Drama at the European Parliament: whoever thought the dispute within the Committee on Legal Affairs (JURI) around the adoption of a new regulation dealing with online transmissions by broadcasters and retransmissions (COM(2016) 594 final) could not become more exciting when JURI voted on its final report at the end of November, was wrong. The rapporteur Tiemo Wölken made a last attempt for new negotiations on the final report prior to the first reading in the EP – and failed. Now, the EP is “ready to start talks with EU governments on new rules for online TV and radio” (press release).
After a long debate and several postponements, on 21 November 2017, JURI finally agreed on a report that significantly differed from the draft regulation that the Commission originally suggested (see our blog post). The report was handed over to the Parliament as the basis for the trilogue negotiations. However, MEP Wölken, who did not support the final recommendation by JURI, took the last option that remained in order to change the report: he relied on Article 69c of the Rules of Procedure of the EP that enables the parliament to reopen the negotiations on the report. Over the last few days, both sides tried to mobilize the supporters of their view on the matter. Finally, the plenary voted with 344 votes against and 265 in favour for MEP Wölken’s request (with 36 abstentions) thereby approving JURI’s report and position.
The vote now paves the way for the adoption of the report by the Parliament and negotiations with the Council and the Commission. Thus, the beginning of 2018 promises to be exciting as well!
On 17 October 2017, Hogan Lovells, London hosted its annual ‘Intellectual Values’ seminar which this year focused on the ‘connected world’. Katie McConnell, a Counsel in our IPMT team, gave a snapshot of the issues arising from the brave new world of wearable technology. The seminar explored the IP challenges faced by market players – with a particular focus on patent litigation – as well as ways in which companies could break into the market.
Katie explained that the ‘wearable technology’ market, in the form of electronic technologies incorporated into clothing and accessories, is predicted to grow extensively in the next 5 years. Indeed, such growth and increased competition for customers is likely to increase the pressure on companies to get their IP protection strategy right.
In Katie’s view, the challenges raised by the rise in this technology are likely to mirror the pattern set by innovations in the mobile phone sector. In respect of patents, these challenges involve obstacles in obtaining initial patent protection – including amongst other things – the fact that wearable technology has brought about the convergence of technology from other fields, meaning that a large amount of the technology is already patented. Katie highlighted that even where patents are granted they are likely to be open to challenges from other players within the market. Nevertheless, Katie explained that this does not mean that companies should not attempt to protect their core technology; she stressed that a patent need not be ‘good’ to impact an opponent via strategic challenges.
For companies hoping to enter the market, Katie summarised some useful tips and/or options for navigating these challenges:
- Build your own portfolio. This can be done be through either the organic development of technology, or the acquisition of a portfolio from a different company.
- Take licences of a different company’s patents, to enable your company to move into the market.
- Have a strategy for challenging competitors’ patents. This could involve creating a “fighting fund” which will allow you to protect your portfolio.
- Be aware that some technologies will be standardised and, therefore, must be licenced to third parties on fair, reasonable and non-discriminatory (FRAND) terms. However, such licencing terms, are at the same time designed to maintain incentives for companies to innovate and participate in standardisation processes.
In Katie’s view, the collaboration of technology and a trusted brand is also crucial to legitimise a company’s offering in the wearable technology sector. She said companies should not overlook normal protection steps in the face of new technology. Continued awareness of the importance of trade mark, copyright and design right protection is therefore essential to an effective collective IP strategy. Wearable technology is a fast-moving industry that requires a well thought-out and efficient approach to IP protection.
If you would like to listen to the discussion please click here.
Last month the November 2017 draft Hague Judgments Convention was published by the Hague Conference Special Commission following the third meeting of the Special Commission in the Hague between the 13th and 17th of November.
