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).

Tuesday, 31 May 2016

BREAKING: CJEU Grand Chamber says what to consider in communication to the public cases

Back in February this blog reported that after hotels [here], dentist waiting rooms [here], and spas [here], the Court of Justice of the European Union (CJEU) had been asked to say whether the making available of TV broadcasts in rehabilitation centres should be regarded as an act of communication to the public.

The case is Reha Training, C-117/15, a reference for a preliminary ruling from the Landgericht Köln (Regional Court, Cologne) asking essentially whether [the questions in full can be accessed here]:
  • the making available of TV broadcasts by means of TV sets on the premises of a rehabilitation centre falls within the scope of Article 3(1) of the InfoSoc Directive and Article 8(2) of the Rental and Lending Rights Directive;
  • and the concept of ‘communication to the public’ for the purposes of those two provisions must be given a uniform interpretation.
This reference was made in the context of litigation between Reha Training (which operates a rehabilitation centre) and German collective management organisation GEMA, concerning Reha Training's refusal to pay a licence fee in connection with the making available of protected works on its premises.

This morning the CJEU delivered its 67-paragraph judgment [just made available on the Curia website in a handful of languages, but not English - UPDATE on 1 June 2016: the judgment is now available in English], substantially confirming the Opinion of Advocate General (AG) Bot although not relying on the four elements indicated therein (see further below). 

Grand Chamber composition

Quite interestingly the CJEU has decided this case as Grand Chamber [ie with 13 judges presided over by the Court President instead of the usual chambers of 3 or 5 judges]The reason for this was [as the AG himself explained in his Opinion] to allow the Court to clarify its case law in the area of communication to the public. 

The AG Opinion

AG Bot noted how the CJEU has been asked several times to say what 'communication to the public' means and that four assessment criteria should be considered [in this Kat's own opinion this rationalisation effort is to be praised, as in its communication to the public case law the CJEU has been at times anything but consistent]:

1.    the existence of an ‘act of communication’ for which the role of the user is indispensable;
2.    the communication of a protected work to a ‘public’;
3.    the ‘new’ character of that public;
4.    and the ‘profit-making’ nature of the communication (according to the AG this is not however an essential condition).

The AG held the view that the notion of 'communication to the public' should be the same in relation to different directives, ie the InfoSoc and the Rental and Lending Rights Directives [both relevant in a case like this]

This said, he considered whether the four criteria above would be present in a situation like the one at stake before the referring court. He concluded that the case at hand is one in which the right of communication to the public is a stake. 

A Reha Training room
The CJEU decision

First, in its decision the Court noted that application of Article 3(1) of the InfoSoc Directive is without prejudice to Article 8(2) of the Rental and Lending Rights Directive. Secondly, given the unity and consistency requirements of the EU legal order, the same concepts in different directives should have the same meaning [well, true in theory, but there have been recent instances in which the CJEU has not followed this very rigorously]

The Court highlighted that there are some differences between relevant provisions in the InfoSoc and Rental and Lending Rights directives. However, it concluded that there is no evidence that EU legislature intended the concepts of 'communication to the public' differently in these two pieces of legislation.

A broad interpretation and a number of criteria, some variable and some constant

This said, the Court held that in assessing the existence of a communication to the public, several criteria - each of which non-autonomous but rather interdependent in nature - should be considered. These criteria may come into consideration differently in different scenarios. What however seems the common element in all the various scenarios is that the concept of communication to the public must be interpreted broadly, further to Recital 23 in the preamble to the InfoSoc Directive.

In addition, the concept of 'communication to the public' combines two cumulative elements: (1) an 'act of communication'; (2) directed to a 'public':

(1) An 'act of communication' means any transmission of a copyright work, irrespective of the medium used or the technical means employed. As a rule, each transmission or retransmission of a work that uses a specific technical mode should be in principle individually authorised by the relevant rightholder;

(2) The term 'public' refers to an indeterminate number of potential recipients, and also implies a fairly large number of people (ie above de minimis). In addition, according to the Court to fall within the concept of 'communication to the public' a work must be directed to a 'new public", ie an audience that was not taken into account by the relevant rightholder when he authorised the initial communication of the work. In this context, it is necessary to take into consideration the indispensable role of the user [eg the operators of a coffee shop, hotel, or spa], who must provide, in full knowledge of the consequences of his behavior, access to the work to a 'new public'.

Although in some cases the profit-making nature (or its lack thereof) of the act in question has been taken into account, the Court clarified that this is not a decisive factor to classify an act as one of communication to the public [it might not be decisive but certainly it is interesting, as the Court itself subsequently referred to it at para 63].

The case of rehabilitation centres

Having clarified what criteria need to be taken into account to determine whether a certain act is to be regarded as one of communication to the public, the CJEU considered that the case at hand is more akin to that of a hotel operator rather than a dentist.

