgium-based company Shoe Branding Europe challenged it, saying the trademark was not distinctive enough. Two years later, the EU Intellectual Property Office annulled Adidas’ trademark, siding with the Belgian company’s complaint.


Two weeks ago, the General Court of the European Union in Luxembourg therefore ruled that Adidas cannot hold a trade mark for the use of three stripes “in any direction”.


Quite a long fight, yeah?


This ruling goes into one of the most basic features of trademark, that it must be distinctive. Here, the mark was “devoid of any distinctive character” to qualify as a trade mark.

The opinion of the court..

According to the court, “The mark is not a pattern mark composed of a series of regularly repetitive elements but an ordinary figurative mark.” It stated further that considering that the mark itself is not distinctive enough , it must have “acquired distinctive character through use throughout the entire territory of the European Union and its 28 member state countries” to convince the court to recognize it as a viable trademark operative through Europe.


However, the ruling applies only to Adidas’ monopoly of an ordinary three-stripe mark which is not distinctive. As such, the ruling does not impact on the broad scope of protection that Adidas has on its well-known three-stripe mark in various other forms in Europe which are distinctive in pattern. For instance, Adidas adopts a logo typically displayed as three black lines of equal width. The three black lines slant from left to right against a black background and this remains protected in all EU states.


So, you want to register your trademark? Ask yourself how distinctive is your mark? You definitely do not want the court to do the asking several years after the mark has become a great asset to your business.
The decision of the Court at Luxembourg can still give room to an appeal at the European Court of Justice, the EU’s top court. However, Adidas only has two months to do so.

Olanrewaju Moses,
For IP Research Team.

cc:@WashULaw

ANALYSIS OF THE NIKE V. ALREADY LLC DISPUTE

Citation 568 US 85 (2013)

 The instant case, decided at the United States District Court for the Southern District of New York, is a case of infringement on the trademark of Nike’s Airforce 1, a basketball brand.

A Very Brief Background of Nike Air Force 1

Nike Airforce 1 is a pair of athletic shoes designed by Bruce Kilgore for Nike Inc, and is considered the first basketball shoe to use the Nike Air Technology. In 1982, like much of its designs, Nike registered and protected the “Air Force 1” by trademark.  In that same year, Nike, based in Beaverton, Oregon, launched the low-cut Air Force 1 sneaker, and began to sell millions of them each year ever since.

cc: International Trademark Association

Facts of the Case

In 2009, in a bid to protect its trademark, Nike filed an infringement lawsuit against Already LLC. Nike’s contention was that Already’s Sugar and Soulja Boy shoes infringed its trademark on the stitching, eyelet panels and other features of Nike Air Force 1.

But, as it turns out, Nike did not see what was coming.

It is often mused that in the contentious world of trademark litigation, a case can “boomerang” on a plaintiff. In other words, a plaintiff may sue an alleged infringer, and be met with a defense or countersuit that unexpectedly endangers the plaintiff’s mark. Such was the situation in the instant case.

In response to Nike’s trademark infringement suit, Already countersued Nike, arguing that Nike’s trademark was invalid. To Nike, the countersuit posed the possibility of losing a valuable asset in the ensuing litigation. Hence, Nike instead opted for an unequivocal surrender, dubbed ‘Covenant Not to Sue’, to Already.

This surrender was in form of a written promise not to make any claim or demand on Already – including its customers and distributors – regarding current or previous shoe designs, or the imitations. The Supreme Court agreed that indeed, the covenant was broad enough to cover all of Already’s allegedly unlawful conducts that had brought the parties to court in the first instance. Rightly guessed – Nike ticked all the boxes that give Already free hand to what was originally considered an infringement.

However, Already was not ready to back down; not especially as it was, perhaps, optimistic about its chances of invalidating Nike’s trademark. Hence, despite Nike’s surrender, Already went ahead with the lawsuit. In countering this move, Nike successfully argued that the “Covenant Not to Sue” had rendered the litigation “moot,” thus, requiring that the litigation be dismissed.

The Lower courts agreed, and Already appealed. Ultimately, the Supreme Court agreed to hear the case.

 What Does It Mean to Render A Case Moot?

The Supreme Court in the instant case explained that, a case is moot when, “The issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.”  One way to meet this standard is for a defendant to voluntarily cease its unlawful conduct – or the act which gave rise to the claim – once sued. Here, Nike is considered to be the defendant with respect to Already’s counterclaims.

It must be stressed that the onus of proving that a case has been rendered moot is heavy. The concerns are reasonable. If defendants were able to moot disputes by desisting from their conduct until litigation was dismissed, and then resuming it afterwards, the civil judicial system would be easy to sidestep. To assuage these concerns, courts require that defendants demonstrate that they “could not be reasonably expected to resume” the conduct that started the dispute.

Recall that the court opined that Nike’s Covenant Not to Sue was held to be sufficiently broad to cover all possible litigation against Already or related parties in connection with the Air Force 1 trademark, and as such, there was nothing left for any court to decide with respect to Already’s challenge to the mark.

It must be reiterated that Nike’s conduct that led to the challenge – suing Already for trademark infringement – had been completely and irrevocably terminated by the covenant, so much that Nike could not reasonably be expected to repeat the behavior in the future. Consequently, the case was held to be moot, and the lower court’s dismissals were affirmed accordingly.

Conclusion

The instant case, in effect, exposes a legal “escape hatch” for trademark holders as well as owners of other protected IP assets. Thus, where a trademark infringement case is filed but there is a huge threat from the other camp that is being sued, the claimant may simply withdraw the threat with a promise to not litigate on that case anymore, rendering it moot. However, to successfully prove that a case has become moot, the claimant must also prove that they could not reasonably be expected to go back on their promise, or resume the conduct that led to litigation. This will go a long way in stemming the tides of boomerang litigation which may discourage the enforcement of IP rights by both minnows and big players. 

Olanrewaju Moses.