Sunday, 10 July 2016

IP and Brexit: the Fashion Industry

Jane Lambert

Our IP system, which is ranked by TaylorWessing as one of the best in the world (see The Global Intellectual Property Index) consists of some rights that subsist under national law and others that subsist under EU law. When we eventually leave the EU, those rights that subsist under EU law such as the EU trade mark and the Community design will fall away. I discussed those consequences generally in What Sort of IP Framework do we need after Brexit and what are we likely to get? 3 July 2016. In this article I consider how those changes will affect the British fashion industry which relies on EU trade marks and Community designs more than most. I have chosen this industry because I have conducted seminars on IP and fashion in London and Leeds (see IP and Fashion Law 12 Sept 2015 London IP and Tech, IP and Fashion Seminar - 7 Oct 2015 20 Sept 2015 and Second Course on IP and the Fashion Industry 27 May 2016),

Importance of the British Fashion Industry
Fashion is enormously important to the British economy. According to Fashion International the fashion industry employs 550,000 persons and has a domestic market value of £66 billion which is 6% of the market. About 75% of those jobs are in retailing  the top 5 British fashion businesses being retailers.Nevertheless, 34,000 are employed in clothing manufacturing with a further 5,000 in making footwear. There are a few men's and women's wear, accessories and jewellery manufacturers at the top end of the market that are household names, some of which are British such as Burberry and Church’s, but most items for everyday use are imported mainly from Asia and sold under retailers’ labels. British exports of textiles and clothing amounted to £6.9 billion in 2014 while imports amounted to £24.3 billion 

IP and the Fashion IndustryBranding and design are particularly important to the industry though there are inventions in the textile, garment and footwear manufacturing sectors from time to time such as new fibres and additive manufacturing equipment.

Investment in branding is protected by trade mark registration and the law of passing off. Trade marks may be registered for the UK alone under the Trade Marks Act 1994 or for the whole EU including the UK under the EU Trade Mark Regulation (Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark), Passing off is a common law or judge made doctrine that evolved long before the UK joined the EU. It may be summarized as nobody may lead consumers to believe that his or her goods, services or business as those of another trader.


Design is rather more complicated than branding because design has two meanings in law as it does in everyday speech. One definition provided by art 1 (a) of the Designs Directive (Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs OJ L 289, 28/10/1998 P. 28 - 35 is 
“the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture and/or materials of the product itself and/or its ornamentation.” 
Another is “the shape or configuration (whether internal or external) of the whole or part of an article” (see s.213 (2) of the Copyright, Designs and Patents Act 1988 ("the CDPA"),

Designs that fall in the first definition that are new and have individual character may be registered for the UK alone under the Registered Designs Act 1949 as "registered designs" or for the whole EU including the UK as "registered Community designs" under the Community Design Regulation (Council Regulation  (EC) No 6/2002 of 12 December 2001 on Community designs(OJ EC No L 3 of 5.1.2002, p. 1)). Designs that could be registered as registered or registered Community designs are protected automatically against copying throughout the EU by the Community Design Regulation as "unregistered Community designs."   

Designs falling in the second definition are protected against copying in the UK by unregistered design right under Part III of the CDPA. 

Design right does not protect surface decoration but fabric designs and other surface decoration may also be protected from copying by copyright. Sometimes a fashion item such as an accessory, piece of jewellery or perhaps even a garment may be protected by copyright as a work of artistic craftsmanship. 

There are a number of ways of protecting investment in research and development. New inventions may, of course, be patented under the Patents Act 1977 or the European Patent Convention or they may be kept under wraps as trade secrets in the hope that nobody discovers them by parallel research or reverse engineering. 

There is as yet no such thing as an EU patent but there is an agreement for a single patent for the territories of most of the EU member states including the UK to be known as "the unitary patent" and for a single court to determine disputes over such patents to be known as "the Unified Patent Court". That agreement, known as the UPC Agreement, is open only to member states of the EU.

The trade secrecy of the laws of the EU member states are shortly to be harmonized a directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure ("the Trade Secrets Directive"),

Effect of Brexit
Art 50 (3) of the Treaty on European Union provides:
“The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.”
It follows that all regulations will fall away and that HM government shall no longer be required to implement directives. Statutes and statutory instruments that have been passed to give effect to directives will continue to apply unless and until they are amended or repealed because they were made by or under the authority of Parliament. There is, of course, nothing to stop Parliament from preserving within the UK a right that had been created by a regulation such as a right in an unregistered Community design that was created by the Community Design Directive.

