20 March, 2019

No Sample for You – Advocate General Szpunar Scratches Music Sampling under EU Copyright

Since the 1970s music sampling has become a staple in the industry, where parts of songs are taken to create parts of new song, particularly popularised by the rap genre. The practice has been an open secret, where artists freely have taken parts from other songs without much by way of repercussions or issues from a copyright perspective, even though an artistic work has been potentially copied. The matter hasn't been widely litigated, but a recent case in the CJEU is set to determine the issue once and for all at least within Europe. Prior to the full CJEU decision, Advocate General Szpunar gave his consideration on the matter in late 2018.

The case of Pelham GmbH v Ralf Hütter and Florian Schneider-Esleben concerned the band Kraftwerk (a well-known German electronic music band), consisting of the claimants Mr Hütter and Schneider-Esleben. The respondents Mr Pelham and Mr Haas had allegedly electronically sampled approximately a two second rhythm sequence from the Kraftwerk song "Metall auf Metall" in their song "Nur mir". Kraftwerk alleged that this sampling infringed their copyright in their song, with the matter ultimately ending with the CJEU from the German courts.

The CJEU were asked six questions, which will be dealt with in turn below.

The first question in essence asked "…whether Article 2(c) of Directive 2001/29 should be interpreted as meaning that taking an extract of a phonogram for the purpose of using it in another phonogram (sampling) infringes the exclusive right of the producer of the first phonogram… where it is taken without the latter’s permission".

After preliminary considerations, the Advocate General addressed the first question, quickly setting out that the copying of the loop would amount to a reproduction under Article 2 of the Directive. This means that the act would be an infringement of the rights afforded by the legislation to the author. However, the rights could be limited, and potential minimal (de minimis) copying could be allowed, i.e. the copying does not pose a financial threat to the original work or its author.

The Advocate General considered that "…A phonogram is not made up of small particles that are not protectable: it is protected as an indivisible whole… a sound or a word cannot be monopolised by an author as a result of its inclusion in a work". The rights afforded to them, therefore, would only be in the entire (or substantial) part of the song, not individual notes and/or sounds. Even so, the right to reproduce the song, or parts of it, are with the author alone, even though the same sound could be created and used in isolation of that work.

The Advocate General also struggled to formulate a test for de minimis copying, as it would be difficult to draw a line, and decide whether this would be a qualitative or quantitative assessment.

Although the parties (and interested third-parties, tried to argue for the de minimis threshold, the Advocate General was not convinced, and saw the answer to the first question as "…Article 2(c) of [the] Directive must be interpreted as meaning that taking an extract of a phonogram for the purpose of using it in another phonogram (sampling) infringes the exclusive right of the producer of the first phonogram to authorise or prohibit the reproduction of his phonogram within the meaning of that provision, where it is taken without the latter’s permission".

The second question referred to the Court concerned "…whether Article 9(1)(b) of Directive 2006/115 should be interpreted as meaning that a phonogram which contains extracts transferred from another phonogram (samples) is a copy of the other phonogram within the meaning of that provision".

Eric had no interest in sampling Anna's music
This question was briefly considered by the Advocate General, who saw that the meaning of a 'copy' of a work should be interpreted as something "…which incorporates all or a substantial part of the sounds of a protected phonogram and which are intended to replace lawful copies thereof". A sample does not replace the original work, but creates a new independent work. Similarly it does not incorporate all or a substantial part of the sounds of the original work.

The Advocate General therefore set out the answer to the second question as "…Article 9(1)(b) of [the] Directive must be interpreted as meaning that a phonogram which contains extracts transferred from another phonogram (samples) is not a copy of the other phonogram within the meaning of that provision".

The third question asked whether it would be possible for Member States to preclude the application of a national law to allow for the use of works without the consent of their author under Directive 2001/29.

As the exceptions included in Article 5 of the Directive don't include permitting the use of protected works for the creation of other works, the Advocate General fairly considered that "...Article 2(c) of Directive must be interpreted as precluding the application of a provision of the national law... according to which an independent work may be created in the free use of another work without the consent of the author of the work used".

