Two recent CJEU decisions and the fuzzy border between trademarks and designs

While no definite trend toward the approximation of trademark and design law has so far emerged in European case law, two recent decisions of the CJEU relating to designs show how fuzzy the border between trademark and design rights may be.

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In Doceram (C-395/16, ECLI:EU:C:2018:172), the CJEU had to interpret the concept of designs subsisting “in features of appearance of a product which are solely dictated by its technical function”, which are excluded from protection under Article 8(1) of Regulation 6/2002 on Community designs (RCD). The Court was asked, in particular, to state whether such exclusion applies even when alternative designs exist which can perform the same technical function, so that the features of the design cannot be considered indispensable for performing said  function.

It is a classic dilemma. As AG Henrik Saugmandsgaard Øe noted in his opinion, in Europe the Courts and legal scholars have given both negative and positive answers.

The position whereby Article 8(1) RCD and the corresponding national provisions only apply when copying the design is the sole way to achieve the technical result is commonly referred to as the “mandatory” (or “multiplicity of forms”) theory. The opinion whereby, to the opposite, it does not matter whether or not alternative designs can fulfil the same function, insofar as the function in question is the sole driver of the shape, is usually referred to as the “causative theory”. In the past the EUIPO has ruled in line with the first theory [also supported by AG Colomer in the opinion submitted in Philips v. Remington (paragraph 34); and followed by the EU General Court in Industrias Francisco Ivars (see paragraph 22)], which is much more favorable to design right holders. Recently it seems to have veered towards the latter. As far as Italy is concerned, there is probably greater support for the “mandatory theory”.

In Doceram the Court (and before the Court AG Saugmandsgaard Øe) endorsed, with little hesitation, the “causative” theory:

if the existence of alternative designs fulfilling the same function as that of the product concerned was sufficient in itself to exclude the application of Article 8(1) of Regulation No 6/2002”, it said,

then

“a single economic operator would be able to obtain several registrations as a Community design of different possible forms of a product incorporating features of appearance of that product which are exclusively dictated by its technical function” (paragraph 30).

 That, added the Court,

“would enable such an operator to benefit, with regard to such a product, from exclusive protection which is, in practice, equivalent to that offered by a patent, but without being subject to the conditions applicable for obtaining the latter, which would prevent competitors offering a product incorporating certain functional features or limit the possible technical solutions, thereby depriving Article 8(1) of its full effectiveness” (ibidem).

By stating this, the CJEU de facto extended to designs the principles it affirmed with regard to trademarks “consisting exclusively of the shape of goods which is necessary to obtain a technical result”.

As is well known, in Philips v. Remington the CJEU stated that the relevant impediment to registration [now contained in Article 4(1)(e)(ii) of Directive 2015/2436] “cannot be overcome by establishing that there are other shapes which allow the same technical result to be obtained: which is, mutatis mutandis, what the CJEU said in Doceram.

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Interestingly, another recent CJEU decision ended up extending the interpretation of provisions concerning trademarks to provisions concerning designs.

In Nintendo v. Bigben (C‑24/16 and C‑25/16, ECLI:EU:C:2017:724), the Court had (inter alia) to issue a preliminary ruling with regard to Article 20(c) RCD, which prevents design right holders from exercising their rights in respect of “acts of reproduction for the purpose of making citations or of teaching, provided that such acts are compatible with fair trade practice and do not unduly prejudice the normal exploitation of the design, and that mention is made of the source”.

The dispute in the main proceedings concerned the use of images of goods corresponding to EU registered designs in the advertisement of goods intended to be used as accessories to the above goods corresponding to EU registered designs. As in the following picture, which shows Nintendo Wii remote controllers, registered as EU designs, together with the charger for such controllers produced and sold by the defendant Bigben.

bigben

In addressing the issue, the Court said that Article 20(c) RCD, insofar as it refers to “acts … compatible  to fair trade practice”, can be interpreted in the light of the case law regarding uses of trademarks made in accordance with “honest practices in industrial or commercial matters” under Article 6(1) of Directive 89/104 [now Article 14(2) of Directive 2015/2436]. And it explicitly applied to designs – again: mutatis mutandis – the principles asserted in Gillette (17 March 2005, C-228/03, ECLI:EU:C:2005:177) with respect to the limitation of trademark rights:

an act of reproduction of a protected design for the purpose of making citations or of teaching is not compatible with fair trade practice … where it is done in such a manner that it gives the impression that there is a commercial connection between the third party and the holder of the rights conferred by those designs, or where the third party, who wishes to rely on that limitation in the course of selling goods that are used jointly with goods corresponding to the protected designs, infringes the rights conferred on the holder of the design protected by Article 19 of Regulation No 6/2002, or where that third party takes unfair advantage of the holder’s commercial repute” (paragraph 80).

Riccardo Perotti

European Parliament approves the DSM Copyright Directive Proposal

In yesterday’s session, the European Parliament approved the proposed Directive on Copyright in the Digital Single Market [see our previous comments here, here, and a more detailed position paper, here]. MEPs voted 438-226 with 39 abstentions.

Here is the text passed – a compromise solution that slightly changes from the previous version rejected by the European Parliament back in July.

Among the most controversial provisions:

  • the text and data mining (TDM) exception has been confirmed in its original structure (limited to research organizations). The new version adds an optional additional TDM exception (Article 3a) that applies in favor of lawful users except such TDM usage has been expressly reserved by the right holder.
  • the ancillary right for press publishers (art. 11) has been slightly amended:

1. Member States shall provide publishers of press publications with the rights provided for in Article 2 and Article 3(2) of Directive 2001/29/EC so that they may obtain fair and proportionate remuneration for the digital use of  their press publications by information society service providers.

