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Thursday, 23 June 2016

No more new Saab cars

Well, we haven't seen any for quite a long time anyway. The press is full of the story that National Electric Vehicle Sweden (NEVS), the Chinese-backed company which took over the bankrupt carmaker's assets, has lost the right to use the Saab name - which, I believe, always belonged to the aircraft manufacturer, which only hived off car-making into a separate company in 1989, just in time for GM to take it over and - well, the rest is history. Reminiscent of VW buying a car-making business based in Crewe and discovering that the name was only licensed to it by an aero-engine manufacturer. It's sad to see a well-known marque like that disappear, though it could be worse - it could be continued on a completely unsuitable range of cars, like MG.

Wednesday, 22 June 2016

Jaguar Land Rover copycat lawsuit proceeds despite patent cancellation | Reuters

Reuters reports that JLR's action in China against the manufacturer of the Landwind vehicle which bears a striking similarity to the Range Rover Evoque is proceeding despite the cancellation of patents owned by both parties. We would call them registered designs, and (in China like here) they must be novel when the application to register them is made. The Chinese authorities revoked the design patent in April on the grounds that it had lost novelty because it had been made available to the public before the application was filed (in the EU, the applicant would enjoy a 12-month period of grace).

Jiangling, the producers of the Landwind, also had one or more design patents and they too have been revoked - on the grounds that they were too similar to JLR's (so they, too, would suffer from prior disclosure and consequent lack of novelty).

However, the legal action that we are really interested in is for copyright infringement and unfair competition, and is unaffected by the revocation of the design patents.

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Friday, 17 June 2016

Carmaker's trade mark used by non-authorised repairer

It's rather hard to see why a case in which an non-authorised repairer, sued by the manufacturer for trade mark infringement, would even incur the expense of going to court. Nevertheless in Bayerische Motoren Werke AG v Technosport London Ltd and Anor [2016] EWHC 797 (IPEC) (13 April 2016) that is exactly what happened, and the defendant won on one count of trade mark infringement. But it lost on another two, and on passing off, so had a bad day overall.

BMW alleged infringements of their BMW trade mark, the roundel device and the "M" device which denotes certain high-performance models in their range. Perhaps I should write "extra-high performance".

The first two are Community or now EU trade marks, and the third an International designating the EU, so the legislation which was engaged in the case was Council Regulation (EC) No. 207/2009. In each case the claimant invoked art.9(1)(a) (double identity) and (b) (likelihood of confusion) and in the case of the "M" device art.9(1)(c) (unfair advantage) as well, and all three infringements had associated passing off claims. That seems pretty comprehensive.
The uses of the trade marks were all the things that one expects of an unauthorised repairer. There was the use of the description "BMW Specialist" on the fascia on the garage premises, which it was accepted was not liable to affect any of the functions of the trade mark (Case C-63/97, Deenik): it was an accurate message about the services offered by the defendant, and was not even pleaded. The roundel also appeared on the fascia, which was another matter: and it was on a van, business cards and a banner inside the premises. The "M" logo appeared on the website.

The novel allegations of infringement concerned the fact that Mr Agyeton, the proprietor of the defendant, wore a shirt with the initials "BMW" on it and he or the defendant operated a Twitter account with the handle @TechnosportBMW. That claim did not succeed, but the others did. The fact that the roundel featured on the packaging of parts which were supplied (through the authorised dealer network) to the defendant, as the law requires them to be, made the claim a little more complicated. In addition, promotional items bearing the roundel were provided to dealers as part of the manufacturer's efforts to encourage the sale of genuine parts, and would be passed on to non-authorised dealers, who would pass them on to customers, which further complicated the matter. In the end, however, the judge was satisfied that the average consumer would not understand the roundel on the packaging to indicate that the garage was an authorised repairer. But where the roundel was displayed on or in the premises, the average consumer would assume that this indicated a connection between the garage and BMW, or (if that was not the case) at least it would cause consumers to wonder about the connection.

The use of the roundel also amounted to taking unfair advantage of the reputation of the trade mark (art.9(1)(c)), although that won't have added anything to the remedies (and, being an IPEC case, the amount of damages available was limited anyway).

The use of the "M" device would also have those effects, so that too amounted to an infringement. But the use of the BMW signs conveyed no suggestion that the defendant was an authorised repairer, partly because the evidence provided didn't get BMW far enough, so this line of attack is hardly foreclosed by this judgment.  There is an interesting argument that, because BMW dealers commonly include "BMW" in their business names, the addition of the defendant's name could actually made it seem more like a representation that there was a connection: the judge thought that too subtle for the average consumer, but it should definitely not be discounted in future. A manufacturer might well find a way to make that approach work in their favour.

