28 July, 2020

None of My Concern - CJEU Looks at TM Infringement on Online Marketplaces and Operators' Liability

Online business, particularly for consumer goods, has exploded in the last ten years, and this writer for one can attest to being one of the most rabid online shoppers. However, with the explosion in popularity comes the legal challenges that often accompany popularity, especially due to the use of third party sales platforms to sell illegitimate goods to unsuspecting consumers. The misuse of trademarks by third-party sellers is not a new thing to be battled over in the courts, but online platforms like Amazon do present new challenges as to the liability of the marketplace itself, which allows for the sale of these goods with relative impunity. Even with this in mind, the CJEU has been set up to answer the question of whether platforms like Amazon can have any liability in relation to the misuse of trademarks by sellers and handed down their judgment on this topic only a few weeks ago.

The case of Coty Germany GmbH v Amazon Services Europe Sàrl concerned the sale of knock-off Davidoff perfume on Amazon. The claimant, Coty, owns the rights to distribute Davidoff perfumes in the EU under the registered trademark (EUTM 876874). After a number of test purchases on the Amazon platform for Davidoff perfumes sold by third parties, with orders being fulfilled by Amazon, Coty pursued the platform itself due to the infringement of the trademark by the third-party sellers. Coty pursued an order that third-party sellers, and Amazon, would not be able to stock the knockoff Davidoff goods - with the matter ultimately ending up with the CJEU through the German courts.

The CJEU only had to look at one question, which asked "...whether Article 9(2)(b) of Regulation No 207/2009 and Article 9(3)(b) of Regulation 2017/1001 must be interpreted as meaning that a person who, on behalf of a third party, stores goods which infringe trade mark rights, without being aware of that infringement, must be regarded as stocking those goods in order to offer them or put them on the market for the purposes of those provisions, if that person does not itself pursue those aims". In essence, the question concerns liability for the proprietor over the sale of goods on an online marketplace, like Amazon.  

As a part of the prohibitions under Article 9(3)(b), a third-party is prevented from offering trademark protected goods, putting them on the market or stocking them. This could include the proprietors of online marketplaces if they are seen to be doing this through the offering of goods on their website by third-party sellers. 

As a part of the platform's service, Amazon stored the goods of third-party sellers, including the counterfeit perfume, which are sold on the platform and processed by Amazon after sale. The Court therefore had to determine whether such a storage operation may be regarded as 'using' or 'stocking' the trademark goods under the above Regulations. 

According to case law, 'using' a trademark entails active behavior and direct or indirect control of the act constituting the use, which includes the activities under Article 9 of the Regulations. However, the prohibitions only apply to third-parties that have direct or indirect control of the act constituting the use, and can therefore comply with those prohibitions. 

Also, the Court noted that operators of e-commerce platforms are not using trademarks in relation to goods sold by sellers on that platform, and the ultimate 'user' of the trademarks is the seller. Similarly, any warehouse-keeper who is sent goods to be held for sale does not use the trademarks contained in those goods. 

Following an extensive discussion of the above precedent and other cases, the Court determined that "...in order for the storage of goods bearing signs identical, or similar to trade marks to be classified as ‘using’ those signs, it is also necessary... for the economic operator providing the storage itself to pursue the aim... which is offering the goods or putting them on the market". In essence this means that requires Amazon, or other similar operators, to actively offering goods they hold for sale, and not simply allowing for third parties to do so using their platform (and their logistics facilities).

This led the Court to conclude that Amazon was not using the trademarks when third parties sold goods through their platform. 

The Court then summarized the matter as "...a person who, on behalf of a third party, stores goods which infringe trade mark rights, without being aware of that infringement, must be regarded as not stocking those goods in order to offer them or put them on the market for the purposes of those provisions, if that person does not itself pursue those aims"

The decision makes perfect sense, since Amazon, or any other similar operator, is not actively selling any counterfeit goods on their platform, but merely enable third parties to be doing so. To conclude that the marketplaces themselves would be liable would hinder their effective operation, and potentially cause them to be liable for 'actions' that they have not taken; namely selling goods unknowingly that are counterfeit. The decision does, however, put them on notice, and ensures that marketplaces that do indeed actively sell counterfeit goods can still be pursued for trademark infringement in that event. 

