For the half-year to 30 June 2015, the IPKat's regular team is supplemented by contributions from guest bloggers Suleman Ali, Tom Ohta and Valentina Torelli.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Friday, 24 April 2015

Friday fantasies

Forthcoming events. As usual, the IPKat's list of impending conferences, seminars, lectures and other IP attractions has been given its weekly spring-clean and update, so don't forget to check it out. Latest on the list is the "Meet the Judges" seminar that takes place in Dublin, Ireland, on Friday 5 June.  It's organised by European trade mark organisation MARQUES and features more judges than you can shake your wig at.  It's ideal for trade mark litigators, particularly if they fancy combining their professional pleasures with a weekend break on the banks of the River Liffey ...

Don't forget to celebrate this Sunday -- it's World Intellectual Property Day 2015 (though our good friends in all sorts of places have started their celebrations a few days early).  This year's theme is "Get up, Stand up. For Music".  Merpel thinks this is a strange slogan and assumes that it sounds better or more meaningful in whichever language it was originally conceived before it was translated into English.  The IPKat doesn't think it's strange at all.  It's obviously an allusion to the custom and practice of that great intellectual property-based money-spinner, the Olympic Games, where there is a great deal of getting up and standing up for music ...

Dreaming of a 3D printer?
Don't forget the Notice ...
Around the weblogs. The 1709 Blog welcomes a new team member in Andy Johnstone, who will be known to many readers of this blog as one of its most frequent comment-posters on copyright-related matters.  Andy has already posted his first item, on ownership of IP created by students.  The same blog also features a piece by Marie-Andrée Weiss on a bill to fix IP infringement notices on all Californian 3D printers.  On PatLit, David Berry reports on some good news for US patent attorneys, whose pay packets must be feeling considerably heavier now that a year has passed since the US Supreme Court gave its ruling on attorney fees in Octane, here. Still on the subject of patents, Penny Gilbert writes a guest piece on The SPC Blog on prospects for patent term extensions for veterinary vaccines in light of the EFTA Court ruling in Pharmaq v Intervet, while the same blog records a most unusual event these days -- an action concerning supplementary protection certificates which the trial judge refuses to send to the Court of Justice of the European Union for a preliminary ruling (Viiv v Teva, here).

The INTA is coming ... and this Kat, together with a colleague or two, will be there. For those who don't like acronyms and initials, this is a bit of a fake one since the "N" doesn't stand for anything.  INTA is the International Trademark Association and its 137th Meeting takes place in San Diego, Southern California early next month. The IP blogosphere has taken cognisance of this event, which will attract some 9,000-plus trade mark and other IP folk: SOLO IP's Barbara Cookson has already had a good moan, quite justifiably, at this year's policy regarding badging and guest tickets, while Katfriend Daniel Greenberg of Lexsynergy -- which will be exhibiting at the Meeting, writes "Instead of handing out cheap breakable gifts [Merpel, who has a wonderful collection of mouse mats from INTA, wonders how you break them. Do you put them in the freezer till they go brittle and then snap them?] we are giving away domain names (.lawyer and .attorney) to lawyers that visit our booth with no strings attached" [So, if you are a straight-laced lawyer, please note: untying your laces is not enough: you have to detach them in their entirety].

Competition, licensing and TRIPS: a new title.  This Kat has just learned that the International Centre for Trade and Sustainable Development (ICTSD), together with the United Nations Conference on Trade and Development (UNCTAD), have published a new paper on Trade-Related Aspects of Intellectual Property Rights (TRIPS). With the long and difficult-to-memorise title of Competition Analyses of Licensing Agreements: Considerations for Developing Countries under TRIPS,  the paper -- written by Hiroko Yamane (National Graduate Institute for Policy Studies, GRIPS, Tokyo) -- tackles the interface between intellectual property rights and competition policy, looking particularly at the relevant provisions of TRIPS Agreement, in particular Article 40 and the considerable discretion which is available for TRIPS implementation in national law.  Further details are available here. This Kat hasn't had a chance to look at it yet, but the topic appeals to him and he hopes that it will live up to his expectations.

German Federal Court says that libraries have a right to digitise their collections

The German Federal Court of Justice
Last September this blog reported [here and hereon the decision of the Court of Justice of the European Union (CJEU) in TU Darmstadt v Ulmer, C-117/13, a reference from the Bundesgerichtshof (German Federal Court of Justice) seeking clarification as to the interpretation of relevant exceptions in the InfoSoc Directive - these being Article 5(2)(c) and Article 5(3)(n) - that allow, amongst others, publicly accessible libraries to digitise works in their collections and make them available for users to view at dedicated terminals.

Among other things the CJEU ruled that, while the exception in Article 5(3)(n) relates to Articles 2 and 3 of the InfoSoc Directive, this provision limits the use of works to their ‘communication or making available’. An establishment that gives access to a work contained in its collection to a ‘public’, namely all of the individual members of the public using the dedicated terminals installed on its premises for the purpose of research or private study, communicates that work for the purposes of Article 3(1). The exception in Article 5(3)(n) would be meaningless if such an establishment did not also have an ancillary right to digitise the work in question. 

Such right would exist under Article 5(2)(c) the InfoSoc Directive 2001/29, provided that ‘specific acts of reproduction’ are involved. This means that, as a general rule and also in compliance with the three-step test in Article 5(5) of the same directive, the establishment in question may not digitise its entire collection. 

Katfriend Nils Rauer (Hogan Lovells) represented TU Darmstadt in the German litigation, and has contacted this Kat to let the readers of this blog know that, following the CJEU judgment, the Bundesgerichtshof has now issued its decision [not yet available] in this case, ruling completely in favour of TU Darmstadt. 

