24 March, 2016

IP Iustitia Turns 3!

Yet another year has passed, and IP Iustitia takes a moment to celebrates its 3rd anniversary! Both the year 2015 and early 2016 have been very eventful in the IP space, and this writer for one does enjoy taking a breather to commemorate this great occasion, if only briefly.

In its inception in early 2013, I never imagined this blog being this popular and drawing in this much interest in the IP community as it has today. Through the blog I have gotten to meet some amazing people (virtually or physically) and to share my meager musings with thousands of people; something which I do not take for granted! It has been a thrilling ride, and one that I aim to keep going for years to come.

As in earlier anniversary editions, here are some details on the blog's current numbers, figures and statistics, should you be interested in knowing what three years of active blogging might entail.

  • The blog has been visited by over 110,000 people from dozens of different countries, with the US, UK and other English speaking countries forming the bulk of the visitors. 
  • The blog's Twitter account, @IPIustitia, has amassed an amazing 767 followers (as of today) over these three short years, including a great deal of retweets, likes and discussion surrounding posted articles.
  • The blog also hosts nearly 200 articles discussing a myriad of topics and cases. Should you find that a topic or case that you would want has not been discussed, please email me at jani.ihalainen(a)gmail.com and suggest it.
  • The blog has over 200 subscribers via its Feedburner RSS service, with more subscribing via other services as well. 

But, as always, the reason why I keep writing these articles is above all else you, the reader. Although the blog's beginnings were mainly as a platform to indulge my own academic curiosity (and still is), the feedback, thoughts and connections I have made through it have been what keeps me writing and sharing my thoughts with you all. Whether you are a loyal reader, or merely a casual passer-by, I wanted to say from the bottom of my heart: Thank you! The IP community is a great one, and I am incredibly proud to be a part of it, and to share this topic with many of you who are truly passionate and incredibly knowledgable about IP.

Please keep sending me your thoughts, questions and feedback via email, and do subscribe to the above services if you do enjoy what IP Iustitia has to offer.

Here's to a great 4th year!

21 March, 2016

A Positive Signal - No Liability for Providers of Free WiFi, Says AG Szpunar

As discussed on this very blog over 6 months ago, free public WiFi is something we all take for granted, even if just a little. Having access to the worldwide web at most restaurants, coffee shops and even the Underground in London is nearly ubiquitous in the developed world, and one that presents both opportunity for its users and liability for those who provide it, especially when it comes to the infringement of intellectual property rights. The CJEU has been slated to answer the question of third-party liability for those who provide free WiFi in the case of copyright infringement, and awaiting that the opinion of Advocate General Szpunar has given their answer as to this highly important question.

The case of Tobias McFadden v Sony Music Entertainment Germany GmbH deals with Tobias McFadden, who owned a business selling and renting lighting and sound systems for various events, and offered free WiFi access at his store for any visiting patrons. The Internet connection offered had no password protection, nor did Mr. McFadden monitor the users taking advantage of the free WiFi. In early September 2010 such a user downloaded a song illegally using his WiFi connection, and Sony Music subsequently took him to court for copyright infringement as a liable third party.

The Regional Court of Munich referred the matter to the CJEU, who had to answer several questions relating to Article 12(1) of the E-Commerce Directive, pertaining to whether the provision of the WiFi would amount to the provider as being a mere conduit, or whether they would be liable for the infringement indirectly.

The Advocate General grouped the questions into two more specific references: "...whether a professional person... who, in the course of business, operates a free, public Wi-Fi network, falls within the scope of application of Article 12 [as a mere conduit]", and therefore is not liable for the infringement of any other parties using that WiFi (questions 1-3); and, if Article 12 does apply, the he needs to interpret the limitation of liability of intermediary service providers in that Article (questions 4-9).

The Scope of Article 12

The scope of Article 12 hinges largely on the potential economic nature of the provision of the service, as defined in Article 2(a) of the same Directive, and the meaning of 'providing' access to a network under Article 12.

A lack of WiFi would cause some issues
The Advocate General addressed the first point by concluding that the provision of free WiFi would indeed be an economic activity, as "...where, in the course of his business, an economic operator offers Internet access to the public, even if not against payment, he is providing a service of an economic nature, even if it is merely ancillary to his principal activity". The Advocate General added onto his point, setting out that the provision of the Internet access necessarily takes place in an economic context, that "[a]ccess to the Internet may constitute a form of marketing designed to attract customers and gain their loyalty. In so far as it contributes to the carrying on of the principal activity, the fact that the service provider may not be directly remunerated by recipients of the service is not decisive.". What remains key here is the ancillary nature of the free WiFi, and this writer agrees, since even if they WiFi is not the focal point of the business, it drives foot traffic and adds value to the provision of the main service, creating a service of economic nature (which is important, since nature does not necessarily mean direct economic benefit)

He then turned to the matter of the meaning of 'providing' access to a network, determining that it means "...that the activity in question enables the public to have access to a network and takes place in an economic context". The intent of projected role of the provider is not relevant, but merely the provision of the service in the above economic context.

