28 Oct
2014

Recent developments and rulings in IP law and practice

This chapter looks at some of the key developments in Norwegian IP law over recent months.

IP enforcement rules strengthened

The total number of IP infringement cases in Norway has always been relatively low. One likely reason for this is that the damages awarded in cases such have traditionally been small and in many cases have not covered the actual loss of the rights holder.

Norway has now taken steps to improve the situation by adopting legislative amendments to strengthen the enforcement of IP rights, and the provisions on the calculation of damages represent the most fundamental change in this regard. The amendments apply to all IP rights, with the exception of copyright.

Norway is not an EU member state and therefore is not obliged to implement the EU IP Rights Enforcement Directive (2004/48/EC). However, the recent changes will bring Norwegian law closer into line with that of the European Union, although the systems are still not identical.

Calculation of damages

The legislative changes that are likely to have the greatest impact on the protection of IP rights are those to the rules for damages calculation. Traditionally, the calculation of damages for IP rights infringement has been uncertain and has often resulted in relatively small damages awards. The rules for calculation have now been standardised for all types of right and will strengthen the right to claim compensation and damages.

For intentional or negligent infringement, a rights holder can claim compensation and damages based on the most favourable of the following three grounds:

  • compensation equivalent to a reasonable licence fee or royalty for the infringement, together with compensation for any economic loss resulting from the infringement that would not have occurred had a licence been awarded;
  • an award of damages equivalent to the economic loss suffered by the rights holder as a result of the infringement; or
  • compensation at least equivalent to the profits made by the infringer.

Alternatively, if the infringer acted intentionally or with gross negligence, the rights holder may claim damages of twice the amount of a reasonable licensing fee or royalty.

The rules concerning the calculation of damages also cover infringements of the provisions of the Marketing Control Act dealing with product lookalikes, trade secrets and technical aids (with the exception of the section providing for twice the amount of a reasonable fee).

Increased criminal penalties

IP infringement has long been punishable in Norway. However, with the exception of the infringement of trademarks and integrated circuit rights in certain aggravating circumstances, the maximum prison sentence was only three months, resulting in few charges being brought against infringers. In an attempt to improve the situation, the maximum sentence for infringement has now been increased to imprisonment for up to one year, or up to three years in aggravated cases.

Improved preventive measures

The option to seek a prohibitive judgment is now available for all types of infringement. The same applies to the option to order preventive measures (eg, removal and destruction of infringing goods and the materials and tools used to create them), and the right to publish information about judgments at the infringer’s cost.

Right to information

The new provisions also ensure that rights holders will have access to more information than before, meaning that anyone who has been involved in the infringement may be ordered to provide information about the origin and distribution systems, or network of infringing or allegedly infringing products. These rules will make it easier for rights holders to identify and pursue infringers, and will be particularly important for the detection and prosecution of various elements involved in the comprehensive and systematic infringement of rights. Information may be required in connection with an infringement suit, as well as in separate cases independent of such proceedings.

Exclusive jurisdiction

Previously, the Oslo District Court had exclusive jurisdiction in invalidity cases concerning patents, registered trademarks, designs and plant breeders’ rights. However, only cases concerning infringement (ie, cases where the defendant had not challenged the validity of the IP right) were heard by the ordinary district courts. The recent amendments ensure that the Oslo District Court will now have exclusive jurisdiction in all cases concerning registrable IP rights. However, this will not affect preliminary injunction actions.

Preliminary injunctions and customs control

Customs can now detain goods suspected of infringing IP rights for 10 days, extended from five days. The provisions on the detention of goods also include certain violations of rights under Sections 25, 26 and 30 of the Marketing Control Act.

In cases where an injunction has been granted, the goods will be detained according to the injunction. The rights holder is granted a six-week period from notification of detention to settle the matter amicably or initiate court proceedings.The court may grant injunctions even if the recipient or his or her representative is unknown. Preliminary injunctions are valid for 12 months and may be renewed.

Comment

Effective enforcement measures are crucial in order to secure strong protection of IP rights and the recent changes will give rights holders a greater incentive to take action. However, it remains to be seen whether litigation activity will increase as a result of the new legislation, or whether the intended preventive effect will lead to a decrease in IP infringement.