Consequences for Branding
The main change will be that EU trade marks will cease to apply to the UK. Unless HM Government agrees to legislate to grant corresponding British marks to EU trade mark proprietors, those who wish to do business in this country should apply for trade marks in the UK unless they already hold UK registrations that cover their goods or services,.

Proprietors of British marks seeking EU registrations will cease to be entitled to seniority from their British registrations. Similarly, such proprietors will no longer be entitled to rely on their British registrations or earlier rights in the UK to oppose applications by others for EU trade marks. Nor can they rely on sales or other use in the UK to resist revocation applications.

Proprietors of EU trade marks will be unable to seek redress for infringement of their marks from courts in the UK after Brexit as those courts will no longer be EU trade mark courts. Sales in the UK after Brexit shall not count for the purpose of the exhaustion of rights doctrine.

Trade mark licensing, distribution and franchising agreements will have to be reviewed and where necessary amendments should be negotiated.

Consequences for Design
The biggest change upon Brexit will be the disappearance of unregistered Community designs. That is a useful tool for fashion designers and manufacturers as the right arises automatically, extends throughout the EU and can be enforced in the small claims track. HM government may well be pressed by the fashion, toy, novelties, consumer electronics and other industries to create a similar IP right in the UK.

Registered Community designs will cease to apply to the UK after Brexit. Again, the government will be pressed to preserve existing registered Community design protection in the UK in some way either by converting them into registered designs backdating the date of filing to the date of application in Alicante or by some other transitional measure.

After Brexit those seeking registered design protection in the UK in respect of new designs will have to apply to the IPO under the provisions of the Registered Designs Act 1949.

Courts in the UK will cease to entertain actions for the infringement of registered Community designs as they will no longer be Community design courts.

As with trade marks, all licensing, distributions and franchising agreements will have to be reviewed and amended where necessary.

Consequences for ManufacturingIt is possible but by no means certain that the UK will still be in the EU when the UPC agreement comes into effect and the Trade Secrets Directive has to be implemented but, even if it is, the effect of those instruments on manufacturing is likely to be minimal.

Costs ConsequencesThe need for registration of trade marks and designs in both the UK and EU plus the costs of reviewing, renegotiating and redrafting agreements and the possibility of conducting litigation in respect of the same or related matters in more than one jurisdiction are bound to increase the industry’s legal costs significantly. That will be offset to a limited extent by savings of time and money in not having to refer points of EU law to Luxembourg for preliminary rulings under art 267 of the Treaty on the Functioning of the European Union.

Seminar on Brexit
I shall discuss this topic as well as other IP issues arising out of Brexit at a seminar in Liverpool to be organized by Guy Williams Layton on 14 Sept 2016. This seminar is likely to be very popular and places will go very quickly. If you want to attend call me during office hours on 020 7404 5252 or send me a message through my contact form

Monday, 2 May 2016

CIPA's Scottish Meeting

National Galleries of Scotland
Author Finlay McWalter
Source Wikpedia
Creative Commons Licence

Jane Lambert

On 15 April 2016 I was invited to speak to t he Scottish meeting of the Chartered Institute of Patent Attorneys at the Scottish National Gallery in Edinburgh on Preparing for the Unitary Patent and the UPC. I was one of four speakers. The others were:
  • Catriona M Hammer who spoke on Portfolio Strategy for Start-Ups, Spin-Outs and Other Small Businesses;
  • David Bloom of Safeguard IP who spoke on Intellectual Property Insurance Solutions; and 
  • Eleanor Wade of the Intellectual Property Office whose talk was entitled Updates form IPO.
Over 50 patent attorneys and other IP professionals attended the meeting which was chaired by Andrea Brewster.

I enjoyed all the presentations but I found Catriona's particularly interesting as I specialize in advising and representing start-ups and other SME. She has spent most of her career in industry and describes herself on Linkedin as an "IP Consultant, focusing on IP Strategy, portfolio reviews, IP transactions and contentious matters" rather than as a patent attorney even though she is the immediate past president of the CIPA.

