The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy
InternKats: Rose Hughes, Ieva Giedrimaite, and Cecilia Sbrolli
SpecialKats: Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Monday, 23 April 2018

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

The 190th edition of Never Too Late is here to help you with your catch-up of everything on IPKat over the last couple of weeks (2nd-15th April)! Highlights include an event report on autonomous cars, user-rights relating to the "first Instagram masterpiece" and a book review of a mystery novel written by a former patent attorney. 

Copyright

Guest Kat Nedim Malovic asks whether an ISP can be required to hand over its subscribers' IP addresses in online copyright infringement cases: Swedish Patents and Market Court of Appeal says that an ISP may not be required to hand over information about subscribers’ IP addressesThe Swedish Patents and Market Court of Appeal ruled that this might not always be the case, in contrast to the decision at first instance and other Swedish courts' recent decisions (see here). The case concerns UK-based Copyright Management Services (CMS) and the Swedish internet service provider Tele2. 

Kat Eleonora Rosati summarises her contribution to the 26th Fordham IP Conference, one of the most notable annual events for the IP enthusiasts: The EU copyright reform and the legacy of CJEU case law: lip service?


Enjoying the spring sunshine

In Rich writer, poor writerAsia Correspondent Tian Lu explores the meaning of "IP-able" in China, i.e. the films and television plays adapted from popular copyright works such as animations, novels, games and songs. Tian analyses the income disparity between "pure-literary" writers and screenwriters, a situation exacerbated by the relatively low damages awarded by the Chinese courts for copyright infringement of literary works. 


Patents

InternKat Rose Hughes turns her attention to the topics of claim interpretation and infringement in a recent decision by the UK Court of Appeal: Regeneron v Kymab - Part II: Interpretation and Infringement. Also, here is Rose’s previous analysis of the court’s conclusions on sufficiency in the same judgement.


Social Media

Departing from the heated topics currently involving Facebook, privacy and data protection, David Serras Pereira (SPAutores) reflects on the social media giant’s global music strategy and its investment in music-related activities: Facebook and music rights: the “not-so-heard-not-GDPR-related-news”. Will it be the new music global service?

A social media project created by an Argentinian artist, Amalia Ulman, may be “the first Instagram masterpiece”, a “sensation of contemporary art”, but what light does the user-rights context shed about this “experiment”? Kat Neil Wilkof explains: Are viewers of on-line contents entitled to the truth? “Excellences & Perfections” and the saga of Amalia Ulman

Event Reports - Autonomous Vehicles

Guest Kat Luke Maunder (Bristows) reports on the British Computer Society event on whether we are ready for autonomous vehicles: What is the final destination of autonomous vehicles? Luke provides an overview of the talks, covering the story of self-driving cars to-date, the current situation, predictions for the future, and the practical and ethical issues associated with autonomous vehicles. 


Does this car have a mind of its own?
GuestKat Rosie Burbidge shares her impressions from a panel discussion, More Than Just a Game Conference London IV. The focus was on a wide variety of perspectives on IP and interactive entertainment from the publisher and developer points of view,  from both  the UK and US legal perspectives: More than just a game - IP and interactive entertainment.

Trade Secrets

Kat friends Sture Rygaard and Emil Jurcenoks (Plesner) report on the recent adoption of The Danish Act on Trade Secrets: The Danish Act on Trade Secrets has now been adopted. The new act is a very literal implementation of the EU Trade Secrets Directive ("Directive"). Sture and Emil provide an outline of the parts of the act of particular importance to Denmark, including the provisions for damages and criminal sanctions.


Book Review

Kat Neil Wilkof reviews a new mystery novel, entitled “The Devil’s Dice”, written by  former patent attorney Roz Watkins, together with an interview with the author as she reflects on migrating from patent law to fiction: From IP practioner to murder mystery author: Roz Watkins and "The Devil's Dice" (a pity about that patent attorney in the opening scene).