It held that:
  • The operator of a rehabilitation center deliberately transmits protected works to patients by means of TV sets installed in several places on his premises. As such, he is committing an 'act of communication';
  • The patients of a rehabilitation centre constitute a 'public' that can enjoy the works broadcast by means of TV sets thanks to the indispensable intervention of the centre operator;
  • This public is also 'new' in that it was not taken into account by the relevant
    A new public always needed?
    rightholder at the time of authorising the initial communication.
Implications of the decision

This decision is a very important one and it will be interesting to read the English version once it becomes available [this blog post has been written by relying on the French version]
  • A 'new public'-fits-all?

First, it seems that the CJEU has embraced the 'new public' criterion fully. 

Readers may remember that in its 2013 TV Catchup decision [here] the Court rejected TV Catchup’s contention that for Article 3(1) of the InfoSoc Directive to apply the communication must be directed to a ‘new public’. According to the Court the ‘new public’ criterion would be only relevant when the technical means are identical. This is not the case (as it was in TV Catchup) of works transmitted via territorial broadcasts and then retransmitted over the internet. 

It is however the case of a communication concerning the same works as those covered by the initial communication and made by the same technical means (eg internet): in Svensson [Katposts here] the Court stated that the 'new public' is a public that was not taken into account by the relevant rightholder when he authorised the initial communication to the public.

It would now appear that 'new public' considerations might become relevant in a higher number of cases, ie those  in which the transmission and retransmission occur through different technical means.
  • Does a communication require a transmission? Possible impact on GS Media

Secondly, another key aspect is that the CJEU appears to require for an act of communication to occur something more than the mere possibility to access a work (Svensson), ie its transmission. 

Any hint as to the forthcoming
outcome of
GS Media?
This could be useful for the CJEU to consider when it decides the key case currently pending before it, ie GS Media [as readers will know, this is a reference for a preliminary ruling from the Dutch Supreme Court. It was made in the context of proceedings between Sanoma (the publisher of Playboy magazine) and GS Media, concerning the publication by the latter on a website (GeenSijl) that it operates of hyperlinks to other websites hosting unpublished photographs taken for a forthcoming issue of Playboy].

In particular, it could be useful to side (if the Court wants to obviously) with Advocate General (AG) Wathelet who, in his Opinion on 7 April last [here], considered that in Svensson the CJEU held that for there to be an ‘act of communication’, it is sufficient that a work is made available to a public in such a way that the persons forming that public may access it, irrespective of whether they avail themselves of that opportunity. 

According to the AG this approach is not correct in relation to hyperlinks, because hyperlinks that lead, even directly, to protected works do not make available’ those works to a public where the works are already freely accessible on another website, but merely facilitate the finding of those works. According to the AG what is key to consider is rather whether the intervention of the ‘hyperlinker’ is vital or indispensable in order to benefit from or enjoy works. 

Sorry not sorry – Justin Bieber and Skrillex deny copying vocal loop to produce ‘Sorry’

Justin Bieber and Skrillex have been accused of copyright infringement by artist Casey Dienel, aka White Hinterland. The suit probably does not come as a complete surprise to the duo as Dienel claimed that she contacted Bieber’s lawyers when “Sorry” was initially released, but did not receive a response.

Dienel alleged that Bieber and Skrillex, whose 2015 hit single ‘Sorry’ has received 1.4 billion hits on YouTube, copied her vocal loop from her 2014 song ‘Ring the Bell’. The allegedly copied segment can be heard in the first five seconds of each song. Skrillex and Bieber have both denied the claims on their Twitter accounts.

Unlike his song lyrics to Selena Gomez,
Bieber isn't sorry about this alleged copying
 If this claim goes to trial, it could be the 2016 edition of the infamous “Blurred Lines” dispute, which resulted in Pharrell Williams and Robin Thicke being ordered to pay Marvin Gaye’s family $7.4 million USD for infringing copyright in his 1977 hit ‘Got to give it up’ (discussed on IPKat here). 

After the ‘Blurred lines’ case, this Kat would be surprised if Bieber’s lawyers took this case to trial, but let’s consider what Dienel would need to prove to win her claim for infringement:

Copyright subsists
For a claim in copyright infringement to succeed, copyright must subsist in the earlier work. Copyright subsists in the US if the work is original according to the standard set out in Feist Publications, Inc., v. Rural Telephone Service Co., 499 U.S. 340 (1991); a modicum of creativity.