21 July, 2020

My Digital Home - CJEU Decides Whether IP Addresses, Email Addresses and Phone Numbers are 'Addresses' under EU Copyright Law

The Internet provides a great deal of anonymity and enables those who want to infringe IP rights, including copyright, to often do so without any repercussions. Sometimes, however, companies will pursue infringers, and the first step in any litigation involving any degree of anonymity is to establish who the infringer is and where they reside. In an online environment an individual's "address" is difficult to establish, but it is possible to track them down using the users' IP addresses (which, in brief, identifies the computers used to connect to a website or other online service). Even though legislation has been conceived during this time, whether an IP address amounts to an 'address' and is therefore something that needs to be disclosed by ISPs is unclear; however, the CJEU tackled this question earlier this month. 

The case of Constantin Film Verleih GmbH v YouTube LLC concerned the movies ‘Parker’ and ‘Scary Movie 5 over which Constantin had the exclusive rights to. The movies were uploaded in their entirety onto YouTube sometime in 2013 and 2014 by users of the website and viewed thousands of times. When materials are uploaded to YouTube the users will have to register on it, and provide certain details to YouTube including contact information and their age (particularly when posting material over 15 minutes long). YouTube and Google also logs the users' IP addresses under their T&Cs during this time. Constantin pursued YouTube (and Google) for the IP addresses and other details of the users who uploaded the movies onto the service in order to pursue them for copyright infringement - a request that YouTube declined, with the matter ending up in the CJEU after litigation in the German courts.

The CJEU was issued two questions, which it dealt with together, summarising them as asking "...whether Article 8(2)(a) of Directive 2004/48 must be interpreted as meaning that the term ‘addresses’ covers, in respect of a user who has uploaded files which infringe an intellectual property right, his or her email address, telephone number and IP address used to upload those files or the IP address used when the user’s account was last accessed"

Article 8 stipulates that third parties must provide the 'names and addresses' of infringers if requested by the Claimant. The Court noted that the term 'address' is not defined in the Directive, but should be interpreted in a uniform way across the whole of the EU and not with reference to national legislation, and in accordance with the term's usual meaning in everyday language. 

Rightsholders really sticking it to users
Following the Advocate General's opinion, the Court determined that the term 'address' only covers postal addresses (namely the place of a given person’s permanent address or habitual residence) and not the email address, telephone number or IP address of a user. Nothing in the proposals for the Directive also point to their inclusion within the term.

Further to this the Court discussed that the purpose of the Directive is to strike a fair balance between the interest of the holders of copyright and the protection of the interests and fundamental rights of users of protected subject matter. Article 8 of the Directive specifically aims to reconcile compliance with various rights, among others the right of holders to information and the right of users to protection of personal data. 

Even with the above in mind the Court did mention that it is up to the Member States to enact a potential right to the information within the Directive should they choose to do so. This is enabled by Article 8(3)(a), which expressly provides for the possibility for the Member States to "...grant holders of [IP rights] the right to receive fuller information, provided, however, that a fair balance is struck between the various fundamental rights involved and compliance with the other general principles of EU law". This could include email addresses, telephone numbers or IP addresses of users. 

In summarizing their position, the CJEU concluded that "...Article 8(2)(a)... must be interpreted as meaning that the term ‘addresses’ contained in that provision does not cover, in respect of a user who has uploaded files which infringe an intellectual property right, his or her email address, telephone number and IP address used to upload those files or the IP address used when the user’s account was last accessed".

