16 - Maria Chetcuti-Cauchi

Maria Chetcuti-Cauchi Malta’s new Trademark Act and Trade Secrets Laws 2019

Dr Maria Chetcuti Cauchi is a senior partner at Chetcuti Cauchi and heads the Real Estate and Intellectual Property & ICT practices. Throughout her years of experience, Maria assisted clients in various Intellectual Property aspects, including IP planning, business and brand protection, branding strategy and structuring and transfer of technology agreements. Maria has represented clients from the automobile, agricultural, food and beverages, personal care, consumer electronics, furniture, gaming and software industries.

Maria also specialises in real estate transactions focusing on providing bespoke advice to buyers seeking to invest in Malta through the use of investment and holding vehicles, structured asset plans, private equity and real estate funds, special purpose vehicles and trusts.

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1. EU 1.1 Trademarks

H

aving regard to the crucial economic position of trademark rights and regulation within the EU and within the national economies of all Member States, the EU embarked on an exercise for the total reform of its trademark legislation in 2008.

It was felt that such review of the functioning of the trademark system in Europe was required for various reasons, including: • further harmonising the national laws of Member States; • streamlining of procedures; • facilitation of cooperation between Member States; • supporting anti-counterfeiting initiatives and actions; and • to improve trademarks systems to reflect the modern business environment.

In 2009, the Max Planck Institute1 was tasked with the review of such laws, resulting in a report to the Commission which launched its proposal for the revision of the Trademarks Directive and the Regulation in March 2013.

Following a process of drafts, consultations and revisions, the European Parliament finally approved the European Trademark Reform Package in December 2015. The new European Union Trademark Regulation and the new Trademark Directive were published in the Official Journal of the European Union on 24 and 23 December 2015 respectively.

The Regulation (EU) 2015/2424 entered into force on 23 March 2016.

Member States had until 14 January 2019 to transpose the provisions of Directive (EU) 2015/2436, which entered into force into national laws 20 days after publication. Directive 2008/95/EC was repealed with effect as of 15 January 2019.

1

One of the 84 research institutions operated by the Max Planck Society.

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Financial Services Legislation 1.2 Trade Secrets In a similar manner, the EU revised its regulations relating to trade secrets. Until 2016, at EU Level, there were no harmonised laws related to the protection of trade secrets. As a solution to patchy trade secret protection between the different EU Member States, Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016 on the Protection of Undisclosed Know-How and Business Information (trade secrets) against their Unlawful Acquisition, Use and Disclosure (the “Trade Secrets Directive”) was adopted. The aim of the Directive was to align different national rules that were often sporadic, outdated, opaque or had significant gaps, as well as to harmonise the definition of trade secrets, define the various forms of legal and illegal acquisition, use and disclosure of trade secrets, and propose remedies for those affected by such misappropriation.

Below, we have set out a non-exhaustive list of what we consider to be the most noteworthy changes and advancements to the previous Trademarks Act 2000 (“the Old Trademarks Act”)2 and previous scattered provisions regulating trade secrets in Malta (resulting in a single Trade Secrets Act).

2. Malta 2.1 Trademarks With regards to trademark law, from a Maltese trademark perspective, for many years, the main law governing such matters was the Trademarks Act 2000 (“the Old Trademarks Act”). Four years after the enactment of the EU Trademark Regulation listed above, Malta revised its TM laws with the salient objective to transpose the provisions of Directive 2015/2436. The new Malta Trademarks Act (‘the New Trademarks Act’)3 has approximated our local trademark laws to the collection of EU Trademark laws as well as the domestic trademark laws of the other EU Member States.

Whilst upholding that the Commercial Code,4 the Enforcement of 2 Act XVI of 2000 which came into force on the 01st January 2001, as Chapter 416 of the Laws of Malta.

3 Act XII of 2019 which came into force on the 14th May 2019, as Chapter 597 of the Laws of Malta.

4 Commercial Code (Chapter 13 of the Laws of Malta).

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Intellectual Property (“IP”) Rights (Regulations) Act,5 and the Intellectual Property Rights (Cross-Border Measures) Act6 are important legislative sources for trademark rights and protection in Malta, the publishing of the New Trademarks Act represents an important milestone in the development of Malta’s trademark legislation. The New Trademarks Act amplified the extent of protection, modernised traditional trademark law to bring it in line with new technologies and increased the level of protection for brand owners. Below is a representation of the salient features.

2.2 Trade Secrets With regards to Trade Secrets, before the enactment of the new Trade Secrets Act7, Malta relied purely on contract law when it came to the protection of proprietary know-how or proprietary technology.