Substantial similarity
The later work must be substantially similar to the earlier work for a finding of copyright infringement. Determining substantial similarity “includes a qualitative as well as a quantitative aspect.” (Abrams, §14.16). This Kat played both songs at the same time and thought there was undeniable overlap between the two sounds. Dienel’ loop has four beats whereas Bieber and Skrillex’s has five, but it is the similarities rather than the differences which have to be compared.
Even if the works are substantially similar, copyright law will not protect a work if the later work was independently created (Abrams, §14.7). Skrillex tweeted a video showing how the loop in question was produced, demonstrating his stance on this issue.

Proof of copying can be direct or indirect. Direct proof could be an admission of copying by the defendants or testimony of a direct observer of the copying.  Dienel is unlikely to have direct proof so she would have to rely on indirect proof. This would include the availability of the work to the accused copier and the similarities between the two works.

Daniel’s song is available on YouTube and Spotify so it would have been easily accessible by Bieber and Skrillex. As for the similarity, US DJ Diplo weighed in on the matter when questioned by TMZ; “I thought they sampled it…but I thought they cleared it. Yea, seems pretty easy to do.”

Significance of the claim
Musical copyright claims such as this one skate a thin line between protecting the creations of artists and chilling future creation. It is difficult to determine when a song has copied rather than been inspired as artists are inevitably influenced by earlier works. The video Skrillex posted indicates that a similar sound or technique was used in producing the song, rather than taking a direct sample from ‘Ring the Bell’. It might be the case that Bieber and Skrillex were inspired by the earlier sound and decided to create their own version to incorporate into ‘Sorry’, using different pitch, timing and placement.

Are Bieber and Skillex copycats or creative cats?
In this instance, whether Bieber was inspired or unlawfully imitated Dienel’s vocal loop, ‘Ring the Bell’ pales in comparison to the global success that ‘Sorry’ has achieved.  It’s not surprising that Dienel would feel slighted and pursue a claim to reap the rewards that her song didn’t produce. 

Who should pay for the independence of the Boards of Appeal? Why the users, of course!

Merpel thought that nothing at the European Patent Office could surprise her any more.  How wrong she was.  She has now received news of a draft of the latest proposal from the EPO administration to reform the EPO Boards of Appeal. The background is given in her previous post, second and third headings.

As she wrote before, the previous proposals from the EPO President to the Administrative Council for the reform of the Boards of Appeal were criticised since they conflated independence with efficiency and seemed fixated on moving the Boards to another physical location.  The new proposal suffers from all the same defects, but now adds another one - the Boards are not sufficiently self-financing, according to Battistelli and his team.

Actually, Merpel should not have been surprised, because she had heard a whisker whisper that Battistelli had been observed to "note with interest" that the UPC is intended to be self-financing from Court fees, and he clearly had his beady eye on applying a similar idea to his own troublesome Boards of Appeal.  He claimed that it was all very well for the Boards to wish for independence when someone else was paying for it, with the clear implication that proper independence means having your own source of funds.

But Merpel did not believe for one moment that the idea that the Boards should pay for themselves would survive any scrutiny.  It is clear that the founders of the EPC did not consider that it was in any way appropriate for the Boards to be funded to any significant degree by appeal fees.  In fact, that realisation is almost certainly why the compromise on the independence of the Boards in the EPC is the way that it is - they were going to be dependent on the rest of the Office for funding, and so could not be completely administratively independent of it; the EPC tried to achieve the maximum practical autonomy while keeping the inevitable financial link.

Now, to be fair, the current draft proposal for reform does not suggest that the Boards be completely self financing.  But it does suggest that the "cost coverage" (ratio of fee income from appeal fees to calculated cost of the Boards of Appeal) be gradually increased from what is apparently 4.2% today to around 25%.  This suggests, over time, something like a 5-fold increase in appeal fees.  The proposal does of course suggest that the 25% figure could also be contributed to by efficiency improvements in the Boards.  While some improvement in throughput of cases could be envisaged, the requirement for 3- or 5- person Boards for appeal cases, plus the serious responsibility that the Boards have that, in the case of a negative determination, they are the final arbiter, suggest to Merpel that any improvements in efficiency are likely to be modest or at the expense of a much reduced quality.

An increase of the appeal fee is suggested in the draft proposal, from the current level of €1880 to €2940 in 2017, and rising to €7350 by 2021.

Merpel thinks that this is completely outrageous.

Firstly, one reason for appeal is that a refusal by the Examining Division is wrong.  As examiners are put under greater pressure for productivity, wrong refusals are expected to be more, not less, common.  Applicants will be penalised by such a massive fee increase.  There is a provision for refund of the appeal fee in the case of a substantial procedural violation, but it is perfectly possible for the examination to be shoddy without amounting to a substantial procedural violation.

Secondly, considering substantial procedural violations, are the Boards now going to be under pressure not to adjudicate that one has taken place, because it will reduce their funding?  That would have the complete opposite of the alleged effect, to decrease their independence not increase it.

