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

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

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

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

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

Ben's counterfeit spoon business took a hit from the ruling

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

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

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

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

Source: IPKat

Can You Infringe Copyright by Browsing the Internet?

Browsing the web can be full of pitfalls, both legally and in terms of your own safety. It's this world that we endeavor to navigate on our times surfing, but often don't think about the unknown issues or are blissfully unaware of the implications of our digital actions. It's because of this many things can slip through the cracks. Web browsers have made temporary copies of the content we read, look at and watch for years, more often than not without our knowledge, and this can present legal issues when dealing with copyrighted content, whether we want it or not. Whether just innocent surfing can infringe copyright is an interesting question, and this writer for one automatically thought the answer would be obvious, yet one would be surprised about the nuances behind the answer.

The case which dealt with this interesting conundrum was Public Relations Consultants Association Ltd v The Newspaper Licensing Agency Ltd, having been referred to the European Court of Justice by its UK counterpart earlier on in 2013. The Public Relations Consultants Agency (PRCA) is an association public relations professionals, who among other duties monitor the news for their clients, clearly to safeguard or preempt any potential PR disasters. The members of this association used a service provided by the Meltwater group of companies; one which used software to automatically compile an index of words used by newspapers in their content online. To better utilize this service Meltwater's clients provide them with a list of search terms which interest them, which are then used to create an index which is oriented around those key words. In the service's results the opening words of the article, the key word and a few surrounding words and a hyperlink are provided for the client, allowing them to find the article containing their desired content more easily. The service does not circumvent any paywalled articles, and the client will have to pay for that specific content should they wish to view it. The respondents of the appeal objected to this use of their content, and took the Agency to court, culminating in the UK Supreme Court in the earlier part of 2013.

The button that all internet users wished existed for certain purposes

The question faced by the ECJ therefore was, as iterated by the Supreme Court: "The question which arises on this appeal is whether [Internet users reading the an article online] are nonetheless infringing copies unless licensed by the rights owner [by creating temporary copies of those works]". More specifically whether this infringes Directive 2001/29/EC, and through which the Copyright, Designs and Patents Act 1988.

Under Article 5 of the Directive incidental copies are treated as not infringing copyright should they be "... temporary, transient or incidental, which are an integral and essential part of a technological process and whose sole purpose is to enable... a transmission in a network between third parties by an intermediary, or a lawful use... and has no independent economic significance". Arguably, on the face of it, the matter is quite clear-cut, as temporary copies are essential to how the internet functions and how we both conserve and make internet traffic more efficient. Nonetheless, the matter is still not that simple, at least from a legal perspective.

The court quickly saw that the temporary copies made through the viewing of websites indeed do satisfy the first requirement under Article 5, as the copies are lost once the user moves on from the website and other content is subsequently brought in to replace the temporary copies of the prior page. This makes those copies wholly temporary in nature. The court then moved on to the third requirement, under which the copies have to be essential for the technology to work properly; or as presented in Infopaq International v Danske Dagblades Forening: "...first, the acts of reproduction are carried out entirely in the context of the implementation of a technological process and, secondly, the completion of those acts of reproduction is necessary, in that the technological process could not function correctly and efficiently without those acts". As the user has to say (mostly) in the creation or deletion of these copies, the technology needs for those copies to be created in order to function as intended, as they are a part of its process. The copies are, as said above, essential to the internet's proper function and help prevent excess volumes of traffic, which would undoubtedly choke the internet beyond use. The court seemed quite satisfied with the technology satisfying the second requirement, meaning that the technology is needed for the process to function properly and efficiently, and therefore satisfies the third requirement.

Under the second requirement the copies have to be transient or incidental, and as the copies, as stated above, are deleted once the user switches to a different page, they are transient, even if there is some level of human intervention in their deletion. Finally, the copies are created as a part of the technology which uses them, and do not by themselves exist independent of it nor have a purpose outside of it, making the copies incidental for the purposes of Article 5. The court therefore saw that the temporary copies created during web browsing do not infringe copyright and are excluded as a part of Article 5.

