For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

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

Tuesday, 22 July 2014

U.S. Representatives Hear about Droit de Suite and Droit Moral

This portfolio should be enough to put you through college, my son.
The U.S. House of Representatives Subcommittee on Courts, Intellectual Property and the Internet, held a Hearing on July 15 on “Moral Rights, Termination Rights, Resale Royalty, and Copyright Term.” I jumped at the opportunity to write about it, as the hearing gave me a chance to pepper my post with famous French copyright expressions such as droit de suite, joie de vivre, and droit moral.

Resale Royalty, or droit de suite for us béret-wearing IP attorneys, is the right for artists to profit financially from the subsequent resale of their work and thus being able to benefit from the increased value of their own reputation as artists. When France first adopted such a right in 1920, legislators were shown during the debate a drawing of a child in rags pointing at a painting that sold for a hefty sum at an auction and wailing “It’s one of Papa’s paintings!”

Indeed, there is an inherent unfairness in the first sale doctrine for visual artists, as they produce works of art which may not be mass-reproduced without losing their fine art status, and thus must make a living by selling their original art. In the U.S., only California has a droit de suite, the California Resale Royalties Act in 1976, which provides visual artists a royalty of 5% of the sale proceeds if the seller resides in California or if the sale takes place in California. The law, however, has recently been declared unconstitutional by a District Court under the dormant Commerce Clause, which prevents U.S. states from unduly burdening interstate commerce. The case is on appeal.

There is no federal droit de suite. The Copyright Office had published a report on the issue in 1992 and at the time did not recommend adopting such right. It noted, however, that Congress should take another look at it if the European Community (now the European Union) would extend this right to all its Member States. It did so in 2001 when adopting Directive 2001/84/EC on the resale right for the benefit of the author of an original work of art. The Copyright office published in December 2013 an adjunct report on resale royalties for visual artists and concluded that U.S. visual artists may indeed be disadvantaged if lack of an U.S. droit de suite prevents them from gaining financially from subsequent sales of their works as they increase in value. It thus supported Congress’consideration on adopting such a right in the U.S.

 Article 14ter of the Berne Convention provides for a droit de suite, and the U.S. joined the Convention in 1989, but implementing article 14ter is only optional. However, article 14ter is reciprocal, and since the U.S. does not have a resale royalty, U.S. artists are not able to take advantage of the droit de suite if their work is sold in countries having such a right. As more than seventy countries have adopted such resale royalties rights, such as the U.K. or France, and as Canada and China are also considering adopting it, the issue of non-reciprocity is likely to become even more salient for U.S. visual artists.

 This is why Representative Jerry Nadler (D-NY) introduced in February 2014 a bill, H.R. 4103, the American Royalties Too Act of 2014 (ART), which would provide artists a resale royalty if their work of visual art is sold at an auction for no less than $5,000. This relatively low threshold follows the recommendation of the 2013 Copyright Office report, so as not to benefit only the most famous artists. The royalty would be the lesser amount of 5% of the sale or $35,000. Visual artists’ collecting societies would be in charge of distributing the royalties to the artists. Failure to pay the royalty would be considered copyright infringement and plaintiff could seek statutory damages. 

U.S. auction houses are lobbying hard against ART, arguing that it would hurt the art market, but artists are in favor of it. Rep. Nadler noted in his introductory speech to the Hearing that the national arts advocacy organization Americans for the Arts supports this legislation, as well as the Visual Artists’ Rights Coalition, which includes the Artists Rights Society, the Visual Artists and Galleries Association, the American Society of Illustrators Partnership, the National Cartoonists Society, the Association of American Editorial Cartoonists, and the Association of Medical Illustrators.

No doubt, in order to continue to force their witnesses to speak French, the Subcommittee Hearing also discussed droit moral, which protects the non-economic rights of the artist, such as the right of integrity of the work or right to attribution. U.S. copyright law provides for limited moral rights under the federal Visual Artists Rights Act of 1990 (VARA), which provides authors of works of visual arts a right to attribution and integrity. Only single copies of drawings, print or sculpture, or limited editions of 200 copies or fewer signed and numbered by the author, are protected by VARA. Representative John Conyers Jr. (D-MI) noted during his introductory speech that courts have struggled to interpret VARA. Rep. Conyers also noted that droit moral can be awarded by contract. However, I would say that only artists with quite a bit of clout and an IP attorney on retainer (Yeah!) would be in the position of negotiating such rights.

Congress also heard Rick Carnes, a songwriter and the President of the Songwriters Guild of America, testifying in favor of granting moral rights to music creators. For Mr. Carnes, “[a]n essential element of moral rights… is the ability to have a remedy when we are wronged” (p.5). Mr. Carnes also testified in favor of establishing small claims copyright courts so that songwriters could enforce their copyright more easily and at a lower cost, a concept supported by the Copyright Office. Mr. Carnes testified that, for songwriters, “each song we write is our baby” and so the moral right of attribution is particularly important.