Catriona explained that every strategy had to complement the company's business plan and take account of the needs of investors who look for:
  • a rational strategy for utilizing registered and unregistered intellectual property rights;
  • a clear chain of title to each of those rights; and 
  • freedom to operate.
Every business has to be selective as to what it seeks to protect. Filings that are no longer of interest to the business should be dropped. Protection should be appropriate for the product and market and should cover not just products already on the market but also those being developed. All forms of legal protection should be considered - not just patents - and systems should be devised for identifying potential IP assets and protecting trade secrets. Businesses should be aware of what they own and what is licensed. Contracts with universities and other partners should make clear who would be entitled to patent any inventions that may be developed as should contracts of employment with key staff. Businesses should also look out for potential conflicts with third parties and deal with them before disputes arise.

There was a lot of discussion as to whether patent attorneys were always the right people to carry out those assessments as they will not necessarily be conversant with every aspect of a client's business. I raised the example of a painter/decorator who spent his life savings on patents and design registrations around the world for an invention that was unlikely ever to be worked. Catriona replied that sort of problem was commonplace 10 years ago but most patent attorneys would be more cautious in advising such clients nowadays.

David Bloom introduced himself as a patent solicitor with over 15 years experience of advising clients on registration, exploitation and protection of IP. He had set up Safeguard IP in 2014 as the UK's only dedicated IP insurance broker. He started that business because the volume of IP litigation was increasing, dispute resolution remained hugely expensive even with the Intellectual Property Enterprise Court and IP claims were difficult to fund. The IPO had issued guidance on the benefits of IP insurance in Intellectual Property Insurance on 22 Jan 2016. He also referred to Andrew Reith's post IP insurance: the heavyweight in your corner of 28 Jan 2016 to the IPO blog. David took the audience through the types of policy that are available, the losses that they cover, the cost of such cover which he estimated to be between 1 and 3% of the sum insured not counting excesses and co-insurance, the usual exclusions and benefits. He concluded that the IP insurance market is developing rapidly and availability is improving and that before-the-event cover provides the best method for transferring the significant cost risk.

In the Q and A that followed David's presentation, Andrea mentioned the report on insurance that the CIPA had published and which could be downloaded from its website. I have written a short article about that report in IP Insurance: CIPA's Paper 1 May 2016 NIPC Inventors Club blog.

There was a short tea break after which I was invited to speak. I will upload my slides and notes to Slideshare shortly and I have written extensively on the unitary patent and the Unified Patent Court in Preparing for the Unified Patent Court 23 Jan 2016 NIPC Blog and the articles mentioned in the bibliography at the end of my article. The delegates' packs included a printout of an interview that I gave to the Kluwer Patent Blog entitled ‘A Brexit will not necessarily delay the start of the Unitary Patent system’ 5 April 2016.

Eleanor's presentation covered a lot of topics.  Starting with backlogs she said that the IPO was recruiting and training more examiners who should make a difference. Turning to the IPO's space on the British government's website she mentioned the new Manual of Patent Practice and on-line design registration faciity that are already available and the "View Patent Cases" facility which was being trialled. She then took us on a brief tour of the IPO's space on the government website and showed how it could be searched and integrated conveniently with other services. Finally, she guided us through the new Manual, design registration and View Patent Cases facilities.

Drinks and some exceptionally tasty and interesting nibbles were served outside the auditorium. I met a lot of interesting attorneys and other IP professionals some of whom offered some very interesting services.  One of these was Lean IP operated by Dr Jim Adams of Glasgow. I have been interested in the ideas of Eric Ries and his book The Lean Startup for some time and have blogged about them in Lean Startup 6 May 2012. Jim's firm is a lean start-up and he applies Ries's ideas in the services that he offers to his clients.

Ar various times during the meeting Andrea mentioned the IP Inclusive initiative which aims to improve equality, diversity and inclusivity in IP. It has a simple charter which sets out practices that I am glad to say my chambers have always followed and although I will make it my business to see that those principles are applied in IP I can call on the support of our very able chambers equalities and diversity officer to see that they are applied generally. I have just signed up to the charter and I will encourage the other members of my set who practise IP law to do the same. I am very glad to see that 3 New Square and 11 South Square as well as the CIPA, ITMA and many patent and trade mark attorneys and specialist law firms have already signed.  

