EU Retail News - February 2017

by Bryan Cave Leighton Paisner
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When Can You and When Should You Use Your Own Name for Your Brand?

Woman Claims Her Picture Is Worth $2 Billion in Right of Publicity Suit

EU Commission Gets Serious About Geo-blocking

UK Employers: You Have Enhanced Positive Obligations to Prevent Illegal Working

Guest Interview with Filippo Catenacci

Pushing Python Products? Beware UK Import Rules for Animal Furs and Skins


When Can You and When Should You Use Your Own Name for Your Brand?

It is a common misconception that we are all entitled to create brands under our own names. It is also a misapprehension that it is always a good idea — from either a commercial or a personal perspective.

What are the barriers to using your own name for your brand?

If somebody else has already used your name (or a similar name) in the same market as you, there is a chance that you will be prevented from naming a company or a line after yourself. This is because the UK Trade Marks Act 1994 provides that a trade mark is not infringed by the use by a person of his own name only where the use is in accordance with "honest practices in industrial or commercial matters".

In deciding whether you have adhered to "honest practices", the court will take into consideration the following factors:

  1. whether the defendant knew of the existence of the trade mark, and if not whether it would have been reasonable for it to conduct a search;
  2. whether the defendant used the sign complained of in reliance on competent legal advice based on proper instructions;
  3. the nature of the use complained of, and in particular the extent to which it is used as a trade mark for the defendant's goods or services;
  4. whether the defendant knew that the trade mark owner objected to the use of the sign complained of, or at least should have appreciated that there was a likelihood that the owner would object;
  5. whether the defendant knew, or should have appreciated, that there was a likelihood of confusion;
  6. whether there has been actual confusion, and if so whether the defendant knew this;
  7. whether the trade mark has a reputation, and if so whether the defendant knew this and whether the defendant knew, or at least should have appreciated, that the reputation of the trade mark would be adversely affected;
  8. whether the defendant's use of the sign complained of interferes with the owner's ability to exploit the trade mark;
  9. whether the defendant has a sufficient justification for using the sign complained of; an
  10. the timing of the complaint from the trade mark owner.

Samuel Smith Old Brewery (Tadcaster) v Lee (t/a Cropton Brewery) [2011]

In order to adhere with "honest practices" you should, as a starting point and at the very least, conduct a search for the use of your name in the relevant market and reach out to any relevant trade mark owners to provide them with the opportunity to object to your proposed use of your name.

Why might you avoid using your own name for your brand?

Apart from the difficulties associated with registering your own name as a trade mark, the long-term repercussions of doing so should also be borne in mind. You may be prevented from using your own name in relation to your future business ventures where these are in the same field as a company you previously branded with your own name.

Kate Spade made the decision, after selling her shares in the Kate Spade brand, to change her legal name to Kate Valentine. Kate was of course free to use her name in relation to herself personally and in a non-commercial capacity despite being no longer associated with the Kate Spade brand. However, the decision was reached, according to Kate, for commercial reasons and in order to completely distinguish herself, Kade Spade the person, from Kate Spade, the brand.

Her decision is sound from a legal perspective too. Under the Trade Marks Act 1994, a person infringes a registered trade mark if, without consent from the proprietor, he uses in the course of a trade sign:

  1. which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered;
  2. where because (a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the sign is registered, or (b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered, there exists a likelihood of confusion on the part of the public (which includes the likelihood of association with the trademark); or
  3. which is identical with or similar to the trade mark and is used in relation to goods or services which are not similar to those for which the trade mark is registered, where the trade mark has a reputation in the UK and the use of the sign, being without due cause, takes unfair advantage.

Kate's legal name change therefore enables her to circumnavigate any potential infringements upon the Kade Spade trade mark which may have arisen as a result of promoting and marketing her new handbag line – Frances Valentine – (which is clearly in the same market as her previous line) under the name Kate Spade.