The fourth question asks whether the quotation exception under Article 5(3)(d) of Directive 2001/29 applies when a extract of a song is used in another. While typically only associated with literary works, the Advocate General did concede that it is possible it could apply to musical works as well. However, for a copy to be regarded as quotation, it needs to fulfill two conditions: (i) the quotation must be ‘for purposes such as criticism or review’; and (ii) the extract quoted must be incorporated in the quoting work as such or, in any event, without modification.

Sampling clearly fails both conditions, as the use of the extract is not for criticism or review, or used without modification. The Advocate General clearly therefore answered the question in the negative.

The fifth question concerned the latitude afforded to Member States in transposing the relevant copyright directives into their respective national law. After some degree of discussion, the Advocate General answer the fifth question as "...Member States are required to ensure the protection, in their domestic law, of the exclusive rights set out in Articles 2 to 4 of Directive 2001/29, in so far as those rights can be limited only in the application of the exceptions and limitations listed exhaustively in Article 5 of that directive. Member States are nevertheless free as to the choice of form and methods which they consider appropriate to implement in order to comply with that obligation".

Finally, the Advocate General took on the sixth question, which asked "...how the fundamental rights set out in the Charter are to be taken into account when interpreting the scope of the exclusive rights of phonogram producers" under the above Directives. In effect it is asking whether there exists primacy of the freedom of the arts over the exclusive right of reproduction of phonogram producers.

After some discussion of the issue in relation to both German and EU law, the Advocate General considered that "...the exclusive right of phonogram producers under Article 2(c) of Directive 2001/29 to authorise or prohibit reproduction, in part, of their phonogram in the event of its use for sampling purposes is not contrary to the freedom of the arts as enshrined in Article 13 of the Charter.".

The case is a very interesting one, and the ultimate decision of the CJEU might have huge implications for the music industry, particularly genres that heavily rely on the use of samples in the production of new music. It remains to be seen what the CJEU say later this year, but this writer will, for one, wait for the beat drop with anticipation.

01 March, 2019

Radio Musings - My Contribution to BBC Radio on IP and the Right to Repair Movement

This writer recently had the honor and privilege of being interviewed by the BBC World Service for their Business Daily program on the business implications regarding IP on the right to repair movement and its future.

You can find the piece here: https://www.bbc.co.uk/programmes/w3cswgrc

The right to repair movement is incredibly interesting, and undoubtedly something that will impact companies and consumers in the near future. While the exact IP implications of any future legislation is still unclear, you can bet that it will have some effect, potentially even dramatic, on companies' IP and potential innovation.

06 February, 2019

McLoss - McDonald's Big Mac Trademark Revoked by EUIPO

It is not often when the 'little guy' wins in a court of law, particularly when coming up against more established and well-known brands and companies. This is even more monumental when the brand in question is near ubiquitous with an industry, namely McDonald's. Although the case has been very widely reported on in the IP community and the wider press, some nuance has been lost in the discourse on the case and what it ultimately means.

The case of Supermac's (Holdings) Ltd v McDonald's International Property Company Ltd concerned the trademark for the iconic Big Mac, which McDonald's had registered as an EU trademark in 1998 (EUTM 62638). Supermac's is an Irish fast food chain, which has been operating in Ireland since the late 1970s. After a prolonged legal fight due to the chain's name against McDonald's (unrelated to the revocation proceedings), Supermac's sought the revocation of the Big Mac trademark at the EUIPO Cancellation Division.

Supermac's argued at the EUIPO that the Big Mac trademark was not put to genuine use within the EU under Article 58 of the EU Trademark Regulation, which stipulates that "...if, within a continuous period of five years, the trade mark has not been put to genuine use in the Union in connection with the goods or services in respect of which it is registered" an EU trademark should be revoked.

What is key is that the Big Mac trademark was registered for a number of goods and services in classes 29 and 30 (covering food items), but also under class 42 for the provision of restaurant services.

The Cancellation Division first set out that genuine use requires "...actual use on the market of the registered goods and services and does not include token use for the sole purpose of preserving the rights conferred by the mark, nor use which is solely internal". Genuine use is assessed looking at all of the relevant facts and circumstances in establishing whether the commercial exploitation is real; however, this does not include commercial success or its scale.

