Month: February 2019

The taste of a food product is not eligible for copyright protection

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On November 13 2018, the Court of Justice of the European Union (CJEU) has handed down its judgment in the case Levola Hengelo BV v. Smile Foods BV(C-310/17, ECLI:EU:C:2018:899) answering to a request for a preliminary ruling referred by the Regional Court of Appeal, Arnhem-Leeuwarden, Netherlands, concerning whether copyright could vest in the taste of a spreadable cream cheese called ‘Heksenkaas’ and produce since 2007.

The request for preliminary ruling was made in a proceedings concerning an alleged infringement of intellectual property rights relating to the taste of such a product by Smilde, a company manufacturing a taste-alike product called ‘Witte Wievenkaas’.

Until this judgement, there was wide divergence in the case-law of the national courts of the European Union Member States when it comes to the question as to whether a scent may be protected by copyright.

While countries as Italy and the Netherlands accepted in principle the possibility of recognising copyright in the scent of a perfume (see. judgment of 16 June 2006, Lancôme, NL:HR:2006:AU8940), other countries such as France or Great Britain has rejected such possibility (Cour de Cassation, judgment of 10 December 2013,FR:CCASS:2013:CO01205).

This is the first time that the CJEU rules on the copyright of the taste of a food product.

Until now, the Court has taken a position only in respect of smells’ registration as trademarks in Europe. The CJEU held in Sieckmann v Deutsches Patent- und Markenamt(Case C-273/00, 12 December 2002) that “smells” are capable of performing the function of a trademark, but they are not capable of registration, since they cannot be represented in a trademark register in a clear, precise, self-contained, easily accessible, intelligible, durable and objective manner.

In the present case, the CJEU ruled that a company should not have the right to copyright the flavour of a food product on very similar grounds.

Following the AG Melchior Wathelet’ s Opinion, the Court stated that the flavour of food can not be regarded as a “work” under Directive 2001/29.

For there to be a ‘work’ as per Directive 2001/29, the subject matter protected by copyright must be expressed in a manner which makes it identifiable with sufficient precision and objectivity, even though that expression is not necessarily in permanent form.

“That is because, first, the authorities responsible for ensuring that the exclusive rights inherent in copyright are protected must be able to identify, clearly and precisely, the subject matter so protected. The same is true for individuals, in particular economic operators, who must be able to identify, clearly and precisely, what is the subject matter of protection which third parties, especially competitors, enjoy”.

“Secondly, the need to ensure that there is no element of subjectivity –– given that it is detrimental to legal certainty –– in the process of identifying the protected subject matter means that the latter must be capable of being expressed in a precise and objective manner” (decision, para. 41).

“Unlike, for example, a literary, pictorial, cinematographic or musical work, which is a precise and objective form of expression, the taste of a food product will be identified essentially on the basis of taste sensations and experiences, which are subjective and variable since they depend, inter alia, on factors particular to the person tasting the product concerned, such as age, food preferences and consumption habits, as well as on the environment or context in which the product is consumed” (decision para. 42).

Moreover, “it is not possible in the current state of scientific development to achieve by technical means a precise and objective identification of the taste of a food product which enables it to be distinguished from the taste of other products of the same kind” (decision para. 43).

It must therefore be concluded that the taste of a food product cannot be pinned down with precision and objectivity and, consequently, “cannot be classified as a ‘work’ within the meaning of Directive 2001/29” (decision para. 44).

This case is particularly interesting as the CJEU attempt for the first time to harmonise the meaning of “works” at EU level, giving to it “an autonomous and uniform interpretation throughout the European Union”.

This should limit the ability for national courts to assess autonomously the protectability of non-conventional categories of work (such as the smell of perfume) and contribute to favour a uniform application of EU law.

While the author shares the CJEU’s concerns about granting copyright protection to smells which cannot be identified precisely, doubt remains about whether copyright protection should be granted to them, when the available technology should make it possible such objective identification in the next future.

Likewise in the Sickmann case, it seems that the CJEU would have preferred to provide a non-definitive response to the issue.

CJEU, 13 November 2018, Levola Hengelo BV v. Smile Foods BV, C-310/17, ECLI:EU:C:2018:899

Jacopo Ciani

Beware of using photographs of Italian (cultural) beauties!

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Italy is worldwide famous for its unique cultural heritage. Not surprisingly, Italian laws have been enacted in the years to regulate its exploitation, management and enjoyment by the public. The main law currently governing this subject matter is Legislative Decree no. 42/2004, setting the rules applicable for the protection and development of the Italian heritage.

