ELZABURU Blog - Industrial and Intellectual Property

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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

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

 

Forward or backward step in court specialisation in Spain?

National Judicial Council (Source: Wikipedia)

Spain’s National Judicial Council, in its Decision of 18 October published today, has extended court specialisation in industrial property to new courts.

It may be recalled that, since Patent Act No. 24/2015 came into force in April 2017,  the issue of jurisdiction in proceedings regarding trademarks, designs and patents had been left in the hands of certain Mercantile Courts in Madrid, Barcelona and Valencia. This concentration of proceedings in three single jurisdictions was cheered by advocates of judicial hyper-specialisation but has also prompted reservations or even jealousy, of sorts, on the part of other courts that were excluded from the allocation of jurisdiction. The reaction of the latter did not take long.

The Decision of the National Judicial Council assigns exclusive powers to rule on industrial property proceedings to, in addition to the courts of Madrid, Barcelona and Valencia, already holding such powers, the following:

ANDALUSIA Granada Mercantile Court 1
GALICIA A Coruña Mercantile Court 1
CANARY ISLANDS Las Palmas Mercantile Court 1
BASQUE COUNTRY Bilbao Mercantile Court 2
 

The new jurisdiction framework will come into force on 1 January 2019 and, in the meantime, it would be no surprise to see some disquiet concerning this development.

One curious aspect worth noting is that the National Judicial Council decided against the designation of specialised courts in other Autonomous Communities that had requested this. It is still to be seen if this extension of the jurisdiction reinforces or, on the contrary, weakens court specialisation in industrial property proceedings. This would not be due to the different strengths or limitations shown by one or another court, but due to the convenience of concentrating matters in the fewest amount of courts possible, in an effort to foster specialisation.

Author: Antonio Castán

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

When can public authorities access SIM card data?

Access by public authorities to electronic data for the purpose of identifying the owners of SIM cards activated with a stolen mobile telephone: not limited to serious criminal offences since it is a non-serious interference with fundamental rights.

On 16 February 2015, Mr. Hernández Sierra filed a complaint with the Spanish police for a violent robbery, during which he was injured and his wallet and mobile telephone were stolen. On 5 May 2015, the Examining Magistrates’ Court rejected the request made by the police to order various providers of electronic communications services to provide the telephone numbers activated between 16 February and 27 February 2015 with the IMEI code of the stolen mobile telephone and the personal data concerning the identity of the owners or users of the telephone numbers corresponding to the SIM cards activated with said code, such as their forenames, surnames, and, if necessary, their addresses.

The Public Prosecutor’s Office lodged an appeal against the rejection of the request, invoking the judgment of 26 July 2010 handed down by the Supreme Court in a similar case. The Provincial Appellate Court of Tarragona decided to stay the proceedings, recalling the amendment of the Code of Criminal Procedure (enacted under Organic Act No. 13/2015 of 5 October 2015, strengthening procedural due process and regulating technological investigative measures), and referred two questions to the CJEU for a ruling:

  1. Can the sufficient seriousness of offences, as a criterion which justifies interference with the fundamental rights recognised by Articles 7 and 8 of the Charter of Fundamental Rights of the EU, be determined taking into account only the sentence which may be imposed in respect of the offence investigated, or is it also necessary to identify in the criminal conduct particular levels of harm to individual and/or collective legally protected interests?
  2. If it were in accordance with the constitutional principles of the European Union, used by the CJEU in its judgment of 8 April 2014 [Digital Rights Ireland and Others, C-293/12 and C-594/12] as standards for the strict review of the Directive, to determine the seriousness of the office solely on the basis of the sentence which may be imposed, what should the minimum threshold be? Would it be compatible with a general provision setting a minimum of three years’ imprisonment?

The CJEU ruled on both questions in its judgment of 2 October 2018 (case C-207/16).

In this judgment, it is stated that pursuant to the principle of proportionality, in the areas of prevention, investigation, detection and prosecution of criminal offences, a serious interference may be justified only by the objective of fighting crime which must also be defined as serious. However, when the interference entailed by such access is not serious, it may be justified by the objective of preventing, investigating, detecting and prosecuting criminal offences generally.

The data sought by the Spanish police only enable the SIM card or cards activated with the stolen mobile telephone to be linked, during a specific time period, with the data concerning the identity of the owners of those SIM cards. Without checking those data against the data concerning the communications made with those SIM cards and the location data, it is not possible to determine the date, time, duration or recipients of the communications made with the SIM cards in question, or the locations where the communications were made, or the frequency of those communications with certain people during a certain time period. Therefore, said data do not allow precise conclusions to be drawn regarding the private lives of the persons whose data is affected, and therefore it cannot be regarded as a serious interference in the fundamental rights of those individuals.