Ronald just needed a rest after the intense legal fight
Having reviewed an extensive amount of evidence filed by McDonald's, including affidavits, marketing and internet materials, the panel considered whether they demonstrated genuine use of the Big Mac trademark. Although a great deal of evidence was filed, the panel considered that it didn't prove the extent of the use of the trademark itself. this includes looking at "...the nature of the relevant goods or services and the characteristics of the market concerned, the territorial extent of use, its commercial volume, duration and frequency".

With regards to internet materials, McDonald's failed to submit evidence on the actual data relating to visitors, their locations and the time frame in which this was done. Similarly, the Cancellation Division considered that, although sandwiches using the trademark were demonstrated in the excerpts from the proprietor's website, it was not possible to order the items online (or information on total orders placed and their details if possible). Finally, while brochures were provided as evidence, details on their circulation were not provided to the panel. Clearly McDonald's failed to submit detailed evidence on the use of its trademark, even though common sense demonstrates that the trademark is used within the EU.

The Cancellation Division concluded that "...the evidence analysed above does not provide sufficient details concerning the extent of use; other than exhibiting the sign in relation to goods which could be considered to be part of the relevant goods, these materials do not give any data for the real commercial presence of the EUTM for any of the relevant goods or services".

The proprietor therefore failed to demonstrate that the products marked with the trademark are offered for actual sale, as there is no confirmation of any commercial transactions, either online, or via brick-and-mortar operations. The trademark was deemed to not have been genuinely used within the EU, and the panel revoked the mark.

Clearly the case is an instance of poor evidence selection and provision, and undoubtedly will be appealed by McDonald's to the EU Boards of Appeal. It only goes to show that even the biggest and most resourceful entities can fall foul of a lack of preparation and consideration of evidence. To McDonald's chagrin, their competitors are already taking advantage of the opportunity.

15 January, 2019

Military Grade News - CJEU Advocate General Opines on Copyright and the Freedom of Expression

IP and freedom of speech have always had a difficult relationship. What could be freer that the ability to use any works you have seen, and share them with a wider potentially different audience, while IP seeks to protect the interests of the original author, even sometimes at the expense of the rightsholders. These issues often come to blows in the courts, and a recent case in the CJEU has brought this conversation back to the forefront. Can you protect works using copyright, even with strong issues of freedom of speech underpinning the sharing of those documents? We found out the precursor to the European answer to this question late last October.

The case of Funke Medien NRW GmbH v Federal Republic of Germany concerned military status reports drawn up for the German government on a weekly basis, which detail developments of deployed forces abroad. These reports are subsequently sent to e.g. various members of the Federal Parliament and the Ministry of Defense for briefing purposes. The documents are classed as classified and restricted. Funke Media published summaries of some of these reports, having acquired copies of them through potentially illicit means as an application to access them was rejected by the German government. They were subsequently taken to court for copyright infringement, with the matter ultimately ending with Advocate General Szpunar.

The balancing act between ensuring freedom of expression, but still protecting copyright owners' rights, is a difficult one, since the interests are often very much in competition with each other. The Court was tasked in balancing this difficult dichotomy.

Copyright through numerous exceptions allows for some freedoms when it comes to using copyright materials, including for critique, satire and review. However, the exceptions are by no means very broad (like in the US under fair use), and could be used to curtail genuine public discourse and commentary.

The Charter of Fundamental Rights of the European Union sets out the various rights enjoyed within the Union, and Article 51 asserts those rights onto any EU legislation implemented by Member States. In this case, Article 11 is in contention, which gives everyone the right of freedom of expression.

Other methods might've worked better to keep matters 'secret'
The main question that the Advocate General sought to answer is whether the grounds asserted by the German government are good enough to trump the Claimant's right to freedom of expression. The Advocate General did, however, note that as the copyright holder in this case is a Member State, it does not enjoy the same rights as the people living in that Member State. He distinguished the matter in that "...the State cannot rely on the fundamental right to property as a means of restricting another fundamental right guaranteed by the ECHR or the Charter", even though the State might have a remedy under civil rights.

The Advocate General summarized the position as "...If the State were able to invoke its individual rights, other than the public interest, in order to limit fundamental rights, the result would be the destruction of those fundamental rights". The State would have to put forward an argument under public interest to protect the works in question in order to limit the fundamental rights guaranteed in the Charter. In his view, the State fails under the public interest argument.