This view was shared by Professor Michael W. Caroll, the Public Lead for Creative Commons USA, who testified that the various Creative Commons licenses, while allowing royalty-free sharing and reuse of work at no cost, also require attribution in exchange for the use of the work. Professor Caroll noted that receiving attribution is “in some cases… more important to the creator than any interest in profit or compensation” (p.4).

Unlike the ART bill, there is no bill introduced in Congress to award more comprehensive moral rights to all artists. However, Congress seems to be concerned about protecting every artist, not only the more famous ones, and so may introduce in a few years a bill to provide moral rights, at least the right to attribution, to every work of art protected by copyright. But that is only a guess.

AG Villalón's parthenotes Opinion in IMC could provide stem cell research certainty (at least for now...)

Now only if  we could clone Kats....
Following from the IPKat's alert last week of the Advocate General's Opinion in the reference from Henry Carr QC (sitting as Deputy Judge of the High Court) [not Mr Justice Arnold, as previously indicated] in International Stem Cell Corporation v Comptroller General of Patents, Shohta Ueno, Associate with Allen & Overy's IP Litigation team in London, helpfully summarizes the key points of the AG's Opinion and predicts whether the CJEU will follow suit:
On 17 July 2014, Advocate General Cruz Villalón delivered his Opinion in Case C-364/13 International Stem Cell Corporation v Comptroller General of Patents, recommending that the CJEU allow patenting of “unfertilised human ova whose division and further development have been stimulated by parthenogenesis”.  This would be achieved by excluding such cells from the term ‘human embryos’ in Article 6(2)(c) of Directive 98/44 (Biotechnology Directive) “as long as they are not capable of developing into a human being and have not been genetically manipulated to acquire such a capacity".

To refresh readers’ memories, the case was referred to the CJEU by Henry Carr QC on appeal from a decision of the examiner that International Stem Cell Corporation’s (ISC) applications were contrary to Article 6(2)(c) of the Biotechnology Directive. The question referred to the CJEU was:

“Are unfertilised human ova whose division and further development have been stimulated by parthenogenesis, and which, in contrast to fertilised ova, contain only pluripotent cells and are incapable of developing into human beings, included in the term “human embryos” in Article 6(2)(c) of Directive 98/44 on the Legal Protection of Biotechnological Inventions?”  
In seeking to persuade the CJEU of his answer to this question, AG Villalón starts by explaining that the question is identical to Brüstle, but with one critical difference – the cells in question are activated by parthenogenesis and therefore are incapable of developing into human beings.


No explanation needed...
By way of background, parthenogenesis is a method by which unfertilised ova are artificially induced into cell division by chemical and electrical techniques (cells derived in this way are referred as "parthenotes").  However, due to absence of fertilisation, parthenotes lack paternal DNA which means human parthenotes can never develop into human beings. This stems from the fact that expression of certain maternal and paternal genes are essential to drive development forward at the very early stages post fertilisation, a concept known as "genomic imprinting". As AG Villalón explains under current scientific understanding parthenotes would not be categorised as totipotent cells, and would, at best, be "pluripotent" cells.

Pluripotent v totipotent

So what does this distinction amount to?  First, totipotent cells (“toti” means “entire or whole” in Latin) are those which are capable of developing into an entire organism. A good example of this would be a fertilised ovum.   On the other hand, pluripotent cells (“pluri” means “several or many” in Latin) can turn into most cell types but crucially, if left on their own, lack the ability to develop into an entire organism.

The distinction is a very important one as whilst the preamble of the Biotechnology Directive states that human totipotent cells should be excluded from patentability, AG Bot and the CJEU in Brüstle did not have any issue with patentability of pluripotent cells (leaving aside the issue of whether such pluripotent stem cells originated from a human embryo).   On the contrary, in his Opinion AG Bot, stated that “pluripotent cell in isolation cannot therefore be regarded as constituting an embryo itself”.   Based on this, the heart of the ISC case was whether parthenotes should be categorised as ‘totipotent’ or ‘pluripotent’ and thus whether they should be patentable.

The decision in Brüstle

Oliver Brüstle
Readers will recall that, in Brüstle, the CJEU held that parthenotes are human embryos capable of developing into a human being and, therefore, are excluded from patentability. In his analysis, AG Villalón disagrees with AG Bot’s characterisation that parthenotes and non-fertilised ova subjected to somatic-cell nuclear transfer are the same and both capable of developing into a human being (this characterisation was followed by the CJEU). AG Villalón argues that the CJEU at the time of judgment did not have the correct scientific understanding of parthenotes. He states that the key criterion for parthenotes being categorised as human embryos (and hence excluded from patentability) is whether they are inherently capable of developing into a human being.  AG Villalón sets out as follows:

“According to my reading of the Court’s argument, the decisive criterion that should be taken into account for determining whether an unfertilised ovum is a human embryo hence is whether that unfertilised ovum has the inherent capacity of developing into a human being, i.e. whether it really constitutes the functional equivalent of a fertilised ovum.”  
Thus, AG Villalón’s Opinion seems to get around the Brüstle decision by carving out parthenotes from being categorised as ‘human embryos’ under Article 6(2)(c) of the Biotechnology Directive.

