New EU Digital Services Act – Regulation of Online Intermediaries

The Digital Services Act (hereafter “the Act”, or “the DSA”) is a huge leap forward in the regulation of online intermediaries. Approved on 27 October 2022, the Act (Regulation (EU) 2022/2065, DSA) began to come into effect in February 2023.

Organisations including social media platforms, marketplaces and search engines face increased obligations relating to trader verification and transparency, monitoring and reporting of illegal content or products, and advertising. And the bigger the organisation, the wider the obligations.

The Act applies to providers of digital services to EU consumers (whether based in the EU or not), with fines for non-compliance set at up to 6% of a provider’s annual turnover. Its intention is to protect consumers from illegal or harmful content in any form, but the impact on counterfeit goods and on brands affected by this ever-increasing problem could be enormous.

Liability of online intermediaries has been limited until now, creating ambiguity and frustration for brand owners tackling counterfeit goods and illicit content, with platforms not adequately held to account. The new requirements are set to change that, to the benefit of brand owners and consumers alike. Although only applicable to the EU market, the changes required by providers will doubtless be adopted across other territories, whether voluntarily by the provider or enforced under local supporting legislation. Similar legislation for retailers is being rolled out in the US, in the form of the Integrity, Notification and Fairness in Online Retail Marketplaces (INFORM) for Consumers Act which was made law in late 2022.

The EUIPO recently held an informative webinar detailing the changes and their impact on online service providers, and we share some of the key points in this article.

It showed a fascinating timeline of the rise of the internet since the last legislation, the E-Commerce Directive, was adopted in 1999.

It is alarming that Facebook and Twitter have been available for around 15 years and only now is legislation catching up to protect users from potentially harmful content or products. Advances in the ways and extent to which online content is consumed have far exceeded the laws that govern them, and the need for reform to manage this new world that has sprung up online over the past two decades is evident.

The new EU-wide rules aim to protect consumers online and ensure that businesses can compete fairly. In practice, this means that:

  • illegal content can be removed faster;
  • sellers of illegal goods will be more easily identified;
  • tech giants will need to mitigate the risks created by their algorithms;
  • sanctions for non-compliance may be imposed.

The E-Commerce Directive imposed little liability on online intermediaries, such as ISPs, search engines, social media sites, marketplaces, domain hosts and cloud services. The DSA introduces increased liability for each of these intermediaries. For very large online platforms (over 45 million monthly users) there are specific additional obligations.

Enforcement of the DSA will be the responsibility of the relevant national Digital Services Coordinator (which will be appointed within each member state), the European Board for Digital Services and ultimately the EU Commission.

Under the Act, all online providers must follow rules such as:

  • Utilise standard ‘notice and action’ system, allowing consumers or brands to raise a complaint about offending content;
    • Implement a ‘trusted flagger’ system, enabling certified organisations or individuals with competence and experience to have notices of offending content dealt with as priority;
    • Redress mechanisms available to notice providers to challenge a platform’s decision to remove (or not remove) content, with the platform liable for the costs of any necessary court proceedings decided in favour of the notice provider;
    • EU representatives required if providers are not established in the EU, allowing more effective enforcement;
    • Repeat infringers’ policy to suspend accounts of anyone frequently uploading illegal content, and also applying to repeat notice givers who may repeatedly complain without reason or legal basis;
    • Increased transparency, including annual reports on how content is removed, ranked, recommended and advertised;
    • Know Your Business Customer – the need to identify the third party seller with random checks being implemented.

Very Large Online Platforms and Very Large Online Search Engines are the first to be liable under the DSA, 4 months from when they are designated as a VLOP or VLOSE with the first obligations having begun in February 2023. They are liable under the full obligations of the DSA. Other providers are liable on a scale of obligations according to their size or nature:

For the remaining platforms, the Act comes into force by 17 February 2024. By this time, EU member states must have designated a Digital Services Coordinator.

Some question whether the new legislation will reduce the prevalence of harmful content online and ask how, or how well, the DSA will be enforced.

The most recent International IP Index report from the US Chamber of Commerce suggests that the DSA will not improve consumers’ or brands’ recourse against illegal content. The report argues that the DSA does not go far enough to fundamentally change how IP is enforced online. The report warns that “The sprawling nature of the legislation and the inclusion of such a high number of exceptions, carveouts, categorizations, definitions, and determinations to be made on a case-by-case basis will almost guarantee that once operational, the law will have a whole host of unintended consequences both in Europe and beyond.” It questions whether the ‘trusted flagger’ system will lead to non-trusted flaggers being deprioritised, and queries how the DSA will interact with other national or EU-wide legislation. All of these points, the report says, are inadequately clarified by the DSA.

