Italian Courts and the protection of Graphical User Interfaces under copyright laws: some recent cases

In some recent cases (case “Trend for Trend Vs Pix Agency” dated 5.2.2016; case “DriveK Italia Vs Webbdone” dated 20.3.2016 and case “Esko Software Vs Beegraphic” dated 6.7.2012) the Court of Milan has ruled with regard to the legal protection of the Graphical User Interfaces (“GUI”) and more in detail on the protection of the overall aspect of the GUI (the so called “Look&Feel”). The GUI can be considered as an atypical and complex creative work based on a project that combines graphical and navigation elements allowing interaction between users and devices (both at software and hardware level).

The term “Look&Feel” is sometimes used in EU case law (AG Bot – C 309/09) and by Italian scholars (Giordano D., Software e grafica dei social network, AIDA 2011, 248) as a synonymous of GUI (see AG’s Conclusion – C 309/09: “The graphic user interface, commonly referred to as the ‘look and feel’, enables communication between the program and the user”). More precisely, some scholars (Hayes, What’s left of “look and feel”: a current analysis, in Comp. Lawyer, X 1993, n. 5) consider “Look” the combination of all the visual and/or audio elements of a computer program as presented in a GUI and “Feel” as the sequence, structure and organization of the non-literal elements into a GUI. It has been questioned whether the overall “look and feel” (i.e. the combination of visual elements and the organization of such elements for interaction with users) can be protected as a whole.

The overall “Look&Feel” and the individual elements in a GUI can be protected, under certain conditions (notably with an adequate level of creativity), by Italian copyright law (see Article 1.1 and Article 19 Italian Copyright Law). This conclusion should not be disputed in case of one-to-one copies of GUIs and/or individual elements in a GUI (i.e. in case of “literal copyright infringements”). More problematic is the case of non-literal copyright infringement of the overall “look and feel”, where it has to be clarified which elements in the overall “look and feel” are eligible for copyright protection.

An obstacle to the protection of the “Look&Feel” is represented by Article 1.2 Software Directive (2009/24/EC), according to which ideas and principles of a computer programs are not eligible for protection under copyright law (“Protection in accordance with this Directive shall apply to the expression in any form of a computer program. Ideas and principles which underlie any element of a computer program, including those which underlie its interfaces, are not protected by copyright under this Directive”). Such EU provision is implemented by Article 2 n.8 Italian Copyright Law. It could be argued that “Look&Feel” incorporates some basic ideas and principles of the computer program generating the GUI. According to the above, protection under Italian copyright law could be granted to the overall “Look&Feel ” without taking into consideration those elements in the GUI: (i) that are expression of technical ideas and principles at the basis of the computer program generating the GUI; and (ii) that are the necessary result of the functional organization of the GUI.

On the other hand, the “Look&Feel” of a GUI could imply a level of creativity in the sequence, structure and organization of the elements, eligible for copyright protection as “elaborated ideas”. A possibile confirmation of this type of protection can be found in a EU case related to the protection of a computer manual. The CJEU has stated that, with reference to a computer manual, also the choice, sequence and combinations of commands, options, defaults and iterations is expression of creativity and can result in an intellectual creation protected under copyright law (see CJEU case C-406/10 “[…] the keywords, syntax, commands and combinations of commands, options, defaults and iterations consist of words, figures or mathematical concepts which, considered in isolation, are not, as such, an intellectual creation of the author of the computer program. It is only through the choice, sequence and combination of those words, figures or mathematical concepts that the author may express his creativity in an original manner and achieve a result, namely the user manual for the computer program, which is an intellectual creation”).

Italian case law regarding the alleged copyright infringement of the GUI of a website has usually excluded the violation of copyright laws in case of non-literal infringement and has made in some cases application of the rules against unfair competition practice in the Italian Civil Code (namely article 2598 ICC). Nevertheless in their legal analysis the Courts have expressed their view on the protection of GUIs under copyright laws. The Court of Milan in the case Trend for Trend Vs Pix Agency dated 5.2.2016, regarding the alleged copyright infringement of the GUI of a website, held that the scope of copyright protection includes both the expression and the elaboration of ideas but found that the format of the allegedly infringed website (inclusive of a description of the GUI) filed with the SIAE was not eligible for protection and that a comparison of the GUI (without taking into consideration forms imposed by the technical nature of the services proposed by the websites) excluded any graphical coherence between the GUIs. In another case the Court of Milan dated 20.3.2016 (DriveK Italia Vs Webbdone), excluding copyright infringement of the GUI of a computer program, stated that it is on the claimant to prove the level of creativity of the GUI, also by offering a reconstruction of the state of the art in the sector of the software at stake and/or by offering a comparison with other comparable software. Finally, in a case before the Court of Milan dated 6.7.2012 (Esko Software Vs Beegraphic) the technical expert found that most of the elements of the GUIs under comparison were imposed by technical reasons and that the organization of the elements in the GUI of the defendant was sufficiently differentiated by the same elements in the GUI of the claimant.

Gianluca Campus

The partial remedies introduced by the EU Commission’s Proposal for a Directive on copyright in the Digital Single Market of 14 September 2016

InfoSoc’s unbalanced approach has been only partially – very partially – remedied by the Proposal for a Directive on copyright in the Digital Single Market of 14 September 2016 (here). Let us go through its main tenets.

  1. New mandatory exceptions

The Proposal envisages the extension of the range of mandatory exceptions to:

  1. “reproductions and extractions made by research organizations in order to carry out text and data mining…for the purpose of scientific research” (Art. 3);
  2. “the digital use of works…for the sole purpose of illustration for teaching, to the extent justified by the non-commercial purpose…” (Art. 4, dictating further restrictive conditions for the enjoyment of the exception; emphasis added);
  3. making copies, by cultural heritage institutions, of works permanently in their collections, for the sole purpose of preservation of such works (Art. 5).

