A further step towards the reform of European copyright was taken on 29 November 2016. The Committee on Legal Affairs of the European Parliament (JURI) not only voted for a proposal for a regulation on ensuring the cross-border portability of online content services in the internal market; in its Brussels meeting, JURI also organized a public hearing regarding one specific and highly discussed aspect of the current reform of European copyright – potential obligations for service providers. In the context of the very diverse Digital Single Market Strategy, the European Commission presented in total five drafts in order to modernize copyright law in the EU that have to pass the legislative process (see also our DSM Watch blog post).
Cross-border Portability Continue Reading
There is no doubt that trade secrets are valuable business assets, have a direct impact on innovation and are important drivers of competitive advantage in the market. Greater use of outsourcing and collaborations, combined with easier access to data and rising statistics of commercial espionage mean that there is currently an increased risk of trade secrets misuse.
With this and Brexit’s far-reaching effect in mind, we gave a presentation to clients and colleagues in London on the protection of confidential information and the Trade Secrets Directive EU 2016/943 (“the Directive”). The session covered the following points:
- Some typical scenarios for trade secrets misuse
- The Directive
- The related effect of Brexit
- What businesses should be doing now
This post gives a summary of these points with links to the presentation and relevant documents.
The EU Trade Secrets Directive Continue Reading
The German Federal High Court (Bundesgerichtshof – “BGH”) has asked the European Court of Justice (“CJEU”) to rule on the reach of the “repair clause” of Article 110 (1) of the European Design Regulation (EC) 6/2002 which bars the scope of design rights. According to this provision, “protection as a Community design shall not exist for a design which constitutes a component part of a complex product used … for the purpose of the repair of that complex product so as to restore its original appearance“. The referral by the highest German Civil Law Court to the Supreme Court of the European Union (file number I ZR 226/14) emerged against the background of the following case:
German car maker Porsche sued Italian manufacturer of motor vehicle rims Acacia in Germany for infringement of certain registered Community designs (“RCD”) because Acacia offered for sale in Germany replicas of the design right protected rims of Porsche. Acacia argued that its replicas would not infringe the designs of Porsche because it would profit from the bar to protection of the repair clause of Article 110 (1) of the Design Regulation.
In the first and second instance, Porsche prevailed. The BGH concluded that the outcome of the further appeal depends on interpretation of Article 110 (1) Design Regulation and therefore referred five questions to the CJEU for decision prior to rendering its judgment:
Questions to the CJEU and Comments of the BGH
In China, the legal personality of limited companies generally protects shareholders and legal representatives (i.e. the Chinese equivalent of a managing director) from debts entered into, or liabilities imposed on a company. This principle is also known as the “corporate veil”. However, in a recent trademark infringement case, the Jiangsu Higher People’s Court held that the corporate veil can be pierced under certain circumstances, meaning that legal representatives can be held jointly liable with their company.
In the case at hand, a Taiwanese bath and kitchen supplies company sued three Mainland Chinese companies -with company names identical to that of the Taiwanese company- as well as their legal representatives for unfair competition and trademark infringement.
In its appeal judgment, the Jiangsu Higher People’s Court held, not very surprisingly, that the use of the claimant’s trademark as a company and trade names did infringe upon the claimant’s trademarks (i.e. ‘double identity’) and did constitute unfair competition. Surprisingly though, the court also held that the legal representatives of the companies could be held jointly liable with their companies.
The court based this finding on article 8 of China’s Tort Law (stipulating that if a tort is committed by several tortfeasors, they can be held jointly liable) and on evidence of intentional and malicious infringement by the legal representatives. According to the evidence, the legal representatives set up new companies after their former companies had already, in an earlier case, been found guilty of infringements of the trademarks of the same claimant company. Moreover, the court also held that the legal representatives could be held accountable for the infringement committed by their company because they owned 90% of the shares in their companies, and because the main business conducted by the companies since their incorporation consisted of counterfeiting the same claimant’s marks. For those reasons the court considered that both companies and their legal representatives had committed joint infringements, and could therefore be held jointly liable for the damages granted, i.e. RMB 2 million (approximately USD 300,000). While the judgment focused on the position of legal representatives, it arguably also applies to other types of directors, managers and majority shareholders, as long as there is evidence showing that they were independently and actively involved in the infringing activities.
This case is seen as part of a continuing positive development for IP enforcement in China, because it offers an interesting new enforcement avenue against counterfeiters in China, who have traditionally used and abused the corporate veil to escape direct liability. This approach could in fact efficiently tackle the “cat and mouse”-scenario that counterfeiters and brand owners now frequently find themselves in: the mastermind behind the counterfeiting could be dealt with directly, and would not be able to hide behind a string of maliciously set up companies.
This judgment should encourage IP owners to take a more aggressive approach and to conduct investigations into the corporate structure of counterfeiters, with a view to potentially suing the culpable individuals directly, with much more deterrent effect.
Today, at the meeting of the EU Competitiveness Council the UK Government confirmed that it is proceeding with preparations to ratify the Unified Patent Court Agreement (UPCA). This is part of the process needed to realise the Unitary Patent and Unified Patent Court.
An official press release from the UK IPO notes that “Following the announcement today, the UK will continue with preparations for ratification over the coming months. It will be working with the Preparatory Committee to bring the UPC into operation as soon as possible.”
UK Minister of State for Intellectual Property, Baroness Neville Rolfe said:
- “The new system will provide an option for businesses that need to protect their inventions across Europe. The UK has been working with partners in Europe to develop this option.”
