Blocking sites with infringing content

By Carlton Daniel on Posted in Copyright

Internet Service Providers now have greater freedom to decide how to block user access to infringing content.  This follows a recent ruling of the Court of Justice of the European Union (CJEU) in the case of UPC Telekabel.

In this case, Constantin Film Verleih GmbH  (Constantin) and Wega Flimproduktionsgesellschaft mbH (Wega) applied in the Austrian courts for an injunction requiring the Internet Service Provider UPC Telekabel to block access to a website which allowed users to unlawfully download films in which Constantin and Wega owned copyright.  The case was referred to the CJEU for an interpretation of the relevant law (the Copyright Directive). access-denied

The CJEU ruled that the courts of EU member states can grant injunctions requiring ISPs, like Telekabel, to block access to websites hosting infringing content and (the new aspect of the ruling) that injunction does not have to be prescriptive. In other words, the injunction does not have to state the specific measures the ISP must take to block access. Instead, the ISP can decide what steps it will take to comply with the injunction, adopting whatever methods it considers most appropriate, taking into account all relevant circumstances. The ISP must balance the rights of copyright holders to protect their IP and the rights of users to access lawful content. It can also take into account its own rights to conduct its business freely. Merely switching a domain off may go too far. Other, more subtle, measures may be used. However, the measures chosen must not unnecessarily prevent users from accessing lawful online content and must be effective in preventing access to the infringing content, or at least make access difficult.

IP and Technology specialist, Carlton Daniel, comments:

This ruling will be both welcomed and disliked by ISPs. On the one hand, instead of being told what steps they must take to block access to infringing content (typically to block the domain name and IP address of the site), they now have some flexibility to use more subtle technological measures than simply switching a domain off.  This means that ISPs can take steps they consider proportionate and cost effective.  However, in practice, there are a number of limitations on this discretion.  Often, there is no middle ground between allowing access to the domain and ‘switching it off’.  Also, ISPs must ensure the measures they adopt are ‘effective’.  Arguably, ISPs are in no better position than if a court issued an injunction specifying that the domain must be blocked.  On the other hand, many  ISPs would  prefer to be subject to a specific injunction which tells than exactly what they must do rather than risk falling short of what the court requires.

Rights-holders may be less satisfied with the ruling.  There is likely to be disagreement around the measures ISPs take to block infringing content. Where this is simply switching off access to a domain, film and music companies will be satisfied.  However, the CJEU now seems to be saying that this may, in some instances, go too far.  Therefore, a more nuanced approach by ISPs may be called for. Rights-holders may not be happy with this, especially where the majority of content on a site is shown to be infringing.  ISPs will have complied with the injunction where they have taken ‘all reasonable measures’ to prevent the infringement.  But that is not necessarily the same as all infringing content having been successfully blocked.”

Can I stop my design being copied?

By Squire Patton Boggs on Posted in Designs

Advocate General Wathelet has issued his opinion in the case of Karen Millen Fashions Limited v Dunnes Stores, Dunnes Stores (Limerick) Limited.  The opinion concerns the scope of unregistered design protection and is helpful for designers, particularly those in the fast-moving fashion industry.

Brief background

Designers in the EU benefit from a relatively new form of IP protection, known as a Community Design.  The appearance of a new product, such as an item of clothing or shoe, will be protected automatically as an unregistered community design when created, provided it is ‘new’ and has ‘individual character’. No registration is needed. The designer can stop others copying the design for three years from creation.  wooden-coathanger

The dispute

Karen Millen, the well-known fashion retailer, designed and sold a striped shirt and a black knit top, which Dunnes Stores copied and began selling.  Karen Millen sued in the Irish courts for unregistered design infringement. Dunnes Stores acknowledged that the designs were new and that it had copied them. However, it claimed that the garments were not protected as unregistered designs because they lacked the necessary individual character. It said that the burden was on Karen Millen to prove that the garments did have the individual character required. The Irish courts asked the Court of Justice of the European Union (CJEU) for an interpretation of the relevant law in the Community Designs Regulation.  As is usual, the Advocate General of the CJEU issued a preliminary opinion in advance of the court ruling. 

The opinion

The Advocate General considered what ‘individual character’ means. He said that for a design to have individual character:

the overall impression which that design produces on the informed user must be different from that produced on such a user by one or more earlier designs taken individually and viewed as a whole, not by an amalgam of various features of earlier designs”.

In other words, the design should be looked at as a whole and compared with existing designs, also looked at as a whole. If your design produces a different overall impression from those existing designs it will have the required individual character and be protected as an unregistered design. Individual character will not be destroyed simply because design aspects of your garment appear on other existing designs. The Advocate General said:

assessment of individual character does not permit the abstraction of certain specific features from one or more earlier designs in order to create a theoretical object of comparison, that is to say, something that does not actually exist in real life”.

