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Now in its twelfth year, Class 46 is dedicated to European trade mark law and practice. This weblog is written by a team of enthusiasts who want to spread the word and share their thoughts with others.

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Anthonia Ghalamkarizadeh
Birgit Clark
Blog Administrator
Christian Tenkhoff
Fidel Porcuna
Gino Van Roeyen
Markku Tuominen
Niamh Hall
Nikos Prentoulis
Stefan Schröter
Tomasz Rychlicki
Yvonne Onomor
16 cases from 12 months in 60 minutes – Annual Conference part 8

Two distinguished trade mark practitioners, Alexander von Mühlendahl of Bardehle Pagenberg and Charles Gielen of NautaDutilh, discussed the top 15 trade mark and design cases from the CJEU in the past year during the final part of the Annual Conference, with a bonus copyright case thrown in. The following cases were analysed (links are to the judgments on the CJEU website; note that some are not available in English):

Textilis concerned whether the figurative sign consisted exclusively of the shape of the goods. The Court said the new rule applying to characteristics other than shape cannot be applied retroactively. “It means the question of what the new rules means is still open, and I’m very much in doubt about what it means,” said Charles.

Hartwall was a case about an application for a blue colour in Finland. Questions had arisen over whether the mark should be treated as a colour or figurative mark, and how that affected the assessment of distinctiveness.

The Red Bull blue/silver case was one where MARQUES intervened. The CJEU upheld the General Court’s ruling. “Applicants are advised to file the colour combination itself without a description in cases such as this,” said Alexander.

Birkenstock involved an application for a pattern, which had been held to be non-distinctive. The CJEU confirmed that a repeating fashion pattern would inherently probably be seen as a surface pattern, unless the applicant could show otherwise

#darferdas involved the reverse situation: what does the office have to prove to refuse a trade mark when the applicant argues it will be perceived as a trade mark?

Adidas was a decision of the EU General Court and another case in which MARQUES intervened. It concerned the three-stripe mark, which was held to be not inherently distinctive despite about 12,000 pages of evidence and market surveys in five member states. “If a mark is very simple, even minor alterations may constitute significant changes,” said Charles.

Roslagsöl was a case from Sweden concerning the application of disclaimers. The Court said disclaimers should be disregarded in assessing likelihood of confusion. “It’s a case book example of examining weak elements in a composite trade mark and is well worth reading,” said Alexander.

Infringement was also addressed in OKO-Test, a case from Germany where the mark was being used on toothpaste, and there was no infringement. The answer for the trade mark owner, said Charles, would be to register as a certification mark or try to enforce under Article 9(1)(c).

BMB/Ferrero was a design case concerning an earlier trade mark right. The CJEU upheld a finding of likelihood of confusion. “This was the first case regarding a conflict between two 3D marks/designs, and it was enforced without any doubt. It’s very interesting,” said Alexander.

Jurisdiction was the issue in AMS Neve, referred from the UK and concerning a website based in Spain. The answer is what the profession hoped for and expected, said Alexander, namely that you can sue in the jurisdiction where goods are offered for sale: “It’s a very welcome addition to our instruments in forum-shopping.”

Neymar was a bad faith case involving a registration of the name of the famous footballer. The General Court had no trouble finding bad faith. Bad faith has also very recently been addressed by the CJEU in the KOTON case.

Genuine use was the issue in Pandalis (Cystus) where the CJEU rejected an appeal against the decision of the General Court.

Klement also concerned genuine use, in a case where there were minor variations in the way the mark was used. There is genuine use of a 3D mark even if a name is added to the mark – a simple answer but one that took many years of litigation.

Boswelan concerned use in clinical tests of a mark registered for goods in class 5. The question was: do clinical tests amount to genuine use. Surprisingly, said Alexander, the mark was revoked and the decision has been upheld at all levels, with the CJEU saying clinical tests are equivalent to internal use.

Finally, Alexander discussed Cofemel which is almost a trade mark case: it involved copyright protection for G-Star clothing and the threshold for creativity that should be applied. The CJEU said there is a single standard for creativity, which is the personal expression of the author.

The panel was moderated by Shane Smyth of FRKelly in Ireland, who the previous night had been presented with the MARQUES David Goldring Volunteer Award.