As with any new legislation there are bound to be teething troubles, but closer monitoring of, and increased obligations on, online providers is a step in the right direction. With the implementation of INFORM and the DSA across two of the world’s largest online communities, it is hoped that the worldwide online space will gradually become a safer place for consumers and brands.

Further information, and the Act itself, can be found here.

If you have any questions or would like to discuss how your business can tackle counterfeits or unauthorised use of your brands, our trade mark attorneys can help. Get in touch here or email hello@two-ip.com

Madrid Protocol Concerning the International Registration of Marks – Changes to Regulations

On 1st February 2023, changes came into effect which will impact how some trade mark applications are treated under the Madrid Protocol. A summary of these changes is provided below:

Only one representation of the mark

In cases where colour is a distinctive feature of the mark, rather than having to provide two representations (one in colour, one in black and white), only the colour representation is now required.

Claim of colour as a distinctive feature of the mark

Applicants are now able to claim colour as a distinctive feature of the mark when the basic mark is protected or meant to be protected in colour, even when a corresponding colour claim does not appear in the basic mark and the representation of the basic mark is not in colour; in such cases, the colour claim of the basic mark must be certified by the office of origin. 

Representation of non-traditional marks

Sound, motion or multimedia marks are now able to be represented separately, such as by submission in a single digital file, rather than being required to fit within the box provided on the WIPO application form. This does depend on the designated Member State of the Madrid Protocol and its national laws allowing the submission of sound, motion or multimedia marks.

Representation of a cited mark in a notification of provisional refusal

When a mark is provisionally refused due to a citation, there is no longer a requirement for the national office to provide a representation of the earlier mark. They can instead indicate how to access the mark in question, for example, by providing a link to the relevant online database or publication accessible to the public.

Electronic communication only

Although the majority of communication with WIPO has recently been done electronically, the changes mean that all communication must now be via the Contact Madrid online platform or the e-Madrid online service. It is necessary to ensure, without delay, that holders and representatives have provided their email address to WIPO.

Expert advice is recommended to navigate these and other trade mark issues, with Two IP’s Chartered trade mark attorneys on hand to help. Get in touch here or email hello@two-ip.com

Protecting your brand from the increase in counterfeits

The global counterfeit goods industry is estimated to be worth around US$600 billion a year. It is thought that as many as 10% of all branded goods sold may be counterfeit, with 80% of us having (knowingly or not) handled fake goods.

Counterfeits remain prevalent in bricks-and-mortar stores, but online sales make up an increasingly large proportion of the total figure, with the COVID pandemic and the shift to online retail providing the perfect environment for counterfeiters to thrive. Numbers of illicit goods have been on the increase for decades, with the development of digital technologies, evolution of freight systems and globalised banking systems all playing their part. The ongoing cost of living crisis affecting many areas of the world was reported in World Trademark Review (WTR) earlier this month as being a considerable concern. The crisis means consumers are looking for more affordable goods, with some purchasing fake products. An increased number of people are also likely to turn to selling illicit goods to make a living.

Counterfeiters operate in all markets, from consumer goods to pharmaceuticals and industrial components. Protecting your brand against offline and online fakes is a huge challenge, but not doing so can negatively and immeasurably impact your brand and your business. Almost 40% of fake goods detained at EU borders have been found to be dangerous to consumers. Harmful or poor-quality goods sold bearing your brand stand to damage the reputation you have worked hard to build, but sales of any unauthorised goods will divert sales from your business, leading to a reduction in profits.

As well as the effect on your business, lost sales due to counterfeiting means billions in lost taxes, and vast numbers of job losses. Counterfeit goods are also linked with organised crime, with the purchase of counterfeit goods funding crimes such as money laundering and illicit drug distribution.

Advanced monitoring and enforcement methods are in place across some of the larger online platforms including Amazon and Alibaba, and there is much discussion over the use of NFTs as authentication tools for products, but those measures are not appropriate or affordable for all. However, there are several steps you can take to protect your business and brands against counterfeit goods.

Needs vary according to industry and sector, but we can tailor a strategy for your business to focus on the most pressing issues. Here are some of the most accessible measures we can help with:

Monitor and authenticate

A range of monitoring and authentication options are available from specialist companies enabling you to monitor sales or listings, and allowing consumers to authenticate products once they are purchased.

Register brands with rights owners’ programmes

Two of the major programmes are Amazon’s Brand Registry and Ebay’s Verified Rights Owner (VeRO) programme. Platforms will usually suspend listings whilst the suspected counterfeits are investigated.

