i guess it’s gucci?

Hmmm....

Two big names in fashion brands are having a slugging match in the courts - Gucci, the maker of expensive upmarket handbags is alleging trademark infringement by Guess, the maker of less-expensive though not really down-market handbags. Gucci is alleging infringement of a whole range of their design marks, including a green and red stripe design, a square G, the designer’s name in flowing script and a diamond pattern with repeating interlocking Gs. They’re asking for US$124 million in damages. If that seems like a lot of handbags, it is. Gucci alleges that 1,495 Guess products infringed. Of course, it is not just limited to handbags - footwear, jewellery, fashion items of all kinds are in dispute.

Apart from an attraction for the fashionistas, the case raises some interesting points;

Guess accuses Gucci of “sitting on its rights” for seven years. The products have co-existed in the marketplace for some time.
The Guess products sell for a lot less than the Gucci products and on that basis alone are arguably unlikely to be confused - they are aimed at quite different market segments. Guess produced some market surveys to show this.  Do they actually deceive?
Was there a deliberate “scheme” to deceive?

There has been some heavy hitting in the evidence stages of the case, with Gucci trying to prove a scheme of deliberate knock-offs by Guess. Guess’s CEO was cross-examined for four hours. If Gucci does manage to prove a lack of good faith by Guess, that will probably put the win in their court. Guess continues to argue otherwise:  “Gucci uses leather, Guess uses plastic.”

The case is Gucci America v. Guess Inc., 09-4373, U.S. District Court, Southern District of New York (Manhattan).  IPKat’s report is here.

a gap in their reasoning

Mind the Gap

In Canada, a war is being waged between an adventure travel company which was named G.A.P. Adventures Inc and the US retail company The Gap, Inc. In dispute is the trademark GAP, and of course the overlap between the services of an adventure travel company and that of a retail clothing giant.

The latest battle in the war threw up some interesting comments from the Federal Court. G.A.P. Adventures argued that “online retail store services” were not encompassed by “retail store services”. After all, a retail store is made of the ubiquitous ‘bricks and mortar’, it has showcases and windows and racks of goods, and live shop assistants. Online retailing is about websites, software, coding, click-throughs and shipping.

The Court was not impressed by the argument. It held that the phrase “retail services” is quite broad enough to mean more than operating a bricks and mortar store. The services of a retail store might well include online advertising, tweeting, emailing, and offering goods for sale over the internet:

The phrase ”retail store services” may reasonably be said to mean more than merely operating a brick and mortar building from which one sells goods and services. The services of a retail store in this day and age may well include online advertising, tweeting, emailing customers and prospective customers, and offering goods over the internet, thus giving the customer the convenience of shopping at home. It is the 21st Century equivalent to the 20th Century catalogue shopping and mail order, which arguably are also retail store services.

It’s encouraging to find a Court which is quite familiar with online selling - and tweeting.

G.A.P. Adventures has also lost out to The Gap Inc in the USA, with a New York federal judge ruling that it must change its name in the USA. The basis of the decision was trade mark infringement, though The Gap Inc was unsuccessful in arguing dilution or tarnishment of its marks, or common law infringement. Still, after a battle that began in 2007 when G.A.P. Adventures opened its first US store, it seems that the armies can collect their wounded and retire from the field - in the US at least. Canada may be an on-going war front. G.A.P. was founded in Canada in 1990, 21 years after The Gap's first store opened.

new gTLD time

String confusion?

Very shortly ICANN will be making its much-anticipated announcement of just who has applied for one of the new top-level generic domain names. Will we see .nike? .coke? .kodak? .fox? Presently it looks like 30th April will be the day of the announcement.

Apart from curiosity, why would you want to keep an eye out for this list? Well, if you are a trade mark owner, you might want to make sure that someone is not planning to use your well-known trade mark as a gTLD. ICANN will have an opposition period - all objections must be filed within seven months from the publication of the applications.

There are a couple of main possible grounds of objection for trade mark owners:

Legal Rights Objections: A trademark owner may object to any gTLD application, even if it has not applied for its own gTLD; and regardless of whether the rights claimed are based on registrations or common law use. Legal Rights Objections will be decided by WIPO using the same criteria as are used to decide domain name disputes. If the trademark owner prevails, the gTLD will not become operational.