Opt-out on black-and-white trademarks

On April 15 2014 the Office for Harmonisation in the Internal Market issued the Common Communication on the Common Practice of the Scope of the Protection of Black-and-White Marks in order to harmonise the different approaches of national offices to the scope of protection given to marks registered in black and white. Under the new common practice almost all EU offices will apply the same rule: trademarks filed solely in black and white (or greyscale) will be considered to be identical to a mark in colour only if the colour differences are insignificant. Further, the use of a mark in colour will support a registration for a black-and-white trademark only if the colour does not alter the “distinctive character” of the mark.

However, Norway (along with Denmark and Sweden) has opted out of the common practice as far as identity is concerned, as national laws have established the rule that black and white covers all colours. This means that registered trademarks in black and white will have a broader scope of protection in Norway than in the European Union.

Personal import of prescription drugs via shipments prohibited

Since July 1 2014 prescription medicinal products for personal use can no longer be imported into Norway via shipments (eg, mail order, online shopping), and illegal imports may be seized and destroyed by Customs.

Previously, to a certain extent, personal imports of prescription drugs via shipments were allowed from countries within the European Union and European Economic Area, but following the recent amendments all personal imports are now prohibited.

The new legislation does not concern imports brought into Norway in person.

Google AdWords and good business practice

The Norwegian Committee of Unfair Competition has found that the purchase and use of a competitor’s trademark as a Google AdWord is a breach of good business practice under the Marketing Control Act.

Committee of Unfair Competition

The Committee of Unfair Competition acts as an arbitration board and issues advisory opinions in cases where there has been a breach of the Marketing Control Act. The committee cannot instruct a party to take action or to cease activity; however, most businesses will follow the panel’s recommendations and stop the infringing activity. The committee’s decision often carries weight if a case proceeds to a regular court action.

The committee is not entitled to award legal costs or damages. The main advantage of the committee is that the proceedings are in writing, meaning that they are quicker and less costly than judicial proceedings.

Unfair competition standard

In several cases the committee has ruled on the general unfair competition standard (Section 25 of the Marketing Control Act), which is applicable when, even in the absence of a risk of confusion, an advertiser has made use of a competitor’s rights. The committee’s recent decision regarding the use of trademarks as AdWords may also be viewed as affirmation that the Marketing Control Act applies as an independent legal basis for trademark-related claims. However, the committee emphasised that it is not in a position to consider whether the purchase and use of a trademark as an AdWord constitutes use of a trademark according to the Trademark Act; rather, its jurisdiction entitles it only to determine whether the common practice of purchasing a competitor’s trademark as an AdWord is in line with good practice under the Marketing Control Act.

By emphasising this distinction, the committee differentiated this case from previous European Court of Justice decisions on AdWords related to the interpretation of the EU Trademark Directive and the EU E-commerce Directive (Joined Cases C-236/08, C-237/08 and 238/08 and Case C-323/09). The committee further emphasised that the Marketing Control Act and the legislation concerning unfair competition are not harmonised within the European Union and European Economic Area.

Teppeabo AS v Teppeland AS

The parties in this case were competitors in the home furniture market. Teppeland AS purchased and used the trademark TEPPEABO as a Google AdWord. Teppeabo AS claimed that this action and the use of its trademark as an AdWord breached good business practice under Section 25 of the Marketing Control Act. Teppeabo further claimed that the use of its trademark as an AdWord breached Section 30 of the act, which prohibits the use of protected trademarks in a way that is likely to cause confusion on the market. Teppeabo also claimed that the use constituted misleading advertising according to Section 26.

The committee found that the use of TEPPEABO as an AdWord did not constitute misleading advertising; nor was it likely to cause confusion. However, it did find that the use of the claimant’s established trademark as a “hidden doorway” for network traffic to Teppeland’s website was unreasonable use of Teppeabo’s efforts and results, and fell within the scope of Section 25 of the Marketing Control Act.

The committee stressed that the goodwill of a trademark, which is a result of the trademark owner’s marketing efforts, is what first causes an internet user to use the term as a search term. Therefore, exploitation of this goodwill should not be allowed unless the trademark owner has consented to such use or is given reasonable compensation. Thus, Teppeland’s unauthorised use took unfair advantage of Teppeabo’s reputation and efforts, and was considered to breach good business practice.

The committee’s decisions are not legally binding, and in order to determine the prevailing law this case or similar cases must be tried before the ordinary courts. However, the committee’s decision was well reasoned and should carry weight in a later court case.

Is ALFRED NOBEL too noble for beverages?