Thirdly, Merpel has seen no corresponding proposal to decrease other EPO procedural fees to offset the effect.  She will be very surprised if one is forthcoming.

The EPO is not funded only by procedural fees.  A major portion of its income is renewal fees, both those it charges directly on pending applications, and those that are remitted to it by national offices after grant (50% of the fees paid to those offices).  Merpel thinks that she can suggest another, better way to make the funding of the Boards of Appeal less open to political interference from the President - benchmark it at a certain proportion of the renewal fee income.  That would tie it, in an indirect way, to the work that the Office was doing, while not making the Boards dependent every year on the President agreeing to their financial requests.

This new focus on the cost coverage of the Boards of Appeal may suggest another reason for the Battistelli obsession to move them out of the Isar building (which they share with him).  If they move to different, rented premises, their office costs will be easily identifiable, without giving rise to awkward questions about what the rest of the Isar building may be costing.  Incidentally, the draft proposal suggests to juggle staff from PschorrHöfe to Isar, and then rent out some office space in PschorrHöfe.  Is now the EPO to be expanding into the office rental business?

The next Administrative Council meeting is at the end of June.  Merpel sincerely hopes that this mad proposal will be ditched before then, or rejected by the Administrative Council.

German Constitutional Court sends sampling saga into another loop

Moses took it to the highest court
In 1997, German music producer Moses Pelham took a two second sample from Kraftwerk's 1977 song "Metall auf Metall" and used it as a continuous loop for the song "Nur mir" performed by Sabrina Setlur. In 2004, Kraftwerk sued Pelham for violation of their phonogram producers' rights and obtained an injunction against the distribution of "Nur mir". The case went all the way to the Federal Court of Justice (BGH), which held in 2008 that even sampling the "tiniest sliver" ("kleinste Tonfetzen") of a record infringed the record producer's right (§ 85(1) German Copyright Act). The defence of Article 24 Copyright Act (Freie Benutzung) was in principle applicable, but required that it was not possible to recreate the sampled sound without copying from the original recording. The BGH sent the case back to the lower court for the factual determination whether it was possible to recreate the sampled sound in the specific case.

Sabrina does not Settlur
The lower court found that it was indeed possible for the average music producer to recreate the same sound without sampling, and in 2012, the BGH dismissed another appeal by Pelham against that decision. It namely held that its interpretation of the law did not violate the constitutional freedom of art (Kunstfreiheit, Article 5(3) Grundgesetz).

Pelham took the case to the German Constitutional Court in Karlsruhe, and won. According to the Constitutional Court, requiring the phonogram producer's permission for taking even the "tiniest sliver" of a recording when it was possible to recreate the sound without copying violated freedom of art as it would essentially prohibit modern forms of pop music, namely hip hop, which relied on sampling. Norms of hip hop demanded actual sampling, not recreation. Licensing was not a viable alternative namely for songs that were sampled from many other recordings, as it 
Lost its steam on appeal
was very time consuming and prohibitively complicated. The effect of the sampling on the commercial exploitation of the original song, on the other hand, was minimal. On balance, the Federal Court of Justice's interpretation of the law violated freedom of art. The case was sent back to the BGH for the BGH to find a way to take into account the sampling artists' protected freedom of art.

I think the Constitutional Court got it right. For already famous musicians with the necessary financial means, clearing all samples may be possible. For up and coming hip hop artists, requiring the phonogram producer's permission to use even "the tiniest sliver" of a published recording would mean the end of producing. Copyright should further the arts, not hinder it.

Monday, 30 May 2016

Never Too Late: If you missed the IPKat last week

Were you away and missed the last week of IPKat? Well, here's Never Too Late, number 98, and bang up to date!

* Are academic publishers liable for ginormous damages?

If a US academic author attempts to assign copyright to an academic publisher, but universities own the copyright in articles all along, could academic publishers be in serious trouble? Mark Schweizer explains the current debate.

The draft UPC Code of Conduct has, apparently, answered some of Merpel's questions... but raised many more for the rest of us.

* What does the timing of the US Defend Trade Secrets Act and EU Trade Secrets Directive really mean for companies?

AmeriKat and James Pooley explore the transatlantic implications of the two new legislative measures strengthening trade secrets protection, just before the EU Trade Secrets Directive was unanimously adopted (see below).

David Brophy brings us an impending CJEU reference which queries what happens when the owner of a trademark right has caused uncertainty as to the function of origin. In particular, although it may seem to be a single entity, the Schweppes mark has various owners across the EEA and so parallel importing is a real possibility.

The new transfer process from triage appears not to have opened the floodgates to overwhelm IPEC, but questions remain about the valuation of IP on the Claim Form, particularly pre-disclosure. Annsley Merelle Ward reports, with a little help from Katfriend James Sweeting.