He then turned to the matter of copyright protection offered for the military reports. Copyright at its core aims to achieve two objectives: (i) to protect the personal relationship between the author and his work as his intellectual creation; and (ii) to enable authors to exploit their works economically.

While Germany does own the copyright in the military reports, the country itself cannot be construed as the author of those works. Even though they were drafted by State employees, strictly speaking the works themselves do not have an author at all. The Advocate General saw that, as copyright endeavors to protect the relationship between the author and the works created, the State's interests cannot be protected in works it isn't the author of. As he put succinctly: "...where there is no author, there is no copyright, in the form of either moral or property rights".

Similarly, as the State does not seek to profit from the works themselves economically, but to protect the contents from public scrutiny, the Advocate General deemed the matter outside of the remit of copyright.

In short, "...the answer should be that Article 11 of the Charter, read in conjunction with Article 52(1) thereof, must be interpreted as precluding a Member State from invoking copyright under Article 2(a) and Article 3(1) of [the] Directive in order to prevent the communication to the public, in the context of a debate concerning matters of public interest, of confidential documents emanating from that Member State. That interpretation does not prevent the Member State from applying, in compliance with EU law, other provisions of its domestic law, including those relating to the protection of confidential information".

The Advocate General clearly sought to protect the interests of those seeking to share and disseminate information, while the State attempted to curtail those efforts through incorrect means. Copyright clearly was not the appropriate vehicle to protect the legitimate interests in keeping military documents secret, and the State therefore could pursue it through other avenues. In the end, it remains to be seen what the CJEU rules in this case.

14 November, 2018

This Tastes Right - CJEU Rules Out Copyright Protection for Taste of Cheese

Sometimes a case comes around that both baffles, and excites intellectual property specialists. Something that makes you wonder why it had gone that far in the first place (let alone the costs), but nonetheless is something that we all want an answer to from the courts - and more often than not never do. Such a case has been the cheese taste copyright case, which seeks to answer the age old question; can you have copyright in the taste of cheese? This writer cannot even count the number of times he's wondered this very question, and finally, we have an answer, as the CJEU handed down their decision earlier this week.

The case of Levola Hengelo BV v Smilde Foods BV concerned the cheese "Heksenkaas", which is a spreadable dip containing cream cheese and fresh herbs, which was created by a food retailer in 2007, which then sold the rights to Levola. The manufacture process for Heksenkaas has been granted a patent in 2012, but no other registered rights vested in the product. Levola's competitor, a fellow cheese-making company, Smilde, sold a product called "Witte Wievenkaas", which, according to Levola, infringed on the 'taste' of Heksenkaas, and brought proceedings against Smilde, ultimately ending up with the CJEU.

The referring court asked the CJEU two questions relating to the protection of food through copyright.

The CJEU tackled the first question, which, in essence, asked "...whether Directive 2001/29 must be interpreted as precluding (i) the taste of a food product from being protected by copyright under that directive and (ii) national legislation from being interpreted in such a way that it grants copyright protection to such a taste".

The Court considered that, for copyright to vest in the 'taste' of cheese, it would need to be classified as a 'work' under the Directive. This comprises of two cumulative factors: (i) the work has to be 'original' in the sense that it is the author's own intellectual creation; and (ii) only something which is the expression of the author's own intellectual creation may be classified as a 'work'.

In addition to the Directive, the Court noted that the above would also have to comply with the Berne Convention, more specifically Articles 1-21 (which deal with the requirements for copyright protection under the Convention). Specifically, copyright protection would only be afforded to "...expressions, but not to ideas, procedures, methods of operation or mathematical concepts as such".

Heksenkaas or not, cheese is amazing (Source)
Following the provisions above the Court considered that for there to be a 'work' under the Directive, "...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". This means that authorities need to be able to identify the subject matter of what is being protected clearly and precisely, and for others in the marketplace to ascertain the same. The subject matter of protection should also not be subjective, but one that can be observed objectively bu anyone.