These extensions deserve approval, of course, as they ‘upgrade’ to mandatory exceptions that InfoSoc provides as discretionary (Art. 5,2.c, e, and 3,a). But their impact is weakened by their persistent subjection – as all other exceptions and limitations foreseen by InfoSoc – to the barrier of the (in)famous three-step test which allows the copyright holder to oppose in judiciary sitting the actual enjoyment of the exceptions. Moreover, they are equally subject to the criterion of ‘strict interpretation’, also dictated by InfoSoc (confirmed by Art. 6 of the Proposal). Thus, for example, the ‘new’ exceptions under a), b) and c) would not allow either the market exploitation by research organizations of the fruits (reports) of their work, or the chance of Universities and other teaching institutions to edit and publish texts assembling lessons and other fruits of their educational activities.

Now, in all the cases where the public interest to spread culture and information may marry with economic exploitation (at times, however, non lucrative in proper sense: cultural heritage institutions, for instance, are bound to invest their incomes in institutional activities), wouldn’t be wiser – and truly consistent with the proclaimed aim to enhance the diffusion of culture and information – to adopt a mechanism of open paying access, instead than across-the board holding fast to the excludent paradigm?

The Max Planck Institute (MPI) went further and affirmed that data mining exception should apply also to commercial uses “as far as concerns content to which the persons performing the mining have lawful access” (see MPI position paper available here). Data mining relates to new analysis techniques to process large amounts of data, particularly to identify correlations and trends, which can be helpful in different sectors (health, marketing, IoT, etc.). In this regards, as acknowledged by Recital 8 “text and data mining may involve acts protected by copyright and/or by the sui generis database right, notably the reproduction of works or other subject-matter and/or the extraction of contents from a database”. Therefore, a general data mining exception would limit copyright and database rights. In this regard, the MPI says instead that data mining should be regarded as a normal use of a work, not requiring further authorization once a lawful access to the work is obtained. On the contrary, the new exception should be extended to cover data mining for research purposes even in cases of unauthorized access to protected works, i.e. research organizations should be able to carry out data mining without having to acquire access to the protected works.

We agree on that view. We however add that, in light of the concurring collective interests, data mining for commercial purposes should not in any case be subject to exclusive rights but rather to a regime of open paying access: business entities should be able to carry out data mining without having to acquire a general access to the protected works but rather by paying a reasonable fee/compensation.

  1. Use of out-of-commerce works by cultural heritage institutions

The Proposal provides for non-exclusive licences stipulated by collective management organizations with cultural heritage institutions for the digitisation, distribution communication and making available to the public of out-of-commerce works whose copyright belongs also to right holders not represented by the collective management organization – and this with cross-border effect (Arts 7-8).

The mechanism that empowers cultural institutions to (store and also) publish works ‘out-of-commerce’ is quite precarious, as the rightholders “may at any time object to their works…be deemed to be out of commerce and exclude the application of the licence to their works” (Art. 7,1.c). And this, without any obligation to resume the publication of the ‘forgotten’ works. As matter of fact, in its weakness, the new regime apparently amounts to a tentative compromise solution with the principle, recently re-stated by the CJEU in interpreting InfoSoc, whereby collecting societies cannot by their own initiative (i.e. substituting themselves to authors) authorize cultural institutions to digitise, store, communicate and make available to the public out-of-commerce works (CJEU, 11 November 2016, case C-301/15, Soulier and Doke).

  1. New rights on press publications against digital uses

The Proposal introduces (Art. 11) a new right, lasting 20 years, in favour of newspapers and magazines publishers to bar third parties (except the authors of the articles) from unauthorized extraction and online exploitation of even short, even very short (‘snippets’), parts of published articles.

This provision represents a ‘hardened’ version of the German Copyright Law which – possibly on the blueprint of an ancient jurisprudence of French origin – instead condoned the extraction and use of ‘imperceptible thefts’ (‘larcins imperceptibles’).

This right is commonly labelled “ancillary”: in truth it is a straight copyright (albeit with a reduced term) since it simply confirms the faculty of copyright holders’ (newspapers and magazine publishers) to grant or deny the authorization to exploit derivative works. Excerpts are indeed ‘reductions’, typically derivative works (hence included in the provision of Art. 12 of Berne Convention): works ultimately similar to the ‘condensed (sic.) books’ traditionally published by the American magazine Reader’s Digest. And the extreme brevity of the extracted text does not per se deny – particularly considering the typical ultra-synthetic mode of today’s digital communications – that the ‘snippet’ can well feature an ‘informational product’ as such apt to be sold and/or draw advertising revenues. Thus subtracted to the publishers of the original article.

However, the basic weakness of the new provision consists, again, in shaping a straight excluding right (just grazed by the research/teaching exception), i.e. remaining stuck to a proprietary approach to facts-assembling (are we introducing copyright on information and facts?). Which (contrast with Feist’s liberal inspiration aside) represents an objective factor of slowdown of the circulation of culture and information.

Once again, wouldn’t it have been wiser to adopt an ‘open paying access’ scheme in dealing with (derivative) commercial journalistic uses of copyrighted materials? For example by sharing part of the actual incomes generated by the derivative uses, if any.

In sum, the trumpet-announced ‘new copyright for the digital age’ is still fundamentally the old closed monad, just renovated with a few narrow windows. This indeed seems the solution adopted also for User Generated Contents (“UGCs”).