According to the press release issued by Hogan Lovells:
"Since 2009, German libraries and German publishers have been arguing about the scope and reach of Sec. 52b of the German Copyright Act (UrhG). The said section holds a statutory limitation of copyright allowing privileged institutions (public libraries, museums, and archives) to make available to individual members of the public works physically contained in their collections. The dispute went up all the way to the Court of Justice of the European Union (CJEU) which rendered its preliminary ruling in September 2014 ...
An important example of how
the right to digitise may be exercised
The judges decided 100% I favour of TU Darmstadt and dismissed the publisher's complaint. In consequence, public libraries may now digitise their physical collections and may make available to their users the digitized works through terminals located in the respective reading rooms. They may do so irrespectively of whether the publisher offers a digital version of the book or not. Further, the library users may not only read the digitized works, they may also print out parts thereof or save those parts to USB sticks. Such reproduction, however, must stay within the boundaries of private or academic use according to Sec. 53 UrhG. In return, the publishers are entitled to receive fair compensation.
The current German decision needs to be seen against the background of Article 5(3)(n) of theInfoSoc. The said provision allows the Members States to provide for very specific exemption or limitations to the concept of copyright. Privileged institutions may be empowered to make works (and other subject-matter not subject to purchase or licensing terms which are contained in their collections) available, for the purpose of research or private study, to individual members of the public by dedicated terminals on their premises. The German legislator made use of this right and implemented section 52 b UrhG with effect of 1 January 2008. Due to the somewhat unfortunate language the legislator used, debates amongst publishers and librarians commenced immediately. The litigious dispute that eventually led to the current decision started in 2009.
The publishers' first concern was that the law in question does not refer to a right of digital reproduction of physical works. They put forward that exceptions and limitations are to be interpreted narrowly. Accordingly, one should read an implied right to digitize into Sec. 52 b UrhG. The German Federal Court now takes a different view on this. Without a permission to digitize, the exception aimed at would run empty. Thus, the libraries must have the right to transform their physical collections into digital data.
The publishers further argued that privileged institutions should not be entitled to rely on a statutory limitation if the respective work could be obtained via a license form the publisher on fair terms. Again, the judges ruled in favour of TU Darmstadt. They refer to the wording of the InfoSoc Directive and point out that only in cases where license arrangements already exist can they take priority over the statutory law.
A different type of 'dedicated terminal'
A further major concern on the publishers' side was the question of what the library users may actually do with the work displayed at the library terminal. They argued that read-only access was feasible. TU Darmstadt responded that thorough academic research requires the possibility to print out and/or save the relevant parts of the book. Reference was made to the fact that Article 5 (2) (b) of the InfoSoc Directive does not differentiate between analogue and digital reproduction. The German Federal Court once more followed the university's line of argument. The judges state that the library user may rely on Sec. 53 UrhG when using the library terminal. Thus printouts and digital copies are allowed within the boundaries of private and academic studies.
Now that the German Federal Court ruled in favour of TU Darmstadt, it may be assumed that a great member of libraries will start offering respective terminals. Given that Sec. 52 b UrhG is now furnished with a clear and transparent scope and reach, adequate legal security allows for such development. However, publishers and libraries still need to sit together and to agree on what may be deemed an adequate compensation for the publishers. The details of the respective copyright levies should be fixed on short notice in order to safeguard full compliance with EU law." 

The case against patents: what does first-mover advantage tell us?

For Kat readers who may not be aware, for more than a decade a professional literature has developed that is challenging the justification for maintaining a patent system, at least in its current form. Perhaps the most notable scholars engaged in this endeavor are Professors Michele Boldrin and David K. Levine, both of the Washington University in St. Louis. The long form of their arguments is set out in their 2008 book, Against Intellectual Monopoly. Various short forms of the positon are scattered across numerous articles. The arguments made by Boldrin and Levine have engendered much commentary, both pro and con. As a window to their position, let us consider their 2013 article, "The Case against Patents", published in the Journal of Economic Perspectives, and their arguments why first-mover advantage is often preferable to patent protection as a competition strategy. First-mover advantage refers to a person who is the first entrant into a product market and where, in addition to being the first to enter, enjoys advantages in the technology involved, preferred access to key resources (such as information or a supply chain) and a barrier to entry in the form of high switching costs for others that might wish to compete. Here is what Boldrin and Levine have to say about first-mover advantage:
"In most industries, the first-mover advantage and the competitive rents it induces are substantial without patents. The smartphone industry—laden as it is with patent litigation—is a case in point. Apple derived enormous profits in this market before it faced any substantial competition….While it is hard to prove this delayed imitation also would have occurred in the absence of patents, intuition suggests—and our formal model in Boldrin and Levine predicts—that there is little reason to assert patent rights while the first-mover advantage is still active. Apple did not initially try to use patents to prevent the Android phones from coming into its market and the subsequent 'patents fight' has been taking pace largely after 2010; these facts are consistent with a substantial first-mover advantage."
This Kat notes that there is a certain frustration in considering these observations since they are not supported by any footnotes (references are set out in alphabetical order at the end of the paper). In light of that limitation, this Kat would make the following observations:
1. Relying on anecdotal information regarding the ultimate hi-tech success story is a far from convincing way to prove the robustness of the proposition across industries. Apple's competitive advantage is also due to the so-called hardware-software-applications ecosystem supporting the iPhone, some of which was anchored in patent protection, as well as the strength of the Apple brand. There is very little that enables the reader to choose between the Apple anecdote as the exception that proves the rule, the rule that proves the exception, or the exception that proves the exception.

2. First-mover advantage is related to the issue of patent versus trade secret protection. Sometimes first-move advantage is "chosen" because the person has no reasonable patent option, sometimes it is chosen because of patent costs, sometimes it is chosen in the belief that early market entry and market share and branding can be successful. At the very least, the authors would have been well advised to consider the various patent/trade secret decision trees.

