From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Sunday, 30 April 2017

Italian court finds Google and YouTube liable for failing to remove unlicensed content (but confirms eligibility for safe harbour protection)

Topazio, one of the soap operas
produced by Delta TV
Is YouTube an active host and, if so, ineligible for the safe harbour protection within Article 14 of the E-commerce Directive?

As readers with an interest in intermediary liability know, this is not a novel question: indeed, it has been already raised a number of times before national courts.

A few weeks ago, in a decision available on Marchi & Brevetti (sentenza 7 April 2017 No 1928, RG 38113/2013, Delta TV v Google and YouTube – judge rapporteur: Guglielmo Rende), the Tribunale di Torino (Turin Court of First Instance) revisited this issue, and provided an interesting response.

Readers might recall that this decision follows other interim rulings commented on this blog here and here.

Background

Back in 2013 Delta TV, which produces and owns the copyright to a number of South-American soap operas (including audiovisual works for the Italian, Monaco, Swiss, San Marino, Maltese, and Vatican markets) brought proceedings against Google and YouTube.

The claimant submitted that, if one searched Google's search engine by using the title of the soap opera at issue, on the first page of results there would be a link to YouTube where relevant episodes, accompanied by advertisements, would be available without Delta TV’s permission.

Google and YouTube responded that, among other things, Delta TV’s action should be dismissed on consideration that, upon receipt of valid [ie with the indication of the URLs relating to the various videos] takedown requests, they would have removed all the videos available on YouTube. In any case:

·       no liability would subsist in relation to either of them, because of the safe harbour regime within Decreto Legislativo 70/2003 [ie the piece of legislation by which Italy transposed the E-commerce Directive into its own legal system];
·       Delta TV did not submit any valid takedown requests before bringing proceedings. This was because a generic cease-and-desist letter without the indication of relevant URLs would not be adequate to trigger any obligations of removal on an intermediary like YouTube.

Following an interim phase [see above], the Turin Court of First Instance ruled as follows.

YouTube is not an active host

The judge noted at the outset that the videosharing service managed by YouTube should be in principle considered akin to that of a hosting provider, and – as such – eligible for application of the liability regime for hosting providers within Article 14 E-Commerce Directive/Article 16 Decreto Legislativo 70/2003. As a consequence, there could no preventive, general monitoring obligation on YouTube, pursuant to Article 15 E-Commerce Directive/Article 17 Decreto Legislative 70/2003.

Having said so, the judge turned to consideration of whether YouTube should not be regarded as merely passive and neutral, but rather as an active host which, as such, would be ineligible for application of the safe harbour regime. This would be so on consideration of an allegedly active role on the side of YouTube to organize, and promote the content hosted on its platform.

The notion of ‘active host’ has been subject to criticism, and the Milan Court of Appeal actually called it “misleading” in relation to hosting providers (sentenza 95/2015).

According to the Turin Court a host would become active and - therefore - fall outside the scope of the safe harbour regime, when it intervenes by modifying or taking part in the elaboration of the content hosted on its platform.

This would NOT be the case when a hosting provider:

·       Indexes and organizes the content hosted;
·       Matches the content with advertisements similar to the content itself;
·       Concludes agreements with third-party uploaders to share advertising revenue;
·       Makes it possible for users to make the videos visible only to their own contacts, thus excluding general availability of videos to YouTube users and – by doing so – possibly hiding unlawful content.

According to the court, in fact, those above would be activities finalized exclusively to an improvement of the use, visualization and commercial exploitation of content, not elaborations that would alter the content of the video shared among users. More specifically [translation from Italian is mine]:

“only an intervention that alters a video uploaded by third parties is suitable to remove the exemption from liability within Articles 16 and 17 of Decreto Legislativo 70/2003.
Vice versa, an intervention that valorizes that video, by adding it to an index, matching it with advertisements adequate to the relevant type of video, or making it visible to similar videos – does not remove the neutrality [of the hosting provider], because it does not affect the content of the video.
Nor is it possible to repress the fact that such behaviours are all finalized to increasing the economic revenue of YouTube, as that is acknowledged by the law where, under Article 2(a) of Decreto Legislativo 70/2003, expressly refers – as the scope of application of such piece of legislation – to “the economic activities carried out online”, that must be identified as “information society services”.

In light of the foregoing, it follows that YouTube is eligible for the safe harbour regime within Articles 16 and 17 of the Decreto Legislativo.

Random soap opera (but featuring a Kat)
The specificity of the takedown request: indication of the relevant URLs

Turning to the content of a takedown request, readers will probably remember that Italian courts have adopted different approaches. While there is a line of cases that requires the indication of the URLs relating to the relevant content to be removed, there are also decisions [here, here, and here] that have found that the mere indication of the title of the work whose related videos must be removed suffices.

The Turin court recalled that the technical counsel it appointed had observed how a mere search of content by title would return a “very” significant number of false positives, ie content that should not be removed. According to the technical counsel it would not be possible to identify univocally all the relevant videos to be removed only by providing the commercial title of the works they relate to.

The court concluded that only indication of the URLs would allow the unequivocal identification of the content to be removed, although – of course – it would not help preventing future uploads through YouTube’s ContentID programme [what is required to this end, in fact, is the provision of relevant reference files against which possible matches can be found].