What is key is how your design appears as a whole when compared with what is already out there, also taken as a whole.

In addition, in infringement proceedings, a designer is not required to prove that his/her design has individual character. The designer need only prove when his/her design was first made available to the public and indicate (not prove) which elements of the design give it individual character.

Implications

The opinion is good news for designers. It is more likely that a design will have individual character (and so unregistered design protection) if, as the Advocate General recommends, it is compared as a whole with other existing designs, also taken as a whole.  Few designs would overcome the individual character hurdle if they were to be held up against a theoretical comparator consisting of aspects of existing designs all put together.  In addition, designers are relieved of any burden of proving that their design has individual character. It would be practically impossible to do so and prohibitive from a costs point of view.  Community unregistered designs are intended to provide immediate protection for designs which have a short shelf-life (such as in the fashion industry). With that in mind, requiring designers to prove that their design has individual character when seeking to enforce their rights against infringers would be inappropriate and undermine the usefulness of this IP right.

This is a preliminary opinion and we await the CJEU ruling.  There are no official statistics, but the CJEU follows the Advocate General’s opinion in around 80% of cases.

 

Can I hold on to this database until I get paid?

By Squire Patton Boggs on Posted in Contract

The UK Court of Appeal has missed an opportunity to bring English law on liens up-to-date.  In the case of Your Response v Datateam Business Media, it held that a supplier providing database services had no right to hold on to the database on termination of the contract until its outstanding fees were paid, unless the contract said otherwise.

What happened in this case?

In this case, a database manager contracted to hold and manage a magazine publisher’s electronic database of subscriber information.  The contract was informal and said nothing about how it could be terminated or what would happen to the database on termination.  The publisher was unhappy with the services and terminated the contract.  The database manager refused to hand the database over to the publisher until its outstanding fees were paid.  The Court of Appeal was asked to rule on whether the database manager had a right to hold on to the database pending payment (known as a ‘common law lien’).

What did the Court of Appeal decide?

The Court of Appeal said that the database manager could not hold on to the database pending payment and must hand it over to the publisher immediately in its most up-to-date form.  In legal terms, that meant that the database manager was not entitled to exercise a common law lien over the database.  The Court of Appeal said that the essence of a lien was a supplier having physical possession of tangible property. It ruled that electronic data was intangible property. It did not exist as a physical object independently of the equipment on which it was held. Although the supplier could exercise practical control over the database, this was different from physical possession. The court also refused to overlook the need for physical possession and treat databases as a special category of property over which a lien could be exercised.

The Court of Appeal acknowledged that this ruling left the law on common law liens some way behind current technological development.  However, it said that if the law was to be extended to include databases or intangible property generally, then the UK Parliament would need to legislate.

What are the implications of this ruling?

What does this mean for suppliers?  Careful drafting of the contract is required.  Where electronic data is part of a contractual relationship, the contract must cover off what will happen to that data on termination.  Is the supplier required to hand the database back to the customer?  In what form?  What is the handover timeframe?  Who will pay the migration costs?  Also, following this judgment, if the supplier wants to be able to hold on to the database pending payment, then that right must be set out in the contract expressly.  Otherwise, the supplier will be required to hand the database over despite not having been paid (and the courts will order that).  That will significantly diminish any leverage the supplier might have in respect of the payment of its outstanding fees.

 

 

Supreme Court Clarifies Standing Requirements for False Advertising under the Lanham Act

By Squire Patton Boggs on Posted in Trademarks

In what many are calling a “game changing” decision, on March 25, 2014, the Supreme Court articulated the requirements for standing in false advertising cases brought under the Lanham Act in Lexmark v. Static Control, 572 U.S. ____ (2014). The long-running dispute between Static and Lexmark relates to the replacement toner market for printers. Lexmark is in the business of selling single-use toner cartridges that are controlled by a microchip in the cartridge. Static Control meanwhile sells replacement microchips companies that re-manufacture cartridges and allow Lexmark’s product to be reused despite Lexmark’s intent that the cartridges be single use. The two companies thus do not “directly” compete with one another. Static, nevertheless, brought a Lanham Act claim against Lexmark alleging that Lexmark had falsely advertised that Static’s microchips were illegal. The Sixth Circuit applied the Second Circuit’s “reasonable interest to be protected” test and found that Static had standing to bring its suit.

