Examination of witnesses (Questions 420
TUESDAY 11 MAY 1999
MR R WESTON
and MR A SERJEANT
420. May we move off your torture equipment?
May we get back onto something else after that detailed explanation?
The CIPA notes that the English courts have historically favoured
international exhaustion of trademark rights. In your experience,
what, if any, were the main problems associated with international
exhaustion operating previously in the UK?
(Mr Weston) Not significant. My predecessors made
a statement there about the decisions. First we have to remember
that these decisions are old law, they are 15 or 20 years old.
The old system of English common law with licences was good but
the world has moved on so far as definitions are concerned. The
continental jurisdictions have favoured exhaustion of rights whereas
in the common law jurisdictions we have had licensing. This just
illustrates that this is the way the flexibility is having to
occur throughout the IP area in the United Kingdom. We are willy-nilly
going down the track of European harmonisation and European style
of law. The old ideas are having to go.
421. Did it work before or not?
(Mr Weston) Yes. I have to go back. It is 20 years
old and one of the problems before this committee when you talk
about a global market is that there is also global intelligence.
People are now far more aware via the media or via their own travel
and investigations how market conditions can vary round the world.
They have far more information. Twenty years ago the average purchaser
in this country was ignorant as to what the market was elsewhere
and therefore a lot of our clients were ignorant as to what the
market was elsewhere. However, the world has moved on.
422. How do you view the assertion that removing
the right to resist parallel imports from outside the EEA would
lead to a loss in sales within the EU?
(Mr Weston) We cannot comment on that. Speaking personally,
as opposed to a representative, I would say a loss of sales by
whom? A market is being satisfied, but this is a personal view.
As for my Institute's point of view, I have to come back to our
fence-sitting position. Different people sell and there is a market
to be satisfied by one route or another.
(Mr Serjeant) It must lead to an international standardisation
throughout. The luxury market is killed because people can import
inferior quality or different quality goods and sell into it.
Then I would say that the luxury market will not be supplied.
It will simply be given the same product as other markets so there
will be a lack of choice.
423. Same quality goods. What about that? That
is the reality of what happens. You are actually getting identical
goods coming in. Not inferior, not low quality, exactly the same
(Mr Weston) As a practitioner in IP, my view is that
to a certain extent the brand holders, the IP owners, can control
the situation themselves by choice of the trademarks they wish
to use. The example was given before by Miss Cratchley of Shield
soap, different formulation, same trademark. As far as I understand
it, again between the European market and the United States market,
Nestle« have instant coffees which are the identical product
but sold under different brands. When I was in the United States
I went into the supermarket there to try to get my favourite Gold
Blend and I could not find it. I found out it has a different
name. That is fair enough and that is in fact a good use of branding
to identify a particular market and, if you like, to control what
happens to that brand on resale. My view is in these areas, and
it is a view represented by the majority of my committee but not
all, that you can, using existing IP rights, obtain protection
for get-up, for new trademarks, for designs, if it is an invention
for patenting. How you obtain and how you apply those rights,
you can still control a market or even control a market if there
are worldwide parallel imports.
424. It is interesting because I do not think
Shield soap is a high quality product as such. In fairness to
it, that is something Unilever may have decided to do. Let us
go back to a quality product, say Chanel going to South Africa.
Surely you are not trying to tell me that it is a different perfume
in South Africa and the UK?
(Mr Serjeant) That is my understanding. I do not actually
know the South African market. Yes; definitely.
425. Let me just get this clear. I do not want
to put words in your mouth. What you are saying to me is that
Chanel designs Chanel No.5 with five different aromas which are
sent round the world.
(Mr Serjeant) That is my understanding. Certainly
in the case of Cinzano the public taste in France was held by
the manufacturers to be different from that in UK so the product
was different. The question you asked me was when the products
426. I believed that Chanel's perfume would
be identical all round the world. No.5 is No.5. Cinzano is not
something you dab behind your ear, it is something you actually
drink and I would not have thought personally it was a luxury
product. If you were saying it was a bottle of champagne by Moet,
I would think it was the same Moet which goes round the world
but I am not interested in Cinzano. What we are talking about
is high quality goods at a very expensive rate which we pay more
for in the UK than in other parts of the world. That is what we
are talking about.
(Mr Weston) I can answer that in two ways, being a
professional fence- sitter. One is that you do not have to buy
luxury goods. Luxury goods are an option in life. If they want
to price these matters so you can go out and buy Tesco's own brand
Chanel Light perfume instead of Chanel No.5 that is one argument.
The other argument is that personally I do not like being ripped
427. That is the consensus on this side of the
(Mr Weston) This is speaking personally and not speaking
428. This is not just about goods which we might
describe as luxury or not, is it? It is about the fact that you
have products, you have patents, you have trademarks and there
is great confusion. The Colgate case has been referred to. Okay,
we have the same trademark which covers totally different products.