  1. Mandatory cooperation between ISPs and copyright holders on UGCs

The Proposal (Art. 13) tries to regulate UGC platforms. It imposes ISPs to “take measures to ensure the functioning of agreements concluded with rightholders for the use of their works or other subject-matter or to prevent the availability on their services of works or other subject-matter identified by rightholders through the cooperation with the service providers”.

As regard the imposition of agreements concluded with rightholders for the use of their works the Proposal is justified as it compensate copyright holders by placing on ISPs the burden of the unauthorised use of protected works on UGC platforms (which ISPs monetize), possibly by sharing part of advertising revenues.

However, the Proposal raises some concerns as it seems – again – dictated exclusively by the tentative of expanding the copyright scope. First, it is not coordinated with E-Commerce Directive and its safe harbour provisions: who are the ISPs concerned? What about “passive” ISPs and the ban of monitoring obligations on the net? In fact, a general obligation to prevent the availability on their services of works or other subject-matter identified by rightholders through the cooperation with the service providers should be imposed exclusively on “active” providers and should be carefully intended as a exception of the net neutrality principle.

Second, albeit the copyright scope is extended over the e-commerce safe harbours, there is no attempt to expand and adapt the existing framework of copyright exceptions to the online environment. And this despite the fragmented and restrictive implementation of InfoSoc’s exceptions list. This is particularly the case of those exceptions that could better fit online uses, i.e., quotation right (Infosoc Art. 5,3.d), parody (Art. 5,3.k) and incidental inclusion of works in other materials (Art. 5,3.i). In most cases restrictively transposed into national laws (where implemented). In other words, the formalized obligation to monitor UGC platforms is not balanced by any legal tools to safeguard new fair uses deserving areas of freedom. Additionally, online monitoring programs used by copyright holders – that would in fact be supported by the Proposal – can difficulty distinguish “fair” uses. Thus, it should have been advisable at least imposing to Member States to fully transpose all InfoSoc exceptions without reducing their scope. With no need to recall what already observed about the three-step test and the need of adapting it as a balancing criterion rather than an exclusive restrictive mechanism.

  1. Fair remuneration in contracts of authors and performers

An innovation that deserves full approval is instead the modified regime of contractual relations authors-publishers that allows the former to request not only an improvement of the level of royalties previously agreed upon, but also (read Art. 14.1 and 2, in functional connection with Art. 15), a fair share of the revenues from the ‘other’ sources of income, i.e. advertising, commercial offers, public representations, etc. In case of disagreement, the dispute author/publisher might be entrusted to ADR (Art. 16).

Realistically, though, the chances to achieve such revisions will depend on general agreements stipulated by collecting societies and publishers’ associations – ultimately, by said societies and the major ‘platforms’.

However, this provision is of high systemic relevance, as it allows alterations of the contractually agreed balance of the parties’ interests beyond the classical boundary of exceptional/unforeseeable new supervening circumstances of dramatic economic impact. And, above all, it fills a manifest lacuna of the InfoSoc Directive, which, as hinted above, is missed: the chance of a regulatory support of new ‘business models’ of dissemination of the works associated with the advent of the Internet and digital technology. Models often characterized by no payment obligation for the user for the enjoyment of single works disseminated online, and where the commercial revenues stem in whole or in part from advertising and the sale of various services and other similar sources. Hence, InfoSoc failed also to defend the legitimate rights of authors to obtain their slice of the pie of these other commercial revenues however stemming from the exploitation, direct or indirect, of their works – especially vis-à-vis ‘free’ online distribution models.

Punitive damages for IP infringement and the Enforcement Directive: some thoughts on the OTK decision

On 25 January last, just a few months after the Liffers (here, and on IPlens) and Hansson (here) judgments, the EU Court of Justice issued another decision under Article 267 TFEU on compensation for IP infringement (OTK, C-367/15, ECLI:EU:C:2017:36: here).

The case concerned the compatibility with Article 13 of Directive 2004/48 (the Enforcement Directive) of a provision of the Polish copyright law whereby, in the case of infringement, the copyright holder may be awarded a sum of money consisting of two or three times the amount of the hypothetical royalty.

Pending the referral proceedings, the above national provision was declared unconstitutional by the Trybunał Konstytucyjny (the Polish Constitutional Court) insofar as it provided for compensation amounting to “three times” the hypothetical royalty. As a consequence, the scope of the EUCJ’s analysis was narrowed to “duplication” of the hypothetical royalty.

However, while triplication of the hypothetical royalty (at least in many cases) quite blatantly amounts to a punishment, duplication thereof may also be viewed as a way of ensuring that IP holders are fully compensated for the damage they have suffered. Therefore, the decision of the Polish Constitutional Court gave the EUCJ the opportunity to answer the preliminary question posed by the referring Court without explicitly ruling on the compatibility of punitive damages with the Enforcement Directive. An opportunity which – at least at first sight – the EUCJ did not miss.

After stating that

Directive 2004/48 lays down a minimum standard concerning the enforcement of intellectual property rights and does not prevent the Member States from laying down measures that are more protective” (paragraph 23)

and that

the fact that Directive 2004/48 does not entail an obligation on the Member States to provide for ‘punitive’ damages cannot be interpreted as a prohibition on introducing such a measure” (paragraph 28)

the Court went on to state that

without there being any need to rule on whether or not the introduction of ‘punitive’ damages would be contrary to Article 13 of Directive 2004/48, it is not evident that the provision applicable in the main proceedings entails an obligation to pay such damages” (paragraph 29), in view of the circumstance that “mere payment of the hypothetical royalty is not capable of guaranteeing compensation in respect of all the loss actually suffered, given that payment of that royalty would not, in itself, ensure reimbursement of any costs — referred to in recital 26 of Directive 2004/48 — that are linked to researching and identifying possible acts of infringement, compensation for possible moral prejudice … or payment of interest on the sums due” (paragraph 30).