When Lexmark appealed the ruling to the Supreme Court, it gave the High Court the opportunity to resolve a circuit split on what test should be used to determine standing in Lanham Act false advertising cases. For example, the Second applied the “reasonable interest” test, while, in the Ninth Circuit, a plaintiff had to prove that it was a “direct competitor.” Still other circuits applied a multi-factor test adapted from anti-trust law.

In affirming that Static had standing, the Supreme Court eschewed each of these tests and fashioned a new standard, which many are calling the “zone of interest” test. Under this approach, in order to have standing, a plaintiff must plead and (ultimately prove) that it (1) falls “within the zone of interests protected by the law invoked” and (2) has suffered an injury “proximately caused” by the actual statute-violating conduct. Accordingly, standing under the Lanham Act requires “an injury to a commercial interest in reputation or sales…flowing directly from the deception wrought by the defendant’s advertising; and that that occurs when deception of consumers causes them to withhold trade from the plaintiff.”

.LONDON domain name to launch on 29 April 2014

By Squire Patton Boggs on Posted in Advertising, Domain Names, e-Commerce, Technology

What is it? 

A new top-level domain name (TLD) permitting registration of (brand).LONDON, with priority given to London businesses, organisations and individuals.  Anyone with a presence or interest in London should consider seeking to register a .LONDON domain name.  It is expected that domain names will be allocated by August or September 2014.

Who is eligible? 

From 29 April 2014, there is a three-month period during which anyone with an interest in London may apply.  There is, however, the following priority system:

1. Trademarks verified with ICANN’s Trademark Clearinghouse database.

2. Londoners (those with a physical address in London) with rights to a name (such as proof of business or trading name).

3. Londoners (those with a physical address in London).

4. Non-Londoners.

If more than one party has equal eligibility under the priority system, there will be an auction for the name.

What is the cost of registration? 

The cost has not yet been set, but it will be set before the launch date and we will publish a blog update when the cost is set.

How long does it last? 

Each .LONDON domain name registration will be renewable annually.

Please contact your usual Squire Sanders contact for more detailed information.

 

 

Running an international prize promotion without breaking the law

By Carlton Daniel on Posted in Advertising, Copyright, Data Protection, Trademarks

Running an international prize promotion is an increasingly popular way for brands to engage with their consumers. Given the obvious benefits of the Internet, brands and their advisors often seek to operate those promotions through third party social media platforms, such as Facebook, YouTube and Twitter, or on bespoke platforms. While there are many benefits to engaging with consumers using an international prize promotion, the challenge for marketers is to do so without breaking the law.

We have produced a useful reference publication summarising some of the legal issues that should be considered when planning an international prize promotion, in particular where it is run through social media. Although we approach these issues mainly from the perspective of English law (which offers more scope and flexibility than elsewhere) we also consider the issues brands typically face in other jurisdictions when running an international prize promotion.

Squire Sanders has extensive experience advising on prize promotions, in particular those using social media. With offices spread throughout the world we are perfectly placed to help ensure that a campaign is clear for operation on a local or international basis.

Please also feel free to read our earlier blog post which looks at some similar issues – Sweepstakes and Contests: Should You Go International?

Lindt-Teddy = Lindt-Easter Bunny ≠ Haribo Gold Bears??

By Squire Patton Boggs on Posted in Trademarks

A rather unusual dispute between chocolate and gummy bears is currently gripping the courts of Cologne in Germany. But what has a fruit-flavoured gum candy treat for children and adults alike to do with a chocolate bear? It is perhaps the peculiarity of trademark law that this question has developed in a multi-million legal dispute involving the German sweet manufacturer Haribo and the Swiss chocolatier Lindt.

Lindt, which is of course well-known for its chocolate Easter bunny in gold foil, started marketing its “Lindt-Teddy” in 2011 in Germany. The Teddy, not only because of what is wrapped under its gold foil, looks rather sweet:

However, the Teddy was not to Haribo’s taste. Haribo considered the Lindt-Teddy an infringement of its trademark rights in its famous Gold Bear and sued Lindt for an infringement of its trademark registration for the word mark GOLD BEAR. It feared a dilution of its valuable GOLD BEAR mark in a market that is known to be highly competitive.

A trademark conflict between a word mark on the one hand and a three-dimensional mark is extremely rare. In fact, the conflict has not been decided by any Court of Appeal in Germany or indeed the German Federal Supreme Court which forms the last instance in civil matters.

It is therefore not really surprising that the battle between Haribo and Lindt before the courts in Cologne has attracted attention even in German mass media. The District of Cologne, at first instance, upheld Haribo’s claim and held that the Lindt-Teddy constitutes an infringement of Haribo’s word mark GOLD BEAR. More specifically, it found that the Teddy was detrimental to the reputation of Haribo’s mark and that consumers would associate the Teddy with Haribo’s Gold Bears.