Check consumers’ comments and reviews for reports of fake products

This can be a quick and easy way of flagging suspected counterfeit goods. Consumers often leave negative feedback if they believe they have received a counterfeit product.

Make test purchases and send ‘cease and desist’ letters

If products look suspicious, they can be purchased, tested and if found to be counterfeit used in further action against the counterfeiter. Letters before action can stop counterfeiters quickly, particularly smaller sellers. They can also be used to extract key supply chain information to enable further investigation. Private investigators can be used to make discreet purchases or approaches to counterfeiters.

File Applications for Action (AFAs) with customs authorities

This can be done in many countries and is the most effective way to support local customs authorities to seize suspect goods as they enter the country.   

Civil or criminal proceedings

If your trade marks or images of your products are used by counterfeiters, consider civil court proceedings which offer remedies such as injunctions, damages, an account of profits and delivery-up and destruction of infringing products. Criminal proceedings are also available. We work with various organisations including the UK National Crime Agency (NCA) and the Police Intellectual Property Crime Unit (PIPCU), particularly in cases involving a threat to consumer health and safety.

Trading Standards

Reports can be lodged at your local Trading Standards office. These authorities have the power to seize and investigate reports of counterfeit or infringing goods.  

Educate consumers

Consumer awareness can be crucial to minimising counterfeits. If consumers can readily detect a fake product or know how to report or verify one, this can be a first line of defence. It also protects them from potentially harmful products. Don’t be concerned about acknowledging that there are illicit goods out there; the world is aware that they exist and most consumers would rather buy authentic goods. Owning the narrative around counterfeits, with guidelines on your website, will be beneficial to your business and to consumers.

 

If you have any questions or require advice about tackling counterfeits or unauthorised use of your brands, our trade mark attorneys can help. Get in touch with the Two IP team: hello@two-ip.com.

The importance of a valid UK address for service for trade marks and designs

The UK Intellectual Property Office (UK IPO) has issued a new Tribunal Practice Notice (TPN 2/2023) with a potentially significant impact upon UK rights acquired through the Madrid Protocol (for trade marks) or Hague Agreement (for designs).

TPN 2/2023 has the good intention of looking out for rights holders based outside the UK, who might have their rights challenged by third parties but do not promptly become aware of that because they have no valid UK address for service recorded for their UK designations in International registrations. However, as explained below, the same TPN brings about an even shorter period for reaction than previously, if rights holders are to be able to defend their UK rights in the face of such a challenge.

A “valid UK address for service” is one in the UK, Gibraltar, or the Channel Islands. Previously, for challenges to registered/protected UK designations in International registrations without a valid UK address for service, the UK IPO would issue documents to the non-UK address for the holder and would deem such action to constitute “effective service” for the setting of an inextensible period to file a defence (with this period being two months to submit a defence in response to a challenge upon a trade mark designation).

The MARCO POLO case

TPN 2/2023 has been issued by the UK IPO as a result of the decision of Geoffrey Hobbs KC, sitting as the Appointed Person in Tradeix Ltd v New Holland Ventures Pty Ltd (BL O/681/22) – the MARCO POLO case.

The MARCO POLO trade mark was protected in the UK as a designation in an International registration secured through the Madrid Protocol. A declaration of invalidity of that UK designation initially succeeded because the trade mark holder did not file a timely defence. The trade mark holder did not have any UK address for service recorded, so the invalidity application was communicated by post from the UK IPO to the trade mark holder’s registered office in Australia. The Australian address was that of the holder’s accountants and due to COVID restrictions and work from home requirements, the holder did not become aware of the challenge on its UK designation in time to submit a defence. Absent a timely defence, the UK IPO declared the UK designation invalid and directed that it be removed from the Register of Trade Marks and deemed never to have been made.

The holder appealed to the Appointed Person, who found that posting of documents to a non-UK address, as had been the UK IPO’s previous practice, had not constituted valid service of those documents upon the trade mark holder. This has led to the change of UK IPO practice described below.

The new UK IPO practice – TPN 2/2023

TPN 2/2023 sets out the changes of practice in the Registrar’s service of documents in inter partes trade mark invalidation, revocation, rectification and opposition proceedings, and registered design invalidation proceedings. It is most relevant to UK designations in International registrations, but does not impact ex parte proceedings, such as new UK designations under examination, where a UK address for service will not be required unless a notice of provisional refusal is issued to which the holder wishes to respond.

