26 July, 2016

Beyond the Horizon - Intellectual Property Law in Space

Even with the recent success of the Mars Exploration Rover program and the Juno mission, mankind is still quite far from a life outside of our own little blue planet. While we look up at the sky in anticipation, hopefully one day being able to colonize a far-away place (for better or worse, dependant on your perspective), we have to consider the ramifications of this endeavor in terms of the law. 129 nations so far have signed the Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, which dictates that outer space is the common province of mankind, and that all activities conducted therein should be done for the benefit of humanity, not a single nation. That being said, this writer is not concerned with the broader picture, but likes to hone down on the things that matter, namely intellectual property. Therefore, what is the possible position in intellectual property law in our interstellar future?

As there is not much concrete legislation dealing with this area, one can only speculate as to what it might be; however, this writer will aim to share his thoughts on this as best he can on the basis of what exists already.

The closest mankind has reached out into space and inhabited for longer periods of time than hours or days is the International Space Station. The primary legal framework for the ISS is the International Space Station Intergovernmental Agreement, which sets out a "...long term international co-operative frame-work on the basis of genuine partnership, for the detailed design, development, operation, and utilisation of a permanently inhabited civil Space Station for peaceful purposes, in accordance with international law". Further, according to Article 5 of the Agreement, all registered parts of the ISS and its personnel are governed by the laws of their country, which adds a layer of complexity for IP in space. Article 21, however, discusses IP specifically in the context of the ISS. It states that "...for purposes of intellectual property law, an activity occurring in or on a Space Station flight element shall be deemed to have occurred only in the territory of the Partner State of that element's registry". This would indicate that any inventions or findings made would be protectable (given favorable national legislation), although this could still be disputed. The Article also touches on infringement, only allowing for the recovery of damages in one European country, rather than all of them (provided infringement has happened in more registered parts of the ISS).

We're not the only ones seeking our fortune in the stars...
The Treaty on Outer Space also acknowledges the jurisdiction of nations over their registered materials and people, but in the context of Article 1 and 2 of that treaty, all exploration in outer space is for the benefit of all mankind, and no materials or places (including the Moon) can be appropriated by any nation as well. This raises a concern when trying to claim IP rights in findings or materials, and arguably no nation or person could claim them under the treaty.

Most nations do not have provisions dealing with IP in space, or any related issues. The United States, however, has enacted a provision that deals with inventions in space, specifically 35 USC 105. It sets out that "Any invention made, used or sold in outer space on a space object or component thereof under the jurisdiction or control of the United States shall be considered to be made, used or sold within the United States for the purposes of this title, except with respect to any space object or component thereof that is specifically identified and otherwise provided for by an international agreement to which the United States is a party". This would mirror the international agreements above, where US national, space station modules etc. are treated as being under US jurisdiction. One could still envision issues, as discussed above, when it comes to the agreements the US is a party to, but it seems probable that most nations would treat intellectual property in a similar fashion in future legislation.

There remain some issues that do require clarification on a dawning Space Age. As set out in the report of the Workshop on Intellectual Property Rights in Space in 1999 (poignant even after over 15 years) that "More attention should be paid to the protection of intellectual property rights, in view of the growth in the commercialization and privatization of space-related activities... [and to develop] a view to enhancing international coordination and cooperation at the level of both the State and the private sector. In particular, the possible need for rules or principles covering issues such as the following could be examined and clarified: applicability of national legislation in outer space; ownership and use of intellectual property rights developed in space activities; and contract and licensing rules". This writer does agree, although reluctantly, since the inevitable commercialization of space materials, inventions and findings will be a reality in the coming decades, and this needs to be both protected (to incentivize that exploration and invention) yet regulated to retain a high level of openness and freedom for all of mankind and the Universe. For a more in-depth look into other issues, one should consult the WIPO paper on Intellectual Property and Space Activities, which, although a little dated, is a great summary of outstanding questions even today.

Space is indeed in many ways the final frontier, and the law will have to catch up with this new world eventually. While there is no pressure to develop the law in relation to space activities, in the coming decades this will become more and more pertinent, and intellectual property will be at the forefront of this development due to the value of technology, invention and exploration in the field (especially to corporations and other private ventures). It remains to be seen how we treat this future, but one can only hope it'll be a future that holds sharing and equal benefit above individual profiteering.