What is meant by “As long as they are not capable of developing into a human being and have not been genetically manipulated to acquire such capacity”

AG Villalón argues there is a possibility that one day it might be possible for scientists to genetically manipulate a human parthenote so that it acquires the ability to develop into a human being. He notes in particular that the technology has already been successfully tried in mice, and that, if parthenotes acquire such ability, they would no longer be patentable as they would fall within the term ‘human embryos’ under Article 6(2)(c) of the Biotechnology Directive.  
If the CJEU follows AG Villalón’s Opinion and adopts the same language in their decision, patentees would therefore need to come up with a specific carve out language when drafting their patents to ensure that they do not fall foul of this decision.

Ordre public and morality

While AG Villalón addresses the issue of morality at paras 32-49 of his Opinion by stating that Article 6(1) and (2) of the Biotechnology Directive should be considered side by side, he does not go further to address the more fundamental question of whether stem cell research generally is contrary to ordre public and morality. This also was not expressly considered in the Brüstle decision. There is, therefore, is a stark lack of discussion on these principles and their intersection with the field of stem cell research, although perhaps they remain too controversial for a clear conclusion to be achieved. 

Significance of the Opinion

There is of course no guarantee that the CJEU will follow the approach set out in AG Villalón’s Opinion, but it is hoped that they will do so as it is a sensible analysis based on the existing case law.  In particular, because AG Villalón’s Opinion follows the same reasoning as Brüstle, it should not be too difficult for the CJEU to distinguish this case from their Brüstle decision.

Should the CJEU follow AG Villalón’s decision, it is expected, as in Brüstle, that the EPO will quickly declare that their practice will follow the CJEU’s decision.

The practical impact of such a decision and statement from the EPO, could lead to an increase in patent filings and investment in this area as the decision will have provided a degree of certainty that was absent following Brüstle.  However, any certainty obtained could be defeated once technology advances further (as predicted by AG Villalón).  Such an approach will inevitably lead to additional references in the future.  However, in the meantime, patentees may wish to exercise caution, when referring to ‘human embryos’ in their patent drafting given the degree of confusion by the CJEU as to what this term refers to.

Tuesday tiddlywinks

This Kat has recently heard from his friends at Coller IP that they've been busily preparing a report, "3D Bioprinting of human transpant organs – A patent landscape", that might be of major interest to many readers of this weblog. It's the fruit of a work experience project undertaken by Mohsan Alvi and Matthew Duckett, under the supervision of Robert Gleave, and you can read it here. It's 42 pages in total and offers a useful collection of thoughts, facts and references.

"Global Innovation Index 2014: Switzerland, UK and Sweden lead Rankings with Encouraging Signs from Sub-Saharan Africa" is the excited message from the World Intellectual Property Organization (WIPO) in its press release here. You can check out your favourite countries in this list and see how they fare. The full rankings feature 143 jurisdictions and there are quite a few surprises. No doubt the fact that the UK comes second in the list is something to do with the fact that its recent ratings in the Eurovision Song Contest have nothing to do with innovation and are therefore excluded.

Merpel is most miffed at not being shortlisted as a potential judge and will not therefore cast her reassuring shadow over the proceedings when the Unified Patent Court opens its doors to hear your cases.  Those of you who would like to know more about the shortlist of judges for the Unified Patent Court may like to take a look at this piece which  (Eubelius) wrote for the Kluwer Patent Blog.  Says Peter:

Want to be a UPC judge? Better
get yourself a degree ...
"It came for a lot of people as a surprise that more than 354 candidates were found with potential to become a legally qualified judge. However, it should be taken into account that the UPC Agreement clearly states that legally qualified judges have to possess the “qualifications required for appointment to judicial offices in a Contracting Member State”. A literal reading of this requirement implies that to become a judge in the UPC, it is sufficient to have the qualifications in a Contracting Member State to become a judge. It is not required to actually be or have been a judge in one of the member states. Article 15 of the UPC Agreement further specifies that judges should ensure the highest standards of competence and have proven experience in the field of patent litigation. Therefore, lawyers that have a proven experience in patent litigation and possess the qualifications required for appointment to judicial offices in a Contracting Member State, could be a candidate and can appear on the shortlist. 

A technically qualified judge needs a university degree, a proven expertise in a field of technology and a proven knowledge of civil law and procedure relevant in patent litigation. It is to be expected that a lot of patent attorneys applied for technically qualified judge.
When will the UPC open its doors?  What was predicted to be the beginning of 2015 has now slipped back to the end of that year. Might it be that even this prediction is somewhat optimistic? 

Despite his long-standing and deeply-felt dislike of the manner in which the UK Intellectual Property Office continues to trivialise innovation in the eyes of innocent children by fusing it in their minds with the antics of Wallace & Gromit, this Kat is keeping his promise to his friends in that otherwise sane and sensible institution to make mention of Cracking Ideas (an "educational resource for 4-16 year olds encouraging innovation, enterprise, creativity and knowledge of intellectual property rights"). You can check it out here. There's also a Facebook page here and a five-minute YouTube clip on Cracking Ideas 2014, here.