* Thursday Thingies
Thomson Reuters Innovation Survey - India's IPR Policy - Upcoming Events - "McKosher" trade mark opposition - Uggs trade mark dispute - The Not-So-Secret Diary of Andrea Brewster

* To tub, or not to tub? Last chance to comment on Civil Justice Council's expert hot-tubbing survey

Well, the very, very last chance to comment on the concurrent evidence survey is tomorrow

* IP wrangling (briefly) delays Mourinho's anointment as new Manchester United manager

What was the hold up with the Special One's latest deal? Nick Smallwood explores the IP issues at play and the lighter side of personal image and trade mark rights.

Julia Jarzabkowski from the Law Commission formally introduces the new Bill to the IPKat, following its introduction to the House of Lords last week. The new Bill sets out a test for unjustified threats which is almost identical for all patents, trade marks and designs.

* Sir Terence Etherton to be next Master of the Rolls

Darren Smyth brings the good news that a highly experienced IP judge, and the first out gay senior judge in the UK has been appointed as the next Master of the Rolls, commencing in October this year. Congratulations Sir Terence!

* The life and death of the PRINCE Bill

Common law personality rights in the US are not to be extended post-mortem, not even by what Emma Perot points out to be an extremely creatively titled Bill.

* BREAKING: EU Council unanimously adopts EU Trade Secrets Directive

AmeriKat Annsley Merelle Ward reports that the EU Trade Secrets Directive has been unanimously adopted by the EU Council. The Directive is not intended to impede investigative journalism, good faith "whistle-blowing" or free speech, but will create a minimum framework for trade secrets across Member States.

* Book Review: The Competence of the European Union in Copyright Lawmaking

This book by Ana Ramalho a must for copyright policy makers and researchers, says Nicola Searle.

* The Nominative Fair Use "Defense" in Trademark Law: Confusion in the US Circuit Courts of Appeal

Mike Mireless explains the confusing evolution of nominative fair use in Trademarks as interpreted by the various Circuits, in light of the latest interpretation by the Second Circuit in International Systems Security Certification Consortium v. Security University.


Never too late 97 [week ending on Sunday 22 May] "Simply"Trademark victory for M&S | Notable events this summer | Positec - the end of disclosure? | IPEC or bust? | Enfish distinguished in TLI Communications patent eligible subject matter case | The Politics of Evidence-Based Policy Making, Book Review | UK tobacco plain packaging law - judicial review challenge rejected | IPKat Limerick Competition

Never too late 96 [week ending on Sunday 15 May] Takedown request tactics in Italy | Wines, spirits, cheese & GI infringement | EU report on GI infringement published | Merpel on latest developments at EPO | Does UPC spell disaster for the EPO boards of appeal? | Andy Grove: in memoriam | Friday Fantasies | Has Federal Circuit revived computer-implemented inventions? | AIPPI event on EU trade mark reform | Ex Deep Purple member registers band name as trade mark | Copyright in the telephone directory

Never too late 95
 [week ending on Sunday 8 May] The Economist presents an anti-patent narrative (and is set straight) | UPC Code of Conduct | Period of compensation for trademark violation - Advocate General Wathelet's decision in C-280/15 'Nikolajeva' | Independent Fashion and IP | Italy approaches UPC ratification | Creative franchising copyright - notably of the Klingon language | ITMA discussion of the Trunki decision | IP Challenges in Bio-Pharmaceuticals | Tobacco Products Directive is valid, according to CJEU | Universal Music score summary judgment against IFP

Never too late 94 [week ending on Sunday 1 May] - Vantablack: is it possible to have rights over a colour? | Anne Frank's diary & geoblocking | Magic Leap lampoons Google Glass | Arnold's decision in Richter Gedeon Vegyeszeti Gyar RT v Generics| US Trade Secrets Act passes House | Publishing and the Machine| DSM Communication on Platforms leaked!| Google Books legal saga ends | s52 CPDA repeal comes into force 28 July 2016 | The latest Jack Wills v House of Fraser judgment

The Nominative Fair Use "Defense" in Trademark Law: Confusion in the US Circuit Courts of Appeal

Applied inconsistently and confusingly, the nominative fair use analysis has been adopted in some U.S. Circuit Courts of Appeal.  This confusion is exemplified in the recent Second Circuit's International Information Systems Security Certification Consortium v. Security University decision. Notably, that case rejects both the Ninth Circuit's and the Third Circuit's approach to nominative fair use.

Ibolya Nyikos
Nominative fair use analysis in trademark law developed from the distinguished former Chief Judge Kozinski of the Ninth Circuit's opinion in the 1992 New Kids on the Block v. News Am. Pub., Inc. case.  Chief Judge Kozinski, the well-known libertarian, is the author of the excellent "Trademarks Unplugged" article. Nominative fair use is different from the classic descriptive fair use defense because the alleged infringer is essentially using the trademark of another to refer to the trademark owner. The classic descriptive fair use defense is ordinarily utilized when an alleged infringer is using the trademark of another to fairly describe the alleged infringer's goods or services.  However, nominative fair use could even apply to a fanciful mark because the alleged infringer is trying to directly refer to the trademark owner itself.

