These Shoes are Made for Selling - AG Szpunar Opines on Intermediary Liability and the 'Use' of a Trademark for Online Marketplaces

Intermediaries in e-commerce are a near necessity for many online sellers of products, but they can produce headaches and issues where potentially unauthorized goods are sold through them that infringe a company's IP rights. The status of intermediaries' liability has been slowly evolving in the courts, and a hotly anticipated decision by the CJEU on the issues is very close in the horizon that should clear matters up significantly in Europe. Before this, however, Attorney General Szpunar has had their say and issued their opinion earlier this Summer (the opinion only being available in English very recently). The opinion sets the scene for the CJEU and could be a glimpse into the CJEU's position on the matter in the near future. 

The case of Christian Louboutin v Amazon Europe Core Sàrl concerned infringement proceedings launched by Christian Louboutin against Amazon, under which they alleged that: (i) Amazon is liable for infringement of his trade mark; (ii) it should cease the use, in the course of trade, of signs identical to that trade mark in the EU; and (iii) he is entitled to damages for the harm caused by the unlawful use at issue. Amazon unsurprisingly challenged this position, arguing that it is merely an operator of an online marketplace and cannot be held liable for the actions of its sellers. The Luxembourg courts referred the matter to the CJEU for clarification, which is closing in on the crescendo of the decision itself following AG Szpunar's opinion.

The case combines two separate actions in Luxembourg and Belgium involving the two parties. 

AG Szpunar noted that they both concerned the interpretation of the concept of ‘use’ for the purposes of Article 9(2) of Regulation 2017/1001. In essence the referring courts are asking "…whether Article 9(2)… must be interpreted as meaning that the operator of an online sales platform must be regarded as using a trade mark in an offer for sale published by a third party on that platform on account of the fact that, first, it publishes both its own commercial offerings and those of third parties uniformly without distinguishing them as to their origin in the way in which they are displayed, by allowing its own logo as a renowned distributor to appear on those advertisements, and, secondly, it offers third-party sellers the additional services of stocking and shipping goods posted on its platform by informing potential purchasers that it will be responsible for those activities". The courts also asked "...whether the perception of a reasonably well-informed and reasonably observant internet user has an impact on the interpretation of the concept of ‘use’". 

As a primer, Article 9(2) provides that the proprietor of an EU trademark is entitled to prevent all third parties not having their consent from using, in the course of trade, any sign which is identical with the trademark. However, what amounts to 'use' in this context is paramount to determining potential liability under the provision for any would-be infringer. 

AG Szpunar then moved on to discussing the current definition of 'use' under Article 9. Some of the main decisions here are Daimler AG v Együd Garage Gépjárműjavító és Értékesítő Kft, Coty Germany GmbH v Amazon Services Europe Sàrl, Google France SARL and Google Inc. v Louis Vuitton Malletier SA and L’Oréal SA v eBay International AG. 

The CJEU has found that the term 'using' in terms of intermediaries involves active behavior and direct or indirect control of the act constituting the use, and that the act of use presupposes, at the very least, that that third party uses the sign in its own commercial communication. The latter point was key in this according to the AG and without it any such use would be lacking.

In terms of the commercial communication aspect, the CJEU has determined that a referencing service provider does not use a sign in its own commercial communication since it only allows its clients themselves to use the relevant signs, with the result that it "…merely creates the technical conditions necessary for the use of a sign". 

Similarly, a marketplace operator would not be using a sign in its own commercial communication when it provides a service consisting in enabling its customers to display that sign in their commercial activities, and that the stocking of goods bearing the relevant sign is not a use of that sign in a third party’s own commercial communication since it has not itself offered the goods for sale or put them on the market. 

The AG does highlight that this set of definitions is not a clear one and needs to be more specific and focused to make better sense. 

The AG very cleverly shifted the definition towards the recipient away from the actual communicator, i.e. the platforms. He discussed that the commercial communication of an undertaking would be to promote goods or services to third parties. To put simply, the intermediary adopts the sign to such an extent that that sign appears to be part of its activity.

The adoption condition still has to be looked at from the perspective of the recipient, i.e. the user of the marketplace, to determine whether the sign is perceived by that user as being integrated into that commercial communication. The user that this would be assessed against is a "reasonably well-informed and reasonably observant internet user". 

AG Szpunar then moved on to discussing Amazon's particular business model and whether they would be 'using' a trademark in the course of their business. 

The first question referred to the CJEU concerned, primarily, if "…the activity of a marketplace operator of publishing commercial offerings from third-party sellers on its website where those offers for sale display a sign which is identical with a trade mark". 

As noted above, this activity would not constitute a 'use' of a trademark (specifically decided in the eBay case), however, Amazon operates differently to eBay as a marketplace. Amazon provides a much more comprehensive offering, where third party sellers can post their own advertisements for goods in addition to Amazon's own. In those instances, the Amazon logo is merely present to indicate to consumers that the ad was posted by a third party seller. 

In that instances the AG noted that that would not lead to a reasonably well-informed and reasonably observant internet user to perceive the signs displayed on the advertisements of third-party sellers as part of Amazon’s commercial communication. The same would apply to the integration of third-party ads by Amazon into specific shops on the platform, which is the type of organization that is integral to the functioning of these types of online platforms. 

The referring courts also asked whether "…the fact that Amazon offers a ‘comprehensive’ service, including providing assistance in preparing advertisements and the stocking and shipment of certain goods, has an impact on the classification of the use of a sign displayed on those advertisements by Amazon". 

To properly consider this the AG highlighted that you must consider Amazon’s activities as a whole to determine whether the involvement of that company might be classified as use of that sign. The AG thought that this would not be the case. 

Amazon's involvement, while able to give them more control over the sale of a product that may infringe a trademark, but that involvement was only for the benefit of the consumer so that they could ensure prompt and guaranteed delivery after a product is purchased. In the AG's view this is not sufficient to establish that Amazon has used the sign at issue in its own commercial communication. 

This position ties in with the decision in Coty, where the CJEU determined that "…a sign cannot be regarded as having been used in the marketplace operator’s own commercial communication where that operator stocks goods bearing a sign on behalf of a third-party seller without itself pursuing the aim of offering those goods or putting them on the market". 

The AG also noted that Amazon's posting of the ads in question would not be 'using' the sign in question either. 

To round things off, the AG summarized their position as answering the questions that "…Article 9(2)… must be interpreted as meaning that the operator of an online sales platform cannot be regarded as using a trade mark in an offer for sale published by a third party on that platform on account of the fact that, first, it publishes both its own commercial offerings and those of third parties uniformly, without distinguishing them as to their origin in the way in which they are displayed, by allowing its own logo as a renowned distributor to appear on those advertisements, both on its website and in the advertising categories of third-party websites and, secondly, it offers third-party sellers the additional services of assistance, stocking and shipping of goods posted on its platform by informing potential purchasers that it will be responsible for the provision of those services, provided that such elements do not lead the reasonably well-informed and reasonably observant internet user to perceive the trade mark in question as an integral part of the operator’s commercial communication".

The AG's opinion really sets the scene for the CJEU and seems very sensible in protecting the functionality of online marketplaces, like Amazon. If the courts would see things otherwise, this would clearly massively impede the functionality of these services, and in fact, without heavy moderation by the platforms themselves, would make them impossible to operate. This should not be seen as carte blanche for the platforms either, but could set sensible, clearer boundaries for both platforms, brands and third party sellers, but it remains to be seen what the CJEU's position will be. 

Just in the Middle - CJEU Decides on Intermediary Liability for Copyright Infringing User Content

The issue of intermediary liability for copyright infringement has been a thorny issue in recent years, and the case involving YouTube (discussed more here) in this regard has been trundling through the EU courts for what feels like decades (exacerbated by the pandemic no doubt). However, the European courts have reached their decision last summer, giving some needed guidance on the matter and setting the scene for intermediary liability for the future. This writer is woefully behind the times in writing about this decision, but it does merit belated discussion and is a very important decision to keep in mind in relation to intermediaries.