Around the weblogs.  There was plenty being posted on the IP blogosphere over the past few days.  IPKat blogmeister Jeremy, writing on the SOLO IP blog, is in mischievous mood when invited by LinkedIn to picture himself working for Freshfields. On Art & Artifice Rachel Buker mulls over the difference between flexibility and inconsistency when it comes to applying fair use principles in artistic copyright cases. The SPC Blog carries a hot-off-the-press piece from victorious law firm Powell Gilbert following judgment in Eli Lilly v Human Genome Science.  For IP Finance, Mike Mireles writes on the tribulations of YUM brands in China while, still in Asia, Althaf Marsoof on the jiplp weblog explains how a court in Sri Lanka chose to balance the interests of tobacco brand owners and public health. Finally, on Excess Copyright, Canadian blogger and Katfriend Howard Knopf catches a Red Bus to take him on a journey to the same issues as Rachel Buker, above.

Monday, 21 July 2014

Precedent III - is it res judicata?

This is the third and, the IPKat expects, final post in this reflective series considering the role of “precedent” at the European Patent Office (EPO).  The previous two posts (here and here) have attracted considerable comment, much of which is worthwhile reading. There is however always more to say and an aspect that has not so far been covered, although it has arisen in some of the comments, is the issue of res judicata and how it differs from precedent.  Since the aim of this series of posts has been to try to step outside of the framework of any individual system of jurisprudence and to try to look at the effect in practice of these concepts, the IPKat will try to explain the difference in practical terms, and again try to draw some parallels with national practice.

Precedent, as discussed in the previous two posts, is concerned with statements of the law. The Rules of Procedure of the Boards of Appeal refer in Article 21 to “an interpretation or explanation of the Convention”; in UK precedent, the emphasis is on the legal reasoning that is used to reach a particular decision and the exposition of law and legal tests applied along the way.  The consideration of precedent is the degree to which a subsequent tribunal should use the same statements of the law, and the same legal tests in a similar manner, as used in previous cases.  The important thing is that it does not refer to the outcome of the case, such as whether the patent is valid and whether it is infringed by a particular product.

Res judicata is about the outcome of a case, and refers to the principle that, once a matter has been decided as between two parties in a decision that is final (ie not open to further appeal), neither party can re-litigate the same matter again.  This is not telling the Court how to decide a case; rather it is telling a party that it may not even raise the issue or seek to have it decided in a different manner.

The confusion between the two arises because in both cases one can use the term “binding”.  In “binding precedent” a subsequent tribunal must follow an earlier statement of the law; when discussing res judicata one can say that the earlier decision is binding on the parties.

On reflection, it was perhaps misleading of the IPKat to refer to Article 112(3) EPC ("The decision of the Enlarged Board of Appeal referred to in paragraph 1(a) shall be binding on the Board of Appeal in respect of the appeal in question") and Article 111(2) EPC ("If the Board of Appeal remits the case for further prosecution to the department whose decision was appealed, that department shall be bound by the ratio decidendi of the Board of Appeal, in so far as the facts are the same") in the context of precedent in the original post, because really they refer to res judicata – the aspects of the case that have been decided by the (Enlarged) Board of Appeal are not open to challenge in the remitted proceedings.  Thus if the Board of Appeal has decided that a claim set is novel, then in principle during the remitted case the novelty of those claims is not further open to question.

Res judicata is a relatively simple concept in principle, but its application in practice is actually rather complex, because its extent and applicability of the doctrine are frequently questioned.  The recent UK Supreme Court case Virgin Atlantic Airway Ltd v Zodiac Seats UK Ltd [2013] UKSC 46 (see IPKat here) concerned whether a finding of validity of a patent as between two parties was res judicata even if the patent was subsequently revoked.  Overturning previous precedent, the Supreme Court decided that it was not.

What is particularly interesting from the point of view of the place of EPO decisions within European jurisprudence is that it is generally acknowledged that EPO decisions do not create any res judicata.  Thus a person who unsuccessfully opposes a European patent at the EPO is quite free to challenge the patent again nationally, for example as a defence to an infringement action.  For example, Grégoire Triet and Jean-Hyacinthe de Mitry of Gide Loyrette Nouel kindly drew the IPKat’s attention to a highly apposite decision, remarking as follows:
"We would like to draw your attention on the attached judgment handed down by the Court of appeal of Paris in 2005 [you can access it here or download it here].

The background was rather classic. A patent owner brought an infringement case against an alleged infringer before French courts. In parallel, the infringer opposed the delivery of the patent before the EPO. The opposition was eventually dismissed and the infringement proceedings resumed in France.

Before the Court of Appeal, the patent owner argued that the EPO decision had res judicata over the Court and, consequently, that the defendant could not dispute the validity of the patent any more. The defendant disagreed and argued that EPO decision could not have res judicata over a French court.

The defendant invoked various grounds, the main ground being that an EPO decision originates from an administrative authority in charge of granting patents and not a court of justice handing down binding judgments. This was the ground adopted in first instance.