1a. The rights referred to in paragraph 1 shall not prevent legitimate private and non-commercial use of press publications by individual users.

[…]

2a. The rights referred to in paragraph 1 shall not extend to mere hyperlinks which are accompanied by individual words.

4. The rights referred to in paragraph 1 shall expire 5 years after the publication of the press publication. This term shall be calculated from the first day of January of the year following the date of publication. The right referred to in paragraph 1 shall not apply with retroactive effect.

Recital 33 specifies that “the protection shall also not extend to factual information which is reported in journalistic articles from a press publication and will therefore not prevent anyone from reporting such factual information”. This seems a bit in contrast with the provision of 2a that allows reporting only “individual words”.

  • As regards article 13, filtering obligations have been only apparently removed, since in case right holders are not happy to license their contents, UGC platforms shall cooperate to block such contents

1. Without prejudice to Article 3(1) and (2) of Directive 2001/29/EC, online content sharing service providers perform an act of communication to the public.  They shall therefore conclude fair and appropriate licensing agreements with right holders.

2. Licensing agreements which are concluded by online content sharing service providers with right holders for the acts of communication referred to in paragraph 1, shall cover the liability for works uploaded by the users of such online content sharing services in line with the terms and conditions set out in the licensing agreement, provided that such users do not act for commercial purposes.

2a. Member States shall provide that where right holders do not wish to conclude licensing agreements, online content sharing service providers and right holders shall cooperate in good faith in order to ensure that unauthorised protected works or other subject matter are not available on their services. Cooperation between online content service providers and right holders shall not lead to preventing the availability of non-infringing works or other protected subject matter, including those covered by an exception or limitation to copyright. […]

Article 2(4b) sets out a very complex definition of the UGC platforms affected, taking into account the CJEU case law: “‘online content sharing service provider’ means a provider of an information society service one of the main purposes of which is to store and give access to the public to a significant amount of copyright protected works or other protected subject-matter uploaded by its users, which the service optimises and promotes for profit making purposes“. Recital 37a adds that this is “including amongst others displaying, tagging, curating, sequencing, the uploaded works or other subject-matter, irrespective of the means used therefor, and therefore act in an active way.” It then excludes from the definition of online content sharing service providers microenterprises and small sized enterprises, as well as service non-commercial providers such as online encyclopaedia or providers of online services where the content is uploaded with the authorisation of all right holders concerned, such as educational or scientific repositories.

Article 12a protecting sport event organizers has been introduced at a later stage (with no impact assessment).

This compromized version shows some slight improvements, despite the original defects of the Proposal still remain unsolved. Now the trilogue negotiations amongst the Parliament, the Council and the Commission will start.

Francesco Banterle

 

On the German Supreme Court’s ruling on linking

On December 2017, the German Supreme Court (Bundersgerichtshof, hereinafter “BGH”) released the motivations on which it grounded its decision of 21 September 2017 (available here) on the classification of “linking” as an act of communication to the public.

In the German proceedings, the defendant was the owner of a website incorporating a search engine function which completely relied on Google’s search engine. It resulted that four images, made available in a password-protected section on plaintiff’s websites only to paying users, were made illicitly accessible on the free internet and appeared also as results of the researches launched on defendant’s website.

Following a cease and desist letter, the defendant complied with plaintiff’s request to prevent users from visualizing  the previews of the images under discussion, hindering the connection between the search criterion and those pictures. Later on, however, the plaintiff discovered that other copyright protected images were made available on the very same search engine tool and decided to sue the website’s owner.

In its decision, the German Supreme Court affirmed that an “act of public communication” occurs when a protected work is reproduced using a technical procedure that differs from the one used so far or – otherwise – is reproduced for a new audience. In the present case, even if the images were shared by the same technical procedure (the internet), the defendant’s search process referred to an audience different from the one intended by the plaintiff, as the search was carried out by an indeterminate number of internet users, whereas the images were made available by the plaintiff only to paying users, in a password-protected section of the website.

Given the above, in order to determine the defendant’s liability for such communication to the public, the German Supreme Court followed the reasoning of the CJEU in the Svenssson case and GS Media cases (respectively, C‑466/12 and C-160/15) and tried to determine if the defendant made available the images for profit and if it could have been aware of the fact that the copyright’s owner did not gave his consent to the sharing of the pictures.

The conclusions of the German Court can be summarized as follows:

  • the Judges did not share the arguments on which the CJEU based the decisions above quoted, deeming that in those cases too broad relevance had been given to the financial gain element in order to assess whether the infringement occurred. According to the BGH, to connect the existence of a scope of profit with the knowledge that hyperlinks have been published without copyright holder’s permission amounts to a misleading presumption.
  • the results of a search engine are collected by the tool through the application of an algorithm that select the content in an automatized manner. Therefore, other than in the cases analyzed by the CJEU, the search engine provider does not have manual and/or direct control on the results displayed.
  • according to the Court, the provider of a search engine cannot reasonably be expected to ascertain whether the images of works or photographs found by the search programs have been lawfully posted on the internet before reproducing those images. Linking a photograph provided on a third-party website to another website by means of an electronic link does not constitute a copyright exploitation of public access as only the operator of the external website, who uploaded the photo to the internet – and not the search engine tool provider – can decide whether it remains accessible to the public.
  • A duty of the search provider to investigate the legality of the publication of the images found by search engines before their display is contrary to the task and mode of operation of the search engines themselves.
  • The Court concluded asserting that there is no doubt, on the basis of the assessment criteria established by the CJEU, that a public reproduction by the provider of a search engine tool, of works protected by copyright within the meaning of Article 3 (1) of InfoSoc Directive, exists only if the copyright holder has not permitted the publication of the works on the open internet and it is clear that the provider of the search function was aware of this or could reasonably have been. Moreover, as hinted, other than in the quoted CJEU decisions, the BGH does not automatically connect the awareness (or the reasonable awareness) of the illicit communication to the presence of a financial gain.