As one can see the ECJ's decision was one of pragmatism and common sense. The prevention of transient copies in the viewing of content on the web would be detrimental to how the internet functions today, potentially even causing issues in its overall usability. As said above the answer to the question seemed obvious, and quite frankly, should not have even been argued in court this far. The matter will be passed onto the Supreme Court to decide on ultimately; however the ECJ's word is a powerful one and clearly demonstrates an unwillingness to compromise the net as we know it for the sake of copyright.

Source: The Guardian

Public Consultation on EU Copyright Law

Copyright reform seems to be on everyone's mind, with reviews being or having been undertaken in the United Kingdom, Australia and Ireland in the past year. Even in this writer's mind copyright has been in dire reform in many jurisdictions, and the calls for change are a welcome change of pace. In conjunction with the aforementioned two EU common law jurisdictions' reform thoughts, the Union itself has set up consultations on the review of its copyright rules. The harmonization of copyright across the EU is something that is desired, especially in the current copyright climate, which is seeking to fit the laws with modern uses of copyrighted material.

According to the European Union's press release this is in response to "...the completion of its on-going efforts to review and modernise the EU copyright legislative framework as announced in the Intellectual Property Strategy "A Single Market for Intellectual Property Rights", while facilitating practical industry-led solutions through the stakeholder dialogue Licences for Europe to issues on which rapid progress was deemed necessary and possible". What this revision will change will ultimately be left to the EU; however the consultation does indicate certain desired changes or directions which the Union may take in the future.

In setting out the reasons for the consultation, the EU was very clear in the background and needs for reform:

"Over the last two decades, digital technology and the Internet have reshaped the ways in which content is created, distributed, and accessed. New opportunities have materialised for those that create and produce content... for new and existing distribution platforms, for institutions such as libraries, for activities such as research and for citizens who now expect to be able to access content... regardless of geographical borders... This new environment also presents challenges. One of them is for the market to continue to adapt to new forms of distribution and use. Another one is for the legislator to ensure that the system of rights, limitations to rights and enforcement remains appropriate and is adapted to the new environment."

Indeed the changes in the environment where copyright functions on a day-to-day basis have drastically changed since the emergence of the Internet and a heavier emphasis on the consumption of digital goods as opposed to their physical counterparts. How the aforementioned issues will be tackled leaves a lot of room for discussion in submissions; however this writer will endeavor to give his insight on some of the solutions or questions posed by the Union.

The EU in this process would want to unify the approach to copyright within all of its territories; which currently is a process which takes place in each nation individually, hindering licencing or forcing partial or separate EU-whole licences to be created. Arguably such a licencing scheme would be desirable, but whether this requires legislative action is questionable. The Union should offer an easy way to licence content all over Europe, providing all of its citizens access to the same or most of the content others have access to. The Single Market in this regard needs to be encouraged, not necessarily further legislated on.

The EU also wants to further clarify the position the law holds with digital content; more specifically the making available of content and what that entails; the rights relating to the making available of content (its reproduction and the right to make it available) and their split nature between different parties; the complexity of linking on the Internet and browsing content on it (and issues that might arise relating to temporary copies thereof); and the ownership of downloaded content. Some of these questions, as pointed out by the consultation paper, have been referred to the Court of Justice of the European Union, and those decisions will undoubtedly influence the changes that might be needed after, if at all.

The paper also seeks to further clarify, and potentially unify, the approaches taken by Member States to exceptions in relation to copyrighted content and their use. Although several a Directive has been issued pertaining to exceptions particularly, for example in terms of research and teaching, there is a clear need for uniformity and the extension of new exceptions in this regard, at least in this writer's opinion. A clear and concise regime of legitimate use of copyrighted content all over the EU would be beneficial to users, and enable the Single Market to function more consistently and easier. As the paper points out, user-generated content is an important consideration, which is yet to be legislated on, among a few other exceptions. As said, this is one area where the EU should step up and give further guidance and unification, purely due to the international nature of digital content especially, easing the modern markets and unifying their approaches within the Union.