In a preliminary opinion issued on 7 March 2014, the Court of Appeal in Cologne disagreed. The judges felt that consumers would associate the Teddy more likely with Lindt’s Easter Bunny as opposed to Haribo’s Gold Bears. The first instance court was criticised as having put too much weight on the colour and the shape of the bear. In the Court of Appeal’s view, the correct interpretation of the overall impression of Lindt’s Teddy, as a necessary criteria of a likelihood of confusion, requires taking the prominently placed Lindt brand into consideration.

It is therefore widely expected that the Court of Appeal will uphold Lindt’s appeal when handing down its decision on 11 April 2014.

However, Lindt and Haribo appear to have an appetite to see the dispute through until the last bear is eaten: Both manufacturers have already confirmed that the losing party will appeal the decision to the German Federal Supreme Court. We will continue to monitor the dispute for our sweet savvy readers.

Read this before you Tweet that link!

By Squire Patton Boggs on Posted in Advertising, Copyright, Technology, Trademarks

Most companies by now have made their footprint in social media, including on leading platforms such as Facebook and Twitter.   With 500 million Tweets being sent per day, companies need to get creative to come up with enough content to engage their consumers.  One popular technique is to send Tweets that contain links to third-party content, along with some discussion relating the content to the company’s own products or services.  This has become such a common practice that some may not consider whether there could be any liability associated with this practice, and how they may best avoid it.

We recently reported on a much anticipated ruling regarding when hyperlinking is lawful in Europe.  In this post we will discuss when you may see copyright or trademark liability for this activity under U.S. law, and best practices for avoiding such liability.  Be sure to read to the end of this post for our “top ten” guidelines!

First, the good news.  Linking  per se is generally not actionable under U.S. copyright or trademark law (phew!).  In fact, most websites encourage linking.  Many news outlets and other content providers use technology on their sites that allows users to share the content on Twitter, Facebook or other platforms by simply clicking an icon.  Also, content providers may favor linking because the more links that are established to their site, the higher their site will be ranked in response to Internet searches.  Finally, the content providers are getting new traffic to their website that they may not have without the links, which most sites would welcome.

However, there are a few special cases where linking practices may be tantamount to infringement.  In general, the areas where you may see liability for linking under copyright law is when a link is presented in a way that encourages access to infringing material, or where the link connects to a live performance or other material streamed to the public. Liability for linking under trademark law may be present where a link suggests false sponsorship or endorsement or would otherwise be viewed as likely to cause confusion.  Linking also may potentially be restricted by contract, such as in a website’s terms of use.

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European Parliament cements its support for the new EU Data Protection Regulation

By Francesca Fellowes on Posted in Data Breach, Data Protection, Privacy

The European Parliament voted strongly in favour of the adoption of the new EU Data Protection Regulation in a plenary vote held last Wednesday (12 March 2014), with 621 votes in favour, 1 against and 22 abstentions. This vote was significant, as it means that the Parliament’s position is now set in stone and cannot alter even if its composition changes, as a result of the upcoming European elections in May. 

However, in order to become law, the proposed Regulation has to be adopted by the Council of Ministers (Europe’s other legislative body). Reports have suggested that Council members have been engaged in detailed debate regarding a number of key provisions contained in the proposed Regulation. Until a further announcement is made regarding the Council’s progress in its endeavours to agree a common position on these controversial proposals, it is impossible to predict when the new Regulation is likely come into force. 

The next meeting of the Council on data protection reform will take place in June 2014. A positive outcome would increase the likelihood of the new Regulation being adopted by the end of this year, although once adopted it will be subject to a 2-year grace period before coming into force. 

Further updates will be reported in this blog.

Hot Topics in Intellectual Property and Technology

By Squire Patton Boggs on Posted in Advertising, Contract, Copyright, Data Breach, Data Protection, Designs, Patents, Privacy, Trademarks

Our new quarterly publication – Hot Topics in Intellectual Property and Technology – highlights the most significant legal developments in the UK and Europe in the areas of intellectual property and technology, contract, data protection and privacy, trade secrets and advertising and media. Our Hot Topics briefing is intended to keep you abreast of key legal developments so you are well positioned to take advantage of new opportunities. It is a succinct summary of what you need to know, with detail kept to a minimum. Feel free to call us to discuss any of the developments, and the implications for your business, in more detail.  Please also feel free to browse other items on this Blog, which is a source of more comprehensive news and insight into legal issues of interest to the global intellectual property and technology community.

 

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