29 May, 2015

Supreme Goodwill - UK Supreme Court Addresses Jurisdictional Goodwill

In today's business world reputation is everything when selling your goods or services to the masses at large. Goodwill, the inherent reputation of your goods or services, can easily overreach beyond the mere confides of countries, continents, or even the solar system. With this in mind, how far a business' goodwill can, and does, reach is hugely important, especially when it comes to someone passing off their goods or services as a famous brands' equivalents. What makes things even more complex is the nature of the online world we are all a part of, which has a wholly borderless reach (excluding geo-blocking), and in which anyone can pass themselves off as someone or something else without much difficulty. This begs the question: how far does your goodwill extend, even if you have no or very little presence in a given territory, due to your goodwill online? The Supreme Court of the United Kingdom endeavored to answer this question only a little over a month ago.

The case in question was Starbucks (HK) Limited and another v British Sky Broadcasting Group PLC and others, which concerned the use of IPTV, or in more simplistic terms, the streaming of TV via the Internet using dedicated hardware to do so, very much like cable TV but in an online environment. Starbucks (HK) and PCCW Media Ltd, two corporate members of a larger group (referred to as "PCCM" in the judgment as a whole), which operated an IPTV service called "NOW BROADBAND TV", subsequently renamed to "NOW TV", in Hong Kong, being the largest entity in its respective IPTV business in the country. Most of the channels offered through the NOW TV service are in Chinese, and are not accessible in the United Kingdom, although some people in the UK had been identified as being aware of the service. PCCM had since considered expanding internationally, and did so by launching a mobile app called NOW aimed at the Chinese-speaking population in the UK. Prior to the launching of the app in the same year Sky announced its "NOW TV" on-demand service, which went into its beta phase roughly at the same time as the launching of PCCM's mobile app. PCCM subsequently sued Sky under the tort of passing off (more on which can be found here), with the case ending up all the way in the Supreme Court.

Passing off, as has been noted in the article above, hinges on three factors that need to be established in order to prove the tort of passing off: (i) goodwill or reputation in the goods or services provided in the minds of the purchasing public; (ii) a misrepresentation by the defendant to the public that leads or is likely to lead, the public to think the goods or services are provided by the plaintiff; and (iii) the plaintiff suffers, or is likely to suffer, damage as a result of this misrepresentation. PCCM established the latter two requirements at first instances, and therefore the Supreme Court had to decide on whether Sky's service fulfilled the first requirement, amounting to passing off.

The main question therefore to the Supreme Court was whether PCCM had goodwill in the jurisdiction in question, in other words a customer base, meaning the UK. As the court stated, reiterating Lord Justice Oliver in Anheuser-Buch v Budejovicky Budvar NP, that goodwill is very much "localized" and that "...reputation which may, no doubt, and frequently does, exist without any supporting local business… does not by itself constitute a property which the law protects". In other words, even if goods or services have a certain, even strong reputation to them, does not mean it inherently commands it everywhere, irrespective of actual use or not. This line of thinking very much confirms precedent from decades prior, where similar conclusions have been made as to the localized nature of goodwill.

Territorial issues can be dealt with amicably at times
After a presentation as to the law from both sides the Court finally discussed its decision on whether passing off, or goodwill, has a territorial nature to it. As Lord Neuberger remarked: "...I consider that we should reaffirm that the law is that a claimant in a passing off claim must establish that it has actual goodwill in this jurisdiction, and that such goodwill involves the presence of clients or customers in the jurisdiction for the products or services in question. And, where the claimant's business is abroad, people who are in the jurisdiction, but who are not customers of the claimant in the jurisdiction, will not do, even if they are customers of the claimant when they go abroad". To put Lord Neuberger's argument in different words, goodwill can only exist in a jurisdiction if its goods or services are used by actual customers in that jurisdiction, irrespective of foreign users who have emigrated or visit that jurisdiction (although, one would imagine, given a sufficient amount of immigrants this would be acceptable). As said, this is fully in line with older precedent, and also foreign authorities within the common law, as was put forth by Sky in its argument. PCCM had very little presence in the UK, although it did establish some user base did exist.

Finally, Lord Neuberger aimed to settle two questions that remained: "(i) clarification as to what constitutes sufficient business to give rise to goodwill as a matter of principle, and (ii) resolution of the judicial disagreement as to the jurisdictional division of goodwill".