The IP Appeal Board issued a decision relating to a trademark registration for the mark ALFRED NOBEL in relation to “spring water, mineral water and drinking water” in Class 32. The Nobel Foundation had filed an invalidity claim against the ALFRED NOBEL registration on the grounds that the use of the mark ALFRED NOBEL for goods in Class 32 would deceive the public into believing that purchasing the goods supported peacekeeping or charity work.

The Nobel Foundation claimed that the applicant was trying to take unfair advantage of its efforts, achievements and activities in relation to the legacy of Alfred Nobel. Referring to UNICEF’s sales of drinking water and Fairtrade labelling, it claimed that for the consumer, it would not appear unlikely that the Nobel Foundation might engage in activities beyond awarding prizes. Consequently, consumers could be deceived into believing that by buying ALFRED NOBEL beverages, they were supporting the Nobel Foundation’s charity and peacekeeping work.

The applicant claimed that the statutory provision, similar to Article 3(1)(g) of the Trademark Directive, protects the general public and not commercial competitors’ interests in a name.

The Norwegian Industrial Property Office (NIPO) rejected the invalidity claim by finding that the statutory provision refers only to objective qualities of the goods (eg, the nature, quality or geographical origin), and not to subjective associations such as an incorrect reference to underlying support of peacekeeping work or charity purposes. Further, NIPO found that the Nobel Foundation had failed to prove that the average consumer would associate the mark ALRFED NOBEL with charity or peacekeeping work.

The IP Appeal Board stated that NIPO was incorrect in finding that only the objective qualities of goods are relevant when considering whether a trademark is deceptive. However, the board also emphasised that misleading associations referring to the commercial origin of the goods fall outside the scope of the relevant statutory provision. Instead, the decisive criterion is whether the public, after having been exposed to the trademark, have been deceived, or are at sufficient risk of being deceived, with regard to what they are actually purchasing.

The board concluded that the Nobel Foundation had not sufficiently documented that it was known for anything outside of its prize-awarding activities, and that the evidence filed in support of this claim was insufficient to prove that the public knew that Alfred Nobel or the Nobel Foundation was engaged in charity or peacekeeping work in general.

Further, the board specified that in accordance with current legislation, the ‘first to file’ principle applies to the registration of historical persons’ names as trademarks. It is not necessary for the first applicant to file to document an affiliation to the deceased or the deceased’s name (eg, by way of consent to registration of the name as a trademark for certain goods or services).

Therefore, the board concluded that the mark ALFRED NOBEL could not be regarded as deceptive to the public in regard to the nature or quality of the goods.

This decision is important as it emphasises the first to file principle that underlies Norwegian trademark law. However, the finding that the deception criterion could include considerations beyond mere objective qualities of the goods may bring the statutory provision closer to consideration of the risk of confusion between trademarks and commercial origins, or fraudulent acts. Whether this is the intent behind the statutory provision is uncertain; however, it will be interesting to see how far claims of deceptive filings may be stretched.

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Bryn Aarflot AS

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PO Box 449 Sentrum

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Norway

Tel +47 4690 30 00

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Web http://[email protected]ww.baa.no

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Kristine S Snyder

Attorney at law

[email protected]

Kristine Snyder has strong expertise in managing, protecting and enforcing IP rights, including trademarks, designs and copyright, domain name acquisition and transfer, as well as competition law.

She has particular experience in trademark portfolio management and trademark dispute resolution, including developing trademark strategies, providing availability and infringement opinions, carrying out trademark prosecutions and supervising external trademark counsel and trademark enforcement actions, as well as in negotiations, licensing, settlement agreements and litigation.

She has successfully managed effective pre-trial, arbitration, mediation and trial strategies to oversee case-handling and settlement negotiations for different IP matters, and has extensive case and litigation experience in the field of unfair competition in regard to the Marketing Control Act.

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Celine Varmann Jørgensen

Partner

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Celine Varmann Jørgensen graduated with a law degree from the University of Oslo, with an IP specialisation from the University of Copenhagen. She also holds an LLM in information technology and communications law from the London School of Economics and Political Science. She joined Bryn Aarflot in 2005, and has extensive experience in all aspect of IP rights prosecution and enforcement, including design and trademark counselling, filing and prosecution, opposition and infringement matters. Further, Ms Varmann Jørgensen has extensive experience in anti-counterfeiting and customs matters. Her clients range from small Norwegian businesses to large Norwegian and international corporations within several industries.