*This is a joint post by InternKats Ieva and Rose*

PREVIOUSLY ON NEVER TOO LATE

Never Too Late 189 [week ending 1 April]  It is the year 2050, and the last trademark litigator has retired | RETROMARK: A year of trade marks - Part 1: Costs after Cartier | Right of publicity not a right to control one's own image by censoring disagreeable portrayals, says appeals court in de Havilland case | EU Commission publishes paper on consequences of Brexit on copyright | Brexit 'cliff-edges' - Alliance for Intellectual Property paper | Del Toro and The Shape of a Lawsuit | Copyright, exceptions and cultural institutions: Australia is listening! | Google cannot hide behind its algorithms, German court finds | Does the InfoSoc Directive envisage digital exhaustion? Questions in the Tom Kabinet CJEU reference finalized (at last) | Court of Appeal, following EPO, reverses Carr J in Regeneron v Kymab dispute | Regeneron v Kymab - Part I: Sufficiency | How do you protect patents from judicial and expert hindsight? | Weekly Roundups: Monday Miscellany

Never Too Late 188 [week ending 25 March]  Shenzhen court issues written judgment in Huawei v Samsung case | Controversy looming for this year's pre-EQE | Courts continue to struggle to find appropriate forms of injunctive relief when social media is involved: Frank Industries versus Nike | Investment disputes, trademarks and licences, and ICSID tribunals-"Bridgestone v. Panama| Will trade mark law stop Marine Le Pen's new campaign? | Eventt Report: INTA Designs Conference 2018 | French court finds appropriation of photograph not sufficiently 'transformative' and therefore infringing | Swedish Supreme Court says that painting based on photograph is new and independent creation and hence...non-infringing | The 5 Pointz case: a response (on the risk of cultural gatekeeping in copyright) | National and EU text and data mining exceptions: room for coexistence? | Book Reviexs: Research Handbooks on Copyright Law and History of Copyright Law | Book Review: Certification and Collective Marks | Weekly Roundups: Around the IP Blogs!

Never Too Late 187 [week ending 18 March] Irish Government proposes introduction of Irish text and data mining exception | Infighting at Nigeria’s main collecting society – Powers of the sector regulator | Unlawful street art used in a promotional campaign: H&M withdraws its complaint | General Court confirms that ‘La Mafia se sienta a la mesa’ cannot be a trade mark on public policy grounds | Nando's v Fernando's: Food for thought | Spanish Supreme Court puts an end to a “sui generis” case concerning database “sui generis” right |  The protection of genetic resources, traditional resources and folklore 35 meetings later… | Book review: ‘Rethinking Intellectual Property – Balancing Conflicts of Interest in the Constitutional Paradigm’ | Friday Fantasies

Never Too Late 186 [week ending 11 March]
 The best and the brightest: key UK and EU design decisions from 2017 | German design law on the brink of change following yesterday's CJEU decision in DOCERAM v CeramTec | Greece: new notice and take down administrative mechanism for online copyright cases now in force | A new type of authors' organization: an exclusive interview with the Executive Director of Authors Alliance | Can Mattel be prevented from making its own Frida Kahlo Barbie doll? | The 5 Pointz case: Should works of art be protected from destruction? | 9th Circuit ‘slam-dunks’ claim of copyright infringement by Nike photograph of Michael Jordan and ‘Jumpman’ logo | Gutenberg.org loses to German publisher and is found liable for damages | AIPPI UK Event Report: Registration, notice and infringement - is certainty an illusion? | L'Oréal v RN Ventures: exclusive licence registration and costs recovery | Eighth Granted Petition for Review | In Memoriam Trevor Baylis: the life-saving wind-up radio and the precarious lot of the sole inventor


China to adopt punitive damages for IP infringement – An economic commentary

The IPKat is happy to publish the following guest post by Roya Ghafele (OxFirston the important issue of punitive damages from an economic perspective.

Here's what Roya writes:

“China is to adopt punitive damages for IP infringement, according to information from Reuters and the New York Times. This is an approach with which the United States is intimately familiar with. To the skilled political economist, the key question in applying legal remedies, be they damage awards or injunctions is that they should be welfare enhancing: ‘If Courts understate damages, the distributional damage remedy may disappear altogether. However, if Courts overstate remedies, then this gives way to strategic behaviour and opportunism and extortion.’  

How to strike such a balance should be core to any governance structure for IP enforcement. The advantage of damages awards is that they allow to offer an award based on the value of the patented technology and not the nuisance from an injunction. For this to happen under fair and equitable conditions, damage awards need to be more systematically assessed from an economic point of view and the practice of IP valuation and damage calculation further promoted. When sound economic principles are applied to the assessment of damages, they allow indeed to model the value of a patent, be it in the eye of the infringer or of the rightholder.