At the very end of the meeting Andrea said that she had noticed that I tweet occasionally about ballet and told me that she had trained to a very high level and that she was actually qualified to teach ballet.  I told her that I had started to attend classes at Northern Ballet Academy in September 2013 (see Realizing a Dream 12 Sept 2013 Terpsichore) and that I still do class whenever I can.  I mentioned that I knew of one patent attorney, Debbie Slater, and one IP solicitor, Helen Newman, who share our interest in dance. A few days after the Edinburgh meeting I met Sir Peter Wright in Budapest (see My Trip to Hungary 21 April 2016 Terpsichore). In our conversation I explained how ballet facilitates nimbleness of mind as well as in body which helps me do my job as an IP barrister better. A few days after that it was World Intellectual Property Day which was an opportunity to point out the overlap between IP and dance (see Happy World Intellectual Property Day 26 April 2016).

Sunday, 3 April 2016

Why every business plan should take account of intellectual property

Jane :Lambert

In Basic Facts About Trademarks: What Every Small Business Should Know Now, Not Later, one of the best video introductions to trade mark law I know in any country, the presenter Mark Trademan (yes that really does appear to be his surname) of the US Patent and Trademark Office Trademark Information Unit asked an audience of entrepreneurs and small business owners how many of them had a business plan. A forest of hands shot up. "How many of you with business plans have a trade mark component?" asked Mr Trademan. Silence. "OK I was afraid of that."

The response would have been no different had Mr Trademan given his presentation here even though our own Intellectual Property Office warn in Before you apply for a patent on the British government website that "it’s pointless patenting an invention unless you have a proper plan for making money from it and can defend it against copying."

Everybody knows that a business plan is
"the vital component for any business, providing potential lenders and investors with a roadmap of how your business will operate and how you will go about achieving your goals" (see What is a business plan? on the British Library's Business and IP Centre website).
So why should IP be integrated into your business plan? The World Intellectual Property Organization which is the United Nations specialist agency for intellectual property provides the answer in Practical IP Issues in Developing a Business Plan. Every business no matter how small nor how simple owns some kind of intellectual asset that is vital to its trade. It may simply be the name or reputation of its owner in the case of a retailer or a tried and trusted recipe for making sponge cake in the case of a tea shop or sandwich bar but if it attracts customers to the business it is an asset which needs protecting, managing and exploiting.

Conversely, a business may need to use the assets of somebody else's assets. A photo on the internet perhaps for the company website or maybe some software for the computer. It needs to plan how it is to acquire the right to use or even buy that asset and how much it is prepared to spend.  All of these matters are at least as important to the start-up as the lease to an office or the purchase of a delivery van.

So why don't more businesses take account of these matters when planning their business. Probably because nobody has told them to do so. Not every accountant or solicitor is IP savvy and certainly not every business adviser.

So what to do?  I'll be giving some talks on the topic on-line and in the regions.  I shall also be publishing information about it here and in my regional blogs. In the meantime you could read the WIPO publication and the Fact Sheet Intellectual Property and Business Plans from the European IPR Help Desk.

If you want to discuss this or any other topic on IP strategy give me a ring during office hours on 020 7404 5252 or send me a message through my contact form.

Friday, 18 March 2016

Animated Advice

Embedded pursuant to the standard YouTube Licence

Jane Lambert

The Intellectual Property Office has recently uploaded a series of videos to its YouTube channel which are very short but also very useful. The primer is IP Basics: What is Intellectual Property and it is followed by films on copyrights. designs, patents and trade marks. Although they have been uploaded for some time they do not seem to have been watched by many people which is a pity because they are a lot better than the advice one can expect from most invention promotion companies or even some lawyers and, of course, they are free. The above video on IP BASICS: Is Intellectual Property important to my business? has received only 970 views since the 27 Nov 2015 and a large number of those will have have been made by me. I hope this article may attract more viewers for these films.

Good though the IPO animations are there are some that have been produced by other organizations that I like even better such as "Patents" by the WIPO and Indecopi (the Peruvian intellectual property office) with funding from South Korea.

There are some animations that could do with improvement.  The video on enforcement IP BASICS: Someone is using my IP is a case in point.  It correctly recommends taking legal advice promptly but goes on to suggest "an IP lawyer or solicitor". It would have been better to have specified "a barrister or solicitor specializing in IP or a patent or trade mark agent or attorney." Not every solicitor is comfortable or competent to advice on IP and patent and trade mark agents do not usually describe themselves as "IP lawyers".