Where, you might wonder, do the art.12 defences feature in this case? The answer is that the defendant accepted that art.12 added nothing to the defence to the infringement claim, namely that "the defendant's use of the signs was not liable to affect the functions of the Trade Marks.  This was because the signs as used by TLL would in each case have conveyed to the average consumer that TLL was a specialist in the repair and maintenance of BMW vehicles, using genuine BMW spare parts." I expected to see detailed consideration of the "honest practices in industrial and commercial matters" proviso, as in Volvo v Heritage, but the judge wasn't asked to get into that.

Regarding the passing-off claims, these stood or fell with the trade mark claims, and the judge explained the connection between the two which strikes me as an interesting point:
 Had I found that the message conveyed by TLL’s use of its roundel and the M logo signs in each case did no more than render the average consumer unable to determine whether there was an economic link between TLL and BMW, as opposed to causing the average consumer to take the view that there was such a link, on that evidence I would have concluded that there had been no passing off by TLL, see Reed Executive plc v Reed Business Information Ltd [2004] RPC 40, at [111] and Phones 4U Ltd v Ltd [2007] RPC 5, at [16].
"Unable to determine" and "caused to wonder" amount to the same thing (so it appears from this judgment), so the test for passing off is somewhat stricter than that for trade mark infringement.

Monday, 13 June 2016

NHTSA warns Tesla over non-disclosure clauses

From the US, two reports from Automotive News last week on the same topic: first, NHTSA warned Tesla about using non-disclosure agreements to keep secret information about out-of-warranty repairs. The agency had learned last month that information about safety-related problems might be being suppressed this way, and announced that it was unacceptable. Then the next day it reported that Tesla was to clarify how customers may disclose problemsrevising a nondisclosure clause in its customer repair agreements in response to NHTSA's concerns.

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Thursday, 9 June 2016

Carwow takes legal action against BMW to lift dealer ban - Car Dealer Magazine

Car Dealer Magazine and Automotive Management report that Carwow, whose establishment we reported back in July last year, are taking legal advice over BMW's efforts to stop their dealers using the web-based service. They have also reported the manufacturer to the CMA.

Coincidentally, the CMA has also warned against online sales bans involving golf clubs, reported here by Pinsent Mason's Out-Law service. That seems to be in line with the case law. And just a few days ago we reported that a ban on German retailers selling Coty products using online platforms such as eBay and Amazon had been referred to the Court of Justice.

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Defining the connected car

We're talking more and more about the connected car these days, but what does the expression mean? Automotive News interviewed Helen Edwards of Intel, who said that you couldn't define it. And when you look at this Intel presentation from a few years ago, it's hardly a matter for surprise!
The Virginia Automobile Dealers Association has called on state regulators to investigate and sanction Tesla Motors Inc. for what it calls “serious, systemic, and habitual violations” of state laws at its existing locations. This includes offering illegal test drives at a shopping-mall gallery. Tesla, unsurprisingly, is not taking it lying down. There is more on Autoblog here.

This comes on top of a lawsuit earlier this year by which the VADA sought to prevent Tesla from opening a second outlet, which it argues the manufacturer cannot do until next year. And last August teh state took issue with Tesla's referral scheme, arguing that it meant that unlicensed individuals were making money from trading in new cars.

Car Wars: The Car of the Future—Legal Aspects in a Connected World

White & Case LLP have published an interesting piece on legal aspects of the connected car, previously published in a special edition of the German newspaper Handelsblatt but here helpfully translated into English. It seems to have a strong German slant but it's definitely worth reading.

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Toyota mulls legal action against Brexit group for logo use

Toyota are not amused by the use of their logo on Leave campaign materials. The manufacturer is reported to be considering taking legal action. The offending leaflets (which also refer to five other carmakers) don't state in so many words that Toyota support Brexit (which they clearly don't), but does say that the companies have all said that they wouldn't pull out of the UK if the UK pulled out of the EU. It sounds as if the action would be for trade mark infringement - and given that Toyota probably haven't registered trade marks for political campaigns, they would have to argue that the use is detrimental to the reputation of their trade mark, which sounds about right.


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German prosecutors investigate VW over deleted data | Reuters

Reuters report that prosecutors in Germany are investigating the deletion of data relevant to investigations into the emissions scandal by VW employees. Some of the data were allegedly transferred onto data sticks, which have since been handed back in (to whom, the report does not make clear).