For this to happen, China, like many other countries, would need to come to grips with the economic analysis of damages. Raising the traditionally low damage awards in China may hence be in fact welfare enhancing as it will allow to model damage awards according the economic merits of the case, provided China or its trading partners are willing and able to help build economic competences as they relate to the assessment of damages. This will require to further promote the practice of IP valuation when assessing damages. If Courts want to apply damage awards correctly, they will need to systematically apply IP valuation methods. Finding the right amount of damages is not infeasible: IP valuation methods are used for sales, licensing, litigation, tax, and accounting purposes.

At the same time, China may want to consider to re-think its practice of issuing quasi-automatic injunctions. In fact, UC Berkeley scholar Renjun Bian analysed all publicly available final patent infringement cases decided by local people’s courts in 2014, which amounted to a total of 1,663 patent infringement judgments.  He finds that all plaintiffs won in 80.16% of all patent infringement cases and got permanent injunctions automatically in 90.25% of cases. Hence China, has been reported to issue a permanent injunction on a quasi- automatic basis in over 90% of all cases where a judge ruled that a patent was valid and infringed.

The inherent challenge with an injunction that is issued on a quasi-automatic basis is that it dictates a purely one-size-fits-all approach. It is not necessarily related to the economic worth of the harm and deprives the Court of the ability to issue a damage award reflective of the value of the IP at stake. Rather, the injunction will reflect the value of the business or business line that is to be closed down.

Hence, a major short coming of quasi-automatic or automatic permanent injunctions can be that it deprives the Court of the ability to issue a nuanced statement on the value of damages and adequately reflect the economic value of the patents at stake. Overall, automatic or near-automatic injunctions are likely to bring the infringed party an arbitrary remedy (if at all) as an injunction is not linked to the economic value of the patent.
If China is hence to depart from a tradition where damage awards are rather low and adopts a more US type rationale for damage awards, it may want to consider to consider to tie the issuance of an injunction also to a U.S. style four factor test, which is required in this country since the 2006 decision of the Supreme Court in eBay Inc. v. MercExchange, LLC. In an article published with the Iowa Law Review, Seamen finds that during a study period of 7.5 years, injunctions in the United States remained fully available for all market participants except patent assertion entities, which obtained an injunction only in 16% of all district Court decisions. Measures along those lines, could alongside a more systematic understanding of patent damages from an economic point of view allow China to find its way to an equitable IP enforcement system!”

Sunday, 22 April 2018

Fearless Girl to be moved due to ... viability concerns

Charging Bull and Fearless Girl
A little over a year ago The IPKat reported that Italian-born sculptor Arturo Di Modica, ie the author of the well-known Charging Bull in Manhattan's Financial District, intended to file a formal complaint with the Office of the New York City Mayor over the decision of the latter to allow the positioning (and stay for a few months) of Kristen Visbal's Fearless Girl right just opposite the famous bull.

Initially an advertisement for an index fund which comprises gender diverse companies that have a higher percentage of women among their senior leadership, Fearless Girl has become a popular sight in Manhattan. 

The reason why Di Modica was unhappy about the positioning of Fearless Girl is explained in his complaint to the Mayor. 

His sculpture was meant to symbolize, initially, the 'strength and power of the American people and, then (after it was moved to its current location), the 'hope of the American people for the future'.

The meaning has arguably changed since the arrival of Fearless Girl. According to Di Modicacontrasted with the soft, altruistic characteristics of the bronze girl, Charging Bull now appears menacing and aggressive.

Fearless Girl as a derivative work

Di Modica's lawyers have argued that Fearless Girl is a derivative work: 'The statue of the young girl become the "Fearless Girl" only because of the Charging Bull: the work is incomplete without Mr. Di Modica's Charging Bull'. 

According to the complaint, also the features of Visbel's work have been deliberately chosen to create an association/contrast with the Charging  Bull, including its material (bronze) and patina.

The result is that 'the Charging Bull has been appropriated and forced to become a necessary element of a new, derivative work: "Fearless Girl: Girl Confronts Charging Bull". This is direct violation of Mr. Di Modica's copyright.'

§106 of the US Copyright Act provides in fact that the copyright holder has the exclusive right "to prepare derivative works based upon the copyrighted work". 

It should be however noted that such exclusive right is: (1) subject to fair use within §107 and (2) the author of a derivative work owns the copyright to the material that he/she has contributed and this is independent of any copyright protection in the preexisting material, as per §103.