The consultation paper contains much more than what has been discussed above, and all parties which can participate in this process should voice their opinions. Although the EU has been far from complacent in recent years in terms of copyright review, this process gives the ability for others to directly influence this process, and therefore improve the current Single Market. Copyright has been a hot-button topic, and seems to keep as such for the foreseeable future.

Source: TorrentFreak

Retrospective - All's Fair in Dealing and Education

Having just a few days ago written about the Canadian progression in the field of fair dealing and education in the new Copyright Modernization Act 2012, I thought it would be best to address a case that changed the way the old provisions of fair dealing applied to both study and education in newfangled ways, applying the principles set out in the mammoth of a case that was CCH, practically still hot from the oven (discussed on this blog as well and worth reading should you be unfamiliar with it).

The case of Alberta (Education) v Canadian Copyright Licensing Agency (Access Copyright) dealt with the copying of excerpts from textbooks and other materials by teachers to distribute to their students as a means to study only specific parts of texts. Some of the materials being copied were under the copyright of Access Copyright, for which various royalty payments were negotiated in the 1990s between the school boards and the company. After subsequent negotiations there was an agreement made for royalties to be paid on a volume basis, instead of the old per-student basis negotiated for most of the decade.

The use of the copies was tracked individually to ascertain the volume being copied; looking at their purpose, who made the copies, and who they were for. Most of the copying was done by teachers either for themselves or for students at their behest, which was agreed to fall under fair dealing by both parties. The contentious matter was the copying of materials for students by the teachers to take home and read. It was argued that this copying of materials did not fall under fair dealing for research or private study, as the copies were not requested by the students themselves, not meeting the requirements set out in CCH, at the initial hearing for the Copyright Board. The schools argued that they would fall under the provision thus being exempt from the tariffs set by Access Copyright. The Copyright Board decided the use did not fall under fair dealing, failing to meet the requirements under CCH; however the schools appealed the decision.

Private "study"

The case culminated in the Supreme Court of Canada in mid-2012 where the matter of whether the teachers' use fell under fair dealing, specifically the aforementioned provision of research or private study was finally decided. One has to note that the Canadian provision expressly mentions the possible use of materials for study as a private one, possibly indicating that a teacher could not act as a conveyor of material to the student, largely being Access Copyright's argument in the case; as the copies were not made at the request of students, it did not fall under fair dealing.

The courts gave an interesting argument, deciding that the teachers' use did indeed fall under fair dealing. To fully appreciate how the Court reached this conclusion, it is useful to look at what exactly was said in the judgment:

"...there is no such separate purpose on the part of the teacher.  Teachers have no ulterior motive when providing copies to students.  Nor can teachers be characterized as having the completely separate purpose of “instruction”; they are there to facilitate the students’ research and private study.  It seems to me to be axiomatic that most students lack the expertise to find or request the materials required for their own research and private study, and rely on the guidance of their teachers.  They study what they are told to study, and the teacher’s purpose in providing copies is to enable the students to have the material they need for the purpose of studying.  The teacher/copier therefore shares a symbiotic purpose with the student/user who is engaging in research or private study.  Instruction and research/private study are, in the school context, tautological."

Clearly the Court saw that the relationship between a student and their teacher is symbiotic; one where the teacher merely facilitates the students' private study by providing them with the material. Should the students be instructed to go and look for the material themselves, copy it, and use it for personal study, their learning would clearly be hindered significantly. Without the teacher being a sort of "middle-man", and being a part of that personal study, the students would suffer.

