IP and the Retail Sector: event review

by Carolina Pina

IP and the Retail Sector was the subject of a conference organized by CLT that took place yesterday at the Holborn Bars, an amazing venue in central London. The event was chaired by the IP guru Jeremy Phillips.

Barrister Jacqueline Reid (11 South Square) started the best way, giving us a clear idea of the characteristics a good trade name should have (such as being distinctive, suggestive, not offensive and having positive connotations), illustrating it with some examples. In order to come up with a good name it is essential to know the relevant market in question and especially the target customers, as some of these characteristics (particularly being offensive or not) are very subjective and vary according to the type of consumer of the brand. Positive connotations also depend on these factors; for example, CostCutter would not have a positive connotation if in a higher quality market. It is equally important to be aware of the consumers’ expectations. A good example of this is the pharmaceutical market, where the consumer is usually expecting more technical trade marks and does not trust simpler ones. Besides, retailers should consider some geographical limitations when deciding on a name, as it may have an offensive meaning in other languages, requiring them to change it when entering specific markets. We were also reminded of the particularities of using your own name, such as what happens when you sell the business? Can you prevent others from using your name? Elizabeth Emanuel did not succeed in the ECJ.[i]

Another topic approached by Jacqueline Reid was shop layouts. Although brand aura is a very actual question, there is not yet an effective way to protect it. Design right might seem obvious but it is not able to protect all the necessary features. While copyright could be an option, considering the definition of “building” (S.4 CDPA 1988) we can conclude that a shop layout is not always a “fixed structured”. So this leaves us with trade marks. The problem is that trade marks are not supposed to protect shop layouts. Anyway, Apple has already successfully registered its shop layouts in the US and is currently waiting for a decision on its application for international registration. The main difficulty here should be the precision requirement from Sieckmann[ii]. For now we will have to wait for more developments on this.

Then it was time for Nigel Parker (Allen & Overy) to talk about turning successful retail business models into money. He focused on Amazon’s Kindle to help us better understand a retail supply chain. Kindle is sold both through different retailers (where Amazon acts as a distributor) and online on Amazon itself. Licensing and securitisation were also discussed, as well as some pros and cons of franchising, which is still the most important model in the retail sector. Franchising implies a collaborative relationship. However, the franchisor very often exerts a strong power on the franchisee, imposing many restrictions.

Next to speak was Robert Cumming (Appleyard Lees), who discussed online retailing. One of the questions raised at this point was the relevance of domain names nowadays, since most of us just type the subject of the research in one of the many search engines available. Hence, companies want to have their name on the first results that the customer has contact with, paying a large amount of money per click just to be on the first page, without any guarantee of success. As Robert Cumming said: “if you’re not on the first page of Google you might as well be on Mars!”. Generally people tend to dislike advertisements, both on TV and online. So, in the search results, although advertisements come on top they are still usually ignored. The concept of “black hat” search engine optimization (SEO) was then considered, by exploring some examples of these unethical techniques to get higher search rankings (e.g. commenting on someone’s blog post addressing to a certain website). To finish, Cumming analysed some case law, the main case here being Interflora v Marks & Spencer[iii], which followed the Google France cases.

Antony Gold (HGF Law LLP) started the afternoon part of the conference with “Specsavers v ASDA”[iv], where all the issues, from the colour to the slogan (“Be a real spec saver at ASDA”), passing through the wordless logo (which was actually never used by itself by Specsavers and is currently waiting to be readmitted to the trade mark register in UK), were covered. The notion of confusion in trade mark infringement and the so called “living dangerously” doctrine (which did not apply in this case because Asda was intending to compare instead of confuse) were other topics approached. Moreover, to make this presentation more practical, Antony provided some extracts from Asda’s marketing campaigns and some lessons from which we can conclude that “even with a brainy judge, litigation is still a gamble”.

Later in the afternoon, Cristopher Stothers (Arnold & Porter (UK) LLP) considered “The importation and sale of third party brands: Issues involving grey goods” from a EU Competition Law perspective, focusing on the perfume industry, as in this industry exclusivity is such an important factor. We analyzed the differences between parallel trade of grey goods and counterfeiting, as these are in fact different realities, although brand owners sometimes like to treat them the same way. Finally Christopher went through some CJEU case law such as L’Oreal v eBay[v], concluding with some advice to brand owners in order to prevent parallel trade. Due diligence is important; in this case confirming the origin of the products and keeping records of all transactions are the most relevant ways to do it.

To finish this CLT Conference, Alexander Carter-Silk (Speechly Bircham LLP) addressed confusion, heuristics and the consumer in a very dynamic way. Carter-Silk explained us the concept of confusion very effectively through the idea of association. When he asked us to think of an airline and the colour red the unanimous answer was immediately Virgin. This is a heuristic trigger (in this case we were educated by the brand) and is exactly what happens when we go to a supermarket and look for a specific product. “How do you prove infringement?” is definitely the million pound question. Very few judgements actually rely on witnesses for this and judges tend not to like surveys as they consider they might have been artificially decided. Carter-Silk suggested that, at the end of the day, judges end up deciding for themselves, based on their own cognitive bias (which we all have) and this can be a problem as they might not be the informed consumer for the case in question. For the future he left us with some advice: have better witnesses, more presentations and show the judge you are actually suffering damage.

Carolina Pina is an LLM (IP) candidate at Queen Mary University of London and Assistant Editor of the Queen Mary Journal of Intellectual Property

[i] Elizabeth Florence Emanuel v Continental Shelf 128 Ltd. (Case C‑259/04)

[ii] Sieckmann v German Patent Office (Case C-273/00)

[iii] Interflora Inc v Marks & Spencer Plc (C-323/09)

[iv] Specsavers International Healthcare Ltd and others v Asda Stores Ltd (Case C-252/12)

[v] L’Oreal v eBay (Case C-324/09)