Tag Archives: European Union

Criminal conviction for storage for commercial purposes of goods infringing copyright, even in storage facilities separate from the place of sale

Source: Pixabay

The judgment of the CJUE (Case C-572/17) of 19 December was issued within the context of a request for a preliminary ruling from the Swedish Supreme Court in criminal proceedings brought by the Public Prosecutor’s Office of this Court against Mr. Imran Syed concerning the infringement of trade marks and infringements of copyright in literary and artistic works. 

Mr Syed ran a retail shop in Stockholm (Sweden) in which he sold clothes and accessories with rock music motifs. In addition to offering the items for sale in that shop, Mr Syed stored such goods in a storage facility adjacent to the shop and in another storage facility located in Bandhagen, a suburb of Stockholm. It is established that Mr Syed’s shop was regularly restocked with merchandise from those storage facilities.

The issue arising was whether goods stored by someone in a warehouse and bearing a protected motif could be considered as being on sale whenever there are identical goods on sale in a retail establishment run by such person.

In this judgment the CJUE recalls that such an act can constitute an infringement of the exclusive distribution right (Article 4(1) of Directive 2001/29) even if that act is not followed by the transfer of ownership to a purchaser of the protected work or a copy thereof (expressly citing its judgment of 13 May 2015, Dimensione Direct Sales and Labianca, C‑516/13). Therefore, an act prior to the actual sale of a work or a copy thereof protected by copyright, which takes place without the rightholder’s consent and with the objective of making such a sale, may infringe the distribution right. Although carrying out the sale is not a necessary element for the purpose of establishing an infringement of the right of distribution, it must nonetheless be proven that the goods concerned are actually intended to be distributed to the public without the rightholder’s consent, inter alia by their being offered for sale in a Member State where the work at issue is protected.

The fact that a person, selling goods bearing copyrighted motifs in a shop without the rightholder’s authorisation, stores identical goods, may be an indication that the stored goods are also intended to be sold in that shop and that, accordingly, that storage may constitute an act prior to a sale being made, which is liable to infringe that rightholder’s distribution right.

Although the distance between the storage facility and the place of sale may constitute evidence that can be used in seeking to establish that the goods concerned are intended to be sold in that place of sale, that evidence cannot, on its own, be decisive. It may, on the other hand, be taken into account in a concrete analysis of all the factors likely to be relevant, such as, for example, the regular restocking of the shop with goods from the storage facilities at issue, accounting elements, the volume of sales and orders as compared with the volume of stored goods, or current contracts of sale.

The judgment finally rules that the storage by a retailer of goods bearing a motif protected by copyright on the territory of the Member State where the goods are stored may constitute an infringement of the exclusive distribution right when that retailer offers for sale, in a shop without the authorisation of the copyright holder, goods identical to those which he is storing, provided that the stored goods are actually intended for sale on the territory of the Member State in which that motif is protected. The distance between the place of storage and the place of sale cannot, on its own, be a decisive element in determining whether the stored goods are intended for sale in the territory of that Member State.

Once more, with this judgment the CJUE imposes order regarding the problem of copyright-infringing acts or means, prior to the sale of goods, that regrettably and painfully affect creators far too frequently.

  Author: Juan José Caselles

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Battle between rightholders and internet users

(Source: Pixabay)

Since it was published in 2016, the proposal for a Directive on Copyright in the Digital Single Market has turned into a showdown between IP rightholders and Internet users, the latter brought together and represented by the main Internet user associations.

The proposed Directive, as its name suggests, was created with the aim of harmonising and adapting copyright law to the new uses and exploitation models of intellectual creations inherent to the Internet age and new technologies.

The Internet, traditionally an information source for the average user, is now increasingly a means of expression. Every day, millions of Internet users share (by means of tweeting, retweeting, tagging) all kinds of content: photos, videos, text, memes, comments. Problems arise when the content being shared has an owner and permission has not been sought or, in more serious cases, when a third party is making a profit from content shared, perhaps innocently and in good faith, by the user.

