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Thursday, 25 February 2010

Trade mark law and the internet: the IBIL seminar

Yesterday evening this Kat attended the UCL IBIL seminar on Trade Mark Law and the Internet, dedicated to an evening of discussion on service provider liability and recent decisions such as L’Oréal v eBay, LVMH v eBay and the numerous Google cases. The Kat wanted a fiery debate on the culpability of third party service providers and to witness the panel and audience taking clear sides, like the parting of the Red Sea. As to be expected, when one is in a room dominated by lawyers, the seminar actually produced an even-keel commentary on current case law and the generally expected positions of the respective parties on either side of the debate. This Kat apologizes in advance that, in summarizing the speeches, she will inevitably do injustice to quality of the panel’s presentations.

The panel Chairperson, Professor Graeme Dinwoodie, commenced the evening by posing two questions:

(1) Should the issues of third party service provider liability be resolved by applying traditional laws to new technological problems or do we need to develop new laws to address such issues?
(2) Should our national and international law making force further EU harmonization over and beyond what has already occurred?
As if saving the best for last, it was only the last speaker, Dr Frederick Mostert (Chief IP and Lead Counsel for Richemont International) who went some way in answering these questions.

Henry Carr QC, lead counsel for L’Oréal in the now infamous L’Oréal v eBay, commenced the presentations by stating that giving his speech before the gathered crowd at UCL was much like advocating before the ECJ – except that in this instance the room was packed and the audience looked interested. Carr did well to explain the respective positions and arguments of each side’s respective position in L’Oreal in such a limited time (see this IPKat article for a report of the case). To aid his explanation and L’Oréal’s position, Carr submitted his analogy of a store that sells a mixture of genuine and counterfeit Linx fragrance, for example. If he stood outside the store with a sign that stated “Shop here to purchase Linx”, would he be liable for trade mark infringement given that the store also sells counterfeit products? Under the L’Oréal argument he would be liable. Carr went on to explain the operation of Article 14 of the E-Commerce Directive and the arguments surrounding the granting of injunctions under UK law against third party service providers by virtue of Article 11 of the Enforcement Directive. Before closing, Carr paused to mention the a German cases that held that there was a duty on eBay to take precautions to prevent future infringements of a brand owner's mark once notified.

Cédric Manara, Associate Professor of Law at the EDHEC Business School in France, received more laughs than the other presenters thanks to his engaging presentation regarding the eccentricities and peculiarities of French IP law. He stated that although he was asked to give “The” French perspective he could only really afford the audience “A” French perspective; the reasons for which soon became clear as he rattled through the somewhat unpredictable approach of the French courts over the past ten years. In particular, he cited France’s favourable forum for luxury and brand owners, Sarkozy-style lobbying, generally ignoring EU trade mark law, a high level of litigation, and a lengthy time to “get things done” as all informing the context of the French decisions. Manara explained the inception of the early litigation against eBay and Google as the high water mark of third party liability in France – Hermès v eBay, Dior v eBay, etc. Although France is still a favourable forum for brand owners, Manara suggested that, over the course of a decade of litigation, parties like eBay and Google have been able to educate the French courts about their technology. Such education has now resulted in decisions which appear to indicate that the French courts are beginning to understand service providers’ level of involvement in alleged trade mark infringements. Manara referred to recent decisions - Dior and LVMH v eBay – which held that using a trade mark to attract consumers to a webpage is use and, in the LVMH case, is “parasitism” as eBay benefits from someone else’s investment and therefore should be fined even in the absence of confusion.

Manara concluded with an interesting statistic. Of the 50 or so cases brought against Google in France over the past six years, the claimants’ strategy in who to sue was equally split between Google alone, Google and the advertiser, and the advertiser alone. Manara indicated that this statistic shows that the claimants’ mind as to who is actually culpable for the trade mark infringement is not entirely clear. That statistic informs this Kat, however, that at least two-thirds of brand owners seem to know that you sue where the money is – Google. Manara ended by stating that French courts find that internet users can be easily confused, which may suggest that French consumers are “idiots” or French courts just think they are idiots. This picked up on an interesting point that was mooted later on regarding the usage of “internet users” as opposed to “average consumer”. Are they different? And if they are, how so?

Following on from Manara, Dr Harjinder Obhi, Senior Litigation Counsel for Google, was next in the line up. This Kat, a vocal commentator on all things Google, was especially interested to hear what Dr Obhi had to say about the issue of liability. Dr Obhi stated by reminding the audience that Google is also a brand owner itself and experiences the same issues as any brand owner including serious issues such as fraud and phishing scams were are damaging to Google and their brands. He comically stated that he was not trying to win the audience’s sympathy (which was met the audience’s expected laughter), but that Google understood the issues faced by brand owners. This Kat, despite her views on Google and orphan works, has great sympathy for this argument and does not believe it should be monopolized only for the benefit of luxury brand owners (see this IPKat post). Dr Obhi next briefly schooled the audience in the technology and workings of Google AdWords - also a registered trade mark so “please do not use it as a noun”. He stated that Google’s mission was to “aim to maximize the richness of information available to the user” and that Google does not know what the user’s intention is when they search for XYZ. One of the IPKat’s friends aptly echoed this sentiment later over dinner stating that Google is a “service provider, not a content controller”. Dr Obhi closed his speech by referring to the imminent ECJ judgment in the Google Adwords case on 23 March 2010 by stating that, in the words of the Advocate General, he hoped that “freedom of expression” and “freedom of commerce” will fall in favour of Google.

Dr Mostert rounded off the evening’s proceedings. Prior to commencing his presentation formally, he stated that he was a firm believer in the power of the internet and technology (so much so he has already placed his order for the iPad). Dr Mostert submitted that with all IP law there were extreme views on both sides of an argument and in the absence of absolute rights, IP law was meant to address the balance between these two views. He stated that he held a somewhat unorthodox view on auction sites: instead of rushing to the courthouse he picked up the phone to auction sites, such as eBay, to negotiate their respective positions. He declared that he believed that opening a dialogue with the other side and negotiating with them has achieved the same remedies for his company as what the likes of Tiffany could have achieved at trial in their litigation. He stated that there was a lot to be said for this approach and that, if anything, if you push a third party ISP too hard they will inevitably “come back to bite you” in another way. In support of this contention he referenced eBay’s petition to the European Commission regarding luxury brands' uncompetitive behaviour following one of their numerous court battles against a luxury brand.

To this Kat, ignoring the obvious technical issues and idiosyncrasies of the internet environment aside, the issue boils down to who should bear the burden for removing infringing material online? Is it the brand owner or is it the service provider? Members of the panel seemed to submit that it was the brand owner at first instance who was responsible and then, once notified of the existence of infringing material, it was then the responsibility of the service provider. However, how far does a service provider have to go to ensure that they are not falling foul of trade mark law? Are they expected to become the policing agent of the brand owner? If they are expected to also have a policy of removing infringing content and repeat offenders, what does this policy look like? As to be expected, there was no consensus on what measures a service provider should take, but to this Kat this is the real battleground of the issue. It is not whether existing trade mark law is inadequate for the purposes of online infringement, but, as Dr Mostert asserted, whether the policy underlying the ‘old’ law can inform the proper scope of service provider liability for the future.

The IPKat would like to thank IBIL for organizing yet another interesting and dynamic seminar. To help UCL establish the incredibly important Sir Hugh Laddie Chair in Intellectual Property Law please click this link.

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