There are two new approaches, dependent on the type of proceeding before the UK IPO:

(1) Invalidation, revocation on the grounds of non-use, revocation on grounds other than non-use, and rectification

Absent a valid UK address for service, a preliminary letter will be issued by the UK IPO in the above types of proceeding, requiring the holder to provide a valid UK address for service within one month, together with confirmation that it intends to defend its right. Said letter will be posted by Royal Mail Signed-For service, using whichever non-UK contact details are available to the UK IPO at that time. This could be to the holder themselves but, if a non-UK representative address is given, the UK IPO will use those representative details in preference to the holder’s address.

If the holder provides a valid UK address for service within the set period, the action will be served to the address of the (newly recorded) valid UK address for service, then the usual period for defence, e.g. of two-months to defend a trade mark right, will run from the date of effective service to the UK address. If the holder does indicate a wish to defend the right within the initial one month set but does not provide a UK address for service in that time, they will be given one month to record a UK address for service.

If no valid UK address for service is provided within one month and no indication of a wish to defend, then the UK IPO will issue a letter confirming their intent to treat the right as undefended and to invalidate or revoke it. Again, this letter would be sent to the non-UK address, with a fourteen-day period for reply. Failure to respond would result in the UK IPO issuing a short decision on the undefended application and could lead to invalidation or revocation.

(2) Trade Mark oppositions against published International Registrations (UK)

In oppositions to UK designations in International trade mark registrations, a notice of provisional refusal will be sent by the UK IPO to the World Intellectual Property Organisation (WIPO), who will in turn notify the holder. The transmission to WIPO is deemed effective service of the opposition and would not at that stage require the holder to appoint a UK address for service. Additionally, the UK IPO will issue a letter to the holder using any non-UK address for service details provided by WIPO: this will require a defence within an already activated two-month period and will also confirm that a valid UK address for service will be required to contest the opposition and engage beyond submission of an initial defence. If a defence is filed, but with no valid UK address for service, the UK IPO will then require appointment of such an address for services within one month.

NOTE – for UK trade marks or registered designs cloned from an EU right at the end of the Brexit transition period:

If the target of challenge is a comparable trade mark or design created out of an EU right which was in force at the end of the Brexit transition period, and if proceedings are launched prior to 1 January 2024, the above new practice will not apply, and service will be effected via any EU address for service provided in the data imported from the original EU right.

Comment and recommendations

This new practice, though well-intentioned, sets an even shorter period than previously for the holder of a UK designation to react, should a challenge be made to their registration, and if they do not have a valid UK address for service. Although preference would be given by the UK IPO to sending initial notification of the challenge to a representative recorded at WIPO, rather than to the holder themselves, a single month is a very short period for that notification to reach a representative outside the UK and be acted upon, with them to quickly arrange appropriate UK representation.

Risks posed by the TPN could be easily mitigated, and future requirements promptly satisfied, by appointing a valid UK address for service as early as possible, rather than waiting for any challenge to be encountered where vital deadlines might be missed.

Wherever questions are raised relating to validity of a right in the UK, local advice and representation is crucial, and Two IP’s Chartered UK trade mark attorneys are well qualified to help you. Get in touch here or email hello@two-ip.com.

Top trademark tips for new brands and products

New year, new product? Or just looking to refresh your brand? Be sure to follow these tips to ensure a smooth process from brand selection to launch and avoid costly challenges and disputes along the way. 

1. Start early  

Clear names, logos and branding for use at the outset, and as early as possible ahead of your planned launch (ideally 6 months+). Engage your design or marketing team in the brand clearance process before they start work on a new name, logo or style. So often clearance is an afterthought when the brand has been chosen, with teams wedded to it and rollout already underway. At this stage if a challenge is encountered the time and expenditure already incurred may go to waste, and even if the challenge is manageable, the associated cost and delay to your launch may not be.  

2. Long-list to Short-list 

We offer fast-turnaround ‘knockout’ searches for ‘long-lists’ of potential names/logos, to quickly discount any which look problematic. A short-list can then be prepared and additional searches considered.  

3. Full clearance searches

Once you have a short-list of perhaps 1-3 preferred names or logos, conduct full clearance searches of the relevant trade mark registers as well as common law or ‘in-use’ searches.  

These searches can be staggered according to preference of name/logo, geographical scope and in line with your budget. Although anyone can conduct identical searches of many trade mark registers, and look for identical names/logos currently in use by using search engines, similar trade marks can be equally problematic and specialist searching software and professionals are required for this.  