The case of Frank Peterson v Google LLC (along with another case; Elsevier v Cyando) concerns Nemo Studio, a company owned by Mr Peterson who is a music producer. In 1996, Nemo Studio entered into a worldwide artist contract with Sarah Brightman covering the use of her audio and video recordings. Further agreements were entered into in the subsequent years, including one with Capitol Records for the exclusive distribution of Ms Brightman's recordings and performances. One of her albums, "A Winter Symphony", was released in 2008 along with an accompanying tour that year. The same year her album and private recordings from her tour were uploaded onto YouTube. Mr Peterson attempted to have the materials removed from the platform, including through cease-and-desist letters, and Google subsequently blocked access to the offending videos. However, even after this the content could be accessed on YouTube again, and Mr Peterson initiated legal proceedings against Google in Germany for copyright infringement, with the matter ultimately ending up with the CJEU.

The other combined case, very briefly put, dealt with at the same time involved Elsevier, an international specialist publisher and Cyando, a website where users could upload files for hosting and sharing. Users had uploaded copies of three works for which Elsevier owns the copyright onto the Cyando website, which were then shared on other websites via web links. Elsevier also brought legal proceedings against Cyando in Germany for copyright infringement, after which the CJEU combined both actions into one.

The first question posed to the court concerned "…whether Article 3(1) of the Copyright Directive must be interpreted as meaning that the operator of a video-sharing platform or a file-hosting and ‑sharing platform, on which users can illegally make protected content available to the public, itself makes a ‘communication to the public’ of that content".

As a primer, Article 3(1) provides the exclusive right to copyright holders to communicate their works to the public, which also gives them the right to prevent said communications by other parties without authorization. Additionally, what amounts to a 'communication to the public' includes all communication to the public not present at the place where the communication originates, so giving a very broad right to copyright holders. However, a balance has to be struck between the interests of the copyright holder and the interests and fundamental rights of users, in particular their freedom of expression and of information.

To dive a bit deeper into the meaning of the phrase 'communication to the public', this encompasses two specific criteria, namely: (i) an act of communication of a work; and (ii) the communication of that work to a public. 

In terms of the first criterion, an online platform performs and 'act of communication' where "…it intervenes, in full knowledge of the consequences of its action, to give its customers access to a protected work, particularly where, in the absence of that intervention, those customers would not, in principle, be able to enjoy the broadcast work". For the second criterion, a 'public' comprises "…an indeterminate number of potential recipients and implies, moreover, a fairly large number of people".

Finally, in addition to the above criteria, the courts have determined that for an act to be a 'communication to the public' "…a protected work must be communicated using specific technical means, different from those previously used or, failing that, to a ‘new public’, that is to say, to a public that was not already taken into account by the copyright holder when it authorised the initial communication of its work to the public". 

One thing to note in the context of both YouTube and Cyando is that both platforms operate through user uploads, who act autonomously from the platform, decide whether the content will be publicly available and are responsible for their own actions. For file-hosting services, like Cyando, there is the additional requirement that the users have to share a link to the content for it to be accessed and/or downloaded, which is up to them to do. While the users might very well be doing an 'act of communication to the public', it remains unclear whether the intermediaries are doing the same through this.

The Court noted that the platforms play an indispensable part in making potentially illegal content available, but this is not the only criterion that you need to concern yourself with; the intervention of the platform needs to be deliberate and not just incidental. This means that the platforms have to intervene in full knowledge of the consequences of doing so, with the aim of giving the public access to protected works for there to be an infringement.

The Court highlighted that, in order to determine this, one has to "…take into account all the factors characterising the situation at issue which make it possible to draw, directly or indirectly, conclusions as to whether or not its intervention in the illegal communication of that content was deliberate". These circumstances can include: "...[i] the circumstance that such an operator, despite the fact that it knows or ought to know that users of its platform are making protected content available to the public illegally via its platform, refrains from putting in place the appropriate technological measures that can be expected from a reasonably diligent operator in its situation in order to counter credibly and effectively copyright infringements on that platform; and [ii] the circumstance that that operator participates in selecting protected content illegally communicated to the public, that it provides tools on its platform specifically intended for the illegal sharing of such content or that it knowingly promotes such sharing, which may be attested by the fact that that operator has adopted a financial model that encourages users of its platform illegally to communicate protected content to the public via that platform".

In short this means that platforms will have to take positive steps to prevent the sharing of infringing content. Mere knowledge that this is being done isn't sufficient to conclude that a platform intervenes with the purpose of giving internet users access to that content unless they have been specifically warned by rightsholders of this activity. Making a profit from this activity will also not, in itself, make a platform liable. 

The Court summarized its answer to the question as: "… Article 3(1)… must be interpreted as meaning that the operator of a video-sharing platform or a file-hosting and ‑sharing platform, on which users can illegally make protected content available to the public, does not make a ‘communication to the public’ of that content… unless it contributes, beyond merely making that platform available, to giving access to such content to the public in breach of copyright. That is the case, inter alia, where that operator has specific knowledge that protected content is available illegally on its platform and refrains from expeditiously deleting it or blocking access to it, or where that operator, despite the fact that it knows or ought to know, in a general sense, that users of its platform are making protected content available to the public illegally via its platform, refrains from putting in place the appropriate technological measures that can be expected from a reasonably diligent operator in its situation in order to counter credibly and effectively copyright infringements on that platform, or where that operator participates in selecting protected content illegally communicated to the public, provides tools on its platform specifically intended for the illegal sharing of such content or knowingly promotes such sharing, which may be attested by the fact that that operator has adopted a financial model that encourages users of its platform illegally to communicate protected content to the public via that platform".

The Court then turned to the second and third questions together, which it posed as asking: "…whether Article 14(1) of the Directive on Electronic Commerce must be interpreted as meaning that the activity of the operator of a video‑sharing platform or a file-hosting and -sharing platform falls within the scope of that provision, to the extent that that activity covers content uploaded to its platform by platform users. If that is the case, that court wishes to know, in essence, whether Article 14(1)(a) of that directive must be interpreted as meaning that, for that operator to be excluded, under that provision, from the exemption from liability provided for in Article 14(1), it must have knowledge of specific illegal acts committed by its users relating to protected content that was uploaded to its platform". 

Under Article 14(1) Member States have to ensure that service providers of information society services are not liable for the information stored at the request of the recipient of the services, i.e. users, provided that the provider does not have actual knowledge of illegal activity or information and, is not aware of facts or circumstances from which the illegal activity or information is apparent, or that the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove the information or to disable access to it. What is key here is that the provider has to be an ‘intermediary service provider’, meaning one that they are "…of a mere technical, automatic and passive nature, [i.e.] that service provider has neither knowledge of nor control over the information which is transmitted or stored".

The above assessment can be made considering Article 3(1), and if a provider contributes, beyond merely providing its platform, to giving the public access to protected content in breach of copyright, they won't be able to rely on the above exemption (but this isn't the sole determination on the exemption). Also, the technological measures that a provider takes to prevent copyright infringement, as discussed above, doesn't give the provider active knowledge of the infringing activity, and bring them outside the scope of Article 14(1). Knowledge or awareness, however, can be derived through internal investigations by the providers or through notifications by third parties.

Summarizing its position in relation to the questions the Court determined that "…Article 14(1)… must be interpreted as meaning that the activity of the operator of a video-sharing platform or a file-hosting and -sharing platform falls within the scope of that provision, provided that that operator does not play an active role of such a kind as to give it knowledge of or control over the content uploaded to its platform". 

The Court then moved on to the fourth question, which asked "…whether Article 8(3) of the Copyright Directive must be interpreted as precluding a situation where the rightholder is not able to obtain an injunction against an intermediary whose services are used by a third party to infringe the rights of that rightholder unless that infringement has previously been notified to that intermediary and that infringement is repeated".

To put in simpler terms, the question asks if rightsholders are prevented from seeking an injunction against an intermediary if their services are used to infringe their rights, unless they have been notified of the infringement previously. 

The Court considered that national courts have to be able to stop current and/or future infringements under the Article. The process and any requirements are up to Member States to determine (but must not interfere with other adjacent EU provisions), which includes a potential requirement of notification before an injunction can be granted. However, this isn't the case strictly under the relevant Article. 

The Court did note that, pursuant to Article 15(1) of the E-Commerce Directive, Member States cannot impose a monitoring obligation on service providers over the data that they store. With that in mind, any obligation to monitor content in order to prevent any future infringement of intellectual property rights is incompatible with this Article.