Colgate is not the same product everywhere. There is Colgate No.1
and Colgate No.2, Colgate No.3, but it is not the same product.
Is there not an inherent problem there where you have one trademark
for different products?
(Mr Serjeant) Colgate is a house mark. As far as I
know, it is used on countless different products.
429. Yes, but is there not a problem when no
information is provided to the consumer giving a clear indication
that we are talking about different kinds of Colgate products?
The manufacturer is keen presumably in providing a lower quality
cheaper version in certain parts of the world to con the consumer
into thinking they are buying the same product they would be buying
if they went down the high street in Europe. Is this not basically
a problem that attempts are being made by manufacturers to say
that two goods are the same when in fact they are not?
(Mr Serjeant) Manufacturers are not trying to say
two are the same. They recognise there are differences in public
tastes and so they knowingly sell a different quality in one country
from another. As the public is different there is no deception.
430. The market is different and they choose
how to operate the market. Would life not be easier if there was
a requirement that trademarks and products were more closely linked
so that people knew exactly where there was a difference between
products, that the trademarking regime assisted the consumer to
distinguish between different products rather than to confuse.
(Mr Weston) This is what happens a lot. With trademarks
you have the house mark. Let us take Kodak for example, which
is one of the best trademarks ever invented. Kodak as a company
has a whole range of different products which they put out into
the market. They have disposable cameras, they have digital cameras,
they have imaging software and everything else. Everything quite
rightly goes under the company's name, Kodak; that is the umbrella.
Within that they have separate product names and brands and these
are differentiated and under these they quite justifiably say
okay, we will send a particular type of Snapper, disposable camera,
for this market because this is what they want and there will
be another camera with a Kodak name but another lower level product
name, different product, which they can sell to a different market.
This must be good business and entirely justifiable. The problem
which comes is say you have a Snapper being sold in Africa and
a flash de luxe being sold in Europe for example. They are both
Kodak cameras. It is very difficult to consider things so that
Kodak cannot prevent re-importation into the European Union of
the Snapper one which is directed towards a particular market
just because it has Kodak on it, even when that product is not
sold anywhere in the European Union and under a different name.
This is the structure you have in trademarks.
431. Is a Japanese buying a Cinzano Bianco in
Japan not entitled to assume it is the same as buying it in Italy?
(Mr Serjeant) No, he knows nothing about the Italian
432. How do you know?
(Mr Serjeant) The average Japanese. It is a theoretical
433. I see. So if the average Japanese does
not know anything about the Italian market, we are being advised
that a Japanese citizen in Japan is not entitled to assume that
Cinzano Bianco bought there is the same as Cinzano Bianco bought
(Mr Serjeant) Correct.
(Mr Weston) This applies to all sorts of things and
Coca-Cola especially. The formulation of Coca-Cola varies, especially
as to sweetness content, from country to country, because of their
market research and the tastes they have evolved as to which particular
form sells best. If you go along to Pret-a-Manger for example,
you can buy cans of Coke there and they are French Coke and they
taste different from English Coke because the formulation is slightly
different. There is nothing wrong with that.
434. When buying a Honda car in the UK we are
not entitled to assume that it is the same as buying a Honda car
(Mr Weston) No, because in fact they are slightly
different. I should love, being a Honda owner myself, to be able
to buy Honda cars in the UK at the rates at which they sell in
Japan and with all the goodies and gimmicks they put on in Japan
because you are stalled in traffic jams for even longer than we
are in this country.
435. A similarly specified car.
(Mr Weston) Yes. With all due respect, we are drifting
away because the premise we are talking about here is whether
it is the identical product we are dealing with. Even in the luxury
range, assuming we are talking about Chanel No.5, there are plenty
of other Chanel perfumes. It is a question of whether it is the
identical Chanel No.5 you can re-import from South Africa. If
they decide to sell Chanel No.15 in South Africa but only sell
Chanel No.5 in the United Kingdom then it is a different ballgame
and it is a justifiable use of IP to sell to different markets.
Mr Berry: Remind me never to drink in Japan.
436. Not again. The Committee had a very hard
working and abstemious trip to Japan some years ago, I hasten
to add. You spoke about Europe a while ago and you spoke about
the difficulties of getting an agreement between what were in
effect two different legal systems, two different ways of working.
Are there other problems involved in getting this kind of very
close international harmony? What about questions of translation,
the speed of translation, which seem to bedevil a lot of the activities
certainly of this place where we get European instructions taking
a very long time to arrive because of the problems of translation
and questions of law. Surely the interpretation of the law affects
the translation thereof.
(Mr Weston) At the moment on the assessment of jurisdictions
it is not a problem because there are established translations
involved. If you are dealing with European patents, the current
law is that there must be an approved translation of that patent
into the national country before it is enforced. There are three
languages prevalent on European patents: French, German and English.