3. The authors state that, since it is hard to prove that patents did not matter as long as Apple enjoyed first-mover advantage, they will rely on their intuition and their earlier model. This will not do. If the proposition is "hard to prove", then it seems to this Kat that the researchers should resist publishing conclusions until they have found a way to do so. Relying on intuition and a formal model does little to provide the level of empirical support that seems necessary to promote the position.
As for more quantitative support, they refer to a 2000 study by Cohen, Nelson and Walsh, "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms (or Not)", NBER Working Paper 7552. They report:
"Here, over 50 percent of [R&D] managers indicate lead time (first-mover advantage) is important to earning a return on innovation; outside the pharmaceutical and medical instruments industry, less than 35% of managers indicate that patents are important."
Here, as well, this Kat has several comments:
1. There is no indication of the relative degree of success between companies that prefer first mover-advantage to those who do not. Perhaps patents are correlated with over-sized profits; perhaps they are not (and vice versa); we are not told.

2. The two prongs summarizing the findings are not entirely clear. Saying that first-mover advantage is important for earning a return on innovation does not exclude patents as an important factor as well, while concluding that patents "are not important" is an exclusionary assertion. As it stands, the two parts need to be reconciled to understand the ultimate thrust of the research results.
The authors, in their customary fashion, take substantial and broad-stroke swipes at the patent system. Their arguments are worthy of attention. As such, they owe readers a clearer and more detailed exposition.

Thursday, 23 April 2015

One small step for man, a giant leap for mankind?

Surprise, surprise!
It has been a quiet day so far, and Merpel was busy taking a nap in the sun when the following media release came in from the European Patent Office (EPO). This Kat has decided to reproduce it in full for the benefit of his readers, who have been wondering what happened at yesterday's historical meeting (the context of which is apparent from the text below).  Not having been at the meeting, this Kat can make no comment other than to express relief both that it has happened and that a further meeting has been diarised.  There was a time when he thought there was a better chance of the Earth facing an invasion from litle green men from the Moon than of this meeting of unlike minds in Munich taking place; he is pleased that this was not the case.

The media release reads like this:
Trade unions join round table with EPO President and Administrative Council Chairman

Munich, 23 April 2015 – At a round table meeting jointly initiated by the Chairman of the Administrative Council, Jesper Kongstad, and EPO President Benoît Battistelli, the SUEPO and FFPE entered into a process which could eventually lead to their formal recognition as trade unions at the Office for the first time in EPO history. The meeting’s aim was to re-launch social dialogue to overcome disputes that have arisen over the inner reform agenda of the EPO.

All parties agreed to continue the process and create a working group to discuss further details already in the coming days. The next round table meeting has been scheduled for 28 May 2015 with the intention to review the findings of the working group, and to consider next steps.

“It wasn’t an easy meeting, but sitting at one table has been an important first move and marked the beginning of a constructive process”, Kongstad said. “We are pleased that the meeting took place in an open atmosphere, and that agreement could be reached that social dialogue is in the best interest of the EPO”, President Battistelli explained.

The EPO is an international organisation established by an international treaty ratified by its 38 member states which creates a legal framework for the Office compliant with the best international standards and practices. That framework is not governed by the provisions of the national laws of the member states, including those where the EPO has offices. As the treaty does not hold provisions on trade unions, the effort to recognise them is a new initiative leading well beyond the currently existing legal framework of the EPO.

General Court says "checkmate" to Louis Vuitton's patterns

Two parallel judgments of the General Court in the Louis Vuitton (LV) cases, T-359/12 and T-360/12, are a welcome example of clarity and completeness, destined to influence case-law on the invalidity of a Community trade mark (CTM) for lack of distinctive character, according to Articles 51(1)(a) and 7(1)(b) of Regulation 207/2009, as well as acquired distinctiveness through use, in respect to Articles 7(3) and 52(2) of the same Regulation.

In each of these cases the invalidity applicant, Nanu-Nana, challenged LV’s figurative CTMs, consisting of a chequerboard pattern, characterised by weft and warp structures, as represented below: one was in brown and beige (T-359/12), the other in light and dark grey (T-360/12). LV applied for to register the respective signs in 1996 and 2008, obtaining registration in 1998 and 2008 for various goods in Class 18 (leather goods, bags, cases, travel sets etc).

In 2009 Nanu-Nana lodged its invalidity claims at OHIM, based on several absolute grounds of refusal. It asserted that LV's patterns could not be registered as trade marks since they were descriptive and lacked distinctive character (Article 7(1)(b)(c)), were customary in the bona fine and established practice of trade (Article 7(1)(d)), consisted exclusively of a shape giving substantial value to the goods (Article 7(1)(e)(iii) and were contrary to public policy or to the accepted principles of morality. It also added that the marks were filed in bad faith according to Article 52(1)(b) of Regulation 207/2009.

Both the Cancellation Division and the Board of Appeal took the view that the marks at hand should be cancelled because they were not distinctive: they consisted of a pattern which would be applied to the surface of goods belonging to Class 18 as decoration rather than as commercial origin identifiers; nor did such patterns depart from the norms or the customs of the relevant sector.

The Board of Appeal also focused on the weft and warp structure composing the marks and explained that it could not count as a feature identifying the source of the products. The fact that it had been copied by competitors or infringers did not mean that the public could distinguish LV’s goods in the relevant market on the basis of it. No other distinguishing element was apparent within the contested marks which would have led to them having a different fate, given that they would anyway be used in combination with LV’s logo and house mark.

Another popular checkered pattern ...
In any event, both the Cancellation Division and the Board of Appeal agreed that the evidence submitted by LV did not show that its marks had acquired distinctive character through their use in a substantial part of the EU, comprising Denmark, Portugal, Finland and Sweden in the case of the brown and beige pattern, and Estonia, Latvia, Lithuania, Malta, Poland, Slovenia, the Slovak Republic and Bulgaria in respect of the other pattern. That was so, whether viewed from either at the time of the marks’ filing, according to Article 7(3), or after their registrations, according to Article 52(2).