The amendments to the text of the proposal for the Directive, adopted by the European Parliament in September, to a large extent reflect the feelings of authors, artists, publishers and other rightholders who are desperately trying to put an end to the culture of sharing something that belongs to someone else in a space where it seems that freedom of expression has to prevail over any other right.

In the parliamentary debate, the bone of contention (or at least one of them) was the issue of the obligation of service providers that share content online to reach agreement with rightholders to avoid users of these platforms being able to upload content protected by copyright or to ensure that, if they do so, the rightholder receives due payment.

Up to now, this type of provider (YouTube, for example) was only obliged to put in place mechanisms for withdrawing content in cases in which the rightholder had reported the providing of protected content (the so-called notice and take down protocol). If the wording of Article 13 adopted by the Parliament is ultimately accepted, it seems that providers of these services will be obliged to carry out prior monitoring and filtering of the content that users wish to upload.

This Article 13 has come under heavy criticism and has been described by certain groups as an attack on freedom of expression and on diversity of opinion online. A review of the full text of the provision and the related recitals should lead to a more moderate view, given that the filtering obligation will only affect those providers acting for profit-making purposes, storing and giving the public access to a large amount of protected works and which are not small or medium-sized businesses. The provision expressly excludes online encyclopedias and scientific or educational repositories.

The amendments to Article 11, which provide for the establishment of a remuneration for press publishers for the digital use of their publications, have generated similar reactions. This is not a new development for Spain, given that since 2014, its own Copyright Act has included a provision for what has become popularly known as the “Google tax”, which in fact led said company to withdraw the Google News service in Spain. The EU provision is considerably less strict than that in Spain, given that it limits the obligation to provide remuneration to 5 years, whereas the provision in Spanish legislation does not set a specific time limit.

The controversy generated by these two provisions has overshadowed other no less important matters that are introduced for the first time in the text of the Directive following the parliamentary debate of 12 September.

One of them is the creation of a right to revoke for authors and performers who have transferred their rights on an exclusive basis. Article 16 imposes on Member States the establishment of rules permitting creators to recover their rights if, after a reasonable time (which shall vary, depending on the type of exploitation involved), the exclusive licensee has not exploited the work. In the case of Spain, this obligation will finally give meaning to and transform into a specific and real obligation the theoretical obligation on exclusive licensees set out in Article 48 of the Consolidated Version of the Copyright Act.

Another matter that has attracted little attention, if not gone unnoticed, is that of recognition of intellectual property rights for organisers of sports events. Article 12 a) does not specify what is to be understood by “organiser of a sports event”, or even what constitutes a sports event, which is in itself a sufficiently broad term to cover all kinds of interpretations.

In any case, the battle does not end here. The final text will be voted on in a plenary session of the European Parliament at the beginning of next year, and only after it has been agreed upon by the Parliament, the Commission and the Council. Until then, it is to be assumed that swords will remain drawn on both sides.

Author: Patricia Mariscal

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New CJEU judgment on the distinctive character of the Kit Kat shape

The long-running conflict between Nestlé and Cadbury (now Mondelez) with regard to registration of the Kit Kat shape mark as characteristic for chocolates is still bringing us interesting rulings by the courts on the question of the acquisition of distinctive character by trade marks through use.

   

Recapitulating, first came the refusal of the trade mark in the United Kingdom, which resulted in a referral for a preliminary ruling, addressed by the Court of Justice of the European Union in its judgment of 16 September 2015 (Case C-215/14). Counter to what many had expected, that decision did not move the British High Court of Justice to find in favour of registering Nestlé’s trade mark. Quite the opposite, in his judgment of 20 January 2016 Mr. Justice Arnold’s interpretation was that the CJEU had held that the association between the image of the confection and the Kit Kat chocolate bar by a large majority of people surveyed did not suffice to consider that the shape had acquired distinctiveness as a trade mark. In his opinion, it would have been necessary to show that consumers perceived the product as having a given undertaking as its business origin on the basis of the sign in question alone, without considering any other marks that may also be present. As a result, the refusal of the British trade mark was ultimately upheld.