The decision of the BGH not only provides with a broader interpretation of the application of the CJEU case law but constitutes also a milestone in the already ‘historical’ contrast between copyright owners and search engine providers on who should bear the duty (and the costs) of monitoring the internet preventing the exploitation of copyright protected material. It can be inferred that the German Judges shared the opinion also expressed by the Courts of other EU Countries confirming that it is up to the copyright holder to perform such controls and inform the search engine provider accordingly; on its side, the latter should promptly comply with the requests to eliminate the contents illicitly made available.

Miriam Loro Piana

Bundesgerichtshof (German Supreme Court), decision of 21 September 2017, I ZR 11/16

Copyright protection of algorithms does not prevent the disclosure of their source code in the context of administrative proceedings

Algorithms are often used for managing complex administrative proceedings where multiple data and parameters have to be analysed to produce a result. Since algorithms can be protected under copyright laws as software (including their source code), it is questionable whether copyright protection might limit the right to access of interested parties in administrative proceedings. In two recent cases (here and here), the Italian Administrative Court of Lazio (TAR Lazio) has clarified the nature of the electronic administrative document and the scope of the right to access pursuant to Law n. 241/1990 with regard to the source code of an algorithm compiled by a software house on request by the Public Administration. The cases at stake have been promoted by a number of Italian trade unions against the Ministry of University and Education (“MUIR”) with the purposes of gaining access to the source code of the algorithm used by MUIR to manage the territorial relocation of school professors under mobility procedures.

Upon first request, the MUIR refused access to the source code of the algorithm developed by a software house on MUIR’s request on basis of the following arguments: (i) the source code itself cannot be considered part of the electronic administrative document and, consequently, does not imply the right to access of interested parties in administrative proceedings, and (ii) the source code enjoys the copyright protection as software and the access to the source code would prejudice the intellectual property rights of the software house. More in detail, MUIR has held that the disclosure of a document describing the way of functioning of the algorithm could be considered sufficient protection for the trade unions and that the Legislative Decree n. 97/2016 (Art. 6) on the civic right to access (for preventing corruption and enhancing transparency in the public sector) expressly excludes access to the acts of the Public Administration when the access could prejudice the economic interest of private parties, thus included their intellectual property rights.

In the Administrative Court’s opinion, the MUIR must allow access to the source code of the algorithm since it can be considered part of the administrative proceeding subject to the right to access of interested parties. MUIR has requested the software house to compile the algorithm with the specific purpose of managing in electronic form the public procedure of territorial relocation of school professors under mobility, according to public rules and collective employment agreements. From a structural point of view, the outputs of the algorithm: (i) are the results of the combination/elaboration of data collected in various endoprocedural acts and (ii) make application of the public rules on territorial mobility.

Taking into consideration the ratio of the right to access in administrative procedures, also the source code of the algorithm enjoys the nature of electronic administrative document and such nature implies that right to access should be allowed also with regards to algorithm. Reasoning to the contrary will lead to the unacceptable consequense that the right to access could be automatically excluded by decision of the Public Administration to manage the administrative proceeding by electronic means. TAR Lazio further clarified the notion of electronic administrative document which, in the Court’s opinion, should not include only those administrative documents formed via electronic means (for the purpose of documentation) but should also include those administrative documents where the elaboration of contents and data (for the purpose of issuing an output) are taken into account.

Also the copyright protection of software (which encompasses also the source code) has not been considered by the Court as an argument for excluding the right to access to the algorithm. First of all, TAR Lazio acknowledges that software can be protected under copyright laws not only as an informatic language but also as a creative work resulting from the use of a certain informatic language. In the case at stake, the algorithm is a software created for a specific purpose of the Public Administration and, in the absence of any indication to the contrary in the agreement between the PA and software house, can be assumed that the software house has transferred to the PA all the economic rights in the algorithm. In the Court’s opinion, the nature of creative work of the algorithm should not interfere with the right to access in the administrative proceedings of interested parties, since the right to access does not prejudice the right to exploitation of intellectual properties (any reproduction made by the interested parties is functional to the exercise of rights to control the administrative proceeding only and not to the commercial exploitation of the algorithm).

In addition, TAR LAZIO considered that is not relevant for excluding the right to access to the source code of the algorithm the fact that: (i) the source code is a pure informatic language unreadable by the public officers and written by a private company (i.e. the software house on behalf of the PA) and (ii) the source code is compiled for the mere application of public rules and collective labour agreements, which are accessible themselves even without direct access to the source code. The Court ruled in favour of the right to access to the source code also on the basis that what impact the giuridical position of private individuals are the outputs of the algorithm.