In both cases the General Court confirmed the earlier decisions, and dismissed LV’s actions. In doing so, the Court provided substantive guidance on the assessment of invalidity of three dimensional and figurative marks -- even though Nanu-Nana limited its invalidity arguments before the Court to only the lack of distinctive character.
The main points of the General Court’s reasoning is as follows:

(a)   Lack of inherent distinctive character

The Court applied the case-law on the assessment of inherent distinctiveness of 3D and figurative marks which coincide with the appearance of the products, according to which consumers perceive those signs as commercial origin identifiers with some difficulty if they do not bear any graphic or word elements, unless they depart from the norms and customs of the sector. That was not the case for the LV's chequered board patterns: they were too basic, too common and lacked any specific character. Moreover, they had a long-standing link with goods in Class 18, where they had always been used for decorative purposes.

Did the Board of Appeal infringe the rules governing the burden of proof by considering it a well-known fact that the chequered board pattern was a basic and banal figurative feature? The General Court said no. At the outset, a registered CTM enjoys a presumption of validity, and it is for the invalidity applicant to put forwards the facts challenging the mark. However, the Board of Appeal is not prevented from considering well-known facts emerging during the invalidity proceeding, which are related to the arguments and evidence provided by the invalidity applicant.

(b)   Lack of proof of acquired distinctiveness

The starting point is that a CTM must have (inherent or acquired) distinctiveness throughout the EU given the unitary character of CTMs. It follows that a CTM cannot be registered if it is not distinctive in part of the EU. However, CTMs can acquire distinctive character through use either at the time of filing (Article 7(3)) or after registration in order for them not to be vulnerable to a validity challenge (Article 52(2)).

The General Court held that the Board of Appeal correctly made the overall assessment of the evidence provided by LV which, however, could not lead to the conclusion that its marks had acquired distinctive character because of the use made of them, in the relevant periods of time and in all the territory in which the marks were not deemed to be inherently distinctive -- in these cases the entire EU. Indeed, unless LV could have proved the contrary, the assessment of their distinctiveness was to be the same in the entire EU, and both were deemed to lack distinctive character ab initio in all Member States. Therefore, since LV could not present evidence of its CTMs’ acquired distinctiveness in some Member States, the mark were to be declared null and void.  

Wednesday, 22 April 2015

Wednesday whimsies

From Katfriend, Appointed Person and Certified IP Enthusiast Anna Carboni comes news of an amazing journey: four women – “the Coxless Crew” – are have set off from San Francisco’s Pier 39 in their boat, Doris, on an unsupported continuous three-stage row across the South Pacific Ocean to Cairns in Australia -- a total of 8,446 miles. One of them, Izzy Burnham, is an intellectual property lawyer with whom Anna used to work. The Crew is seeking to raise awareness and funds for their two chosen charities, Walking With The Wounded (in particular for a dedicated fund to help injured servicewomen) and Breast Cancer Care. Adds Anna:
We hope that you will join us in supporting the team in whatever way that you can. Do check out the team’s website at and consider sponsoring the row and/or ‘buying a mile’ (or perhaps a few) to help them to achieve their goals (i.e. to reach Australia and to raise £250,000 for charity on top of paying for the project). You can follow them on Twitter (@coxlesscrew) or read their blog via the website, which also has a map that will track their position as they make their way across the Pacific. 
Well, if the Office for Harmonisation in the Internal Market can't fund the row, we'd all better do our bit.  Come on readers, says Merpel - it's all in a good cause.

EPO Rules. The European Patent Office has posted news that its new rules of procedure have been officially promulgated: you can read them, under "Decision of the Administrative Council of 25 March 2015 approving amendments to the Rules of Procedure of the Enlarged Board of Appeal of the European Patent Office (CA/D 3/15)", by clicking here.  They contain the procedure for proposing to the Administrative Council the removal of a member of a Board of Appeal.

World IP Day 2015 is nearly upon us. It's more than one day, really, though the real date is 26 April and this year's official theme is "Get up. Stand up. For music". There are events all over the world but, if you can't find one in your vicinity, do organise one yourself since there is no monopoly in it.  This Kat has just heard that Bosnia and Herzegovina is celebrating with a workshop on "Removing Copyright Infringing Content from the Internet", at the University of Travnik Faculty of Law on 27 April at 10 am.  If you are in the area, do pop in and say "hello!" This information comes from Katfriend Haris  Hasić, who tells him that he is presenting a paper at the 11th International Convention of Slavic librarians in Sarajevo this Friday. Haris's paper addresses protection of the rights of librarians and archivists through the implementation of the London manifesto and reform of the Copyright and Related Rights Law of Bosnia and Herzegovina. He adds that there are two other papers of particular note: Tatjana Brzulović Stanisavljević and Dragana Stolić (Univerzitetska biblioteka “Svetozar Marković”, Beograd) on "Libraries: between respect for copyright and the need to digitalize scientific heritage, as exemplified by orphan works" and Rita Fleis on "The possibility of supporting authors through temporary free presenting of unpublished artistic and scientific works at library websites up to the moment of their publication". 

Distance learning was so hard
before we all had computers ...
Distance learning. "Computer & Communications Law" (subtitled "with key focuses on digital IP law, media law, telecommunications law and IT law") is on its way again.  For those people who like to learn at home, and also for who have no other option, this popular course -- run by Queen Mary, University of London in conjunction with Informa --  is coming your way not once but twice, with commencement dates of 1 September 2015 and 11 January 2016. You can get further details of this popular, well-organised course by clicking here.