String Confusion: A gTLD applicant may object to another proposed gTLD if it believes that the string of letters making up the other gTLD is confusingly similar to its own string of letters. If “string confusion” is found, only one of the gTLDs will be allowed. That will be determined by an auction. Thus, applicants must carefully consider whether to assert such a claim.

It seems certain that the list will cause a certain amount of interest, so keep an eye out for its release soon.

“String confusion”! I wonder if that is anything like “string theory”...chaos?

patently obvious

How does it work?

Australia's favourite economist (yes, really), Ross Gittins, penned a recent article about his thoughts on the patent system. The sub-editor gave it the snappy headline: It's patently obvious that the system is broken.


It's becoming quite fashionable to question the basis of the monopolies given by intellectual property rights. Why should Facebook have a trade mark registration for BOOK? Free culture enthusiasts argue that copyright is too restrictive. And now we have a very thoughtful article questioning the very basis of the patent system. It is a great article - very thought provoking - and I urge you to read it in full. To entice you, here are a few of Gittin's pithy points:

The reason reform of intellectual property should be high on the productivity promoters' to-do it is that we seem to be drifting ever closer to the point where its costs exceed its benefits...

So what's the problem? Much of it is that the whole area has been taken over by lawyers. It's become hellishly legalistic, complicated, loophole-ridden and expensive. In the process, the lawyers have lost sight of the economic object of the exercise. It's become an area of endless battles between businesses arguing over their rights...

It's too easy to get a patent - you can get them for very obvious ideas - and patents can be too broad, covering yet-unthought-of uses. 

You can get a patent for something that's very similar to someone else's patent. But because they're handed out so easily, you often don't know whether a patent is valid - whether his patent beats your patent - unless you spend between $5 million and $7 million battling it out in court. The high cost of litigation means big businesses regularly intimidate small businesses. 

This problem of ''fuzzy boundaries'' to patents is so bad some businesses make a living buying up dodgy patents, then threatening to sue legitimate patent-holders. The victim pays what amounts to protection money to avoid the higher cost of a court battle...

It's got so bad in the US that, according to the calculations of a leading campaigner for patent reform, James Bessen, of Boston University school of law, for all US patents bar those for chemicals and pharmaceuticals, earnings from their patents are more than exceeded by the cost of litigation to protect those patents. He calls this a ''patent tax''. 

If he's right, the intellectual property system has degenerated to the point where it's actually inhibiting innovation. We're being forced to pay higher prices, but getting nothing in return.

Them's fighting words, but  as we watch the Battles of the Giants over patents - Apple v Samsung, Yahoo v Google - it's not a bad thing to go back to basics and examine the public policy reasons behind the whole set-up. The granting of patents is supposed to protect the inventor for a short period of time (14 to 20 years usually) from anyone else copying and exploiting the invention. This undoubted monopoly and market advantage is granted to allow the inventor to get a head start on commercialisation and reap some benefits from his/her inventiveness - and increasingly not only inventiveness, but also a great deal of money spent on R&D. The cost of bringing a new drug safely to market, for example, is astronomical.

But in return, the inventor is required to disclose exactly how the new invention/chemical/software etc. actually works. The inventor thus adds to the pool of human knowledge, and - as a practical matter - saves many other busy souls from having to reinvent the wheel. Others cannot exploit the patented invention (until its monopoly expires) but they can take the new knowledge and run with it to find even better ways of doing things or making things. And this is often what happens.

Gittins makes some useful points, but - for an economist - he does skate lightly over the very high cost of developing a new drug or new software to commercial usefulness. Why should the drug companies invest massive sums in R&D if they can't reap a commercial reward? If we insist they share their inventions for free, commercial reality surely says that they will just, er, stop.

This is a greatly simplified summary of the important policy issues surrounding the patent monopoly, but so is Gittins' article. There are several sides to the story, and a bit of lawyer-bashing is not enough to disguise that. If patent law has become too uncertain and complicated, by all means reform it. But...something about babies and bathwater...?