In the light of the above, it would be fair to think that the Court did not believe the issue of punitive damages to be at stake in the case at hand; that, in the Court’s view, the Polish provision in question did not provide for punitive damages; and that, therefore, the Court saw no reasons for (again, explicitly) ruling on the compatibility of such damages with Article 13 of the Enforcement Directive.

However, in paragraph 31, the Court concludes its reasoning by admitting that a doubled “hypothetical royalty” may exceed the loss actually suffered by the IP holder: and, “in exceptional cases, may exceed it “so clearly and substantially that a claim to that effect could constitute an abuse of rights, prohibited by Article 3(2) of Directive 2004/48”.

So, quite interestingly, when it deals with the case of the IP holder being awarded a sum exceeding the actual loss as a result of the application of the Polish provision at stake, the Court does not make any reference to Article 13 and to the expression “damages appropriate to the actual prejudice” contained therein. In line with its conception of the Directive as a “minimum standard” (paragraph 23), the Court only relies, with regard to damages exceeding the actual loss, on the concept of abuse of right provided by Article 3(2). And this seems to be an implicit acknowledgment of the admissibility of punitive damages under Article 13 of the Enforcement Directive. Indeed, on the one hand, damages which exceed (even if not “clearly” and “substantially”) the actual loss suffered by the IP holder are not compensatory, but punitive. On the other hand, an abuse of right entails the existence of a right. Thus, it might be inferred from paragraph 31 of the reasoning that, according to the Court, the Directive does not prevent national laws from providing IP holders with the right to be awarded damages which exceed the actual loss they suffered – that is, punitive damages. However, the right in question, just like any other, should not be abused. And, in this regard, the Court appears to find in the general Member States’ obligation to provide for safeguards against the abuse of rights under Article 3(2) of the Directive the sole limit to punitive damages laid down by the Directive itself. The Court does not precisely indicate when claiming damages which exceed the actual loss constitutes an abuse of right. It simply says that claiming damages which clearly and substantially exceed the actual loss may amount to an abuse, thus leaving unsolved the issue of what “clearly” and “substantially” mean.

The Court decision, in this perspective, appears to be in flagrant contrast with the opinion (here) of Advocate General Sharpston (who pointed out that, under the Enforcement Directive, compensation should be appropriate and proportionate to the actual prejudice suffered by the IP holder).

It may be noticed that a provision almost identical to the Polish one was contained in the Proposal for a Directive on measures and procedures to ensure the enforcement of intellectual property rights presented by the Commission on January 2003 (here). Under Article 17 of the Proposal [which, contrary to Article 13 and recital 26 of the Enforcement Directive, expressly referred to both compensatory and non-compensatory damages]:

“… the competent authorities shall award, at the request of the prejudiced party:

(a)  … damages set at double the royalties or fees which would have been due if the infringer had requested authorisation to use the intellectual property right in question.

And, in such respect, the Commission’s Executive Memorandum (here) read as follows:

This provision does not constitute punitive damages; rather, it allows for compensation based on an objective criterion while taking account of the expense incurred by the right holder such as administrative expenses incurred in identifying the infringement and researching its origin”.

*** . *** . ***

The issue of punitive damages is a very hot one. In Italy, such damages have traditionally been considered as contrary to the public order (see, for all, Court of Cassation, 19 January 2007, no. 1183). However, quite recently [1], the I Civil Division of the Italian Court of Cassation submitted the issue to the President of the Court of Cassation for the possible consideration of the Joint Division of the same Court of Cassation, also in view of the presence in the Italian legal system of provisions which may be read as providing for punitive damages. So far, no decision has been rendered by the Court of Cassation in this respect. However, it is not unlikely that the Court will change its traditional stance.

In this context, it is worth remembering that Article 68(2) of the Agreement on a Unified Patent Court clearly provides that “The infringer shall not benefit from the infringement. However, damages shall not be punitive”. Thus, at least in (unitary) patent matters, the issue might be considered to be resolved.

Riccardo Perotti

[1] Order no. 9978 of 16 May 2016, available here.

EU Court of Justice, 25 January 2017, Stowarzyszenie ‘Oławska Telewizja Kablowa’ v Stowarzyszenie Filmowców PolskichC-367/15, ECLI:EU:C:2017:36.

The Court of Milan says that standard-essential patents may be only “optionally” implemented in compliant products.

This past September the Court of Milan issued an interesting – and so-far unpublished – decision in a patent infringement cahtc-legendse involving smartphones and standard-essential patents. The decision is noteworthy as it addressed (albeit briefly) the dynamics of standard-setting and the concept of essentiality, in partial reversal of previous decisions from the same Court and other Italian Courts.

The facts first. The case involved, on the one side, TLC giant HTC and, on the other, IPCom: a German non-practicing entity. Around 2010 IPCom pressed criminal charges against HTC, claiming that a number of HTC smartphones infringed three of its patents (EP 1 236 368, EP 0 913 979 and EP 1 226 692) that had been declared essential to a number of standards (e.g. WDCMA, SAP and UMTS). In response to this, in September 2010, HTC summoned IPCom before the Court of Milan, looking for a declaration of invalidity and non-infringement of said patents. IPCom counterclaimed for infringement, but only for EP 1 226 692 (hereinafter “EP ‘692“).