Fearless Girl and a Kat
Fearless Girl as a moral rights infringement 

Besides issues of trade mark dilution, Di Modica's lawyers also argued that the altered meaning of Charging Bull would violate the work's integrity and cause prejudice to the author's honour and reputation, thus amounting to an infringement of §106A.

At the time of reporting on the complaint, I suggested that, although Di Modica's sculpture might potentially qualify for protection under §106A, the right of integrity envisaged therein is only actionable in relation to a "distortion, mutilation, or other modification of the work which would be prejudicial" to the honour or reputation of the author. 

Arguably Fearless Girl and its positioning have not resulted in any direct intervention on Charging Bull.

In addition, §106A(c) sets significant exclusions to moral rights protection. Of particular interest here is that "[t]he modification of a work of visual art which is the result of conservation, or of the public presentation [can the addition of Fearless Girl be considered part of the Charging Bull's public presentation?], including lighting and placement, of the work is not a destruction, distortion, mutilation, or other modification ... unless the modification is caused by gross negligence." (emphasis added)

Finally, it is worth noting that also §106A protection does not exclude availability of fair use within §107 of the Act.

The latest development

Despite all this, on 19 April last Mayor Bill de Blasio announced that Fearless Girl will move to a new location in front of the New York Stock Exchange by the end of this year.

But what reasons have been given for this decision if the threat of litigation on copyright grounds from Di Modica is not mentioned in the press release?

Well, believe it or not the reason is ... health and safety and viability!

"The new, long-term home will also alleviate safety issues arising from the large numbers of pedestrians and visitors drawn to the statue, which has been located on a narrow median on Broadway", says the press release.

While the reasons given by the Mayor for his decision are indeed noble ones, it is a pity that Fearless Girl is being moved. 

Two, brief, additional points can be made.

The first one is that Fearless Girl communicates a certain message irrespective of its location. In this sense, the claim that it is a derivative work that draws its meaning from the positioning in front of the Charging Bull may be debatable. Similarly questionable are, as explained above, the moral rights concerns.

The second point relates somewhat to the reasons given for its relocation and concerns indeed urban planning. Would it be a good idea for an author to be in a position to have a say over items or even buildings placed in the proximity of his/her publicly displayed work or ... would that be just too much (possibly with the exception of special circumstances)?

Friday, 20 April 2018

Book review: Droit d’auteur 4.0 / Copyright 4.0

On this sunny Friday afternoon, why not sip some lemonade and drink in a book review from Katfriend Sabine Jacques [lecturer in IP/IT/Media law at the University of East Anglia. Her research mainly focuses on copyright exceptions and creative industries]. Luckily, Sabine also happens to be multilingual, as two of the chapters of this book are written in French (indicated below), the others are in English. 

The latest edition of Droit d’auteur 4.0 / Copyright 4.0, edited by Jacques de Werra, includes contributions from Yaniv Benhamou, Jo Oliver/Elena Blobel, Jean-Michel Bruguière, Ysolde Gendreau, Wenwei Guan, Daniel Schönberger. 

Copyright 4.0 represents the tenth volume of the series ‘propriété intellectuelle – intellectual property’. This time, the volume is devoted to the impact of the advent of technologies and digitalisation on copyright, and brings together contributions written in light of the ‘Journée de Droit de la Propriété Intellectuelle’ organised by the University of Geneva on the 22nd of February 2017.

Without pretending to exhaust this broad topic, this book provides interesting regional insights on specific challenging areas including the enforcement of copyright online, the creation of user-generated content and also, the role of AIs in copyright.

Perhaps to some readers’ surprise, blocking injunctions have had a tumultuous journey in Swiss law. Yaniv Benhamou covers the Swiss legal developments of this type of injunction, considering civil liability, criminal confiscation, administrative procedures and the proportionality test enshrined in fundamental rights in light of the absence of any specific legal provisions, or comprehensive jurisprudence. The author reminds us that safe harbour provisions, such as present in the EU or the USA, do not exist in Swiss law. Intermediary liability is currently based on a more general framework, although in respect of copyright at least, this is likely to change in the future, which might itself be problematic because it fragments the legal framework. Here, the author calls for a coherent approach to intermediaries’ liability, and does not reject alternative solutions, such as de-indexing websites, or endorsing the ‘follow the money’ approach. Finally, the author favours self-regulatory models to increase transparency and flexibility in adapting the regime to new developments in this area. This chapter is written in French. 