These interesting administrative rulings offer a clear and deep reconstruction of the notion of electronic administrative document (expanding such notion to include also algorithms) but should be subject to further analysis with regards to the asserted strike of balance between the right to access and the protection under copyright laws of the source code, exspecially taking into consideration possible future cases where the PA should make use of algorithms: (a) not specifically developed for a single administrative proceeding (under the assumption of a complete transfer of intellectual property rights) and/or (b) based on more sophisticated technologies licensed to the PA under a proprietary scheme.

Gianluca Campus

TAR Lazio, case No.  3742/2017, 21 March 2017, CISL, UIL, SNALS Vs MUIR (President of the Court: Hon. R. Savoia; Judge-Rapporteur Hon. M.C. Quiligotti)

TAR Lazio, case No.  3769/2017, 22 March 2017, Gilda Vs MUIR (President of the Court: Hon. R. Savoia; Judge-Rapporteur Hon. M.C. Quiligotti)

The Court of Rome affirms its jurisdiction in a torpedo case

In a post of some months ago, after noting that none of the torpedoes launched in Italy after the Asclepion ruling [Italian Court of Cassation, 10 June 2013, no. 14508, in Giur. ann. dir. ind., 2013 (for a full English translation, see IIC, 2014, pp. 822 ff.)] had been successful, we envisaged a possible end to the Italian torpedo story. A recent decision of the Court of Rome shows, however, that the end is yet to come. In a non-infringement action brought against an Austrian patentee (and two other defendants, also from Austria) with regard to the Italian part and several foreign parts of a European patent, the Court of Rome firmly stated that

the Italian courts have jurisdiction … for the French, German, Austrian and UK parts of the patent, on the basis of art. 5.3, EU Council Regulation 44/2001 of 22 December 2000, whereby the courts for the place where the harmful event occurred or may occur have jurisdiction, and on the basis of art. 27 of the Regulation, concerning jurisdiction for related actions”.

The brief reasoning of the decision (full text, in Italian) exclusively stems from a quotation of the Asclepion ruling of the Court of Cassation mentioned above. With regard to this ruling and its impact on torpedo actions (as well as for a review of the most recent decisions issued in Italy on the topic), we refer to the considerations already made here.

Riccardo Perotti

Court of Rome, 5 February 2018, Anki v. Stadlbauer 

The Court of Rome orders a mother to stop publishing on social networks contents relating her underage son

With the countdown to the GDPR almost at its end, this interim order from the Court of Rome (full Italian text here) has been largely debated in Italy in the last days.

These are the facts, in sum:

  • During a divorce proceedings, a mother has been publishing on social networks many photos, videos, posts relating this lawsuit, including information about her son – a 16 years old guy;
  • The son was really frustrated by this situation. Details about him were constantly disseminated on social networks by his mother and his history – in all details – became known to all his schoolmates. He started suffering serious psychological effects – particularly he was scared of being discriminated and considered “different” by his mates due to his private “issue”.
  • For this reason, the guardian of the son (previously appointed in another proceedings) asked the Court to confirm his right to attend a US college to get a new life far away from this nasty situation.

In the interim injunction, the Court ordered:

(i) the mother to stop publishing on social networks and any other media, images, information and any other data relating her son, (ii) to remove all these contents published so far on social networks; additionally the Court (iii) fixed a monetary sanction for any violation of these orders.

(iv) the guardian of the son to ask search engines to de-list and social networks to remove all images, information and any data relating the young guy.

The interim decision is of course reasonable. The Court has not relied on a particular legal qualification of the matter, however apparently based on general civil law principles considering psychological damages suffered by the young guy. Thus the decision seems to refer to a general right to privacy (even before considering a question of fair processing of personal data).

The case confirms how social networks can be risky for our privacy due to their media massive effect. A part from this specific case, we should wonder about possible negative consequences of posting certain contents about third parties, that we might not foresee. This is particularly true for underage people, where particular attention is to be paid to their privacy – also in the long term (for a view on the possible negative consequences of parental oversharing, see for example here: ‘it’s difficult for an individual to control that information once it’s out there. When it comes to our children, we’re making the decision to put things out on their behalf, and what seems appropriate now may not be appropriate in ten years’ time’).

Even before the GDPR, the EU data protection legislation required consent for publishing contents about third parties on social media, with some exception as in case of news reporting (that remains mostly a matter of national law). But not – of course – if it is a parent publishing data about his/her underage son. The GDPR is now paying new attention to:

(i) the processing of data of underage people (Recitals 38, 58, 65, 71, 75) – the GDPR requires parental consent for the use of information technology services (Art. 8). Although limited to this type of services, it sets the legal age for data protection choices (i.e., a “digital consent”) at 16 years old (there is some flexibility for national legislation, but this age cannot be below 13 years). If this applies also to the exercise of privacy rights is difficult to say (Recital 65 seems to confirm this option) and it shall probably consider national legislation as well. Recital 38 states that consent by a parent or guardian is not required in the context of preventive or counselling services offered directly to a child. For example, the provision of child protection services offered online to a child by means of an online chat service does not require prior parental authorization, clarifies the WP29 Guidelines on Consent under the GDPR (here).

(ii) the risk of discrimination – a risk we should often consider in certain personal data processing operations (we have discussed this aspect in relation to profiling activities here).

Francesco Banterle

Court of Rome – Judge Monica Velletti – order 23 December 2017

 

New French law on retouching advertising images of fashion models

Last year, France enacted a new legislation (Law no. 2016-41 on the modernisation of our health system dated January 26, 2017, which came into force on January 1st, 2017) with the aim to encourage more socially responsible ads and avoid the use of artificially thin images of fashion models, whose view may induce eating disorders amongst teenage.