The new Trade Secrets Act transposed Directive (EU) 2016/943 on the Protection of Undisclosed Know-How and Business Information (trade secrets) against their Unlawful Acquisition, Use and Disclosure (“the Directive”).

The question begs: why are trade secrets so important that they require special protection?

The process of research and creation leads to development of substantial knowledge that might often fall outside the scope of the protection provided by traditional Intellectual Property Rights (IPRs). Furthermore, some enterprises might not find it apt for their information to be protected through such traditional IPRs. Having said that, such information is invaluable for industry innovation and competitiveness and such trade secrets need to be kept “confidential” as the contrary would deter enterprises from investing heavily in their R&D.

5 Enforcement of Intellectual Property Rights (Regulation) Act (Chapter 488 of the Laws of Malta).

6 Intellectual Property Rights (Cross-Border Measures) Act (Chapter 414 of the Laws of Malta).

7 Act XXIX of 2018 which came into force on the 14th May 2019, as Chapter 589 of the Laws of Malta.

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2.2.1 Definition Despite various mentions scattered in different pieces of Maltese legislation, before the implementation of the new Trade Secrets Act, Maltese law provided no formal definition of ‘trade secret’. Such scattered references were purely conceptual and trade secrets per se were never formally defined or properly regulated. In fact, trade secrets holders would many times commonly safeguard their rights and interests through fiduciary obligations and non-disclosure agreements, with contract law being the main limb of law covering this area.

Some noteworthy and well-known trade secrets are Coca-Cola’s Coke recipe, KFC’s chicken coating recipe, the Google algorithm, or the New York Times Bestseller List. Other examples include business methods, market analyses, business relationships, pricing information, office techniques, customer or supplier lists and related data, recipes, computer programmes and computer databases.

2.2.2 Protection Again, before the enactment of the Malta New Trade Secrets Law, there was no specific source of law for trade secrets protection. The most significant provisions which were usually used to protect trade secrets were set forth in: • The Maltese Civil Code8 - with its provisions on fiduciary obligations that could apply in certain circumstances to protect trade secrets, in particular, those obligations arising by virtue of law, contract, quasi-contract, trusts, assumption of office or behavior and when a person receives information from another person subject to a duty of confidentiality and he or she is aware, or should have been aware, that the use of such information was meant to be restricted. A fiduciary is obliged by law to carry out his or her obligations with utmost good; 9 • The Maltese Criminal Code10 - although this law does not directly deal with trade secrets, it regulates certain general offences which can be applied to trade secrets, in particular, the 8 9 10

Civil Code (Chapter 16 of the Laws of Malta) ibid, Article 1124A Criminal Code (Chapter 9 of the Laws of Malta)

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general offence related to the disclosure of professional secrets that punishes any person who discloses a secret of another, obtained by reason of its profession or office. 11 Another general provision that could potentially apply to trade secrets concerns the disclosure of secrets by public officers or servants.12 • The Maltese Competition Act13 - again, although this law does not directly deal with trade secrets, it also contains general provisions which could have potentially be applied to trade secrets, in particular, if the disclosure or unauthorised use of trade secrets causes a practice prohibited under the Maltese Competition Act, such as the abuse of a dominant position,14 or an agreement with the effect of distorting, preventing or restricting competition.15

3. The New Trademarks Act, 2019 3.1 New Trademark Typologies The Old Trademarks Act defined a trademark as any sign capable of being represented graphically; and which is capable of distinguishing goods or services of one undertaking from those of other undertakings.

A glance at a broad definition of the generic term “sign” in the Oxford English Dictionary provides that a sign is ‘[a] symbol or word used to represent an operation, instruction, concept, or object in algebra, music, or other subjects’.16 Accordingly, the said term can be broadly deemed as inclusive of the terms “design” and “colour”, which have been expressly included in the introduced Act. However, it is also possible to hold that the inclusion 11 ibid, Article 257 12 ibid, Article 133 13 Competition Act (Chapter 379 of the Laws of Malta) 14 ibid, Article 9 15 ibid, Article 5 16 LEXICO powered by OXFORD, <https://www.lexico.com/en/definition/sign>, accessed 11 December 2019.