In answering the first question Lord Neuberger quickly settled the matter by largely stating what has already been settled above: "The claimant must show that it has a significant goodwill, in the form of customers, in the jurisdiction, but it is not necessary that the claimant actually has an establishment or office in this country. In order to establish goodwill, the claimant must have customers within the jurisdiction, as opposed to people in the jurisdiction who happen to be customers elsewhere. Thus, where the claimant's business is carried on abroad, it is not enough for a claimant to show that there are people in this jurisdiction who happen to be its customers when they are abroad. However, it could be enough if the claimant could show that there were people in this jurisdiction who, by booking with, or purchasing from, an entity in this country, obtained the right to receive the claimant's service abroad.". Lord Neuberger's answer to the first question further establishes that a business has to have some form of customer base in a jurisdiction it wishes to protect its intellectual property in that jurisdiction, and that business would have to be, mostly at least, permanent in that jurisdiction, rather than just transient.

The answer to the second question leads to a much wider discussion than can be settled in this blog post, and merits reading in its own rights by those who might be interested. What needs to be said, however, is that Lord Diplock's comments in Star Industrial Co Ltd v Yap Kwee Kor further support Lord Neuberger's conclusions and highlight the distinction between goodwill in different jurisdictions through the existence of separation of judiciaries; i.e. not one court can decide an issue of a foreign court.  Allowing for territorial overlap would let businesses simply claim a right in a name in another jurisdiction with a minimal presence, thus restricting business and trade for legitimate entities in that jurisdiction.

Ultimately the Supreme Court dismissed PCCM's appeal, and concluded that their claim in "NOW TV" had no basis in the UK, as they did not have the requisite consuming public in the UK for their service to merit protection under passing off.

This case is an interesting one, and although one could say the decision is very much a common sense approach, it still does answer some question relating to goodwill, especially in a digital age where the Internet permeates nearly every part of the globe. Businesses have to have a legitimate business presence in a given country in the form of a customer base, even in this digital age.

Source: KWM Legal Insights

21 May, 2015

The EU Single Digital Market - 16 Initiatives to Success?

As diligent readers of this blog have probably noted, the last 12 months have been vary favorable to those who are inclined to law reforms, especially in the field of copyright. This writer, for one, enjoys the rapid changes being introduced, and has awaited the next step of the reform process, which was leaked not long ago; the European Union Single Digital Market strategy. The strategy encompasses much more than just IP within it in attempts to combat the issues plaguing the internal digital market, and this post shall endeavor to touch upon the most relevant parts, divided by the "pillars" they're under.

Pillar I - Better Access For Consumers and Businesses to Online Goods and Services Across Europe

Along with the introduction of changes to e-commerce regulation, delivery systems and VAT within the European Digital Economy, the strategy also proposes some key changes into the landscape in which copyright resides.

Geo-blocking has, and will be, a contentious issue, especially in this global world where not all consumers are created equal in their access to media. The strategy states that: "[b]y limiting consumer opportunities and choice, geo-blocking is a significant cause of consumer dissatisfaction and of fragmentation of the Internal Market", and while arguably true to a certain extent, the statement does not reflect the commercial nature of geo-blocking. Often it is used to ensure either the locking in of content to regions, or to secure proper negotiations for wider, more lucrative licensing agreements (whether you agree with this notion or not is an entirely different matter). The strategy discusses 'unjustified' geo-blocking, but as to what amounts to an unjustified use remains unclear. Nevertheless the strategy proposes that "[a]ction could include targeted change to the e-Commerce framework and the framework set out by Article 20 of the Services Directive". Arguably a relaxing of geo-blocking within the EU would harmonize the market, especially with the emergence of prominent internet based media services; however, it still leaves the abuse of cheaper pricing (or conversely, the pricing out of poorer regions) in the market in the light of this potential change.

The first pillar also includes a proposal to allow for a more fluid, easier access to content within the EU in terms of its legislative base. The strategy notes that "[b]arriers to cross-border access to copyright-protected content services and their portability are still common, particularly for audiovisual programmes. As regards portability, when consumers cross an internal EU border they are often prevented, on grounds of copyright, from using the content services (e.g. video services) which they have acquired in their home country". This can be argued to relate to the point above quite heavily, with copyright ensuring the effective enforcement of geo-blocking, or any curtailment thereof. Some issues to persist, such as the inaccessibility to content for which you have rightfully paid for outside of some jurisdictions, as has been noted in the strategy as well, but these issues, at least in this writer's anecdotal experience, don't seem to be too prevalent.

The strategy also discusses a lack of clarity within copyright in the EU, but does not state as to what is unclear and how it is proposed to be remedied. Ending the first pillar, it is suggested that "...the Commission will propose solutions which maximise the offers available to users and open up new opportunities for content creators, while preserving the financing of EU media and innovative content". While this is all well and good, no actual legislative measures are proposed, and the aim of the strategy in relation to copyright seems foggy at best.

The first pillar clearly envisions a freer, more affordable digital market within the EU, but omits the actual regulatory structures, or changes thereto, leaving the strategy with more questions than have been answered.

