The year 2008 probably be remembered as a year of economic downturn and collapse of the financial system. Iceland has seen more than its fair share of the global financial crisis and was hit especially hard in October, when its three largest banks failed. The collapse of the financial system and the declining world market price of aluminum (aluminum and alloys account for almost 40 percent of exported goods) have swiftly turned the focus from banking and heavy industry to innovation, start-up companies and SMEs. One of the obvious side effects of this shift in focus is the importance of intellectual property.


The Ministry of Business Affairs

When the current government took over in the spring of 2007, it was decided that the Ministry of Business Affairs and Industry should be divided into two separate ministries. According to this reorganisation, responsibility for industrial property and the Icelandic Patent Office is now under the auspices of the Ministry of Business Affairs. As a result, statutes were passed that pertain to those changes regarding project transference within the governmental offices of Iceland. Included in those statutes were: revisions of the Patent Act, no. 17/1991, Design Act, no. 46/2001, Collective Marks Act, no. 155/2002, and Municipality Act no. 45/1998. Amendments to the Trademark Act were unnecessary. The aforementioned changes took effect on January 1, 2008. Copyright, however, still remains under the auspices of the Ministry of Education, Science and Culture.

The Nordic Patent Institute

The Nordic Patent Institute, NPI, is an international searching authority and preliminary examining authority, which was set up in accordance with provisions of the Patent Cooperation Treaty (PCT), of which Iceland, Denmark and Norway are members. The NPI was established with the purpose of maintaining and enhancing the patent competencies and services of the national patent offices in the institute’s member states. The institute commenced operations on January 1, 2008. Parallel to this, a new opportunity opened up for Icelandic applicants, which utilises the international patent system. This specifies the NPI as an international novelty and preliminary research institute, in an international application for which the Icelandic Patent Office renders receipt. 
The NPI has signed an agreement with the World Intellectual Property Organization (WIPO) in relation to the functioning of the Nordic Patent Institute as an International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) under the PCT, and a special agreement with the European Patent Office on matters relating to the PCT, with the purpose of establishing a framework for future co-operation.

The EFTA and L’Oreal

On July 8, 2008, the EFTA (European Free Trade Association) Court in Luxembourg gave a judgment on the joint cases E-9/07 and E-10/07, generally referred to as the L’Oreal case. The parties of the case were not Icelandic, but Norwegian, but since Iceland is a party to the EEA (EuropeanEconomic Area) Agreement with Norway and Liechtenstein, the judgment is very relevant for Iceland. 
The EFTA Court has jurisdiction with regard to EFTA states that are party to the EEA Agreement (at present, Iceland, Liechtenstein and Norway). The court is mainly competent to deal with infringement actions brought by the EFTA Surveillance Authority against an EFTA state with regard to the implementation, application or interpretation of an EEA rule, for the settlement of disputes between two or more EFTA states, for appeals concerning decisions taken by the EFTA Surveillance Authority and for giving advisory opinions to courts in EFTA states on the interpretation of EEA rules. Thus, the jurisdiction of the EFTA Court mainly corresponds to the jurisdiction of the Court of Justice of the European Communities over EC Member States.

The case concerned the question of whether it is in conformity with EEA law to maintain a principle of international exhaustion of trademark rights. The references to the EFTA Court arose from litigation between L’Oreal and retail companies in Norway that were selling original REDKEN products imported from the United States. In an earlier judgment, the EFTA Courthad concluded that the EFTA countries were free to apply the doctrine of international exhaustion (judgment of December 3, 1997, Case E- 2/97, Mag Instruments Inc. v. California Trading Company Norway, the so-called MAGLITE case). The ECJ, however, decided that Article 7 of the Trademark Directive 89/104 must be interpreted as precluding international exhaustion (judgment of July 16, 1998, Case C-355/96, Silhouette International Schmied v. Hartlauer Handelsgesellschaft, the Silhouette case). The issue raised here was whether the EFTA countries belonging to the EEA were entitled to maintain the principle of international exhaustion or should follow the interpretation of the ECJ.

The questions referred from the Oslo tingrett (district court) to the EFTA court were:

1. Is Article 7 (1) of Council Directive 89/104/EEC to be understood to the effect that a trademark proprietor has the right to prevent imports from third countries outside the EEA when such imports take place without the consent of the trademark proprietor?

2. Is Article 7 (1) of Council Directive 89/104/EEC to be understood to the effect that international exhaustion is permitted?

The EFTA Court decided to follow the ECJ. Its answer to the questions was as follows: Article 7 (1) of First Council Directive of December 21,1988 to approximate the laws of the Member States relating to trademarks (89/104/EEC) is to be interpreted to the effect that it precludes the unilateral introduction or maintenance of international exhaustion of rights conferred by a trademark regardless of the origin of the goods in question.

The London Agreement

The London Agreement, formally the Agreement on the application of Article 65 of the Convention on the Grant of European Patents, is a patent law agreement concluded in London on October 17, 2000 and aimed at reducing the translation costs of European patents granted under the European Patent Convention (EPC). 
The London Agreement is an optional agreement between Member States of the European Patent Organisation.

The London Agreement entered into force on May 1, 2008, following the ratification and accession of the 13th EPC Member State, France. The deposit of the instrument of accession was made by Iceland on August 31, 2004. The Icelandic Patent Act No. 17/1991 was subsequently amended according to the Agreement so that the requirements of the London Agreement were already fulfilled concerning translation of European Patent applications/patents. 
In Iceland, claims of a European patent must be supplied in the national language, Icelandic, but other parts of the patent may be supplied in Icelandic or English. According to Article 77 of the Icelandic Patent Act, a European patent shall take effect in Iceland only if the applicant fulfils the following conditions within the required time limit, according to regulations, after the day on which the European Patent Office has published notification of granting the patent or made a decision on maintaining the patent in an amended version:

1. Submitting to the Icelandic Patent Office within four months from date of grant an Icelandic translation of the patent claims, together with an Icelandic or English translation of the other parts of the patent if the European patent was granted or maintained in an amended version in German or French

2. Paying the Icelandic Patent Office the prescribed fee for publication.