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of “sounds”, as a separate and isolated term altogether in the introduced Act, eliminated any potential ambiguity and/or claims, thereby providing definitive confirmation and protection to proprietors upon such means of communication and unique identifiers. Service marks, collective marks and certification marks are also covered by the New Trademarks Act. It is with relief that one notes that “unconventional trademarks” have been introduced in the New Trademarks Act. This is a welcome novelty aligning traditional trademark law with modern and novel scenarios. Sound, movement, colours, patterns and olfactory (relating to the sense of smell) marks are a few examples. The New Trademarks Act does away with the obligation to represent the trademark graphically within the registration process, hence opening doors to applications of new categories of marks that can be filed and represented through widely acceptable and available technology, as long as this representation is clear, precise, autonomous, easily accessible, intelligible, durable and objective.17 Older national and regional systems did not permit this, with cases such as the landmark Sieckmann case, delineating that the criteria for a mark to be eligible for registration are difficult to reach unless a graphical representation is possible.18 The case is widely recognised as a landmark decision of the CJEU on the graphical representation of non-conventional trademarks such as the “methyl cinnamate” scent, which the applicant had described as ‘balsamically fruity with a slight hint of cinnamon’. The CJEU had ruled that: • a chemical formula depicting this scent did not represent the odour of a substance and was not sufficiently intelligible, nor sufficiently clear and precise; • a written description was not sufficiently clear, precise and objective; and • a physical deposit of a sample of the scent did not constitute a graphic representation and was not sufficiently stable or durable.

Considering that within the gamut of EU case law, a conservative approach had been adopted along the years, the new Maltese Act is a major steppingstone to modern interpretation, in that by doing away with the obligation to 17 18

Example JPEG, Text, MP3 and MP4 formats.

Case C-273/00 Sieckmann v German Patent and Trademark Office (2002)

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represent a mark graphically, it guarantees greater flexibility to companies to practically apply for the registration of ANY type of mark.

The sign should be able to be represented in any suitable form using the generally available technology, and therefore not necessarily by means of graphic tools, provided that the representation offers sufficient guarantees in this sense.19 3.2 Search and Opposition Rules The Trademark Search and Opposition Rules20 came into force on Friday 26th October 2018, heralding a change in the trademark procedure for searches and opposition for trademark applications received on or after the above date.

3.2.1 Search Process The search process has now been simplified and limited to a search in the Maltese national database.

Under the Old Trademarks Act, the examiner was expected to compare search results from the EUIPO and Malta Register to the proposed mark and make a decision on each result prior to effecting a final decision on whether a trademark may be registered in Malta or not.

By means of the change in the New Trademarks Act, applicants applying to register a trademark in Malta will not have their requests turned down on the basis of EU registered trademarks, where trademark owners might have no intention of ever using such registered trademarks in Malta.

3.2.2 Opposition Process Under the Old Trademarks Act, trademark owners were not permitted to oppose the registration of another trademark whilst the trademark was in the process of being registered before the Industrial Property Registrations Directorate (IPRD). Their only remedy was in court. The New Law now allows the possibility of trademark owners to prevent and stop conflicting marks 19 Article 13 of Directive (EU) 2015/2436.

20 Subsidiary Legislation (SL) 597.03 entitled Trademark Search and Opposition Rules (Legal Notice 343 of 2018)

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from being formally registered in the first place. The process now permits that within 60 days from the publication of the new trademark application on the IP Online Journal, the TM existent owner/holder can initiate proceedings for opposition before the IPRD. This would be a process that precedes any initiation of proceedings before the courts of Malta for any invalidation or revocation of an existent registration. The IPRD would take a decision on whether to accept or refuse the opposition. The decision of the Office can be appealed before the Court of Appeal. Final registration of the application would be published on the IP Online Journal.

3.3 The Exclusion of Functionality Another substantive major change under the New Law relates to the extension of the functionality exclusion.21 Under the Old Law, a trademark was deemed to be functional (and hence non-registrable) only if it resulted from the shape of a trademark.

Article 5 of the New Law expands the extent of the functionality exclusion to encapsulate the ‘shape, or another characteristic’ of a mark. Therefore, any characteristic of a trademark which may be considered “functional” can now form the basis of an objection to a trademark registration.

3.4 Grounds for Refusal 3.4.1 Absolute Grounds The New Trademarks Act stipulates that some marks shall not be registered as trademarks and, if already registered, shall be liable to be declared invalid.

