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Spicy trademark suit over descriptive marks

Trademark law protects a trademark if it is primarily unique and non-descriptive of the goods or services for which it is being used. For example, you cannot register the mark Computer to sell computers or computer related products, you have to name it differently, such as Apple, Microsoft, Dell, Ubuntu etc. This is one of the basic tenets of trademark law.

Sky Enterprise Private Limited (“Sky Enterprise”) is engaged in the business of processing, manufacturing and marketing of various types of spices, condiments and masalas (mixture of spices). It has, inter alia, registered the marks “Star Zing”, “Black Chinese Pepper Masala” and “White Chinese Pepper Masala”, in Class 30 for spices. A cursory glance at these marks would portray that Star Zing is the brand and the other marks are describing the different Masalas sold under this brand. However, Sky Enterprise, thought differently. According to them, the terms “Black Chinese Pepper Masala” and “White Chinese Pepper Masala” were so closely associated with their brand, such that the customers could identify products described in this manner only with Star Zing. Sky Enterprise filed a suit against proprietor, Abaad Masala which was found to be using the marks viz., “Black Chinese Pepper Masala” and “White Chinese Pepper Masala” along with its brand name AMZ on their masala packets. Sky Enterprises alleged that the use of these terms amounted to infringement of its rights in the trademark.

The Defendant argued that the words ‘Black Chinese Pepper Masala’ and ‘White Chinese Pepper Masala’ are used by the Defendant in its trade dress, just as in the case of the Plaintiff, for identifying or indicating the kind, quality, and intended purpose of the goods.

The Court held that the defendant may use the words ‘White Chinese Pepper Masala’ and ‘Black Chinese Pepper Masala’ however, not in this particular sequence. It may use these words in some other sequence or in combination with some other words. However, this particular combination was associated distinctively with the Plaintiff, and it being the registered proprietor of the marks, was entitled to protection.

This case goes against the conventional notion of not allowing descriptive marks to be registered in the first place, let alone protecting them in an action for infringement.

Apple and Qualcomm end their “Legal Beef” and drop lawsuits

The convoluted legal battle between Apple and chipmaker Qualcomm may be coming to an end. The companies said Tuesday that they’re dismissing all litigation against each other. Apple will pay Qualcomm an undisclosed sum as part of the settlement, which includes a six-year licensing agreement between the two.

The settlement also covers suits brought by Apple’s manufacturing partners, which wanted Qualcomm to repay $9 billion—a number that reportedly could have been tripled under antitrust law—that they say the chipmaker overcharged them for patent royalties.

The announcement came while Qualcomm’s lawyer was delivering his opening remarks in a trial of numerous claims and counterclaims that started Tuesday morning in San Diego, according to CNET. Qualcomm told investors last year that Apple would stop using its wireless chips, switching instead to chips made by competitors like Intel.

One potential catalyst for the settlement emerged a few hours later: Intel said it won’t make wireless modems capable of connecting to the coming generation of 5G networks. Earlier this year, Intel had said it would have sample 5G modems ready in 2019, and officially launch the products next year. With Intel no longer an option, that would explain why Apple needed to work out a new deal with Qualcomm. There are few 5G-capable networks operating yet, but Huawei, Samsung, and other smartphone makers have announced 5G-capable phones based on Qualcomm’s wireless chips.

The dispute between Apple and Qualcomm involved the unusual way Qualcomm licenses its technology to other companies. Qualcomm generally charges handset makers like Apple and Huawei around 5 percent of the total price of a phone for the right to use its technology, up to about $20 per device, according to a legal brief filed by Qualcomm. In other words, if you pay $300 for a phone that uses Qualcomm technology, $15 of that might go to the company, even if there are no chips made by Qualcomm in the device. If you paid $1,000, Qualcomm would get $20. Those licensing fees come on top of what a manufacturer would pay for Qualcomm’s chips. Apple referred to this as double-dipping and argued that Qualcomm only got away with it because it effectively holds a monopoly on high-end wireless chip technologies.