20 July, 2016

Watch the Fight - Court of Appeal Affirms Blocking Order for Cartier Against ISPs

Just as was discussed last week, the issue of counterfeit goods has plagued many retailers, brand owners and online sellers for years, with the availability of Chinese (or otherwise) manufactured counterfeit items being sold for pennies on many websites. While qualitatively often worse than the real thing, the lost sales and revenues from the counterfeit business are what ultimately matter, and brand owners have tried to combat this issue through various means. One such tool has been to utilize the ISPs as third-party intermediaries in stopping access to these sites, and with a High Court ruling allowing for ISPs to be possibly on the hook for this enforcement (more on which can be found here), the matter seemed all but settled. The providers appealed the case, and the Court of Appeal handed down its decision only a couple of weeks ago.

As a brief primer to those who are not familiar with the case, Cartier International AG & Others v British Sky Broadcasting Ltd & Others dealt with the sale of counterfeit Richemont goods, encompassing the Cartier and Montblanc brands specifically. The goods were sold on a set of specific websites, and the claimant pursued an order to block access to these websites through the ISPs. They contested the application, which was subsequently given to the claimant, for which the ISPs appealed to the Court of Appeal.

The first point of contention discussed by the Court was that of jurisdiction, specifically under Article 8(3) of the InfoSoc Directive, Article 11 of the Enforcement Directive (and the lack of its implementation into UK law) and section 97A of the UK Copyright, Designs and Patents Act 1988, which, arguably, does not allow for the granting of an injunction under domestic law in the UK. Cartier contended the assertion that the lack of implementation of Article 11 of the Enforcement Directive did not preclude jurisdiction, which stemmed from section 37 of the Senior Courts Act 1981.

A blocking order: the red card of the Internet
Lord Justice Kitchin, who delivered the majority judgment, determined that, although the ISPs are not guilty of any wrongdoing (as they did not encourage or participate in the infringement themselves) nor did they owe a duty of care (per CBS Songs v Armstrad) to Richemont, the court's would still have jurisdiction to give the order in the case. The rejection of this would, per his assessment: "...impose a straightjacket on the court and its ability to exercise its equitable powers which is not warranted by principle". The ability to impose injunctions was not restricted to apply to only infringers, and could be used in 'new ways'. This extension was also, in his view, fully covered by Article 11 of the Enforcement Directive.

The law Lord saw no issues with the provision of the order by law, especially in the light of limitations to the rights and freedoms set out in the Charter of Fundamental Rights of the EU.

To be able to issue a blocking order certain threshold conditions have to be observed. These are, as set out by Lord Justice Kitchin: "...First, the ISPs must be intermediaries within the meaning of the third sentence of Article 11 [of the Enforcement Directive]. Secondly, either the users or the operators of the website must be infringing the claimant's trade marks. Thirdly, the users or the operators of the website must use the services of the ISPs. Fourthly, the ISPs must have actual knowledge of this". After some discussion (which this writer consciously omits for brevity's sake), the Court did determine that the threshold conditions were indeed satisfied in this instance.

Finally, the Court dealt with the matter of principles to be applied  when considering the imposition of a blocking order. These were set out by Lord Justice Kitchin: "...the relief must (i) be necessary; (ii) be effective; (iii) be dissuasive; (iv) not be unnecessarily complicated or costly; (v) avoid barriers to legitimate trade; (vi) be fair and equitable and strike a "fair balance" between the applicable fundamental rights; and (vii) be proportionate". Primarily what these conditions operate as are a safe-guard for too broad, onerous and one-sided orders, allowing for a certain degree of leniency to be applied in the consideration of any blocking orders. This, however, has to be assessed with the substantiality of the websites in mind (one would think this would encompass user amounts, sales and accessibility, and the number of websites applied for, for example) and the need for remedies to properly function as safeguards to abuse.

Lord Justice Kitchin did see that the order could be justified in the light of the above principles in this instance. The Court ultimately disallowed the appeal and sustained the order.