These would be marks that fall within the list of trademarks that are refused or invalidated under absolute grounds for refusal or invalidity22. These would be: a. signs that cannot constitute a trademark; b. trademarks that are devoid of any distinctive character; c. trademarks that consist exclusively of signs or indications that may serve, in trade, to designate the kind, quality, intended 21 22

Article 4(2) of the old Trademarks Act (Chapter 416 of the Laws of Malta) Trademarks Act, Chapter 597 of the Laws of Malta, Article 5

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purpose, value, geographical origin, the time of production of goods or of rendering of the service, or other characteristics of the goods or services; d. trademarks that consist exclusively of signs or indications that have become customary in the current language or in the bona fide and established practices of the trade; e. signs that consist exclusively of: â&#x20AC;˘ the shape, or another characteristic, that results from the nature of the goods themselves; â&#x20AC;˘ the shape, or another characteristic, of the goods that is necessary to obtain a technical result; or â&#x20AC;˘ the shape, or another characteristic, which gives substantial value to the goods; f. trademarks that are contrary to public policy or to accepted principles of morality; g. trademarks that are of a nature as to deceive the public or are likely to deceive the public, such as to the nature, quality or geographical origin of the goods or services; h. trademarks that have not been authorised by the competent authorities and are to be refused or invalidated pursuant to Article 6 of the Paris Convention; i. trademarks that are excluded from registration pursuant to Paris Union legislation, the Laws of Malta or international agreements to which the Paris Union or Malta is a party, providing protection of designations of origin and geographical indications; j. trademarks that are excluded from registration pursuant to Paris Union legislation or international agreements to which the Paris Union is a party, providing for protection of traditional terms for wine; 320

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k. trademarks that are excluded from registration pursuant to Paris Union legislation or international agreements to which the Paris Union is a party, providing for protection of traditional specialities guaranteed; or l. trademarks that consist of, or reproduce in their essential elements, an earlier plant variety denomination registered in accordance with Paris Union legislation or the Laws of Malta, or international agreements to which the Paris Union or Malta is a party, providing protection for plant variety rights and that are in respect of plant varieties of the same or closely related species.

An exception to the above lies in situations where if, before the date of application for registration, or before the date of action for a declaration of invalidity, a trademark had acquired a distinctive character as a result of the use made of it in Malta, then such a mark would not be refused registration or declared invalid.

A trademark shall also be liable to be declared invalid where the application for registration of the trademark was made in bad faith by the applicant.23 Similarly, a trademark shall not be registered or, if registered, is liable to be declared invalid where and to the extent that: (a) the use of that trademark may be prohibited pursuant to provisions of law other than trademark law of Malta or of the Union; (b) the trademark includes a sign of high symbolic value, in particular a religious symbol; (c) the trademark includes badges, emblems and escutcheons other than those covered by Article 6 of the Paris Convention and which are of public interest, unless the consent of the competent authority to their registration has been given in conformity with the laws of Malta.24 23 24

ibid, Article 5(2) ibid, Article 5(3)

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A trademark which consists of or contains: (a) the arms, or any of the principal armorial bearings of the arms appertaining to the President or the Roman Catholic Archbishop of Malta, or any insignia or device so nearly resembling such arms or any such armorial bearing as to be likely to be mistaken for them or it; (b) a representation of the Presidential or Episcopal flags; (c) a representation of President or the Archbishop, or any colourable imitation thereof; or (d) words, letters or devices likely to lead persons to think that the applicant either has or recently has had Presidential or Episcopal patronage or authorisation, shall not be registered unless it appears to the Comptroller that consent has been given by or on behalf of the President or the Archbishop.

The proviso further provides that the Minister may by regulations extend the applicability of the provisions of this sub-article to apply mutatis mutandis in respect of religions other than the Roman Catholic Apostolic Religion.25 The law continues to provide other situations where the trademark would either be refused registration or, if registered, would be considered to be invalid. These would cover matters such as: â&#x20AC;˘

trademarks which consists of a representation of the national flag of Malta;

â&#x20AC;˘

trademarks which contain a representation of the national flag of Malta shall not be registered if it appears to the Comptroller that the use of the trademark would be misleading or grossly offensive.26

A trademark shall not be registered in the cases specified in Article 127 or Article 128 except as provided in said New Trademarks Act. Article 127 provides that: 25 26

ibid, Article 5(4) ibid, Article 5 (5)

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Financial Services Legislation • A trademark which consists of or contains the flag of a Convention country shall not be registered without the authorisation of the competent authorities of that country, unless it appears to the Comptroller that use of the flag in the manner proposed is permitted without such authorisation.

• A trademark which consists of or contains the armorial bearing or any other State emblem of a Convention country which is protected under the Paris Convention shall not be registered without the authorisation of the competent authorities of that country.