Posted by: Blog Administrator @ 13.00
Tags: Annual Conference, Cofemel, CJEU, ,
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Latest trends on non-traditional marks – Annual Conference part 7

Annual Conference delegates were divided over the registrability of three examples of sound marks, in interactive votes carried out during part 7 of this year’s Annual Conference. The votes suggested that roughly half of the audience believed each of the marks (for a banana jingle, a tune with the words “Premium Quality” and the same tune with no words) were inherently distinctive, illustrating the challenges examiners face when presented with applications for these types of marks.

The session concentrated on the registration of non-traditional marks, following the changes introduced in the past two years by the Trade Mark Regulation and Directive. Dimitris Botis, Deputy Director of ICLAD at EUIPO said the Office has been monitoring filing trends and issues that have arisen since the new Regulation was implemented. “The Guidance in Article 3 of the Implementing Regulation is a good thing for legal certainty,” he said.

The number of applications for non-traditional marks is still small. Only around 1,400 out of nearly 300,000 applications filed since 1 October 2017 are non-traditional marks, including:

  • 66 sound marks (of which 34 have been registered so far). Reasons for refusal under Article 7(1)(b) include being too long (39 seconds) and complex, being perceived as a mere burst engine noise and being too short, abstract and commonplace. The Board of Appeal has upheld a rejection of the sound of an effervescent drink being opened in its first decision on a sound mark under the new Regulation. Accepted sound applications include the Barca chant, the Fratelli tune and a short jingle for furniture. “We are continuously monitoring how examiners react to the new challenges and any difficulties they have in applying the Guidelines in a consistent manner,” said Dimitris.
  • 64 motion marks (29 registered). Reasons given for refusal include being too closely related to the goods or their function (for hand gestures), being perceived as an instruction and having nothing particularly memorable other than showing a chart (this case has been appealed). However, some gesture marks have been registered where the gesture is not directly connected with the goods or services.
  • 31 multimedia marks (17 registered). Marks that are purely promotional have been rejected but some simple and complex videos have been found to be distinctive.
  • 3 hologram marks (2 registered).
  • 19 other marks (9 registered). An application for metal elevator ropes was rejected.

There have been a number of oppositions filed against motion marks, all of which are at an early stage.

Dimitris also summarised recent relevant case law from the CJEU and EU General Court, including the Enercon, Hartwall, Textilis and Red Bull cases.

Regarding certification marks, there have been 226 applications, and 45 registered. There have been 72 objections based on formalities, most of which can easily be overcome, said Dimitris. But he added that there is a lack of harmonisation in the EU, as member states have the option to provide certification marks, and follow different practices. This creates problems when certification marks with geographical terms are cited as earlier rights. There are five cases on certification and collective marks pending before the courts.

Further guidance on non-traditional marks will come from Convergence Programme 11, which MARQUES has been involved in as a user association. “There are a lot of borderline cases,” said Jana Bogatz of D Young & Co LLP, “and we need to find answers that work for all the offices with their different approaches.”

Petra Goldenbaum of CMS Hasche Sigle provided an update on the implementation of the Trade Mark Directive in EU Member States, and Roland Mallinson of Taylor Wessing summarised the latest Brexit developments, saying it was hoped that the UK would follow CP11 even in the event of a hard Brexit: “We don’t anticipate immediate divergence, but there is the possibility that the UK judges will take a different view of shapes and colours.” The panel was moderated by Robert Guthrie of Osborne Clarke.

Posted by: Blog Administrator @ 11.21
Tags: Annual Conference, EUIPO, non-traditional marks, CP11,
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BEPS, DEMPE and the Double Irish – Part 6 of Annual Conference

“Tax is political,” said Lodewijk Berger of Jones Day in The Netherlands during Part 6 of this year’s Annual Conference in Dublin, which asked: Do tax havens have a future? “Who gets to tax what portion of the profits of a multinational enterprise? It doesn’t get more political than that!” explained Lodewijk. The panel was especially topical given the success of Ireland in implementing favourable tax regimes, and the controversy that has generated.

Lodewijk said that the arm’s length principle, which is widely applied, is a good principle but is not perfect. Today, allocation of profits is particularly sensitive where IP is significant for the company and there are different corporate entities in different countries. Corporate tax rates can vary substantially, from zero in the Cayman Islands to more than 30 percent in countries such as France. And some tax structures have been created specifically to attract international enterprises, such as the Double Irish which offers preferential rates to some companies.