Indeed
The obligation to prevent future uploads

The court accepted that a platform like YouTube can prevent the re-uploading of content previously removed. Although the judge noted that a slight alteration of the video at issue would result in an alteration of the related HASH value, the provision by the relevant rightholder of reference files to be used within ContentID might reduce – yet not eliminate completely – this problem.

It follows that [once again, the translation is mine]:

“being this fully possible from a technical standpoint, yet with a slight risk of failure, there subsists on YouTube an actual legal obligation to prevent further uploads of videos already flagged as infringing of third-party copyrights”.

Further to Article 14 E-commerce Directive/Article 16 Decreto Legislativo 70/2003, a hosting provider is not responsible for the information stored at the request of third parties, but only upon the condition that it is not actually aware that the activity or information is unlawful.

“Such knowledge surely arises when a third party notifies an infringement of his/her copyright, and the uploader does not seriously or at all contest such notification.
Upon obtaining knowledge of the unlawful activity, the operator of the video sharing platform has the obligation … to act and cooperate with the copyright owner to bring to an end the unlawful activity at issue and avoid its repetition.”

What happened after Delta TV sued Google and YouTube

Delta TV claimed that, after serving its writ of summons to Google and YouTube [this, unlike the earlier cease-and-desist letter contained indication of the URLs relating to the videos for which removal was sought], there were several visualizations of the relevant videos. According to the court, Google and YouTube should have expeditiously removed the videos and prevented further uploads, but this only occurred in part. Among other things, the videos – while no longer visible from Italy – remained visible from abroad.

For these reasons, the court partly [it rejected the request for damages relating to missed compensation for private copying] accepted Delta TV’s request for damages for copyright infringement, and ordered Google and YouTube to pay EUR250k further to an equitative assessment of the price for the missed authorization for the use of Delta TV’s works. 

Never Too Late: If you missed the IPKat last week!

This Kitten is delighted to bring you the 144th edition of Never Too Late!

It’s Never Too Late to catch up!
InternKat Hayleigh Bosher covers the latest posts from some IP blogs.

IPKat Annsley Merelle Ward announces the Fordham IP conference’s 25th anniversary program, covering IP and policy, which took place in New York.

Katfriend Colm Ahern reports on the European Commission’s initiative entitled “Standard Essential Patents for a European digitalized economy”, which aims to address 5G technology, Internet of Things and SEP enforcement.

IPKat Eleonora Rosati discusses the US and Italian copyright provisions in the context of the alleged moral rights infringement due to the placement of Kristen Visbal’s sculpture known as “Fearless girl” opposite Arturo Di Modica’s sculpture entitled “Charging Bull”. The letter sent by Di Modica Lawyers to the mayor of New York can be reviewed here.

IPKat Annsley Merelle Ward announces the launch of the International chapter of ChIPs, a non-profit organization, which aims to advance women in technology, law, and policy.

IPKat Eleonora Rosati provides a useful checklist for determining whether a copyright exception established in the Copyright, Designs and Patents Act (CDPA) applies to a specific case. 

Guest Kat Eibhlin Vardy summarizes the Rapid Response event organized by AIPPI on the case Fujifilm Kyowa Kirin Biologics Company Limited v AbbVie Biotechnology Limited, [2017] EWHC 395 (Pat), from the perspective of patent and competition law.

Guest Kat Rosie Burbidge recaps the case SoulCycle Inc v Matalan Ltd, [2017] EWHC 496 (Ch), in which the appeal to the dismissed opposition to registration of the mark SOULUXE, based on prior registered marks that include the word SOUL, was dismissed.

Guest Kat Rosie Burbidge summarizes the case Apple Inc v Arcadia Trading Limited, [2017] EWHC 440 (Ch), in which the appeal to the refusal of registration of the mark IWATCH for various goods in class 9, on the ground of descriptiveness, was dismissed.


PREVIOUSLY ON NEVER TOO LATE

Never Too Late 143 [week ending on Sunday 9 April] | Can you use the Pope's image on T-shirts and gadgets? | Can a public domain artwork be registered as a trade mark or would that be contrary to public policy and morality? | Wednesday Whimsies | Retromark: a year in trade marks | BREAKING: Birss J hands down first FRAND decision in Unwired Planet v Huawei | Katcall: So You Think You Can Blog? GuestKats and InternKat | “Curry favour with Donald Trump'” by granting trade mark rights… seriously? | The UPC after Brexit - is CJEU jurisdiction a deal-breaker? | New book for the preparation for the Pre-Examination of the EQE | Oldie but goldie - when is old prior art a suitable starting point for inventive step analysis? | Tune in LIVE for tomorrow's Eli Lilly v Actavis Supreme Court showdown | French court rules that resale right royalty must be only paid by sellers

Never Too Late 142 [week ending on Sunday 2 April] | Conference report: Online platforms and intermediaries in copyright law | Fun with Fujifilm Declarations! An AIPPI Rapid Response Event | UK UPC ratification still on track despite Article 50 trigger | Does Mr Justice Arnold's decision in Teva v MSD show just how large a role patent law has come to play in assessing SPC validity? | When today's pizza meets ancient law: how would you decide? | The Unitary Patent and Unified Patent Court - where are we now? | GS Media and its implications for the construction of the right of communication to the public within EU copyright architecture: a new article | Preview of the new Danish trade secrets proposal | WIPO's statistics for 2016: Asia continues to roar | Wednesday Whimsies | Avoiding objections to claiming priority in Mexico: Standarized presentation of priority data | No admission after the show has started - transfer of priority right must occur prior to filing of subsequent application (T 577/11)