On the other hand, Nestlé had succeeded in registering the shape of the Kit Kat chocolate bar as a three-dimensional European Union trade mark in 2006. The following year Cadbury filed a request asking the EUIPO to invalidate the registration on grounds that the sign was devoid of distinctive character. The EUIPO’s Board of Appeal held that even though the sign was initially devoid of distinctiveness, Nestlé had proven that it had acquired distinctive character through use. That decision was set aside by the General Court by its judgment of 15 December 2016 on grounds that the findings of the Board of Appeal did not address the acquisition of distinctiveness by the mark in part of the European Union (specifically, in Belgium, Ireland, Greece, and Portugal).

In essence, the issue in dispute was the geographical extent of the evidence of acquisition of distinctive character through use. While Nestlé and the EUIPO maintained that it sufficed to show that the mark had acquired distinctiveness in a significant portion of the European Union, the General Court ruled that this had to be shown in the entire territory of the EU, not just in a substantial part or in the greater part of that territory.

On appeal, by its judgment of 25 July 2018 (Joined Cases C-84/17 P, C-85/17 P, and C-95/17 P), the Court of Justice upheld the General Court’s decision. The CJEU found that Article 7.3 European Union Trade Mark Regulation requires proving distinctiveness in the European Union to have been acquired wherever the sign was not distinctive ab initioWhere this is the case throughout the European Union, the proof needs to encompass the territory of the EU as a whole; evidence dealing with a substantial part of the EU does not suffice.

The Court has clarified, though, that the evidence does not have to consist of separate evidence for each individual EU Member State but that evidence may instead be produced globally for various Member States combined. However, the evidence, whether individual or global, must cover the entire territory of the European Union. In consequence, the Board of Appeal’s decision was vitiated by an error in law in failing to adjudicate on the acquisition of distinctive character by Nestlé’s trade mark in Belgium, Ireland, Greece, and Portugal.

The Court of Justice has set a very high bar for evidence. It should be noted that both the EUIPO and the General Court had deemed Nestlé to have proven acquisition of distinctive character in 10 EU Member States, including the largest ones (Germany, Spain, France, Italy, and the United Kingdom). It would thus seem that owners who, in the event of a challenge, wish to rely on the acquisition of distinctive character through use to defend the validity of their European Union trade marks had best be prepared to embark on a laborious and costly process of compiling evidence.

Author: Carlos Morán 

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S.O.S. Security incident

Since 25 May, we receive news and notifications every day of security breaches at top-level companies resulting in the mass exposure of customer data.

The reality, as unlikely as it may seem, is that the number of security breaches has not increased since the application date of the Data Protection Regulation (GDPR) of 27 April 2016. It is in fact the case that, up to now, there has been no obligation under our legislation to report security violations except in the case of providers of publicly available electronic communications services, while the GDPR now extends this obligation to any company processing data.

A security incident is the destruction, loss or alteration of personal data due to internal or external causes, which may be accidental or intentional. With regard to such an eventuality, the most important things for any company to bear in mind should be to (i) define a procedure for management of security breaches; (ii) have the tools available to assess the risk of such an incident occurring; and (iii) know whether it should be reported to the supervisory authorities and to data subjects depending on the characteristics of the incident and the risk for data subjects.

Notification to the supervisory authority, as established under the GDPR, is required whenever the incident may result in a risk to data subjects and the notification must be made within 72 hours of becoming aware (having actual evidence) of the incident. It is also required to notify the data subjects affected whenever such an incident could result in a high risk for them and provided that said notification does not compromise the outcome of a pending investigation, in which case the communication may be made at a later stage, all under the control of the supervisory authority.