The interference entailed by access to said data may be justified by the objective of preventing, investigating, detecting and prosecuting criminal offences generally, as referred to in the first sentence of Article 15(1) of Directive 2002/58, without it being necessary that those criminal offences be defined as serious.

Consequently, it is stated that the access of public authorities to data for the purpose of identifying the owners of SIM cards activated with a stolen mobile telephone, such as forenames, surnames, and if necessary, their addresses, constitutes interference with their fundamental rights, enshrined in the aforementioned articles of the Charter, which is not sufficiently serious to mean that said access is to be limited, in the areas of prevention, investigation, detection and prosecution of criminal offences, to the objective of fighting serious crime.

Let us hope that this judgment helps to reduce the reluctance of courts in Spain, when it comes to prevention, investigation, detection and prosecution of any type of crime in which technological investigative measures are required, encouraging them to weigh the different interests involved but without hindering the chances of establishing the facts of the matter.

  Author: Juan José Caselles

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

Low cost luxury? Judgment comes down on imitations of a Longchamp handbag

Summary of commentary on judgment No. 401/2017 of 15.9.2017 by the Provincial Appellate Court of Madrid (ECLI:ES:APM:2017:14041), published in the “Revista de Derecho de la Competencia y de la Distribución” [Competition and Distribution Law Magazine]

The conflict arose as the result of the sale on the GROUPON website of some vouchers that could be exchanged for handbags from the company SARASWATI (doing business as PRISAUK), whose design was reminiscent of LONGCHAMP’s 1623 LE PLIAGE model (hereinafter “LE PLIAGE) and the offering of which was accompanied by promotional phrases such as “dale un toque francés a tu outfit con un bolso plegable de estilo Longchamp” [give your outfit a French touch with a Longchamp style foldable handbag] or “bolso plegable de estilo Longchamp, lujo asequible con un toque francés” [Longchamp style foldable handbag, affordable luxury with a French touch].

Shown below is a comparative image with Longchamp’s LE PLIAGE handbag model and the handbags sold by SARASWATI on GROUPON and on its PRISAUK website:

Top left: Red LE PLIAGE handbag / Top right: “BENZI” handbag sold on the website www.groupon.es

Bottom left: Beige LE PLIAGE handbag / Bottom right: “PRIASUK” handbag sold on the website www.priasuk.es

In view of the above sale of goods, CASSEGRAIN, as the owner of the intellectual and industrial property rights in the LONGCHAMP handbags and trademarks, and LONGCHAMP, as the manufacturer and exclusive distributor of the handbags, instituted proceedings against SARASWATI and GROUPON on the grounds of trademark and copyright infringement and unfair competition.

Specifically, the complainants claimed that the LE PLIAGE handbag warranted protection as an applied work of art and that the model sold by SARASWATI was a reproduction of said handbag.

Furthermore, they considered that the use on the GROUPON website of the LONGCHAMP trademark and of expressions such as “lujo asequible con un toque francés” [affordable luxury with a French touch], made reference to the origin and position in the marketplace of the LONGCHAMP trademark and constituted an infringement of said trademark, which is, moreover, well known in its sector.

Finally, the complainants considered that the use of promotional phrases such as “estilo LONGCHAMP” [LONGCHAMP style] constituted an act of imitation, exploitation of another party’s reputation, unlawful advertising and misleading acts capable of generating confusion or association, as referred to in the Unfair Competition Act.

In turn, the defendants disputed the well-known character of the LONGCHAMP trademark and that the LE PLIAGE handbag could be considered a work. Moreover, GROUPON tried to assert the exemption from liability provided for under the Law governing e-commerce, claiming that they had simply reproduced the description provided by SARASWATI and that they were unaware of the unlawful nature of the information on their website.

  1. Findings of the first-instance judgment.

On 18 November 2015, Madrid Mercantile Court No. 9 handed down a judgment dismissing the claims concerning exclusive rights, intellectual property rights in the handbag and trademark rights in LONGCHAMP, but accepting the claims concerning acts of imitation and misappropriation of another party’s reputation.

Specifically, the judge of the lower court held that it had not been demonstrated that Longchamp’s LE PLIAGE handbag model had the sufficient degree of originality and creativity to be considered a work under the Copyright Act and that since the LONGCHAMP trademark had not been used on the product but rather in the advertising, there had been no trademark infringement either, but rather acts of imitation and misappropriation of another party’s reputation, pursuant to Articles 11 and 12 of the Unfair Competition Act. The judge also concluded that GROUPON could not benefit from exemption from liability under the Law governing e-commerce, given that it had been proven that the design of the advertising of the handbags in dispute had been undertaken jointly between SARASWATI and GROUPON.