• A trademark which consists of or contains an official sign or hallmark indicating control and warranty adopted by a Convention country shall not, where the sign or hallmark is protected under the Paris Convention, be registered in relation to goods or services of the same, or a similar kind, as those in relation to which it indicates control and warranty, without the authorisation of the competent authorities of the country concerned.

• The provisions of Article 127 provide relative to national flags and other State emblems, and official signs or hallmarks apply equally to anything which from a heraldic point of view imitates any such flag or other emblem, or sign or hallmark.

• Nothing in Article 127 prevents the registration of a trademark on the application of a national of a country who is authorised to make use of a State emblem or official sign or hallmark, of that country, notwithstanding that it is similar to that of another country.

• Where, by virtue of Article 127, the authorisation of the competent authorities of a Convention country is or would be required for the registration of a trademark, those authorities are entitled to restrain any use of the mark in Malta without their authorisation.27 Article 128 extends protection in that it applies to the armorial bearing, flags or other emblems, and the names and their abbreviations, of international 27

ibid, Article 127

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intergovernmental organisations of which one or more Convention countries are members.

A trademark which consists of or contains any such emblem, abbreviation or name which is protected under the Paris Convention shall not be registered without the authorisation of the international organisation concerned, unless it appears to the Comptroller that the use of the emblem, abbreviation or name in the manner proposed : (a) is not such as to suggest to the public that a connection exists between the organisation and the trademark; or (b) is not likely to mislead the public as to the existence of a connection between the user and the organisation.

The provisions of Article 128 relative to emblems of an international organisation apply equally to anything which from a heraldic point of view imitates any such emblem.

The New Trademarks Act provides that, by virtue of Article 128 the authorisation of an international organisation is or would be required for the registration of a trademark, and that organisation is entitled to restrain any use of the mark in Malta which is being used without its authorisation.

The Article ends by providing that if bona fide use of the trademark in question began before 1st January 2000, then nothing in the New Trademarks Act affects the right of such a bona fide person.28 3.4.2 Relative Grounds The New Trademarks Act also provides for situations related to relative grounds of refusal.

A trademark may not be registered or if already registered, shall be declared invalid, if: â&#x20AC;˘ 28

it is identical to an earlier trademark, and the goods or services for which the trademark is applied to or is registered are identical with the goods or services for which the earlier trademark is ibid, Article 128

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protected;29 •

due to its identicality with, or similarity to, an earlier trademark and the identity or similarity of the goods or services covered by the trademarks, there exists a likelihood of confusion on the part of the public, including the likelihood of association by the public with the earlier trademark;30

•

the mark is identical with, or similar to, an earlier trademark, irrespective of whether the goods or services for which the trademark is applied are identical with, similar or not similar to those for which the earlier trademark is protected where the earlier mark has a reputation in Malta or, in the European Union in the case of an EU trademark, has a reputation in the Paris Union and the use of such a later trademark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trademark;31

•

the agent or representative of the proprietor of the trademark applies for registration thereof in his or her own name without the proprietor’s authorisation, unless the agent or representative justifies his action;32

•

an application for a designation of origin or a geographical indication had already been submitted in accordance with the Paris Union legislation or the laws of Malta prior to the date of application for registration of the trademark or the date of the priority claimed for the application, subject to its subsequent registration33 and the mentioned designation of origin or geographical indication confers the right to prohibit use of a subsequent trademark on the person authorised under the relevant law to exercise the rights arising therefrom;34

•

rights to a non-registered trademark or to another sign used in the course of trade which were acquired prior to the date

29 30 31 32 33 34

ibid, Article 6(1)(a) ibid, Article 6(1)(b) ibid, Article 6(3)(a) ibid, Article 6(3)(b) ibid, Article 6(2) ibid, Article 6(3)(c)(ii)

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of application for registration of the subsequent trademark, or the date of priority claimed for registration of the subsequent trademark, and that non-registered trademarks or other signs confer on its proprietor the right to prohibit the use of the subsequent trademark35 and to the extent that the use of the trademark may be prohibited by virtue of an earlier right, subject to some exceptions, and protected by means of copyright, registered designs or other rights that the Minister may prescribe by regulation.36 A trademark shall not be refused registration or declared invalid where the proprietor of the earlier trademark or other earlier right consents to the registration of the later trademark.37 Also, where grounds for refusal of registration or for invalidity of a trademark exist in respect of only some of the goods or services for which that trademark has been applied or registered, refusal of registration or invalidity shall cover those goods or services only.38 Earlier marks39 are defined as: (a) trademarks of the following kinds with a date of application for registration which is earlier than the date of application for registration of the trademark, taking account, where appropriate, the priorities claimed in respect of those trademarks: (i)