Tax reforms

This means that if a significant portion of global profits are attributable to IP, it matters where the IP is located. “That impacts how a multinational enterprise is organised,” said Lodewijk. But he added that major tax reforms are now underway. In the United States, President Trump has lowered the corporate tax rate. There is a significant effort by the OECD to overhaul international standards on allocation of taxation rights (so-called BEPS), and the EU has agreed minimal standards for all Member States. Ireland has agreed to phase out the Double Irish structure, and the Netherlands and Switzerland have also tightened up their rules. The impact of these initiatives is more transparency and crackdowns on abuses.

“There’s nothing new in tax and IP planning,” said Peter Vale of Grant Thornton in Ireland. There has already been a shift away from offshore tax havens following public concern, he said, adding: “That means that groups are going to pay more tax.” The new rules mean there is closer alignment between the “substance” of your business and taxable profits, so it will be increasingly rare to have the substance and the IP kept separate. BEPS has introduced the concept of “DEMPE” to help define substance: Development, Enhancement, Maintenance, Protection and Exploitation of intangibles.

While much progress has been made, Peter said questions remain over profit allocation once the location of the IP has been finalised. He explained that a future drive towards location of consumers, based on customer data for example, could alter existing profit allocation models. Lodewijk added that another developing issue is digital services and BEPS 2.0, which has two pillars: change rules to give market countries a bigger piece of the cake and a global minimum tax standard.

Questions addressed in the discussion, which was moderated by Patricia McGovern of DFMG Solicitors in Ireland, included whether the EU risks becoming less competitive compared to other regions; what approach the UK might take after Brexit; the interaction between tax and state aid; and how DEMPE will be implemented in practice. The speakers concluded that tax havens do have a future, but maybe not for tax purposes.

Posted by: Blog Administrator @ 12.17
Tags: Annual Conference, OECD, BEPS, DEMPE, tax havens,
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Don’t be afraid of GIs - part 4 of Annual Conference

Should trade mark practitioners fear geographical indications? As Jürg Simon, of Lenz & Staehelin in Switzerland said in part 4 of this year’s MARQUES Annual Conference, the law around GIs is complicated with different legal means including registered rights and other laws protecting signs that belong to a particular geographical region and relate to a product that has certain characteristics. “There is a huge basket of law dealing with GIs,” he noted.

“A GI is a territorial right, like all other IP rights. Whether it functions as a GI depends on how it is perceived by consumers in that territory,” said Marcus Höpperger of WIPO in Switzerland. That complicates international protection, he added, although attempts have been made to agree standards, both multilaterally through the Lisbon Agreement and bilaterally.

Carleen Madigan of the Irish Whiskey Association, which works in 140 export markets, provided some insight into the role GIs can play. “A lot of developments enhance our protection to protect Irish Whiskey on an international level,” she said. In particular, the EU has concluded a number of bilateral agreements, including recently with India, which is the world’s biggest whiskey market. “Obtaining GI status is our preferred option, but many countries don’t have specific laws so we also look at trade marks, collective and certification marks,” said Carleen. For example, the Association has recently taken action successfully against "St Patrick Whiskey" being sold in Belarus.

Latest developments

The panel, moderated by Ortrun Günzel of df-mp Dörries Frank-Molnia & Pohlman in Germany, began by discussing recent developments in GI protection. Marcus revealed that the EU has agreed in principle to adhere to the Geneva Act of the Lisbon Agreement, with a final decision expected later this year. “That’s really useful for us,” said Carleen. Switzerland is also considering ratifying the Geneva Act, likely in 2021 or 2022, said Jürg. The Act needs five ratifications to come into effect. So far there are just two, so it is expected to enter into force within the next two years.

Brexit poses particular challenges for the Irish Whiskey Association, as there are GIs for the island of Ireland that span the border between Ireland and Northern Ireland. Carleen said they will continue to be protected in both the EU and UK whatever happens with Brexit, which is not necessarily the case for other European GIs in the UK if there is no deal.