Though terms of the agreement were not disclosed, investors viewed it as good news for Qualcomm. Its shares rose 23 percent. Apple shares were little changed.

It’s not necessarily the end of the legal woes that have pitted Qualcomm against regulators around the world in recent years. The company is still awaiting a decision in an antitrust suit brought by the Federal Trade Commission alleging the company uses its dominant position in the wireless chip market to overcharge customers to use its technology.

During the FTC trial, Qualcomm said it doesn’t factor the value of its intellectual property into its chip prices. In other words, Qualcomm claims that it essentially sells the chips at a discount and then makes up for it with the patent licensing fee. It’s an odd arrangement, but it’s one that Qualcomm has had in place for decades, long before it became a major player in the semiconductor industry.

The history of Apple and Qualcomm’s legal beef sounds a bit like a Game of Thrones recap. Apple sued Qualcomm in January 2017, alleging that Qualcomm had withheld $1 billion in royalty rebates in retaliation over Apple’s cooperation with antitrust regulators in South Korea, where Qualcomm was hit with a $854 million fine in 2016.

Qualcomm countersued Apple that spring, claiming that Apple deliberately slowed Qualcomm modems used in some iPhones to cover up slower performance of Intel-made modems used in other iPhones. Apple retaliated by withholding payments for the patent licensing fees its manufacturing partners were supposed to pay to Qualcomm, and by expanding its lawsuit to include the double-dipping allegations. Qualcomm responded by suing Apple’s manufacturers over the unpaid licensing fees and by suing Apple itself for patent infringement.

Sam Sloma: Two must-reads for financial planners

If you had told me 10 years ago that not only would I be a chartered financial planner but that I would enjoy it so much I would be reading about the “science” of retirement and the “new retire-mentality” in my spare time, I reckon I would have asked you to kill me.

But it seems the lifestyle planning element has ignited a spark within me and, once the passion for what you do kicks in, you just want to learn as much as you can.

I have just finished The New Retire-mentality by Mitch Anthony, who spoke last month at Paul Armson’s BACK2Y conference. I saw Anthony speak last year and he was fantastic.

The crux of the book is that retirement should not have to mean stopping work and switching off one’s brain. In fact, there is plenty of evidence to support the idea that doing so has a negative impact on your life.

Advances in medicine and healthy lifestyles mean people are living longer and are far more able to work until they feel they cannot or do not want to.

The internet and progression in human connectivity have also meant that, instead of putting a finite date on one’s working life, it is now easier for people to phase the slowdown, to start new businesses or follow passions in their spare time.

Traditional ideas of retirement are changing and there is an element of responsibility on planners to make sure retirees understand they have options. It was an enjoyable, easy read and I would give it an eight out of 10.

The second book I want to recommend is Start with Why by Simon Sinek. While not specific to financial services, it is a brilliant book about understanding the “why” within your business.

Understanding why the business exists provides a fundamental foundation to build on, of which you only realise the importance once you have found it. Sinek gives numerous examples of business leaders, including high-profile chief executives such as Apple’s Steve Jobs, who have started with why, and how it leads to repeated success.

It is not difficult for a business to explain what it does and it is also fairly easy (though possibly more technical) to explain how it does it.

But very few businesses can clearly articulate their why. Why is it not about financial assets or profits? Why does your business exist? Why does it do the things it does? Why do customers really choose one company over another? Why are consumers loyal to some businesses, but not others?

Starting with why works across businesses of all sizes and across all industries. Those that start with why are more likely to achieve the consumer behaviour they desire through inspiration. And the people who follow them do not do so because they have to; they follow because they want to.

Now, the comparison between companies like Apple and a local financial planning business is not really a fair one. However, it does not mean we cannot learn lessons from these successful businesses. It is a huge asset to be able to look at your business from the ground up and have everything aligned to your why.

Start with Why is a bestseller and for anyone looking at starting their own business, I would say it is a must-read. I give it a solid nine out of 10.

Sam Sloma is Managing Director at Engage Financial Services

Is Apple Buying Netflix?