EU trademarks

(ii)

trademarks registered in Malta

(iii) trademarks registered under arrangements which have effect in Malta;

international

(b) EU trademarks which validly claim seniority, in accordance with Regulation (EU) No. 2017/1001, of a trademark referred to in sub-article (2)(a)(ii) and (iii), even when the latter trademark has been surrendered or allowed to lapse; 35 36 37 38 39

ibid, Article 6(4)(a) ibid, Article 6(4)(b) ibid, Article 6(5) ibid, Article 6(9) ibid, Article 6(3)(c)(i)

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(c) Applications for the trademarks referred to in sub-article (2) (a) and (b), subject to their registration; (d) Trademarks which, on the date of application for registration of the trademark or, where appropriate, of the priority claimed in respect of the application for registration of the trademark, are well-known in Malta, in the sense in which the words “wellknown” are used in Article 6 bis of the Paris Convention.

By way of procedure, the main progress under the New Law was the introduction of a process for the resolution of “relative grounds” disputes.

Under the Old Law, an objection to a trademark registration when this conflicted with a pre-existent registered mark could only be raised by the Malta IPRD. Applicants, in turn, were offered only two options for objection: (1)

comply to registration conditions set by the IPRD; or

(2)

argue their case before the IPRD.

Once registered there was only one route available to owners for recourse, which was a court suit before the First Hall of the Civil Court.

Under the New Law, new solutions have been provided in that the Comptroller shall examine whether an application for registration of a trademark satisfies the requirements of this New Trademarks Act, but it also allows the Minister to prescribe regulations as to whether such an examination shall include ex officio relative grounds for examination.40 For the time being, it seems that the role of the IPRD will be limited to the examination of trademark applications on absolute grounds only. The Trademark Search and Opposition Rules41 only require the Directorate to carry out “relative searches” for the purposes of notifying owners of identical or similar marks once a trademark application has been filed. The ultimate responsibility for objection to a trademark application, before registration, will at the end, fall upon trademark owners.

40 ibid, Article 48 41 Subsidiary Legislation (SL) 597.03 entitled Trademark Search and Opposition Rules (Legal Notice 343 of 2018)

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3.5 Classification of Goods Under the New Trademarks Act, we find a clear delineation and reference as to which system needs to be applied when dealing with the classification of goods and services. Whereas under the Old Law it was stated that: (1) Goods and services shall be classified for the purposes of the registration of trademarks according to such system of classification as may be prescribed; and (2) Any question arising as to the class within which any goods or services fall shall be determined by the Comptroller, whose decision shall be final,42 The New Law provides us with a more specific indication of the manner in which goods and services should be classified and delineates that the goods and services in respect of which trademark registration is applied for shall be classified in conformity with the system of classification established by the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957 (“the Nice Classification”).43 Article 45 gives further details in that it provides that: • the goods and services for which protection is sought shall be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on that sole basis, to determine the extent of the protection sought; • the Office shall reject an application in respect of indications or terms which are unclear or imprecise, where the applicant does not suggest an acceptable wording within a period set by the Office to that effect; • the use of general terms, including the general indications of the class headings of the Nice Classification, shall be interpreted as including all the goods or services clearly covered by the literal meaning of the indication or term. The use of such terms or indications shall not be interpreted as comprising a claim to 42 43

Old Trademarks Act, Chapter 416 of the Laws of Malta, Article 32 Trademarks Act, Article 45

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goods or services which cannot be so understood; â&#x20AC;˘ where the applicant requests registration for more than one class, the applicant shall group the goods and services according to the classes of the Nice Classification, each group being preceded by the number of the class to which that group of goods or services belongs, and shall present them in the order of the classes; â&#x20AC;˘ goods and services shall not be regarded as being similar to each other on the ground that they appear in the same class under the Nice Classification. Goods and services shall not be regarded as being dissimilar from each other on the ground that they appear in different classes under the Nice Classification; â&#x20AC;˘ any question arising as to the class within which any goods or services fall shall be determined by the Comptroller, whose decision shall be final. 44 The above reliance on the Nice Classification are a far cry from the previous Act, since the Old Law did not provide us with any details or accurate information for such classification. The above definitely gives more certainty to any applicant when it comes to classifying the goods and services that the mark will represent.