It implies that "litigation", "mediation" or "settlement out of court" as alternatives which they are not. Negotiation and mediation succeed only because of the threat of litigation. It continues that most types of IP cases are suitable for mediation which is only partially true because mediation needs consent and a measure of co-operation from the opposing parties. The film fails to mention that a party that requires an interim injunction has to apply promptly and while it mentions the Intellectual Property Enterprise Court it says nothing about that court's small claims track.

However, there is only so much that can be said in a couple of minutes and it may be that further films on those subjects are planned. I shall certainly be incorporating these materials into my talks and writings and I hope that they will contribute to making IP more accessible to the general public. PS. The CIPA has just tweeted Good point folks!

Friday, 4 March 2016

Dispute Avoidance Planning and Dispute Management

Jane Lambert

Most IP disputes arise out of conflicts between competitors and competition is what businesses do. In fact, businesses are compelled to compete by law. Disputes will therefore happen unless precautions are taken to avoid them. The risk of disputes can never be eliminated entirely because folk miscalculate and act emotionally but if a dispute cannot be avoided it can at least be managed.

How Disputes arise and what can be done to prevent them

Disputes arise because of uncertainty as to the existence, extent or nature of an IPR or because one party believes that the other lacks the means or will to enforce its rights or defend its interests. In order to minimize the first risk businesses should ensure that they have obtained appropriate legal protection for their most revenue generating intellectual assets. To minimize the second risk they should ensure that they had sufficient funding through insurance or otherwise to enforce their rights or defend their interests. Those arrangements should be reviewed periodically (at least once a year in most cases) to ensure that they are adequate.

No Need to patent every Invention

That does not mean patenting everything in sight. It costs a tidy sum simply to acquire and maintain just a UK patent alone and a great deal more to obtain patent protection abroad. Few businesses can afford that measure of protection or even need it. There is a lot of varied data on the Invention Success Rates | Odds of Inventor Success page of the Invention Statistics | Invention Data website on how many patents are actually worked but none of the sources quoted on that page suggest that more than a small proportion of the inventions for which patents have been granted make serious money for their inventors. A more promising approach is to identify the income generating assets for which legal protection is appropriate and ensure that the optimum legal protection is in place in the relevant market.

Appropriate Legal Protection

That may be a patent or even a family of patents in different patent offices for the same invention but in some cases it may be the brand that attracts customers to a business for which case a trade mark is more appropriate. Moreover, even of it is technology that provides a competitive edge it can be protected in different ways. Trade secret protection perhaps or in the case of computer software copyright in the source code.

Identifying Intellectual Assets

The exercise of identifying a business's principal income generating assets and considering how to protect them should involve patent and/or trade mark attorneys but it is much too important to leave to them alone. ideally, it should be carried out by a multidisciplinary team of professionals and company management.

Flagging up other People's IP

If carried out correctly the exercise should flag up possibly areas of conflict over competitors' IP rights giving business owners the chance to plan for dealing with such conflicts as may arise.

Dispute Resolution Provisions

If a dispute does arise there are various ways in which it can be resolved. The default option is the court system but litigation is expensive and takes place in public. There are alternatives such as arbitration, expert determination and of course mediation and direct negotiation. If you want to use any of those alternatives to the court you will need the co-operation  of the other side which is a lot easier to obtain before a dispute arises than afterwards. Review the dispute resolution provisions of your licences and other agreements and insert arbitration or other dispute resolution clauses if appropriate.

Dispute Planning

Litigation can be planned for and managed just like a power outage, IT failure or any other disaster.  Make sure that you have your teams of outside legal advisers in place and that you and your staff know what to do. Information and documents are supposed to be exchanged and parties are expected to attempt to resolve a dispute without recourse to litigation if at all possible. There are also some definite no-noes such as threatening litigation which can result in  you or your company being sued for groundless threats.


IP litigation is expensive anywhere, particularly expensive in common law jurisdictions like England and Wales. Unless a business can fund its own and potentially its adversary's legal fees comfortably out of its earnings it should consider IP insurance or some other form of funding. I have written quite a lot of articles on that topic over the years in this blog and elsewhere.  A good starting point is IP Insurance Five Years On 23 Oct 2010 NIPC Inventors Club.

Periodic Reviews

The nature and frequency of these reviews will depend on the nature and size of your intellectual asset portfolio but for most businesses it should take place at least once a year.

Further Information

If you want to discuss this article or dispute avoidance planning and management in general, call me on 020 7404 5252 during office hours or use my contact form.