A (complex and very lengthy) technical investigation phase followed suit, with the appointment of an independent expert. In particular, it was questioned whether HTC smartphones would have directly or indirectly infringed EP ‘692, which was preliminarily deemed valid by the Court-appointed expert.

In assessing infringement, the experts and the Court had to first come at odds with the fact that EP ‘692 had been declared “essential” to ETSI, a prominent standard-setting organisation, for the UMTS standard. And that HTC smartphones were undisputedly compliant to said technical norm.

IPCom contended that since EP ‘692 was formally declared essential to the UMTS standard, every product that proved to be complaint with said standard would automatically infringe its patent.

The Court of Milan, however, viewed things differently.

In the first place, it held that a declaration of essentiality is a “necessarily unilateral” statement, particularly referring to paragraph 3.2 of the ETSI Guide on IPRs, wherein the Institute specifies that it “cannot confirm, or deny, that the patents/patent applications are, in fact, essential, or potentially essential” (for the latest version of the ESTI Guide on IPRs see here). Therefore, the Court affirmed that it had to assess the infringement on a factual and technical basis, implicitly affirming that it could not presumptively do so, on the basis of the patent’s declaration of essentiality alone.

In the second place, the Court of Milan further reviewed the UMTS technical specification at stake, noting that the execution of the activities covered by the patent (relating to the so-called PDCP layer), although regulated in the standard, were only optional for standard-compliant products. To ascertain this, the Court ordered for tests to be carried out on HTC smartphones, simulating both the network operations and the phones’ connection to the providers. As the test revealed that “the phones communicated to the base station that they cannot do” the particular operations mentioned in the patent and that, in any case, “Italian providers don’t ask them to do” said operations, the Court excluded the occurrence of both a direct and an indirect infringement of IPCom’s EP ‘692 patent.

This passage of the decision highlighted a circumstance that is often disregarded in the SEPs discourse: namely that technically-essential patents may be indeed essential, but in relation to portions of the standard that are only optionally implemented in compliant products.

In light of the above, the Court of Milan seems to have stepped away from a previous case law of 2008, where – in line with the technical report drafted by Court-appointed expert – it established infringement of a standard-essential patent by referring only to its essentiality and to the product’s necessary compliance to the standard: a sort of presumptive assessment of the infringement (see Court of Milan, 8 May 2008, Italtel s.p.a. et al. v. Sisvel s.p.a et al.; similar reasoning were put forward – although in preliminary injunction matters – also by Court of Genoa, 8 May 2004, Koniklijke Philips Electronics N.V. v. Computer Support Italcard s.r.l., in Giur. ann. dir. ind. 2006, 4949; Court of Trieste, 23 August 2011, Telefoaktiebolaget L.M. Ericsson v. ONDA Communication s.p.a. ,in Giur. ann. dir. ind. 2013, 5951).

The approach here suggested by the Court of Milan in determining the infringement of SEPs seems to better take into account the inherent technical and legal nuances of the standard setting dynamics, where the possibility of the so-called “over-disclosure” phenomenon — i.e. claiming essentiality for non-essential patents – is considered to be wide spread, and where specific technical features may often be only “optionally” implemented within standard-compliant products.

Giovanni Trabucco

Court of Milan, IP division, decision of 21 September 2016, No. 10288

Birkenstock fails to register as a trademark its shoes’ sole pattern

European Union General Court, 9 November 2016, Case T-579/14, Birkenstock Sales GmbH v EUIPO

By its judgement of 9 November 2016 the European Union General Court confirmed the refusal of protection of the international trademark registration of the Birkenstock sole pattern presenting wavy lines crisscrossing at right angles in a repetitive sequBirkenstock imageence.

The GC agreed with the assessment of the EUIPO Board of Appeal that the trade mark in question was devoid of any distinctive character in respect of orthopaedic shoes and parts therefor.

The GC found that the repetitive sequence could extend infinitely in all four directions of the square and therefore be applied to any two- or three-dimensional surface.

Thus the sign at issue would be perceived immediately as representing a surface pattern.

It observed that the case-law relating to signs that are indissociable from the appearance of the products should be applicable in the case at issue.

Such case-law stated that as the average consumers do not usually presume the commercial origin of goods on the basis of the signs that are indissociable from the goods themselves, those signs will have distinctive character only if they depart signicantly from the sectorial standards or usual practices (judgments of 12 January 2006, Deutsche SiSi-Werke v OHIM, C‑173/04 P, EU:C:2006:20, paragraph 31, and 22 June 2006, Storck v OHIM, C‑25/05 P, EU:C:2006:422, paragraph 28).

In the judgment of 19 September 2012, Fraas v OHIM, “Tartan pattern in dark grey, light grey, black, beige, dark red and light red” (T‑50/11) the Court already applied such a test  in the case of a figurative mark consisting of a part of the shape of the product that it represents, inasmuch as the relevant public will immediately and without further thought perceive it as a representation of a particularly interesting or attractive detail of the product in question, rather than as an indication of its commercial origin.

According to such case law, the court concluded that it was well known that the surfaces of goods or their packaging are decorated with patterns for a variety of reasons, including enhancing their aesthetic appearance and/or for technical reasons.

The decision has been appealed before the ECJ (C-26/17 P).

This is not the first case addressing whether an outsole is capable of functioning as a trademark. Many will remenber that Louboutin, the renowned footwear brand based in Paris, registered as a trademark the bright-red lacquered sole featuring its luxury footwear and filed a trademark infringement lawsuit against Yves Saint Laurent, Zara and other competitors, in a number of countries, including Swiss, France, Germany, Belgium and the United States. In these cases, however, the limits of the protection granted to the colour red contained in a trademark were at issue, with very different outcomes.