In light of its considerations on the question, the Court summarized its position as: "…Article 8(3) of the Copyright Directive must be interpreted as not precluding a situation under national law whereby a copyright holder or holder of a related right may not obtain an injunction against an intermediary whose service has been used by a third party to infringe his or her right, that intermediary having had no knowledge or awareness of that infringement, within the meaning of Article 14(1)(a) of the Directive on Electronic Commerce, unless, before court proceedings are commenced, that infringement has first been notified to that intermediary and the latter has failed to intervene expeditiously in order to remove the content in question or to block access to it and to ensure that such infringements do not recur. It is, however, for the national courts to satisfy themselves, when applying such a condition, that that condition does not result in the actual cessation of the infringement being delayed in such a way as to cause disproportionate damage to the rightholder".

The fifth and sixth questions were the only ones remaining, but the Court decided that they didn't need to be answered as the first and second questions were answered in the negative.

As is apparent, the case is a huge milestone for the regulation of intermediaries and copyright on the Internet. It sets fairly clear guidelines and expectations on service providers but seems to attempt to strike a proper balance with freedom of expression and the interests of service providers and rightsholders. This, however, is very much subject to change with the introduction of the Digital Copyright Directive, which, under Article 17, now imposes an obligation on service providers to under threat of liability to make 'best efforts' to obtain authorization and act in a similar way when infringing content is present on their services. The case and the new Directive set the scene for service providers, who will have to stay on their toes with the prevalence of infringing content online these days.

That's my Dataset! - AG Szpunar Opines on Whether Search Engines' Indexing can Infringe Database Rights

In the age of big data databases can be worth their weight (or in reality, lack thereof) in gold, since the compilation of those databases can take years and cost tremendous amounts of money. As such, databases are afforded special protection through database rights (i.e sui generis rights). These rights don't always pop up in the courts, but when they do, it's worth taking note, since the infringement of these rights can be deceptively simple, at least on the face of things. As a part of the functioning of the Internet as we know it today, search engines like Google index the websites that allow for it to do so, which in effect adds them to the collective directory of that search engine (and accessible to those searching for it). This indexing will affect all websites and sub-pages that are allowed to be indexed, but could that indexing infringe database rights if done so? As luck would have it the CJEU is slated to decide this matter in the near future, but Advocate General Szpunar has given his opinion on the matter ahead of this decision. 

The case of SIA ‘CV-Online Latvia’ v SIA ‘Melons’ concerns the website 'CV.lv', operated by CV-Online, which includes a database containing notices of jobs published by employers. The website also uses meta tags, allowing for the easier identification of content on each of the site's pages for indexing purposes. The meta tags contain typical information like the name of the job being advertised, place of employment and the date when the ad was posted. 

SIA Melons operates a website called 'KurDarbs.lv', which is a search engine specialising in notices of employment, allowing for several websites posting these notices to be searched on it. The site then refers to the people searching to the websites where the information was found in via hyperlinks (including to the site operated by CV-Online). The meta tags inserted by CV-Online on its website are also displayed in the list of results obtained when SIA Melons’ website is used. 

CV-Online subsequently brought proceedings against SIA Melons for the breach of its sui generis database rights, alleging that it copies substantial parts of the contents of the database on the CV-Online website. Following decisions in the Latvian courts the case ultimately landed on the CJEU's desk, with the Advocate General giving its opinion before the decision.

The AG first discussed the basics of database rights set out in Article 1 of Directive 96/9. The article sets out databases as "...a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means". The 'independent works' discussed should be ones that are "...separable from one another without their informative, literary, artistic, musical or other value being affected", or in other words, they need to have autonomous informative value. The database itself has to include "...technical means such as electronic, electromagnetic or electro-optical processes... or other means... to allow the retrieval of any independent material contained within it". 

In addition to the above there has to have been "...qualitatively and/or qualitatively a substantial investment in either the obtaining, verification or presentation of the contents of that database".

Following on from this the AG quickly set out that the job ads contained in the database were indeed units of information which has autonomous informative value which are separable from the other ads in the same database. The only question that remained therefore was whether CV-Online had made a substantial investment in creating its database. 

Discussing the actual wording of the two questions referred to the court the AG considered that they should be reworded and considered together, namely whether "...under Article 7(1) and (2)... the maker of a database that is freely accessible on the internet is entitled to prevent the use of that database by an internet search engine that specialises in searching the contents of databases". 

According to the AG, after the reformulation of the questions the case at hand resembles the decision in Innoweb BV v Wegener ICT Media BV, in which the CJEU held that where the operator of a meta search engine reutilised the whole or a substantial part of the contents of a database constituted by the website on which that meta search engine allowed searches to be carried out. The use of a meta search engine allowed users to access the whole database through those searches other than intended by the marker (and breached the database rights as a result). 

Looking at whether Melons' website acts as a meta search engine, as in Innoweb, the AG concluded that this is irrelevant, as this is not a requirement for a potential infringement of database rights. He concluded that "...a search engine that copies and indexes the whole or a substantial part of databases which are freely accessible on the internet and then allows its users to carry out searches in those databases according to criteria that are relevant from the aspect of their contents effects an extraction and a reutilisation of those contents". 

However, even with this mind we have to have a balance of allowing for the indexing (and therefore searching) of the Internet, while protecting against 'parasitic' services utilizing databases they didn't create. Keeping this in mind the AG thought that national courts should verify not only whether the extraction or reutilization of the whole or a substantial part of the contents of a database and whether a substantial investment has been made into the database, but also whether the reutilization or extraction prevents the recouping of that investment. If the latter is the case, the database should be protected.  

Furthermore, national courts should consider the protection of competition within the marketplace. This is to prevent the use of database rights to prevent legitimate competition within the EU, essentially through the abuse of a dominant position through the ownership of key information through database rights. If the reutilization of that information, e.g. such as what Melons has done, does not negatively impact the business of the database rights owner, the courts should allow for the reutilization to allow for fair competition. Thinking about these issues will effectively limit the rights of the database maker, provided there is no or limited impact on the recouping of their investment. 

Ultimately the AG answered the two questions as follows, namely that Article 7(1) and (2) must be interpreted as meaning:

(i) a search engine which copies and indexes the whole or a substantial part of the contents of databases which are freely accessible on the internet and then allows its users to carry out searches in those databases according to criteria that are relevant from the aspect of their contents effects an extraction and a reutilisation of those contents within the meaning of that provision; and

(ii) the maker of a database is entitled to prevent the extraction or the reutilisation of the whole or a substantial part of the contents of that database only on condition that such extraction or reutilisation adversely affects its investment in obtaining, verifying or presenting those contents, that is to say, that it constitutes a risk for the possibilities of recouping that investment by the normal exploitation of the database in question, which it is for the referring court to ascertain.

But one must still keep in mind that this must not result in the abuse of a dominant position under Article 102 TFEU. 

The opinion is an important one in the light of how the Internet functions and sets clear guidelines on how the CJEU should answer the questions posed in this case. The ultimate decision by the CJEU could impact the operation of search engines tremendously if it creates very stringent requirements for the indexing of data, but this writer hopes that certain limits are put while respecting the functionality of the Internet. Provided no, or little, damage is done to the original website's recoupment of its investment, indexing should be rightfully allowed. 

I'm Not Involved! - AG Øe Opines on the Liability of Intermediaries in Copyright Infringement by Communication to the Public

The freedom of many services on the Internet can create a pile of problems for service providers, particularly when users have a wide berth in the use of those services. YouTube has faced a deluge of issues in relation to copyright over the years, since users are free to upload whatever they please, and those materials are then processed through the Content ID system for any potential copyright infringement. As copyright holders have taken issue on this freedom and have demanded for more direct action, YouTube itself hasn't faced a great deal of litigation around copyright infringement matters. A recent saga in the European courts, however, changed this, where the service provider was alleged to have infringed copyright through its users' actions. The case is now closing on its end in the CJEU, and Advocate General Øe gave their opinion only recently on the case before the decision of the CJEU.  