Applying this to the question at hand, the Court noted that "...[t]he taste of a food product cannot, however, be pinned down with precision and objectivity", as it is not in a tangible or observable form (although one can experience it through the tasting of the goods). There are also many variables in the sensations and experience of any particular taste, which change over time and through consumption habits etc. It is also not possible, at least in the state of current scientific developments, to precisely and objectively identify the taste of a food product that distinguishes it from other food products (although this writer wonders if a deep analysis of the food's compounds would get us closer, even though this, again, changes with the ingredients, their age, storage methods and the like).

The Court therefore concluded that the taste of a food product therefore cannot be classified as a 'work' under the Directive, and would not be protected by copyright. Similarly, national legislation cannot protect the same subject matter in compliance with EU laws.

Due to the negative answer to the first question, the second question was not necessary to be dealt with.

The CJEU was clearly correct in their decision when it came to the taste of cheese, as it is something that one cannot easily pin down and therefore clearly protect. Once food chemistry and science develop to a point where we can isolate these differences, it might be possible to actually show what the taste of a given food item is, and potentially protect it under copyright. While waiting for this, we can eat our imitation Heksenkaas with reckless abandon.

01 November, 2018

Fixing Your Rights - The US Copyright Office Expands Right to Repair

The right to repair the devices, vehicles and other goods you own seems to be a given right when looked at on the face of it. After all, you bought the item, therefore you should be able to maintain it and try to prolong its lifecycle in your use; however, this is not exactly this simple. Some IP provisions hinder or even outright prevent the repair, modification or tinkering of those goods, particularly through copyright in proprietary systems to those goods. Many have fought over the right to repair, discussed on this blog before, but the line hasn't clearly been drawn in the sand as to what is okay and what isn't. In the light of this, the US Copyright Office was recently petitioned to rectify this wrong, and the right to repair movement took great strides in allowing this practices.

As a primer, under 17 USC 1201, a person is not allowed to "…circumvent a technological measure that effectively controls access to a work protected under this title". These types of measures include digital rights management software, or the encryption of software or underlying code in sophisticated machines or goods. More recent examples include the disabling of iPhones that detect third-party repairs or parts, and John Deere preventing tractors from being repaired under their user licences.

In a ruling released last week (including a very thorough background document here), the Copyright Office decided that owners of certain goods and vehicles could repair those devices without infringing on copyright.

Firstly, the Office allowed the 'jailbreaking' of computer programs (i.e. gaining access to the operating system to allow the installation and running of unauthorized software) relating to 'voice assistant devices like Amazon's Echo or Google's Home. The exemption already applied to smartphones, and is now extended to these types of devices.

Not all damage is fixable, even with extensive rights
The Office also focussed on computer programs that disabled the repair and diagnosis of land vehicles, specifically personal automobiles, commercial vehicles or mechanized agricultural vehicles (including any telematics systems, i.e. an in-vehicle computer). When the circumvention of the software is needed to repair, diagnose and lawfully modify the vehicles, the Office considers this circumvention to be lawful. They also expanded this to include the same for smartphones, home appliances such as fridges and HVAC or electrical systems. What needs to be noted is that 'maintenance' specifically only includes the "…servicing of the device or system in order to make it work in accordance with its original specifications and any changes to those specifications authorized for that device or system".

Any repairs discussed above are also allowed to be done by third-party vendors, and not simply the owner of the device and/or vehicle. This is a huge step, as the third-party repair market is important to support those who do not have the technical know-how or inclination to do their own repairs.The ruling also does not exempt some circumventions, including any non-land vehicles (such as planes and boats), or devices that do not fit into the categories set out above. One can understand the hesitation to give a very broad exemption by the Copyright Office, as this could have unintended consequences or provide for uses that should not be allowed for. This distinction will undoubtedly change, but incremental changes can hinder the steps towards progress in the long run. The Office also denied the right to repair in relation to gaming consoles, which raised strong concerns of piracy if allowed.

The expansion of the right to repair devices and vehicles is an important part of protecting the environment and minimising unnecessary purchases of new devices or vehicles when the repair of the old one would have been prohibitively expensive. Many advocates for this right will rejoice at the ruling, while manufacturers will be less than thrilled losing control over the devices or vehicles once sold to the end-user. It remains to be seen whether the Office will expand these exemptions in the future, but seeing their inclination to do so, this writer thinks these rights will only be expanded on once new technologies become more commonplace and the need for their repair necessary.