The Court of Appeal ruled in favour of the defendant and affirmed the first instance judgment. Although the reasoning of the Court is slightly different, for it found that (i) the preparatory works of the Munich Convention show that there was an intent to avoid that national courts be bound by EPO decisions, (ii) no section of the Munich convention provided that EPO decision had res judicata over national courts, and (iii) based on Section 22 of EU Regulation 44/2001, a national court has sole jurisdiction to revoke the national part of an European patent.

Unfortunately (for the sake of law of course), this case was not heard by the Supreme Court".
The same conclusion was reached in respect of England and Wales in Buehler AG v Chronos Richardson Limited (Merpel loves this decision because it cites the maxims "nemo debet bis vexari pro una et eadem causa" and "interest rei publicae ut finis sit litium" - there is nothing like a bit of judicial Latin).  According to that decision, the same approach is taken in Germany, according to the decision of the Bundesgerichtshof in Zahnkranzfraser (Case No X ZR 29/93).

This gives rise to a situation that this Kat finds counter-intuitive, namely that a UK Court, for example, will give deference to the exposition of law in an EPO Board of Appeal case, but will then quite happily come to a different conclusion concerning, for example, novelty or inventive step.  This can even in principle be on the basis of the same prior art, since a UK Court will generally take the view that differences in expert evidence , for example, may justify a different outcome.  For example, as was stated in Generics (UK) Limited and others v H Lundbeck A/S [2009] UKHL 12:
“National courts may reach different conclusions as to the evaluation of the evidence in the light of the relevant principles, but the principles themselves should be the same, stemming as they do from the EPC.”
Even here, however, we see signs that UK courts are trying to be more consistent with the EPO, and in the HGS v Lilly litigation, reading the decision of the Supreme Court in Human Genome Sciences Inc. v Eli Lilly and Company [2011] UKSC 51 (see IPKat here) it is possible discern in the judgment a desire to not only apply the jurisprudence of the EPO Boards of Appeal, but also to reach the same conclusion (of sufficiency of the claims) on the specific facts of the individual case.

If the EPO revokes a patent then that is the end of the matter and there is no patent for a national court to exercise any jurisdiction over.  If the EPO maintains a patent in opposition, then, as stated above, anyone, including the unsuccessful opponent, can generally still challenge the validity of the patent in national proceedings.  The degree to which a national court will defer to the EPO finding varies from country to country.  Perhaps readers would care to comment with respect to their own jurisdiction how easy it is in practice to successfully challenge the validity of a patent already found valid by the EPO, such as whether it is generally necessary to use different prior art.

Ten million! Thanks so much ...

This morning the IPKat weblog's Google page-view counter (which readers may have noticed in the sidebar on the left-hand side of the IPKat's home page) reached the magical, if admittedly arbitrary, figure of 10,000,000.  The Kat, together with Merpel, just wanted to take this opportunity to say another big "thank-you" to their readers from all around the world who have kept on visiting their blog and whose comments, criticisms and witticisms have both educated them and enriched their understanding of IP and how it works.

Thanks are also due to the many regular and guest Kats past and present, plus our occasional guest contributors, for keeping a regular flow of at least passably interesting blogposts -- and, as ever, our especial gratitude goes to the legislators, lawyers, litigants and judges whose combined efforts, for good or ill, have provided such fertile material for us to discuss.

Thank you all!

Tama the ten million dollar cat here
Tommaso the ten million euro cat here
Ten million wildcats here

Italian court says that YouTube’s Content ID should be used to block allegedly infringing contents

A couple of months ago this blog reported that the Tribunale di Torino (Turin District Court) had rejected an application for an interim injunction brought by Delta TV in the context of proceedings between this and Google and YouTube. 

As readers might recall, Delta TV produces and markets TV programs, and holds the economic rights to a number of South American soap operas for a number of territories (including Italy), where it licences the relevant rights to third parties. 

Delta TV became aware that a number of episodes of such soap operas dubbed in Italian had been unlawfully uploaded on YouTube. It also became aware that, by inserting their titles on Google Search, the first results displayed links to such YouTube videos. 

Delta TV sued [the case is still pending] Google and YouTube for secondary copyright infringement, seeking damages for over EUR 13m. It also sought an interim injunction to have the videos removed from YouTube.

Antonio is confused:
how on earth could one prefer URLs
to titles such as
Sortilegio ("spell") or
La forza del desiderio ("the strength of desire")?
YouTube and Google opposed the application, claiming that, as soon as they became aware of such allegedly infringing contents, they removed them from YouTube, in compliance with the obligations set for hosting providers by the Ecommerce Directive and the piece of legislation (Legislative Decree 70/2003) that implemented it into the Italian legal system. 

