IP Report 9 - Q1 2019
Inteo is a Belgian law firm focused on intellectual property and related practice areas. This newsletter reports on noteworthy developments and court decisions relevant to intellectual property and technology law in Belgium and the EU.
Trade secrets – collecting evidence : On 7 January 2019, the Ghent court of appeal dismissed a trade secret misappropriation action by Umicore against former employee E.C. and a Turkish company Ege Kimya. Umicore claimed that a retired engineer had misappropriated confidential information in relation to a polymer paint dryer. The court of appeal dismissed the action. It decided that Umicore failed to prove that E.C., the senior scientist at Umicore before his retirement, had in fact used confidential information.
Evidence seems to have been a key factor in this case. To obtain it, Umicore sought preliminary measures akin to the saisie contrefaçon, a Belgian ex parte procedure that is not available in trade secret matters. Ege Kimya had filed a patent application designating the former Umicore employee as the sole inventor. Umicore alleged that this patent application was an indication that its trade secrets had been illegitimately disclosed to and used by Ege Kimya. On the ex parte action by Umicore, the Bruges enterprise court appointed a court expert to collect and seize relevant documents and files at the residence of E.C. The engineer’s opposition against that order was rejected in the first instance. On 4 April 2016, the Ghent court of appeal overturned that decision. It revoked the ex parte order, explaining inter alia that it considered that the action by Umicore was a disproportionate fishing expedition. On 22 May 2017, the Cour de Cassation rejected Umicore’s point-of-law appeal against that decision. The result of this was that Umicore was not entitled to rely on the expert’s findings in further proceedings. The main action judgment mentions that, in parallel to the trade secret action, Umicore has initiated entitlement proceedings in relation to the Ege Kimya patent application before the Brussels enterprise court. It seems that the final outcome of this dispute is not yet cut-and-dried.
Trade marks – second hand design furniture - exhaustion – On 15 November 2018, the President of the Brussels enterprise court decided that Funky Vintage infringed Roset SAS’s trade marks in relation to the iconic Togo, a sofa designed by Michel Ducaroy. Funky Vintage sells refurbished Togo sofas. On its website, it explains that it can replace everything from the foam base, the upholstery to even the zipper. The fabrics and leather used for reupholstering the sofas are not Roset products. Funky Vintage further clarifies that it recovers the original Ligne Roset label and stitches it on the correct place on the new upholstery.
Roset sought an injunction. Funky Vintage’s defence was that Roset’s trade marks in the products are exhausted in accordance with Article 15.1 of the European Trade Mark Regulation (“EUTMR”). The court did not accept this. It held that Roset had legitimate reasons to oppose further commercialisation in accordance with Article 15.2 EUTMR. An injunction was considered justified because the original condition of the products was changed. Allowing Funky Vintage to use the trade marks would, according to the court, adversely affect their function of guaranteeing product quality.
Interestingly, a month and a half later, a case decided by the Amsterdam court of appeal went the other way. Klaver, a refurbisher of inter alia ‘Charly’ chairs commercialised by Montis, performs services such as rewelding and painting the chair’s frame, as well replacing the upholstery and the seating foam. In its judgment, the Amsterdam court held that commercializing such chairs is not an infringement of Montis’ trade mark. It finds that, where the refurbisher refers to the trade mark, it clearly indicates that the chairs have been refurbished. A subtle but important distinction between the two cases is that unlike Funky Vintage, Klaver does not reaffix the label on the product if the upholstery is replaced. In the Belgian case, the court explained that, even if Funky Vintage indicated in its marketing that the sofas had been refurbished, consumers may still believe that they are original products when the sofas are subsequently resold.
Designs – novelty and individual character : In case T-296/17, the General Court dismissed an application for annulment of an EUIPO Board of Appeal decision between Buck-Chemie and Henkel. Buck sought to invalidate Henkel’s registered Community design (RCD) for toilet detergent balls for lack of novelty and individual character over inter alia an earlier design and photographs of a ball pit. The prior disclosures included 4 balls in an identical colour sequence as the one claimed in the contested RCD.