The Advocate General then concluded that: "...Articles 2(a) and (b) and 12(1) of [the] Directive... must be interpreted as applying to a person who, as an adjunct to his principal economic activity, operates a Wi-Fi network with an Internet connection that is accessible to the public free of charge".

Interpretation of Article 12

Questions 4-9 concerned the specific interpretation of Article 12, and will be dealt with in more brevity below, although discussed quite extensively by the Advocate General. The questions are, specifically, whether a national court could penalize an intermediary service provider, in the event of infringement through their service, awarding damages, costs or an injunction as the form of the penalty (questions 4-5). Additionally, if this would not be generally possible, whether it would be possible to limit the extent of Article 12 (question 6), or through other unwritten requirements (questions 7-8). Finally, the last question asks for the limits of any injunctions that may be awarded against an intermediary service provider (question 9).

In answering question 4 and 5 the Advocate General saw that the limitations of liability for intermediary service provides would extend to damages and pecuniary claims, such as for costs. In his view this is precluded by Article 12(1), and would have an impact on the development of the service provider's business, irrespective of it being damages or punitive costs. He did, however, accepted the possibility of injunctive relief, and any ancillary penalties thereto. In summary to questions 4 and 5, he stated that "Article 12... precludes the making of any order against a provider of mere conduit services that entails a finding of civil liability against that service provider... [it] therefore precludes the making of orders against intermediary service providers not only for the payment of damages, but also for the payment of the costs of giving formal notice or other costs relating to copyright infringements committed by third parties as a result of the information transmitted. It does not preclude the granting of an injunction, non-compliance with which is punishable by a fine".

In relation to questions 6,7 and 8 (seeking to clarify the possible exclusion of actions taken against intermediary service providers), the Advocate General sought to strike a balance per recital 41 of the Directive. In his opinion, the Advocate General saw that there should be no limitations imposed on actions that can be taken against providers, though taking into account their actions when the infringement is brought to their attention. He also observed that the conditions under Article 12(1) are non-exhaustive, and could be added to with additional unwritten requirements.

Finally, he turned to the final 9th question, which asks whether national courts could impose injunctions on service providers against future infringement on their network. He saw that this was indeed possible, but this injunction could not impose a future obligation of monitoring the network or breach any other EU or national legislation (including the basic human rights afforded in the European Convention on Human Rights). He summarized that the injunction can only issued if the provider cannot, or will not, address the infringement in one of three measures: the termination of the internet connection (of the infringer); password-protection of the connection; or the monitoring the connection, but only to ensure the future infringement of rights using the same connection (observing time limitations on said monitoring).

The ultimate decision of the CJEU is pending, and will potentially impact the provision of free WiFi in the EU should they not follow the AG's opinion in this matter. This writer expects them to follow the opinion, as it clearly shows a practical and functional approach to a complex, and sensitive question. Should they not do so, the provision of free WiFi could be severely hindered, or even ended by some providers, which would be a big problem for those who cannot necessarily afford their own connections. Either way, this writer is anticipating the CJEU's decision with great interest.

Source: IPKat

10 March, 2016

All Packed Up - UK Supreme Court Rejects Trunki Appeal

Community Registered Designs rarely get their time in the spotlight, but the Supreme Court's decision on the Trunki saga has been one that many intellectual property practitioners have been waiting for. The case is an important one, and sets the tone for the future of 3D registrations as designs, potentially impacting the vast amount of CRDs that use these types of illustrations (mainly through the use of CAD imaging) as their registration. With bated breath this writer awaited the decision, which was published yesterday.