The case of Frank Peterson v Google LLC concerned music tracks and a live concert that were uploaded onto YouTube in 2008 by the users of the platform from an artist, Sarah Brightman's, album 'A Winter Symphony', in which Mr Peterson owned the copyright. After requests for the removal of the music were unsuccessful, Mr Peterson took Google to court in Germany for copyright infringement requiring the removal of the materials and the acquisition of profits made from the works availability. Google challenged Mr Peterson's actions, which ultimately were referred to the CJEU for further clarification. The CJEU has joined the above case with two similar ones concerning Cyando AG (who operated a file-sharing site onto which potentially infringing works were uploaded) Elsevier (who also sued Google for copyright infringement over the uploading of episodes of the TV show 'Gray's Anatomy) that concerned similar questions on liability.

The above cases raised a number of questions to the CJEU predominantly in relation to the liability of service providers for the uploading of infringing materials onto their platforms. For the sake of brevity, this article will not discuss every nuance of the judgment, so it is advised for anyone wanting a full picture to consult the opinion for themselves if needed. 

The first question asked whether "...the operator of a video-sharing platform and the operator of a file-hosting and ‑sharing platform carry out an act of ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29 when a user of their platforms uploads a protected work there". 

The AG first set out what amounts to a 'communication to the public', which is comprised of two separate elements: (i) an act of ‘communication’ of a work and (ii) a ‘public’. In relation to the first element, a person or company carries out an act of 'communication' when it "...transmits a work and thus makes it perceptible at a distance" - or to put in different terms, transmission a work via the Internet or makes a work available on the same. This includes interactive on-demand transmissions where members of the public may access the work from a place and at a time individually chosen by them, such as uploading a work onto a website. As to the second element, a 'public' refers to "...an ‘indeterminate’ and ‘fairly large’ number of persons", including the general public that can access a website. 

The AG swiftly concluded that works shared on YouTube would be communicated to the public under the Directive. The uploading of the works is also not covered by the exceptions under Article 5 of the Directive.

The AG then moved onto considering whether the user uploading a work or platforms like YouTube, carries out the act of communication to the public. He considered that the acts of companies like YouTube are those of an intermediary, and not of a party that communicates a work to the public. This is due to the fact that intermediaries don't decide, on their own initiative, to transmit works to a public, but follow the instructions of their users. The communicator is therefore the user alone. However, if a service provider intervenes actively in the ‘communication to the public’ of works, i.e. selects the content transmitted, determines it in some other way or presents it to the public in such a way that it appears to be its own, the provider would be the communicator to the public. 

The AG then concluded that service providers like YouTube don't communicate works to the public that are uploaded by their users onto their services, as they merely provide the 'physical facilities' necessary for the communication of those works (as envisaged by recital 27). Clearly, passive service providers will not be deemed as such, but ones that take an active role in the selection of materials to be communicated would potentially be in breach.

He ultimately suggested that the answer to the first question is "...the operator of a video-sharing platform and the operator of a file-hosting and -sharing platform do not carry out an act of ‘communication to the public’ within the meaning of Article 3(1)... when a user of their platforms uploads a protected work there". 

The AG then moved onto the second question, which asked "...whether operators such as YouTube and Cyando can benefit from Article 14(1) of Directive 2000/31 with regard to the files that they store at the request of users of their platforms". 

Article 14 provides an exclusion over liability for the storage of files by service providers, which, according to the AG, applies in relation to both primary and secondary liability for the information provided and the activities initiated by those users. In the AG's view Article 14 doesn't apply where a provider communicates to the public its ‘own’ content, but does apply on the other hand when the content communicated was provided by the users of its service. 

After an incredibly exhaustive discussion on the details of Article 14, the AG saw that Article 14 therefore applies to service providers like YouTube would be exempted under the provision in relation to liability for files that have been uploaded by their users. 

The case then moved onto the third question, which asked whether the conditions mentioned in Article 14(1)(a) refer to specific illegal information. The provision relates to the discussion above, as the service providers cannot have knowledge of illegal activities or information on their service in order to benefit from the exemption. This could, potentially, include any infringing materials on those services, and it is important for providers like YouTube to have actual and abstract knowledge or awareness of those materials. 

According to the AG, this knowledge has to be specific and in relation to objective factors relating to specific information on its servers, which then obligates the service provider to remove that material from its servers. To summarize: "...a service provider is obliged diligently to process facts and circumstances brought to its knowledge, in particular by notifications, concerning specific illegal information". They are, however, in no way obligated to actively search for infringing materials before notification. 

Even with that in mind, the awareness factor cannot be used as a shield by service providers and any bad faith would make them lose the exemption altogether. 

In short, the AG noted that "...Article 14(1)(a)...  must be interpreted as meaning that... where a service provider has ‘actual knowledge of illegal activity or information’ and the situation where such a provider is ‘aware of facts or circumstances from which the illegal activity or information is apparent’ — refer to specific illegal information".

The AG then moved onto the fourth question, which asked what the conditions are for rightsholders to be able to apply for an injunction under Article 8(3). 

After some discussion in relation to German legal concepts in terms of conditions, the AG determined that this is possible "...where it is established that third parties infringe its rights through the service provided by the intermediary, without the need to wait for an infringement to take place again and without the need to show improper conduct by the latter". This means that rightsholders won't necessarily have to establish infringement and apply for an injunction each time an infringement occurs, but future infringements could also be prevented through a court order. This could include measures to 'detect and block', which, according to the AG, does not infringe Article 15(1). However, as discussed above, this should not be in order to establish a pre-emptive detection system, as actual knowledge is still required. 

 The AG summarized his position in relation to question four as "...Article 8(3)... precludes rightholders from being able to apply for an injunction against a provider whose service that consists of the storage of information provided by a user is used by third parties to infringe a copyright or related right only if such an infringement has taken place again after notification of a clear infringement has been provided".

The fifth and sixth questions asked whether the operators, such as YouTube, would be regarded as 'infringers' pursuant to Article 13(1). If the operators are not deemed to be 'communicating to the public' they of course would not be classed as infringers. Even so, the legislation does leave a great deal of room for national harmonization in this respect. 

The case is really important in establishing the remit of infringement, and liability over the same, in materials uploaded to services like YouTube by their users. As such the CJEU's decision will be an important one, which will most likely be handed down later this year. This writer will await in with bated breath, as undoubtedly many companies like Google who offer services allowing for user-uploaded materials. 

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. 

A Sour Result - CJEU Rules on Protection of Parts of Compound PGIs

Having discussed the protection of the term "Aceto Balsamico di Modena" after an opinion by Advocate General Hogan this Fall, this writer waited for the decision of the CJEU with great intrigue. This was colored by a love of balsamic itself, but also with intrigue in relation to whether separate components of a PGI are protectable. Like on Christmas morning, the CJEU finally delivered its judgment earlier this month.

As discussed above, the case of Consorzio Tutela Aceto Balsamico di Modena v Balema GmbH concerned the registration "Aceto Balsamico di Modena" (PGI application here) in relation to a balsamic vinegar which is produced in the Modena region of Italy. Consorzio is a consortium of producers of the products designated by the PGI. Balema produces and markets vinegar-based products made from wines from the Baden region, including bearing the terms "Balsamico" and "Deutscher balsamico". Consorzio subsequently took Balema to court for infringement of the PGI, with Balema arguing that it didn't infringe the PGI as it didn't use the entirety of it and the components to the name are not protected separately.

The Court faced only a single question, which asked "...whether Article 1 of Regulation No 583/2009 must be interpreted as meaning that the protection of the name ‘Aceto Balsamico di Modena’ extends to the use of the individual non-geographical terms of that name".

They first set the scene by stating that the protection of various constituent parts of a registered name falls under the jurisdiction of national courts. With regards to 'compound' marks, such as Aceto Balsamico, that have not specifically mentioned that the individual components of the name are protected separately doesn't mean that those components are not protected outright. As set in Chiciak and Fol, "...in the absence of specific circumstances pointing to the contrary, the protection... covers not only the compound name as a whole, but also each of its constituent parts, that will be the case only if that constituent part is not a generic or a common term".  Even though the case concerned an earlier Regulation, it still applies to Article 1.

The Court swiftly concluded that protection couldn't be afforded to the individual non-geographical terms of the Aceto Balsamico name. They further specified that "...the name ‘Aceto Balsamico di Modena’ that has an undeniable reputation on the national and international market and that it is therefore that compound name as a whole which meets the inherent condition for the product having a specific reputation linked to that name". To put simply, the terms ‘aceto’ and ‘balsamico’ (and their use in combination) won't benefit from the registration of the whole name.