Never Too Late 141 [week ending on Sunday 26 March] | UK Industrial Strategy | "What is this thing called love, this funny thing called love"? And while you're at it, what is a covenant not to sue? | Around the IP blogs | The Perks of Being a Coffee Seller - Star Box |Telstra loses big in keeping its information confidential in Australian patent dispute | «Printed by Jouve» it’s not | Welcome clarification on the Malaysian law of well-known marks; but there is still judicial work to be done | BREAKING: US Supreme Court holds cheerleading uniforms eligible for copyright protection | Italian Supreme Court rules that mere reproduction of Vespa image may amount to counterfeiting

Never Too Late 140 [week ending on Sunday 19 March] | Friday Fantasies | Kat konfusion regarding passing off: likelihood of confusion and the Starbucks (HK) case | Thursday Thingies | Wednesday Whimsies| First live blocking order granted in the UK | The scope of a well-known mark: not always as broad as some might wish | Monday miscellany | Around the IP Blogs | UK's IP Enforcement Framework-IPO Research Bid Opportunity (Update)

Never Too Late 139 [week ending on Sunday 12 March] | Shall we dance? Regulatory approval, trade secrets and the transatlantic biosimilars patent wars | Biosimilars and generics as "rip-offs": when the facts may not matter | UK's IP Enforcement Framework - IPO Research Bid Opportunity | Curtain - Merpel's final EPO post | Amgen, Pfizer, Alphabet and Uber face up to trade secrets in biosimilars, self driving cars and product launch plans | BREAKING: Politico publishes (part of) draft copyright report by MEP Comodini Cachia | Parallel imports are permitted--unless they are not: the case of SAMSONITE in Singapore | UPC to open in December - a triumph of hope over experience? | The KitKat shape mark – no merging of territories for proof of acquired distinctiveness

Protecting the SOVEREIGN - The Royal Mint v The Commonwealth Mint

Some Money, Money, Money
Can the Royal Mint register SOVEREIGN as a trade mark for "gold commemorative coins"?

The Royal Mint Ltd wanted to but the Commonwealth Mint & Philatelic Bureau Ltd was not impressed and opposed the application on the basis that "The word SOVEREIGN is ... widely recognised, as a word describing coins of a particular type and denomination that may be legal tender in any one of a number of different countries/territories."  The Hearing Officer upheld the opposition and refused to register the mark on the basis of the absolute grounds for refusal set out in section 3(1)(c) and (d) of the Trade Marks Act 1994 ("the TMA").  In other words, the word "sovereign" when used for gold commemorative coins:
(i) designates the the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services; and
(ii) consists exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade.
Whilst "Sovereign" can mean many different things to different people, in the world of coins it means a gold coin with a nominal value of £1 which is used for commemorative or trading purposes.

A different sort of mint
In the UK, only the Royal Mint is entitled to make or issue a sovereign as legal tender.  However, there is nothing to prohibit UK trade in sovereigns which were minted elsewhere.  Although the Royal Mint argued that the word sovereign had acquired distinctiveness through use, the Hearing Officer refused registration because:


  1. sovereigns are legal tender in the UK (albeit the value is nominal);
  2. the Royal Mint drew attention to the value of sovereigns in its marketing material;
  3. the Royal Mint's marketing material uses "sovereign" in an analogous way to other denominations such as the Queen's £5 coin which was issued for the diamond jubilee; and
  4. although the Royal Mint closely assesses the quality of the sovereigns, this is also true for the other coins it mints such as the £1 coin and "pound" is not a trade mark for coins;
  5. although the average consumer is likely to be aware that most sovereigns offered for sale in the UK come from the Royal Mint, there is trade in the UK of coins from other countries e.g. Australia; and
  6. although the Royal Mint has sold a large volume of coins over a long period of time and had a very significant share of the gold coins market in the UK, it had not established that consumers perceived gold coins as originating from a particular undertaking based on the word "sovereign" alone.
This decision was made after hearing evidence from two experts in coinage - from the British Museum and Royal Mint Museum.  The Hearing Officer didn't consider that either represented the average consumer (which he considered to be "traders in gold coins, such as banks and jewellers").  Therefore whilst they clearly knew a great deal about commemorative coins this did not help the Royal Mint.

Newey J agreed that neither witness was an average consumer and that the Hearing Officer was entitled to discount their opinions.  Indeed, Newey J agreed with the Hearing Officer's findings and upheld his decision in full.

As Newey J put it, "The real question" is "whether the fact that no one but [the Royal Mint] can make sovereign coins for United Kingdom purposes means that the word "sovereign" must be distinctive of its coins?"