Staying on this theme of website blocking injunctions, Jo Oliver and Elenal Blobel (IFPI) provide the music industry’s perspective, focussing mainly on the EU, although offering insights from other jurisdictions as well. In addition to providing an overview of the impact of blocking injunctions on the music recording industry, this contribution also offers some recommendations for improving the cross-border effect of injunctions to better protect right-holders. Additionally, the authors note that the effectiveness of website blocking injunctions for tackling online music infringements has been hindered by the ease with which website blocks can be circumvented. Here, the UK courts’ ‘dynamic’ injunctions are brandished as an example of good practice, which allows a blocking injunction to relate to a particular website instead of its domain name or IP address. The authors also welcome the recent ‘live’ blocking injunction granted in the UK, because this targets the streaming servers directly, meaning the order may adapt to technological advancement and new users’ habits.

Jean-Michel Bruguière’s contribution [in French] discusses the digital single market from two angles: the proactive behaviour of the CJEU and current legislative proposals. Firstly, the author notes the boldness and creativity on behalf of the CJEU in harmonising copyright law. Revisiting the GS Media decision, Bruguière questions whether it is appropriate to distinguish the burden of proof based upon whether the undertaking which provides the hyperlinks to the copyright-protected content has done so in pursuit of financial gain. This contribution also questions the scope of GS Media’s guidance, as well as highlighting the numerous areas which are yet to be developed. The sections on inflections and admonition are particularly interesting. The admonition award is attributed to the C-301/15 Soulier and Doke decision. In an audacious move, the CJEU not only reformulated the national questions (much criticised by Mr. Justice Arnold), but introduced an additional condition before the authorisation of the right-holder may be implied. This constitutes another example where the public interest has been cast aside in favour right-holders and their exclusive rights. Finally, the chapter comments on the EU Commission’s recent copyright proposals including the press publisher’s right. Although acclaimed by publishers, the author notes that there is no widespread enthusiasm for this proposal. He recounts that journalists fear that they will be worse off as a result of this new ancillary right and most online intermediaries cannot identify any market failure which requires this legislative intervention, which is only likely to increase transaction costs. Here, the author agrees with the criticisms and argues that a publisher’s right is unnecessary, given the remedies available under copyright and competition law. 

Ysolde Gendreau takes us to North America and tackles the challenges brought by user-generated content (UGC) and other digital copyright uses by focusing on users and online intermediaries. The author explains how the Canadian courts deal with the question of internet intermediaries’ liability differently to those in the USA by focusing upon the surprising outcome in Lenz, concerning a 29-second video of a baby dancing to Prince’s song – ‘Let’s Go Crazy’. Applauding the adaptability of fair use to new technological developments, the US approach is contrasted to the Canadian regime. Since the Canadian Copyright Reform in 2012, the UGC exception has attracted a lot of attention, but the author reminds us that this exception comes with many conditions attached. Firstly, it needs to lead to the creation of a new copyright work. Secondly, the use must mention its source. Finally, the use must not adversely affect the market of the original (i.e. the second step of the three-step test) which requires economic analysis based on the facts of a particular case. Another particularity lies in the requirement that the original source must be obtained legally and without circumventing a technological measure.  Interestingly, this Canadian exception shields both the user and any intermediary involved in the  dissemination of the UGC from liability. Finally, whilst both US and Canadian systems now include provisions tackling the digital environment specifically, these may lead to different outcomes, since the Canadian legislature has been more interventionist than its US cousin in the field of intermediary liability. The future is only likely to extrapolate the territorial issues linked to copyright laws.

An insightful and accessible read for any Kat
Providing a view from Asia, Wenwei Guan examines the local efforts amending copyright law in Hong Kong and Mainland China to adapt it to the digital era. Hong Kong’s current copyright system is modelled on the UK’s CDPA. Having gone through several reforms, the latest Amendment Bill 2014 brought some relief by further promoting freedom of expression and the public interest. However, the rejection of a UGC exception, while introducing a parody exception, leaves the author with a bitter taste, since both are seen to share similar objectives. Compared with Hong Kong, China appears less author-oriented, concentrating on the protection of trade interests, while Taiwan attempts to align itself closely with TPP provisions. Therefore, the author explains the real danger that users’ interests will be eclipsed by trade-related concerns.