The Court also noted that the terms would be designated as common terms under Chiciak (as they merely describe a common product such as a balm or a vinegar). Ultimately they denied protection for the individual terms in Aceto Balsamico di Modena.

The decision is not a very surprising one, as the extension of protection to non-geographical parts of PGIs could open the floodgates for the registration of incredibly long PGIs, and in effect deter competition in the marketplace in relation to similar products. Of course one expects the regional identifiers to remain protected, but extending protection to common terms would not be a good idea, especially since the authentic product is still protected through the PGI. The case is a good reminder to PGI holders to limit their protection to what matters; the stamp of regional quality for the product.

The One and Only - Advocate General Hogan Considers the Limits of Protected Geographical Indicators and their Individual Terms

Protected Geographical Indicators (or PGIs for short) are a crucial part of being able to identify local goods that have a particular quality and/or manufacturing methods that are unique to a particular region of the EU. Seeing a PGI in packaging can guarantee that the goods you're buying are legitimate, whether it is looking for that special something in Bolognian Mortadella or Gruyère cheese, it is key to distinguishing the 'real stuff' from the pretenders. Even so, sometimes the PGIs can become almost generic or the terminology used within it separated to hint at the PGI without actually containing the whole term. That being said, where does one draw the line when naming products similarly to PGIs? Luckily, the CJEU is slated to decide this question, and Advocate General Hogan gave their thoughts on this earlier this summer.

The case of Consorzio Tutela Aceto Balsamico di Modena v BALEMA GmbH concerned balsamic vinegar from the region of Modena – "Aceto Balsamico di Modena" (PGI application here). The product is an aged, flavoured vinegar made from grapes. The name does contain the word 'balsam', which has colloquially become to mean the same product, but historically it was used to denote a balm or a product with healing properties. Balema produce a German 'balsamic vinegar' called "Balsamico" made from Baden wine. Consorzio Tutela Aceto Balsamico di Modena, a consortium of producers of Modena balsamic vinegar, took Balema to court for the infringement of their PGI. Balema challenged this, with the CJEU left to decide whether the individual word components of the PGI could be protected as PGIs within the registration, or would be free to be used by others in isolation from the whole PGI as they were generic terms..

The AG started off with defining what amounted to a 'generic term'. Under Article Article 3(6) of Regulation No 1151/2012, a generic term is defined as "…the names of products which, although relating to the place, region or country where the product was originally produced or marketed, have become the common name of a product in the Union". This means that the PGI has become generic and no longer denotes the quality and characteristics that one would expect from that PGI. This also includes words that have always been generic, even if included within the PGI.

Ptahhotep was no fool when it came to new types of balms
(Source: AHRECS)

The AG added that, in order to determine whether a term has become generic, what is decisive is "…not necessarily whether a term has a particular meaning in a given language but rather whether it lacks a current geographical connotation". The same applies to terms that could be considered as being generic (i.e. mean something specific in one language), but do still retain their geographical connotation, therefore potentially avoiding becoming generic. Adding onto this, even if in one Member State the term is considered to be generic, it does not mean the term has become generic for the whole of the EU.

The specific test courts would have to apply is whether "…the manner in which these words would be perceived by the ‘average consumer who is reasonably well informed and reasonably observant and circumspect", i.e. does the average person consider the term generic or not.

The AG then moved onto considering the interpretation of Article 1 of Regulation No 583/2009 which denotes the registration of the specific PGI. The Regulation didn't provide any limitations or qualifications for the registration of the term 'Aceto Balsamico di Modena', or whether its components themselves would be generic or non-geographical terms separately from the PGI. The AG does point out that previous decisions have indicated that this does not mean that the terms would be protected individually as well as within the whole PGI.

In the light of the Regulation, the AG considered that the terms ‘Aceto’, ‘Aceto Balsamico’ and ‘Balsamico’ were generic terms, and protection was only afforded to the whole PGI. This was due to the common nature of the words, and the particular emphasis made by the Regulation on the entirety of the term.

The opinion is very interesting, albeit unsurprising, as the monopolization of 'common' words (even if used less these days) would be detrimental to the wider internal market. The protection of region specific goods is important, but this also needs to be balanced with the allowance for the use of words that describe goods, rather than their specific geographical origin. It remains to be seen if the CJEU agree with the AG, but this writer for one thinks they'll agree.

Ten Hut! - CJEU Decides on Derogation from Authors' Rights and Copyright Infringement in Relation to Military Reports

This blog discussed the issues of balancing the freedom of expression in the early part of this year (with more on news reporting at the CJEU here), and the issue has still lingered in the backlog of cases faced by the CJEU. The balance between protecting works, while affording the ability to review and use those works for specific , is a difficult one to strike, but one that the courts often have to face. Following an Advocate General's opinion in January this year, the CJEU were now tasked with clarifying this issue, and handed down their decision not too long ago.

As a very brief primer, the case of Funke Medien NRW GmbH v Bundesrepublik Deutschland concerned the publication of confidential military reports by Funken online by the daily newspaper Westdeutsche Allgemeine Zeitung (having obtained them through unknown means). The reports detailed the deployment of the German military abroad, and various developments at the locations. Due to the sensitive nature of the reports, the Republic of Germany took Funken to court for copyright infringement, with the matter ultimately ending up with the CJEU.

The referring court asked the CJEU three questions, the first of which asked "…whether Article 2(a) and Article 3(1) of Directive 2001/29 first, and Article 5(3)(c), second case, and (d) of [the] Directive… second, must be interpreted as constituting measures of full harmonisation".

The Court considered the matter very extensively in its judgment, concluding that only Articles 2 and 3 of the Directive constituted measures of full harmonization. Without getting too much into the depths of this question, the matter revolved around the differences in the provisions in terms of wording, where Articles 2 and 3 were unequivocal in their remit, while Article 5 left some room for Member State specific implementation.

In short, the Court answered the question as "…Article 2(a) and Article 3(1) of Directive 2001/29 must be interpreted as constituting measures of full harmonisation of the scope of the exceptions or limitations which they contain. Article 5(3)(c), second case, and (d) of Directive 2001/29 must be interpreted as not constituting measures of full harmonisation of the scope of the relevant exceptions or limitations".

The Court then jumped to the third question, which asked "…whether freedom of information and freedom of the press, enshrined in Article 11 of the Charter [of Fundamental Rights of the European Union], are capable of justifying, beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29, a derogation from the author’s exclusive rights of reproduction and of communication to the public, referred to, respectively, in Article 2(a) and Article 3(1) of that directive".

To kick things off, the Court noted that the exceptions in Article 5 are exhaustive, but those will need to be balanced with the interests of the rightsholder as well. The balancing is required through the transposition of the exceptions into national law. The Court did mention that "…the exceptions and limitations provided for in Article 5(3)(c)… (d)… are specifically aimed at favouring the exercise of the right to freedom of expression by the users of protected subject matter and to freedom of the press… over the interest of the author in being able to prevent the use of his or her work, whilst ensuring that the author has the right, in principle, to have his or her name indicated". The use by users, however, cannot interfere with the author's normal use of the work.

Following this the Court determined that "…freedom of information and freedom of the press, enshrined in Article 11 of the Charter, are not capable of justifying, beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29, a derogation from the author’s exclusive rights of reproduction and of communication to the public, referred to in Article 2(a) and Article 3(1) of that directive respectively".

The Court moved onto the second question, which asked "…whether, in striking the balance which it is incumbent on a national court to undertake between the exclusive rights of the author referred to in Article 2(a) and Article 3(1) of Directive 2001/29 on the one hand, and, on the other, the rights of the users of protected subject matter referred to in Article 5(3)(c), second case, and (d) of that directive, the latter derogating from the former, a national court may depart from a restrictive interpretation of the latter provisions in favour of an interpretation which takes full account of the need to respect freedom of expression and freedom of information, enshrined in Article 11 of the Charter". To put into other terms, can national courts go with a less restrictive interpretation of the rights given to users over protected works, particularly in the light of Funken not adding a summary of the document to the article (but merely linked to it).