He concluded that the answer was "no" based on the Hearing Officer's unchallenged findings that:
  1. "the trade in gold commemorative coins is international in nature" (paragraph 62),
  2. "a small proportion of coins so-named [i.e. as 'sovereigns'] have been produced outside of RM's control" (paragraph 62) and 
  3. "'sovereign' gold commemorative coins from, at least, the Isle of Man, Jersey, Gibraltar and/or Australia are also available in the UK" (paragraph 77). 
In fact, while sovereign coins from jurisdictions other than the United Kingdom commonly bear the word "sovereign", United Kingdom sovereigns hardly ever have, and RM's promotional material usually involves "the designation 'sovereign' [being] used in association with the name Royal Mint" (paragraph 34 of the Decision).

Acquired distinctiveness could not come to the Royal Mint's rescue because although 'the vast majority' of coins in the UK came from the Royal Mint and 'a large proportion' of the relevant public was familiar with the name 'sovereign' this did not mean that 'a "significant proportion" of the relevant class sees the goods as originating from a particular undertaking because of the trade mark (per Windsurfing and Cadbury).

Some fun facts to finish

A postage stamp is legal tender in the UK, don't take it from me, take it from David Brent.

Find out more about the history of the sovereign here.

By Rosie Burbidge

Friday, 28 April 2017

BGH on the freedom of the seas, ahm, panorama

AIDA "kissing lips"
The freedom of panorama - an exception to copyright protection that permits depicting buildings and sometimes sculptures and other art works which are permanently located in a public place without the copyright's owner's permission - is an area of law in Europe that is so far not harmonized, and while some countries recognize the freedom of panorama,  others don't. The draft Directive on Copyright in the Single Digital Market does not provide for a compulsory freedom of panorama exception, despite a public consultation on the issue.

Germany is a member state that recognizes freedom of panorama in its national law. § 59(1) German Copyright Act reads (in an unofficial translation):
It is permissible to reproduce, disseminate and publicly reproduce works, which are permanently on public paths, streets or squares, by means of painting or graphics, by means of photographs or by film.
Feliks Büttner is the designer of the "kissing lips" painted on the bow of every cruise ship by the operator AIDA. He assigned the exclusive rights of use to AIDA. AIDA sued an operator of a website that offered excursions in connection with cruises and depicted an AIDA cruise ship with the kissing lips design. The website operator tried to avail itself of the freedom of panorama. AIDA argued that the "kissing lips" were not permanently on display in a public place, as the cruise ships moved about. In any case, the art work was not on display on a path, street or square, but rather on water...

Art on a truck.
The BGH sided with the defendant. § 59(1) was to be interpreted such that a work was display "on a public street" if it was visible from any place under the open sky accessible to the general public. This includes a harbor, although "harbour" was not specifically mentioned in the wording of the article. A work was "permanently" present in a public place even if it moved about, as long as it was destined to be in some public place for a prolonged period of time ("längere Zeit". Why this has to be assessed through the eyes of the general public, as the BGH indicates, and is not an objective standard eludes me).

The freedom of panorama therefore includes art on cruise ships, but more importantly, also art on cars, trucks, lorries, busses, street cars and other means of transportation. Therein lies the importance of this decision, since in a modern urban environment, it is almost impossible to take a picture without depicting some copyright protected work affixed to some form of transportation.

Decision of 27 April 2017 - I ZR 247/15 - AIDA Kussmund (only the media release has been published so far)

ESPN: When Teflon is not enough in the face of platform disruption


In the world of media, the mantra for over a generation has been— “pity the poor daily print newspaper”, which became the poster child for media disruption in the on-line world. With much news, once provided by newspapers now available free on-line, reader subscriptions have declined, leading to a drop in advertising revenues, resulting in staff cut-backs and less content, leading to a further drop in subscribers, and so on.

No one in the media industry has stood more in contrast to the newspapers than the sports broadcasting business, and no company within sports broadcasting has cast a larger shadow than ESPN. Owned by Disney, ESPN has been perhaps the major source of steady revenues for the Disney empire. While the commercial fortunes of Disney’s creative content offerings ebb and flow, ESPN has provided consistent and respectable revenues. After all, the contents of sports broadcasts are unique. They must be consumed in real time (who wants to watch yesterday’s football match?), the demographics are an advertiser’s dream, and the exclusive nature of broadcasting rights promises to bring top dollar contracts between the broadcaster and the various sports leagues.

The diminishing number of newspaper reporters, virtually unknown to the wider public, drink coffee from plastic cups and operate in tiny cubicles; sports broadcasters sit in fancy studios and present to tens of millions of viewers, all the while projecting a sense of understated in-studio cool. Pity the poor newspapers and their staff, another example of an “oh-so-yesterday” form of media with an outdated business model.

Well, not exactly. As widely reported earlier this week, including by The New York Times, ESPN has laid off what is described as “scores of journalists and on-air talent.”. They include the firing (or, as they say in England, “being made redundant”) of former American football players such as Trent Dilfer, who won a Super Bowl ring while playing quarterback for the Baltimore Ravens, and professional basketball player Len Elmore. It appears that the move was made overnight—here today, gone tomorrow.

So, what is behind the move? After all, The New York Times describes ESPN as “by far the biggest and most powerful entity in the sports media industry.” Certainly, there is a degree of truth in saying that sports broadcasting differs from the newspaper business. But that difference turns out to be more of degree than of kind. James Andrew Miller, the author of a book about ESPN, observed that “ESPN was wrapped in Teflon for many years.” But as everyone knows, there is nothing ultimately impregnable about a Teflon coating.