In New Kids on the Block, Chief Judge Kozinski set forth the elements for the test: "First, the product or service in question must be one not readily identifiable without the use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder."  Chief Judge Kozinski ultimately found a newspaper's use of the New Kids on the Block trademark in a for-profit telephone poll concerning the band was a nominative fair use.  Notably, Chief Judge Kozinski's concerns with the First Amendment protection of free speech loomed large--and the case did involve a newspaper and the public's expression of which New Kid was the "best."  After New Kids on the Block, the Ninth Circuit itself confusingly applied the test.  For example, some courts placed the burden on the trademark owner to prove a lack of nominative fair use and others placed the burden on the alleged infringer to prove nominative fair use.  Courts also either applied nominative fair use as a replacement for the likelihood of confusion test and others applied it as a defense.  In the 2010 Toyota Motor Sales v. Tabari decision, Chief Judge Kozinski explained that post-KP Permanent Make-Up v. Lasting Impression, a Supreme Court case, the burden is on the trademark owner to prove a lack of nominative fair use and nominative fair use replaces the likelihood of confusion test.
Boy Bands & Libertarians! MEEOW!

Some Circuits have considered nominative fair use and others have not.  The Third Circuit modified the Ninth Circuit's approach in Century 21 v. Lending Tree by revising the factors to attempt to more accurately reflect the necessity of the trademark by the alleged infringer and a concern with preventing any potential consumer confusion.  As distinguished from the Ninth Circuit, the Third Circuit expressly recognizes there could be a likelihood of confusion and the nominative fair use defense could apply.  The Third Circuit's approach seems to recognize broader protection for an alleged infringer's use of a mark than the Ninth Circuit's approach which may contemplate that any confusion would not allow nominative fair use to apply.  Under the Third Circuit approach, after the trademark owner proves likelihood of confusion under a modified test, the alleged infringer must prove: "(1) the use of plaintiff's mark is necessary to describe both the plaintiff's product or service and the defendant's product or service; (2) the defendant uses only so much of the plaintiff's mark as is necessary to describe plaintiff's product; and (3) the defendant's conduct or language reflect the true and accurate relationship between plaintiff and defendant's products or services."

On May 18, 2016, the Second Circuit in International Systems Security Certification Consortium v. Security University addressed the nominative fair use analysis in the context of the use of a certification mark.  Specifically, the court rejected nominative fair use as an affirmative defense (the Third Circuit approach) mostly because Congress specifically provided for affirmative defenses in the Lanham Act and did not provide for nominative fair use.  The court also appears to reject the Ninth Circuit approach; however, the Second Circuit notes the nominative fair use tests applied by the Third and Ninth Circuits are relevant for determining whether there is a likelihood of confusion.  The Second Circuit conflates the Ninth Circuit and Third Circuit test, and seemingly takes a swipe at the Third Circuit's word play.  The Second Circuit stated:
It's not always so black and white.
When considering a likelihood of confusion in nominative fair use cases, in addition to discussing each of the Polaroid (likelihood of confusion) factors, courts are to consider: (1) whether the use of the plaintiff's mark is necessary to describe both the plaintiff's product or service and the defendant's product or service, that is, whether the product or service is not readily identifiable without use of the mark; (2) whether the defendant uses only so much of the plaintiff's mark as is necessary to identify the product or service; and (3) whether the defendant did anything, that would, in conjunction with the mark, suggest sponsorship or endorsement by the plaintiff holder, that is, whether the defendant's conduct or language reflects the true and accurate relationship between plaintiff's and defendant's products or services.
The Second Circuit also provided guidance on applying the factors: "When assessing the second nominative fair use factor, courts are to consider whether the alleged infringer 'step[ped] over the line into a likelihood of confusion by using the senior user's mark too prominently or too often, in terms of size, emphasis, or repetition.' . . . Additionally, when considering the third nominative fair use factor, courts must not, as the district court did here, consider only source confusion, but rather must consider confusion regarding affiliation, sponsorship, or endorsement by the mark holder."

The confusion in the U.S. Circuit Courts of Appeal make the existence and application of the nominative fair use defense ripe for consideration by the U.S. Supreme Court.  Hopefully, the U.S. Supreme Court will get the opportunity to clarify the doctrine soon.

For more on former Chief Judge Kozinski, enjoy this blog post from Above the Law including highlights from the Judge's relatively recent interviews at Yale Law School and this blog post concerning his views relating to the immigrant experience and judging.