Around the weblogs.  Writing on Art & Artifice, Rosie Burbidge explains a recent Privy Council decision on an appeal from the Bahamas as to whether a technical drawing of a septic tank was an artistic work that was protected by copyright or a "useful article" which was not [the IPKat thinks it highly appropriate that the court giving a final ruling on the status of a drawing of a septic tank is called the "Privy Council", but no-one else seems to be amused]. The jiplp weblog features a review by Mr Justice Arnold on the economics of copyright which concludes with an expression of regret that it was not available to the Court of Appeal when it adopted the incremental costs rule in Hollister Inc v Medik Ostomy Supplies Ltd [2012] EWCA Civ 1419 [on which see the AmeriKat's posts here and here].

That OHIM rebrand: can you help?

Lousy name. Does anyone know why they spell
"harmonisation" with a "z" when the text
of the CTM Regulation
 spells it with an "s"?
So the trilogue is agreed: the Office for Harmonisation in the Internal Market, otherwise known as OHIM or, to the in-crowd, OAMI, is to be re-branded (on which, see last night's Katpost here).  The chosen replacement for this sesquipedalian monstrosity (47 characters, inclusive of spaces) is to be the nearly-as-sesquipedalian European Union Intellectual Property Office (43 characters, inclusive of spaces).  For those who love brevity, IP Australia takes some beating, but IP EU was never likely to be.

The search for the Lost City of Alicante ...
It's probably too late to persuade Europe's finest to change their minds, but this Kat is convinced that his talented readers, many of whom are deeply involved in branding and marketing issues, could have come up with something less boringly descriptive and certainly less long-winded than "European Union Intellectual Property Office".  He therefore invites them to submit their improvements. This Kat also thinks that it would be fun to design a new logo to represent the deeper meaning of the European Union Intellectual Property Office, this being an IP office which (i) is by the seaside, (ii) just can't stop making money, (iii) operates in five official languages and (iv) unlike most other IP offices, has nothing to do with the oldest and most expensive IP right, the patent.

Do please send your suggested logos for the rebranded office to the IPKat at, ideally as .jpg or .png documents so that he can edit them if need be, or at least in a format that doesn't send his computer into spasms or stun it into total inertia.  The best entries will be posted on this weblog (so can we have an irrevocable non-exclusive licence for that purpose, please?) and a small, as yet unspecified prize will be offered for the best entry.  Closing date for entries is close of play, Sunday 3 May. It might be a pint of Badger at The Old Nick or, if it turns out to be cheaper, a flight to Alicante with Ryanair ...

Hyperlinks and the CJEU 'new public' criterion: a Response to Rosen

Last week, in a Katpost entitled "The CJEU 'new public' criterion? National judges should not apply it, says Prof Jan Rosen" (here), fellow Kat Eleonora reported on one of the attractions of this year's Fordham IP Conference, writing:

"... how can a panel on EU copyright not feature at least some discussion of the recent hyperlinking cases, notably the decisions of the Court of Justice of the European Union (CJEU) in Svensson [Katposts here] and BestWater [here]? Not are only things interesting but also get sparkling when the person who discusses all this is someone who has been both really prominent in the post-Svensson debate and is not a huge fan of the 'new public' criterion developed by the CJEU. This is of course Prof Jan Rosen of Stockholm University, among the signatories of the ALAI Opinion on Svensson [ALAI has taken a rather different stance on hyperlinking and copyright from the European Copyright Society].
Eleonora asked Jan if he could provide a summary for the readers of this blog, which he kindly did. Not all readers of Jan's paper were however entirely in agreement with it.  That's why regular reader and copyright enthusiast Andy Johnstone (who also contributes to the forums) begs to differ.  This is what Andy has to say:
Like the ALAI Opinion which preceded it and with it shares much similarity, I find Professor Rosen's argument hard to accept. This be may indicate some intellectual failing on my part, but I think not.
Because Professor Rosen's blog piece is largely a re-working of the executive summary of the ALAI Opinion of 17 September 2014, I hope he will forgive me if I take the arguments in the Opinion as being congruent with his personal position.

Much is made of the fact that there are no references to a 'new' public in any of the treaties and directives which the Opinion cites. But before examining the validity of this line of argument, I would like to eliminate a certain amount of extraneous matter from the discussion. As well as the Berne Convention, reference is made to the WIPO Copyright Treaty (WCT), WIPO Performances and Phonograms Treaty (WPPT), Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and the InfoSoc Directive (2001/29). TRIPS adds nothing to the party: it merely requires signatories to abide by their obligations under Berne. To that extent its only value here is create a direct legal obligation on the EU to conform to Berne. The WCT and WPPT make fundamentally the same point (namely that the main provisions of Berne should be complied with) in respect of their own subject matter (copyright and phonograms) but significantly they introduce the new concept of making works available to the public in a way that members of the public can access the works from a place and time of their individual choosing. Significantly, the ALAI Opinion makes very little direct reference to this sub-set within the overall right of communication to the public. In contrast I find this distinction to be critical to the debate about linking and, by extension, to the issue of a new public, and so I will return to this later. The InfoSoc Directive Art 3(1) merely restates WCT Art 8, virtually verbatim. I suggest that, given the overlap, TRIPS, WPPT and the Info Soc Art 3(1) actually contribute nothing useful to the debate.

That leaves Berne Art 11bis [reproduced in full at the foot of this blogpost for ease of reference] and the mention in WCT Art 8 of the making available 'right'.

