Trade marks, registered designs and the monopolisation of functional shapes:a consideration of Lego and Dyson

Legislation: Regulation 6/2002 on Community designs art.3(3)(e) Directive 98/71 on the legal protection of designs art.7(1) Cases: Dyson Ltd v Vax Ltd [2010] EWHC 1923 (Pat); [2011] Bus. L.R. 232 (Ch D (Patents Ct)) Lego Juris A/S v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) (C-48/09 P) Unreported September 14, 2010 (ECJ) *E.I.P.R. 60 In Lego, the Court of Justice of the European Union denied registration for an exclusively functional shape mark despite the availability of other shapes capable of fulfilling the same function and in Dyson v Vax Mr Justice Arnold established that a design can not be registered for a purely functional shape even though another shape could fulfil the same required function.

Trade marks and performance in UK firms:evidence of Schumpeterian competition through innovation

This paper uses novel data on trade mark activity of UK manufacturing and service sector firms to investigate whether trade marks improve the profitability and productivity of firms. We first analyse Tobin`s q, the ratio of stock market value to book value of tangible assets. We then investigate the relationship between trade mark activity and productivity, using a value added production function. Finally we examine interactions between firms IP activity, to explore creative destruction and growth via innovation. We find trade marks are positively related to both Tobin`s q and to productivity. Also in the short run greater IP activity by other firms in the industry reduces the value added of the firm, but this same competitive pressure has later benefits via productivity growth, also reflected in higher stock market value. This describes the Schumpeterian process of competition through innovation, restraining profit margins while increasing product variety and quality.

O2 v Hutchison 3G comparative advertising:European trade mark law beyond compare?

Legislation: Directive 89/104 on trade marks art.5 Directive 84/450 on misleading advertising Directive 97/55 amending Directive 84/450 concerning misleading advertising so as to include comparative advertising Case: O2 Holdings Ltd v Hutchison 3G UK Ltd (C-533/06) [2008] E.C.R. I-4231 (ECJ (1st Chamber)) *Comms. L. 155 Long, long ago a trade mark allowed a craftsman to be identified and held accountable for shoddy goods. Today in the era of the ‘Lovemark,’1 due to extensive advertising hopes and aspirations a lifestyle can be purchased with a brand. For many products a trademark is no longer merely a badge of origin but has a commercial value of its own. Through advertising an emotional attachment is created in the heart of the consumer for particular brands. Brand owners are determined that the value of this attachment be preserved and protected against any encroachment into the aura that has been painstakingly created. Comparative advertising, the allusive use of a mark, is seen by the owners of such emotive brands as likely to jeopardise the character of the brand that they have so carefully nurtured. As they have invested so heavily in creating their concept these owners want to control its use by others. There is an issue however as to how far this control ought to extend when the image is used in the marketing of a rival's goods or services.

The value of intellectual property to firms and society

Economists view intellectual property rights (IPRs) as policy tools for encouraging innovation, but they recognize that they can also inhibit competition. There are many types of IPRs and institutions concerned with their administration. We begin by outlining how these complex and varied rights are supposed to work and how they interact with other characteristics of firms and markets. We then survey the available literature on patents, trade marks, and copyright to assess the value of these IPRs to firms and the costs to firms of acquiring and defending their rights. The paper concludes with suggestions for topics requiring further research to inform public policy better.

The value of innovation:the interaction of competition, R&D and IP

This paper analyses market valuations of UK companies using a new data set of their R&D and IP activities (1989–2002). In contrast to previous studies, the analysis is conducted at the sectoral-level, where the sectors are based on the technological classification originating from Pavitt [Pavitt, K., 1984. Sectoral patterns of technical change. Research Policy 13, 343–373]. The first main result is that the valuation of R&D varies substantially across these sectors. Another important result is that, on average, firms that receive only UK patents tend to have no significant market premium. In direct contrast, patenting through the European Patent Office does raise market value, as does the registration of trade marks in the UK for most sectors. To explore these variations the paper links competitive conditions with the market valuation of innovation. Using profit persistence as a measure of competitive pressure, we find that the sectors that are the most competitive have the lowest market valuation of R&D. Furthermore, within the most competitive sector (‘science based’ manufacturing), firms with larger market shares (an inverse indicator of competitive pressure) also have higher R&D valuations, as well as some positive return to UK patents. We conclude that this evidence supports Schumpeter by finding higher returns to innovation in less than fully competitive markets and contradicts Arrow [Arrow, K., 1962. Economic welfare and the allocation of resources for invention. In: Nelson, R. (Ed.), The Rate and Direction of Inventive Activity. Princeton University Press, Princeton], who argued that, with the existence of IP rights, competitive market structure provides higher incentives to innovate.

Trademarks with a reputation:bridging the 'logical lapse'

The article focuses on the Trade Marks Regulations 2004, which came into force on May 5, 2004. Regulation 7 repeals s 5(3)(b) and amends s 10(3) of the Trade Marks Act 1994, implementing the decision of the European Court of Justice in Davidoff & Cie SA and Zino Davidoff SA v Gofkid Ltd., which was then confirmed in Adidas-Salomon AG and Adidas Benelux BV v Fitnessworld Trading Ltd. The orthodox definition of the primary and proper function of a trademark is that it is to identify the origin or ownership of the goods to which the mark is affixed. As society has changed so too have the functions of the trademark. Due to increased affluence and the growth of the consumer society, some trademarks may now have achieved the status of being a symbol of desire in their own right.

Intellectual property activity by service sector and manufacturing firms in the United Kingdom, 1996-2000

This paper provides evidence from a newly constructed database of UK firms about the extent of their intellectual property acquisition activities over five years. We focus on service sector firms, which have not previously been studied, with comparisons for firms in manufacturing and other sectors, such as agriculture. The measures of IP include both trade marks, which are most important in services, and patents, which are predominantly sought by manufacturing firms. The analysis includes patents and trade marks applied for via both the UK and European routes. While IP assets sought through the UK Patent Office remained strong, more services firms were seeking European Community trade marks and more manufacturing firms were seeking patents via European Patent Office through time. Firm characteristics that are positively correlated with IP activity include larger firm size, stock market listed status and high product market diversification.