Thursday, 3 December 2015

IP Arbitration

Jane Lambert

Earlier this year I discussed mediation as a method of resolving IP disputes (see IP Mediation 22 May 2015). Mediation is a form of alternative dispute resolution ("ADR"), that is to say resolving a disputes without going to court.  ADR offers a number of advantages which the World Intellectual Property Organization ("WIPO") listed in ADR Advantages. As I noted in my previous article "the courts and the Intellectual Property Office ("IPO") hearing officers expect parties to consider mediation or some other form of alternative dispute resolution before issuing proceedings" in every case.

In that article I described mediation as "chaired" or "facilitated" negotiation. Like all forms of negotiation it works through consent. However. there are some disputes that can never be resolved in this way.  They require an adjudication, that is to say a decision based on a finding of fact and law.  Litigation is one form of adjudication and arbitration is another.  An arbitration can resemble a court case with counsel examining witnesses on oath and making detailed submissions on the law but differs from litigation in that the person who decides the dispute ("the arbitrator") and the procedure by which he or she reaches his or her decision are chosen by the parties. Often the arbitration takes place behind closed doors and the decision is made available only to the parties.  Further information on arbitration can be gleaned from the WIPO's arbitration index.

Arbitration can take place only if the parties agree to dispose of their dispute in this way.  Such an agreement can be made either before a dispute arises or afterwards. The WIPO suggests the following dispute resolution clause for a licence or other commercial agreement:
"Any dispute, controversy or claim arising under, out of or relating to this contract and any subsequent amendments of this contract, including, without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual claims, shall be referred to and finally determined by arbitration in accordance with the WIPO Arbitration Rules. The arbitral tribunal shall consist of [a sole arbitrator][three arbitrators]. The place of arbitration shall be [specify place]. The language to be used in the arbitral proceedings shall be [specify language]. The dispute, controversy or claim shall be decided in accordance with the law of [specify jurisdiction]."
If the parties wish to refer an existing dispute to arbitration where there is no arbitration clause, the WIPO suggests the following form of words:
"We, the undersigned parties, hereby agree that the following dispute shall be referred to and finally determined by arbitration in accordance with the WIPO Arbitration Rules:
[brief description of the dispute]
The arbitral tribunal shall consist of [a sole arbitrator][three arbitrators]. The place of arbitration shall be [specify place]. The language to be used in the arbitral proceedings shall be [specify language]. The dispute shall be decided in accordance with the law of [specify jurisdiction]."
There are, of course, other arbitration rules for parties to choose.

Although most intellectual property disputes could be resolved by arbitration very few actually are in the United Kingdom at any rate. There are a number of reasons for that.  In Why Arbitration in Intellectual Property? the WIPO lists a number of features of litigation such as lack of judicial expertise and long drawn out procedures that simply do not apply to England and Wales. We have specialist Patents and Enterprise Court judges who are equipped with powers to ensure the just and relatively swift disposal of cases. However, even in the UK there are cases such as those where there is an arbitration clause or an international element where arbitration is the only or preferred option. The increasing cost of bringing an action in the civil courts may also make arbitration more attractive (see How to enforce your IP claim after court fees sky rocket 7 March 2015 NIPC Inventors' Club).

Should anyone wish to refer a dispute to arbitration we have a team of arbitrators in 4-5 Gray's Inn Square of which I am a member and I specialize in the resolution of IP and technology disputes. I sit on the WIPO list of neutrals together with my colleague Joseph Dalby SC of the Irish Bar. If anyone wishes to discuss this article or arbitration in general call me on 020 7404 5252 during office hours or contact me through my message form.

Sunday, 25 October 2015

How to challenge a UDRP Decision

WIPO head office, Geneva
Author Melatron
Reproduced under a Creative Commons licence
Source Wikipedia

Jane Lambert

In my experience as a domain name dispute resolution panellist for the WIPO as well as a member of the Bar who has advised and settled pleadings for both complainants and respondents, most domain name disputes are straightforward. Moreover, most complaints are decided in favour of the complainant.  Of all the cases that have been referred to WIPO since 1999, some 21,399 or nearly 86.0% have resulted in a transfer to the complainant and 407 or 1.6% in a cancellation. A complaint has been denied in only 3,086 cases making 12.4% of the total (see Case Outcome (Consolidated): All Years on the WIPO website).