The draft Convention is part of the Hague Conference on Private International Law “Judgments Project” which is aimed at developing a convention on the international jurisdiction of courts and the recognition and enforcement of their judgments abroad. The question of whether IP judgments are included in the scope of the Convention remains under discussion. The EU delegation is in favour of including IP judgments, primarily in order to simplify enforcement in relation to online infringement and cross-border cases. However, many industry groups are actively involved in the discussions and some argue that some (e.g. patents) or all IP judgments should be removed from scope.
In the November 2017 draft (which updates the earlier February 2017 draft), all intellectual property and “analogous” matters remain potentially excluded from the scope of the Convention (although this is still being debated). The November 2017 draft also includes a new Article 19 which allows contracting states to choose whether to apply the Convention to a specific matter (e.g. IP) where it has a strong interest in not applying the Convention to that matter.
If IP judgments are ultimately included, based on the current draft, it would mean that:
- judgments on an IP infringement in the contracting state in which the right is registered (or, where the right is unregistered, where protection is claimed);
- judgments on the registration or validity of a registered IP right from the contracting state in which the right is registered; and
- judgments on validity, subsistence or ownership of copyright or an unregistered trade mark or design, from the contracting state for which protection is claimed;
are eligible for recognition and enforcement in another contracting state. However, under Article 11 of the draft Convention (also still under discussion) a judgment ruling on infringement shall be recognised and enforced only to the extent it rules on a monetary remedy in relation to harm suffered in the state in which the judgment was given.
The Special Commission has said it will recommend to the Hague Conference Council on General Affairs and Policy at its March 2018 meeting that it have a further meeting in mid-2018 to discuss the current draft and that a Diplomatic Session will be convened in mid-2019.
Last month we hosted our annual ‘Intellectual Values’ seminar in London which this year focused on the ‘connected world’. Sarah Turner, an IP partner in our Tech Hub, gave a talk on the steps companies can take to improve their cybersecurity. The potential damage resulting from a cybersecurity attack is ever increasing as the world becomes more and more connected. Sarah encouraged companies to respond now to the threat by taking the following ten steps:
Step one: Acceptance
Delay is the enemy of protection. Nobody is safe as rogue players target all types of business for their money, personal data and intellectual property. Accept that you will experience a cybersecurity incident at some point and start to put appropriate policies and measures in place now. Luckily, most cyber attacks are relatively basic and it is reasonably easy to put good, simple protections in place.
Step two: Understand your vulnerabilities
You should consider whether any of your businesses are operating in particularly vulnerable sectors (such as healthcare or financial services) or jurisdictions and what assets the “bad actors” are likely to be targeting. Competitors, suppliers, cyber criminals, nation states and politically active hackers may all pose a threat. Unfortunately, most cyber attacks will involve a company insider in some way. Their actions are not always malicious (an employee may unwittingly click on a link in a phishing email thereby permitting access to the business’ networks) but the importance of the human factor within the business cannot be ignored when considering cybersecurity.
Step three: Prioritise
Cybersecurity is not just an IT issue. Cyber risk should be a board priority and boards should be provided with a complete picture of their company’s cybersecurity status. You need to identify, and review periodically, the critical data within your business and how that data is stored so that you can prioritise protecting those assets.
Step four: Assess the impact of loss on your business Continue Reading
On 29 November 2017, the European Court of Justice (CJEU) handed down a decision on a video recording service that stores TV programmes online in a cloud (C-265/16 – VCAST). According to the Court, the cloud recording service has a dual function that enables its users to create reproductions on the one hand but also makes copyright protected works publicly available on the other. The means by which the TV program is communicated to the public differs from the means of the original transmission. Therefore, the transmission constitutes a communication to the public and the business model of a cloud recording service without the right holders consent is unlawful.
Linear TV that can only be watched at a specific time of the day is increasingly substituted by new business models that allow consumers to watch any programs whenever the consumers would like to. One of those business models is currently involved in a litigation in Italy: the cloud recording service of the British operator VCAST Limited. The cloud recorder enables its users to watch terrestrial “free to air” TV programmes by Italian broadcasters – and to store the content in a cloud instead of the private servers of the customers. VCAST did not obtain the right holders consent. By means of the cloud recorder, the Italian TV could also be watched outside of Italy.