The problem with Berne Art 11bis is that it is very old!  Even if in 1967 (when the current wording of 11bis was added) the drafters of the Stockholm Act of the Berne Convention were prescient enough to predict the arrival of the internet, given that discussions about ARPANET were just starting around that time, they surely had no vision of the concept of works being made available at the time and place of the user's own choosing, in the form that we understand it today. Indeed the technology which allows the making available right to operate mainly lies within the creation of the World Wide Web which did not occur until 1989/90. 
Perhaps more significantly, delegates at the Berne Convention's 1971 Paris Act saw no need to update 11bis. It is self-evident that the entire content of 11bis is concerned with traditional terrestrial broadcasting; it doesn't even address the subject of satellite broadcasting which had begun in 1962 via Telstar. It is unsurprising therefore to find that 11bis is as ill-suited to being applied to a fundamentally different technology such as the internet as would a copy of the 1967 Highway Code to today's road users. Yet the argument in the ALAI opinion is largely based on an analysis of the meaning to be construed from 11bis. 
I would agree with the ALAI's conclusion that the meaning of 11bis is relatively clear, but that makes it all the more obvious that Berne is taking about apples, while the issues in Svensson were oranges. At its heart the ALAI argument is that, since there was no mention of a 'new' public in 11bis (or the other referenced treaties etc), this means that the CJEU's coining of both the term and the concept is illegitimate. But 11bis doesn't mention the making available right either, so is that also suspect? Obviously the answer is no because the concept of making available is here in real life, thanks to the internet and reflects that, unlike in 1967, we now have two models of transmission within the umbrella term 'communication to the public', namely push (broadcast) and pull (on demand, a.k.a. 'making available'). 
Further, the ALAI fails to acknowledge that paragraph 2 of 11bis grants signatories a margin of appreciation in how they determine the conditions under which the rights in 11bis may be exercised. While this seems unlikely to have been an attempt at making 11bis future-proof, it recognises that specific national circumstances may require a degree of flexibility to vary the implementation of the general international norm. Or to put it another way, Berne offers more flexibility than ALAI give it credit for. The introduction of the making available right is an obvious example of a change in the conditions under which the rights may be exercised. What Art 8 of WCT provides, in effect, is a much needed update to reflect the technology of the day (1996). 
Checking Berne: no mentionof the word "phonogram" ...
Clearly the Berne Convention has been updated many times in its 128 year history, so treating Art 11bis as the last word in international jurisprudence on communication to the public is to ignore how Berne has developed and grown over the years. The fact that Berne has not been further updated since September 1979 probably says more about the pre-eminence of WIPO, the USA and the EU, when it comes to setting the agenda, than it does about the enduring value and relevance of every last word to be found in Berne. Berne provides the overarching framework containing the principles of international copyright; in many discrete areas of the law, things have moved on. There is no specific mention in Berne of an exception for parody or how to treat orphan works, yet the EU and other states have seen fit to introduce legislation for these purposes. There is no mention of the management of collective rights or the word 'phonogram' in Berne, yet the the world of copyright today is built around such terms. Few states retain the minimum term of 50 years post mortem auctoris required by Berne. These and many other trivial discrepancies only serve to show that Berne should not be determinative when it comes to the small details.
ALAI's objection to the concept of a new public is that this somehow limits the author's right to authorise communication of his work to the public, and at the same time it causes that right to become exhausted, because it removes the author's ability withdraw his permission. I would contend that, far from limiting the author's right, the CJEU in Svensson sought to protect it by trying to identify those sub-groups within the public as a whole, to whom the author envisaged communicating his work, and differentiating them from other parts of the public not so authorised. 
In one sense the concept of a 'new' public is analogous to the adaptation right with respect to translations of a literary work. An author writing in English envisages his readers as being English speakers; if he authorises a French translation of his work he adds French speakers to the reading public to whom he wishes to communicate. The latter are 'new' readers not envisaged when the author wrote and initially published the book. We might speak of these French readers as being a different target audience, just as a website behind a paywall envisages a particular sub-group of the overall public as its target. This is essentially the distinction the CJEU was trying make. They chose the word 'new' but could equally have chosen 'different' or 'other' or 'separate' to denote that part of the public which the author did not have in mind at the time he authorised a communication to the public.

The second objection found in the ALAI Opinion is that somehow the 'new' public concept leads to exhaustion of the author's right to communicate to the public, on the basis that if their works are linked to, this somehow compromises their ability to withdraw authorisation at a later stage. This is a puzzling conclusion. If one considers the question in terms of a traditional broadcast, then this is a one-off event. In theory a broadcast could effect a simultaneous communication to several million people or none. The author's right to decide whether or not to communicate the same work again through a subsequent broadcast, to the same audience or to an entirely different one, remains unaffected by the single event of the first broadcast. However making the work available for a member of the public to access at a time of their own choosing, must, by definition, extend over a far longer period of time than is the case with a broadcast. By authorising that a work is made available with the meaning of WCT Art 8, the author is accepting that this is a continuous event which he can (subject to contract) terminate at will and still retain the right to re-authorise the communication at any time. Communication to the public by making available is achieved by a series of individual events which may or may not be concurrent; the quantity of the public in receipt of the communication could still be millions or none, although this may well be determined by very different factors to those which apply to the size of an broadcast audience. 
Nonetheless there is no exhaustion of the making available right due to something similar to estoppel, that is to say the length of time the authorisation is in operation does not diminish the author's right to terminate the authorisation as and when he chooses. But what is far more significant, when it comes to distinguishing between a broadcast and making available, is the functioning of a link. A link provided by another website has no meaning in the context of a broadcast; links only apply and function where the content being linked to has an existence well in excess of the few milliseconds necessary to transfer a piece of data within a broadcast; this means that linking only exists as a viable technical process where the act of communication which has been authorised is the making available right (which to emphasis the point once more, does not exist within Berne Art 11bis). Although a broadcast may be conducted via the internet, the more prevalent form of communication to the public via the internet is the making available form. While the authorised content is on the website, being made available to the public, barring any technical or other measures which the CJEU characterised as a means of excluding a new public, the content is freely available for any one to consume irrespective of how they arrived at the site. The author's right to authorise the communication is mainly defined in temporal terms, namely, how long he wishes the work to be made available in that way (other limitations in terms of territory or who may access the work can usually only be achieved by Technical Protection Measures, 'TPMs'). So long as the period of availability is not less than the time required for the user to make his choice and carry out the technical steps necessary to access the complete work, technically the criterion for the making available right will have been met. Realistically the period should as a minimum, probably be measured in days, or weeks. And the consequence of the author withdrawing permission is the same for all users of the website, also irrespective of how they arrived at the site. The content once removed from the host server is no longer available to the whole of the public (comprising both the target audience and any new audience), and in this way the author retains his right to cease communication of his work to the public when he chooses and he also retains his right to communicate it again on a future occasion if he chooses. There is no exhaustion of the right to authorise communication just because the authorisation permits the work to be made available as defined in WCT Art 8, or by the operation of the CJEU's construct of a new public.
In many ways the problem with the ALAI position on exhaustion (second sentence, first paragraph, page 15 of the Opinion) seems to stem from the false premise that linking or framing are technically different to accessing the content normally via a direct URL. Once it is understood that a link merely allows the content to be requested by the end-user's computer directly from the authorised server, with no intermediate copy held, authorised or facilitated by any other server, it is clear that the process of transmission remains exactly the same and at all times falls within the authorisation of the author or copyright owner, whether the communication is initiated by a link or a direct visit to the authorised host site. Clearly where the reproduction right is infringed, by the copying of the protected work onto an unauthorised server, this action would supplant the authorised act of communication, and as the CJEU in Svensson implied but did not expressly state [31, last sentence], this leads to a different cause of action, where the type of public is no longer material.