Just for mention the most significant findings, the U.S. Second Circuit Court of Appeals (No. 11-3303, 2013) found that the Red Sole Trademark had acquired secondary meaning, but only to the extent the sole did contrast with the upper part of a shoe (i.e., not in case of monochromatic red shoes). On the contrary, The Swiss Federal Administrative Court ruled that the red soles are merely a decoration, ineligible for trademark protection (decision B-6219/2013) and the French Supreme Court (may 30, 2012) stated the 3D mark could not be registered because the shape lacks distinctiveness and is imposed by its function.

Jacopo Ciani

Time limits for amending patent claims in pending litigations: the opinion of the Tribunal of Milan

The Tribunal of Milan (full text here) has recently ruled (for the first time) over a thorny issue concerning the Patent Limitation Procedure regulated by art 79.3 of the Italian Industrial Property Code (“CPI”). The norm states that “In a proceeding concerning nullity, the owner of the patent has the right to submit to the Court, at any stage or instance of the trial, modified claims that remain within the limits of the content of the patent application as initially filed and that does not extend the protection conferred by the patent granted” (emphasis added).

T1he facts of the dispute are simple. Thermorossi S.p.A. claimed that several competitors infringed its European patent’s Italian Portion No EP 2 083 221 on “heating apparatuses such as pellet-fired stoves and thermostoves”. As counterclaim, the defendants filed an action for the declaration of invalidity of EP ‘221.

Since an Opposition was filed against EP ‘221 and the EPO decision (through which the Patent was amended) was published only after the Italian final hearing, the owner presented to the Tribunal a set of amended claims only in the final statement.

Despite Thermorossi had known EPO’s decision only after its final hearing, Milan’s Tribunal stated that the new set of claims could not be considered in that procedure because the final hearing had already identified the object of the trial. According to the Tribunal, in light of the Constitutional principle of reasonable delay (Article 111.1 Italian Constitution), the right to file a new set of claims cannot be exercised after the final hearing.

Due to this reason, the Tribunal took into account the patent as originally approved by the EPO. Furthermore, it declared the Italian portion of EP ‘221 invalid and consequently rejected all the requests filed by Thermorossi.


The Tribunal rightly points out that Article 79.3 CPI should be interpreted in light of the Constitutional principle of reasonable delay. This consideration is certainly well founded considering that the limitation procedure (which requires the modified claim to be within the content limits of the patent application as initially filed and does not allow to extend the protection conferred by the patent previously granted), often requires an in-depth technical analysis. However, while it is true that in applying Article 79.3 CPI the Judge has to respect the principle of reasonable delay, it is equally true that the Court must make a case by case assessment. The words “at any stage of the trial ” seem to admit the reformulation of the claims even after the final hearing if this is deemed necessary for the overall economy of the judicial procedure (the opposite solution would require the institution of a new trial).

Giovanna Sverzellati

Tribunal of Milan, IP section, decision of 20 October 2016, No. 11544

“Data ownership” in the big data era: some thoughts on the new Bird&Bird White Paper – what’s next for the EU?

Few days ago, a Bird&Bird team (Benoit Van Asbroeck, Julien Debussche, and Jasmien César) published a white paper about “Data Ownership” in the EU legal framework (available here).

The paper is issued within the Toreador Project (Trustworthy model-aware analytics data platform – a three-year big data research project funded by the EU Commission), and fits within the EU Commission’s strategy towards data.

The White Paper makes a thorough analysis of the EU acquis on data ownership. In sum, the paper affirms that:

  1. no EU legislation directly regulating ownership in data exists;
  2. a number of legislations provides other forms of protection to certain data. In particular the IP law area, namely: database rights; copyright; and trade secrets. However, none of these provides an adequate protection of ownership in data (e.g., sui generis right does not protect data as such; trade secrets require information to remain secret, etc.);
  3. EU case-law does not acknowledge an ownership right in data, with minor exceptions at national level where Courts occasionally addressed the data ownership issue;
  4. scholars are suggesting a new interpretation of current civil law provisions;
  5. while the paper does not provide an extensive examine of data protection legislation, it suggests that personal data is not necessarily owned by individuals. Instead, an ownership right in personal data for data controllers can be recognised, although subject to the individuals’ control.

The paper concludes that the current legal framework does not sufficiently deal with all issues related to data. Indeed, the data ownership is complicatdata-cycleed by the data value cycle which can involve numerous stakeholders (ISPs, IT providers, data providers such as marketplaces, data analytics service providers, data-driven services, etc.). Actors involved in the data value chain have no certainty as to the ownership of the data they process. Hence, the data ownership issue would require a new solution. The paper suggests creating a non-exclusive and flexible ownership right in datasets, with a data traceability obligation as a safeguard. 

Many points of this White Paper are in line with our view. In a paper presented in a conference about a holistic approach on personal data held by the Max Plank Institute in October 2016 (some slides are available here), I analysed the interface between IP rights (database sui generis right and trade secrets) and data protection rules. The latter in fact allow data controllers to exercise control over data, thus creating a semi ownership regime (though some scholars say it should be seen as a sort of licence on personal data granted by individuals). And I concluded that this interface produces an ownership regime on data, which can be strong although it cannot cover all situations. Residual areas are currently regulated by contract or by technology measures.

Property in data challenges civil law principles: information has public nature; property and IP rights are subject to the numerus clausus principle; and res incorporales are generally not included in property rights. Whether a new right on data should be created is debated (in a recent public consultation promoted by the EU Commission, here, the market answered “no”). We however agree that such possible new right should not be exclusive nor absolute. An exclusive right would risk blocking access to data. Access to data appears crucial in this data driven-economy. Big data requires data reuse, data enrichment, and access to multiple sources of raw information (in certain cases, we won’t be surprised to think about big data as essential facilities). At the current stage, it is impossible to predict where value will be created. Thus, a flexible approach to data is welcomed.