Article L. 2133-2 of the French Public Health Code (FPHC), as introduced by the new law, provides that “Photographs for commercial purposes of models whose physical appearance has been altered by an image processing software in order to slim or to thicken the model’s figure shall be accompanied by the words “photographie retouchée”.

Moreover, article R. 2133-6 of the FPHC burdens the advertiser with a best-efforts obligation to verify that the commercial photographs that he buys directly or through different service providers have not been modified by image processing softwares.

Only the modifications of silhouettes that affect the model’s weight seem to be concerned by the new rule.

The modalities of implementation of this new obligation have been specified by a Decree (Decree n°2017-738 of 4 May 2017 relating to photographs for commercial use of models whose appearance has been modified), that came into force on October 1st, 2017.

The Decree states that the mention “photographie retouchée” must be 
affixed in: “an accessible, easily legible and clearly differentiated way from the advertising or promotional message. The presentation of messages shall respect the rules and use of best practices as defined by the profession, notably by the Professional Advertising Regulatory Authority (ARPP)”.

Until now, the ARPP has only provided unofficial guidance on how and where the mention “photographie retouchée” should be affixed (at the “Réunion ARPP d’échanges et de lecture commune consacrée au Décret n° 2017-738 du 4 mai 2017” as of July 4, 2017) (link).

Without any clear guideline from the Regulator, nor settled market practices or court’s ruling, there is a high degree of uncertainty among the stakeholders over the correct way to comply with the law.

It follows from the wording of the law that the mention “photographie retouchée” should be (i) of sufficient size, (ii) of a colour contrasting with those used in the background and (iii) not drowned among other mentions.

Neither the Law nor the Decree lay down clear provisions on where exactly the mention must be displayed (on the photograph itself, near the product description or as a disclaimer on the bottom of the brand’s website). Given this lack of specifications, positioning the disclaimer on the photograph itself appears to be the safest solution to comply with the Regulation, while the only use of a general notice at the bottom of the webpage might be enough only if a clear reference to the relevant photos concerned is provided thanks to an asterisk or another pictogram (except maybe in the case that all photographs are retouched).

This new obligation applies to “photographs for commercial purposes” published through all types of media (cf. article R. 2133-4 of the FPHC which provides for a non-exhaustive list of media, including press or online publications, e-commerce marketplaces, social networks’ posts, printed ads, newsletter or correspondence), except for videos and television ads.

The Regulation does not specify the territorial scope of the rule. A cautious approach would be to assume that it applies to photographs that are accessible by French consumers. Indeed, it is settled case-law that national law applies if a violation is committed through a website available in the country of reference or otherwise addressing its audience, being irrelevant the place where the servers are located or where the company is registered (CA Paris, 19 March 2010, PIBD n°920 III p.391; TGI Paris, 6 December 2012, n°10/12560; Cour de cassation, Chambre commerciale, 17 January 2012, n°10-27311).

The Decree provides that responsible for complying with the duty of disclosure is the “advertiser” (“Annonceur”). Failure to comply with the Regulation can be sanctioned by a fine up to € 37,500, the amount of which may be increased up to 30% of the advertising expenses. No definition of “advertising expenses” is provided nor the Regulation specifies if this fine applies to each non-compliant photograph. However, it may be expected that judges shall apply the sanction once only for the entire offense and not for each challenged photograph. In this way, it would appear reasonable that the “30 percent of the cost of creating the advertisement” shall be calculated on all the expenses incurred in connection with the contentious advertising campaign.

Similar provisions exist from 2012 in Israel (Weight Limitation in the Modelling Industry Act, colloquially referred to as the “Model Act” or the “Photoshop™ Act”). Such law also prohibits advertisements which display fashion models (both male and female) who are underweight in accordance with measuring formulas (namely, the Body Mass Index) provided by the law.

In Italy, although we don’t have a rule specifically requiring this kind of disclosure when a model’s general appearance is altered, Article 10 of the Italian Self-regulatory Code of Marketing Communication (link) provides that marketing communication should respect human dignity in every form and expression. Moreover, Article 12 establishes that marketing communication should not contain representations that may lead consumers to be less cautious than usual or less watchful and responsible towards their own health and safety. These provisions remind to be careful when using the body image which is likely to cause pressure to conform to an unrealistic or unhealthy body shape, or which are likely to create body confidence issues, particularly among young people (cf. decisions 121/2007 or 6/2002).

Jacopo Ciani

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First results of the public consultation on revision of the EU Database Directive

Last 6 October, the European Commission published the first results of the public consultation on revision of the Database Directive 96/9/EC (here) that took place between 24 May and 30 August 2017 (here).

Among the various initiatives to foster European data economy, the European Commission is conducting an ex-post evaluation of the Database Directive. In its view, the Directive should play a key role in increasing legal certainty for database makers and users, and enhancing the re-use of data.

There is however little evidence regarding the application and effects of the Directive. The previous report published in 2005 concluded that “the economic impact of the ‘sui generis’ right on database production is unproven” (here). The 2005 Report (not really positive) invited for more analysis on the Directive’s effects.

After more than 10 years, where the CJEU had to clarify the boundaries of the sui generis right, the aim of the consultation is “to understand how the Database Directive, and in particular the sui generis protection of databases, is used, to evaluate its impact on users and to identify possible needs of adjustment”.