Such action is a statement of the pitfalls of tying your personal identity up with your brand identity – and the potential for losing both.

Woman Claims Her Picture Is Worth $2 Billion in Right of Publicity Suit

Could a promotional photograph of a restaurant scene that includes a customer with her hand partially obscuring her face be worth more than $2 billion? That’s what a lawsuit brought by the customer claims.

In an action pending in the U.S. District Court for the District of Colorado, plaintiff Leah Caldwell of Sacramento, California, who is representing herself, claims the restaurant chain Chipotle used the "iconic" image of her for advertising between 2006 and 2015. The lawsuit includes a claim for right of publicity under California's misappropriation statute, stemming from Ms. Caldwell's allegation that she is "readily identifiable and depicted in the photograph as a woman of color wearing a white, long-sleeved shirt, hair up, and large eyes looking directly at the camera." Ms. Caldwell says that she was approached by the photographer on the day of the photo shoot, which took place at a Chipotle restaurant in Denver, Colorado, in 2006, and was asked to sign a release, which she refused. According to the lawsuit, she subsequently saw the photograph displayed at various Chipotle restaurants in both California and Florida.

It used to be that right of publicity claims were the province of famous people, who would bring lawsuits when their image or likeness was used for commercial gain (i.e., for advertising or marketing purposes) without their consent. With the growth of the Internet and social media, ordinary folks have entered the right of publicity arena, using such claims when they feel their image was used commercially and without their consent. However, there are numerous exceptions and defenses to right of publicity claims, many of which depend on the context in and purpose for which an image is used. In some cases, there is a nuanced line between the unprotected use of a photo in an advertisement and the protected use of a photo in connection with editorial material.

There are a number of factors that should be considered when thinking about using someone’s picture in promotional materials or on websites, including, for example: the purpose for which the image is being used; the degree to which the individual can be identified; and whether consent has been obtained to use the individual’s photograph. Also, it is important to note that right of publicity claims are governed by state law, and each state is different. While some states have adopted statutes governing right of publicity claims, in others such claims are determined by common law. Some jurisdictions even permit right of publicity claims on behalf of deceased people.

Independent of how Ms. Caldwell's lawsuit is resolved, it serves as a prudent reminder to businesses to account for potential right of publicity legal risks when using photographs of identifiable individuals in marketing and advertising materials.

EU Commission Gets Serious About Geo-blocking

On 2 February 2017, the EU Commission simultaneously launched three investigations into the e-commerce sector. What is significant about this latest development is that it shows that e-commerce is a clear priority area in antitrust enforcement, and that the Commission is willing to attack perceived anti-competitive practices head-on.

The investigations focus on (1) video games, (2) hotel price discrimination and (3) consumer electronics manufacturing.

The video games inquiry is directed at the largest PC game distribution platform, Steam, and its agreements with multiple video game publishers and is focused on geo-blocking practices. Geo-blocking is the practice of blocking cross-border online sales by redirecting international customers back to their own domestic websites or preventing the use of foreign delivery addresses or credit cards. The alleged geo-blocking in question relates to game activation keys released by Steam in order to unlock games electronically. In this case, the activation keys are themselves geo-blocked, which means that a game purchased through Steam in (for example) Poland could only grant access to users in that country. Although a novel and modern form of geo-blocking, the Commission believes that this restricts cross-border sales and could amount to a breach of Article 101 of the TFEU, the prohibition of anti-competitive agreements.

The second of the Commission’s investigations also relates to geo-blocking and another practice that it is allegedly designed to hinder cross-border trade. The hotel price discrimination investigation looks at agreements between a hotel chain and the largest European tour operators. The restrictions in this case are alleged price discriminations between customers located in different EU Member States. The result of these restrictions, if proven, is that customers in some Member States would not have access to the same rates offered by tour operators to other Member State nationals. The effect of this behaviour would be a partitioning of the Single Market.