3.6 Official Indication that a Mark is a Trademark A welcome addition to the New Trademarks Act is related to the reproduction of trademarks in reference works. Under the new law, the proprietor of a trademark can call upon publishers of encyclopedias, dictionaries or similar reference works (whether in print or electronic format) to include, in their publication, an indication that the trademark is a registered trademark. This procedure is expected to aid right-holders in avoiding that their mark is diluted, becomes a generic term and no longer benefits from formal protection.45

44 45

ibid, Article 45(2),(4),(5),(6),(7) & (8) ibid, Article 14

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4. The New Trade Secrets Act 4. 1 Definition Notwithstanding that trade secrets are still an unregistrable intellectual property right, it is fair to say that the Maltese New Trade Secrets Act46 has upgraded this legal concept to a higher status by giving it official legal recognition in a formal Act of Law as well as granting increased certainty to the right holder. The said Act incorporated the main objectives of the Directive (EU) 2016/943 by: • ensuring an equivalent level of protection of trade secrets to that of the EU and other Member States; • adopted a uniform definition of the term “trade secret”; and • provided common measures against the unlawful acquisition, use, and disclosure of trade secrets.

It defines a “trade secret” as a method of information which meets all the following cumulative requirements: (a) It is capable of being a secret, i.e. generally not known among or accessible to persons within the circles that normally deal with that kind of information; (b) has commercial value because it is secret; and (c) it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.47 4.2 Lawful & Unlawful Acquisition, Use & Disclosure Part of the objectives of the Trade Secrets Act is to set out rules to safeguard against the unlawful acquisition, use and disclosure of trade secrets.

46 47

Trade Secrets Act, Chapter 589 of the Laws of Malta ibid, Article 2

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The law provides that the acquisition of a trade secret without the consent of the trade secret holder shall be considered unlawful, whenever carried out by: (a) unauthorized access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the trade secret holder; and (b) any other conduct which is considered contrary to honest commercial practices.48 Additionally, the unlawful use or disclosure of a trade secret happens when carried out by a person who acquired the trade secret unlawfully; or was in breach of a confidentiality agreement or a duty not to disclose the trade secret; or in breach of a contractual or other duty to limit the use of the trade secret.49 The acquisition, use or disclosure of a trade secret is also to be considered unlawful whenever a person, at the time of the acquisition, use or disclosure, knew or ought to have known that the trade secret had been obtained directly or indirectly from another person who was using or disclosing the trade secret unlawfully within the meaning of sub-article (2) above.50 Similarly, the production, offering or placing on the market of infringing goods, or the importation, export or storage of infringing goods for those purposes, is also considered an unlawful use of a trade secret where the person carrying out the activity knows or ought to have known that the trade secret was used unlawfully.51 The law also provides for situations where an application for the measures, procedures and remedies provided for in the New Trade Secrets Act shall be dismissed where the alleged acquisition, use or disclosure of the trade secret is carried out in any of the following cases (exemptions from infringement): (a) for exercising the right to freedom of expression and 48 ibid, Article 6(1) 49 ibid, Article 6(2) 50 ibid, Article 6(3) 51 ibid, Article 6 (4) â&#x20AC;&#x201C; â&#x20AC;&#x153;Secondary liabilityâ&#x20AC;? which refers to those cases where the recipient knew that the trade secret was unlawfully obtained from another.

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information as set out in the Charter of Fundamental Rights of the European Union, the Constitution of Malta and the European Convention Act including respect for the freedom and pluralism of the media; (b) for revealing misconduct, wrongdoing or illegal activity, provided that the respondent acted for the purpose of protecting general public interest; (c) disclosure by workers to their representatives as part of the legitimate exercise by those representatives of their functions in accordance with the law, provided that such disclosure was necessary for that exercise; or (d) any disclosure by an employee to a whistle-blowing reporting officer or a whistle-blowing reports unit as provided for in the Protection of the Whistleblower Act; and/or (e) for the purpose of protecting a legitimate interest recognised by law.52 The remedies provided by the New Trade Secrets Act in cases of infringement include: • • •

the award of damages to the right holder; imposition of sanctions on the infringer; and publication of the court decisions.

The law also provides for the preservation of confidentiality of the trade secrets in the course of legal proceedings and the provision of provisional and precautionary measures.53 4.3 Employment It is apt to also assess the implications of the New Trade Secrets Act on the employer-employee relationship.

The “trade secret holder” is defined by law as either a company or 52 53

ibid, Article 7 ibid, Article 9

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individual who has the right to manipulate or exploit the trade secret. In the case of an employer-employee situation, the trade secret holder would many times be the employer with the trade secret being used or worked with during the day-to-day running of the business.