The decision was by no means without its issues, and one primary concern was raised by Lord Justice Briggs on costs. While the majority agreed that the costs and time should be imposed on the ISPs, Lord Justice Briggs saw that these should be not placed on the ISPs, but the rightsholders (and this writer, agreed with him, as the ISPs, functioning as non-active entities in the infringement process, would be unduly burdened by the possibility of dozens/hundreds of blocking orders and their subsequent costs). Even though the costs are largely modest, as observed by Lord Justices Kitchin and Jackson, burdening the ISPs with them would seem onerous, especially considering they derive no benefit from the exploitation of those rights.

In the end the case is a very interesting example of the law adapting to its new playing field, and while it does provide a great opportunity for rightsholders, it does also cause some concern for ISPs and the automation of enforcement on the Internet.  In any event, this writer does envision the case possibly being appealed to the Supreme Court, who would have the final say in the matter.

12 July, 2016

The Physical and Intangible - CJEU Allows for the Prevention of Sale of Infringing Goods in Physical Marketplaces

The sale of online goods has been both a revelation and a curse for retailers, but a particular problem when it comes to deal with counterfeit or otherwise infringing goods being sold. Cases such as Cartier v British Sky Broadcasting have seemingly helped to remedy this issue, however, whether this rationale applied to the physical world, specifically in marketplaces and the like (as fellow Londoners can attest, many of these market stalls sell items of questionable origin). This particular thorn in retailers' collective sides is one that cannot be so easily removed, but in the vein of the above, could the stopping of online infringement be extended to applying outside of the Internet to these physical locations? The Court of Justice of the EU sought to clarify this position in a recent ruling.

The case of Tommy Hilfiger Licensing LLC and Others v DELTA CENTER a.s. dealt with the sale of fake goods at the Prague market halls (locally known as Pražská tržnice), where individual traders could sub-lease different sales areas within the halls to sell their items. Upon the sub-leasing of a sales space, the traders would be subject to an obligation to "...respect the regulations to which their activities are subject", i.e. law and regulations governing the sale of goods in the Czech Republic and the EU. Additionally, the traders were given a brochure that prohibits the sale of counterfeits under the threat of termination of the lease. It transpired that many of the stalls sold counterfeit goods of the applicants' brands, who subsequently took Delta Center to court over the issue.

The Czech court referred two questions to the CJEU: 1. Whether the third sentence of Article 11 of the Enforcement Directive encompasses a person with a lease of premises in a market, who provides the spaces for the purposes of selling goods, as an "...intermediar[y] whose services are used by a third party to infringe an intellectual property right"; and, is it possible to impose those persons the same impositions provided in the case of L’Oréal and Others v eBay? These measures would, as summarized by the Court, would allow for the Court to "...take measures aimed at bringing those infringements to an end and measures seeking to prevent further infringements".

The Court continued that, for an economic operator to fall under the definition of an 'intermediary', it must provide a service capable of being used by one or more persons in order to infringe one or more intellectual property rights, irrespective of a maintained relationship or not. The provider would still fall under the definition even if it does not provide a service other than the one used to infringe the aforementioned rights.

Ben's counterfeit spoon business took a hit from the ruling
Following a brief discussion of admitted facts, the Court quickly determined that "...an operator which provides to third parties a service relating to the letting or subletting of pitches in a marketplace, thanks to which they have access to that marketplace and offer for sale in that marketplace counterfeit branded products, must be classified as an ‘intermediary whose services are being used by a third party to infringe an intellectual property right’ within the meaning of that provision". The Court's rationale here is correct in this writer's opinion, since the provision of the service is integral to the infringement of the rights by third-parties, irrespective of their acquiescence to those activities. Following this they continued that the realm where the provision of services happens, i.e. physical or electronic, is irrelevant, which, again, makes sense considering the Court's earlier decision in L'Oreal. The Court therefore concluded that the third sentence of Article 11 would include the tenants subletting the plots that are used to sell infringing goods.

The Court then turned to the second question, which dealt with the ability to impose measures against those sellers per the L'Oreal case.

After a brief discussion of the nature of those measures that can be imposed (that they have to be e.g. proportionate, equitable, and not be barriers to legitimate trade), the Court saw that "...the conditions for an injunction within the meaning of that provision against an intermediary who provides a service relating to the letting of sales points in market halls are identical to those for injunctions which may be addressed to intermediaries in an online marketplace, set out by the Court in the judgment of L'Oreal". Arguably, this writer yet again agrees with the Court's assessment, as the provision of measures against infringing activities should function equally, when possible, across all mediums of sale, irrespective of whether they are physical or not.