Additionally, it is crucial to respond quickly in an effort to mitigate the consequences of the incident, by adopting security measures that prevent access to data or amendment or reading of the same.

The only effective formula for avoiding this deluge of legal obligations is prevention. All possible measures must be taken to avoid security breaches, prevent unauthorised reading and amendment of data, and establish a procedure for responding to incidents of this kind.

The European Data Protection Board, formerly the Article 29 Working Party, prepared a guide on notification of security breaches which deals with many of the issues that had given rise to doubts. Moreover, on 19 June 2018 the Spanish Data Protection Agency published a guide for management and notification of security breaches with directives for detection and management of security breaches and evaluating notification of the same.

Author: Martín Bello y Cristina Espín

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The European Commission presents its Draft Withdrawal Agreement on the withdrawal of the United Kingdom – Brexit

In a bid for complete transparency, this past 28 February 2018 the Commission, in phase 2 of the negotiating process, made public its Draft Withdrawal Agreement for the countries of the European Union, setting out its proposals for solutions to the inevitable consequences Brexit will bring. Title IV of the Draft deals with Intellectual Property rights, including not just trade marks but also designs, plant variety rights, geographical indications, and designations of origin.

The Commission’s proposal is that the owners of rights registered in the European Union before the end of the transition period should automatically own those same rights in the United Kingdom without having to apply for registration in Britain, without being subject to examination by the British Authorities, and without having to pay for protection of their rights.

In its turn, in a letter sent to the British Government last December 2017, British Intellectual Property practitioners asked the Government to ensure continuity of the protection conferred by the European-wide intellectual property system, in which the United Kingdom has been an active participant, since it is regarded as one of the linchpins for being able to carry on normal business operations.

The position and interests of British practitioners thus appears to converge with the Commission’s proposal in respect of intellectual property rights. The position taken by the British Government remains to be seen.

One of the main stumbling blocks that has arisen in this phase of the negotiations between the Commission and the British Government to draw up a common text for the Withdrawal Agreement is setting a date for the end of the transition period. In its draft released in February, the Commission proposed a final date of 31 December 2020, that is, 21 months after the date set for Brexit, which is 29 March 2019. The British Government considers two years to be a suitable time period but does not want to commit to a hard date and proposes remaining in the single market and Customs Union as long as necessary.

The issue of the end of the transition period is to be discussed at the next meeting of European leaders, scheduled to take place in Brussels at the end of March. Judging from recent statements made by certain authorities, the position of the Government of Spain on this issue is the same as the Commission’s. It sees little point for either the European Union or the United Kingdom in keeping the UK in a system that it would have to continue funding even though it would not be able to take part in decision-making, since it would no longer be present in the institutions of the European Union.

The Member States have displayed unity and consensus during this process of withdrawal by the United Kingdom from the European Union, and they have taken a positive, constructive stance in seeking solutions that do not punish the United Kingdom but instead lay the groundwork for future relations with the UK when the transition period has ended and it ceases to be an EU Member State.

Still, the possibility that the negotiations may fail cannot be ruled out. In this respect, at the same time as it has been drawing up a draft text as a basis for agreement, the Commission has also taken this into account and warned the various economic operators of the possible repercussions that would ensue from a failure to reach agreement.

Spanish companies should therefore be aware that there is a risk that their trade mark rights could cease to have effect in the United Kingdom on 29 March 2019, and for this reason, at least for those companies interested in the British market, it could make sense for them to register their brands as national marks in the United Kingdom, even though their marks have already been registered with EUIPO as EU marks.

We should therefore keep an eye on developments in the negotiations between the Commission and the British Government. The Commission has done its homework and has published its draft Withdrawal Agreement. The ball is now in the British Government’s court.

 

Author: Catherine Bonzom

Visit our website: http://www.elzaburu.es/en

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