Pillar II - Creating the Right Conditions for Digital Networks and Services to Flourish

The second pillar builds on the first, with the proposal of a more robust, free and functional network, with basic rights and the assurance of content enforcement, especially in relation to third party operators such as ISPs. After discussions on the introduction of wider rules for telecoms, and the potential expansion of the Audiovisual Media Services Directive, the strategy moved onto discussions on improving the online environment.

Some pillars hold more than others
The strategy brings up the restriction of certain players in the online world, such as search engines (Google, anyone?) and media services. Issues raised "...include a lack of transparency as to how they use the information they acquire, their strong bargaining power compared to that of their clients, which may be reflected in their terms and conditions (particularly for SMEs), promotion of their own services to the disadvantage of competitors, and non-transparent pricing policies, or restrictions on pricing and sale conditions". In this regard one has to agree to a certain extent, as e-commerce and other online giants become even bigger, their monopolies become harder to detect, and has the ability to curtail competition. How and when these issues would be tackled was also left out of the strategy, allowing for nothing but mere speculation at this point.

Illegal content online has been, and will be, a contentious issue, and the strategy does not leave it out either. Discrepancies with online enforcement of the removal of infringing content, and the blocking of such sources, can be said to be a thorn on the EU's side, and as the strategy points out: "[d]ifferences in national practices can impede enforcement (with a detrimental effect on the fight against online crime) and undermine confidence in the online world". For the first time the strategy does bring up concrete steps as to how to deal with the issue of infringing content online: "In tandem with its assessment of online platforms, the Commission will analyse the need for new measures to tackle illegal content on the Internet, with due regard to their impact on the fundamental right to freedom of expression and information, such as rigorous procedures for removing illegal content while avoiding the take down of legal content, and whether to require intermediaries to exercise greater responsibility and due diligence in the way they manage their networks and systems - a duty of care". Again, although more clear in its intent, the measures proposed have been left quite convoluted, a 'duty of care' on ISPs (and other third parties, possibly) could become too onerous, especially with more and more infringing content popping up online daily. With a sufficient allowance for flexibility, yet robustness, a duty of care system, or something akin or related to, could allow for the better enforcement of intellectual property rights online, while still allowing for its dissemination, sharing and other uses that fall within the scope of any exceptions.

All in all the EU digital environment, at least prima facie, would seem to have a bright future, but with a substantially sized caveat included. How intermediaries are treated in this new environment, with the expansion of rules on telecoms, could hinder the sharing and dissemination of content online, as has been seen with the DMCA in the US, if left too broad. This means any legislative initiatives would have to take both interests, being end-users' and commercial interests, into account when moving forward with any new legislative frameworks.

Pillar III - Maximising the Growth Potential of our European Digital Economy

Finally, the third pillar aims to add the last piece to the puzzle built on the two other pillars by creating more standardized platforms and technologies within the EU, and the improvement of digital skills and e-governance in the internal market. While largely irrelevant to a IP-heavy discussion, they still seem to add to the strategy in allowing for a more developed online network where these rules can operate. This article won't delve into the third pillar much, as it mostly does not relate directly to IP, but it is worth a read for anyone interested in the more practical aspects of the digital market.

Conclusion

While this writer can air nothing but his disappointment in the content of the strategy above, he is left to wonder why the proposal lacks so much in substance when the earlier leak seemed to offer more concrete terms of operation and improvement. With so much uncertainty in its future application, the Digital Single Market leaves with a whimper, and it remains to be seen how its final incarnation will impact on the EU and its legal (and practical) framework. The removal of barriers to enjoyment, and the possible harmonization of pricing and/or licensing in the EU seems, at least from a very superficial interpretation, a very welcomed change, how and when this would be done is still a big question as well.

As said, the strategy left much to be desired, but this writer remains hopeful.

08 May, 2015

Retrospective - Geographical Indicators and Trademarks

As many wine connoisseurs can clearly tell you, there is a vast amount of difference in the origin of a wine, be it from Southern France or Northern Italy, the specific region where the product is produced lends itself to create a nuanced flavor profile only achievable from that particular region. While this writer has no knowledge of such differences (he distinguishes his wines based on color), they illustrate a very important aspect of protection for some products and their geographical origins. Be it Feta cheese, Parmigiano Reggiano, or Scotch whiskey, where the products come from is often as important, or at times more important, than the quality of the product, giving each item its 'signature' taste and feel. With this specific taste and feel (at least prima facie) comes a need for protection, lest we allow for the production and sale of Parma ham produced all over the world, clearly therefore not being from Parma at all, potentially deceiving the public as to its origins. That said, does the geographical origin of a product confer a protectable right, and if so, how wide-reaching is the right?