The third investigation, whilst similarly focused on e-commerce, does not relate directly to location and geo-blocking but instead addresses an automatic pricing mechanism. The allegation is that several manufactures of electronic notebooks and hi-fi systems have restricted the ability of online retailers to set their own prices by insisting upon online pricing mechanisms that automatically adapt prices to those of leading competitors. The Commission’s view is that such a practice, if confirmed, would restrict intra-EU price competition by preventing the sellers from setting prices lower than their competitors’ (even though, ironically, the intention behind the practice may have been to stay competitive).

The Commission has launched these investigations before the final report of its e-commerce sector inquiry has even been published (expected later in 2017). In September 2016, the Commission published a preliminary report which has now been followed by a public consultation. (We reported upon the Commission’s initial findings in our previous post.) Therefore, these three Commission investigations do not in any way represent a conclusion of the Commission’s focus in this sector. The final report from the inquiry is still awaited and recommendations and new legislation could follow. These current investigations are likely to have come from the Commission’s exploration into this sector and the practices they uncovered.

More investigations may be coming and all companies selling online, particularly those with an EU cross-border presence, would be well-advised to review their current contractual arrangements, especially if they contain any kind of geo-blocking or price restriction.

UK Employers: You Have Enhanced Positive Obligations to Prevent Illegal Working

[co-author: Nicola Conway]

One facet of the new Immigration Act 2016 focuses on strengthening the laws surrounding illegal workers and tightening the obligations on UK employers.

The new law is intended to, amongst other things, "introduce new measures to make it easier to enforce immigration laws and remove illegal migrants". This is particularly relevant to employers in the retail and hospitality spheres.

Employers – you may be committing a civil and/or criminal offence if you have reasonable cause to believe that any of your employees is not permitted to work in the UK as a result of their immigration status.

If you are found to be in violation of the law, you may find yourself vulnerable to fines of up to £20,000 per illegal employee, closure of your business, and imprisonment on conviction for up to 5 years.

To protect yourself, you should be vigilant to check (and re-check where appropriate) whether your employees are permitted to work in the UK. Achieve this by:

  • undertaking the prescribed "right to work" checks when hiring, which involves checking that employees have the necessary immigration status before they commence work for you, and repeating those checks at prescribed intervals where the employee has temporary or time-limited permissions to work; and
  • collecting and retaining (for the duration of the employment and a further 2 years following termination of employment) copies of original documents from employees which demonstrate their right to work, taking steps to ensure that said documents are valid and legitimate.

You should also bear in mind that immigration officers now have enhanced powers to enter and search your premises, seize evidence, remove and detain illegal migrants, and close your business down if they suspect illegal working is taking place. The resounding takeaway is that employers must never turn a blind eye to suspicions about the legality of their workers.

Guest Inverview with Filippo Catenacci

London based Retail Team Partner Sarah Atkinson talks to Filippo Catenacci, Head of Legal & Compliance at Burger King Restaurants Italia s.r.l. (Group BK SEE S.A.)

Please could you give us a bit of background about yourself and your career path to Burger King.

I first started working with BK back in 2009 while I was an associate at a law firm in Rome. During my time there, I acquired a lot of experience of the franchising market and its development in Italy, setting up, and advising on, franchising businesses for many clients, including BK.

Several years later, I was approached by BK to manage the legal side of the Italian franchising business from Milan and also to be part of the leadership team. I have been with them now for about 20 months.

How did you find the move from private practice to in-house?

I knew the business very well which really helped with the transition from private practice. But when you work in-house, you have to learn how to manage the expectations of people who are not lawyers and work in a different way. You have to adjust your soft skills to speak the same language as say, an engineer, and also to understand what they need from you. Also, as the only lawyer, you also have to be prepared to work outside of your comfort zone, while at the same time understanding your own limits.

We all recognise that the increasing volume and complexity of regulation is placing additional demands on legal and compliance teams. How do you stay on top of new regulatory developments affecting your business?