When Member States transpose EU legislation into national legislation, this has to be done without conflict with the EU laws themselves, including through the interpretation used to devise national legislation. This means that any derogation from the provisions would have to be interpreted strictly. With regards to Article 5, the exceptions and limitations in it have to be protected in terms of their efficacy.

The Court continued that the Charter does expressly protect intellectual property rights, but those rights are by no means superior to everything, and can be broken given the appropriate exception. This means that both the rights held by the rightsholders, and the ability for users to use the materials for legitimate, fair purposes, have to be appropriately balanced.

The Court saw that Funken's use could fall under the exception of news reporting, due to the structure it was presented in, the notes added in and the further links given within the article. The specifics of which would have to be determined by the referring court in the end.

The answer to the second question therefore is "…that, in striking the balance which is incumbent on a national court between the exclusive rights of the author… on the one hand… the rights of the users of protected subject matter… the latter of which derogate from the former, a national court must, having regard to all the circumstances of the case before it, rely on an interpretation of those provisions which, whilst consistent with their wording and safeguarding their effectiveness, fully adheres to the fundamental rights enshrined in the Charter".

The case follows the other news reporting related cases that have come before it through the CJEU in recent times, and doesn't provide many surprises. News reporting would have to adhere to the Court's guidance on the matter, but it seems that similar use to that of Funken's would be covered by the exception under Article 5, to the potential chagrin of many authors that might not want this.

That's News to Me - CJEU Decides on Whether Copying for the Purpose of Reporting of Current Events Infringes Copyright

News reporting is an important part of society and one of the best ways to keep a population informed and up-to-date on current events. Many consider the preservation of news reporting, particularly an unfettered reporting, incredibly important. Quoting and copying of materials for the news isn't always as straightforward as that, with many instances amounting to copyright infringement. With that in mind, what are the limits to copying for the purposes of reporting current events? Luckily the CJEU took this question on and handed down its judgment only a few weeks ago.

The case of Spiegel Online GmbH v Volker Beck concerned a manuscript written by a German politician, Volker Beck. The manuscript, which dealt with criminal policy relating to sexual offences committed against minors, was originally published in 1988 under a pseudonym. At the time the manuscript's title, along with very small parts of its contents, were changed by the publisher, to Mr Volker's dismay. The manuscript was discovered 25 years later, which was put to Mr Volker during his then campaign for the German parliament. During this period Mr Volker provided some newspaper editors with the full manuscript to show it had been edited (but didn't give consent to the editors for publication), and published it on his website distancing himself from it. Spiegel Online, however, published an article contesting Mr Volker's stance, including links to the full manuscript with the article. Mr Volker subsequently sued the paper for copyright infringement, with the matter ending up with the CJEU sometime after.

The referring court asked the CJEU six questions, the first of which asking "…whether Article 5(3)(c), second case, and (d) of Directive 2001/29 must be interpreted as constituting measures of full harmonisation".

The CJEU dealt with the background of the question quite extensively, but decided that the Article does not constituting measures of full harmonization. As the transposition of legislation into national law is dealt with on a case-by-case basis, the Court saw that there was a high degree of discretion allowed for Member States, and therefore the provision isn't looking to harmonize EU law in a strict fashion across the board.

The Court then moved onto the third question, which asked "…whether freedom of information and freedom of the press, enshrined in Article 11 of the Charter [of Fundamental Rights of the European Union], are capable of justifying, beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29, a derogation from the author’s exclusive rights of reproduction and of communication to the public". In other words, would the freedom of information go beyond the express exceptions already provided for in the legislation.

At the outset the Court noted that the exceptions contained in Article 5 are exhaustive, and seek to strike a balance on interests between protecting works, while allowing for users to access information where and when needed (especially regarding the freedom of expression and information). They continued that Article 5 is specifically aims at favoring the exercise of the right to freedom of expression by the users of protected subject matter and to freedom of the press over the interest of the author in being able to prevent the use of his or her work. Even so, allowing for an exception beyond the above remits would potentially endanger the effectiveness of the harmonization of copyright in the EU and legal certainty on its factual remit.

The CJEU then determined that "…freedom of information and freedom of the press, enshrined in… the Charter, are not capable of justifying, beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29, a derogation from the author’s exclusive rights of reproduction and of communication to the public".

Having dealt with the third question, the Court turned to the second question, which asked "…whether, in striking the balance… between the exclusive rights of the author referred to in Article 2(a) and Article 3(1) of Directive 2001/29… and… the rights of the users of protected subject matter referred to in Article 5(3)(c)… and (d)… a national court may depart from a restrictive interpretation of the latter provisions in favour of an interpretation which takes full account of the need to respect freedom of expression and freedom of information".

According to the Court, the exceptions provided for in Article 5 confer specific rights to users of protected works, which should be given a broad interpretation, and the effectiveness of the provision needs to be safeguarded. Even though the Charter does expressly protect intellectual property, the rights given to rightsholders are not absolute. When striking a balance between the rights given to citizens by the Charter, courts have to consider the context in which that use occurs in the light of copyright protection. The Court considered that, in answering the question "…a national court must, having regard to all the circumstances of the case before it, rely on an interpretation of those provisions which, whilst consistent with their wording and safeguarding their effectiveness, fully adheres to the fundamental rights enshrined in the Charter".

The Court followed this with the fourth question, which asked "…whether Article 5(3)(c), second case, of Directive 2001/29 must be interpreted as precluding a national rule restricting the application of the exception or limitation provided for in that provision in cases where it is not reasonably possible to make a prior request for authorisation with a view to the use of a protected work for the purposes of reporting current events".

In answering the question, the Court noted that the exceptions in Article 5 don't require any authorization from the rightsholder prior to the use of a protected work. In considering the meaning of 'in connection with the reporting of current events', the Court saw that it meant "…the action of ‘reporting’… must be understood as that of providing information on a current event", but does not require the analysis of an event in detail. The reporting must also relate to 'current events', which is "…an event that, at the time at which it is reported, is of informatory interest to the public". The author of the protected work would also have to be attributed in the news reports.

The Court determined that national rules restricting the application of the exceptions would be precluded by EU law.

That was followed by the fifth question, which asked "…whether Article 5(3)(d) of Directive 2001/29 must be interpreted as meaning that the concept of ‘quotations’… covers a reference made by means of a hyperlink to a file which can be downloaded independently".

The Court commenced by looking at the meaning of 'quotation' under the provision, which is considered to be "…the use, by a user other than the copyright holder, of a work or, more generally, of an extract from a work for the purposes of illustrating an assertion, of defending an opinion or of allowing an intellectual comparison between that work and the assertions of that user". A direct and close link needs to be established between the quoted work and the author's own reflections. As such the quotation doesn't need to be inextricably integrated, by way of insertions or reproductions in footnotes for example, into the subject matter citing it, which allows for a hyperlink to be a quotation for the purposes of the provision.

The Court therefore answered the question as "…the concept of ‘quotations’, referred to in that provision, covers a reference made by means of a hyperlink to a file which can be downloaded independently".

Finally, the Court turned to the sixth and final question, which asked "…whether Article 5(3)(d) of Directive 2001/29 must be interpreted as meaning that a work has already been lawfully made available to the public where that work, in its specific form, was published previously with the author’s consent".

The Court noted that the exception for quotation only applies to works that already been lawfully made available to the public. If a work has been made lawfully available, it has been made available with the author's authorization, allowing for quotation. Mr Beck had clearly done so by publishing the manuscript on his website, even if he disassociated himself from the work (with the statement needing to be included with any quotation).

The Court therefore set out that "…Article 5(3)(d) of Directive 2001/29 must be interpreted as meaning that a work has already been lawfully made available to the public where that work, in its specific form, was previously made available to the public with the rightholder’s authorisation or in accordance with a non-contractual licence or statutory authorisation".

The case is yet another important update to the world of quotation, and how copyright protected works can be used in news reporting. The limits of what would amount to quotation can be tricky, and therefore a serious of cases from the CJEU dealing with the subject matter is a very welcome addition. Many news outlets will welcome this change, but will have to make sure to abide by it so as to not infringe copyright in any works.