The European Commission asked in particular if:

  1. by creating the sui generis right, the Directive has protected investment in the creation updating or maintenance of a database
  2. the Directive is encouraging investments in advances information processing systems
  3. the Directive reached a good balance between interest of rightholders and users
  4. the Directive has achieved harmonisation
  5. national contract law give more legal certainty than sui generis protection when it comes to prevention of extracting or re-using database content
  6. the Directive still fit for purpose in an increasingly data driven economy

Respondents were a mix of business, academics/research institutions, trade associations, and non-governmental organizations.

At a first glance views are divided, particularly in relation to whether [I have tried to count the answers, including the report of the anonymous replies, taking aside hesitant positions – so apologies for any inaccuracy]:

  • the Directive sufficiently protects investments in creating databases (II.2.1) – pro: 45 / contra 25
  • the Directive has achieved its objective to protect and stimulate a wide variety of databasesand innovation in advanced processing systems (II.2.2) – pro: 38/ contra 39, and development of the data market (II.3.9) – pro: 39/ contra 39
  • the current scope of the sui generisright is still satisfactory (III.5.1) pro (satisfactory – too narrow): 42 / contra (too broad – unclear): 53
  • the original objectives of the Directive are still in line with the needs of the EU (III.1) – pro: 53/ contra 39
  • the Directive is coherent with the EU Data Economy Package objectives (III.4.4) pro: 27 / contra: 34
  • the sui generis right has brought more legal certainty for database makers (II.3.1) – pro: 43 / contra: 42, and lawful users (II.3.2) – pro: 38 / contra: 47
  • the Directive achieves a good balance between interests of rightholders and users (II.2.4) – pro: 32 / contra 49
  • the Directive had a positive effect on (i) access to data (II.3.5) – pro 29 / contra (negative or no effect) 57; or (ii) re-use of data (II.3.6) – pro: 30 / contra (negative or no effect) 51
  • national case law gives more legal certainty than the sui generis right (II.2.6) – pro: 30 / contra: 35
  • whether the Directive still fit for purpose in an increasingly data driven economy (2g) – pro: 36 / contra: 47
  • whether the restriction drawn by the CJEU on the scope of the sui generis right (i.e., no protection of the investment made in the creation of data) had positive effect on the scope of the protection of database (III.9.1) – pro: 33 / contra: 27
  • The sui generis right should apply to databases which contain automatically collected and/or machine-generated data (III.10.2) – pro: 20 / contra: 36

As said, opinions are divided, although at a first glance, the general outcome seems not very positive.

It is difficult to foresee which adjustments the European Commission is willing to propose, if any. It is known that the introduction of the sui generis right has been largely criticized (going in the opposite direction than that endorsed by Feist in the US). And it does not seem that any other country has been inspired by and replicated our EU database protection system. Both the 2005 evaluation and this public consultation highlighted that the subject matter and the extension of the sui generis right are often unclear. Indeed, the CJEU intervention has been necessary to limit an excessive extension and the possibility to protect the investments in the creation of data (only those relating collection, verification and presentation of data can be protected – see here and here). However, the points raised in this consultation seem to suggest that the European Commission is trying to question the CJEU approach. The European Commission indeed has inquired about the respondents’ approval of the CJEU interpretation (to ask whether they would instead include also the creation of data under the database right) and whether businesses have appetite to explore the extension of rights also in non-personal raw data (machine generated data), at the moment excluded by the scope of the database right (that requires the investment in the “organization” of data – i.e., the contrary of “raw” data). Thus it seems that apparently the goal is finding confirmations from the market to legitimize a stronger legislative approach to data.

As a confirmation, the European Commission has already launched at least two other recent consultations about the opportunity to strengthen the legislative approach to data, respectively in (i) 2016, see the “Synopsis report – public consultation on the regulatory environment for data and cloud computing”, of 12 May 2016 here at § 4.2.4.; and (ii) in 2017, see the “Synopsis report – public consultation on building a European data economy, of 7 September 2017, here, at p. 5. However, the answer of the market seems always the same: the data value chains are extremely varied, making it difficult to design one-size-fits-all solutions, and freedom of contract should prevail (see here for our comments against the introduction of new exclusive rights in data).

Instead, adjustment can be introduced in the boundaries of the exclusive given by the sui generis right, such as the concept of “substantiality” of the extraction/re-use (Art. 7 of the Database Directive) and – above all – exceptions. Exceptions – especially those for research – should be made mandatory and not optional (see Articles 6.2 and 9 of Database Directive). In this regard, it should also be advisable to introduce the Text and Data Mining (TDM) exception suggested by the DSM Copyright Directive Proposal (see our comments here). However, we repeat that the new exception should allow also TDM for commercial purposes although based on compensation (paying access), in order to stimulate auto-regulation and new access schemes. TDM is not competing with the exploitation of the original database (in line with Art. 8.2 of the Database Directive) and seems instead a good mechanism to ensure flexibility and open data (that is a real instrument to foster a European data market).

In any case, the public consultation should push the European Commission to analyze the economic impact of the ‘sui generis’ right, in order to justify its stay in the EU acquis. We will keep monitoring the next communications from the European Commission on this issue.

Francesco Banterle

May #hashtags safely rely on trademark protection?

In recent years, trademark offices worldwide have been assisting to a new trend: brand owners are increasingly trying to protect hashtags as trademarks. However, some substantive differences existing between these two figures suggest that trademark protection is most of the time improper – and even unnecessary. This, for a number of reasons.