The decision highlights the CJEU's inclination to protect users' rights alongside the rights of copyright holders, even if this means that they are unable to pursue particular users. While the matter remains in the hands of the legislatures of Member States, giving rightsholders carte blanche to users' information could be hugely detrimental to users' rights and cause rafts of information to be floating around that contain incredibly sensitive information. Pursuing the uploader of a video on YouTube might not even be monetarily worth it for rightsholders in the end, however, if the infringement is so detrimental to their business, it might be possible to pursue other avenues of enforcement in those instances. It'll remain to be seen whether Member States enact any freedoms as discussed above, but it would seem highly unlikely given the current state of the World. 

14 July, 2020

Function Above Form - CJEU Discusses Copyright Protection over Functional Designs

Protection over functionality in relation to copyright is a bit of a contentious subject. Many laws around the world, including in the EU, preclude protection from extending to methods of procedures, potentially including functional aspects of a particular form of expression. The idea of this is to prevent the use of copyright in the way of patents to protect some specific function, giving the rightsholder a much longer period of protection than under patent legislation. Nevertheless, the issue has been litigated before, and the CJEU was set to decide on the matter once and for all earlier this Summer, and finally handed down its decision in June 2020. 

The case of Brompton Bicycle Ltd v Chedech/Get2Get concerned a folding bicycle sold by Brompton, whose design's comprises three different folding positions. The design was patented, however the patent has expired. Get2Get sold a similar bike (called the "Chedech"), which also featured three folding positions. Brompton subsequently took Get2Get to court over copyright infringement, with the defendant arguing that you cannot have copyright in functional designs, i.e. the technical function of the bike design. After a period of litigation in the Belgian courts the matter ultimately ended up with the CJEU. 

The CJEU was asked two questions, which it combined into one; "...whether Articles 2 to 5 of [the InfoSoc] Directive must be interpreted as meaning that the copyright protection provided for therein applies to a product whose shape is, at least in part, necessary to obtain a technical result", meaning, can Brampton have copyright in the three-fold design of their bike. 

The court first discussed the requirements for a "work" under EU case law, namely, that it has to be an original subject matter which is the author’s own intellectual creation and an the expression of that creation. This is slightly different when it comes to subject matter that has been dictated by technical considerations, such as the design of a bike. 

In relation to originality, the courts will have to keep in mind that there can be no "work" as such if "...that subject matter cannot be regarded as possessing the originality required for it to constitute a work", which leaves it ineligible for copyright protection. In relation to expression of that 'work' it needs to be identifiable with sufficient precision and objectivity. 

With that said, the Court noted that "...a subject matter satisfying the condition of originality may be eligible for copyright protection, even if its realisation has been dictated by technical considerations, provided that its being so dictated has not prevented the author from reflecting his personality in that subject matter, as an expression of free and creative choices". This would allow for works with functional designs to be protected, provided that the technical considerations included in that design haven't prevented the author from creating it using their own determination as discussed above in relation to originality. 

The Court then moved onto discussing the actual design of the Brampton bike and whether it could be protected by copyright. 

The design of the bike is clearly necessary to obtain a certain technical result, namely that the bicycle may be folded into three positions. Even though there remains the possibility that choice shaped the design of the bike, the Court was unable to conclude that it was indeed a 'work' pursuant to the above Articles, as further evidence would be required. 

The Court further noted that even though the existence of other possible shapes which can achieve the same technical result makes it possible to establish that there is a possibility of choice, this does not in itself show that the design is an original one. In addition, the intention of any alleged infringer is not relevant for the assessment of originality, but courts can indeed consider the existence of a patent over the design (even if expired), but only to the extent that the patent(s) make it possible to reveal what was taken into consideration in choosing the shape of the product concerned.