Just a Little Taste - The CJEU Decides on Whether Music Sampling Infringes Copyright

Having discussed the recent opinion by Advocate General Szpunar in relation to copyright and sampling, the CJEU's decision has been very hotly anticipated, particularly by the music industry. Sampling has become incredibly common in the creation and production of music, and so the potential curtailing of sampling by the CJEU could pose a big problem to artists, producers and labels. Luckily (or unluckily) the CJEU has finally handed down its judgment very recently.

As a short primer, the case of Pelham GmbH v Ralf Hütter and Florian Schneider‑Esleben concerned the song "Metall auf Metall" created by the band Kraftwerk, which comprises of the respondents Hütter and Schneider‑Esleben. The song was sampled in another song called "Nur Mir", which was produced by Pelham in the late 1990s. Kraftwerk allege that Pelham sampled a two-second rhythm sequence from their song, and used it as a continuous loop in "Nur Mir", therefore infringing their copyright. Pelham contested the infringement allegation, and the case then ended up in the CJEU some years later.

The referring court asked the CJEU six questions, which the Court dealt with (mainly) in turn.

The first and sixth questions were dealt with by the CJEU together, which essentially asked "...whether Article 2(c) of Directive 2001/29 must, in the light of the Charter [of Fundamental Rights of the European Union], be interpreted as meaning that the exclusive right granted to a phonogram producer to reproduce and distribute his or her phonogram allows him to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram".

The Court opened with setting the scene, in that the copying of a sound sample, even if very short, must be regarded as a reproduction ‘in part’ of that phonogram within the meaning of the Article. Even so, if a user is exercising their freedom of the arts to create a new, distinguishable phonogram work, that particular use wouldn't be classed as a 'reproduction' under the Article. The Court noted that a balance has to be struck between the rights afforded by copyright, and the rights under the Charter.

Having considered the questions, the Court determined that "…Article 2(c)… must, in the light of the Charter, be interpreted as meaning that the phonogram producer’s exclusive right under that provision to reproduce and distribute his or her phonogram allows him or her to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram, unless that sample is included in the phonogram in a modified form unrecognisable to the ear". In short, an artist would have to utilize a short clip of music in more ways than simply copying it in and the work has to be unrecognizable when compared to the original.

The Court then moved onto the second question, which asked "…whether Article 9(1)(b) of Directive 2006/115 must be interpreted as meaning that a phonogram which contains sound samples transferred from another phonogram constitutes a ‘copy’, within the meaning of that provision, of that phonogram". The Article affords the owner of the rights in a phonogram the right to distribute copies of the work.

Having discussed the legislative backdrop of the provision quite extensively, the Court considered that samples transferred from another phonogram would be a 'copy' under the provision, as they are a 'duplicate' of the part of the work, since the samples contain sounds taken directly or indirectly from a phonogram.

The Court then considered the third question, which asked "…whether a Member State may, in its national law, lay down an exception or limitation, other than those provided for in Article 5 of Directive 2001/29, to the phonogram producer’s right provided for in Article 2(c) of Directive 2001/29" – or in other words, can additional exceptions be provided to the rights afforded to rightsholders in relation to phonograms.

The matter yet again circled around the balancing of interests in terms of the rights in works, and exceptions to those rights allowing for the use of works in specific circumstances (so long as it doesn't conflict with the normal exploitation of a work). The Court answered the question in the negative, considering that Member States cannot lay down additional exceptions outside of Article 5.

The fourth question concerned "…whether Article 5(3)(d) of [Directive 2001/29] must be interpreted as meaning that the concept of ‘quotations'… extends to a situation in which it is not possible to identify the work concerned by the quotation in question".

The Court first focussed on the requirements for quotation, which has to be made "in accordance with fair practice, and to the extent required by the specific purpose", meaning you can't simply copy a work and claim it as a quotation of that work if it exceeds the requirements and purpose of a given quotation. Also, the Court noted that the meaning of 'quotation' is the use of a copyright protected work to "….illustrat[e] an assertion, of defending an opinion or of allowing an intellectual comparison between that work and the assertions of that user", which is typically done through a 'dialogue' with that work.

A key consideration on quotation is that the work needs to be identifiable, which, in sampling, might not be as easy. Without the identification of the sample, it isn't strictly possible to have a 'dialogue' with the work as a part of the quotation. The Court therefore set out that "…the concept of ‘quotations’… does not extend to a situation in which it is not possible to identify the work concerned by the quotation in question". It is a case-by-case question, in terms of sampling, when the copying can be considered as a quotation within the provision.

Finally, the Court dealt with the fifth question, which concerned "…whether Article 2(c) of Directive 2001/29 must be interpreted as constituting measures of full harmonisation".

The Court emphasised that EU law takes precedent over national law, even if it concerns a Member State's constitution, and any national measures shouldn't undermine the effectiveness of the EU in its territory. That also means that EU legislation would have to be transposed into national legislation irrespective of their discretion. The Court therefore concluded that "…Article 2(c)… must be interpreted as constituting a measure of full harmonisation of the corresponding substantive law".

The decision is a big one, and potentially is a big blow to the music industry, but has shown more clarity in the area of quotation. The courts will undoubtedly grapple with this decision in the coming years, particularly due to the nature of whether a sample can be recognized within a different song where it is copied. This writer agrees with the Court, but will wait to see whether, or if at all, the decision will have an impact on the music industry.

Walking the Dotted Line - CJEU Decides on what Dotted Lines mean in Trademark Applications

The Devil is often in the details, especially when applying to register trademarks and/or patents. Sometimes the smallest of 'mistakes' or strategic choices could lead to the revocation or devaluation of your IP, so it is important to be sure you have set out the exact parameters in the best way possible to avoid potential issues. One such matter is how trademarks are presented in graphical form, including dotted lines (the Trunki case being a good example of when the illustration of a mark really mattered). With this in mind, how does the inclusion of dotted lines in trademark applications impact the mark, and can they be excluded as being simply illustrative?

The case of Deichmann SE v EUIPO concerned the registration of a trademark involving a cross design on the side of a shoe, where the shoe itself was marked using dotted lines to illustrate the position of the mark (EUTM 2923852). Infringement proceedings involving the mark were initiated by Deichmann 6 years after the registration of the mark, and the other party, Munich SL, counterclaimed for revocation and invalidity. The matter then ultimately ended with the CJEU for determination.

The crux of the matter is whether the mark can be revoked under Article 51 of the EU Trade Mark Regulation for a lack of genuine use in the EU. What the Court also had to consider was whether the mark was a figurative or a position mark, and whether that was an irrelevant fact for the determination of genuine use.

Does it really count if I signed on a dotted line?

The Court considered that "…it [is] irrelevant whether the mark at issue should be regarded as a position mark or a figurative mark". The General Court had previously determined that the mark was a figurative mark at the same time as being a position mark – which the Court agreed with. They further noted that "…‘position marks’ are similar to the categories of figurative and three-dimensional marks as they related to the application of three-dimensional elements to the surface of a product", and the distinction between a figurative and a position mark in the light of distinctiveness is irrelevant.

Similarly it was irrelevant to the assessment of genuine use. The Court emphasised that the acquisition of genuine use is analogous to that of distinctiveness, therefore rendering the distinction between a figurative and a position mark unnecessary for genuine use.

The Court then looked at the mark itself, which they saw consisted of "…broken or ‘dotted’ lines, which represent the appearance of the product covered by that mark, and two solid lines, representing an affixed cross". The dotted line therefore clearly denotes the location of the mark itself, rather than forming a part of the mark, i.e. making it a position mark.

The mark had been registered as a figurative mark, and even though the above sets it out as a position mark, this ultimately does not matter in the light of the mark's registration.

The case is by no means revolutionary, but does draw a line in the law in the light of dotted lines. Most of the time common sense prevails, and applicants can let out a sigh of relief in their world of dotted outlines.

It Ain't Bad - Advocate General Kotott Considers Bad Faith in TM Applications

Picking the right trademark can sometimes feel like it's the make-or-break moment for a brand, particularly when you are building a brand from nothing. Maybe taking 'inspiration' from a very well-known brand might be the boost you need, since people might naturally gravitate to your brand thinking it is another – but of course without meaning it is that one! Toeing the line of registering a trademark in bad faith is a tough one, since when is an application truly made in bad faith? This issue hasn't been touched on by the EU courts in a while, and in the lead-up to a CJEU decision Advocate General Kokott has given their two cents in a recently published opinion discussing this very issue.