As with any other IP right, the realm of trade secrets seeks to strike a balance between the rights of the holder and the rights of other stakeholders within society at large. The Trade Secrets Act in fact seeks to maintain equilibrium between the right to protect such trade secrets and worker protection. This is achieved even through the introduction of safeguards to employees and their representatives. The safeguards provide that nothing in the Trade Secrets Act is to be understood to offer any ground for restricting the mobility of employees and in particular, the law shall not provide any ground for: (a) limiting employees’ use of information that does not constitute a trade secret; (b) limiting employees’ use of experience and skills honestly acquired in the normal course of their employment; and/or (c) imposing any additional restrictions on employees in their employment contracts other than those restrictions imposed by law.54 Since trade secrets are not registrable, formal steps need to be taken to show that protective measures have been taken in order for a given piece of information to be granted “trade secret status”. Businesses should consider adopting some or all of the following: (1) Non-disclosure agreements; (2) Confidentiality agreements and clauses; (3) Termination forms; (4) Written employee policies defining the employees’ rights and obligations; 54

ibid, Article 4(2)

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id-dritt (5) Technical and physical security measures, including passwords, encryption and data access limitations, and (6) Company handbooks: • explaining different IP rights, including trade secrets; • clarifying that the holder of such IP rights is the company; • listing the company’s trade secrets; • explaining how such information is to be handled with additional levels of secrecy.

Employers need to ensure that the above measures are in conformity with the law and do not exceed the limits imposed by such law.

The implementation of the New Trade Secrets Act by the Courts will be interesting to follow. A noteworthy recent judgement that dealt with trade secrets and fiduciary obligations (albeit prior to the implementation of this Act) is the case of M.A.I.N. Services55. It is interesting to note that the judgement did not merely examine in extensive detail the nature and the effects of fiduciary duties but also dealt with the concept of trade secrets theft and misappropriation of confidential business information by the defendant.

Galea (the defendant) had previously been an employee and director of the company M.A.I.N. Services Ltd (the plaintiff). Eventually he resigned from his position and a key foreign supplier ended its business relationship with the business relations with Galea.

In its analysis, the Court observed the following: • the business that the defendant was planning to open was in the same line of operation of the plaintiff; • the defendant had shown signs of opening his own business 55 (2017).

M.A.I.N. Services Limited v Galea Albert Pro, App. No. 1246/2007, First Hall Civil Court

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before he resigned from his position with the plaintiff and had even applied for his own VAT number before his official resignation; • due to his position as employee/director, the defendant used to solely represent the plaintiff company with the foreign supplier and had intimate knowledge of this supplier; • the defendant had access to sensitive data belonging to the company.

In view of the above, the Court concluded that the defendant could not proceed to open an identical or quasi-identical business to that of the plaintiff due to the fact that the defendant had been entrusted with a fiduciary position, and such fiduciary duty persisted post-resignation.

5. Conclusions The changes presented in the New Trademarks Act have been welcomed by industry and right-holders alike. Such changes have achieved a higher level of modernisation and clarification to this area of law. The widening of the scope of a trademark to better align it with modern definitions; the removal of the requirement of graphical representation of a mark; the opening for non-conventional marks to successful registration; the streamlining and introduction of a new opposition procedure; and the introduction of a procedure for the resolution of disputes based on “relative grounds” opposition, are all welcome additions to the previous laws and regulations.

This revision has enabled Maltese trademark law to advance to a level that is conformant to its European counterpart, whilst at the same time also creating an assimilation to the local laws of individual member states. The main aim behind such changes was the strengthening of the gamut of local laws and regulations covering this topic, in particular the introduction of opposition proceedings prior to the registration of a trademark, hopefully providing for a more equitable and practical procedure.

Similarly, the New Trade Secrets Act was a very welcome addition to 335

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the whole range of laws regulating IPRs. According to national experts, the previous sporadic legal system touching upon trade secrets used to deter right-holders from bringing an action before the courts due to the lack of formal legal recognition and protection of such secrets. Previously, any plaintiff would have to face an uphill struggle in obtaining recognition for his/her rights and for the enforcement thereof.

Trade secrets do not need to be novel; protection does not require registration or payment of any official fee (as opposed to trademarks, patents or designs) and is not for a limited period. For these reasons, the protection of valuable business information under the Act has become particularly attractive to SMEs who are planning to invest more in R&D and creative solutions but are looking for higher levels of legal certainty.

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