After all of the above discussions the Court summarized their decision on the matter: "... Articles 2 to 5... must be interpreted as meaning that the copyright protection provided for therein applies to a product whose shape is, at least in part, necessary to obtain a technical result, where that product is an original work resulting from intellectual creation, in that, through that shape, its author expresses his creative ability in an original manner by making free and creative choices in such a way that that shape reflects his personality, which it is for the national court to verify, bearing in mind all the relevant aspects of the dispute in the main proceedings"

The decision opens the door for national courts to consider the application of copyright in relation to functional designs, and will be quite important for companies wishing to protect those designs going forward. The big hurdle will be evidence, at least in this writer's opinion, as it will be difficult to demonstrate clear decision-making and choice by the author simply by showing designs of a bike. It would clearly have to show a trail of decision-making, potentially even deviations from earlier designs, to show that the author has exercised sufficient thought and scrutiny to fulfill the requirements of originality. It will remain to be seen how national courts will apply this going forward, and what evidence will/might be sufficient to establish copyright in functional designs. 

07 July, 2020

Artificial Intelligence Cannot be an Inventor of Patents, Says USPTO (and the UKIPO and EPO)

Artificial intelligence is a topic that is near and dear to this writer's heart, and something that has the potential to hugely impact the world of intellectual property law. Whether it is in relation to the possibility of copyright protection being afforded to copyright works by AI, or even inventions devised by the same, both the legislatures and judiciaries of the world will have to tackle these questions more deeply as the technology evolves and becomes more commonplace. However, recently many national governing bodies dealing with IP have handed down decisions relating to artificial intelligence and patents, which will undoubtedly shape the direction we will be heading.

First off, the USPTO handed down its decision in Re FlashPoint IP Ltd, where it had to consider whether AI can be an inventor under US law, and therefore could own patents for those inventions. The case concerned applications for a patent relating to devices and methods for attracting enhanced attention (Application No. 16/524,350), which was created by DABUS - an AI that was created by Stephen Thaler. DABUS was solely listed as the inventor for the invention in question (with Mr Thaler being listed as its representative and assignee for the rights). At first instance, the USPTO rejected the application due to a lack of an inventor, and Mr Thaler subsequently appealed the decision. The Commissioner of Patents then handed down its opinion earlier this Summer.

Pursuant to 35 USC 115, an application for a patent has to include the name of the inventor of that invention being claimed, with "inventor" being defined as "the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention". The Commissioner then noted that the entirety of the law around this concept only speaks of 'natural persons', i.e. humans, and that the declaration at the end of the application requires a declaration from a person. In brief, the legislation seems to therefore preclude any non-human inventors from applying for patents. 

Furthermore, the Commissioner considered the decision in the University of Utah v Max-Planck-Gesellschaft, where the US Federal Court determined that 'inventors' of patents are the individuals that conceived the invention, which seems to, again, not include non-human inventors. Similarly, in the same case, the Court noted that "...only natural persons can be 'inventors'". The Commissioner then concluded that, based on the above precedent and interpretation of the provisions, AI cannot itself be an inventor. Additionally, even if applicants list a natural person as the inventor, when they have not invented the invention in question, the application will fail due to that person not fulfilling the inventorship criteria under the legislation. 

Mr Thaler also applied for patents in relation to the same invention in both the UKIPO and the EPO. 

The UKIPO handed down its decision in relation to Thaler's applications GB1816909.4 and GB1818161.0 in December 2019. Again, the rejection of the applications concerned the naming of DABUS as the inventor of the inventions, which, according to the UKIPO, does not fulfill the requirements of the UK legislation for registration. 

According to s. 7 of the Patents Act 1977, a patent can only be granted to the inventor of the invention, with an 'inventor' being defined as "...the actual deviser of the invention". Additionally, if no inventor is named in an application, s. 13 requires that the applicant identify the “person or persons whom he believes to be the inventor or inventors” in the application - clearly referring to persons and not non-human inventors. The UKIPO quickly determined that this indeed did require a natural person as the inventor. 

Finally we'll look at the decision from the EPO in late January 2020, specifically concerning applications EP18275163 and EP18275174. In its decision, the EPO determined that "...the inventor designated in a European patent must be a natural person", which was a standard that was intentionally applicable and supported by decisions in national European bodies (as above in the UK). The requirement for an inventor is also mandatory in relation to EP applications, and without proper legal personality the owner of the rights in the patents would be unable to exercise them, including any AI machines. With this in mind, the applications didn't meet the requirements of the EPO, and the applications were rejected. 