Notable cases

The panel discussed several recently decided or pending cases involving GIs and related issues. These included:

  • The Scotch Whisky Association has taken action against Glen Buchenbach whisky from Germany using the word “Glen” because it evoked Scotch whisky. The CJEU ruled that under the Spirits Regulation the word Glen was not a commercial use of the GI but that evocation can occur if the term triggers an image of the protected GI. The Court set out a six-step test, said Jürg, the final step of which concerns “conceptual proximity”. “It’s paradise for IP litigation lawyers,” he added, while Carleen said: “It’s a positive ruling for us.” Marcus added that Article 11 of the Geneva Act could also be interpreted to provide protection against evocation.
  • Another case that addresses similar questions concerns Aceito Balsamico di Modena and is pending at the CJEU. The Advocate General’s opinion was published in July this year.
  • The Queso Manchego case, decided earlier this year by the CJEU, involved a manufacturer of Rocinante cheese with packaging resembling the character Don Quixote de la Mancha and other images associated with the region. “The lesson is figurative signs alone can under certain circumstances evoke a protected designation of origin, even if they do not use the name of the PDO,” said Jürg. “It’s protection that would make even a famous trade mark owner very happy,” added Ortrun. However, it raises questions about the average consumer across the EU.
  • The final case discussed by the panel was the pending Morbier cheese case, in which the CJEU has been asked: “Must Article 13(1) of Council Regulation No 510/2006 of 20 March 2006 1 and Article 13(1) of Regulation No 1151/2012 of the European Parliament and of the Council of 21 November 2012 2 be interpreted as prohibiting solely the use by a third party of the registered name, or must they be interpreted as prohibiting the presentation of a product protected by a designation of origin, in particular the reproduction of the shape or the appearance which are characteristic of it, which is liable to mislead the consumer as to the true origin of the product, even if the registered name is not used? (emphasis added)”. In Switzerland, said Jürg, the courts have ruled that consumers can be deceived even without the name of the PDO being used.

Don’t be afraid!

Questions remain open about how broadly GIs can be protected, whether they can be enforced against dissimilar goods and whether they can cover services. But the panel agreed that the scope of protection of GIs, particularly in Europe, is potentially vast. “Brand owners need to include GIs in their trade mark clearance projects, but there are challenges to that, including searchability,” said Ortrun. “Speak to a specialist and make sure you are aware of where the protection line is drawn,” added Marcus.

Posted by: Blog Administrator @ 18.36
Tags: GI, PDO, WIPO, Irish Whiskey, Queso Manchego, ,
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A global guide to damages – Annual Conference Part 3

The availability and scale of damages are key parts of risk assessment in taking action over trade mark infringement. In the third part of this year’s Annual Conference, moderated by Bjorn Bahlmann, Boehmert & Boehmert, Germany, six speakers took the audience on a journey around the wold, highlighting commonalities and differences between the common law countries of the UK and US as well as civil law jurisdictions France, the Netherlands, China and the Middle East.

Common law

Damages in the US are characterised by a hotchpotch of rules, with considerable confusion, explained Lisa Pearson of Kilpatrick Townsend & Stockton, USA. When it comes to claiming damages, she said, the burden is on the plaintiff to prove sales; but the defendant has the burden of proving costs or deductions. A successful plaintiff can also be awarded damages and costs (excluding attorney fees in most cases). In intentional counterfeiting cases, however, enhanced remedies are available.

In practice, she said, there are splits between circuits on many issues, including how damages are calculated and what factors are considered. One case concerning lookalike fragrances copying Coty brands led to an award of $6.5 million based on the defendant’s sales. In another case, Adidas-America v Payless, a jury awarded $304.6 million, the highest ever amount in a US trade mark case. The trial court subsequently reduced this to $65.3 million plus $380,000 in costs.

In the UK, damages are decided in a separate trial, said Jeremy Blum, Bristows, UK. But in practice many cases settle once the issues in the infringement cases have been decided, so there are relatively few decisions on damages. Claimants can choose either damages or an account of profits: damages compensate the complainant for losses suffered by the infringing acts while an account of profits aims to ensure the defendant is not unjustifiably enriched by their infringing acts.

“Damages is not a precise science,” said Jeremy. “The judge is trying to recreate what would have happened.” In one case, 32Red v WHG, the claimant elected damages and sought £5 million but the judge awarded £150,000, saying the defendant had other options than using the infringed mark. “It’s a reminder that the theory of damages is not to punish the defendant,” said Jeremy. “The defendant should not be in a worse position by virtue of its infringement.”

Damages awards are generally not high in the UK, but can be in certain cases. In the Hotel Cipriani v Cipriani case, for example, all the defendant’s profits were entirely due to trade mark infringement and £5.3 million was awarded.