A decision seeking to answer this question was faced by the then-named House of Lords in the UK in the early part of the 21st century in Consorzio Del Prosciutto Di Parma v Asda Stores Limited and Others. The case concerned the packaging and sale of Parma ham, specifically by Asda (a large chain of UK supermarkets), which had been sliced and packaged in Wiltshere in the UK by Hygrade Foods Ltd. Although the ham had been produced in Parma and subsequently sent to Hygrade, the act of slicing and packaging the meat had occurred in the UK; something that went against the Italian law (accessible here in Italian) protecting Parma ham and its processing specifically, and the sale thereof. Upon identifying this the Parma Ham Association sued Asda and Hygrade for selling the ham.

The law relied upon by the Association is European in origin, specifically European Council Regulation No. 2081/92. Under the Regulation the European Commission can register a name, upon the satisfaction of criteria set out in Article 4 of the Regulation, as a "protected designation of origin" or a "protected geographical indication", which, as explained by the court, are: "...[a] PDO is the name of a place used to describe a product, originating in that place, with characteristics that are due to its particular environment. A PGI is similar to a PDO except that the causal link between the place of origin and the quality of the product may be a matter of reputation rather than verifiable fact". Parma ham was registered as a PDO in 1996. 

Clucky didn't care if it was from Parma or not
After some deliberation by Lord Justices Hoffamn and Scott, the Lords could not answer the question posed to them as to the direct enforceability of the Regulation within Member States' domestic courts, and therefore referred the question to the European Court of Justice for further deliberation: "As a matter of Community law, does [the Regulation]... read with Commission Regulation (EC) No 1107/96 and the specification for the PDO “Prosciutto di Parma” create a valid Community right, directly enforceable in the court of a Member State, to restrain the retail sale as “Parma ham” of sliced and packaged ham derived from hams duly exported from Parma in compliance with the conditions of the PDO but which have not been thereafter sliced, packaged and labelled in accordance with the specification?"

The decision of the ECJ was given two years later. The ECJ answered the House of Lords' question after long deliberation of the Regulations application to Member States, and whether a PDO can be enforced against economic operators, including its specification as to slicing and packaging:

"[the Regulation]... must be interpreted as not precluding the use of a protected designation of origin from being subject to the condition that operations such as the slicing and packaging of the product take place in the region of production, where such a condition is laid down in the specification. Where the use of the protected designation of origin ‘Prosciutto di Parma’ for ham marketed in slices is made subject to the condition that slicing and packaging operations be carried out in the region of production, this constitutes a measure having equivalent effect to a quantitative restriction on exports within the meaning of Article 29 EC, but may be regarded as justified, and hence compatible with that provision. However, the condition in question cannot be relied on against economic operators, as it was not brought to their attention by adequate publicity in Community legislation."

All in all the Regulation does create an enforceable right through a PDO, but only if the stipulations within it as to specific packaging, slicing or other measures, have to be expressly stated within the registered PDO. Geographical indicators, therefore, act very similarly to trademarks, and do offer an route of enforcement ensuring the quality of the goods themselves within the European Union. Geographical indicators are also protected outside of the EU through a variety of agreements between the EU and other nations, with the addition of agreements between World Trade Organization members. They are by no means an answer to a lack of a trademark, but offer an avenue through which distinct origins (and quality) can be protected, especially when its derived from tradition and strict rules on the above.

30 April, 2015

Pirates Uncovered - Dallas Buyers Club's Landmark Case in Australia

Piracy is considered by many in the entertainment industry to be the plight of the 21st century creative minds and pockets (and the pockets' of many shareholders, one would think). What ever your thoughts on copyright piracy, the topic remains a hot-button issue, and the courts have been, and will undoubtedly continue to, battle with for years to come. With this in mind, the enforcement of rights online has proven difficult, especially when a user, either downloading or sharing said infringing content, is effectively hidden behind a single Internet Protocol (IP) number, which does not accurately identify the given user (as discussed here in some manner relating to the US). The battle between Internet Service Providers (ISPs) and copyright holders has been an active one regarding this, and a recent decision in Australia seems to have opened the door to potentially combating this issue on the copyright holders' end, at least for now.

The case in question was Dallas Buyers Club LLC v iiNet Limited, which dealt with the very successful movie Dallas Buyers Club that was, among other things, nominated for 6 Oscars in its year of release. Due to the movie's immense success, it was promptly shared online, and in an action for preliminary discovery, the movies' rights holder Dallas Buyers Club LLC sought to identify the individuals behind all 4726 unique IP addresses associated with sharing the movie online through the 6 respondent ISPs in the action. The ISPs contested this application on several grounds, but the first instance decision lay with the Federal Court of Australia.