- “As the Prime Minister has said, for as long as we are members of the EU, the UK will continue to play a full and active role. We will seek the best deal possible as we negotiate a new agreement with the European Union. We want that deal to reflect the kind of mature, cooperative relationship that close friends and allies enjoy. We want it to involve free trade, in goods and services. We want it to give British companies the maximum freedom to trade with and operate in the Single Market – and let European businesses do the same in the UK.”
- “But the decision to proceed with ratification should not be seen as pre-empting the UK’s objectives or position in the forthcoming negotiations with the EU”
This makes the coming into force of the UPC, with a central division branch for Pharma and Life Sciences in London, more certain. However, how things will proceed after that remains rather unclear.
Keep up-to-date on the latest UPC developments by visiting the microsite here
Vlogging (“video blogging”) has become extremely popular over the last couple of years. It does not come as a surprise that considerably more companies seem to find their way to vlog-advertising. During her Television interview on the well-known Dutch TV Show “Kassa” of Monday 21 November 2016, Mrs De Cock Buning, chairman of the Dutch Media Authority, said that the Dutch Media Authority is planning to implement stricter rules on surreptitious advertising, especially when it comes to vloggers (“video bloggers”). According to Mrs De Cock Buning, it is often unclear whether vloggers are being paid for displaying or advertising certain products in their vlogs (“video blogs”).
The position of the Dutch Media Authority does not come as a surprise. Earlier this year, the Dutch Advertising Commission already set an example with respect to (indirect) advertising on vlogs. In its decision of 17 March 2016, the Advertising Commission ruled that vlogging is regulated under the Dutch Advertising Code on Social Media (Dutch Advertising Commission, 17 March 2016, File no. 2016/00079). Thus, both vloggers and companies interested in advertisement collaborations should operate within the scope of the Dutch Advertising Code.
Case details Continue Reading
In a thought-provoking paper presented at this year’s TPRC Research Conference on Communications, Information and Internet Policy, Internet scholar Kevin Werbach explains how the use of blockchain technology creates a new kind of trust architecture, which Werbach calls “trustless trust.”
Most existing trust relationships are based on a centralized “Leviathan” trust architecture where the state or another centralized authority (for example a central bank) acts as the trusted party of last resort. Other trust architectures are fully decentralized, operating on a peer-to-peer basis. Many human relationships are based on peer-to-peer trust, such as trusting a family member to feed your pet while you’re gone. Werbach argues that blockchain introduces a third kind of trust architecture, “trustless trust,” which is a system in which “it is possible to trust the outputs of a system without trusting any actor within it”. Yet Werbach warns that blockchain’s technical reliability should not be confused with trust. “Trust is a manifestation of goodwill of the one being trusted” – it involves a “positive expectation about the other party and a willingness to be vulnerable”, yet blockchain has neither of these attributes.
Continue reading on our GMCWatch blog
Is it permitted to reproduce out-of-commerce works and make them publicly accessible under European copyright exceptions? So far, there is no explicit regulation at European level dealing with out-of-commerce works. However, a few member states, including Germany, have already complemented their copyright by way of introduction of new provisions governing the use that one can make of out-of-stock works. In simple terms, national legislators mainly understand such works as works not being commercially available anymore.
The respective provision in French law has recently been subject to the European Court of Justice (CJEU). On 16 November 2016, the judges in Luxembourg handed down their judgment thereby declaring the French law incompatible with the InfoSoc Directive 2001/29. (Case Ref.: C-301/15).
Background to the preliminary ruling is an application for a declaration of invalidity of French provisions concerning out-of-commerce works made by the French authors Marc Soulier and Sara Doke. In 2012, the French legislator introduced provisions governing out-of-commerce books into the French copyright law (see LOI n° 2012-287 du 1er mars 2012 relative à l’exploitation numérique des livres indisponibles du xxe siècle). According to the provision:
- A book is out-of-commerce if it has been published before 1 January 2001 and if it is no longer commercially distributed or published in a printed or digital form.
- In order to enable the accessibility of the respective out-of-commerce books, the French collecting society SOFIA is allowed to authorize the reproduction and the public accessibility in a digital form, as far as the right holder has not opposed the use within a period of six months after the books are added to a specifically created database.
- Under certain conditions, the right holder can also put an end to the use at a later stage.
Soulier and Doke consider this provision an unjustified copyright infringement of their exclusive authors’ rights. In response to their legal action, the French Conseil d´État submitted the question to the CJEU as to whether the French provision is compatible with the demands set by the European law concerning reproduction and the barriers set by the InfoSoc Directive 2001/29.
The Judgment Continue Reading
Industry sources estimate that more than $4 billion worth of deals in digital health have been signed globally this year so far, as pharmaceutical manufacturers look for “beyond the pill” solutions to medical problems, health care providers seek more efficient means to monitor their patients’ wellbeing, and technology companies aim to commercialize their products and services in a burgeoning field.
As these entities pursue third-party partners to help leverage their assets and improve patient care, the success or failure of many of these deals often hinges on the agreements and covenants that protect the intellectual property of parties involved.
In a previous post, we discussed the elements of an effective IP protection plan, which is a critical component in monetizing an IP asset. Now we explore the points inventors and developers should consider when pursuing partners to maximize the potential of their IP product. Continue Reading
In this IP Enforcement Focus v-log, we report on a very surprising recent decision of the German Supreme Court dealing with illegal file sharing… and visitors from Australia.
How does the court view secondary liability of account holders?
Are primary claims enforceable in practice for such cases?
Click here to view the V-log
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