China and Saudi Arabia

China is a civil law country, explained Jiao Hongbin, of King & Wood Mallesons, and the law provides that damages can be awarded on four bases: plaintiff’s actual loss; infringer’s profit, multiplier of trade mark licensing royalty rate; or statutory damages up to RMB5 million (with effect from 1 November 2019). For malicious or serious infringement, the rights owner can request punitive damages up to five times the damages awarded (also effective from 1 November). The rights owner can also request that the burden of proof be transferred to the defendant.

The statute of limitations restricts claims to three years before the case was filed, but it may be possible to claim damages for a longer period if the rights owner was not aware of the harm earlier. “How much did the alleged infringing mark contribute to the profits made? There is no specific provision in the Law, but the Supreme People’s Court has made it clear that illegal profits cannot be simply concluded by multiplying sales volume by profit rate. It is at the court’s discretion and a case-by-case decision,” said Jiao.

In the New Balance case from 2016, RMB 98 million was awarded at first instance, but this was reduced to RMB5 million on appeal. In another case, concerning a Chinese language mark, an award of RMB100,000 was reduced to zero by the SPC due to bad faith on the part of the claimant. And this principle was affirmed in the UNIQLO case, where the lower courts found infringement but awarded no damages, and the SPC ultimately overturned the finding of infringement. “China is not only fighting vigorously against infringers but also protects honest trade mark owners from being damaged by malicious registrants,” said Jiao.

Bahia Alyafi, Alyafi IP Group, Qatar focused on Saudi Arabia, where there are four sources of IP legislation. “From the GCC trade mark law, we can conclude that actual damages are provided for, moral damages are partly provided for and punitive damages are certainly provided for,” she said, adding that punishments (including corporal punishment) are provided in Saudi Arabia by Sharia law.

“The burden of proof lies on the plaintiff, who has to prove cause and effect. And interest is prohibited,” said Bahia. In 1992, a case concerning the DETTOL trade mark led to punitive fines of just $16,000 and no actual damages. Ten years later, a case over the ROXTEC mark resulted in no compensation, due to lack of evidence about the defendant’s action. But it’s not all bad news: in 2013, following nearly 20 years of litigation, a trade mark holder was awarded about $5.8 million over sales made following the termination of a licensing agreement. And, notably, anyone reporting a fraud case can receive 30% of damages awarded. Given Saudi Arabia’s importance in the region, it is worth looking out for future developments, said Bahia.

Divergence in Europe

In France, damages are to compensate prejudice, not punish the defendant, said William Lobelson, Germain & Maureau, France. “The Enforcement Directive has been transposed, but the practical interpretation is not what we would like. It takes time for judges to change,” he added. Courts take into account a variety of factors in assessing damages, and can also consider moral prejudice. A recent decision concerning the name of a labour union involving moral prejudice led to an award of lump sum of $10,000.

Cumulative damages are also possible in France for the same act, including damages for both trade mark infringement and unfair competition. In a 2018 registered Community design case, Céline v Forever 21, €50,000 was awarded for unfair competition in addition to awards for economic and moral prejudice, costs and injunctions.

William said a lot of information about damage can be obtained: “We can conduct infringement seizures, and you can access the accounts, computer hard drives etc to gather evidence of the extent of infringement.” Defendants can also be ordered to provide this information, though this is rare in practice. “In France you don’t go to court to get money. You go to get injunctive relief and deter infringers,” he concluded. Article 700 of the Civil Procedure Code also provides for the reimbursement of legal fees and expenses, though in practice this is often limited by judges.

Average damages are between €10,000 and €50,000 said William, while €10,000 is typically awarded for moral prejudice.

Timee Geerlof, Windt Le Grand Leeuwenburg said the Netherlands has some similarities with France, with various remedies available – though in a copyright case the Supreme Court said that actual loss and surrender of profits cannot both be awarded. The quantification of damages often results in “costly and lengthy proceedings, that are often determined in subsequent proceedings to the infringement,” said Timee.

The Supreme Court has set out the steps a court must take in calculating damages. In one case, concerning Atari games sold without authorisation, the court awarded damages for the actual loss of 603,509 but refused to grant damages for indirect loss or reputational damage. In another, concerning counterfeits of Chanel wallets, the court declined to award damages based on actual loss and referred to follow-up proceedings for the determination of damages due to the overlap of actual loss and surrender of profits.