Design law aficionados may worry about the impact of the judgment in C-361/15 P and C-405/15 P (Group Nivelles) on this type of cases. In Group Nivelles, the Court of Justice held that an earlier design can take away the novelty and/or the individual character “whatever the product in which that earlier design is intended to be incorporated or applied.” In relation to the prior disclosures of the ball pit, the General Court holds that it is well known that these are characterized by a random and unpredictable mix. That disclosure does not affect, according to the Court, the novelty and individual character of the Henkel toilet detergent design, which is considered a single product rather than 4 separate ones. The General Court confirms the Board of Appeal’s decision that the layout and sequence of individual colours in the prior disclosure do not convey the same overall impression (“déjà vu”) as the contested design.
Promotion of medical devices – CE-marking: The Brussels court of appeal confirmed an injunction imposed on Physio Support, a company that commercializes matrasses for pain relief. Its competitor Home Health Products alleged that Physio’s marketing of these products violated the Belgian decree on medical devices. On its website and in advertising sent to physiotherapists, Physio said that its product alleviates chronic back problems and suggested that it is suitable for pain relief.
The court of appeal finds that, because Physio made medical claims in relation to its products, these qualify as medical devices in accordance with Article 1, §2, 1° of the Royal Decree of 18 March 1999. Such products are subject to conformity assessment by a notified body and appropriate CE marking. The certificates of the product at issue only confirmed that it is compliant with Directive 2002/95/EC (restrictions on use of hazardous substances) and Directive 2004/108/EC (electromagnetic compatibility). The court confirms that these do not replace the required conformity assessment procedures for medical devices. Physio submitted that it was not subject to the medical device requirements because it is not the manufacturer of the products. The court rejects that defence because the decree also applies to companies that place products on the market under their own name (as per Article 1.2, f), second paragraph of Directive 93/42/EEC). Nor did the court accept that Physio had only said that the matrasses have a relaxing effect. Although the advertising materials occasionally do say that the product has no healing effect, references to conditions such as arthrosis and fibromyalgia could, according to the court, mislead consumers into believing otherwise.
Trade marks – common sign – Studio 54: On the day of Christmas eve, a judgment of the Antwerp court of appeal ruined the party of LGBT night club Cargo Club. Cargo Club organised disco parties under the names Studio 54, 54 Antwerp and Funky 54. It was faced with an infringement action by Star Events, the organiser of an annual major dance event under the name Studio 54 and the holder of several Benelux trade marks for that name.
Cargo Club filed a counterclaim to revoke the trade marks because they are a customary in established practices of disco events. The court of appeal acknowledges that the name Studio 54 is linked to the seventies and the legendary New York night club. However, it does not accept Cargo Club’s contention that Studio54 has become a generic term for a disco party. Cargo Club raised a subsidiary defence based on lack of legitimate interest for the infringement action. In relation to that defence, the court of appeal notes that Cargo Club “asserts but does not prove that Star Group attempts to curtail gay and drag-queen parties, the expressions of their sexuality.” Having found that the trade marks are valid and infringed, the injunction was confirmed.
Non-disclosure agreements –aiding and abetting breach of contract: A judgment issued by the Cour de Cassation on 3 January 2019 indicates that circumventing non-disclosure agreements is not a straightforward matter. Europro, a company commercializing promotional products, had concluded a management agreement with Dacah. The management agreement included a confidentiality clause. Dacah’s only shareholder founded another company, Bold HK. Bold HK then approached a customer of Europro with an offer for promotional products that were ‘identical to last year’ and that would be manufactured by a supplier that had been audited by Europro and the customer. Europro successfully sought an injunction against Bold HK on the basis of its aiding and abetting breach of contract by Dacah. Because the same individual was behind the contracting party Dacah and Bold HK, the latter could not claim that it was unaware of Dacah’s obligations and the confidential nature of the information. The Cour de Cassation dismissed the point-of-law appeal that the injunction imposed was insufficiently precise.
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