Although the respondents actively contested the ownership of the copyright in the work (decided as being held by Dallas Buyers Club LLC, with very little resistance from the Court), and other matters underpinning the case at hand, the meat of the discussion lay in the possible allowance of discovery in relation to the aforementioned IP addresses.

The secret life of a copyright infriger (Source: Bizarro Comics)
Under the Australian Federal Court Rules 2011 a party can seek for the identification of an unknown party should they have a cause of action against that person under certain requirements: "(a) there may be a right for the prospective applicant to obtain relief against a prospective respondent; and (b) the prospective applicant is unable to ascertain the description of the prospective respondent; and (c) another person (the other person): (i) knows or is likely to know the prospective respondent’s description; or (ii) has, or is likely to have, or has had, or is likely to have had, control of a document that would help ascertain the prospective respondent’s description." Clearly, as the individuals sharing the movie are behind an IP address, and therefore hard to identify without information from the ISP as to who is behind said IP address, Dallas Buyers Club, at least prima facie, had a case to find out who these people are under the Act.

Regardless of the ISPs' rejection of Dallas Buyers Club's assertions under the three requirements of the Act, the Court saw that they had fulfilled the requirements and were therefore entitled to disclosure as to the users' identities. They had a right to seek relief as to a potential breach of their copyright; they could not identify the individuals committing that infringement; and the ISPs knew or were likely to know who they were, or at least would be in possession of their subscriber details based on fixed IP addresses.

Even though Justice Perram allowed the disclosure of the users' information to Dallas Buyers Club, he did however set certain restrictions on it, which will be set by the parties later in the process. Dallas Buyers Club have indicated that they want the details disclosed by May 6th, but the letter that will be sent out will be determined on a later note as well.

Although the case is an important landmark in the fight against piracy, the disclosure of individuals' details in relation to copyright infringement is nothing wholly new. In Canada, under the Federal Court Rules, the disclosure of such information is very similar to the Australian provision; and Voltage LLC, the parent company of Dallas Buyers Club, has successfully used the provision to gain such information in Canada in the case of Voltage Pictures LLC v John Doe. Similarly, in the UK, a Norwich order (the equivalent of the Australian provision's application) was issued for copyright infringement through which subscribers' details were disclosed to the copyright holder in Golden Eye (International) Ltd & Anor v Telefonica UK Ltd. Both cases also discuss the restrictions needed in the event of such disclosure, such as: "[p]utting safeguards in place so that alleged infringers receiving any “demand” letter from a party obtaining an order under Rule 238 or a Norwich Order not be intimidated into making a payment without the benefit of understanding their legal rights and obligations... [s]pecific warnings regarding the obtaining of legal advice or the like should be included in any correspondence to individuals who are identified by the Norwich Order... [l]imiting the information provided by the third party by releasing only the name and residential address but not telephone numbers and e-mail addresses... [and] [r]equiring the party obtaining the order to provide a copy of any proposed “demand” letter to all parties on the motion and to the Court prior to such letter being sent to the alleged infringers". These, among others, will undoubtedly be considered by the Australian courts in their application of such orders in the future, and in this case specifically.

As one could imagine, the case has spawned a huge amount of discussion, especially relating to Voltage Pictures' previous strong-arm tactics in their letters to infringers. Nevertheless, the cold application of the law, at least to this writer, seems to be quite accurate, and individuals who engage in such activities need to understand the risks associated with illegal copying of media online. The Dallas Buyers Club case clearly sets the stage for more direct, stronger enforcement of copyright within Australia, and it remains to be seen how the provision will be utilized in the future, and what restrictions the courts ultimately put on the disclosure of subscribers' details and the usage thereof.

Source: Sydney Morning Herald

17 April, 2015

Stifled Words - The DMCA and Censoring Free Speech

Since its enactment at the cusp of the 21st century, the Digital Millennium Copyright Act in the United States has been the subject of discussion within the IP community, practitioners and even the public in general. With its inception being in the early days of the internet, back when our full understanding of the scale and complexity it will achieve later in its life was all but naught, the provisions in the DMCA can be seen as being quite broad and outdated in their application to the Internet as we know it today. The Electronic Frontier Foundation published a white paper some 2 years ago, detailing very thoroughly the potential abuse of the DMCA and its provisions, and this writer can agree that the DMCA has its issues and needs to be addressed by the US legislature. That being said, a lot of laws have their negative applications (some IP related discussion can be found here and here), but could the DMCA be used to stifle free speech, even abroad?

For the uninitiated, under the DMCA a noticed can be issued to a service provider to request the taking down of copyright infringing works on that provider's services, for example, on a website, under 17 USC section 512. After a sufficient amount of information is provided, the content has to be taken down, should the material alleged actually be infringed as described. While the provision purely affects intellectual property rights, there have been instances where the takedown notice has been abused, and more often than not, service providers will comply with the request just to cover their own backs.