  1. Summary of the findings of the judgement of the Provincial Appellate Court of Madrid and commentary synopsis.

The judgment of the Mercantile Court, appealed both by the complainants and by GROUPON, led to the judgment of 15.9.2017 by the Provincial Appellate Court of Madrid, which overturns the Mercantile Court’s judgment almost in full, finding that the sale of the handbags on GROUPON’s website infringed the copyright in the LE PLIAGE model and the well-known trademark LONGCHAMP.

The full commentary, which may be accessed in issue number 22 of the Revista de Derecho de la Competencia y de la Distribución [Competition and Distribution Law Magazine], offers a detailed analysis of the main findings of this judgment, dealing with important issues for the fashion sector (“Fashion Law”), such as the protection of creations in this field under copyright (in this case Longchamp’s “Le Pliage” handbag model), the possible infringement of a well-known trademark when used in advertising accompanied by expressions such as “estilo”, “tipo”, “imitación” [style, type, imitation], the principle of the somewhat complementary relationship between the regulations governing exclusive rights and Unfair Competition law, and the liability of information society service providers in relation to such possible infringements.

  Author: Cristina Velasco

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

Fashion Law. Licensing (XIII)

ELZABURU has had the pleasure of working together with the publisher Thomson-Reuters Aranzadi on Fashion Law, a pioneering work in Spain on the subject of fashion law, which was presented on 16 April.

In these short weekly summaries, the professionals at ELZABURU who participated in the work offer us a brief outline of their contributions:

Licensing

A licence is an instrument available to holders of intangible assets that enables them to permit third parties to use their assets subject to a series of conditions. Unlike an assignment, a licence does not transfer ownership of the asset but simply grants an opportunity to use it in a given territory for a limited period of time.

Licences enable licensors to exploit assets in territories or markets which might otherwise hold out little interest for them or which they might be unable to enter on their own.

It should be noted that licences may be issued both for rights that depend on registration at a patent and trade mark office and for rights that arise without formal registration, such as copyright or trade secrets, though in this last-mentioned case it would be wise to put in place procedures to protect the asset and systems for monitoring its use. Various intangible assets may be licensed in a single agreement, a common practice in franchising agreements, in which trade marks, designs, know-how, and the like may all be licensed.

The basic instrument used to issue licences is the licence agreement, which can be worded by the parties to stipulate whatever terms they deem suitable as a framework for the licence. In any event, licence agreements ordinarily contain a series of clauses aimed at consolidating and enhancing the consistency of the contract.

Thus, clauses specifying the object, duration, and territorial extent of the licence help shape the content of the licence.

It is advisable to include both an intellectual property clause (specifying the owner of the assets, which party will take charge of their defence in the event of third-party infringement, and whether sublicensing is permissible as well as prohibiting registration by the licensee) and a supervision and audit clause (setting up mechanisms for monitoring use of the assets by the licensee, compliance with the terms of the licence, and proper reporting of the profits obtained through use of the assets) in the interest of further protecting the asset.

In terms of payment for the licence, where a consideration changes hands, the arrangements most commonly stipulated basically number four:

  • (i) payment of a fixed amount for the entire lifetime of the licence.
  • (ii) payment of an amount for the licence each year.
  • (iii) payment of a percentage of the profits earned through commercial use of the asset concerned.
  • (iv) payment of an initial fee plus a percentage of the profits obtained. Any combination of these arrangements is of course feasible, or any other scheme agreeable to the parties may be used.

Other clauses – such as early termination or applicable law and jurisdiction – are essential to ensure the legal certainty of the agreement and avert further difficulties in the event of a dispute.

Lastly, it should be noted that for licence agreements to have effect vis-à-vis third parties, they must be recorded on the relevant registers, such as registers kept by industrial property offices (the Spanish PTO) or intellectual property registers.

Author: Martín Bello y Alba María López

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

 

Blog entries in the series Fashion Law:

1.Trademark protection in the fashion sector (23.04.2018)

2.Design protection in the fashion sector (30.04.2018)

3.Patent protection in the fashion sector (07.05.2018)

4.Protection of fashion through copyright (21.05.2018)

5. Image rights in the fashion sector (28.05.2018)

6.Fashion Law. Data Fashion (04.06.2018)

7.Counterfeiting in the fashion sector (11.06.2018)

8.Exhaustion of rights in the fashion sector (18.06.2018)

9.Corporate reputation in the fashion sector (25.06.2018)

10. Protection of the commercial imagen of a fashion brand (04.07.2018)

11. Websites, Apps & Social Networks (13.07.2018)

12. Valuation of intangible assets (17.07.2018)

13. Licensing (06.09.2018)

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