The Court of Appeal of Milan and the active role of the ISP in selling infringing services via the e-marketplaces White Pages and Yellow Pages

The liability of the Internet Service Providers (ISPs) is still an unsettled area of the case law both at European and national level, with a lot of recent cases that deal with ISPs and the unauthorized online distribution of audio-visual contents (see CJEU case C-610/15 and Court of Appeal of Rome – case Break Media – and Court of Turin – case Delta TV). Anyway, there is also another side of the case law on the liability of ISPs that deals with the selling of goods and services which infringe IP rights via e-marketplace (the leading case of the CJEU is case C-324/09 L’Oréal Vs eBay). In a recent decision, the Court of Appeal of Milan (here) shed light on the joint liability of the ISP and the professional users of its services.

The case at stake is based on the alleged infringement of the trademarks of some major manufacturers of domestic appliance (Electrolux, Candy, Ariston, Bosch, Hoover, Smeg and others, collectively the “Claimants”) by the company ABB, with others (the “Defendant”) via some adverts on the Italianonline’s websites White Pages and Yellow Pages. ABB offered maintenance and support services for domestic appliances – on the White Pages and Yellow Pages edited by Italiaonline – using the ABB’s registered trademarks “Boschexpert”, “Candyexpert”, Aristonexpert” and so on. The Court of Milan in first instance held that ABB’s trademarks were void and found ABB liable of trademark infringement and unfair competition against the manufacturers, since the consumers were misled by the use of ABB’s trademarks on the real origin of the support and maintenance services. Italiaonline has been found jointly liable of such IP violations and both ABB and Italiaonline have been ordered to jointly pay damages to the Claimants. Italiaonline reached a settlement with the Claimants while ABB appealed the Court’s ruling of first instance.

The Court of Appeal of Milan has confirmed the ruling of the Court of first instance in terms of determination of the illicit conduct and quantification of the damages but has clarified the position of Italiaonline as ISP whose electronic means have been use for committing an IPR infringement. Indeed, in the first instance Italiaonline has been fully indemnified by ABB since ABB had a preeminent role in the illicit conduct. This seemed to ABB inconsistent, since Italiaonline has been declared jointly liable for the same illicit conduct. According to ABB, Italiaonline as a technical ISP is the sole responsible of the search engine for the adverts on the websites White Pages and Yellow Pages, which results are misleading and determining confusion to the consumers.

According to the Court of Appeal, Italianonline’s websites can be considered Information Society Services pursuant to E-commerce Directive (despite the fact the White Pages and the Yellow Pages are published both in paper and in electronic form). This leads to the fact that Italianonline can be considered a host provider pursuant to Article 14 of the E-Commerce Directive for the websites White Pages and Yellow Pages, since it technically hosts on such websites the adverts of its professional clients, such as ABB. More in detail, in this case the ISP cannot invoke the safe harbour provision pursuant to Article 14 of the E-Commerce Directive due to its active role for the third-party adverts in return for payment, where Italiaonline does not merely technically process third party adverts but also edits promotional messages coupled with the third-party adverts and identifies the key-words for its search engine. While playing this active role – according to the Court of Appeals – the ISP is responsible for lack of control and for not having expeditiously removed the infringing adverts after the notices of the Claimants (the earliest ones dated 2003).

With regards to the relation between the infringing activity of ABB and the cooperation of Italialonline, the Court of Appeal found that, even if jointly liable, ABB had effectively a preeminent role in terms of relevance and wilfulness of the conduct and that the joint liability must be evaluated according to Article 2055 of the Italian Civil Code, pursuant to which, where two or more parties are held jointly liable, the party paying the damages can recover from the other parties the pro quota of damages attributable to the level of wilfulness and to the consequences of the conduct of the other parties (so called, right of recourse). The request raised by Italianoneline for indemnification of the damages determined by ABB is considered by the Court of Appeal as a right of recourse aimed at clarifying the pro quota  of responsibility of Italiaonline. The right of recourse is applicable pro quota also to ABB as party paying the damages. In light of this interpretation, the Court of Appeal awarded also to ABB a recourse against Italiaonline equal to the 30% of damages to be paid to the Claimants.

This precedent seems of interest because the Court of Appeal of Milan, while making clear application of the principles set forth by the Court of Justice in the leading European case law L’Oréal Vs eBay (an e-marketplace cannot invoke the safe harbour provisions under E-Commerce Directive if it plays an active role by optimizing and promoting the selling of infringing products or services), has even moved forward by clarifying a possible criterion for the attribution of responsibility between professional users and e-marketplaces. It would be of interest verifying whether the same approach could be adopted by other foreign jurisdictions, since the regime of joint responsibility under tort law seems to be matter of domestic jurisdiction.

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Court of Appeal of Milan, case No.  1076/2014, 14 December 2016, Italiaonline Spa Vs ABB Srl and Others (President of the Court: Hon. A.M. Vigorelli; Judge-Rapporteur Hon. F. Fiecconi)

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.

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