It is such Decree that establishes the rules to follow to reproduce an asset eligible for protection as cultural heritage. According to article 107 of the Decree, “the Ministry of Cultural Heritage and the other public entities having rights on a cultural asset may authorize its reproduction and use, save […] for the provisions on copyright“. Article 108 identifies the rules applicable to calculate the amount of the fees to be paid for said reproduction, stating that “the concession fees and the consideration related to the reproduction of cultural assets shall be determined by the entity having right on the same asset, taking into account: a) the type of activity for which the concession is granted; b) the means and ways used to carry out the reproduction; c) the type and time of use of both the location and assets; d) the intended use of the reproduction and the economic benefits for the applicant“. No fee is due in case of reproductions made by individuals for personal use or for the purpose of study nor by private entities for cultural heritage development purposes, as long as the reproduction is carried out not for profit. The concession fees for each type of use are set by Ministerial Decree of 8 April 1994, without prejudice to the right of each entity or other administrative bodies to provide for different concession fees.

Although these rules have been set out years ago, almost no case law have dealt with unauthorized reproductions of the Italian heritage so far (and – we believe – not because of lack of violations but, most likely, for lack of interest in enforcing such rights). Overcoming such trend, two recent Italian decisions addressed the issue of commercially exploiting a cultural asset without having obtained the previous authorization from the entity in charge and, thus, without having paid the concession fee. More precisely, they determined the rules to follow when using photographs reproducing an asset which is eligible for protection under the Decree and, in particular, a work of art kept within a museum, and thus accessible only upon purchase of the ticket entrance, and one which is part of the city landscape and thus visible by anyone without restrictions.

  1. The first decision concerns the worldwide famous statue of David by Michelangelo. The statue is kept within the Uffizi Galleries in Florence, which are thus, according to the Decree, the legal entity having rights on the statue.

David

Uffizi Galleries sued a travel agency that was using on its promotional materials – including its brochures and website – photographs of the David and of the same Uffizi Galleries. According to Uffizi such uses constituted a violation of articles 107 and 108 of the Decree on the basis that (i) the statue was eligible for protection under the Decree, (ii) the use of an image embodying David shall be considered a reproduction under the Decree, (iii) such reproduction had never been authorized by Uffizi Galleries and (iv) no consideration was paid by the travel agency. The Court of Florence upheld Uffizi Galleries’ arguments and declared that the promotional use of the image representing the David made by the travel agency was unlawful under the Decree, granting an injunction to use the image of David in Italy and in Europe and ordering the immediate withdrawal from the market and destruction of any material embodying such image (see decision here).

It is worth noticing that the injunction granted to the Uffizi Gallery is not limited to the Italian territory but encompasses the whole Europe. The enforceability of the decision at stake outside Italy, however, is not immediate and triggers a number of doubts. The absence of supranational and international regulations applicable to the world cultural heritage excludes the possibility to automatically apply the decision abroad. Also, it is uncertain whether Regulation no 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments would be deemed applicable to this type of decisions as it applies only to civil and commercial matters, while administrative matters are expressly excluded. It seems odd that, in a field as international as culture, there are no instruments to effectively and easily stop the unlawful reproduction of an Italian cultural asset carried in a foreign country, with which Italy has not entered into a specific international agreement prohibiting such reproduction, unless a cross-border decision recognizable in such a State is granted.

2. The above legal framework is somehow complicated when the cultural asset is located in an open-air space. Any control of third parties reproductions is complex, not to say impossible. This is the case of the Teatro Massimo of Palermo, the biggest opera house in Italy, designed by the Italian architect Giovan Battista Filippo Basile at the end of the XIX century and reputed for its peculiar architecture and acoustic.

Teatro Massimo

Again, the Court of Palermo upheld the arguments of the Teatro Massimo Foundation that sued a bank for having used an image reproducing the theater palace (seen from outside, as in the picture above and decision here) in an advertising campaign on billboards and boards on the basis of articles 107 and 108 of the Decree. The bank questioned any violation of the Decree, stating that no rights can be claimed on reproductions of the outside architecture of a cultural asset which is part of the city landscape, that shall be considered in public domain as visible by anyone.

In such a scenario, the freedom of panorama doctrine comes into play. As known, its role is very different in the various jurisdictions. As far as Italy is concerned, the freedom of panorama is not recognized. Italian copyright law does not provide a specific exemption in this respect. Similarly, the Decree does not distinguish cultural heritage which is part of the Italian landscape from assets kept within closed areas, accessible only upon certain conditions. The Decree applies to both, as reiterated by the Ministry of Cultural Heritage in the interrogation available here.