Discussions can be odd at times (Source: HiJinks Ensue)
A recent instance, as discussed above, prompted this writer to look into a matter where the DMCA was clearly used for more nefarious purposes, and not to protect legitimate interests in one's intellectual property. The case in question was Automattic Inc and Oliver Hotham v Nick Steiner, for which summary judgment was passed early last month (PDF copy can be downloaded here), regarded a young journalist called Oliver Hotham. Mr. Hotham, in his journalistic endeavors, contacted an organization called Straight Pride UK, one which advocates their notion of current discrimination of heterosexual people in the light of emerging gay rights. In his email communication to Straight Pride UK Mr. Hotham identified himself as a 'freelance journalist' and asked the organization some questions relating to them and their agenda. They promptly answered a week later, attaching a document titled "Press Release", in which they detailed their answers to most of Mr. Hotham's questions. He subsequently cleaned up the answers, rearranged them and published them in his blog article "It's great to be straight... yeah" (quoted in full here), which garnered a great deal of traction. Due to the article painting Straight Pride UK in a less beneficial light, they threatened to, and did, issue a takedown notice under the DMCA if the article wasn't take off Mr. Hotham's blog. Wordpress did, however, take down the article, yet after some voicing out on Mr. Hotham's part as to his ordeal, Wordpress took action and sued Straight Pride UK (through their representative, Nick Steiner) for abuse of the DMCA.

Under section 512(f) a claim can be brought against a false DMCA notice that has been issued through materially misrepresenting that the activity in question infringes their rights, i.e. that you claim someone's post on a website infringes your copyright when it (potentially at least) doesn't. Wordpress asserted that, as Mr. Steiner represented that "[the] [u]ser http://oliverhotham.wordpress.com did not have my permission to reproduce this content, on Wordpress.com or twitter account or tweets, no mention of material being published was made in communications... [and that] [i]t is of good faith belief that use of the material in the manner complained of here is not authorized by me, the copyright holder, or the law". As Mr. Hotham had identified himself as a journalist, and the work sent had been titled as a press release, clearly Mr. Hotham did not infringe copyright in the US, or hypothetically even in the UK had the case been brought forth here. Wordpress firmly contested Mr. Steiner's assertion and the court agreed with their argument, issuing a summary judgment in their favor.

Although the case discussed nothing in terms of substantive arguments relating to section 512(f), it highlights an important issue regarding the potential abuse of DMCA when it comes to freedom of expression, and not only limiting it to the US (as the case was here, and wholly related to two UK entities and a US service provider). Had Mr. Hotham not been a journalist (says the writer, writing his own 'journalistic' blog) the nature of the case could have been very different. The DMCA, or any provisions regarding copyright, should protect legitimate interests, and not merely those aiming to stifle criticism or dissent in the veil of protecting copyright. However, as was stated by Paul Sieminski, Chief Legal Counsel for Automattic: "...[this] DMCA abuse may go unpunished this time. But, we're heartened that our case makes some good new law for future cases. There's very little case law in this area, and previously no case law about what damages were available if a plaintiff were to win". Arguably this is very true, and serves as an important milestone in the protection of free speech under the DMCA.

Source: The Guardian

07 April, 2015

Links Galore - Hyperlinking Faces Its Third Challenge

After the Svensson and BestWater decisions hyperlinking seemed to already be a matter, which has been dealt with extensively and thoroughly. Even so, a third decision loomed in the horizon, hopefully shedding the final bit of light needed into the question of hyperlinking and copyright infringement. After the Svensson decision the questions posed to the Court were reduced to all but one, leaving more significance to that final question and its potential impact on the issue.

The case in question was C More Entertainment AB v Linus Sandberg, which dealt with the broadcasting of ice hockey games, which were supplied by C More for a nominal fee for those wishing to view the games live online as opposed to on TV. Linus Sandberg created links on a website to allow access to two ice hockey games without having to pay C More for the pleasure of doing so, allowing for users to watch paid-for content beyond their paywall protection; however C More quickly put a stop to this, and Mr. Sandberg only was able to post links to two games. He was also taken to court in Sweden over copyright infringement.

As said above only one question was referred to the ECJ: "May the Member States give wider protection to the exclusive right of authors by enabling “communication to the public” to cover a greater range of acts than provided for in Article 3(2) of [Directive 2001/29]?" The question, prima facie at least, clearly requires guidance on whether Member States can extend the coverage of what constitutes a 'communication to the public' beyond what is expressly provided in the Directive, namely the posting on hyperlinks to paid-for content such as hockey games.

