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CJEU rules on Cloud Recorder: Transmission constitutes a communication to the public that requires the right holders consent

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-265/16VCAST). 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.

The Background

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

US: Supreme Court hears argument on constitutionality of inter partes review

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.

‘Fashiontech’ hits the catwalk

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

Blockchain: Use Case – Copyright

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

Europe – General Court: EUTM revocation action takes the biscuit

(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

Blockchain and IP: Podcast Interview

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.

EUTMs: “Strategic” re-filings and the GC’s last word – for now – on related bad faith & proof of use

General Court (GC) judgment in case T-736/15, 19 October

Re-filings – legitimate interest versus bad faith

Trademark re-filings can have a legitimate interest which could be to slightly amend the specification of goods and/or services of its previous rights or to modernise its trademarks (e.g. slightly changing the stylisation of its figurative trademark) – see GC judgment of 13 December 2012, T-136/11, “the Pelican case”.

However, other re-filings are copies of earlier rights, filed with the aim of using them as the basis of opposition, instead of older rights, to artificially extend the use requirement period. An additional aim in these cases is to avoid proving use of older trademarks and avoid non-use cancellations. The latter aim is expressly listed in the EUIPO’s Guidelines as an example of bad faith filings. That said, “strategic” re-filings are not expressly prohibited by law so bad faith filings continue to be an issue.

European Courts on “strategic” re-filings

European Courts are increasingly wary of trademark re-filings and require rights holders to provide proof of use, even if those rights are not subject to the use requirement.

One of the most relevant cases in this regard is the EUIPO’s decision of the Fourth Board of Appeal of 15 November 2011, R1785/2008-4, “the Pathfinder case”. Here the opponent was requested to prove use of its mark (serving as the basis of opposition) despite not being subject to the use requirement, as it was an identical re-filing of abandoned earlier rights (i.e. same representation, same goods and/or services and same territory).

The EUIPO’s Second Board of Appeal had a broader approach in early 2014, in case R 1260/2013-2, “the Canal+ decision”, as it reached the same finding even if only some of the services in class 38, of most of the re-filings, were identical to those protected by the earlier rights. It also held that an EUTM can also be considered a re-filing of an earlier EU national trademark as well as an EUTM (and vice versa) given the overlap in the territory.

The latest word of the GC in this regard can be found in its recent judgment. Continue Reading

Italy: Double win in TopLegal awards

Partner Luigi Mansani receiving the award

We are very pleased to announce our awards in Monday’s TopLegal awards for the following two categories:

  • Best IP Law Firm,
  • Best Independent Authorites/Regulatory Law Firm

This confirms the excellence of our well known IP team in Italy and we are excited also to have been awarded for our regulatory activity in relation to advising the EU Single Resolution Board and our continued assistance to independent financial regulators on Brexit matters.


For more information on our work in Italy, please contact the IP-BD team and check out our Integrated IP Enforcement guide covering cross-jurisdictional strategy including Italy.

Every bit counts: Could Blockchain be a solution for e-mobility?

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.

Does blockchain technology open up new avenues in the field of electromobility? Can decentralized processes that are controlled by a large network be used to convert individual mobility on the road to electrified vehicles and sustainable energy resources? These questions are the starting point of the following blog post of our series on blockchain. In addition to smart contracts, which we discussed in the last blog post, electromobility is another field in which technical innovation and intelligent billing processes can bring significant value via blockchain.

Electromobility

In general, electromobility means the use of electrified vehicles for individual mobility. It relies on a form of power based on the storage of energy in memories (batteries) installed in the vehicle, possibly as hybrid supplementation to an internal combustion engine. Thus, electromobility is a key element of a sustainable and climate-friendly transport system based on renewable energies. Despite the primary advantage – reducing emissions – there are some disadvantages for the consumer. The main issue is “range”, the distance an electrical vehicle can cover with one charge/fill, which is still restricted compared to vehicles with an internal combustion engine. Depending on the model and the driving style, this is sometimes only 100 kilometres. Long battery charging time is another negative aspect. It is therefore necessary to create an infrastructure, away from home and the workplace, which allows continuous recharging of batteries – where the vehicle is in a position to be on the spot for longer periods of time.

Where could blockchain come into play?

Short-term charging while out on the road is another consideration and here it is likely that operators of the charging stations will have to foot the bill for construction and operation of the infrastructure. Interesting concepts are currently being developed here which aim to make the infrastructure financially viable. Continue Reading

Hogan Lovells Comes to Taiwan To Help Financial Supervisory Commission

Partner Ted Mlynar, senior consultant Amelia Lin, Dr. Zheng-yi Shon, Dean of the School of Management of Tainan University of Technology, and representatives from Microsoft and Acer in Taiwan, visited Wellington Koo, Chairman of the Financial Supervisory Commission (FSC) and his staff to discuss accelerating the pace of development of Taiwan’s financial technology.

Dr. Shon noted that the Taiwan government should create a financial regulatory sandbox that extends beyond the traditional financial and economic framework and that Taiwan can learn about the latest development in foreign sandboxes, and avoid unnecessary mistakes in its own sandbox activities, through consultation with international law firms. Ted’s invitation to speak to the FSC was based on Hogan Lovells’ global expertise in regulatory sandbox issues.

Ted commented that in addition to sharing world-class sandbox design know-how with the FSC, we are able to provide particular insights regarding the success and failures experienced in sandboxes in other countries.  Where the requirements of some countries are set too high, they may have not been able to attract truly disruptive financial innovators, but only encourage business model innovation and not real financial technology innovation.

Ted believes that Taiwan’s sandbox should be designed so that companies interested in international financial innovation will be interested in coming to Taiwan.  Hogan Lovells will be introducing cross-border teams to assist in Taiwan and enhance its business opportunities.

Overall, Ted accentuated that although Taiwan is not a purely finance-centric economy, it can still play a key role on the world stage.  Although it is starting later than others in the region, by learning from others’ experiences, Taiwan can proceed more quickly to develop and implement a world-class sandbox environment.