Here's a techdirt article on James Bessen, the US 'patent reformer' Gittins refers to. It looks like Bessen has been urging action for some years - his book Patent Failure came out in 2008. His main theme seems to be that while the patent monopoly does encourage innovation and investment in it, the return isn't fair because the rights granted by patents are too fuzzy and difficult to enforce. Gittins makes the same point - then blames the lawyers. Ho-hum.

Let's lower the level of rhetoric and examine patent law reform. Without forgetting why we have patents in the first place.

australia raises the bar: guest post

not that kind of bar...

Long time listener, first time caller...

Hi, I'm Dan Wilson. As a brief introduction, I'm a Sydney-based Australian Trade Marks Attorney currently working in private practice. I had the pleasure (short time though it was) of working with Annette for the better part of a year. So I was naturally flattered when asked to provide a guest post for her IP blog.

I am a diligent Twitter follower and blog reader, but this is my first venture into the world of trade mark blog writing, so please be kind and I hope you enjoy.

The Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 has now been passed (awaiting Royal Assent) and will come into force in Australia in a little over 12 months from now. Although concerned principally with patents, the Act also affects trade marks. The following is a brief summary of some of the important changes the Bill will introduce to the Trade Marks Act 1995.

A presumptive return...

Section 41 of the Act (dealing with registrability) is to be repealed and replaced to ensure that the 'presumption of registrability' is extended to the entire section.

The Trade Marks Act 1995 was introduced with the intention that there would be a 'presumption of registrability' applied to all applications, that is, an application must be accepted by the Registrar unless there are definite grounds for rejecting it. In other words, if in doubt, accept the mark and allow the market (through the opposition/removal process) to determine if the mark should, in fact, be accepted. Then came Blount. The Federal Court of Australia handed down a decision in the Blount case which altered the interpretation and application of the presumption of registrability by the Trade Marks Office.

Following Blount, the Office took the view (as stated in the Examiners' Manual) that "the onus reverts to the applicant to demonstrate that the trade mark is, or may be taken to be, capable of distinguishing the applicant's goods or services."

Now, much to the relief of those involved in running skirmishes with the Office regarding the capacity of various marks to distinguish (one of Annette's previous posts will shed some light on these frustrations for those fortunate enough not to know the pain first hand), the amendments will make it clear (once again) that the 'presumption of registrability' is alive and well and applies to all applications.

It took just over two years for the Blount case to turn the 'presumption of registrability' around. One wonders how long it will take the courts and/or the Office this time.

Dis(op)posed to cost efficiency...

State Your Grounds
When filing  Notice of Opposition, current Australian practice usually (and almost always) sees an opponent nominate all the available grounds for opposing a trade mark. Under the new provisions, when filing a notice of opposition an opponent will be require to outline the particular grounds upon which it will rely. The exact details of 'the how' remain unknown until the associated regulations are released (at which tine, I may be invited back to provide another update...). We do, however, know 'the why' and 'the wherefore'. The Explanatory Memorandum accompanying the Bill indicates that this is an attempt to help reduce the time and costs associated with defending and/or pursuing an opposition.

On Guard!
A notice of intention to defend an application or registration against opposition will need to be filed or the opposed mark will be deemed lapsed/abandoned. This move makes sense and has been widely (as far as I have read) accepted as a sensible and logical amendment, designed to save opponents time and money pursuing oppositions that the owner of the opposed mark has no intention of defending. The Kimberly-Clark v Goulimis matter is a perfect example of the need for this amendment. Again, we will not know the full workings until the regulations are released.

Short and sweet...

Punishment Fitting the Crime
There will be an introduction of summary offences, increases in the maximum penalties for offences, and the courts may award additional damages. Here is a win for trade mark owners. Making it easier to prove fault (summary offences), higher penalties for infringers (raising penalties) and the court having the power to hand out punitive damages (additional damages) should all mean greater deterrents to would-be infringers.

Border Security
Inspection of seized goods by the trade mark owner will be allowed for in the Act. This will enable trade mark owners to determine potential infringement first hand.

Trade Marks Attorneys, Inc.
Legal privilege for Trade Marks Attorneys will be extended to include communications to overseas associates; and the registration of companies as incorporated Trade Marks Attorneys will be allowed.

What is the collective noun for a group of trade marks attorneys?


Daniel Wilson, Australian Trade Marks Attorney