For ESPN, the Teflon ceased to be effective in the face of two factors. First, ESPN had entered into humongous deals to acquire broadcasting rights for various sports, such as the National Football League (eight years, $15.2 billion dollars) and the National Basketball Association (nine years, $12 billion dollars). Of course, no one forced ESPN to agree to such amounts; presumably, it did the calculations and came away convinced that the sums were reasonable.

However, in so doing, ESPN seems to have misread where consumer viewer habits were going in the face of changing communication platforms. In a manner not dissimilar to the failure of the print media to correctly understand the implications of internet connectivity for disrupting traditional newspaper reading habits, ESPN misgauged the durability of cable as the preferred sports viewing platform. In a word, viewers are more and more “cutting the cable”, in part, due to increasing resistance to the multi-channel, bundle acquisition cable model and the seemingly ever-increasing cable subscription fees; in part, due to the increasing popularity of streaming as an alternative channel of distribution.

The result is a commercially deadly combination of increasing expenses and declining revenues from both subscriptions and advertising. Indeed, the Disney cable networks division experienced an 11% decline in operating income for its most recent quarter, as compared to the same quarter a year ago, all of which is due to a drop at ESPN. Locked into huge, long-term licensing fees, perhaps the only material way to improve bottom line, at least in the short-term, is to cut from somewhere, and that “somewhere” are the “on-air” personalities, many of whom have been with ESPN for some time. (In 2015, ESPN had laid off some 300 employees, but most of them were “off camera” types.)

Perhaps there was a sense that the fate of “on-air” personalities would be different; after all, they were identified by the public as synonymous with ESPN cable offerings. If that was the sense, it was wrong. In the best tradition of a sanitized corporate statement, the president of ESPN, John Skipper (how ironic, with “skipper” being slang in American baseball for the on-field manager of a baseball team), wrote in a letter to ESPN employees—
“Dynamic change demands an increased focus on versatility and value, and as a result, we have been engaged in the challenging process of determining the talent—anchors, analysts, reporters, writers and those who handle the play-by-play—necessary to meet those demands.”
At the end of the day, the sporting event itself (much like “meat and potatoes” newspaper contents), is the heart of what the sports broadcasting platform ultimately has to offer. In a hyper-charged world about anxiety over employment security, sports broadcasting may ultimately be no different—Teflon can only go so far.

Photo at left by Eleassar

Photo on bottom right by Tanya Dropbear

Thursday, 27 April 2017

Filmspeler, the right of communication to the public, and unlawful streams: a landmark decision

Yesterday this blog reported that the Court of Justice of the European Union (CJEU) has issued yet another long-awaited judgment, this being the decision in Filmspeler, C-527/15.

At the time of writing, the text of the ruling was not yet available. Now that it is and having had a chance to read it, it seems to me that – despite its highly specific factual background (sale of multimedia players enabling free access to audiovisual works protected by copyright without the consent of the rightholders) - Filmspeler is a MAJOR copyright decision.

The reason is essentially two-fold:

·       First, because the Court relaxed the notion of what amounts to an ‘indispensable intervention [the judgment does not even contain a reference to the intervention being ‘indispensable’] for the sake of the right of communication to the public within Article 3(1) of the InfoSoc Directive. This means – as I also suggested in this article on GS Media written for Common Market Law Review – that a broader group of defendants might be now regarded as primarily liable for unauthorized acts of communication to the public.
·       Secondly, because the Court held that streaming unlicensed content can amount to copyright infringement, on consideration that the mandatory exemption for temporary copies within Article 5(1) of the InfoSoc Directive would not be applicable. This paves the way to holding not only those who provide unlawful streams, but also viewers of such streams, liable for copyright infringement.

Let’s take a closer look at both issues.

Construing
the right of communication to the public:
yes, but where to start,
wonders Bubi?
Construction of the right of communication to the public

The first issue for the Court to address was whether the concept of ‘communication to the public’ must be interpreted as covering the sale of a multimedia player on which there are pre-installed add-ons, available on the internet, containing hyperlinks to websites - that are freely accessible to the public - on which copyright-protected works have been made available to the public without the consent of the rightholders.

As usual, the CJEU recalled at the outset that the right of communication to the public, which is preventive in nature, must be interpreted broadly. This is so in order to fulfill one of the objectives of the InfoSoc Directive, ie to grant authors a ‘high level of protection’.

Provided that an act of communication to the public requires (1) an act of communication directed (2) to a public, what actually amounts to an act of communication to the public also requires an individual assessment and taking into account several complementary criteria. These – as the CJEU noted in GS Media – are not autonomous and are interdependent, and must be applied both individually and in their interaction with one another.

At para 31 of the Filmspeler decision the Court recalled that among such criteria, there is “the essential role played by the user. The user makes an act of communication when he intervenes, in full knowledge of the consequences of his action, to give access to a protected work to his customers and does so, in particular, where, in the absence of that intervention, his customers would not, in principle, be able to enjoy the broadcast work”.