  1. A hashtag can be defined as the symbol # followed by a word, a phrase or a symbol. Hashtags are used on social media in connection to a certain content to synthetically describe or comment it. They were firstly introduced on Twitter, then the main other social networks followed. It must be emphasized, even for legal purposes, that they are freely usable by anyone.

twitter

Technically, the social network indexes and groups all the contents using the same hashtag. Hashtags function as hyperlinks: by clicking on a single hashtag, the user is redirected to a page where all the contents using the same hashtag have been grouped and organized together by the social network.

From a consumers’ view, hashtags are helpful in following topics and finding contents. From a brand’s view, they are useful to control and attract online consumer traffic and enhance the brand appeal. In particular, hashtags are used in advertising campaigns to redirect users to the company website and social networks, where the consumer experience can be enhanced and the brand loyalty reinforced. From a social network’s view, they are a new way of organizing information and topics.

  1. Let’s come to trademarks. As known, besides their essential legal function of indicating the origin of the product or service covered by the trademark, they can perform, if famous (“with reputation”) other factual functions, such as that of ‘guaranteeing’ the quality of a product or service, or that of supporting advertising of, and investment on, the ‘brand’. However, it must be noted that quite often hashtags are not perceived as trademarks, as they do not perform any of the above functions.

Focusing on the distinctive function, if a sign does not have distinctive character the trademark owner shall retain its exclusive right only by proving that the sign has acquired – typically by strong advertising – a ‘secondary meaning’ – i.e.- the capacity to identify, in the eyes of consumers, the product or service as originating from a firm.

Now, as concerns hashtags, it seems all too evident that, except when the word component is wholly or in part of coincident with a trademark already known on the market (e.g. #cokecanpicks or #CokeZeroSugar, as in the below example), it is indeed hard to say that a hashtag is inherently distinctive: in such cases, it would be normally necessary to prove secondary meaning to secure a valid registration.

coke

In this respect, hashtags shall be considered as a mix of domain names and slogans. As for the top level domain names such as “.com” or “.it”, the symbol “#” is considered as not capable of conferring to the sing any distinctive value. Therefore, if the word or the phrase composing a hashtag are not per se distinctive, the presence of the symbol # cannot save the trademark from being prevented registration for lacking of distinctive character. On the other hand, hashtags are often composed by small phrases and shall, therefore, be compared to slogans. As for slogans, the proof of the existence of a distinctive character is more difficult than for ordinary trademarks, as slogans are usually not perceived as source indicators. Against this background, it seems more efficient to try to secure registration to a phrase or word, and not to the same in the form of a hashtag.

Further, their functional character may prevent hashtags registration as trademarks. The functionality doctrine, based on the ‘imperative of availability’ (“the need to keep free”, “Freihaltebeduerfnis”) prevents to use trademark law for inhibiting legitimate competition by allowing a single company to claim a monopoly either on a descriptive term or a useful product feature. And a product feature is considered functional if it is essential to the use or purpose of a good. Now, as hinted, hashtags function as hyperlinks and tags, to group contents. This function is essential for their success.

In the light of the considerations just submitted registering a hashtag as trademark could be quite difficult. That said, provided that a company succeeds in obtaining trademark registration, its enforcement towards third parties could be difficult for a number of reasons:

a) in most cases, hashtags are not perceived as trademarks. As said, they are typically a form of metadata or tag, through which a word or a phrase becomes a searchable expression on a social network. On the one hand, therefore, it is inevitably that the hashtag registered as trademark is used by all social network users willing to do so. Such users would likely not perceive the hashtag as a trademark, a source indicator, but more likely as a descriptive text or as a tool having a specific function.

Obviously, though, trademark owners have an interest to control the use of their hashtag, if registered as trademark, in order to protect it from dilution and/or consumer confusion with a similar trademark. Here lies one of the most strident paradoxes of hashtag registration as trademarks: as trademark registrants, hashtag owners are encouraged to enjoin unauthorized third parties from using their registered sign. At the same time, it is their interest to encourage social network users to make use of the hashtag for commercial benefits — expand brand awareness, ‘lock in’ consumers, and so on. More precisely, brand owners use hashtags in social media contexts for marketing purposes, often in a way that results detrimental to their distinctive character (and, as a consequence, to their possible enforcement). They convert the hashtag into a means through which the public is encouraged to comment, share and ‘talk’ about the brand and its products or service, while gathering information and data about consumers tastes, preferences and so on. Thus, again, notwithstanding a possible registration, even registered hashtags are hardly used as indicators of origin, but merely as collectors of data and comments (of course not possibly subject to any monopoly).

b) Even when hashtags are used and perceived as trademarks, descriptive use, functionality, legitimate use play in most cases play a crucial role in excluding the existence of a trademark infringement.

Here, the constitutionally ranking principle of freedom of expression would play a role in determining where there is a legitimate use of a hashtag. If people are encouraged to use a hashtag to get involved in a topic and participate to a discussion, their use of the hashtag, as such, shall be considered indeed legitimate under the principle of freedom of expression.

c) Therefore, the sole relevant case when the use of hashtags could be protected under trademark law seems that of competitors adopting hashtags confusingly similar to a hashtag that includes (or corresponds to) a registered trademark. This position seems reflected by the main social networks policies, preventing the use of third parties trademarks when such use creates confusions for consumers.

But even in such a case, there is room to affirm that the use of an identical or similar hashtag by a competitor is legitimate. Considering that the hashtag is a means to tag and categorize contents, the well-known case law on keyword advertising could well apply to a third party use of a registered hashtag. In this context, if the use a third party hashtag by a competitor enhances competition and offers consumes an alternative or a wider range of offer, this use could be considered fair according to the keyword advertising case law.