The Tribunale di Torino dismissed the request for an interim injunction, holding that from Articles 16 and 17, and Recitals 42 to 48 of the Directive as interpreted by the Court of Justice of the European Union (CJEU) in its decisions in Cases C-70/10 Scarlet [here] and C-360/10 Netlog [here], it follows that:

a)  YouTube does not have any duty to determine in advance whether individual users who upload videos onto its platform have actually the right to do so. 
b)  The only case when a hosting provider such as YouTube may be responsible for third parties' infringements is when it has actual knowledge of the presence of illegal content or, upon obtaining such knowledge or awareness [according to the judge it is necessary for the rightholder to indicate the URLs of the allegedly infringing content, not just the title of the works in which copyright has been allegedly infringed] it does not act expeditiously to remove or disable access to the content. 
c)  EU and Italian laws forbid any obligation on ISPs to monitor the information they store or transmit. Moreover, should obligations of preventative control and filtering be imposed on hosting providers, the broad diffusion of services based on the adoption of automatic uploading systems would be negatively affected.

The Tribunale found - among other things - that, upon receiving notice of the relevant URLs, YouTube had acted expeditiously to remove all the allegedly infringing videos. The judge also suggested that to prevent future infringements, rightholders may continue monitoring whether new allegedly infringing content is uploaded, or – even better - participate in YouTube's Content ID program. This allows rightholders to deliver reference files of content to which they say they own the copyright to YouTube, metadata describing that content, and policies describing what they want YouTube to do when it finds a match. YouTube compares videos uploaded to the site against those reference files, and when a match is found it applies the rightholder’s chosen policy, ie (a) make money from the upload; (b) leave it up and track viewing statistics; or (c) block it from YouTube altogether.

Delta TV appealed the decision, seeking an injunction that would require YouTube and Google to prevent further infringements. According to Delta, this could be done by requiring the defendants - rather than Delta - to activate Content ID. Delta also argued that, by indexing and organising the contents uploaded onto its platform, YouTube is not a hosting provider that is eligible for the Ecommerce Directive “safe harbors”.

The Tribunale di Torino has now issued its decision [made available only at the end of last week] and - contrary to the dramatic reports of some newspapers [here and here] that suggested that YouTube can no longer be considered a hosting provider within the Ecommerce Directive - agreed with Delta's claims to a pretty limited extent. 

Enforcement v Ecommerce Directive?
No need for a fight
IP protection and information society services: the latter prevail

The three judges that re-examined Delta’s claim started by observing that there might be a clash between IP protection (which is also protected as a fundamental right within Article 17(2) of the Charter of Fundamental Rights) and information society services. 

At the EU level, this might have resulted in a conflict between the Enforcement Directive and the Ecommerce Directive, but EU legislative avoided it: Article 3(2)(a) of the former states in fact that that directive would not affect the latter, notably Article 12 to 15. 

This means that the safe harbor provisions of the Ecommerce Directive prevail over the Enforcement Directive, yet within the boundaries set by the Ecommerce Directive itself, in particular at Recitals 42, 43, 45, 46, 47, and 48. 

It is within this legislative framework that: (1) the prohibition of a general obligation on providers to monitor the information transmitted or stored must be interpreted and, more generally, (2) the balance between IP protection and information society services must be established. 

The judges then recalled that in L'Oréal and Scarlet the CJEU prohibited national measures that would require an intermediary provider to monitor actively all the data of each of its customers in order to prevent any future infringement of IP rights. However, the jurisdiction conferred on national courts must allow them to order those intermediaries to take measures aimed not only at bringing to an end infringements already committed, but also at preventing further infringements.

Don't worry Cecil:
safe harbors still exist
YouTube is a new generation provider, yet still a hosting provider

The judges then considered whether YouTube could be considered a content – rather than hosting - provider. They noted how technological development has been such as to supersede the descriptions provided in the Ecommerce Directive, which posits the idea of a hosting provider as a subject that merely "sells storage space" [does this imply a suggestion to EU law-makers that this directive should be updated?].

These days no hosting provider may be considered completely neutral in respect of the information stored, in that the very way in which it organises such information economically supports its activities by making its service attractive to advertisers. 

YouTube should be considered a new generation hosting provider. However, this does not mean that a subject like YouTube is not eligible for the safe harbors of the Ecommerce Directive, but rather that the duty of care that can be reasonably expected from it pursuant to Recital 48 to the Directive may be of a higher standard. 

Rightholders must specify URLs, and YouTube should use them as reference files for Content ID

The judges confirmed that rightholders must indicated the URLs of the allegedly infringing content when sending a formal request to YouTube. Sole indication of the title of the works in which copyright has been allegedly infringed is insufficient. 

Once this has occurred, can the hosting provider be required to prevent future uploads of the same contents that were accessible at the URLs specified? 

According to the judges, this question must be addressed from both a legal and technical standpoint.

As regards the former, it is necessary to determine whether imposing this obligation would conflict with the provisions of the Ecommerce Directive. According to the judges, this control would be ex post and specific, thus differing from a general obligation to monitor.

In relation to technical feasibility, the judges found that it would be possible for YouTube to employ Content ID to prevent further infringements. Although Content ID works through reference files provided by the rightholder, in the case of requests to remove specific URLs of YouTube videos, such reference files would be already present on the video hosting platform. This means that YouTube could use directly those files to prevent the future uploading of identical contents. In any case, the rightholder shall remain responsible towards third parties for any illegitimate use of Content ID.