Truth is that the application of the above rules leave room for many doubts: from the definition of “reproduction” to the limits to the entity’s discretion. That said, the above decisions seem to ring a bell to all entities having rights on Italian cultural heritage: Italian Courts could be favorable to recognize the right to concession fees in case of commercial reproductions, wherever made and independently from the type of asset concerned. This could be connected to the fact that concession fees appear to be aimed at granting an income to the entity having rights on the cultural asset, so to support its development, an ambition that is clearly stated in the Decree. Moreover, one of the Decree goals seems to be ensuring to the entities having rights a sort of control over third parties reproductions of the cultural asset, through the pre-authorization process. In this way, the entity may deny the authorization in case of uses that might result detrimental to the protection and development of the cultural heritage, as conceived by the single entity having rights.

Maria Luigia Franceschelli

Court of Florence, 26 October 2017, case No. 13758/2017 and Court of Palermo, 21 September 2017, case No. 4901/2017

 

Two recent decisions on selective distribution and infringement of luxury trademarks from the Court of Milan

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The Court of Milan issued two recent decisions in similar cases of selective distribution of cosmetic products bearing luxury trademarks, finding in both cases trademark infringement for the sale of products by unauthorized distributors.

1. The l’Oreal case

Facts

In the first decision (Italian text here), the case concerned an urgent action brought by l’Oreal Italia and Helena Rubinstein Italia (jointly referred as “l’Oreal”), two Italian subsidiaries of l’Oreal Group, against IDS International Drugstore Italia (“IDS Italia”) for trademark infringement.

L’Oreal is the licensee of a series of luxury trademarks (e.g., Armani, Cacharel, Ralph Lauren, Diesel, Yves Saint Laurent, etc.), and set up a selective distribution system for the sale of cosmetic products. In particular, l’Oreal selective distribution was based on the following quality elements:

  1. brick-and-mortar retail: (i) location, display and fitting of the points of sale; (ii) the (necessary) presence of products bearing competitors’ brands; (iii) the way in which products are presented at the point of sale (dedicated space, cleaning, etc.); (iv) the professional qualification and standing of the staff involved in the sales, and consulting and demonstration services.
  2. online: (i) the localization and presentation of the website (graphic quality, visual appearance of the home page); (ii) the space dedicated to selective luxury perfumery/cosmetics within the website and its aesthetic quality; (iii) the online customer advice service, in as many languages as are offered by the website; (iv) professional qualification of the consultants, equal to that required for physical points of sale; (v) the conditions and terms of payment, the conditions of storage of goods, transport and shipping.
  3. L’Oreal group developed a system of product traceability to map the circulation of each product in the market, that is based on an “anti-diversion code” (“AD code”).

IDS Italia, part of Auchan Group, is a major retailer and manages a group of drugstores under the brand “Lillapois”.

L’Oreal objected to IDS Italia the sale of products bearing its licensed trademarks through its drugstores and on its own e-commerce website: products were displayed in a messy manner, with strong discounts, and placing stickers on the AD codes. Moreover, some of the products were imported from non-EEA countries.

IDS objected that: (i) they had a selective distribution agreement with L’Oreal Luxe (a luxury division of the group), that covered some of the contested trademarks; (ii) market surveys proved that Lillapois points of sale are considered premium stores by consumers; (iii) the intention of the complainants is in fact to restrict competition; (iv) all products were initially marketed in the EEA territory, as confirmed by IDS’s providers; (v) the selective distribution system could not benefit from the provisions of Reg. 330/2010 since parallel selective distribution systems were in place; (vi) they only placed anti-theft stickers.

The Court’s findings

The Court found that:

  • IDS did not prove that the products were marketed in the EEA with the trademark owner’s consent (and in particular that its suppliers purchased the products from the trademark owner or another authorised distributor in the EEA). The relevant burden of proof is on IDS. Indeed, l’Oreal applied a selective distribution and not an exclusive distribution system (only the latter would require the trademark owner to prove the absent consent to the marketing of the products in the EEA, based on Davidoff, CJEU C-414/99 – C-416/99);
  • L’Oreal set up a legitimate selective distribution according to Reg. UE 330/2010, as its relevant terms of sale define the quality and localisation of the point of sales, the characteristics of the display of the stores and the minimum professional requirements of authorized resellers. Thus, proving the objective and non-discriminatory nature of said criteria (based on Coty, CJEU C-230/2016);
  • The existence of a selective distribution may account to a legitimate reason for excluding the trademark exhaustion, if:

(a) the product is a luxury or premium item.