Source: iFixit

18 September, 2018

I Spy with My Little IP - An IP Address Not Enough to Identify Copyright Infringer, Says US Court of Appeals

The identification of infringers of intellectual property is incredibly important in order to mount a proper and, above all, fair prosecution of those who are infringing on your rights. This is, however, exceedingly difficult in the Internet age, where the person downloading a movie, for example, is difficult to tell from a household of four, let alone the swathes of nameless ‘individuals’ occupying Internet services. The IP address of a given for each computer, identifying them separately in a network when connected to it, has long been one way of distinguishing the infringers from other users. The protocol still has its issues in certainty, and therefore, is it a reliable piece of evidence when establishing liability? The US Court of Appeals took on this question not long ago.

The case of Cobbler Nevada LLC v Thomas Gonzales concerned the movie ‘The Cobbler’, for which Cobbler Nevada owned the copyrights to. Due to its popularity, the movie was swiftly shared on many websites online using the BitTorrent protocol. Cobbler Nevada identified one IP address in Nevada which downloaded and distributed the movie without authorization, later further identified as being Mr Gonzales’ internet service. The connection, however, was a freely accessible one, which was used by both residents and visitors at an adult care home. Legal counsel for Cobbler Nevada determined that they were unable to confirm that Mr Gonzales was the infringer in question. Nevertheless the company filed a complaint against him, alleging they copied and distributed the work online, basing this on the fact that he was the subscriber of the IP address used to do so.

The crux of the matter is whether the IP address used in the matter is enough to prove that Mr Gonzales had indeed been the infringing party. The Court correctly highlighted that “…a particular IP address (i.e., an account holder)… does not mean that the internet subscriber is also the infringer… simply establishing an account does not mean the subscriber is even accessing the internet, and multiple devices can access the internet under the same IP address”. This fact is further exacerbated by the fact that many people were able to freely access the connection at the location.

Cobbler Nevada promptly moved to more traditional
identification methods
The US court have firmly established that, for a claim to be established, you “…must show… the defendant himself violated one or more of the plaintiff’s exclusive rights”. The Court quickly determined that Cobbler Nevada had not done so in this case. As discussed above, their internal investigations yielded no confirmed result, and clearly led to unsubstantiated allegations of infringement. The claim was later amended to simply refer to the IP address and no particular defendant, which still left the claim with no clearly identified infringer.

The second claim revolved around contributory infringement, i.e. that Mr Gonzales had encouraged or facilitated the infringing activities using his network connection. To put into more concrete terms: "...one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another". Cobbler Nevada claimed that Mr Gonzales had failed to adequately police his Internet connection, especially in the light of several notices sent to him regarding the matter. The Court, yet again, dismissed this allegation out of hand, as the perfunctory allegation does not sufficiently link him to the alleged infringement. The courts have previously denied contributory liability merely through the possibility of the use of a technology to infringe in Sony Corporation v Universal City Studios (more on which here), which similarly would apply to an open Internet network.

Contributory infringement requires two strands of liability: (i) actively encouraging (or inducing) infringement through specific acts; or (ii) distributing a product distributees use to infringe copyrights, if the product is not capable of ‘substantial’ or ‘commercially significant’ non-infringing uses.

Cobbler Nevada lacked any allegations that Mr Gonzales had infringed along the first strand. They had done no acts to encourage anyone to infringe any rights, or materially contributed to the same. Similarly his Internet service was not capable of distributing a product or service that is not capable of substantial or significant non-infringing uses. The Court noted that Internet service owners should not have an affirmative duty to actively monitor their Internet connection.

The Court ultimately dismissed Cobbler Nevada's claim.

The case is an important milestone in establishing firmer rules of identification on the Internet. Should we simply use the closes possible approximator of liability we could expose swathes of people to direct or indirect liability, which is clearly not the intention of the legislation. While the lack of certainty in using IP addresses to identify potential infringers has been established before, this is an important reminder of the fact. Even so, infringers could face liability when identified via an IP address, so the decision is by no means absolution for the wicked.