Finally, Daniel Schönberger, looking at Swiss law, explores some challenges which AI creativity presents, but concludes that a new legal regime is not currently warranted. As the copyright paradigm rests on the idea that creativity requires a human component, how does this fit when a work has been ‘created’ by a machine? While there is no denying that most of these works are likely to pass a  threshold which is merely defined as useful and aesthetic, the output remains different from what we expect from human creativity. Schönberger argues against recognition of legal persona in robots. The author skilfully articulates that as copyright protection serves as a reward to foster future creativity, that protection is unnecessary for AI creations. Unlike human authors, robots do not need any incentive to continue creating. But also, what spill-over effect might there be on human creativity were robots awarded the same status as humans?

Copyright 4.0 is not only comprehensive and accessible but it can be read as a whole or in parts. This book certainly is of interest to those who research and/or study in the area of copyright law, as well as being a very informative read for anyone interested in the development of copyright law in the digital era.

Details
ISBN: 978-3-7255-8662-2
Publication Date: 2018
Extent: 194 pp
Hardback Price: CHF59.00, Currently available on the Schulthess Website.

photo: Aulusgellius

Fordham 2018 Report 1: Building Out the House - Music Licensing

The AmeriKat has had her paws pretty full of late with trials, events, conferences and general life.  So this year, she was not able to report on the ever incredible sessions from the Fordham IP Conference in New York.  But knowing this, she roped in some wonderful law students and interns at Fordham University who stepped up to the plate.  So over to J.D candidate (Class of 2019), Jacob Tesch, for the first report from the conference on the Music Licensing session: 

"During Thursday afternoon’s session Music Licensing, Termination & Territoriality: Time for Recalibration?, moderator N. Cameron Russell (Center for Law & Information Policy, Fordham Law School) likened the legal developments in U.S. music licensing to building additions to a house. Instead of bulldozing years-old foundation, Congress has, over the years, passed several pieces of legislation to keep up with changes in the ways people both create and consume music.  
Following Russell’s opening remarks, Kenneth Steinthal (King & Spaulding LLP) spoke on issues concerning Performing Rights Organizations (“PROs”) ability to license public performance rights, as well as the Copyright Royalty Board’s the latest update in mechanical licensing rates under Section 115 of the Copyright Act. Steinthal first summarized the Second Circuit’s recent decision in which the court affirmed the determination that the consent decrees governing PROs, such as ASCAP and BMI, permit “fractional” licensing of works—thereby allowing BMI to license works that it or its affiliated writers or publishers lack full control of. According to Steinthal, BMI’s ability to fractionally license could have severe consequences for licensees because they now cannot be certain that their public performance license was approved by all rights holders. This decision, coupled with the lack of a credible database indicating who holds the public performance right of a given work, could result in increased infringement litigation against streaming services by those non-consenting copyright holders. It will be interesting to see if the Department of Justice takes on the Second Circuit’s decision by arguing that this interpretation of the PROs’ consent decrees violates U.S. antitrust law. Steinthal closed his speech by opining that the royalties structure established by the Copyright Royalty Board in January 2018 raises concerns for streaming services.

The panel then debated the impact of these developments on the marketplace for mechanical and public performing licensing of musical works. Many of the panelists disagreed with the extent of Steinthal’s notion that the Second Circuit’s decision could be the downfall of several streaming services and cited Spotify’s recent multi-billion-dollar valuation as evidence of streaming services’ financial ability to fight infringement lawsuits. Steinthal defended his position by stating that we are particularly attuned to larger streaming services because they are frequently in the news and, absent a compulsory licensing regime for sound recordings, the Second Circuit’s decision could be fatal to many smaller streaming services found to owe exorbitant statutory damages for infringement. Richard Pfohl (CONNECT Music Licensing), in agreement that a blanket compulsory licensing system for sound recordings would be an efficient solution, suggested that leaving this issue to the marketplace partially help solve this problem. Moreover, all of the panelists agreed that the lack of transparency with respect to who owns the public performance right of a given work is a major problem in the music industry that needs to be resolved.

Next, Regan Smith (U.S. Copyright Office) provided an overview of the concerns targeted by three potential copyright reforms: the Music Modernization Act, the Classics Act, and the Allocation for Music Producers (“AMP”) Act. The Music Modernization Act, as its name suggests, attempts to modernize the current licensing regime under 17 U.S.C. §115 by creating a blanket licensing arrangement for digital phonograph deliveries. The Act establishes a music licensing collective (“MLC”), overseen largely by publishers and songwriters to collect and distribute mechanical royalties for musical compositions. The formation of the MLC aims to assuage the challenges digital services face when attempting to match songwriters and publishers with recordings and create a more transparent and efficient system for compensating authors. Furthermore, the Music Modernization Act would repeal Section 114(i) of the Copyright Act and give PROs and songwriters the opportunity to present evidence in rate-setting proceedings to a rotating “wheel” of judges who would consider licensing fees by applying a “willing buyer willing seller” standard.