... rather than those of courts?
So what?

In the end, the Tribunale only accepted Delta’s claim that YouTube should use Content ID to prevent further alleged infringements, by using the reference files at the URLs specified in Delta’s earlier formal request to block new identical contents.

Wait a second, says Merpel: isn’t this already one of the options from which rightholders using Content ID may choose from?

Basically this new decision of the Tribunale di Torino just means that Delta has decided that it does not want to monetise or leave the contents up, but rather wishes to have them removed when the same reference files are found again on YouTube, and that YouTube must comply with its request.

This is something that YouTube would do even without being sued and actually do better than the solution proposed by the Tribunale. Rightholders who participate in the Content ID program may in fact provide YouTube with the reference files of any contents to which they own the copyright and want blocked, while in the case of Delta TV YouTube will have to use Content ID only to block the contents specified in its earlier removal request.

Is this a smart solution for Delta TV? Let’s now wait for the final decision of the Tribunale to know more ...

Never too late! If you missed the IPKat last week ...

Here is the third in our weekly series of compilations by our good friend and former guest Kat Alberto which list and briefly summarise the feature posts (excluding the regular around-ups) that have appeared on this weblog over the previous week and which readers who were sunning themselves on the beach, absent or too busy can see what they missed and decide conveniently for themselves what they want to chase up, without ploughing through the debris at the bottom of their inboxes.  Anyway, what you missed last week was this:

Guest blogger Paul England (Taylor Wessing) reports on an IP Enterprise Court, England and Wales, ruling in  SDL Hair Ltd v Next Row Ltd & others [2014] EWHC 2084, where Judge Hacon addressed the issue of damages for loss of opportunity following the receipt of cease and desist letters groundlessly claiming patent infringement. There's a nuanced border between aggressive protection of IP rights and bullying. This is a super-hot topic, and so is this tale -- which incidentally also concerns a device for heating hair rollers.

* What is precedent and does the EPO have it?

Does the EPO adopt a civil or a common law-type system of precedent? The first part of this true masterpiece from Darren explains this dichotomy with words of such outstanding clarity that all comparative law students should learn it by heart. Darren then provides for an in-depth analysis on whether EPO Boards are bound by the EPO’s precedents and, if so, whether the same applies to national courts. The final part of the post focuses on the nature of the EPO’s Guidelines for Examination.

* EPO Bound again - more precedental than ever: Precedent 2

Predictably, Darren’s post on the EPO and the precedent doctrine, above, attracted an outstanding number of comments. This allowed the same Darren to pen this follow-up post, further exploring the main issues emerging from readers’ comments. A key point here is the proper significance and the general understanding of “precedent” and how it reflects on legal certainty and the judges' degree of freedom in ruling what they think it is just. Definitely another must-read piece on our beloved European integrated system. 

* BREAKING: Do not expect to read the EU copyright White Paper while on your summer holiday

Bad news for European copyright lovers. After leaking the internal draft of the forthcoming White Paper on "A Copyright Policy for Creativity and Innovation in the European Union", Eleonora informs us that the publication of the final version of it, keenly awaited for this summer, has been postponed -- likely till September 2014. This has nothing to do with bureaucratic tardiness, as rumours indicate substantial divergences between Commissioners Barnier and Kroes on how revolutionary that paper should be in the world of European copyright.

* Biopatent Opinion: will it be "ova and out" for pluripotent human cells?

Jeremy talks about AG Cruz Villalon’s Opinion in a case concerning the concept of “human embryos” in the meaning of Article 6(2)(c) of Directive 98/44 on the legal protection of biotechnological inventions. The case is C‑364/13, International Stem Cell Corporation v Comptroller General of Patents, and it comes from a reference from the Patents Court, England and Wales. This is of one of those patent issues that trigger moral and ethical dilemmas-- as well as an extended use of Wikipedia to try to understand what the invention at stake is all about [Katnote: this is just the hors d'oeuvres. The main course, a considered guest post from Shohta Ueno, is on its way soon].

* Philips Win Patent Infringement Suit Against Nintendo

Darren gives the floor to his younger colleagues of Jacob Loftus and Gemma Wooden, who write about a fresh ruling in patent litigation brought by Philips against Nintendo in the Patents Court, England and Wales ([2014] EWHC 1959 (Pat)). According to Philips, Nintendo’s Wii and Wii U consoles infringed three of its patents relating to the interaction between users’ physical bodies and the virtual tennis character that one of Nintendo’s video games allows you to become. The whole case and Birss J’s decision are extraordinarily entertaining -- though one of the two parties might not find the ruling so funny.

* Reber's chocolate dancing dream ends in meltdown


Another guest contribution this week comes from Valentina Torelli, who delves into the Court of Justice of the European Union (CJEU) decision in Case C-141/13 P Reber Holding GmbH & Co. KG v OHIM, Wedl & Hofmann GmbH. The case concerns ‘genuine use’ of trade marks aimed to distinguish chocolate products. Is there any reason why we should we keep calling it ‘genuine’, Jeremy wonders?