In this context, instead of a property rule, a liability rule appears more balanced. In other words, in certain cases the new right should entitle the data owner to receive payment for its data but would not allow him to exclude other from its access. This solution should be introduced for commercial uses of data only. Research uses should instead remain free, in line with the approach taken by the proposed Directive on copyright in the Digital Single Market (here).

Francesco Banterle

IP addresses as personal data under the CJEU, French Supreme Court, and the GDPR approach: towards an expanding protection of data

Are IP addresses personal data? The answer has been debated in recent times.

An IP (internet protocol) address is a series of digits assigned to a networked device to facilitate its communication over the internet. IP addresses do not directly reveal the identity of users: additional information is necessary to identify them. However they can show some patterns of user behaviour. Static IP addresses are invariable and allow continuous identification. Dynamic IP addresses are provisional and change each time there is a new connection.

A study commissioned by the EU Commission (available here) revealed how EU members’ traditions with regard to the IP address “personal” nature have substantially diverged.

Recently, in the Breyer case (full text here), the CJEU held that under Directive EC/95/46 (“Privacy Directive”) IP addresses can be personal data. The action was brought by Mr Patrick Breyer, a member of the German Pirate Party. He objected that websites of Federal German institutions store visitors’ IP addresses with the aim of preventing cyber-attacks and allowing criminal proceedings. Eventually, the Bundesgerichtshof asked the CJEU whether in that context (where only internet service providers – ISP – hold data to identify users) ‘dynamic’ IP addresses constitute personal data.

A personal data is any information relating to an identified or identifiable individual, including in by reference to an identification number. Recital 26 of Privacy Directive says that to determine whether a person is identifiable, account should be taken of all the means “likely reasonably” to be used either by the controller (or by any other person) to identify him/her. It is not required that all the information necessary to identify the data subject is in the hands of one person. The possibility to reach the data with reasonable efforts is enough. Thus, the CJEU held that, since the website owner is able to contact the competent authority, so that the latter orders the ISP to disclose additional data on the individual, the website owner has the means which may likely reasonably be used to identify the data subject on the basis of the IP address. In light of this, a dynamic IP address can constitute personal data.

The Court thus embraced an extensive interpretation, previously suggested by the Article 29 Working Party (see opinion 4/2007 on the concept of personal data, p. 16).

Personal nature of IP addresses has been recently confirmed by the French Cour de Cassation (French text here), which held – although briefly – that “les adresses IP, qui permettent d’identifier indirectement une personne physique, sont des données à caractère personnel”.

In this context, the General Data Protection Regulation (“GDPR”) has strengthened this approach. It has specifically recognized that online identifiers, including IP addresses, may potentially identify users and create profiles, especially when combined with unique identifiers (e.g., usernames, see Recital 30). Therefore, the GDPR now explicitly includes online identifiers in the definition of personal data (Article 4). Thus, apparently the rule set by the GDPR could be as follows: IP addresses (likewise online identifiers) are presumed to be personal data unless under the circumstances a data controller can demonstrate that it does not have means “likely reasonably” to identify individuals. However, based on Breyer such proof will not be easily reached.

Finally, as a confirmation of the tendency to expand the definition of data deserving protection, the e-Privacy Regulation proposal (available here, which should repeal Directive 2002/58/EC) seems in line with the GDPR’s approach. The draft includes metadata (e.g. time of a call and location, numbers called, the websites visited, etc.), which are highly intrusive in the privacy sphere, within the scope of the protected data. Thus, except their use for billing purposes, metadata will require users’ consent to be used.

In sum, the concept of protected data is in the process of being updated and expanded, probably having the IoT and big data in mind, to embrace all aspects of virtual identities. And shall be shortly re-defined also vis-à-vis new tracking techniques.

Francesco Banterle

CJEU, decision of 19 October 2016, C-582/14, Patrick Breyer v. Bundesrepublik

French Supreme Court, decision of 3 November 2016

Patent or Utility Model: which distinction?

Four months ago, the Italian Supreme Court ruled again on the distinction between Patents and Utility Models (full Italian text here).

Vecam S.p.A. brought action before Milan IP Court asking for the declaration of invalidity of the Italian portion of European Patent No. 1024331, owned by Tecnosystemi S.p.A. The patent dealt with a “Flush-mount enclosure, particularly for making provisions for air-conditioning systems”. While resisting against Vecam, Tecnosystemy in alternative asked to establish whether the requirements for conversion of the Patent into a Utility Model were met.

Article 76.3 of the Italian Intellectual Property Code reads “A null patent may produce the effects of a different patent of which it possesses the requirements of validity and that would have been desired by the requesting party, if he had known of the nullity”.

On 13 May 2010, the IP Court upheld the claim of Vecam declaring the Italian portion of European patent no. 1024331 invalid. At the same time, the Court asserted that the legal requirements for conversion of the patent into a utility model were met.

Against the first instance decision, which downgraded the Patent into a Utility Model, Tecnosystemi filed an Appeal before Milan’s Court asking for the Italian European Patent no.1024331 to be recognized valid.

The Court of Appeal confirmed the decision of the first instance stating that the technological solution constituted an utility model. In particular, the Court explained that Tecnosystemi improved the usefulness of something already existing whilst it did not invent anything new.

More precisely, the air conditioning unit was built with a new device allowing a 180 degrees rotation of the flush-mount enclosure’s base aiming to facilitate the condensate’s drain.