The CLASSICS Act grants owners of pre-1972 sound recordings the exclusive right to digitally broadcast said recordings, which due to an arbitrary quirk in U.S. copyright law, do not enjoy the same federal protections as post-1972 sound recordings. While these recordings will continue to be freely broadcast over terrestrial radio, the CLASSICS Act attempts to alleviate what has been considered by one recording artist a form of “digital ageism.” The AMP Act will amend federal copyright law by codifying SoundExchange’s “Letter of Direction” practice to directly pay producers, mixers, or sound record engineers from a featured artist’s or label’s statutory scheme, if directed to do so. The bill provides for 2% of the featured artist’s share of royalties to be directly paid to a pre-November 1, 1995, producer, mixer, or sound engineer absent a letter of direction or an objection by the artist.

The entire panel agreed that these three bills, which have been received by both the House of Representatives and Senate, are sensible pieces of legislation. Jacqueline Charlesworth (Covington & Burling LLP) noted that the publicly available ownership database created by the MLC would be extremely beneficial for recording artists, music publishers, and songwriters because it would help solve the music industry’s transparency problem. Still, Steinthal expressed skepticism that these proposed bills would resolve the statutory damages problem that entrenches the current statutory scheme.

Joshua Graubart (The Law Offices of Joshua Graubart, P.C.) reviewed the UK High Court decision from Mr Justice Arnold in Gloucester Place Music v. Le Bon, in which the British rock group Duran Duran sought to terminate the transfer to their music publisher, Gloucester Place, which alleged such action constituted breach of contract. Under Section 203 of the U.S. Copyright Act, the author may terminate a grant at the end of 35 years from the date of execution or publication of the work. Mr Justice Arnold of held that English contract law was controlling and that service of a notice of termination under the U.S. Copyright Act would result in a breach of the band’s music publishing agreement. Lauri Rechardt (IFPI) commented that this decision demonstrates that our global music industry is in need of stronger and more transparent rights to underpin the global marketplace for music.

The overarching theme that drove most of the panel’s conversation was that our global music industry faces a transparency problem. It will be fascinating to see if the three proposed bills, which are scheduled to begin the House Judiciary markup process on April 11, can overcome a problem that has negative consequences for songwriters, music publishers, and digital streaming services."

Public interest in Plant Variety Rights. How high is the bar for the grant of a compulsory license?

IPkat has previously reported on the background and contents of the first compulsory license application. Now, as  we finally have the decision itself (Decision nr NCL 001, of the 16th of March 2018), there are a number of interesting points to discuss.


Background of the case

On 12 October 2009, Smith Kline Beecham Limited ( “GSK” ) filed a Community plant
variety right (CPVR) application No 2009/1980 for the variety ‘Ben Starav’ of the species Ribes nigrum L.. By Decision No (EU) 35825 of 8 July 2013, the Office granted a CPVR. By request of 18 November 2014, GSKasked the Office to effect the recordal of the transfer of rights to Lucozade Ribena Suntory Limited( “LRS”).  

On 16 March 2017, the Office received an application for a compulsory licence by Pixley Berries (Juice) Limited ( “the applicant”) pursuant to Article 29 of Council Regulation (EC) No 2100/94 of 27 July 1994 on Community plant variety rights (Basic Regulation) (the Council Regulation (EC) No 2100/94 of 27 July 1994),.

Public Interest

Article 29(1) of the Basic Regulation provides that a compulsory licence shall only be granted on the ground ofthe public interest. Article 41(2) of the Proceedings Regulation (of Commission Regulation (EC) No 874/2009 of 17.9.2009.) further provides three circumstances  that may, in particular, constitute a public interest:
a) The protection of life or health of humans, animals and plants;
b) The need to supply the market with material offering specific features;
c) The need to maintain the incentive for continued breeding of improved varieties.

The CPVO clarifies in its decision that it is the applicant that has the burden of proof regarding whether there is a public interest, and thus clarifies that the CPVO will not proceed with an independent investigation, but will  base its decision solely  on the facts and arguments raised by the parties to the proceedings.