The decision is very much of common sense, equating the internet as an equivalent space to physical marketplaces, which, considering the efficacy of the law's interpretation, makes sense. It will be interesting to see whether the decision is a spur to the industry in the prevention or addressing of the sale of physical counterfeit goods, but this writer thinks it will maintain the status quo, purely due to the expense and time taken up by enforcement activities. Even so, it is nice to see a parallel being drawn between these worlds, even when we shift to an ever-more electronic existence.

Source: IPKat

08 July, 2016

The Digital Realm - Lending of e-Books is Allowed under the Rental and Lending Right Directive, Says AG Spuznar

The days of the library seem to have been over for some years now, with e-book sales reaching £2,1 billion in 2015, and most young people are blissfully unaware of that wonderful place where books are free and (nearly) endless. While modern media consumption has clearly been a catalyst in this paradigm shift, e-lending was touted as the next big thing, especially since many consume their literary share exclusively in electronic form. With this change in consumption, the question of whether libraries can indeed lend out electronic copies of books was dealt with by the Advocate General prior to a ruling by the CJEU.

The case of Vereniging Openbare Bibliotheken v Stichting Leenrecht involved two stakeholders in relation to the above question. VOB are an association representing of all of the public libraries in the Netherlands, who argued that electronic lending should apply equally to physical lending under Netherlands' (and EU) law, specifically through the Rental and Lending Right Directive. The other side, Stichting Leenrecht, are a collection society for authors in relation to the public lending derogation under Article 6 of the Directive, and argue that e-lending does in fact fall under the scope of the lending right. According to VOB, this lending would be done similarly to physical copies, i.e. one copy for one user, making it inaccessible to others during this period, therefore being covered by the derogation; a position that Stichting Leenrecht contest.

The first question, summarized by the Advocate General, asked whether Article 1 of the Directive "...is to be interpreted as meaning that the making available to the public, for a limited period of time, of electronic books by public libraries falls within the scope of the lending right enshrined in [the Article]".

Will was thrilled about the opinion for the sake of his arms
Advocate General Spuznar discussed the evolution of the technology after the setting of the legislation (having its origins in legislation from 1992), and saw that "...at that time, the EU legislature did not contemplate the inclusion of the lending of electronic books within the concept of lending of Directive 92/100, if for no other reason than because the technology for commercially viable electronic books was then only in its infancy". Clearly, the Advocate General's position here is one of pragmatism, and this writer concurs with his thoughts here, since technological evolution, even when not contemplated by the legislature at the time, should be included when possible. His continued, in a similar vein to this writer's thoughts, that the courts should "...take[] into account developments in technology, markets and behaviour and not to fix such acts in the past by adopting too rigid an interpretation... An interpretation of this kind, which might be described as ‘dynamic’ or ‘evolving’... [and is important] particularly in fields where technological progress has a profound effect, such as copyright". His opinion concludes that the borrowing of library books in electronic form illustrates the phenomenon perfectly, and a looser, inclusionary interpretation would lead to a better enforcement of the law in the new technological world. This adaptation is also in the interests of the authors and the public at large in being able to access culture and scientific knowledge more readily.

In short: "...Article 1 includes the making available to the public of electronic books by libraries for a limited period of time".

The Advocate General then discussed the wording and structure of the Directive, quickly dismissing any claim as to it being contrary to the Directive in allowing for electronic books from benefitting from the derogation. Similarly, he addressed possible issues with the copyright system in Europe and international obligations, concluding that there are no issues with neither provisions in the light of the above. 

In answering questions 2 to 4, he determined that should a Member State wish to introduce provisions enshrining the derogation in Article 6 in national law, they, however, are free to preclude the derogation from applying prior to initial circulation by the author and/or without proper consent from the same as to the lending of a given work. This cannot unduly restrict the derogation, but can be applied within reason.

The opinion in the case, as stated above, is one of pragmatism and reason, allowing for the development of technologies and new ways of distributing lawful copies to those who otherwise might not be able to access them. New technologies are being created all the time, and the law's rigidity would only deter the proper application of those technologies, often to the detriment of the general public. We remain to see whether the CJEU follow the Advocate General's opinion, and this writer for one, hopes they do.

Source: IPKat