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Tuesday, 27 March 2012

US price-fixing case: Denso executive will plead guilty

Automotive News reports that a Japanese executive with component maker Denso is going to pay a $20,000 fine and do a year and a day in prison for his part in the bid rigging scandal involving heater control panels. The Department of Justice press release is here.

Sunday, 25 March 2012

D and G - David and Goliath?

Motor Law's friends at Auto Retail Network report how two partners in a Fife-based garage business received a notice of threatened opposition from Dolce & Gabbana when they tried to register their trading name, D + G Autocare. The Italian fashion house claimed that the business, which has nine branches in Scotland, could be confused with it if the trade mark application were allowed to proceed. Are they serious?

The garage business is run by George Simpson and David Hunter, hence the name. Mr Simpson told the Daily Record (which has the story here): ‘it was outrageous. How on earth could a garage that knocks out £35 MoT tests be confused with a company known for its £735 handbags?’ (I see that Mr Simpson spotted the "David and Goliath" analogy - I can only say that I thought up the title of this post before I read the Daily Record website.) Their lawyers replied with what Auto Retail Network called "a stiff rebuttal", leading to a sensible compromise: so long as the garage kept ‘Autocare’ as part of its trading name, the fashion house would withdraw its objections. I can't find the trade mark application online, but I bet that it corresponded to the company name and therefore the "Autocare" part was there anyway, which makes Dolce & Gabbana's threats even less justifiable.

There is protection in the Trade Marks Act 1994 for businesses that just use their own name, even if that name is invented. However, they can only do so if it is in accordance with honest practices in industrial and commercial matters - which would exclude trying to take a free ride on the reputation of an earlier business. Hard to see how the Italians' reputation could help with car servicing in Fife ... Perhaps they just want to monopolise the style "D&G", like so many big brand owners. The Act also protects companies with a local reputation, who can't be forced out of business by trade mark bullies, but they don't have a right to register their trade mark. Fortunately, common sense seems to have prevailed here, but it's such a shame that they should have been put to the trouble and expense. The trade mark system consistently fails the small business community.

Monday, 19 March 2012

Theseus's Bentley in the Court of Appeal

Back in October 2010 (how time flies), before this blog started, the Motor Law newsletter carried a report on a case concerning a Bentley Speed Six which evidently was not what it seemed. It was not quite a case of the chassis plate being the only original part, but it came close: and in particular the engine was not an original Speed Six engine, but a different Bentley unit which had been modified to Speed Six spec.

The trial judge held that the car was, essentially, not a Speed Six. The decision caused consternation in the vintage car market, not surprisingly, for how many cars of that age are there around which are original in sufficient respects not to have a judge hold them to be misdescribed? Indeed, it was a problem for the whole world of antiques - old cars are not the only things that might have replacement bits and pieces on them.

Now the Court of Appeal has overturned that judgment. I'll cover it in the March/April edition of Motor Law but in the meantime here's the story on the Daily Telegraph website, and here's the judgment. The appeal court was pretty critical of the judge's handling of the case: the fact that he issued no fewer than five judgments - four of them different iterations of the trial judgment (the fifth being concerned with  ancillary matters such as leave to appeal).

All these years writing Motor Law, and now blogging too, I have come to love cases like this. They allow a commentary on the law without much risk of the reader getting bored. And this one has delivered twice over.

Competition law reforms announced

The Competition Commission and the Office of Fair Trading into a single Competition and Markets Authority will be merged, the government announced last week. The widely-expected changes will, if all goes according to plan, be fully implemented by April 2014, making the competition lawyer's favourite - indeed, only - joke (originally "why is there only one Monopolies Commission?") worth cracking again. The new body's name doesn't quite have the same ring to it, though.

The Government also proposes to amend the existing criminal cartel offence to abolish the requirement that an individual must act "dishonestly" to be guilty of the offence. This requirement is considered to have severely inhibited the successful prosecution of the offence, though on the other hand it does mean that only a very serious case will get to court. Abolition could lead to increased criminal prosecution and convictions of cartelists in the UK, but we are still out on a limb in Europe where other countries have no criminal cartel offences.

Bridgestone wins tread design patent case in China

Design rights in a tread pattern? Never heard of that before. Design patents in many countries of the world correspond to registered designs in the UK and European Union systems, and generally novelty is required before protection is given. But I bet there a plenty of registrations for tread designs lurking on registers around the world.

In this case, Bridgestone, the tyre manufacturer, succeeded in a claim against Guangming Tyre Group in the Beijing Second Intermediate People's Court. In May 2011 Bridgestone filed a claim alleging that its design patent rights were violated by Guangming's manufacturing and sales of tyres, under the Heshan and Chaoyinsu brand names, using patented truck and bus tire tread patterns.

The court ruled in Bridgestone's favour in December 2011 and ordered defendant to pay damages for the infringement. The defendant did not appeal this decision, and the decision has now been confirmed.

The novelty requirement strikes me as a high standard for something as functional as a tread pattern - but, as in other areas of intellectual property law, the lines between different rights are becoming more and more blurred. Surely a tyre tread is applied for utilitarian not aesthetic reasons? But design laws, such at those in the EU, have lost their focus on the all-important question of whether something appeals to the eye. I don't know whether Guangming challenged the validity of the design patent - my guess is that they were put off from trying, perhaps by the expense.