Once the search data is received, we will analyse the results to provide a clear and concise assessment of the risks posed by any identical or similar trade marks. Trade marks registers are extremely crowded and it can be difficult to come up with an entirely original name or brand, but understanding what the risks are and if those risks are manageable for your business is key to the success of your brand launch.  

4. File Applications  

With our help you have selected a name or logo and you should now file applications in all relevant territories to protect that trade mark from third party use or misappropriation. If your brand will span multiple territories, this stage can be staggered using the six-month ‘priority’ afforded by your first application. This helps to manage budget by spreading cost and can be used to draw out potential challenges that may have been identified by the searches. 

We will advise on the most cost-effective and comprehensive registration strategy for your brand and budget; different positioning of words and logos, colour variations and other versions of your trade mark may be used in practice, and with separate applications usually required for each, the costs can mount up. We will ensure that you secure the broadest possible protection for your business within your budget. 

If your brand launch is highly confidential, we can advise how you can shield your application from public view for as long as possible whilst having your all-important ‘flag in the sand’.  

5. Swiftly deal with objections or challenges 

Unfortunately, objections from trade mark offices and third parties are common, but if you have followed the steps above these should be minimised. In the event of an objection, we are on hand to quickly and efficiently guide you through the process of overcoming the challenge and navigate towards a successful registration.   

6. Additional Considerations.  

You may have a new product or packaging design, or need a new domain name for your product or brand. We can advise on the registration of designs and registration or acquisition of domain names. 

You will also want to ensure that once your brand is selected third parties do not encroach on your rights. A trade mark watch can be put in place providing early notification of any identical or similar third party trade mark applications that you may wish to challenge. We can also provide online monitoring for your product or brand to alert us to unauthorised use of your trade mark online.  

If you are thinking about launching or refreshing your brand and would like our help, our trade mark attorneys are happy to have an initial chat. Get in touch here or email hello@two-ip.com 

  

 

Beware of patent and trade mark registration and renewal scams

According to reports from the UK and European Patent Offices, more and more patent and trade mark owners are receiving unsolicited and unexpected requests to pay registration and renewal fees for their IP rights.  However, on closer inspection these demands aren’t coming from official sources, they are a scam.

This type of scam is nothing new.  However, because of the continuing increase in email traffic – a trend that’s only been exacerbated by the pandemic – instances are on the rise.

How does a patent or trade mark scam work?

The scams typically generally split into two types: patent or trade mark applications; and patent and trade mark renewals. 

With a patent or trade mark application scam, the fraudster obtains a patent or trade mark owner’s details once their application becomes public. 

They then use the details to send fake demands for official application or renewal fees from authentic sounding organisations like the ‘World Bureau for Intellectual Property or ‘International Patent and Trade Mark Office’ (you can find a more complete list of the fake IP organisations that have been reported here). 

With a patent or trade mark renewal scam, they will also find the date of each renewal and use that along with the name and address details to make their demands look even more genuine.

More worryingly the invitations will often identify a PCT application by its international publication number, its publication date, the title of the invention, its international application number and its priority information to make it look even more legitimate.

The requests also often come with large red ‘WARNING’ or ‘FINAL DEMAND’ watermarks across the middle to wrong foot the recipient and create additional panic.

However, despite the fact they use official sounding names and official looking stationery, language, and details, they are being created by unscrupulous individuals deliberately attempting to mislead you.

What should you do if you receive an unsolicited demand for patent or trade mark fees?

Firstly, all correspondence relating to your patent or trade mark applications, including renewal fee reminders, will be sent by the relevant IP Office to your attorney to be dealt with and your attorney will report them to you. Any costs relating to your application or a renewal fee will appear in your attorney’s bill to you, clearly accounting for each charge. 

The only exception to this rule is if your attorney has transferred management of renewal fees on a granted patent, trade mark or registered design to a specialist renewals or annuities provider like Renewals Desk, the service Two IP use.

This means if you are in any doubt about the legitimacy of any payment request you receive, you should immediately send a copy to your attorney. 

They can then contact the relevant IP body to report it so that it can be investigated.  They will also confirm there is nothing for you to pay or to worry about.

Under no circumstances should you pay any invoice that does not come from your attorney or from the specialist annuities provider that they use – in our experience, it will be almost impossible for you to get your money back.

If you are based in the UK and want to take the matter further, you can send copies of any scam invoice that you receive to the UK Intellectual Property Office at misleadinginvoices@ipo.gov.uk, to Action Fraud, and/or to your local Trading Standards office in addition to sending a copy to your patent or trade mark attorney.

If you would like to find out more about how Two IP would manage and safeguard your IP portfolio, please email us today.