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VW receives approval for fixes on a further 1.1 million diesel cars

Reuters via Automotive News report that in addition to the 800,000 that the KBA gave approval for last week, VW has approval to fix another 1.1 million diesel cars and CVs, including Audi models, Tiguan and Caddy models with the 2.0-litre TDI EA 189 engine.

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Slovenia: Competition Protection Agency adopts commitments for Hyundai Auto Trade

The Slovenian competition authority has accepted undertakings from the local Hyundai concessionaire, which are intended to ensure that warranty terms are no longer used to keep repair and maintenance work within the authorised network, according to a report from law firm Shoenherr. The case was brought under domestic competition legislation (Article 6 of the Prevention of Restriction of Competition Act) but the principles contained in the block exemption were applied.

Vehicle tax collected fell £200m after paper discs axed - BBC News

BBC News reports that vehicle excise duty collection has fallen by £200 million since the abolition of the paper tax disc, which was not the idea. No doubt it will all come right in due course, but for the time being the change doesn't look like a great success: and that's without even thinking about all the controversy there has been about losing paid-up tax when a vehicle is transferred, or even just when the registered keeper changes - and we are always told that the registered keeper is not necessarily the owner ... 

Wednesday, 8 June 2016

Fiat engines comply with emissions rules, Italian minister says

From Automotive News Europe: 

Fiat Chrysler diesel engines have been tested and they comply with emissions regulations, Italy's Transport Minister Graziano Delrio said, after German media reported that irregularities had been found.

Tuesday, 7 June 2016

Germany wants stricter EU rules for car emissions

Automotive News reports that Germany, of all countries, wants emissions rules tightened up. It's carbon dioxide that's the problem (CO2, as everyone who hasn't worked out how to use subscript, or understood the need to do so, refers to it), not NOx: last month a committee of the German legislature revealed that some 30 car models were emitting suspiciously large volumes of the gas. The proposal is designed to help defeat or deter the use of cheat technology, and to require vehicle manufacturers to disclose what technology they are using to protect engines in harsh driving conditions. It's the fact that GM have admitted that the emissions controls on Zafiras shut off at a certain speed and air pressure, to avoid damaging the engine that seems to have prompted this latest idea: GM say that they are doing nothing illegal there, but whether it should be legal is another matter.

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Monday, 6 June 2016

VW receives approval for fixes on more than 800,000 cars | Reuters

Reuters  reports that VW has been given approval by regulators for fixes on more than 800,000 cars out of the 8.5 million in Europe that require attention. This means that recalls can begin in earnest - so far only about 50,000 cars have been dealt with.

The KBA has approved fixes for Passat, CC and Eos models with 2.0 litre TDI EA 189 engines, the manufacturer announced on Friday. It also said that software updates on the affected 1.2-litre, 1.6-litre and 2.0-litre vehicles, as well as hardware fixes for about a third of the affected cars, would be completed by the end of the year.

Reuters say that the KBA had been worried that the proposed fix would increase consumption for the Passat, but it now seems satisfied that fuel consumption will not increase. Performance and noise levels will also be unchanged. Modifications for other 2.0 litre models should now be approved in the  near future, but recalls of 1.2 litre cars are being delayed.

Competition in Motor Racing: A New Formula One Antitrust Case? by Oliver Budzinski :: SSRN

Competition in Motor Racing: A New Formula One Antitrust Case? by Oliver Budzinski  is an interesting piece of reading. It's been around for a couple of years but I only recently found it. The abstract says:   
The European Commission appears to be considering to open a new antitrust case against the owners of the FIA Formula One World Championship (F1), which by some accounts represents the second biggest sports business in the world. Specifically, two interrelated concerns are raised: (i) a violation of a former settlement between F1 organizers and the EC’s competition division by re-mixing regulatory authority and commercial rights through the Fédération Internationale l’Automobile (FIA) and (ii) an unfair treatment of smaller teams by excluding them from regulatory decision procedures and by a grossly uneven distribution of revenues among teams. These two concerns, however, do not only point to a violation of the former settlement, they also reveal a major flaw in the 2001 agreement. Instead of restoring competition, the power may just have been leveraged from the FIA to the commercial rights holder.

U.S.: Chevy dealer fined $40,000 for selling recalled new vehicles without repairs

In the United States, Federal law makes it an offence for a dealer to sell a car that is subject to an open recall without making sure that whatever caused the recall in the first place has been fixed. A recent case involving a Chevrolet dealer in Phoenix is the subject of a settlement agreement  under which the dealer agreed to pay NHTSA $40,000.