The Italian Broadcaster RTI SpA claimed copyright infringement and sued VCAST. However, VCAST relied on the Italian private copying exception based on EU law. The Tribunale di Torino had doubts about the application of this provision on the cloud recording service and therefore submitted two questions that basically deal with the issue whether the cloud recording service is lawful in the light of Art. 5(2) lit. b of the InfoSoc Directive 2001/29.
The Advocate General Szpunar recently published his opinion on this topic and argued the cloud recorder is not covered by the exception for lawful private copies. Despite the fact that the users initiate the copyright relevant acts, it lacks of lawful access to the works. The Italian TV programs are distributed free-to-air and it is possible that some users do not possess an antenna nor a TV set. Therefore, some users may have access to works using the cloud recording service that they would not have otherwise. On that ground, the Advocate General denied the application of the exception.
The Judgement by the CJEU Continue Reading
On November 27, 2017, the Supreme Court heard oral arguments in a case that will determine the constitutionality of inter partes review, a proceeding before the United States Patent and Trademark Office’s Patent Trial and Appeals Board that allows third parties, including alleged infringers, to challenge the validity of issued patents. As previously reported by this blog, the Supreme Court took up the case, Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, to determine “[w]hether inter partes review, an adversarial process used by the Patent and Trademark Office to analyze the validity of existing patents, violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.”
During oral argument, counsel for the petitioner, Oil States, attempted to draw a distinction between inter partes review proceedings and other, older, post-grant invalidity proceedings before the Patent Office, such as ex parte reexaminations. Oil States attempted to distinguish ex parte proceedings as “fundamentally examinational” proceedings, between the Patent Office and a patent owner, as opposed to the adversarial inter partes proceedings which allow continual participation by a third party. Counsel for Oil States also addressed questions regarding the extent to which a patent was a private property right as opposed to a right possessed by the public “to promote the progress of science” (under the Constitution’s Intellectual Property Clause), and the extent to which Congress can restrict private property rights.
Counsel for respondent, Greene’s Energy, faced questions comparing the Patent Office’s post-grant invalidation of a patent to other contexts, such as public employment benefits, and addressed whether judicial review of inter partes decisions on appeal at the Federal Circuit sufficiently satisfied the Due Process Clause of the Constitution.
The Patent Office also participated in the oral argument, supporting Greene’s Energy and defending the inter partes review process. The Patent Office’s counsel was faced with questions comparing the Office’s revocation of patents that have been in effect for years, including title transfers, with a hypothetical revocation of patents to land under the same circumstances. Counsel for the Patent Office distinguished constitutional revocations from unconstitutional revocations by arguing that post-grant revocation of a patent is constitutional, as Congress limited the scope of that right before grant of the patent to allow revocation, and also argued that such revocations must comply with due process to be constitutional.
The Court appears to be divided following argument, with several justices asking questions suggesting they view the grant of a patent as a right that cannot be restricted by an administrative agency following the grant of a patent, and other justices indicating that they support post-grant administrative revocation of patent rights. Given the current well-established practice of alleged patent infringers pursuing inter partes review of patents asserted against them, as well as five years of inter partes review decisions which may be called into doubt by a decision finding the proceedings unconstitutional, patent practitioners and potential litigants will watch this case closely.
The popularity of wearable technology has seen a number of collaborations between technology companies and designer brands looking to launch the next big thing in the ‘Fashion Tech’ space. For example, this summer saw the launch of Levi’s Commuter Trucker jacket which has Google Advanced Technology woven into the jacket, allowing the wearer to wirelessly access their phone simply by touching their sleeve. This article looks at some of the issues and opportunities from the perspective of a new technology company (the “TechCo”).