The protection of life or health of humans, animals and plants (Article 41(2)(a) of the
Proceedings Regulation)

The applicant claimed that there is a public interest  based on the benefit that ‘Ben Starav’ provides to the public health when used for the production of 100% juices, as the consumption of said juices is associated with a healthy lifestyle. Second, due to the climate change, it would be in the public interest to use a variety that adapts well to different climatic conditions, as it is the case for ‘Ben Starav’.

According to the CPVO, the applicant  failed to show the specific benefits provided by ‘Ben Starav’ to public health. The general statement provided by the applicant is not enough (“healthy lifestyle”), since it fails to prove that “Ben Starav” presents better characteristics than other blackcurrants. Furthermore the use of the concept “healthy lifestyle” was considered by the CPVO to be too generic, since it refers to a general way of life covering, for instance, everything from a balance between work and private life to stress control and personal hygiene, rather than pointing to the specific nutritional characteristics of the particular  plant variety.

Furthermore, the applicant’s argument that “Ben Starav”, adapts well to climatic zones, and thus also guarantees good harvests throughout different seasons, does not provide any concrete evidence of a public interest.

The need to supply the market with material offering specific features (Article 41(2)(b) of the Proceedings Regulation)

The next step in the evaluation of the CPVO consists of determining whether the characteristics that are of importance from a public interest perspective are unique for the specific plant variety. The applicant claimed that ‘Ben Starav’ has unique characteristics, which make it unlike any other blackcurrant varieties, namely i) a consistent high yield of good quality fruit, ii) harvest season not in conflict with other cultivars , iii) even ripening at harvest, iv) even bud-break across a range of winters , v) good juice quality from an organoleptic point of view, vi) good compositional analysis and vii) excellent colour .

The CPVO concluded, however, that the evidence provided by the parties is clear in that the alleged characteristics of “Ben Starav” are not unique to the specific plant variety.   As such, the CPVO ruled that the alleged unique characteristics of the variety “Ben Starav” do not fulfil the requirement of Article 41 (2) of the Proceedings Regulation  since these features are also offered by other varieties of blackcurrant.

On the need to supply the market with material from ‘Ben Starav’
The applicant claimed in brief that there is a need to supply the market. Taking into consideration that it has been shown that there are a number of available blackcurrant varieties, and that the characteristics of importance from a public interest perspective are shared by several other varieties of blackcurrant, the CPVO  concluded  that there is no need to supply the market with “Ben Starav”.

On the public funding of the variety ‘Ben Starav’
Worthy of discussion is  the fact that “Ben Starav” is the result of a partly state-funded breeding program. LRS answered  that this fact  does not in itself mean that a third party may exploit the research results by means of a compulsory license.  The question thus posed to the CPVO was whether state funding could have an impact on the grant of a compulsory license. In other words, can partial public funding of the “Ben Starav” breeding programme  constitute a  public interest sufficient  to justify the grant of a compulsory license?

The CPVO concluded that this is not necessarily the case. A state authority may choose to invest in a breeding programme for reasons of public interest but at some point needs to determine whether to claim the legal rights on the variety or to allow a private entity to protect and own the plant variety protection, as in this case. When such a decision is reached, the public (e.g., consumers and competitors) may not then raise any claim to the variety in question. Thus, granting a compulsory licensing should abide by the same rules irrespective of whether the breeding programme leading to the variety was 100% private or 100% state funded.

Interest of the case 
An important question that the CPVO answered is whether alternatives to the variety are an important part of the evaluation whether to  grant a compulsory license. The CPVO concluded  that although the determination of the existence of alternatives belongs  to competition law (theory of essential facilities), it is  also important for the determination of whether the requirements for the grant of a compulsory license are fulfilled.

 In fact, where alternatives exist, the need to supply the market with the specific plant variety becomes much more difficult to prove.  In support of this argument, the CPVO points to the ruling of the German Federal Court of Justice ruling of 11 July 2017 regarding a patent on the antiviral agent “Raltegravir”. There, the Court stated that “a compulsory licence cannot be granted if the public interest can be satisfied with other, essentially equivalent alternatives”. It is  interesting how the CPVO chose to seek guidance  by reference to  parallels between patents and intellectual property rights. Moreover, this decision  points to  the growing importance of competition law principles in the application and interpretation of intellectual property law provisions.



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