The Court didn't alter its position in the matter of personal study, firmly sticking to its prior interpretations, but did apply common sense in the relationship between a teacher and a student in that regard. The case didn't enable anyone to abuse the provision under the veil of providing materials for others for personal study. The decision was a 5-4 split decision, clearly showing a side of disdain even in the judiciary to accept this use of fair dealing as such, but nevertheless the decision seems to be a practical one and clearly makes sense. Without the option for teachers to copy and distribute reading materials for their students, the underlying matter of fairness would be skewed towards the copyright owner instead of the user, clearly going against what fair dealing stands for; the allowance of use of various copyright materials to improve yourself, your knowledge and to improve society as well without the shackles of copyright payments when clearly there is no competing interest.

The Enterprise and Regulatory Reform Act 2013

A piece of legislation having incited a lot of conversation among the copyright law community in recent times is the Enterprise and Regulatory Reform Act 2013 in the United Kingdom, having been given assent last month, and finally having its final draft released early this month. The discussions around the Act have been largely focused on its approach to orphaned works, especially relating to photographs, but what could the impact of the legislation potentially be?

The Act mainly deals with amendments relating to corporations, mergers and markets, but the inclusion of copyright provisions seems to have fallen into the spotlight more than the rest. Section 77 adds a licensing scheme to works, which after a diligent search, have become orphaned as the owner of the copyright has not been found or cannot be contacted to attain a license to their work. Once this has been established, regulations passed by the Secretary of State could allow for that work to be  licensed to the party or parties seeking to use it for their own purposes for a fee.

Photographers should never resort to drastic measures

What causes the most concern to owners of copyright works, especially photographers, is the lack of definition for what a 'diligent search' would entail, as it isn't defined in the Act, and the nature of the environment where their works currently reside for the most part; the Internet. Looking at the former, what potentially could amount to a diligent search remains quite open, and will without a doubt be looked at by the judiciary in coming years once the Act has come into force. On the face of it one could imagine it encompassing would be proper investigation, through the means of Internet searches for similar imagery and trying to attain who the real author is, or by the use of other means of identification, such as watermarks or digital signatures in copyright works. What makes this issue difficult is the nature of the Internet, where information (including copyright works) is passed on and on, used and copied, diluting or even eradicating the underlying metadata from works, possibly rendering the identification of the copyright owner near impossible. Also the lack of clarity as to what amounts to a diligent search further adds to the ambiguity, since if a lower threshold is introduced amounting to a diligent search, the Act could potentially create a loophole through which works could be abused by those wishing to use them for their own benefit.

One thing I also have to note is a lack of a way of redress for those whose works have been licensed under the Act. There is no provision enabling the original copyright owners from enforcing their copyright once the license has been granted, even after they have identified the work or works as their own, clearly opening the provision up for possible abuse without repercussions. Surely such an omission is one which could harm the creative industry, however as I've stated this is purely speculative and whether this will cause any abuse or harm remains to be seen. The Act has already ruffled some feathers within the creative community, so its potential impact seems to be real and threatens those within the industry.

The Government has posted a list of Facts and Myths about the Act, and also provided some clarifications as to its effects and implementations.

Independent third party;  Sherlock Holmes

The IPO never addresses the matter of what a diligent search is, even in its notes mentioned above, but it does give some indication as to the process, where a diligent search will be "...verified by the independent authorising body which the Government will appoint before a work can be used". What this means is that the process will be an evidentiary process, so there will be no automatic scheme implemented, and all licenses should go through a more rigorous process before being granted. Not only will this provide a minimum threshold, but also an independent body whose sole job it will be to wade through the sea of applications.

The Act does not remove any automatic rights in works, nor does it allow for them to be 'stripped' from them, contrary to the belief of some parties. What it does is introduce a potentially harmful scheme, but as said, it will remain to be seen how or whether this will impact authors of copyright works. The IPO also indicates that authors will have a say in the final draft of the Rules, giving them more say in the process coming down to its finalization and establishment.

Also the licensing fees paid will be held for the copyright owner to claim, allowing for some amount of compensation should the works' owner or owners come to light, but it still does not address the possible financial loss incurred from a very successful use of a copyright work.