In light of the Directive (namely Article 3) and its Preamble, the Court swiftly determined that Member States' rights in extending coverage could potentially cover the posting of hyperlinks to live, paid-for content. This, however, only applies to on-demand services, which the above service is not, as live broadcasts are not watched by individuals at a time that is convenient to them, but rather, at a strict prescribed time. The Court dismissed its applicability to the current situation, at least in light of Article 3, deeming Mr. Sandberg's actions not an infringement of the right of communication to the public via his hyperlinks.

Hyperlinks can be enticing...
With this in mind, the Court did not oust the possibility that Member States could extend the coverage of the provision beyond what has been expressly set out in the Directive. The aim of the Directive is to harmonize copyright within the EU, but does not, as was seen by the Court, "...prevent or remove any differences between the national legislations as regards the extent of the protection which the Member States may grant to the holders of the rights referred to in Article 3[] with regard to certain acts, such as those at issue in the main proceedings, which are not expressly referred to in that provision".

Following their argument the Court saw that under Directive 2006/115 Member States had the ability to give more far-reaching protection in relation to copyright when it comes to broadcasts and communication to the public. Article 8 even includes content, which is restricted by payment, as well as wireless communication of such content, for example via the Internet.

The Court then summarized its judgment on the matter: "It follows that Article 3(2) of Directive 2001/29 must be interpreted as not affecting the option open to the Member States, set out in Article 8(3) of Directive 2006/115, read in conjunction with recital 16 to that directive to grant broadcasting organisations the exclusive right to authorise or prohibit acts of communication to the public of their transmissions provided that such protection does not undermine that of copyright... Having regard to all the foregoing considerations, the answer to the question referred is that Article 3(2) of Directive 2001/29 must be interpreted as not precluding national legislation extending the exclusive right of the broadcasting organisations referred to in Article 3(2)(d) as regards acts of communication to the public which broadcasts of sporting fixtures made live on internet, such as those at issue in the main proceedings, may constitute, provided that such an extension does not undermine the protection of copyright".

While the decision is by no means as influential, at least in this writer's opinion, as Svensson or BestWater, to an extent, it still sets a potentially influential precedent should Member States wish to enact more wider coverage in relation to the communication to the public right. It does still leave the question of hyperlinking in more doubt, as links to newspaper articles have been deemed to infringe copyright, when links to live broadcasts would not. What happens now after the myriad of hyperlinking decisions in Member States remains to be seen; however the law is begging for more correction in terms of national application.

Source: IPKat

26 March, 2015

New Waves of Copyright - Reform Proposed in the EU

In the last couple of years it seems that copyright has not been willing to stop in its transformation and moulding to its new home in a digital world. With recent reforms enacted in the UK, Australia and Ireland, among others, this writer for one has been waiting to see where things go in the coming years. In that vein, discussion has yet again been brought up on copyright, its efficacy and whether things should be changed entirely by European Parliament member Julia Reda in mid-January. Although this recent discussion seems very unlikely to yield any results as to change (says this writer in his ever-present cynicism); however it merits discussion, or at least addressing.

The draft report itself is quite brief, and shall be broken down into its respective headings.

Exclusive Rights

Ms. Reda, although a supported notion by many, does not want to eradicate copyright altogether. Copyright is an important decide to incentivize and reward independent, original creation, and this writer for one would never want to see it wholly removed from the world's IP scheme. Ms. Reda does, however, bring an interesting addition to this existing regime: "...[she] calls for improvements to the contractual position of authors and performers in relation to other rightholders and intermediaries". One can try to envision how, through law, the relationship between creator and funder could be improved, seeing as the relationship is (often) quite unbalanced by its nature. In the UK the freedom of contract is a corner-stone of contract law, and should be upheld, even if/when it has the capability to produce unbalanced contractual relations. This, by no means, should lead to unfair contractual terms, but it does not present a need for legal intervention in the scheme of copyright in itself.

A big point of contention within copyright has been fair dealing, and the allowance of using copyrighted material for the purposes of creating new, original works, or simply for the reporting or discussion of current events. Ms. Reda proposes that "...the EU legislator should further lower the barriers for re-use of public sector information by exempting works produced by the public sector - within the political, legal and administrative process - from copyright protection". In the UK at least, under the Re-use of Public Sector Information Regulations 2005, the use of such information is allowed under certain circumstances, and only through the consent of relevant governmental bodies. Although by no means perfect, it aims to safeguard potentially sensitive information from public viewing, even if requested through the Freedom of Information Act 2000. Ms. Reda's objective clearly is one of openness and freedom of publication for all; however this would present challenges if implemented with little or no restrictions.

