A Sour Result - CJEU Rules on Protection of Parts of Compound PGIs

Having discussed the protection of the term "Aceto Balsamico di Modena" after an opinion by Advocate General Hogan this Fall, this writer waited for the decision of the CJEU with great intrigue. This was colored by a love of balsamic itself, but also with intrigue in relation to whether separate components of a PGI are protectable. Like on Christmas morning, the CJEU finally delivered its judgment earlier this month.

As discussed above, the case of Consorzio Tutela Aceto Balsamico di Modena v Balema GmbH concerned the registration "Aceto Balsamico di Modena" (PGI application here) in relation to a balsamic vinegar which is produced in the Modena region of Italy. Consorzio is a consortium of producers of the products designated by the PGI. Balema produces and markets vinegar-based products made from wines from the Baden region, including bearing the terms "Balsamico" and "Deutscher balsamico". Consorzio subsequently took Balema to court for infringement of the PGI, with Balema arguing that it didn't infringe the PGI as it didn't use the entirety of it and the components to the name are not protected separately.

The Court faced only a single question, which asked "...whether Article 1 of Regulation No 583/2009 must be interpreted as meaning that the protection of the name ‘Aceto Balsamico di Modena’ extends to the use of the individual non-geographical terms of that name".

They first set the scene by stating that the protection of various constituent parts of a registered name falls under the jurisdiction of national courts. With regards to 'compound' marks, such as Aceto Balsamico, that have not specifically mentioned that the individual components of the name are protected separately doesn't mean that those components are not protected outright. As set in Chiciak and Fol, "...in the absence of specific circumstances pointing to the contrary, the protection... covers not only the compound name as a whole, but also each of its constituent parts, that will be the case only if that constituent part is not a generic or a common term".  Even though the case concerned an earlier Regulation, it still applies to Article 1.

The Court swiftly concluded that protection couldn't be afforded to the individual non-geographical terms of the Aceto Balsamico name. They further specified that "...the name ‘Aceto Balsamico di Modena’ that has an undeniable reputation on the national and international market and that it is therefore that compound name as a whole which meets the inherent condition for the product having a specific reputation linked to that name". To put simply, the terms ‘aceto’ and ‘balsamico’ (and their use in combination) won't benefit from the registration of the whole name.

The Court also noted that the terms would be designated as common terms under Chiciak (as they merely describe a common product such as a balm or a vinegar). Ultimately they denied protection for the individual terms in Aceto Balsamico di Modena.

The decision is not a very surprising one, as the extension of protection to non-geographical parts of PGIs could open the floodgates for the registration of incredibly long PGIs, and in effect deter competition in the marketplace in relation to similar products. Of course one expects the regional identifiers to remain protected, but extending protection to common terms would not be a good idea, especially since the authentic product is still protected through the PGI. The case is a good reminder to PGI holders to limit their protection to what matters; the stamp of regional quality for the product.

A Big Bite of the Apple - Supreme Court Decides the Fate of Design Patents

The two titans of technology, Apple and Samsung, have fought long and hard over many aspects of intellectual property law, especially ones relating to the design of the (now ancient, at least in smartphone terms) iPhone. The two companies have fought legal battles all over the world since 2011, with varying results for both parties. After a monstrous $1.05 billion award of damages to Apple in earlier cases by a jury, the matter ended up with the Supreme Court, who were destined to look at an aspect of design patents often overlooked by the judiciary, even if it was merely from a damages perspective. The Supreme Court handed down its judgment in early December.

The case of Samsung Electronics Co. v Apple Inc., dealt with design patents owned by Apple on aspects of the iPhone, in particular a black rectangular design (D618,677), the same with a bezel on a surrounding rim (D593,087), and a colourful grid of 16 icons on a black screen (D604,305). Samsung employed similar design aspects in its various smartphones (including the Galaxy S line), and Apple took them to court for infringement in the aforementioned design patents. What the Supreme Court were tasked to determine was the infringement, and subsequent award for damages for infringement, under section 289 of the US Patent Act.

The above section provides a remedy for damages when "[a] person who manufactures or sells “any article of manufacture to which [a patented] design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit". While this is more straightforward in instances of whole infringement of a simple, single article, it is more difficult, as admitted by Justice Sotomayor (handing down the Court's unanimous judgment), in cases with complex, multi-component items and subsequent profits using the infringing elements.

Complexity comes with a need for introspection

What remains key is the liability for the infringing articles where the designs have been applied, which has been traditionally set at "…the extent of his total profit, but not less than $250". This then means you have to initially identify the 'article of manufacture' to which the infringed design has been applied, and then calculate the infringer's total profit made on that article of manufacture.  The Court therefore had to decide "…whether, in the case of a multicomponent product, the relevant “article of manufacture” must always be the end product sold to the consumer or whether it can also be a component of that product". This would either enable the patent holder to claim all profits made by selling the Samsung smartphones (i.e. the whole phone), or restrict the damages that can be claimed (i.e. only allowing damages for the particular designs used, and not the whole phone) by the rightsholder.

The Supreme Court left quite a bit unanswered in relation to the question of when an article of manufacture would be the whole product, or simply a component thereof, which, at least to this writer's mind, is a huge part of this matter and many others involving complex technology. Arguably, as the decision will be sent to the Federal Court for a rethink, the lower rungs will have to fill this space; however, there is a chance that an agreement will not be reached (yet again) by the lower courts, and the Supreme Court will have to address this matter in the future.

Justice Sotomayor saw that, after a simple reading of the term 'article of manufacture' that it would encompass both an individual component of a product, or the product as a whole. Design patents can be acquired for both, and while a component has to be embodied in an article, the designs can themselves only cover those components.p

The Supreme Court ended up saying very little in their judgment, and the future of design patents, especially in the smart device space, will remain very unclear. Whether the Federal Court comes up with a good test for the above remains to be seen, but this writer for one thinks the Supreme Court should've added more meat to their decision. Although they did highlight some issues with the parties' briefs, one would have concieved that some more guidance was to be given. Either way, the decision is important, and sets the scene for Apple and Samsung to compete more for the future of their devices and their designs.

Source: IPKat