There were 15,000 applications to the Ideas Powered for business SME Fund in the first half of 2022, making a total of 28,000 applications since it was launched in January 2021.

The Fund was set up to help SMEs in EU member states with IP rights in the wake of the pandemic. It provides financial support for trade mark and design applications and the IP Scan service. It remains open until 16 December 2022, and grants of up to €2,250 are available.

Information on applying for grants is available on the SME Fund page.

According to EUIPO, the most popular countries for applications are:

• Spain (2,652)
• Italy (1,855)
• Poland (1,702)
• France (1,232)

Nearly 80% of applicants have had their first contact with IP through this initiative.

As a result of its success, the European Commission and the EUIPO have increased the Fund by €10 million.

Find out more on the EUIPO website, from where the illustration is taken.

The latest issue of the HouseMARQUES newsletter is now available to read on the MARQUES website.

It includes an update on upcoming MARQUES events, such as the Annual Conference in Madrid and Luxury Brands Symposium in Florence

There is also news from the Designs Team on the UK designs consultation and the Anti-Counterfeiting and Parallel Trade Team on the Observatory’s 10^th anniversary.

Regular features include roundups of news from EUIPO and WIPO and a summary of some recent decisions of the EU General Court, including links to the judgments.

In addition, there is a short report from the recent EUIPO Boards of Appeal IP Case Law Conference, which a number of MARQUES members took part in, and details of recent episodes of the Talking MARQUES podcast.

MARQUES members receive notification of new publications by email, as well as many other benefits. If you are not a MARQUES member, you can find out more about joining here.

The third instalment in the WIPO Respect for IP webinar series takes place on Friday 29 July from 1.00 pm to 2.00 pm CEST.

It is on ‘The Role of Border Measures in IP Enforcement’.

WIPO states:

This webinar will address the role of customs authorities and border measures in the effective enforcement of intellectual property rights (IPRs).

IPR infringing goods, and especially counterfeit trademark and pirated copyright goods, harm the economy of the country of destination and threaten the health, security and safety of its population. The detection of IPR infringing goods originating from abroad, and suspending their release into free circulation at the point of entry is therefore crucial.

The session will also present IP border enforcement from an international perspective, specifically focusing on international cooperation among customs authorities.

The speakers are Ms Alaina van Horn (Chief, IP Enforcement Branch, US Customs and Border Protection, USA) and Mr Maurice Adefalou (Technical Officer IPR, Health and Safety Programme Manager, WCO).

The webinar will include a Q&A.

Any readers who would like to find out more and/or register for this webinar can do so on WIPO’s website.

The EUIPO has announced that it will launch a new electronic form for EU trade marks on 1 August 2022.

The form is designed to be more intuitive and easier to use, based on feedback from users. It includes:

• customisation options allowing you to tailor your filing experience;
• a new design with full guidance and contextual help;
• faster goods and services management; and
• enhanced security.

The new form has been tested by 25 users in a pilot project in the past few months.

More information is available on the EUIPO website here, including a link to a webinar demonstrating the main features and a help page.

The new form is part of the EUIPO’s digital transformation programme. The Office plans that the new form will completely replace the existing 5-Step Form and Advanced Form by the end of November 2022.

About 3 million UK trade marks will be added to the Global Brand Database, following an agreement between the UK IPO and WIPO.

The Global Brand Database now comprises more than 50 million records from 71 national and international collections. It is fully searchable and includes an image search function.

The UK will add existing registered UK trade marks.

UK IPO Chief Executive Tim Moss said in a statement: “The addition of more than 3 million UK registered trade marks to WIPO’s database will help businesses grow their brands with confidence. By providing additional protection, it will reassure UK trade mark holders that their mark is less likely to be infringed.”

WIPO Director General Daren Tang said: “We are delighted with the inclusion of the UK trade marks collection in WIPO’s Global Brand Database. This is a significant step for users the world over and greatly enhances the value of the database, especially for companies seeking to file a new trade mark application in multiple countries. The new agreement also paves the way for greater technical collaboration between our offices, including the use of machine learning to improve the efficiency of IP-related procedures.”

The UK IPO also recently announced new board appointments.

On 12 March 2022, the Shanghai Intellectual Property Court gave its final judgment (number 2021Hu73MinZhong301) on the trade mark infringement and unfair competition dispute between New Balance Athletics, Inc (the plaintiff) and three defendants New Barlun (China) Co, Ltd (defendant A), Shanghai Shiyi Trading Co, Ltd (defendant B), and Shanghai Lusha Industrial Development Co, Ltd (defendant C).

Haiyu Li and Tingxi Huo summarise the case and draw out some key lessons.

Defendants A and B, respectively the registrant and licensee of the disputed trade mark number 3954764 for shoes in class 25, were held jointly liable for damages of CNY25 million (about €3.62 million).

Defendant C, as one of the retailers, was jointly responsible for damages of CNY100,000 (€14,492).

Plaintiff’s trade mark	Defendant A’s trade mark
No. 5942394, “Athletic shoes”, Class 25 Published for opposition on 6 August 2010 Registered on 13 September 2016	No. 3954764, “Shoes”, Class 25 Registered on 14 May 2012 Declared invalid on 29 September 2019

The courts considered the two marks to be similar. They found that defendants A and B deliberately used the disputed trade mark on both sides of the shoes, making the parties’ marks highly similar in actual use.