These are the languages of prosecution and to go into the establishment
of the national patent which comes from the European patent you
have to translate into the local language. If a patent is being
prosecuted in German through the European Patent Office, before
it can be enforced in the United Kingdom a sworn translation must
be filed so the information is available in front of the public
as to what the right is. The same happens with the Community trademark,
except it is even worse because currently there are five official
languages of prosecution but 11 languages to be filed in and eventually
to be translated into. Publication from them can be yea thick
and I am certain colleagues from ITMA can speak to this at least
as well as I can or longer. That is not the problem of establishing
the right or establishing the law because that is laid down. We
have problems now and if we go to something like a court of first
instance there will be problems of simultaneous translation, problems
of language of the proceedings and language of the people being
(Mr Serjeant) It is the whole question of approach.
In the EpiLady case Mr Weston mentioned a moment again, the tradition
in Germany is to interpret the claim in a completely different
way from this country.
437. May I ask you a question with regard to
look-alikes? Can you explain how any additional brand protection
against look-alikes would disadvantage or could disadvantage those
wishing to search the register on trademarks? Could you explain
that a little?
(Mr Weston) We have two methods of protecting get-up
in the United Kingdom at the moment. The first of all is a registered
trademark. A registered trademark could be anything from the particular
name, shape, smell, everything like that. Because it is a registered
right it is searchable. You look at it and ask whether anybody
is using it. If a client comes to me and says he has a new product
coming onto the market, trademark, shape or anything else, I can
go ahead and search to find out whether there is already an established
registered right to that product. We also have common law passing
off, which is an unregistered right. It is a right which is there
and as such it is very difficult to search to find out whether
there is an unregistered right for a particular shape of a bottle
or anything else. There are some industries where they have by
agreement lists or indices of trademarks. I have clients in the
carpet field and there is a British index of quality marks which
is the listing but that is not comprehensive. Unregistered rights
are very difficult to search. Even here on other parallel rights
we have registered designs and unregistered design rights; registered
design because there are statutory rights. You can search to find
out whether there is a right there. With unregistered design rights
nobody knows whether it is out there or not and clients have to
rely on their knowledge of the particular industry to find out
whether in fact there is a right over which they could trip or
(Mr Serjeant) In addition to that if I do a search
and find that a particular bottle shape is registered, so I say
a competitor has this right, according to the various proposals
put forward someone would have to make a judgement as to whether
what the client intended to do was sufficiently similar and other
subjective matters, that he intended to take unfair advantage
and that kind of thing which sitting in our offices is pretty
(Mr Weston) No, I disagree with my colleague there.
It is no more than we do for patent infringement anyway. You have
to make an assessment of the right and the penumbra or the extent
to which that right extends. It is easier for patents because
patents have a thing called a claim at the end which is a word
description of where the invention lies, but against whichwe
talked about this EpiLady caseis how different countries
can interpret that same EpiLady claim in different ways. When
it comes to trademarks or appearance and get-up it becomes more
objective. If they are identical there is no problem. If it is
a "Chinese copy", when you trade in the areas of how
close can you go, can you be a fair follower as to a theme or
a trend or have you gone a step over the line to become an infringement,
on designs this is very difficult. The classic argument on registered
designs is that you take the design which is registered, you take
the alleged infringement, you take the nearest bit of early design
you know of and you have to say which one is closer. Here is the
registered design. If you think that the nearest bit of prior
art is closer than the alleged infringement then the extent of
protection from the design means there is no infringement. It
is an elastic protection system because there is no specification.
438. May I take you up on this, flowing back
to what we were talking about before? You said you can register
a bottle shape. Presumably the thinking behind registering a bottle
shape is that somebody buying that shape of bottle will expect
the contents to be what that bottle shape implies.
(Mr Weston) Yes.
439. Presumably wherever they go if they buy
the genuine article they can expect, if they buy that bottle shape,
to find the same contents. But you have just said that the contents
may vary from place to place and from market to market. Is there
any real justification for allowing companies to register a bottle
shape when the public really has no idea of what the contents
may be from one place to another?
(Mr Weston) The answer to that is yes, because it
depends on what the market is. At the moment effectively we have
national markets. We are expanding and evolving into a pan-European
market. In consumer items, especially looking at foodstuffs for
example, there is no uniformity of taste. I have already given
an example of Coca-Cola changing its formulation. I know Nestle«
change the formulation of their instant coffees depending on the
market. In southern Europe their Blend 37 would have a higher
chicory content than in northern Europe. At the moment, because
they are essentially just satisfying a national market and they
will have a national formulation, the customer in that market
is being protected by what a trademark is for because they can
say if they buy Nestle« Blend 37 they know they get a particular
taste. If you are a visitor to that market, you detect a difference.