Finally ALAI argue that, in order to protect the right to authorise communication of a work to the public, and to avoid the exhaustion of that right which they say will result if the concept of a new public is allowed to stand, the author will need to resort to TPMs. These TPMs would, in ALAI's view, be necessary to prevent the linking which they appear to believe causes the dilution or exhaustion of the right. They maintain that this would be contrary to the Berne Art 5(2) prohibition of formalities. This is not expanded upon in the Opinion, possibly because it is arrant nonsense. First, TPMs cannot be deployed solely to defeat linking while at the same time continuing to allow the public to access the site directly. Where an author sets out to expressly limit the act of communication to a specific, defined sub-group of the public, he is perfectly able to employ restrictive measures (paywalls, membership systems, logins, passwords etc) to control who may access the site or parts of it, but this is a discretionary action that falls well outside both the letter and spirit of Berne Art 5(2). To that extent, TPMs applied to control access to a website, or parts thereof, are analogous to TPMs as applied to digital media such as music downloads or films on DVDs. They are additional security measures the rights owner applies to protect the economic value of his work from piracy, or on grounds of confidentiality, privacy, etc. TPMs used in this way are not formalities imposed by the state in order for the author to enjoy and exercise his rights.

ALAI imply (see paragraph 2 of the Executive Summary to the Opinion) that the CJEU was forced into adopting the concept of a new public in order to avoid causing the internet to grind to a halt, once they had found that linking was a communication to the public. ALAI thought the CJEU's decision on linking was correct, while many others, including the European Copyright Society (ECS), feel this is actually where the Court went wrong. If one follows the ECS's cogent argument that linking is not an act of communication, the whole issue of what constitutes the public, or a sub-set of the public, falls away. 
What is clear from this debate is that the EU, in conducting its review of copyright reform, needs to pay close attention to this particular subject. To my mind what is needed is the creation of a clear distinction between broadcasting (a unidirectional transmission requiring merely passive participation by the recipient) and what is generally understood by the making available right (or on demand communication) where the end-user/customer/client initiates and largely determines the parameters of the process. Such a split would greatly assist the courts, copyright owners and consumers of copyright works in understanding how the right of authorising communication to the public should take effect.

Article 11bis: Broadcasting and Related Rights

1. Broadcasting and other wireless communications, public communication of broadcast by wire or rebroadcast, public communication of broadcast by loudspeaker or analogous instruments; 2. Compulsory licenses; 3. Recording; ephemeral recordings

(1) Authors of literary and artistic works shall enjoy the exclusive right of authorizing:
(i) the broadcasting of their works or the communication thereof to the public by any other means of wireless diffusion of signs, sounds or images;

(ii) any communication to the public by wire or by rebroadcasting of the broadcast of the work, when this communication is made by an organization other than the original one;

(iii) the public communication by loudspeaker or any other analogous instrument transmitting, by signs, sounds or images, the broadcast of the work.
(2) It shall be a matter for legislation in the countries of the Union to determine the conditions under which the rights mentioned in the preceding paragraph may be exercised, but these conditions shall apply only in the countries where they have been prescribed. They shall not in any circumstances be prejudicial to the moral rights of the author, nor to his right to obtain equitable remuneration which, in the absence of agreement, shall be fixed by competent authority.

(3) In the absence of any contrary stipulation, permission granted in accordance with paragraph (1) of this Article shall not imply permission to record, by means of instruments recording sounds or images, the work broadcast. It shall, however, be a matter for legislation in the countries of the Union to determine the regulations for ephemeral recordings made by a broadcasting organization by means of its own facilities and used for its own broadcasts. The preservation of these recordings in official archives may, on the ground of their exceptional documentary character, be authorized by such legislation.

Tuesday, 21 April 2015

When three is company: trilogue happy with proposed EU trade mark reforms

The European family of trade mark owners, practitioners, consumers, judges and administrators has been waiting patiently to find out what might be the fate of the European Commission's proposals for trade mark reform.  Today we have found out: both the EU Council and the European Parliament are, at least in theory, supportive.  This Kat reproduces today's media release below, with a few comments inserted in bold red print.  This is how it reads:

European Parliament and EU Council back European Commission trade mark reform package 
Trilogue: the Commission is in the middle ...
After two years of inter-institutional discussions, the Commission, the European Parliament and the Council have reached today in so-called "trilogue discussions" provisional political agreement ["political" here being more or less used as an adjective drawn from the word "policy": the trilogue is more concerned with the big picture than with matters of fine detail] on the trade mark reform package. The agreed measures will make trade mark registration systems all over the EU more accessible and efficient for businesses in terms of lower costs, increased speed, more predictability and greater legal certainty [this seems quite comforting, though this Kat sometimes wonders whether any amount of legal certainty can compensate for the uncertainties resulting from the application of even the best laws to facts that can be equally be construed in quite different ways]. The reform will improve conditions for businesses to innovate and to benefit from more effective trade mark protection against counterfeits, including non-authentic goods in transit through the EU's territory.
Dream Package for
IP enthusiasts ...
European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, Elżbieta Bieńkowska, said: "Trade mark intensive industries contribute enormously to economic performance and employment in the European Union. The agreement on the EU trade mark reform package will lead to a modernised and more efficient legal framework. This will promote entrepreneurship and competitiveness [an interesting question for economists is whether a good trade mark system promotes entrepreneurship and competitiveness more than a bad one], which is good news for Europe. And we will be better equipped to stop the flow of counterfeit products effectively."
The cornerstones of the trade mark reform are:
How much is being saved?
  • Significant reductions of the fees for European Union trade marks covering all 28 Member States. The agreed changes will lead to savings of up to 37%, in particular for businesses that seek protection of their registered European Union trade marks beyond an initial period of 10 years [this is welcome, but let's remember that official fees are often only the tiny proportion of a business's spend on professional fees, search, clearance, monitoring legitimate and unauthorised use, litigation, marketing and the myriad other items that presumably will still cost the same];
  • Streamlined, more efficient and harmonised registration procedures across all trade mark offices in the EU. Faster and less burdensome procedures will be a great improvement for successfully growing companies, mainly SMEs, which roll out their business beyond one Member State and seek trade mark protection in front of multiple national administrations [sounds impressive, but earlier conflicting national registrations do seem to be a problem for businesses which do all that rolling out across the EU, and plenty of those earlier national marks are bona fide ...];
  • Strengthened means to fight against counterfeits in particular of goods in transit through the EU’s territory. This will prevent abuse of the EU as a distribution hub for illegal fake goods to world-wide destinations [this should have been a no-brainer, but the Court of Justice has had some difficulty in appreciating it: remember Nokia/Philips];
  • Modernised rules and increased legal certainty by adapting trade mark rules to the modern business environment and clarifying trade mark rights and their limitations [maybe spelling out some rules on use of trade marks in parody, as metatags, in domain names, as search terms ...?].
The political agreement on the Trade Mark reform package reached by the three institutions in the so-called "trilogue discussions" still requires to be formally confirmed by the European Parliament and the Council, which is expected in the coming weeks. ...
Further detail is provided by this item on the Council's Consilium website, which states:
Under the agreement, a number of political principles will be incorporated in the new system, including:
  • a new structure with a reduced level of fees to be paid by applicants and proprietors of trade marks; such a reduction is justified by the need to render the system more accessible to users [do we know how many people have found the current system (as distinct from OHIM's headquarters in Alicante) inaccessible?] and to balance OHIM's budget [surely this is the real reason], which has been producing considerable budgetary surpluses over the years; 
  • the setting up of an offsetting mechanism to cover expenses incurred by national industrial property offices resulting from the handling of procedures involving EU trade marks. 5% of the OHIM annual revenue is foreseen for the offsetting mechanism, with the possibility of increasing this amount by another 5% in case of a substantive budgetary surplus [this is long overdue, from the perspective of sometimes under-resourced national offices which will welcome this step]
  • closer cooperation between national offices and the OHIM in projects to promote convergence of practices and tools in the field of trade marks and designs. The maximum amount of funding for cooperation projects is set at 15% of the yearly revenue of the OHIM [OHIM and national offices have been very good about this, so further cooperation is very welcome]
  • the improvement of the governance structure and the establishment of sound financial procedures in the OHIM [European Patent Office, take note!]
  • the renaming of the OHIM to "European Union Intellectual Property Office" [Merpel wonders whether it will be the only Intellectual Property Office in the world that has no responsibility for patents. Come to think of it, it won't be responsible for copyright, plant breeders' rights, geographical indications, domain names ...]
  • the implementation of efficient and expeditious administrative procedures by the national offices for revocation or declaration of invalidity of trade marks [much welcome, particularly if issues relating to burden of proof, standard of proof and admissibility of evidence are to be dealt with consistently across the Community trade mark and national marks]
  • the adaptation of the designation and classification of goods and services to comply with recent EU case law, in conformity with the international classification established by the Nice agreement [many pixels have already been consumed in discussing this topic: the basic principle that an objective reading of the specification of goods and services for which a mark is registered should indicate what that mark covers -- and what it doesn't -- should be paramount].
And let's not forget the European Parliament's own statement, which adds little other than the news that
"Throughout the negotiations, MEPs stressed the need to ensure smooth transit of generic medicines to developing countries" [generic medicines shouldn't have too many problems getting to developing countries, where they are needed, if they don't find themselves taking circuitous routes through some of the more attractive markets in the European Union before heading out there, and if they are at less risk of falling of those transitory lorries ...]
Says this Kat, the system for trade mark registration, administration, enforcement and commercialisation is immeasurably better than it was in the 1970s, when Europe's finest were fretting about how to bring about a radical change to the feudal patchwork of autonomous jurisdictions which existed then.  However, the fact that there has been so great an improvement should blind no-one to the fact that the system could be a lot better.  He cautiously welcomes most of the current list of changes, believing that the European trade mark system, both for Community trade marks and for national marks, is very much "work in progress" and that we can expect to see at least two more such sets of reforms before we are left with nothing but fine-tuning ahead of us.  Most importantly, in his view, something should be done as a matter of urgency to speed the progress of trade mark litigation through Europe's courts (each of the General Court's three most recent rulings on an application to invalidate a mark were commenced over five years ago) and to process applications and oppositions far more swiftly through office procedures.  That, he thinks, is the best way to benefit businesses and remove the uncertainty that blights their business plans.

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