Taking into consideration the high fame of the plaintiff’s trade mark, the duration and scale of the defendants’ use, the extent of subjective malice and sales figures of the infringement, the first instance court awarded high damages to the plaintiff in the first instance.

The Shanghai Intellectual Property Court upheld this decision in the second and final instance.

The courts have clarified some important issues in the ruling.

Bad-faith filing sours everything

First, registration in bad faith cannot be an armour for the holders to safely use the trade mark even if its registration is approved by the China Trade Mark Office. The disputed trade mark was actually registered in 2012 but was later invalidated in 2019. Under Article 47 of the Chinese Trade Mark Law, a registered trade mark that is invalidated is deemed as non-existent from the beginning. The use by defendants A and B thus constituted infringement and the registration did not exempt the defendants from liability.

Secondly, the bad faith trade mark user shall still bear liability for damages during the period from publication through registration of the plaintiff’s trade mark. According to Article 36 of the Law, compensation shall be made for the losses caused to the registrant by the bad-faith user. The plaintiff’s trade mark (number 5942394) was published for opposition on 6 August 2010, but was registered until 13 September 2016 due to the opposition, appeal and lawsuits initiated by defendant A. In other words, there was a six-year gap between the publication and registration. As defendants A and B acted in bad faith in registering and using the disputed trade mark, they bear liability for the infringement before the registration approval date.

Thirdly, bad faith also undermines the subsequent acquisition. Defendant A is the third holder of the disputed trade mark, the previous two holders being defendant A’s affiliated companies. In 2006 and 2012, the two previous holders’ use of the disputed trade mark was ruled by other courts to be infringement of the plaintiff’s distinctive logo for famous products. Defendant A had well known the facts but still acquired the disputed trade mark and granted a licence to defendant B. Such acts cannot justify the defendants’ use, but simply demonstrate defendant A’s bad faith.

This leads to two important conclusions:

1. As earlier trade marks registered in bad faith are fragile, if needed it is advisable to contest such trade marks.
2. The acquisition of a bad faith trade mark might risk losing the trade mark or investment. Therefore, it is safer to re-file your own application even if you have acquired the trade mark.

The statutory maximum damage may not be the ceiling

In this case, the defendants refused to provide accounting records or evidence in their possession, so the courts used their discretion to determine the damages. Considering the plaintiff had exhausted its efforts to prove that the actual profit earned by defendants A and B was obviously higher than the statutory maximum damage of CNY5 million prescribed under Article 63 of the Trade Mark Law, the courts were not limited by the maximum, but used their discretion to award damages of CNY25 million, including the plaintiff’s reasonable expenses, to stop the infringement.

As China has no discovery, rights holders need to prove their own loss or the infringer’s profit caused by the infringement to claim damages. It is highly advisable to do your best to collect evidence to support your claim for damages. But it is also advisable to request the courts to order the infringers to submit the account books or evidence in their possession, and, if applicable, claim damages higher than the ceiling amount. The infringers’ refusal or provision of false evidence might result in the courts’ dependence on the rights holders’ one-sided evidence, particularly after the rights holders have exhausted their efforts.

By Haiyu Li and Tingxi Huo of Chofn IP. Tingxi Huo is a member of the MARQUES China Team

The Office has released some guidance on the classification of items relating to "virtual goods" and "non-fungible tokens (NFTs)".

This is exciting news for any trade mark practitioner who has not been living under a rock for the past year. NFTs are a new form of digital asset. Using blockchain technology, they provide proof of ownership for digital or physical objects. And the Metaverse itself has been covered widely enough in the media so that it no longer requires an explanatory note.

The proper classification of virtual and NFT-related goods as well as other assets often associated with the Metaverse has been a hot topic of discussion for months. Different theories have evolved and been talked about at international trade mark conference and, of course, online. Will virtual goods simply form a sub-category of the IRL goods contained in a particular Class? Or should a separate Class emerge for products in the virtual world?

Perhaps not. The EUIPO's position, at least, seems to point in a different direction. The Office confirms that it will be taking the following approach:

• "Virtual goods are proper to Class 9 because they are treated as digital content or images. However, the term virtual goods on its own lacks clarity and precision so must be further specified by stating the content to which the virtual goods relate (e.g. downloadable virtual goods, namely, virtual clothing).

• The 12th Edition of the Nice Classification will incorporate the term downloadable digital files authenticated by non-fungible tokens in Class 9. NFTs are treated as unique digital certificates registered in a blockchain, which authenticate digital items but are distinct from those digital items. For the Office, the term non fungible tokens on its own is not acceptable. The type of digital item authenticated by the NFT must be specified."

Moreover, the EUIPO points out that services relating to virtual goods and NFTs "will be classified in line with the established principles of classification for services."

Based on initial reactions on social media, practitioners clearly appreciate the fact that the EUIPO has published this timely clarification. And while the classification of "virtual goods" in Class 9 will not come as a surprise, the EUIPO's view on NFTs will probably spark further debate (e.g. regarding NFTs tied to physical goods).

One thing is certain: properly classifying all the things consumers may or may not enjoy in the Metaverse will keep the Office and trade mark lawyers busy for some time to come. With the Office "increasingly receiving applications containing" the items mentioned above, tricky trade mark conflicts may arise in Class 9. After all, who is to say whether "virtual sneakers" and "virtual burgers" are similar?

The EUIPO's above approach (linked here) is set out in the 2023 draft Guidelines. Stakeholders are invited to submit their comments by 3 October 2022.