As we learned to appreciate over the past year or so, virtual goods are intangible assets that can be traded within a virtual economy, worth whatever participants in the virtual market are willing to pay for them. Though a type of virtual good, NFTs have their own unique definition, which can now be found in the Cambridge Dictionary:
An NFT is a unique unit of data (the only one existing of its type) that links to a particular piece of digital art, music, video etc. and that can be bought and sold.
In a recent alert, we painted the big NFT picture, highlighting what a non-fungible token (NFT) means and the opportunities they present (see here). In this second part of the NFT series, we will take a deeper look at local regulatory control (or lack thereof) in this uncharted territory.
NFTs have gone mainstream. But what are NFTs? Should your business develop its own NFT? How are they regulated? In The NFT Collection series of alerts, we will delve into these questions to help your business understand this new technology.
In part 1 of this series (here), we considered the welcome introduction of a 12 month grace period that came into effect as of 10 March 2022. The grace period protects a design owner against inadvertent disclosure of a design before an application for protection of the design is filed – previously, this was fatal to having enforceable design rights. In part 2, we delve into the prior use infringement exemption that concurrently came into effect to mitigate the commercial risks that might arise as a result of the grace period.
In a widely distributed Notice of Penalty Offense sent to over 700 companies last year, the Federal Trade Commission (“FTC”) warned businesses about use of fake endorsements and consumer reviews. Forewarned should be forearmed.” This is a continuing reminder to companies to have systems in place to ensure endorsements and reviews comply with FTC guidelines. Companies that are found to be in violation after receiving a “we’re watching you” letter can face civil penalties of up to $46,517 per violation.
Recipients of the FTC’s letter included major consumer products companies, retailers, and advertising agencies. Recipients were not accused of any wrongdoing but were put “on notice” of their responsibilities under the FTC Act and the Commission’s increased focus on specific advertising practices, particularly endorsements.
Protecting the visual appearance of a product, or its packaging, should be a key consideration in any comprehensive IP protection strategy. We have previously written about amendments to the Australian Designs Act 2003 (Cth) (here and here). All changes to the Designs Act have now come into force as of 10 March 2022. In this first of a series of articles, we delve deeper into amendments that introduce the long awaited grace period.
On 24 February 2021, the UK High Court found that a number of Oh Polly dress designs had infringed the unregistered design rights of its competitor, House of CB. This recent decision confirms the risk of additional damages being awarded if infringers flagrantly copy third party designs, whilst also confirming the difficulties brand owners face in bringing passing off actions based solely on copycat designs.
In the recent judgment State of Escape Accessories Pty Limited v Schwartz  FCA 1606, Justice Davies of the Federal Court of Australia found a fashionable neoprene tote bag was not a “work of artistic craftsmanship” and therefore not an “artistic work” for the purposes of the Copyright Act 1968 (Cth) (the Act). Since the Court found that copyright did not subsist in the State of Escape bag (the Escape Bag), there was no finding of copyright infringement.
On 19 November 2020, the Intellectual Property Enterprise Court (IPEC) in the UK handed down its judgment in the case of Freddy SPA v Hugz Clothing Ltd & Ors  EWHC 3032, which ran for an unusually long time for the IPEC (three days).
The decision was a rare occurrence of a passing off claim, together with other IP causes of action, succeeding in the get-up of a functional item, being “bum enhancing jeans”. Ordinarily, such cases, particularly with respect to fashion items, fail as the get-up is seen as merely design elements or ornamental, or the circumstances of the use lead to a conclusion that other trade marks (e.g. brand names and logos) dominate consumer perception.
This case could embolden brand owners in relation to enforcement of the look and feel of their clothing as it creates the possibility of confusion ‘post-sale’ in addition to the point of sale.
Use of Ferrari’s trade mark in a fashion show or on social media requires consent. This is the lesson we assume Philipp Plein has recently learnt following a couple of legal defeats before the Italian Courts that ruled in favour of Ferrari.
In a ruling issued by the Court of Genova last June, the Court ruled in favour of Ferrari for the illegitimate use of Ferrari’s trade marks on Plein’s Instagram account. The designer on that occasion posted several pictures as well as Instagram stories showing some of his clothing line with Ferrari’s trade marks in the background. Ferrari successfully argued that in those shots Philipp Plein was unlawfully appropriating the positive image and reputation of the well-known car company by using its trade marks for promotional purposes.
In another recent case, the Court of Milan ordered Plein to remove from its website, social media, and other online platforms all the videos and images showing Ferrari cars and trade marks. The Court also ordered the payment, in favour of Ferrari, of €300,000 in damages plus legal fees as well as the publication of the decision in two national newspapers. Furthermore, in the event in which that Philipp Plein would not promptly remove the contested images and videos representing Ferrari cars and trade marks, it will have to pay a penalty of €10,000 for each day of delay in the removal of the infringing images and videos. To view the decision, click here.