When piracy failed politics was what was left for Captain Hook
Her final argument relating to exclusive rights is one which piqued this writer's interest: "[she] [c]alls on the Commission to safeguard public domain works, which are by definition not subject to copyright protection, and therefore should be used and re-used without technical or contractual barriers; also calls on the Commission to recognise the freedom of rightholders to voluntarily relinquish their rights and dedicate their works to the public domain". Arguably, her initial point seems like quite the obvious one, but, as the Sherlock Holmes saga (discussed here and here) has shown us, even if a work or works are in the public domain it doesn't necessarily mean they are there as firmly as one would believe. The public domain should, indeed, be the public domain, and all works within should be free to be used. Copyright protects specific expression, not ideas (as has been discussed prior in more detail), and once the expression is within the public domain (e.g. a specific story relating to Sherlock Holmes), it should be free to be used - even encompassing ideas within that expression. As for Ms. Reda's proposed right to relinquish any and all copyright interests in works voluntarily, a right could be recognized; however seems highly unnecessary given the function of copyright. Should the copyright holder of the original work just simply not pursue any claims of infringement, the rights are rendered effectively useless, albeit not void. Allowing for the relinquishing of rights does protect any subsequent derivative works from future malicious attacks from new rights holders, and would seem a great device to expand on copyright and the powers of rights holders on self-governance of their works.

Exceptions and Limitations

Exceptions, especially when it comes to private use of copyrighted content, have been a sore subject for a lot of parties involved. Too little allowance of use restricts the freedom to use your legally purchased materials, yet too few restrictions can lead to mass abuse of said content. In that vein, Ms. Reda has proposed major changes in this area, which should be addressed alongside the above.

Ms. Reda proposes that "...exceptions and limitations should be enjoyed in the digital environment without any unequal treatment compared to those granted in the analogue world". Arguably, this approach is very sensible, and this writer for one cannot think of an instance off the top of his head where digital would be excluded from exceptions when compared to its analogue counterpart. Nevertheless, this is something that should be enshrined in the back of any law pertaining to modern copyright, and defended to ensure the comfortable transition from the physical to the digital in the years to come.

She further proposes that "...all exceptions and limitations referred to in Directive 2001/29/EC [should be made mandatory], to allow equal access to cultural diversity across borders within the internal market and to improve legal security". This writer would argue that the introduction of exceptions is less about diversity, but more about the promotion of communication and the creation of new, potentially copyrightable, works. Whether all exceptions should be made mandatory is a question one cannot easily answer; however, quoting many parents, too much too quick can be bad, and a gradual introduction would be beneficial in the long run. Ms. Reda also wants to add more flexibility to the aforementioned exceptions, and her argument echoes that of US and Canadian fair use where the exceptions are less à la carte, and more malleable to a different assortment of uses based on the use and their impact on the original works.

Hyperlinking is currently the topic of choice at the ECJ, and Ms. Reda also proposes its protection, due to a lack of communication to a new public through hyperlinking. As has been discussed in both Svensson and BestWater, the ECJ seems to quite firmly protect this notion in Europe, and with the forthcoming decision in C More hopefully even further clarifying this, this write does not fret for the sake of hyperlinking in the near future.

Ms. Reda also suggests that "...the exception for caricature, parody and pastiche should apply regardless of the purpose of the parodic use" - something that this writer will wholly disagree with. Deckmyn was the most recent instance where parody was assessed on an EU-wide basis, and the purpose of use in terms of parody is an important consideration and should not be omitted. A borderless approach to parody will only create abuse and infringing works created under the veil of parody when no parody was intended. When using copyrighted works the use should be a genuine, bona fide parody use, which both protects expression and encourages it through creativity in parody and thus, potentially new protectable works.

Ms. Reda goes further into other exceptions, but for the sake of brevity, those will be left out, although still remain important considerations for the future.

Conclusion

The response at large to the proposal has been varied, and that's no surprise. What Ms. Reda is proposing is by no means revolutionary, and a lot of what is brought up, from an IP person's stand-point is worth protecting and/or extending copyright to in its little realm. Yet, what Ms. Reda's undoing is, is her affiliation with the Pirate Party. The image evoked to anyone involved in IP, especially rights holders, will be one of dismantlement, and a fear of the allowance of piracy and losing the very structure your livelihood depends on. Ms. Reda does not propose this; however she inevitably loses out on that one simple aspect: public relations.

This writer commends a lot of what she has put forth, and seeing how copyright has started to evolve in the last couple of years yields a tremendous amount of promise. Nevertheless, there are doubts as to the proposals and their efficacy in the future, but from an end-user perspective, Ms. Reda gives a glimmer of hope for a more open (i.e. less restrictive) copyright regime, which still aims to support the content creators out there and protect their works.

Source: IPKat