“Technology companies can benefit enormously by being linked to a big name brand with an established reputation and loyal following.”
Read the full article from our the Global Media, Technology and Communications Quarterly publication.
A version of this article first appeared in Intellectual Property Magazine
In this series of blog posts, we take a look at the current state of play regarding blockchain technology as well as the legal setting with a European and German focus.
In the context of the digital use of copyrighted works, the concept of the “value gap” has been around for some time. The question is whether authors and rights holders are sufficiently involved in the revenues generated by the use and the display of their works on online platforms. The European Commission has recently addressed this issue within the framework of its strategy for a Digital Single Market, more specifically in the context of its draft for the Directive on copyright in the digital single market (COM (2016 593 final)), and it called for more rigorous monitoring for certain platform operators. Whether rigorous obligations will come into effect is still unclear. The fact that blockchain technology offers options for the traceability of the license chain to the author, and thus its participation in the revenue generated on the Internet, is undeniable. So a good question is: where does it make sense to use this technology?
Authors could continue to be involved through a number of methods. Existing solutions such as digital rights management, micro-payments, paywalls, subscription-models for news websites or streaming offerings have their strengths and weaknesses. In particular, they do not consider the author. A blockchain-based network, which reflects the chain of the rights transparently and invariably, could contribute to a fair distribution of revenue. In principle, the model can be applied to all works that can be digitally consumed, whether the work is audio, video, image or written text.
According to estimates, 850 start-ups worldwide are working on the use of blockchain technology. A look at a few start-ups handling copyright protected works and currently applying blockchain, albeit some still in the developmental stage, aims to provide a practical perspective on the above-mentioned issues.
The “Copyright-Blockchain” Continue Reading
(Judgments of 23 October 2017 in Cases T-404/16 and T-418/16 – Galletas Gullón SA (Gullón) v EUIPO)
The General Court has recently overturned two EUIPO Board of Appeal decisions which deemed Gullón’s marks as used to be different to their registered 3D trade marks shown below due to differences in the dominant elements. It held that the minor changes to the brand as used were insufficient to alter the distinctive character of the registered marks, and that genuine use had therefore been proven.
The Court also confirmed that the scale of use had been sufficient. The invoices provided were considered to be of an exemplary nature, showing regular use over three and a half years. As the invoices were addressed to various distributors, the extent of use was deemed to be widespread, thus amounting to a real and serious commercial effort and not a mere attempt to simulate genuine use.
In 2014, O2 Holdings Ltd filed an application for revocation of the marks claiming that they had not been put to genuine use in connection with the relevant goods in class 30 during the relevant time period. The applications for revocation were rejected by the Cancellation Division but later upheld by the Boards of Appeal, which took the position that the marks as used altered the distinctive character of the marks as registered and that the criterion relating to the extent of use had not been satisfied.
Not satisfied with the decisions of the Boards of Appeal, Gullón appealed to the General Court. O2 then saw its case crumble as the Court upheld the Spanish company’s appeal. Firstly, unlike the Board of Appeal, it found that the differences between the marks as registered and the marks as used (in particular, the white colour in the upper part of the packaging and the stylization of the element ‘gullón’, the letter ‘O’ and the number ‘2’ in the ‘mini O2’ element – comparison displayed below) didn’t affect the distinctive character of the registered marks. See graphic below comparing the complete packs as registered and main elements as used: Continue Reading
Ted Mlynar and Ira Schaefer in our Blockchain-Smart Contracts IPMT Working Group were interviewed for the Fordham Intellectual Property, Media & Entertainment Law Journal podcast series.
Ted and Ira talk about their work with Ethereum smart contracts, and how blockchain technology can be used to protect intellectual property rights. They also discuss the important new roles for lawyers in implementing the technology and resolving the legal issues surrounding it.
Catch the podcast here
For more international information, please visit our Blockchain: Linked Ledgers topic center.