Readers might remember that in his Opinion in GS Media, Advocate General (AG) Wathelet [here] had embraced a narrow understanding of what amount to such an ‘essential role’/’indispensable intervention’. The AG held the view that links posted on a website that direct to copyright works freely accessible on another website cannot be classified as an ‘act of communication’: the
intervention of the operator of the website that posts the hyperlinks is not indispensable to the
making available of the works in question to users. The CJEU did not go as far as AG Wathelet. However, it ‘limited’ liability for linking to unlicensed content to the situations in which [see further here]:

·       The defendant has knowledge that the content linked to is unlicensed and no defence is available to him;
·       The defendant operates for profit, so that he is presumed to have knowledge of the lawful/unlawful character of the content linked to, and he fails to rebut such presumption;
·       The defendant's link circumvents restrictions to access.

An indispensable intervention
to allow access
Why Filmspeler is different

Filmspeler is different. Although possibly a natural evolution of GS Media and preceding case law, it seemingly broadens the framework of liability. This is essentially because the intervention needed to fall within the scope of Article 3(1) does not require to be strictly indispensable: mere facilitation seems enough.

The Court excluded that the sale of a multimedia player could be regarded as akin to the mere provision of physical facilities [this is outside the scope of Article 3(1), as Recital 27 in the preamble to the InfoSoc Directive clarifies], and concluded that the communication at hand to would be to a ‘public’.

With regard to the former, the Court noted that “intervention enabling a direct link to be established between websites broadcasting counterfeit works and purchasers of the multimedia player, without which the purchasers would find it difficult to benefit from those protected works, is quite different from the mere provision of physical facilities … [I]t is clear  … that the streaming websites at issue in the main proceedings are not readily identifiable by the public and the majority of them change frequently.” [41]

Turning to the notion of ‘public’, the court held that there is a ‘public’ if a number (above de minimis) of persons purchases or may acquire the multimedia player in succession and has an internet connection [44 and 45; so potentially this means ‘anyone’]. The CJEU also noted that in this case the works would be communication to a ‘new public’. [47]

Having established that in the case at hand there would be a communication to a new public, the CJEU turned to GS Media, and noted that: (1) the defendant has knowledge that the content linked to is unlawful [50]; (2) the defendant has a profit-making intention.

Readers will remember that in GS Media the CJEU failed to provide guidance on how the profit-making intention criterion should be assessed: should one consider whether the relevant link is provided with the intention to make a profit? Or should rather one consider the surrounding environment to the relevant link, eg whether it is provided on a website that is operated for profit?

Although both alternatives appear plausible, consideration of the context in which the relevant link is provided appears to be more in line with earlier CJEU case law and, now, Filmspeler

In both SGAE and FAPL, in fact, the Court considered that the profit-making nature of the communication was apparent from the fact that the defendants transmitted the relevant works in their own establishment (hotels and a public house, respectively) in order to benefit therefrom and to attract customers to whom the works transmitted are of interest. 

Similarly, in Filmspeler the profit-making intention subsists because “the multimedia player is supplied with a view to making a profit, the price for the multimedia player being paid in particular to obtain direct access to protected works available on streaming websites without the consent of the copyright holders … [T]he main attraction of such a multimedia player for potential purchasers lies precisely in the fact that add-ons are pre-installed on it which enable users to gain access to sites on which copyright-protected films are made available without the consent of the copyright holders.” [51]

Also known as 'three-step test'
Streaming of unlicensed content

The next, topical, issue to address was whether the streaming of unlicensed content could result in liability infringement of the right of reproduction or could be, instead, excused under the exemption for temporary copies within Article 5(1) of the InfoSoc Directive.

As readers know, the exemption within Article 5(1) is subject to five cumulative conditions that must be interpreted strictly: (1) the act of reproduction is temporary; (2) it is transient or incidental; (3)  it is an integral and essential part of a technological process; (4) the sole purpose of that process is to enable a transmission in a network between third parties by an intermediary or a lawful use of a work or protected subject matter; and (5) that act does not have any independent economic significance.

In addition, Article 5(1) is subject to the three-step test in Article 5(5).

The CJEU held that the acts of reproduction at issue do not relate to a lawful use of copyright works, also because the main attraction of Filmspeler’s player is the pre-installation of the add-ons. In addition, and as a consequence, the resulting temporary acts of reproduction are such as to adversely affect the normal exploitation of those works and causes unreasonable prejudice to the legitimate interests of the right holder [71].

Comment

As mentioned, the background proceedings in Filmspeler relate to a very specific factual background, so I expected that the resulting CJEU decision could have limited impact.

This does not seem to be the case.

Watch out what you're watching!
Communication to the public

As regards the construction of communication to the public, two main aspects are worth noting.

First, that facilitation is seemingly akin to intervention, which arguably does not even need to be ‘indispensable’. This makes me think when the CJEU decides Ziggo, it will follow AG Szpunar [here] and hold that a subject like The Pirate Bay makes acts of communication to the public, and is primarily liable for copyright infringement.

In the immediate aftermath of the AG Opinion in Ziggo and the CJEU decision in Filmspeler some commentators have submitted that the CJEU has de facto harmonised secondary liability, ie an area of copyright that has not been formally harmonized at the EU level. That might be true, but it is important to note that not all EU Member States envisage a secondary liability regime for copyright infringement.

The second aspect is that after Filmspeler it should be clear that one’s own profit-making intention should be appreciated in relation to the context, ie surrounding environment, in which the allegedly infringing act takes place, rather than whether the actual act of infringement is motivated by a profit-making intention. This, as seen from the early national applications of GS Media (particularly in Sweden and Germany), should broaden the situations of prima facie infringement.