External counsel provide regulatory updates and we also receive internal updates from our Belgian parent company. Being a member of the International Franchise Association is a useful source of information, and with food regulation, we tend to deal with suppliers with a certain amount of sophistication and understanding of the various principles and requirements involved.

The real estate aspects can be complicated and we work closely with the architects and the engineers appointed to develop and build the restaurants. In Italy, there are a large number of local authorities who have to approve the opening of new premises, and the regulations vary depending on the location.

No-one knows exactly what Brexit is going to look like yet, but do you have any particular concerns at this stage about how it may affect your team and/or the fast food business? Otherwise, what, if any other issues are currently impacting on the business?

We have not seen any particular impact on the business so far, but it’s difficult to predict and probably too early to say. Milan is the main industrial and financial centre of Italy, with many regulatory bodies are based there. Perhaps some corporations will choose Milan as a hub for their EU operations in place of the UK.

The head of legal and compliance role can be challenging one. What is the most challenging aspect of your role?

Aside from the challenge of being the only lawyer in a start –up operation, the role involves supporting both existing and new franchisees on legal and commercial issues. You are expected to understand the business and add value to it. It’s a constant challenge, but it opens your mind.

Getting a bit more personal, what do you most enjoy about your job?

Working in a start-up is both challenging and demanding but I enjoy being more involved in the business and part of the decision making process, rather than the more limited role and input you provide as an external lawyer. Having said that, I am also the main person who has to implement any decision, which makes it difficult to achieve a good work/life balance.

And what is the worst thing about your job?

I am currently based in Milan while my family are in Rome which has been difficult, especially with the arrival of a new baby at the end of last year, but it is only a short term arrangement and is going to change very shortly.

Otherwise, the reaction we receive to the fast food industry can be frustrating and we have to educate people about how seriously we take health and safety and how good the product is. It took our competitors years to establish their brands, and BK will do the same.

Pushing Python Products? Beware UK Import Rules for Animal Furs and Skins

[co-author: Nicola Conway]

Global luxury group, Kering, has described python as "le dernier cri in high fashion" and has maximised its access to ethically raised skins by building its own python farm in Thailand. The parent of brands including Balenciaga, Bottega Veneta, Alexander McQueen and others has risen to meet retail demand in a way which it hopes respects the "need for greater transparency or better traceability, the assurance of sustainability and the conservation of pythons in the wild."

Global luxury group, Kering, has described python as "le dernier cri in high fashion" and has maximised its access to ethically raised skins by building its own python farm in Thailand. The parent of brands including Balenciaga, Bottega Veneta, Alexander McQueen and others has risen to meet retail demand in a way which it hopes respects the "need for greater transparency or better traceability, the assurance of sustainability and the conservation of pythons in the wild."

But retailers importing furs, skins and leathers into the UK need to do more than assure their customers that they are sourcing their materials ethically. Under UK law, commercial imports of fur and skin from certain categories of animal are banned – including cats and dogs and endangered animals such as baby harp seal. The furs of animals caught in leg-hold traps are also subject to strict import regulation.

Python, however, does not fall within a protected category and commercial imports of this precious skin — being classified as a product of animal origin ("POAO") — are subject to EU legislation and the general rules on POAO imports as provided by the UK Government:

  • "If you are moving POAO within the EU, you need to meet any relevant health certification and product-marking requirements specific to each type of product and which are standardised across the EU."
  • "When you import POAO from non-EU countries, your goods will be checked at the point of entry into the UK at Border Inspection Posts. You will have to ensure that the relevant paperwork has been completed in order for Customs to clear the goods. Goods must be certified by recognised authorities in the originating countries — these countries are approved on an EU-wide basis."
  • Fees must also be paid before goods will pass customs and be permitted into the country. The import rules are applied strictly and failure to meet them may result in goods being turned away at the border or destroyed. Either way — release into and circulation within the UK will be prohibited and extra costs of re-export and/or wastage will be incurred.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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