The case of PMS International Group Plc v Magmatic Limited dealt with the Trunki travel case, designed by Robert Law in the late 1990s (at the time called the 'Rodeo'). The case is intended for kids, allowing them to ride the suitcase as well as use it in its traditional sense, incorporating child-friendly animal themes in its finished look. Mr. Law subsequently sought registration for the design, and attained his CRD in 2003 (No. 43427-0001), exclusively licencing the sale and manufacture of the design to Magmatic Limited, his own company. The registration used CAD imaging in the illustration of the Trunki suitcase, using a degree of tonal contrast to showcase the different components of the design (incorporating no decorations apart from the tonal differentiation of the wheels, "horns" and the strap at the top, for example). PMS International, having noted the success of the Trunki case, designed and manufactured its own version called the Kiddee Case, which incorporated a very similar design and child-friendly decorations (although, as the Court noted, with some distinct elements in the decorations and/or colors used). Magmatic then started the proceedings over the infringement of their design, ultimately culminating in the Supreme Court's decision.

What the Supreme Court had to answer was whether the Kiddee Case "...produce[s] on the informed user a different overall impression" from the registered Trunki design, therefore not infringing the design. This includes, to put it plainly, the appearance of the two products, especially in the light of the features shown in the CRD, reflecting the choices of the applicant at the time of filing (restricting or broadening the registration based on the inclusion or exclusion of features and/or ornamentation).

The Court had to deal with the disagreement between Justice Arnold and Lord Justice Kitchin in the first instance and appeal decisions, which dealt with the absence of ornamentation and the effect of the included two-toned coloring in the CRD documentation as detailed above. Lord Neuberger, handing down the unanimous decision of the Court, dealt with the disagreements in three parts, discussing each affecting element individually per the Court of Appeal's decision.

The horned animal appearance

In the judgment of the Court of Appeal, Lord Justice Kitchin considered that Justice Arnold had not fully given weight to the overall impression of the CRD as a 'horned animal', and the distinction between it and the more 'insect' appearance of the Kiddee Case, resulting in the Kiddee Case not infringing the design.

The Supreme Court agreed with Lord Justice Kitchin, and determined that Justice Arnold had not given proper weight to the overall appearance of the two cases. This is clearly a subjective assessment on Lord Neuberger's part, and this writer, although can see his point, will disagree that the judge did not consider the overall impression. Justice Arnold seemed to focus on the suitcase shape of the CRD, rather than its fanciful impression, and both perspectives can be accepted, however, he did not entirely dismiss the impression the design made as an animal or creature with 'horns'.

Decoration of the Kiddee Case

Similarly, Lord Justice Kitchin disagreed with Justice Arnold on the ornamentation of the Kiddee Case, and the lack thereof in the CRD. In his mind, the lack of ornamentation made the overall impression of the CRD seem more like a horned animal, whereas the ornamentation in the Kiddee Case highlighted its distinction from the former as a bug with antennae (or a tiger with ears), forming a wholly different impression on an informed user.

Intricate design or not, Trevor struggled with suitcases
The Supreme Court, again, agreed with Lord Justice Kitchin, confirming that "...the absence of decoration on the CRD reinforced the horned animal impression made by the CRD". Lord Neuberger did, however, consider that the inclusion of some ornamentation could potentially detract from the overall impression given as a horned animal, if sufficiently distinctive or eye-catching. This writer would wholly disagree with Lord Neuberger, and thinks that the lack of ornamentation should focus the inspection on the non-fanciful elements of the infringing product, and should not be included in the consideration of overall impression. What is important in the CRD is the shape or design of the product, and the lack of ornamentation should focus the assessment on just that, the design, rather than additional elements that can (arguably) be irrelevant to the design of an item, rather than its aesthetic appearance.

Lord Neuberger did address the appellant's concerns over the lack of ornamentation and its impact on a CRD (or in subsequent infringement actions), albeit obiter. In his mind the "... absence of decoration can, as a matter of principle, be a feature of a registered design" and that "...if absence of ornamentation is a feature of a registered design, that does not mean that because an item has ornamentation, it cannot, for that reason alone, infringe the registered design in question: it merely means that the fact that an allegedly infringing item has ornamentation is a factor which can be taken into account when deciding whether or not it does infringe that design".

His Lordship focused on the images as CAD images, rather than line drawings, and determined that the lack of ornamentation (although including colors and/or textures) would be treated as potentially distinguishing in the former, but not the latter. The inclusion of ornamentation reinforced the former point on distinction as different creatures, rather than be a full point of contention in its own right. He concluded that (again, obiter) "...the point of principle [is] that absence of ornamentation can be a feature of a Community Registered Design".