Unlawful streaming

Turning to liability for unlawful streaming, just a few weeks ago the Derbyshire Council Trading Standards in the UK submitted that streaming unlicensed content would not give rise to liability. After Filmspeler, this does no longer seem true.

Although there might be a discussion as to whether the acts of reproduction are actually made by the viewer (rather than the site that hosts the stream), it appears that now the case of unlawful streams is fully comparable to that of unlawful downloads. In fact, the reasoning of the CJEU in Filmspeler closely resembles that in ACI Adam [Katposts here], ie the case concerning whether unlawful downloads of copyright works could be covered by the private copying exception.

In conclusion

All in all, Filmspeler is a very good victory for rightholders: this is so as far as their enforcement efforts are concerned, but also in relation to lobbying work at various levels – notably the EU and the drafting of a ‘value gap’ provision.

Wednesday, 26 April 2017

Happy World IP Day!

The AmeriKat is currently writing this post at 37,000 feet somewhere off the east coast of the US. As eye-rolling as this may sound, she loves these moments where she can look towards the horizon and ponder on the various things going on in her life. However, she has been finding it more difficult to ponder and to plan given the turbulent times in which we live and the impact on our IP field.


Political discourse across the world is being exchanged at a fevered pace and in fevered tones.  Uncertainty as to the direction and destination of some of the world's biggest consumer markets permeates news headlines.  In the midst of this flux, what role does IP have?  Well,in the vein of Brad Smith's (General Counsel, Microsoft), comments during Fordham last week, IP will have an important role to play and one that it has been accustomed in playing through centuries of technological upheaval, political change and troubling periods of history.  

The way in which nations, innovators and the public have engaged with IP during these times have been diverse and context specific.  Some countries in their infancy, like the US, chose not to engage with IP at all (or at least minimally).  Other countries through various periods have adopted different approaches on substantive IP and trade issues.  There has been a continuum of different national approaches towards IP and, belatedly, some international harmonization.  

But, perhaps, in these polarized and divisive times there may be a new role of IP.  That as a unifying force. IP has common goals of incentivzing innovation and creation for the benefit of society.   IP also touches on everything.  It is the life blood of companies and individuals who rely on protection to get their products and works to the public.  It employs people.  It nourishes people.  It challenges people. 

So on this IP day perhaps we should think a bit about what unites us in our profession, despite all the challenges (and opportunities) that lay head politically and how we can provide strong united leadership in IP, policy and innovation over the coming year for the benefit of all.  

And with that rosy, high-altitude perspective relayed.... 

Happy World IP Day from the entire IPKat team!

(And happy birthday Sir Robin Jacob!)

Varsity Brands and Star Atheltica - A Closer Look

Varsity Brands' registered copyright works
In March the IPKat reported the breaking news that the long awaited US Supreme Court decision in Star Athletica v Varsity Brands had finally come out.

Now, in the words, of Seth Meyers, it's time for A Closer Look.

The Supreme Court decision is not about whether the cheerleader uniforms in issue met the requisite level of creativity to qualify for protection as copyright works (although both majority opinions did note that the level of creativity required is "extremely low" following Feist).

Instead, this case was concerned with art as it is applied to functional (or "useful") items be that a cheerleader's outfit, a lamp or anything in between.  More specifically it was about the circumstances in which it is possible to separate the artistic work from the functional item and the method for doing so.

Some applied art
(at Tate Britain until 29 May 2017)
Why is this an issue?

§101 of the US Copyright Act defines “Pictorial, graphic, and sculptural works” as including:
two-dimensional and three-dimensional works of fine, graphic, and applied art...  the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article (emphasis added).
Star Atheltica argued that the five designs in issue served the useful function of identifying the garments as cheerleading uniforms and therefore they could not be physically or conceptually separated from the cheerleading uniforms.

Is it necessary to consider separation at all?

Varsity Brands' primary argument was that the copyright works in issue are two dimensional graphic designs which appear on useful articles but are not themselves designs of useful articles.  The above images depict the registered copyright works.  They were all created before the cheerleading uniforms rather than taken from the uniforms after creation.  Therefore, they said, it is not necessary to consider whether the artistic work can be separated from or exist independently of the cheerleading uniform because the designs in issue are not for a useful article.

The Supreme Court disagreed. Because the designs were incorporated into the design of a useful article and §101 explicitly provides for two dimensional items being part of a useful article, this must be the sort of issue that congress had in mind when drafting the section.  Therefore, the majority held that the separability analysis applies in this instance.

Ginsburg J disagreed with this analysis and noted that because the designs were created before they were applied, "the designs are themselves copyrightable pictorial or graphic works reproduced on useful articles" (emphasis in original).  Therefore, in her view, the separability analysis is not necessary at all.

What is the separability test?

The separability test consists of two requirements (as set out in the statute):
  1. separate identification - this was considered to be "not onerous" as anyone can look at a useful article and identify some 2D or 3D component which has PGS qualities (i.e. pictorial, graphic or sculptural qualities);
  2. independent existence - is usually "more difficult to satisfy".  This requires that the PGS work must be able to exist alone once it is separated from the useful article. 
One of the statuettes from Mazer
The key authority in this decision was able to shed some light on this issue.  Mazer v Stein, 347 US 201, 214 (1954) concerns the protection of lamps.  More specifically it answered the question as to whether a statuette which was intended for use as a lamp base could be protected by copyright.