Bridgestone's press statement concludes, predictably:
In accordance with its policy of making customer safety and security its highest priority, Bridgestone will continue to take aggressive action in the courts and with regulators in response to the copying and infringement of its products and services. These actions are necessary to protect consumers and to maintain and enhance Bridgestone's brand value.
What about preserving their monopoly? Nothing wrong in admitting that - it's what design patents and registered designs are all about. 

Sunday, 4 March 2012

Warning labels and instructions in product liability law

 Here's a little legal problem that I have been grappling with, and there seems to be no harm in sharing it in general terms. It's all to do with product liability, under the Consumer Protection Act 1987 and also under the General Product Safety Regulations 2005, but connects with issues of type approval both for an individual component or system and for the whole vehicle. What can the producer of a modified component which does not meet those approvals do to protect itself?

The Act gives a remedy to anyone who suffers injury because of a defective product. Section 3 defines "defect":
(1)Subject to the following provisions of this section, there is a defect in a product for the purposes of this Part if the safety of the product is not such as persons generally are entitled to expect; and for those purposes “safety”, in relation to a product, shall include safety with respect to products comprised in that product and safety in the context of risks of damage to property, as well as in the context of risks of death or personal injury.
(2)In determining for the purposes of subsection (1) above what persons generally are entitled to expect in relation to a product all the circumstances shall be taken into account, including—
(a)the manner in which, and purposes for which, the product has been marketed, its get-up, the use of any mark in relation to the product and any instructions for, or warnings with respect to, doing or refraining from doing anything with or in relation to the product;
(b)what might reasonably be expected to be done with or in relation to the product; and
(c)the time when the product was supplied by its producer to another;
and nothing in this section shall require a defect to be inferred from the fact alone that the safety of a product which is supplied after that time is greater than the safety of the product in question.

Under the Regulations, it is an offence to put a product on the market unless it is a safe product, defined as:
... a product which, under normal or reasonably foreseeable conditions of use including duration and, where applicable, putting into service, installation and maintenance requirements, does not present any risk or only the minimum risks compatible with the product’s use, considered to be acceptable and consistent with a high level of protection for the safety and health of persons. In determining the foregoing, the following shall be taken into account in particular—
(a)the characteristics of the product, including its composition, packaging, instructions for assembly and, where applicable, instructions for installation and maintenance,
(b)the effect of the product on other products, where it is reasonably foreseeable that it will be used with other products,
(c)the presentation of the product, the labelling, any warnings and instructions for its use and disposal and any other indication or information regarding the product, and
(d)the categories of consumers at risk when using the product, in particular children and the elderly.
The feasibility of obtaining higher levels of safety or the availability of other products presenting a lesser degree of risk shall not constitute grounds for considering a product to be a dangerous product ...
So, what can you do? For my client, the key lies in the references to labelling, warnings and instructions for use. While you can't escape liability altogether by such means, you can get the product liability genie back in its bottle, or whatever it is that genies live in. Make sure you tell prospective buyers about what they should not do with the product, and how they should use it safely - what it has been designed to do. It brings to mind all those early, scary, possibly apocryphal, product liability cases mostly from the US involving drying dogs in microwaves, cutting hedges with hover lawnmowers, and the like. Not a complete solution, then, but the best available.

This is certainly not legal advice: consult a lawyer (i.e. take advantage of his or her insurance cover) if you have a problem, and get something drafted that will do the particular job you need done. But be careful not to put the customers off!

Right to Repair in the US

It happens more often that you might think: Federal legislation is introduced to create for the US a European-style protection regime for spares. The latest effort, reported here by Motor Law's friend Dave Musker on the excellent Class 99 blog, goes under the catchy name of the “Promoting Automotive Repair, Trade, and Sales” (PARTS) Act, HR 3839 (IH). Well, the abbreviation is catchy, anyway. The full text can be found here.

The Bill would give third parties the right to make, import, sell and use spare parts without infringing design patents (which broadly correspond in the States to registered designs here), by curbing the term of protection which would normally be 14 years. That is similar to the approach taken in the EU, to deny spare parts protection in order to deal with competition problems (which to my mind is a misguided attempt to deal with problems with the exercise of rights by curtailing the rights rather than dealing with the real problem). However, it would give the automakers a 30 month exclusivity period before selling and using the parts became legal, which isn't found in the EU system, although independent parts-makers would be able to take steps to prepare for marketing even during that 30 months.  Our home-grown Unregistered Design Right law gives five years' exclusivity, but denies most spare parts protection because of the must-fit and must-match exclusions. The residual protection offered in the US would be even less use than what they get under our law: there's an interesting article about the proposal by Kelly Burris of Brinks Hofer here.

Of course, attempts to tie up the loose ends left by the European Union designs legislation have come to very little over the past many years. How can anyone ever hope to find agreement on spare parts protection? The vested interests are just too deeply entrenched and irreconcilable. Don't expect the Americans to devise a magic solution.