The above decisions highlight the current issues with AI and the legislative frameworks that require human inventors or creators for works to be able to be protected. Whether this changes in the future remains to be seen, but it would probably be more likely that the current scheme remains and AI is relegated to supporting human inventors in the creation of inventions, allowing for patentability and protection. Without this human end-point it would be improbable for AI to be the inventor of inventions barring a shift in legislative attitudes. 

01 July, 2020

This is my Domain - US Supreme Court Decides on the Registration of Generic ".com" Domains as Trademarks

Since the advent of the world wide web, domain names' value to their owners have skyrocketed, with some, such as Google.com, being valued by some at roughly $31 billion. Although the valuation of that domain is a little ridiculous, being able to have the right domain at the right time can in itself create a business opportunity and thus be very valuable. However, domain names and their registration and trademarks has been a hot-button issue for some time, since the inclusion of ".com" along with a descriptive element might not be enough to allow for their registration. The USPTO has had a long-standing position where the inclusion of ".com" with a generic word would render that mark as generic and therefore ineligible for registration. This position has since been challenged, and the matter went up all the way to the US Supreme Court, which handed down its opinion earlier this week.

The case of USPTO v Booking.com BV concerned the registration of the mark "Booking.com" by, you guessed it, Booking.com BV, which is a site specialized in the booking of hotels for travelers. At first instance the mark was refused registration as the USPTO deemed it to be generic under the above rule, meaning the name would only have the descriptive meaning to consumers of the service and would not signify that particular website to consumers. Booking.com challenged the ruling, and ultimately took the matter all the way up to the Supreme Court.

Handing down the majority's judgment, Justice Ginsburg first discussed the registration of trademarks overall, particularly the requirements for a mark to be registered. This includes that the the mark has to be one "...by which the goods of the applicant may be distinguished from the goods of others", i.e. it has to be distinctive. Word marks, such as the domain above, can be distinctive in a sliding scale of sorts, namely (from least to most distinctive)  (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful. A mark will have to achieve distinctiveness specifically "...in the minds of the public".

Justice Ginsburg then moved onto considering whether the mark in question is registrable or not. Booking.com applied to register the domain (and other variants of it, including visual features) as a trademark in relation to travel-related services; however, the application, as discussed above, was rejected at first instance. 

The main question the Supreme Court had to therefore consider is whether the term "Booking.com" is generic, specifically naming "...a “class” of goods or services, rather than any particular feature or exemplification of the class". As the domain is also a compound term (consisting of "Booking" and ".com" as separate elements), the Court would have to consider its meaning as a whole and not in isolation of those parts. Its meaning would have to be considered in the light of its meaning to consumers. In short, as noted by the Court, the consideration is "...whether “Booking.com” is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel-reservation services".

The Court quickly noted that under evidence, consumers don't perceive the domain as being generic for hotel-reservation services, and as such, the term cannot be generic. The USPTO argued that, irrespective of that evidence, the term should be seen as generic since when a generic term is combined with a generic top-level domain like “.com,” the resulting combination is generic, barring exceptional circumstances. 

Finally, the Court considered whether the registration of  “generic.com” terms as trademarks would hinder competition, i.e. prevent a competitor from using the term "booking" when describing their services. The Court outright rejected this notion, noting that the risk of deterrence of using a term exists in relation to all descriptive marks. Even if a competitor uses that term, provided it's done in good faith, they would most likely be protected by fair use. 

The Court subsequently affirmed the decision of the Court of Appeals, and allowed the registration of the mark as it was not considered generic.

The case is a very important one, and surprisingly very late into the existence of domain names. It's important for brands that have more descriptive names to be able to potentially register their name as a trademark, particularly if it's in relation to a specific domain that is the heart and soul of that business. Competitors should be adequately protected by fair use and other similar doctrines, allowing for the use of those terms in describing their business, while allowing for sufficient protection of legitimate registered trademarks for those domains.