One last remark. Trademark law is just one of several laws that are relevant to the use of hashtags. Among others, privacy law, consumer law, licensing, image rights and advertising are strictly connected to hashtags use and shall be carefully considered by all users adopting hashtags.

Maria Luigia Franceschelli

The relevance of profit for the qualification of an act of communication to the public according to the Italian Court of Frosinone

The decision of the Court of Frosinone, published on February 2017 (available here), relies on a criminal investigation carried out by the Italian Tax Police earlier in 2014 against several websites that shared protected contents without the authorization of the right holders. Among these websites, there was also filmakerz.org.

The users of filmakerz.org were allowed to access without right holders’ consent a large number of movies and TV series through hyperlinks posted on the website. However, before being able to check the list of links that redirected to other websites, users were forced to see advertising banners.

The Italian Tax Police initially requested the Review Court of Rome, competent to rule on precautionary measures, to grant the preventive seizure of the website to exclude any further access to the infringing material. Other than expected, the Court rejected the request considering that the information insofar collected by the Tax Police was insufficient to prove the capacity of the advertising banners to produce profit in favor of the website’s holder, considering the profit purpose crucial to grant any precautionary measure against filmakerz.org.

Following further investigations, the Tax Police found out that after the first instance request, the websites filmakerz.org and the affiliated websites filmakerz.me and filmkerz.biz, automatically redirected to the website cineteka.org. According to the Tax Police, it was highly reasonable that all the domains were managed by the same person (filmakerz.org‘s holder), who set the redirection to bypass any possible block applied against filmakerz.org and the other affiliated websites.

The evidence presented before the Prefecture of Frosinone in the administrative proceedings was instead considered sufficient by the Judge to issue a fine of Euros 546,528.69 according to Article 171-ter, para. 2, letter a-bis of the Italian Copyright Act (which punishes everyone who “In violation of art. 16 of the Copyright Act, for profit, communicates to the public a copyright-protected work or part of it, by entering it into a system of telematic networks, by means of connections of any kind”).

The infringer appealed the administrative sanction before the Court of Frosinone which overruled the Prefecture’s decision. According to the Court the Italian Copyright Act requires the unauthorized communication to the public to be performed for profit, namely the intention to gain a consistent economic advantage or patrimonial increase from the infringer’s illegal conduct. It follows that the hyperlinker cannot be sanctioned for the sole act of linking to unauthorized protected material, but it is necessary that this leads to a considerable economic benefit.

In the case at stake, the evidence collected was deemed not sufficient to prove that the creator of filmakerz.org, filmakerz.me, filmkerz.biz and cineteka.org was obtaining any significant profit from his/her activity.

The Court of Frosinone has been one of the first in Italy to deal with the linking issue after the CJEU recent cases (particularly Svensson, GS Media and more recently the Pirate Bay case).

The meaning of “profit” – and the possibility to detect the existence of such purpose – assumes in the case at stake a prominent relevance. The same factor has been considered also in the CJEU case law, leading to different conclusions.

In the GS Media case (available here), the CJEU did not clarify what should be intended as “lucrative purpose”, though the Court specified that the presence of the profit intention is relevant to determine whether the conduct of the hyperlinker amounts to an “act of communication to the public”. In fact, in case hyperlinking is made for profit it must be assumed that it has been made following previous controls, from which the hyperlinker should have verified that the work in question is not unlawfully published on the site to which those hyperlinks refer. Even though no lucrative purpose is detected, hyperlinking can still be considered an “act of communication to the public” if the hyperlinker is aware – or should have been reasonably aware – of the fact that said work had been published on the Internet without authorization. In the GS Media case the CJEU asserted that a profit purpose existed. But the absence of lucrative purpose would not have directly led to the exclusion of the hyperlinker’s liability: it would have just implied the need for further evidence (based on the awareness criterion).

In the Pirate Bay case (available here) the EU Court stated: “there can be no dispute that the making available and management of an online sharing platform, such as that at issue in the main proceedings, is carried out with the purpose of obtaining profit therefrom, it being clear from the observations submitted to the Court that that platform generates considerable advertising revenues”. In this case, the presence of the profit intention is strictly connected to the fact that the hyperlinker was obtaining “considerable advertising revenues” from its activity, in a way which highly resembles the case held before the Court of Frosinone. Indirect income, such as the one obtained from the advertising banners, might be qualified as source of profit in the way intended by the CJEU in the Pirate Bay case. Moving from this decision, the Court of Frosinone might have qualified the profit incoming from the advertising banners, placed on the websites under investigation, as sufficient to consider fulfilled the requirement prescribed by Article 171-ter of the Italian Copyright Act.

The other way around, the Italian Court seems to have considered that the investigation did not provided enough evidence to prove that the infringer gained an economic benefit from his/her conduct. Without clarifying if, in the Court’s view, this circumstance relied on the impossibility to qualify the advertising banners as a source of profit or, conversely, on the inability to prove that the economic advantage gained was “considerable” (that is the term used by the Court). Such consideration would require assessing when the economic benefit can be deemed “considerable” within the scope of the Italian Copyright Law, in contrast with Article 171-ter which refers only to the profit intention itself regardless any quantification.

The above considerations remain however unanswered since the decision does not share any in depth reasoning about the grounds on which the Court ruled, probably without taking into consideration to the CJEU caselaw.

Miriam Loro Piana

Court of Frosinone, docket No. 1766/2015, 7 February 2017, Unknown vs Prefecture of Frosinone (Judge Gemma Carlomusto)