* Two Community trade mark appeals head for the CJEU: do you want to have a say?

From our friends at the UKIPO comes the news of two trade mark cases on their way to be heard by the CJEU. The first  is Case T-221/12, now renumbered as Case C-142/14 P, The Sunrider Corporation v OHIM. The word trade mark "Sunny Fresh", registered for (among other things) medical food preparations and beverages, opposes the Community “SUN FRESH” device mark application, filed for beers, fizzy drinks and other beverages. The main point there is what “medical” means within EU (medical and not medical) law. The second is (or are?) Cases T-604/11 and T-292/12 Mega Brands International v OHIM, Diset. As reported in IPKat’s posts here and here, the case is about the chance to register “MAGNEXT” in front of (mainly) an earlier “Magnet4” trade mark, and how device characterisation can make a later sign fall outside the scope of protection of an earlier similar word mark -- an additional issue about use could rise, Jeremy bets. Everyone is invited to comment (either as comments to Jeremy’s post or to the UKIPO itself, though tight deadlines later this week apply!).

* Green paper consultation on GIs, plus an update on Nico's "trophy" helmet

Birgit informs readers of another call for comments, this time about the EU Commission’s Green Paper consultation on a potential extension of geographical indication (aka 'GI') protection to non-agricultural products. People who would be interested in having, not having at all, or simply saying a word on Gis on things like ceramics, marble, cutlery, shoes, tapestries and musical instruments can make their point until 28 October 2014.

This week Neil gets into the field of nature, both agricultural and human. The story begins with Monsanto developing a system that allows ‘prescriptive farming’. In a nutshell, the system uses a vast database, enriched with information as to soil characteristics and weather-simulation points. Combining those data with the library of seeds it sells, Monsanto is able to suggest “planting a field with different varieties at different depths and spacing, varying all in accordance with the weather.” The innovation’s greatest opportunities, however, might be reduced by clients’ mistrust, and that appears to be the case for Monsanto’s system, with US farmers nothing less than reluctant to share their harvest information with the multinational company.

* Does anyone fancy some McFashion?

This is the final post for last week and it's about a pretty much unusual co-branding case. What happens when a luxury fashion house marries the brand image of a giant fast-food company? Have a look at Rebecca’s note to get the answer. This, by the way, is Rebecca's first post as an official guest Kat. Well done, Rebecca.

John Allen (1970-2014)

It is with great sadness that the IPKat has learned of the untimely death of a popular member of the intellectual property community, NautaDutilh partner John Allen.  The firm's website this morning states thus:
"We were shocked to learn that our much-loved colleague John Allen, his wife Sandra and their sons Christopher, Julian and Ian were on board the Malaysia Airlines flight on route to Kuala Lumpur that crashed in the Ukraine on July 17. Our thoughts are with John’s family and his friends in and outside the office.

John joined our firm in 1996 and became a partner in 2007. He was very important in building the intellectual property practice group, where his expertise and skills in patent litigation and technology- related disputes were highly praised by his clients and peers. ... He was a person with many talents, and in addition to his professional contribution to our firm he generously shared his musical and athletic abilities with us ...".
John spent some 18 years at NautaDutilh, during the course of which this Kat had the pleasure of getting to know him and almost persuaded him to write an article for JIPLP. In a world in which we all depend on the support, the encouragement and the constructive contributions of others for our own well-being, each of us is that little bit diminished by the loss of any one of us -- and we are all diminished by the loss of John, and of those contributions to life and to law that he is now never to make.

The IPKat, Merpel and the whole of the blog team offer their condolences to John's family, friends and colleagues. May we live to see years of peace in which we are spared all further tragedy and sorrow.

Saturday, 19 July 2014

Does anyone fancy some McFashion?

In case you haven’t seen it yet, Moschino’s Autumn/Winter 2014 Collection includes a big portion of McDonald’s inspired items. It is comprised of French fries phone covers, a Happy Meal box handbag and a soft drink cup handbag amongst others.

McDonald’s is the world’s largest restaurant chain and its golden arches are one of the most recognised logos in the world, indicating the value of its intellectual property. Moschino has always been known for its eccentric collections, but this one appears to be particularly successful and has recently attracted attention from health services, accusing it of glorifying fast food.

For those wondering if this blatant inspiration from McDonald’s trademarks and designs may constitute a potential infringement, the answer is no. A McDonald’s spokesperson said: “We've signed a licence agreement with Moschino that allows them to use McDonald's intellectual property on the merchandise. Moschino will make a donation to Ronald McDonald House Charities.” Far from damaging its reputation, these products seem to be good advertising for McDonald’s, giving them the opportunity to target a different group of customers. With the distinctive style of its products, Moschino is attracting considerable attention.

The public seems to have loved the concept, and as any other successful product, fake copies have emerged and are now being sold online with prices at less than a tenth of the price.

For more quirky McDonald's facts, click here

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