Saturday, 28 May 2016

Book Review: The Competence of the European Union in Copyright Lawmaking

Given, um, upcoming political events, analysis of the lines between member states and EU institutions couldn't be better timed. In "The Competence of the European Union in Copyright Lawmaking", Ana Ramalho presents a comprehensive analysis of EU competencies related to copyright.Using EU Court of Justice case law and EU treaties to identify benchmarks, she develops normative perspectives on EU copyright policy.

It's always interesting to read analysis of EU competencies.  As per the UK Government's 2013 consultation, a UK-centric definition of EU competencies is: "everything deriving from EU law that affects what happens in the UK ... all the areas where the Treaties give the EU competence to act, including the provisions giving the EU institutions the power to legislate, to adopt non-legislative acts, or to take any other sort of action ... areas where the Treaties apply directly to the Member States, without needing any further action by the EU institutions." Basically, where the EU can tell member states what to do.

Given member states' diverse approaches to copyright, Ramalho addresses some core tensions in EU copyright law. Like most IP debates, there is friction between a natural rights justification, where IP is largely a recognition of existing rights, and a utilitarian/social welfare approach, which is where innovation arguments come into play.  Noting the debates amongst scholars, she suggests that a combination of the two approaches better encapsulates the rationale for IP. [Merpel is pleased to hear there is a middle ground.]

The author details a thrust towards harmonisation in recent EU copyright policy, but as a consequence of a general harmonisation drive of the internal market, rather than a copyright-specific approach. Looking back to the 1970s, copyright initially fell under a cultural remit, instead of the market focus of today.  Ramalho also investigates how copyright policy should connect to the EU objectives of 1) creation of an internal market, 2) promotion of the EU's values including respect for fundamental rights and the rule of law, and 3) respect of cultural diversity (she notes both cultural and diversity are hard to define.)

Ramalho explores the principles that support the competencies system.  These principles are key to member states' negotiations with the EU.  They are (paraphrased):
1. Conferral - the EU is bound by the objectives and the powers bestowed on it by member states
2. Subsidiarity - the EU should only do things that need to be done at an EU level, rather than by member states
3. Proportionality - a three factor test, but basically asks whether EU competency/action is suitable, necessary and is proportional (is burden > help?)
Making law
by Azzza

The author then proceeds through an analysis of EU primary law and CJEU case law, and develops a series of benchmarks for legislative activity. She makes a number of normative statements to 'field-test' these benchmarks. The former civil servant in me bristled at this point, expecting specific policy measures, as is the penchant of economists.  However, Ramalho instead further unpacks some of the practical issues in EU policymaking. For example, in examining the benchmark of "Protection of Creators: Guarantee of Income and Recognition to Creators," the author looks at the protectionist trend in recent copyright policy which, "takes place regardless of who the owner of the rights actually is." I would have liked to seen some more detail on how a "guarantee of income" would work, but that likely merits a future book in itself.

This book is a must for copyright policy makers and researchers. It might become a must for all of us, depending what holds next for the UK.

Bibliographic information: Ramalho, Ana. 2016. The Competence of the European Union in Copyright Lawmaking: A Normative Perspective of EU Powers for Copyright Harmonization. Cham: Springer International Publishing. Hardcover: £74.50 e-book: £58.99 Rupture factor: Medium-Low, 250 pages.

Friday, 27 May 2016

BREAKING: EU Council unanimously adopts EU Trade Secrets Directive

Just as the AmeriKat was ready to
leave for the Bank Holiday weekend
the EU Council surprises her...
(c) Joe Delaney
This morning the EU Council unanimously adopted the EU Trade Secrets Directive.  The EU Trade Secrets Directive provides for a common framework of minimum standards that Member States must provide for the protection of trade secrets.  For background on the Directive see previous Kat posts here.  The vote had originally been scheduled for yesterday's meeting but was postponed until today.