You can read more on the Automotive News website here.

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China: JLR sue Landwind over Evoque look-alike

According to Reuters, Jaguar Land Rover has become the first western car maker to sue a Chinese rival, Jiangling Motor, in China for copying its design. Although copying is rife, the difficulty of enforcing intellectual property rights in China has usually deterred manufacturers from taking such a step - Honda took action to protect the CR-V design from copying by a little-known Chinese company, and were in court for 12 years before winning far smaller damages than they had sought.

The JLR suit is based (it seems) on copyright and unfair competition law. Jianling's Landwind X7 - the latest version of which was announced last November - bears a striking resemblance to the Evoque. It has softer, more rounded angles on the front, but cheap kits enable the owner to modify the look to make it more like an Evoque, which costs three times as much.

In the UK, JLR have applied to register the appearance of the Evoque as a trade mark. The application is still under examination, but there are many precedents for vehicle shapes being registered as trade marks - though how effective they are has not yet been shown in litigation.

Friday, 3 June 2016

Germany: court recognises repair and service market is brand-specific

In 2011 the Bundesgerichtshof controversially took the view in the MAN case that the aftermarket is not brand-specific, so quantitative restrictions on authorised repairers are permissible. Now the same court has come to the opposite conclusion, in a case (KZR 41/14) involving Jaguar.

Wednesday, 1 June 2016

South Wales car salesman handed seven-month jail sentence - Car Dealer Magazine

A car dealer from south Wales has been jailed for seven months for a long list of offences relating to unfair commercial practices. According to Car Dealer Magazine, he washed his hands of any problems customers encountered with the "budget" cars he sold, and went so far as to threaten to kill customers who complained: that seems to be taking the definition of an unfair commercial practice a bit far. However, and perhaps unsurprisingly, he was already serving three years for assault occasioning actual bodily harm and sexual assault, to which the new term is added.

Here is the story in Car Dealer Magazine.

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American Consumers Recover $225 Million As Court Approves Settlements Against Automotive Parts Cartel

Cotchett, Pitre & McCarthy, LLP, who represented consumer plaintiffs seeking damages against members of the car parts cartel which has been the subject of so much antitrust enforcement in the US in recent years, report that on 12 May a judge in Michigan approved a settlement under which the defendants to pay $225 million to compensate the plaintiffs for the inflated prices they paid for their cars.

It seems that there is more to come, though, as more plaintiffs put in claims.

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Court of Justice to consider online sales ban in selective distribution

The whole idea of selective distribution is that the manufacturer is allowed to decide how its goods will reach the market - through a certain type of reseller, which in the motor sector means a dealer who meets a raft of standards imposed by the manufacturer. Luxury goods might be limited to shops with a certain ambience, and in only the best locations. In Case C-439/09, Pierre Fabre, the Court of Justice ruled that absolute bans on online sales were prohibited, in selective distribution agreements and elsewhere. But can selected retailers be prevented just from selling the goods using online platforms like eBay and Amazon?

That's the topic of a reference from the Oberlandesgericht Frankfurt am Main to the Court of Justice (Case C-230/16, Coty Germany). The courts in Germany have taken a different view from that of the competition authorities there, which is a bit of a problem: the competition authorities have struck down online sales bans, while the courts (or at least the OLG Frankfurt am Main, here) have been upholding them. That court applied something very like the traditional justification for selective distribution, that a manufacturer has a legitimate interest in ensuring that its branded products are perceived as high-quality products, and that customers receive the right sales advice, so the manufacturer is free in principle to dictate the conditions under which its products are sold provided that they are necessary to meet its quality standards. Note that the court was there concerned with branded goods: it looks as if the fact that the new reference to Luxembourg concerns luxury products is significant, as the headings of the court documents suggest. The earlier case concerned "The question of the admissibility of the prohibition of Internet sales of brand-name items and their setting in the price search engines" and the new one is headed "Decision on the admissibility of selective distribution systems, which are directed on distribution of luxury and prestige goods" (thanks, Yandex Translate).

The motor industry is still quite a long way from having a big problem with online sales, with new car transactions still being showroom-based - but that isn't going to remain the case for ever. Depending on what the Court of Justice says, it might be a long, long time before online sales become significant. But we'll have to wait a while just to know that - about 15 months, according to one commentator.

[Hat tip to Isabelle Rahman, a partner in Sheppard Mullin's Brussels office, on the firm's Fashion Apparel Law blog - the commentator cited above.]