Finally, just this week, the Dutch King announced that the Netherlands will update its IP law. Timme noted higher amounts have been awarded in trade mark cases in Belgium, for example in the Levi Strauss case where there were damages of €4.5 million. “Maybe we can solve this discrepancy after our King’s message,” said Timme.

Posted by: Blog Administrator @ 16.20
Tags: Annual Conference, damages, Coty, Adidas,
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The impact of global developments on IP - Annual Conference Part 2

“Our jobs are radically changing,” said moderator Gregor Vos of Brinkhof in The Netherlands, introducing Part 2 of the MARQUES Annual Conference, looking at the impact of global developments on IP. “The nature of our work and even the nature of our jobs will change,” he added.

The speakers brought diverse perspectives to topics such as disruption, the benefits and challenges of technology, e-billing, legal marketing, security and compliance and how the practice of law will change.

Fourth Industrial Revolution

Disruption at work is happening to all of us, said Adrienne Gormley, Vice President of Global Customer Experience & Head of EMEA at Dropbox in Ireland. “We are living in the Fourth Industrial Revolution. It will have a profound impact on who we are as people, the way we live and the way we work … Even as a young company, we’ve had to take a hard look at disruption in our environment.”

Using the example of maps, she said consumers are demanding more and more of products – but get highly frustrated when brands don’t deliver, and are often quick to make their concerns public: “We bring this demand of customer expectation to the companies we work with.”

By 2025, she said, car-sharing will be much more common, there will be a transplant of a 3D printed liver and 3D-printed vehicles. A manufacturing company today could be a software company tomorrow. But this disruption also brings opportunities, said Adrienne, pointing to the example of new Dropbox, launched in June this year.

Disruption also affects workplaces, recruitment and retention, she added, with a greater focus on creativity, technology and lifelong learning. “People are the best possible brand ambassadors – how do you retain them?” she asked. Generation Z are digitally native, and expect technologies to add value in all aspects of their lives. “Digital and tech has to embed in every organisation in every sector in the world … and every person in every organisation,” she explained.

Buyer’s market

Turning to the legal landscape, Ginevra Saylor, Director, Innovation Programmes, Gowling WLG in Canada said there has been a shift from a seller’s market to a buyer’s market. This is shown in greater access to law, more awareness of legal process and a shift in supply and demand. In addition, client expectations have changed: they want to know what a matter will cost, expect more innovative billing arrangements and want more valuable services, as well as demanding more transparency and responses 24/7.

Other changes affecting lawyers include the disaggregation of legal work, keeping more work in-house, globalization and new entrants. “As a law firm, your competition is the world over,” said Ginevra, adding that lawyers are responding by working more closely with clients, and collaborating with other firms and service providers.

In response to change, many law firms have built up a “patchwork” of technologies, but now there is a need to integrate these and ensure they work together, as well as with external providers. This enables new services such as client dashboards showing the progress of a case, said Ginevra, as well as the development of new tools such as predictive analytics. Challenges for firms include training, upgrades, new skills and legal competence and cybersecurity. “This gives us an opportunity to delight our clients and deliver truly valuable services, in ways that make more sense to clients,” she said. “These opportunities make the business of law really exciting.”

Becoming agile

“Technology is everywhere,” added David Taylor of Hogan Lovells (Paris) LLP in his presentation, using the example of his domain name practice: case management has gone digital and hard copies have been eliminated for most UDRP disputes and online filing platforms have been developed. Technology also brings frustrations, but also opportunities, he said: “I try to work as remotely and as agilely as possible.”

Demand is going up, but productivity is already peaking, so tools such as document automation and automated contract review will become essential. “We need a balance between people, technology and process. We have to get that balance right,” concluded David.

Posted by: Blog Administrator @ 12.48
Tags: Annual Conference, Dropbox, e-billing, disruption,
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Annual Conference Part 1: Brands buffeted by winds of change

“Change is all around – is your brand ready?” was the question posed in the first session of this year’s MARQUES Annual Conference in Dublin. A panel moderated by Robert MacDonald of Gowling WLG (Canada) LLP addressed topics including economic shifts, trust, transformation and their impact on brands.