Those figures are hardly surprising as it is rare for a complaint to be defended and even rarer for a response to disclose any merit. It can therefore be said with some confidence that most panellists' decisions are likely to be right. Consequently, those decisions will not often be challenged but every so often a party is aggrieved at a decision and wants to take it further. There is an appeals procedure in Nominet's Dispute Resolution Service Policy for decisions in respect of ".uk" domains but not in ICANN's Uniform Domain Name Dispute Resolution Policy ("UDRP") for generic top level domain names such as those ending in ".com", ".org" or ".info". What happens if you or your client want to challenge a decision by a panellist appointed by the WIPO, the Czech Arbitration Court or any of ICANN's other domain name dispute resolution service providers?

The first point to remember is that the UDRP is a form of alternative dispute resolution but not full blown arbitration and therefore does not seek to oust the jurisdiction of the courts. My colleague David Bernstein of  Debevoise & Plimpton LLP in New York City once characterized the procedure pithily as an interim custody arrangement for domain names. Paragraph 4 (k) of the UDRP states:
"The mandatory administrative proceeding requirements set forth in Paragraph 4 shall not prevent either you or the complainant from submitting the dispute to a court of competent jurisdiction for independent resolution before such mandatory administrative proceeding is commenced or after such proceeding is concluded."
As a condition for filing a complaint, paragraph 3 (b) (xiii) of the UDRP Rules requires complainants to submit with respect to any challenges to the jurisdiction of the courts of the country in which the registrar of the domain name or the respondent is domiciled.

The second point is that challenges have to be made very promptly. Paragraph 4 (k) of the UDRP provides:
"If an Administrative Panel decides that your domain name registration should be canceled or transferred, we will wait ten (10) business days (as observed in the location of our principal office) after we are informed by the applicable Provider of the Administrative Panel's decision before implementing that decision."
"We", in this context, means the registrar.  The registrar is bound to implement a panellist's decision unless it receives from the respondent during those business days official documentation (such as a copy of a complaint, file-stamped by the clerk of the court) that the respondent has commenced proceedings against the complainant in a jurisdiction to which the complainant has submitted under paragraph 3 (b) (xiii) of the Rules. If the registrar receives such documentation within those 10 business days it will not implement the panellist's decision. Indeed, it will take no further action, until it receives satisfactory evidence of:
(i)  a resolution between the parties;
(ii) dismissal or withdrawal of the law suit
(iii) an order dismissing the law suit or finding that the respondent does not have the right to continue to use the domain name.
If the complainant agrees to submit to the jurisdiction of the English courts a challenge will usually be brought in the Chancery Division of the High Court of Justice, the Intellectual Property Enterprise Court ("IPEC") or a county court with a Chancery District Registry attached (see CPR 63.13 and paragraph 16 of the Part 63 Practice Direction). As IPEC including its small claims track is part of the Chancery Division there seems to be no reason in principle why a challenge should not be launched out of that court though the claimant might have difficulty in obtaining leave to serve the claim form outside the jurisdiction or in resisting an application to transfer the case to the multitrack.

The grounds upon which a UDRP decision may be challenged will vary. The WIPO lists a Selection of UDRP-related Court Cases on its website.  In Marchex Sales Inc. v. Tecnologia Barcaria S.A. (unreported), the most recent case on the list, the US District Court for the Eastern Division of Virginia, injuncted the registrar from transferring the disputed domain name to the defendant's bank which had been ordered by the majority of a three member panel in Case No. D2014-0834 Tecnologia Bancaria S.A. v. Marchex Sales Inc 24 Sept 2014 in what appears to have been a default judgment. Much the same seems to have happened in Walter v Ville de Paris 14 Sept 2012 (unreported) in respect of Case No. D2009-1278 Ville de Paris v. Jeff Walter 19 Nov 2009. However, challengers are not always successful as Patel v Endo Pharmaceuticals Inc, [2006] EWHC 3461 shows.  Often the case will turn on the construction of the registration agreement and sometimes on the validity of the trade mark.  Those seeking to challenge a domain name decision may also be able to take advantage of s.21 of the Trade Marks Act 1994 as a small English computer company did when threatened by a mighty US multinational in Prince Plc v Prince Sports Group Inc. [1998] FSR 21.

Should anyone wish to discuss this article or domain name disputes generally, he or she should call me on +44 (0)20 7404 5252 during office hours, or send me a message through my contact form.