The two-toned coloring of the CRD

The final point of contention was Lord Justice Kitchin's disagreement in the use of tonal colors in the CRD, meaning the difference in color (gray and black) in some features, like the wheels or the strap on top. In his mind, the difference is an intention to include contrasting colors, rather than to simply distinguish the components, which implies a desire to use those contrasting colors in the actual registration as defining features. This brought into focus the color scheme of the Kiddee Case, further impacting the above assessment on its overall impression through these ornamental features. Arguably one can agree with the Supreme Court here, as the inclusion of different colors will be taken as that, even if the clear intention to differentiate the parts was not there at the time the application was drafted. Whether this is necessary or useful for the purposes of CAD drawings is beyond this writer's knowledge, but would be an interesting aspect of discussion if this is indeed the case.

Lord Neuberger agreed with Lord Justice Kitchin, and saw that the inclusion of contrasting colors in the registration (with or without the intent to do so) bares a need for the items to be compared in the same vein, i.e. through an assessment of not only shape, but color as well. He concluded that "...the design claimed in this case was for a wheeled suitcase in the shape of a horned animal, but that it was not a claim for the shape alone, but for one with a strap, strips and wheels and spokes in a colour (or possibly colours) which contrasted with that of the remainder of the product". The Supreme Court therefore upheld the decision of the Court of Appeal, and saw that the Kiddee Case did not infringe the CRD and made a different overall impression to the Trunki.

The Supreme Court also rejected a referral to the Court of Justice of the EU, determining that there is no question that requires answering, even in the light of the consideration that a lack of ornamentation could be a feature, which will remain a point of contention.

The case clearly will alter CRD practice, especially when CAD images are quite often used as the basis of the registration (with line drawings clearly being the preferred option from now on). What this writer finds perplexing is the lack of concrete answers, especially in the light of the question of a lack of ornamentation as a feature, and further laments the Supreme Court's rejection of a referral to the CJEU on these points. Lord Neuberger restricted his comments to obiter only, and a lack of referral will leave this question in the shade for the foreseeable future. Nevertheless, the Trunki saga has been an eventful one, and this writer has enjoyed the ride, but is saddened by the Supreme Court's lack of answers and an arguable wrong outcome.

04 March, 2016

Free to Sing - 'Happy Birthday to You' In Public Domain After Settlement

The recent saga dealing with the song 'Happy Birthday to You' has been discussed at length by many intellectual property commentators, including in this very blog here and here. The ownership of the copyright in the song, and the licencing practices surrounding it handled by Warner/Chappell, have been a big point of contention, with a recent ruling by the District Court of Central California declaring the copyright in the works to not reside with Warner/Chappell due to a lack of proper transfer of the rights to the ultimate entity. Warner/Chappell undoubtedly would have appealed the earlier decision, but the matter has since come to an abrupt end after a settlement between the relevant parties.

Per the Settlement Agreement, accessible here on Scribd, there are some terms of interest that must be mentioned.

The Settlement was a bitter-sweet end for Lisa
Section 2.1 of the Agreement mandates the establishment of a Settlement Fund, aimed at remunerating those who have paid licencing fees for the use of the song 'Happy Birthday to You'. The maximum amount allocated to the fund, if needed, would be $14 million, clearly demonstrating the understanding that there will be a considerable amount of entities with the relevant Settlement Class (considering that each licence is roughly $1500). This would include all persons who have paid such licencing fees since the 3rd of September 1949 (including, among others, to collecting societies or direct licences to Warner/Chappell). Even so, the realistic periods and sums of payment are set for two specific groups: payments made on or after the 13th of June 2009, or payments made before that date. The former group is entitled to all of their payments, but the latter only a share of 15% of what they have paid out. The difference, according to the claimant's lawyers, is due to the Statute of Limitations, enabling them to recoup some of their costs even in the absence of a proper claim due to the limitation period.

Additionally, section 2.2 sets out an express relinquishment of all claims of ownership over the song, and a requirement to no longer pursue any fee payments over the use of the song. Furthermore, the parties agree that the song is (under all likelihood, outside of any third-party claims in rights) in the public domain after the 8th of February 2016. However, Warner/Chappell did expressly defend their position in the settlement, and retained their position as the holders of the rights in the song. This seems to be mainly a point of principle, as the settlement does dictate that the song is in the public domain.

The Agreement also stipulates certain actions that need to be taken, such as the creation of a website and other administrative duties involved with the settlement and the payment of the settlement fees.

Arguably, the settlement is not much to write home about, but is an important illustration of the importance of challenging even the oldest, most well-known rights, when needed. The first instance decision set the tone for the settlement, and it shows in the one-sidedness of the Agreement, especially in the financial side of things. Nevertheless, the Happy Birthday saga has been an interesting one, and this writer, although underwhelmed by a settlement rather than a prolonged legal battle, is happy that we can all once again sing the song where ever and when ever we want.

Source: Ars Technica