Mazer held that: (i) copyright subsisted in the statuette even though it was intended for use as a lamp base; and (ii) it was irrelevant whether the statuette was initially created as a freestanding sculpture or as a lamp base.

Therefore, Mazer said that "if a design would have been copyrightable as a standalone pictorial, graphic or sculptural work, it is copyrightable if created first as part of a useful article".   The Supreme Court traced the origins of §101 to Mazer and consequently intepreted §101 in line with Mazer.

They summarised the test as:
"[A] feature of the design of a useful article is eligible for copyright if, when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work either on its own or when fixed in some other tangible medium."
When applying this test to the cheerleading uniforms in issue they found that:
  1. the surface decorations on the uniforms could be identified as features having pictorial, graphic or sculptural qualities;
  2. the arrangement of colours and chevrons etc could be separated from the uniform and applied to another medium e.g. a painting;
  3. removing the surface decorations from the uniforms would not replicate the uniforms themselves.
If the decoration is removed, what is left?
Why was the Supreme Court divided?

This was not a unanimous decision.  The court was split 6-2 with Breyer J and Kennedy J dissenting.  

The court's opinion was divided on the following key issues.

Separability 

The dissent argued that removing the designs from the cheerleading uniforms and placing them in some other medium, e.g. a canvas, would create "pictures of cheerleader uniforms".  In other words, even when the surface decoration is extracted, you cannot entirely remove the useful article (the uniform).  

The majority noted that two-dimensional applied art inevitably correlates to the medium on which it is recorded and it would be ludicrous for a fresco, ceiling panel or dome to lose copyright protection simply because they are designed to track the dimensions of the surface on which is is painted. 

Moving from fine art to a more popular realm, the justices applied the same reasoning to painted guitars being replicated on album covers.  They noted that it would create an anomaly if they (a) deny copyright protection to art that was first applied to a useful object whilst (b) allowing art which was later applied to a useful object to be protected.

The dissent allowed that a work of art printed on a T-shirt could be protected.  The majority noted that there is no material difference between a T-shirt and the uniforms.  They were clear that this decision does not give anyone the right to prevent the manufacture of cheerleading uniforms of the same shape, cut or dimensions.

Physical vs conceptual separability - usefulness after removal

One of the arguments around separability focused on whether it was necessary for the original item to remain as useful after the artistic work is removed.  In this instance, the dissent considered that the designs were necessary to identify the wearer as a cheerleader.  If the surface decoration it would simply be a plain white outfit rather than a cheerleading uniform.  

The majority gave this argument short shrift.  They noted that it you took the lamp in Mazer and removed the statuette you would be left with a shade, bulb and wires - i.e. it would not be equally useful after removal.  Importantly, "the statute does not require that we imagine a nonartistic replacement for the removed feature to determine whether that feature is capable of independent existence" (emphasis in original).

As a result of their analysis, the court "necessarily abandon[ed] the distinction between 'physical' and 'conceptual' separability which some courts and commentators have adopted".  The justices were very clear that because the statute does not require the underlying useful article to remain, the physical-conceptual distinction is unnecessary.  The only relevant question for separability is: can the artistic work be conceptually separated from the useful article?

Artistic judgment and marketability

There was an argument that the test for identifying an artistic work should include two objective components:

(1) do the design elements reflect the designer's artistic judgment?
(2) would the artistic feature be marketable to a significant segment of the community without its utilitarian function?

As neither test has any basis in the US Copyright Act, both tests were rejected.  Adding market surveys into the copyright process did not sound like a good idea to the justices as it "threatens to prize popular art over other forms or to substitute judicial aesthetic preferences for the policy choices embodied in the Copyright Act".

Inconsistent with the exclusion of industrial design

There has been a long history of the fashion industry trying to get protection for clothing as a specific useful article (in a similar way that semiconductor chips and boat hulls have been protected).

Because congress has declined to specifically protect clothing as copyright (and left it to be covered by design patents), Star Athletica argued that there was a "presumption against copyrightability".

The majority noted that (i) "congressional inaction lacks persuasive significance", (ii) design patents and copyright are not mutually exclusive; and (iii) the test formulated by the Supreme Court would not protect the physical garments including their shape, cut and dimensions but only the surface decoration applied to those uniforms. 

Although the ultimate decision on infringement could still go in Star Athletica's favour, the basic principle from this decision (i.e. that art can be protected as a copyright work if it can be conceptually separated from a utilitarian object) seems perfectly reasonable to me.  Whether this will make a tremendous change to industry remains to be seen.   

For more on the history of the Mazer v Stein statuettes including more images of the statuettes at issue in the case and an explanation for any ballet dancer/Balinese dancer confusion see Zvi Rosen's fascinating blog here.

Finally - a big caveat and a shout out to all the US copyright lawyers.  I am an English lawyer and whilst many of the principles in this judgment are similar, if there are any errors or omissions, whether in use of language or interpretation of the decision, please let me know and I can update the post.

By Rosie Burbidge

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