(b) prejudice to the premium image of the trademark occurs, due to the marketing of the products by entities not included in the selective distribution network (Copad, CJEU C-59/08), in particular based on the type of products, the volume of sales to resellers outside the selective distribution, the forms of distribution normally applied.

In this last regard, the Court observed that the criteria identified by trademark owner for the selective distribution system are not the only legitimate standards to be considered (see the Chantecler case, Court of Milan, 17 March 2016, full text here, and Peak Holding, CJEU C-16/03). Similarly, cash & carry channels are not themselves contrary to a luxury image. Rather, it is necessary to demonstrate that the particular sale modalities are impairing the trademark’s prestigious image. The Court found that IDS points of sale were too similar to discount stores, with low-quality furniture, poor lightings, close-up shelves with very different products (from detergents to toilet paper). Thus, they were able to impair the prestigious image of the trademarks.

2. The Landoll case

Facts

The second case (full text, here) concerns an urgent action brought by Landoll S.r.l., an Italian hair and body cosmetic manufacturer that owns the trademarks Nashi and Nashi Argan. Landoll set up a selective distribution system for its products, which includes agents, distributors, and resellers selling Landoll products to professional clients.

Landoll objected to MECS s.r.l. the sale of its products on a third-party e-commerce platform and on its own website – ermeshop.com – without being part of Landoll selective distribution network. Previously, in 2017, Landoll already sent a warning letter to Mecs, that at that time undertook to cease the sale of Landoll products.

Mecs denied this last circumstance and objected that it purchased Landoll products in good faith from a distributor.

The Court’s findings

The Court found that:

  • Landoll set up a legitimate selective distribution according to Reg. UE 330/2010, as this system is aimed at ensuring the professional preparation and training of the authorized distributors and the proper use of products for meeting the users’ needs, thus protecting the prestigious image of the Landoll products. The qualitative criteria set out by Landoll to select the authorized distributors are coherent with the purpose of protecting the prestigious image of the products, they are applied in a non-discriminatory way and proportioned to the objective sought.
  • The existence of a selective distribution may account to a legitimate reason for excluding the trademark exhaustion, if: (a) the product is a luxury or premium item; (b) a prejudice to the premium image of the trademark occurs due to the marketing of the products by entities not included in the selective distribution (Copad, CJEU C-59/08). In this case, the trademark owner can prohibit unauthorized resellers from selling products purchased from authorized distributors.
  • As regards the prejudice to the prestigious image of the trademark, the third party e-commerce platform used by Mecs, as well as its own website, were presenting the Landoll products in the same manner as any other generic product sold in the store, even of inferior quality, and no professional advice on how to use the products was offered. The Court held that this was enough to cause a prejudice to the trademarks.
  • The good faith of Mecs was excluded, since it received a warning letter, without ceasing the marketing of the Landoll products.
  • Mecs objected that Landoll products were in fact sold by a number of third parties outside the selective distribution network. In this regard, the Court held that the alleged inactivity of the trademark owner vis a vis the sale of products outside its selective distribution network is to be excluded, as Landoll proved to have already brought other legal actions in the past.

The reasoning of the Court is similar in both cases. It fully supports the establishment of selective distribution networks, following the CJEU position, although states that the existence of a selective distribution is not enough for excluding the trademark exhaustion: actual prejudice to the trademark is to be proven. On the other hand, the Landoll case seems in line with the Coty decision, acknowledging the chance of limiting the online resale, if the website is not meeting quality standards necessary to protect the prestigious image of the trademark. And the Court has given some examples on how this can occur. As the Coty case highlighted, this issue is particularly important for marketplaces. They tend to be less exclusive in terms of brand experience. However, if they allow special windows to be created within the marketplace (or special manner of displaying and offering premium products), it might be more difficult arguing a prejudice against the prestigious image of the trademark.

Francesco Banterle

Court of Milan, decision of 19 November 2018, docket no. 38739/2018, L’Oreal Italia S.p.a. and Helena Rubinstein Italia S.p.a. v. IDS International Drugstore Italia S.p.a.

Court of Milan, decision of 18 December 2018, docket no. 44211/2018, Landoll s.r.l. v. Mecs S.r.l.