The case of Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO concerned the application for the registration of a figurative mark by Nadal Esteban for the trademark "STYLO & KOTON", with the letters o written using symbols that look like flowers (EUTM 9917436). The application was opposed by Koton, who had earlier rights in the figurative trademark "KOTON", in which the letter o was also written using flowers. Koton argued that Mr Esteban's mark had been registered in bad faith, and should be declared invalid. After a rejection most recently by the EUIPO General Court, the matter has moved for determination by the CJEU, with the AG issuing their opinion ahead of the decision.

Under Article 52(1)(b) of the Trade Mark Regulation, an application can be declared invalid if the applicant was acting in bad faith when filing the application. For the Article to apply the mark applied for has to be identical or similar for identical or similar goods/services to the third-party mark being 'copied'. The General Court rejected Koton's argument under this premise since the mark being applied for was in relation to dissimilar good/services.

The AG emphasized that in assessing bad faith you have to, in addition to the above "…take into account all the relevant factors specific to the particular case which pertained at the time of filing the application". Factors in considering bad faith could include a lack of intention of using the mark at all, or the intention to use it in order to mislead consumers over the origin of goods or services. This could also include the attempt to register a mark knowing or thinking that registration by another would be imminent (i.e. registering iPad thinking Apple might start a line of tablets).

The AG therefore considered that based on the variety of factors raised by the AG (as discussed above) "…It is not therefore essential for recognition of bad faith that a third party is using an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought". Bad faith can include the registration of a similar or identical mark for wholly unidentical goods/services. 

The General Court had not considered Mr Esteban's earlier application as a factor when assessing bad faith, which was refused, for identical goods and services. After the EUIPO rejected his application Mr Esteban changed the goods and services included in his application and the mark was registered. The AG considered this to be an important factor and one that needed to be included. What the earlier application allows an inference to be drawn as to his intentions at the time of filing.

This highlights just how different bad faith is to other causes for invalidity, as it "…is not an inherent defect in the trade mark itself, but stems from the circumstances in which it was applied for". An application also cannot be divided into good and bad faith parts under Article 52 of the Regulation, but must be looked at as a whole in the light of bad faith. As such the AG saw that "…The fact that an application was originally filed for a trade mark for goods and services in respect of which the applicant knew or should have known that identical or similar trade marks existed may in any event be an important indication that the application to register that trade mark for other goods or services was also filed in bad faith".

The General Court also failed to properly assess whether Mr Esteban's defense to bad faith had any 'economic logic'. Having considered the new factor, and Mr Esteban's defense to bad faith, the AG concluded that the application had indeed been filed in bad faith.

While we wait for the CJEU's decision in the matter, it seems that the Advocate General has highlighted important oversights made by the General Court.

But I've Done Nothing Wrong! - Can You Infringe a Trademark Without Using the Trademark At All?

Quite often the simple use of a mark will amount to trademark infringement (to put things very simply). While there is some level of uncertainty that related to the specific assessment of infringement, many practitioners have no problems establishing trademark infringement when a particular mark is used by an unauthorised third-party. Even with that in mind, a recent case in the CJEU has challenged the simplicity in assessing trademark infringement; can you infringe a mark without ever using it? This puzzling question landed on the CJEU's desk late last month, which sets an interesting precedent for future infringement cases.

The case of Mitsubishi Shoji Kaisha Limited v Duma Forklifts NV concerns the sale of Mitsubishi forklifts, for which Mitsubishi's European arm has the exclusive rights to. The forklifts of course include the Mitsubishi logo, which the company has had as a registered trademark for nearly 20 years (EUTM 117713), and its name. Duma is a company that specialises in the sale of new and second-hand forklifts, including some under its own brands, and historically operated as the sub-dealer for Mitsubishi forklifts in Belgium. Since then Duma parallel imported Mitsubishi forklifts from outside the EEA to Europe, without authorisation, removing all signs from them identical to ones owned by Mitsubishi, and bringing them up to spec under EU regulations. All identification plates and serial numbers were also replaced. Mitsubishi took Duma to court over trademark infringement over the matter, with the case ending up all the way at the CJEU this summer.

The referring court asked the CJEU two questions, which it considered together, asking in essence "…whether Article 5 of Directive 2008/95 and Article 9 of Regulation No 207/2009 must be interpreted as meaning that the proprietor of a mark may oppose a third party removing all the signs identical to that mark and affixing other signs, without its consent, on products placed in the customs warehouse… with a view to importing them or trading them in the EEA where they have never yet been marketed". The articles are identical, so we're only concerned with the interpretation of the newer 2009 Regulation.

The Regulation, as decided in the Davidoff case, allows for the marketing of goods outside the EU, as is the case here, without losing your rights in the EU to those goods and the marks they bare, so long as those marks are registered within the EU. The Regulation also affords the proprietor the right to protect those rights within the EU against third parties, should they employ an identical mark in the marketing and/or selling of the goods in the EU.

After chiselling the badge off of his car for an hour
Tony realized it was a big mistake

What makes this case tricky is the removal of all Mitsubishi marks from the forklifts, and necessary modifications to comply with EU law, before they are imported into the EU. The court did, however, consider that the removal of the marks "…deprives the proprietor of that trade mark of the benefit of the essential right… to control the initial marketing in the EEA of goods bearing that mark". The placing of new marks on the goods also, according to the court, adversely affects the functioning of the original mark in the EU. The court considers that, as discussed in the TOP Logistics case "…any act by a third party preventing the proprietor of a registered trade mark in one or more Member States from exercising his right to control the first placing of goods bearing that mark on the market in the EEA, by its very nature undermines that essential function of the trade mark" (emphasis added). Clearly the court's thinking is that the act of removal should be reserved only for the proprietor of the mark, and Duma undertaking to do so undermines the function of that mark, or at least the choice in the use of the mark in the territory by the proprietor.

The Court also noted that consumers could identify the forklifts simply from their outwards appearance, and the removal of the marks from those goods and the subsequent harm to the marks would only be accentuated by that fact.

The removal of the mark additionally precludes the proprietor "…from being able to retain customers by virtue of the quality of its goods and affects the functions of investment and advertising of the mark where, as in the present case, the product in question is not still marketed under the trade mark of the proprietor on that market by him or with his consent". The placing of the goods without the mark further highlights the Court's reluctance to allow for the choice of introducing the goods to the market to be taken away from the proprietor by a third-party. They also emphasise the loss in reputation and economic value, among other things, due to the removal and subsequent marketing/sale of the goods in the EU by the third-party, and not by the proprietor.

The Court noted that the removal of the marks is also, in their view, a way to try and avoid the possibility of the prevention of the goods' importation into the EU by the proprietor, further adding to their reluctance to take away power from the proprietor (and therefore preventing distorted competition).

Importantly, the Court saw that the in concept of 'use in the course of trade' (a key component in establishing infringement) "…an operation consisting, on the part of the third party, of removing signs identical to the trade mark in order to affix its own signs, involves active conduct on the part of that third party, which, since it is done with a view to importing those goods into the EEA and marketing them there and is therefore carried out in the exercise of a commercial activity for economic advantage… may be regarded as a use in the course of trade". This only emphasises the removal of the choice from the proprietor, and the Court is clearly protecting the ability to do so for the proprietor, and also the easy avoidance of trademark infringement.

In short: "…Article 5 of Directive 2008/95 and Article 9 of Regulation No 207/2009 must be interpreted as meaning that the proprietor of a mark is entitled to oppose a third party, without his consent, removing all the signs identical to that mark and affixing other signs on the products placed in the customs warehouse, such as in the main proceedings, with a view to importing them or trading them in the EEA where they have never yet been marketed".

The decision is definitely an oddity, but to this writer at least, is clearly a marker being put down by the Court to protect the interests and rights of trademark holders, and to prevent the avoidance of infringement through the removal of registered marks from goods. What makes the decision weird is that the Court is saying that the removal of marks equates to the use of an identical trademark, even though no such mark exists on the goods themselves. In the end, it seems like the decision is one that will stand out, particularly from a trademark infringement perspective, and it will be interesting to see whether the decision will have more significant impact than you would initially think.