Winds of change

What are the five winds of change driving the world? In his presentation, Jan Willem Velthuijsen, Chief Economist, PricewaterhouseCoopers in The Netherlands, discussed megatrends. “These are the long-term trends that make the world in this century different from the previous century,” he explained. These five winds are summarised as ADAPT:

(1) Asymmetry in personal wealth and access has risen; income differences have grown and the way we allocate wealth is moving, he said: “We are not always subtle in how we do that, and we don’t have explicit discussions about what is fair.” Some jobs are at risk of being automated away. “The gap between the haves and have-nots is getting bigger partly because of digitization … that is a fundamental challenge we have not faced yet.” Jan Willem asked: Where – eventually – does the value of a brand land?

(2) Disruption. An explosion of technologies – such as genomics, robots and the Internet of Things – has become valuable thanks to digitisation. “We have already seen some outsiders entering other industries unannounced. Now we see it in every industry, such as automotive and energy.” That means brands are entering new areas, and facing challenges from established brands in other sectors. It will also lead to a more network economy, at the expense of big conglomerates. “It doesn’t make sense to be a very big company. What does that mean for the longevity of your brand? Staying in existence for 100 years is not guaranteed!” said Jan Willem.

(3) Ageing. A million more people leave the labour market each year than enter it in Europe. “That is massive – for healthcare, pensions, care homes and more – that we haven’t seen before,” said Jan Willem. Japan has already shown the challenges that ageing creates. But in countries such as Nigeria the opposite is the case: the number of young people is soaring, and these young people act differently in the way they work, live and shop. “There is a yearning for a purpose, including in the company they work for – they want that company to pursue certain objectives,” said Jan Willem. He added that we have to see elderly people differently: they are fit and active and wealthy, but he warned that brands may not be able to appeal to both the elderly and old.

(4) Populism. Anti-elitism can be seen in many ways in the ballot box. “Individuals can now influence economics, for example to block or stimulate mergers,” said Jan Willem. “That is new – whether it is good or bad I leave up to you. But it means brands can be politicised, and that was not the case 15 years ago … Beware of the angry mob and beware of the role of social media. Are you ready for an attack on your brand?”

(5) Trust. “Trust reduces transactional costs, and increasing distrust raises costs. It is deteriorating in almost every domain,” said Jan Willem. Digitalisation itself raises questions about trust, for example concerning data. A brand is ultimately about trust, so does it become more expensive to protect if trust in general diminishes?

The transformation paradox

In his presentation, Simon Black, Chief Strategy Officer of Design Bridge discussed “The Transformation Paradox” and the concept of the “flexible masterbrand”. He said that there are “two totally different approaches to marketing from legacy brands and start-ups” citing the example of the rise of smartphones and the decline of Kodak, and the emerging personal brands in the fashion industry that threaten the traditional houses. “Legacy brands have to observe, learn and continually evolve,” he said, giving the example of Carlsberg Pilsner. In this context, trade mark practitioners are “true asset managers” bridging the past, present and future of brands.

But he also issued a warning: protecting what you already have may be stifling who you could become. To reap rewards, brand have to transform how they protect ideas and focus on the future not the present: Unilever and Guinness are great examples of this. “We need supportive, progressive attitudes from counsel to keep brands relevant,” he added, describing the evolution of the Guinness harp brand as “adding real craft and value to existing assets, reinterpreting the brand’s magic for today’s consumer”.

Need to react faster

Clare Willetts, CEO and Founder, Not Only Pink and Blue discussed change, trust and fake news, saying: “The world is never static … Brands need to react faster.” Using examples from the Virgin Group, where she used to work, Clare added that “trust is one of the most important things brands have to have” and that means values and actions have to align: “Brands have to dig in and be part of what they say they are. CSR is no longer enough.” Virgin Holidays, for example, now includes single parents and LGBT families in its advertising, while Cadbury updated entire packaging as part of its “Donate your words” campaign.

Brands need to think about rectifying old wrongs, having trusted partners and how to respond to challenges. Deciding brand values “involves people from all around the organisation … to get to what is distilled down to a few words,” said Clare. “Sometimes it’s hard to hold yourself to account when you’re inside that brand. Service providers are trusted partners in that.”

A lengthy discussion, with several stimulating questions from the audience, covered topics including how to build and maintain trust, adapting to different cultures, appealing to different demographics and brands' responsibility for provoking populism.

Posted by: Blog Administrator @ 10.49
Tags: Annual Conference, Guinness, Virgin, Unilever, PwC,
Perm-A-Link: https://www.marques.org/blogs/class46?XID=BHA4781

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