The EU to defend its high-tech sector and the Judgment in Case T‑806/19 (Andorra)

THE EU TO DEFEND ITS HIGH-TECH SECTOR

The European Union has raised awareness about an extensive practice which China has been resorting to in the last years, resulting harmful for European companies operating there. In a nutshell, the EU has raised a dispute settlement consultation before the World Trade Organisation (WTO), on grounds that China is restraining EU high-tech companies, usually right holders of key technologies related to the mobile industry, from going to foreigner courts to protect and use their patents. The patents involved are usually standard-essential patents (known as SEP). As you might know, the technology protected under such patents is considered to be essential for producing certain goods, and therefore it is compulsory for the right holders to ensure licences under Fair, Reasonable and Non-Discriminatory (FRAND) conditions. In this way, manufacturers are allowed to incorporate this new technology into their devices, under the payment of a licence fee. 

The European Union deplores the fact that some Chinese companies (e.g. mobile manufacturers) are illegally using, or using without an appropriate compensation, patented technologies from EU companies – and without having to face heavy consequences. Indeed, when European companies seek to enforce their rights and sue for infringement, they are in a way forced to do so in China. This is due to an “anti-suit injunction” taken in 2020 by China's Supreme People's Court, by which Chinese Courts are now allowed to restrain EU companies from enforcing their rights elsewhere, under penalty of a substantial daily fine. 

As a consequence, companies are being discouraged to take legal actions in a different jurisdiction, as they face high fines and therefore are pushed to negotiate below-market rates licencing agreements with the Chinese companies. 

For this reason, the EU has taken this first step of dispute settlement consultations before the WTO, on the grounds that China is not complying with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Through this dispute settlement mechanisms, the EU expects to refrain this practice allowing Chinese companies to “benefit from cheaper or even free access to European technology”. 

Full article available here. 

ANDORRA (T‑806/19)

Fresh from yesterday, the General Court of the European Union has issued a judgment, rejecting the appeal raised by the Government of Andorra for the registration of the figurative mark with word elements “Andorra”. 

The appellant filed back in 2017, an application to register their sign as a EUTM at the EUIPO, designating goods and services from several classes: class 16 (photographs), class 34 (tobacco), class 36 (banking and real estate services), class 39 (travel arrangement), class 41 (among others teaching; publication of books) and class 44 (beauty services). 

Both the examiner and at a later stage the Boards of Appeal (BoA) refused the EUTM application pursuant article 7.1.b) and c) (absolute ground for refusal), as considered that the term “Andorra” was devoid of any distinctive character and simply described the geographical origin of those goods and services. Therefore, the relevant public would perceive the sign as a designation of the geographical origin of the goods and services in question, or the place where those services are provided.

The Government of Andorra lodged an appeal against this decision before the General Court (GC), arguing that the figurative sign Andorra was distinctive, as there was not relevant link between the goods/ services and the sign, for the relevant public to consider that “Andorra” indicated a geographical origin. 

The GC, after having analysed the descriptive character of the sign in relation to the goods and services, upheld BoA’s arguments. The Court confirmed that the sign “Andorra” had a sufficient relation to the designated goods and services, to enable the relevant public to perceive immediately, a description of the goods and services in question in the sign. For this reason, the sign was not suitable to perform the essential function of the trade mark, as to identify the commercial origin of the goods. Moreover, trade marks grant a monopoly for the right holder for a very long time, hence signs consisting in a geographical term need to be freely used by everyone for a matter of public interest, and thus cannot be registered. 

Therefore, the appeal was dismissed and the Government of Andorra couldn’t succeed in registering the figurative sign sought.