Tecnosystemi then filed an appeal before the Italian Supreme Court assuming that the Court of Appeal, as the Judge of first instance had done, had not been able to identify how to correctly distinguish between Patent and Utility Model.

The Supreme Court declared the appeal inadmissible and, quoting two precedents (Italian Supreme Court – Judgments 8510/2008 – and 19688/2009), it clarified that Utility Models: require an inventive step capable of increasing the usefulness of something already existing rather than inventing a completely new product or process.

By this decision the Italian Supreme Court followed the so-called “Qualitative Doctrine”, whereby, while Patents relate to a new product or a new process Utility Models concern an existing object.

However, several scholars share the so-called “Quantitative Doctrine” whereby Patents require an higher inventive step.

Other proposals have emerged in Italy in the last few years, which aim at across-the board abolishing the category itself of utility models. This, on the basis of the intrinsic inconsistency of separating two different levels of ‘inventive character’ vis-à-vis the fact that, even for patents, nothing more than ‘non obviousness’ is required. Thus, once the ‘inventive step’ is a unitary requirement, there is no reason why to retain two different types /level of protection.

Giovanna Sverzellati

 Italian Supreme Court – Judgment No. 16949 of 10 August 2016


According to article 24 of the Italian Intellectual Property Code, an Italian trade mark shall be revoked (i) if, within a continuous period of five years, it has not been put to genuine use in connection with the goods or services in respect of which it is registered, and there are no proper reasons for non-use or (ii) if the use is suspended for the same amount of time.

Not many Italian decisions addressed the question of which uses are considered “genuine” and which is the sufficient amount of use that would put the right-owner safe from any contestation.

The Court of Bologna had the chance to investigate this question in a case (available here) involving a non-profit sailing club that sued a company when it discovered that it had started the production and commercialization of sailing cloths and accessories using the exact same trade mark already registered by the club and had registered a number of identical and similar trademarks for identical products (i.e. sailing accessories and garments).


According to the defendants, however, the plaintiff could not enforce its earlier trademark because it had been used on the market in a manner that was not effective. Thus, they counter-claimed to declare it revoked for non-use.

The plaintiff resisted claiming that the use made of the “IL MORO” trademark in the years was genuine and continuous, in line with the purposes of the sailing club and the activities organized by its members. In particular, the plaintiff showed, by filing a number of pictures and invoices, that the trademark was used for clothes, shoes and accessories that were distributed for free during sailing races and similar events.

Bearing in mind that the rationale behind the provision on revocation for non-use is to “clean” the register from those trademark registration preventing third parties from registering and using a name or a logo as trademark in absence in the right owner of any interest in being secured such monopoly – which is indeed a goal consistent with the pro-competitive rationale of the requirement of availability (i.e. the need to keep free) – the case law actually adopts different approaches on the notion of use that is sufficient to evidence the subsistence of said interest.

According to a first theory, any type of use is sufficient, as long as it shows an actual interest of the right holder in continuing to distinguish its products/services on the market. Consequently, only the complete and total cessation, in any mode, of the trademark’s use would cause its revocation. Even a local, restrained in time or intermittent use could be thus considered sufficient (see Court of Milan decision of 10 October 1996, Court of Milan decision of 30 September 2002, Court of Turin decision of 21 December 2004 and Court of Rome decision of 22 May 2003 and, among the leading scholars, A. Vanzetti – V. Di Cataldo, Manuale di diritto industriale, Milan, 2012, page 283).

According to a second theory, to which the decision in comment adheres, only a sufficiently intense, stable and continuous use of the trademark on products or services offered for sale on the market can prevent revocation. This use shall be not symbolic: consumers shall be aware of the sign so that it is capable of distinguishing the products or services from the competitors’ (see Supreme Court case no. 16664 decision of 1 October 2012, Court of Naples decision of 2 February and Court of Milan 20 September 2002).

By upholding this second theory the Court of Bologna non only affirmed that the use made by the plaintiff was too limited for the small amount of sailing clothes and accessories produced by the club, but also claimed that said use was not genuine. This because the garments and accessories on which the trademark was fixed were promotional gadgets intended to be distributed for free to club members and in occasion of sailing events. In other words, they were not for sale. Thus, the “IL MORO” figurative trademark was, according to the Court of Bologna, not used to distinguish the sailing club’s products from the ones offered by other companies on the relevant market.

Even if the ‘requirement of availability’ would support the result of the decision, due to the limited use made of the trademark on the market, it is also true that trademark law does not require that only companies with a profitable business (and the consequent capability of demonstrating wide sales made on the Italian market) are entitled to register a trademark.

In particular, the provision requires the existence of a use and not that such use has generated incomes to the right owner. The EU Court of First Instance seems to have confirmed this point, having assessed – with respect to EU trademarks, but the provision is equivalent – that “the purpose of the provision is not to assess commercial success or to review the economic strategy of an undertaking, nor is it intended to restrict trade-mark protection to the case where large-scale commercial use has been made of the marks” (Case T-191/07 Anheuser‑Busch v OHIM, Inc. see also case T‑169/06, Charlott v OHIM and case T‑203/02 Sunrider v OHIM).

It thus seems that the evaluation of the existence of a use should be carried on taking into account also the type of business of the right-owner, on the basis of a case-to-case analysis. Otherwise, the trademarks registered by non-profit organizations would be seriously compromised.

Court of Bologna, case No. 9754/2013, 9 September 2015, Europa Yacht Club, Moro S.r.l. and Giovanni Benito Ballestrazzi v. Punta della Maestra S.r.l., Overseas Property LLC, ASD Il Moro di Venezia Yacht Club and Rama S.n.c..