Citi analysts recently sent a note to clients saying there is a 40% chance that Apple AAPL -0.03% will buy Netflix NFLX +1.93%, according to Business Insider. This will no doubt garner headlines and will be discussed ad nauseam on the financial news networks.

The basis for the analyst’s argument is that Apple will have $252 billion in overseas cash available to repatriate, and they need to do something with it. It would be boring and obvious to tell their clients that Apple will stay the course and continue what they’ve been doing — making smaller acquisitions (like last month’s purchase of Shazam), increasing research & development spending and buying back shares and growing their dividends. It’s much splashier to say they’ll do something exciting like buy Netflix, Walt Disney DIS +0.43%, or Tesla TSLA -1.05%.

Where did Citi come up with their 40% estimate? Did they just pull it out of thin air? Apple is very secretive when it comes to their long-term plans, so this type of analyst note seems to be nothing more than mere speculation.

The Citi analysts have nothing to lose by making their prediction — if they’re wrong, they can claim they said there was a 60% chance of a deal not happening. If they’re right, they can hang their hat on it and say they were the ones who made the call that it would happen.

Apple has already committed $1 billion towards creating new shows and their largest acquisition was buying Beats for $3 billion in 2014. Why would they spend $75 billion to buy Netflix? It would be a desperation move that would raise a white flag and signal a major organisational shift in philosophy.

Where did Citi come up with their 40% estimate? Did they just pull it out of thin air? Apple is very secretive when it comes to their long-term plans, so this type of analyst note seems to be nothing more than mere speculation.

Netflix shares will probably get a boost from this (“buy the rumour, sell the news!”), but they are already overvalued and overpriced. Netflix currently has a P/E ratio over 191 and negative free cash flow as it burns through cash developing new content. Competition in the streaming market is heating up considerably after Disney announced plans to pull their content from Netflix and start their own streaming service next year.

Ultimately, it’s highly doubtful that Apple would buy Netflix, especially at such a high premium. Citi probably knows that, but will be happy to have the attention, and their clients who own Netflix shares will be happy from the inevitable bump.

Ebay paid UK corporation tax of £1.6m in 2016

The UK arm of eBay paid only £1.6m in corporation tax last year, even though its US parent had total revenues from its UK operations of $1.32bn (£1bn).

Ebay’s UK accounts record only £200m in revenues, which came entirely from a Swiss parent firm, seemingly for acting as its advertising agency.

The company declined to explain how its UK revenues were not booked though its UK business. However, an eBay spokesman said its tax affairs were entirely legal.

“In all countries and at all times, eBay is fully compliant with national, EU and international tax rules including those of the OECD, including the remittance of VAT to the appropriate authorities,” he said.

The pre-tax profit eBay UK made on its revenues in 2016 was £7.7m, according to the accounts, and it was on this figure that the UK corporation tax was levied.

Ebay is a huge international business that makes money mainly from advertisers and the commission on sales made through its auction site.

The total revenues of $1.32bn that the parent US business generated from the UK included those from subsidiaries such as the Stubhub ticket exchange and Gumtree classifieds site.

Within the group, the UK arm of eBay is wholly owned by eBay International, which is based in Switzerland and is itself owned by eBay in the US.

The firm’s UK accounts describe the role of eBay UK as providing “services to eBay International by recommending market penetration and advertising strategies for the UK internal marketplace and related third party advertising sales in the UK, Germany, Italy, Belgium and Australia”.

The seeming ability of the company to shelter most its UK profits from the UK tax authorities raises again the ability of big international companies to route their revenues to the countries with the most favourable tax regimes.

This has led in the past few years to intense scrutiny of the tax practices of big firms such as Apple, Amazon, Google and Starbucks.

Ebay in the US, whose international revenues hit $9bn last year, acknowledged that its tax affairs were under scrutiny in several countries, which may leave it with more tax to pay.

“The material jurisdictions where we are subject to potential examination by tax authorities for tax years after 2002 include, among others, the US (Federal and California), Germany, Korea, Israel, Switzerland, United Kingdom and Canada,” its US accounts said.