In its press release, the Council addressed concerns that the provisions provided for in the Directive would impact free speech, whistle-blowers or mobility of employees.  The measures provided by the Directive "fully ensure that investigative journalism can be exercised without any limitations including with regard to the protection of journalistic sources".  In particular Recital 19 of the Directive provides that:
"While this Directive provides for measures and remedies which can consist of preventing the disclosure of information in order to protect the confidentiality of trade secrets, it is essential that the exercise of the right to freedom of expression and information which encompasses media freedom and pluralism as reflected in Article 11 of the Charter ofFundamental Rights of the European Union, (‘the Charter’) not be restricted, in particular with regard to investigative journalism and the protection of journalistic sources."
As to whistle-blowers, the EU Council commented that in line with Recital 11:
"Persons acting in good faith that reveal trade secrets for the purpose of protecting the general public interest, commonly known as “whistle-blowers”, will enjoy adequate protection. It will be up to national competent judicial authorities to judge whether the disclosure of a commercial secret was necessary to denounce a misconduct, wrongdoing or illegal activity."
Article 5 backs up these principles by providing that Member States will dismiss applications for measures, procedures and remedies under the Directive where the alleged misuse or disclosure of a trade secret was carried out:
"(a)  for exercising the right to freedom of expression and information as set out in the Charter, including respect for the freedom and pluralism of the media;  
(b) for revealing misconduct, wrongdoing or illegal activity, provided that the respondent acted for the purpose of protecting the general public interest;  
(c) disclosure by workers to their representatives as part of the legitimate exercise by those representatives of their functions in accordance with Union or national law, provided that such disclosure was necessary for that exercise;  
(d) for the purpose of protecting a legitimate interest recognised by Union or national law."
After the Directive is published in the Official Journal of the EU and it comes into force (i.e. the 20th day following its publication in the OJEU under Article 20), Member States will have a maximum of two years to incorporate the new provisions into domestic law.

The Council's adoption of the Trade Secrets Directive comes only a couple of weeks after President Obama signed the Defend Trade Secrets Act into law.  For discussion on what the coincident timing of these two trade secrets laws might mean for companies, see the AmeriKat's recent conversation with Jim Pooley here.
Kat pats go to Holger Andreas Kastler (Morrison & Foerster) and Gunther Meyer (Eversheds) for alerting the AmeriKat to the news this morning.  

The life and death of the PRINCE Bill

The recent passing of Prince left many fans in mourning and potential heirs clamouring for a piece of his estate. The singer, who died intestate, left behind a wealth of copyright protected works. His right to publicity, however, did not survive him, as the common law right in Minnesota, where Prince was domiciled, only applies to the living.

The Minnesota State Legislature hastily attempted to pass a bill to change this, by creating a post-mortem right of publicity. On May 9, the Bill, entitled Personal Rights in Names Can Endure Act, was put forward, two weeks before the end of the Legislature’s session on May 23. The bill was subsequently pulled amid concerns that it was not properly thought out and could have unintended consequences, but this Kat commends the carefully created name. 

The current law in Minnesota

Minnesota recognises a common law right of publicity and the tort of appropriation of name and likeness. Even though the right of publicity is not statutory, Minnesota’s common law approach provides extensive protection as it is not delimited to specific personal attributes. Instead, the right protects against unauthorised uses of ‘identity’ for commercial purposes. This can extend to the names of characters portrayed by an individual, as occurred in the case of McFarland v. E & K. Corp., 1991 WL 13728 (D. Minn. 1991) where the plaintiff successfully claimed for use of his character name ‘Spanky’.

The potential for a broad interpretation of ‘identity’ is best illustrated by the Californian case of White v. Samsung Electronics Am., Inc., 971 F.2s 1395 (9th Cir. 1992). In this case, Wheel of Fortune presenter Vanna White claimed that Samsung had infringed her right of publicity by creating an advertisement featuring a robot, wearing a dress, standing next to a replica of the ‘Wheel of Fortune’ board. White claimed this was an unauthorised use of her likeness for a commercial purpose. The 9th Circuit Court of Appeals dismissed White’s appeal as they opined that the robot did not constitute likeness within the meaning of the California publicity statute. However, the found her common law right of publicity infringed as the advertisement evoked her ‘identity’.

Labour theory

The theoretical justification behind Minnesota’s law is Lockean labour theory, as the court in McFarland stated that [2] “A celebrity’s identity, embodied in his name, likeness, and other personal characteristics, is the “fruit of his labor” and becomes a type of property entitled to legal protection.” Labour theory is often cited as a justification for persona protection in US courts, and was advanced by Nimmer in his seminal 1954 article, published the year after the right of publicity was first recognised. This theory has been criticised by Madow as it does not take into account that fame does not result solely from the efforts of the individual. Stylists, publicists and producers crafted Prince into the superstar that he was. Also, Prince undoubtedly worked hard to achieve his stardom, but the Minnesota right applies to every individual, regardless of fame. There is no labour requirement, which means even celebrities who have rose to the spotlight through luck or connections, benefit from this protection.

Implications of a post-mortem right

The Bill proposed a duration of 50 years post-mortem. Since Minnesota’s common law approach gives a broad interpretation to ‘identity’, Prince’s estate would be able to require authorisation for any use which evokes Prince. This broad protection would have chilling effects on posthumous memorabilia and advertising uses, even where his attributes have not been directly used. In the meantime, it is likely that the merchandising industry will capitalise on his death.

The Bill has been shelved for now, but may be reconsidered next year.
If the Bill passes into law, it would give new meaning to the lyrics from Prince’s song, ‘Let’s go Crazy’:
But I’m here to tell you
There’s something else
The afterworld

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