The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Parvis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Tuesday, 23 May 2017

US Supreme Court uses TC Heartland to blunt key troll tool, but will California welcome the next wave of troll litigation?

The AmeriKat's view on her way to San Jose.  Will
California be the new hotbed of troll litigation?  
With the ramifications of yesterday's US Supreme Court decision in TC Heartland reverberating from coast to coast, the AmeriKat has asked her Kat friends at California-headquartered firm, Fenwick & West, to provide some more background for European readers, what this means for patent trolls and foreign defendants.  Patent litigation partner Mike Sacksteder and associate Athul Acharya report:    
"For the past 27 years, plaintiffs have been able to bring patent infringement suits against most corporations almost anywhere in the United States. So-called non-practicing entities (“NPEs”), also known as “patent trolls,” have taken advantage of that fact to make the United States District Court for the Eastern District of Texas the country’s most popular forum for patent lawsuits by a huge margin. But yesterday, in TC Heartland LLC v. Kraft Food Group Brands LLC, the United States Supreme Court changed the dynamic, simply by reinterpreting a single word in the patent venue statute. As a result of the Court’s decision, a domestic corporation not organized under Texas law and without a “regular and established place of business” in the Eastern District is no longer amenable to suit there.
Legal Framework:  Where does a corporation reside? 
The legal question in the case is relatively simple: Where does a corporation “reside”? The United States’ general venue statute provides that a defendant may be sued where it resides, and that “for all venue purposes”—“except as otherwise provided by law”—a defendant corporation “shall be deemed to reside” in any judicial district where it is “subject to the court’s personal jurisdiction.” To simplify somewhat, in practice this has meant that corporations that direct their activities throughout the States can more or less be sued throughout the States. A more specific venue statute for patent cases provides that a corporate defendant may be sued for patent infringement either in a district where it has a “regular and established place of business” and has committed alleged acts of infringement, or in the state where it “resides.” The issue before the Court, therefore, was whether the general statute supplies the definition of “resides” in the patent-specific statute, or whether the specific statute is, in the words of the general statute, an exception “otherwise provided by law.”
The evolution of the field
The Supreme Court had previously addressed this question in its 1957 decision Fourco Glass Co. v. Transmirra Products Corp., in which it canvassed the history of the statute and determined that Congress had enacted the patent venue statute specifically to limit the fora in which a corporate defendant could be sued for patent infringement. The Fourco Court accordingly held that a corporation’s residence for patent purposes was only its domicile—the state in which it was incorporated—and that the patent venue statute stood “complete, independent and alone controlling in its sphere.”
In 1988, however, Congress amended the general venue statute. Shortly thereafter, in its 1990 decision VE Holding Corp. v. Johnson Gas Appliance Co., the United States Court of Appeals for the Federal Circuit—an intermediate court that hears all patent appeals from American trial courts—held that the amendments to the general venue statute had brought the patent-specific statute within the general statute’s ambit. Absent review by the Supreme Court, that decision was binding throughout the States.
As discussed above, in the 27 years since VE Holding, patent plaintiffs—in particular, NPEs—have flocked to a single district court tucked away in Marshall, Texas, and the small cities nearby. More than 40 percent of U.S. patent cases are filed in the Eastern District of Texas, and a quarter of all patent cases nationwide are overseen by a single judge there. More than 90 percent of those cases are brought by non-practicing entities. Indeed, some see the explosion in such suits in the last decade as a driving force behind the Supreme Court’s recently renewed interest in the field of patent law.
Justices disfavor implied amendment 
The Court’s unanimous decision in TC Heartland rejected the Federal Circuit’s decision in VE Holding and restored the Fourco regime. Invoking the canon against implied repeals—here applied to implied amendment—the Court reasoned that absent a “relatively clear indication of its intent,” Congress does not alter the meaning of one statute by amending another. Here, Congress may have amended the general venue statute in 1988 and 2011, but it had left the patent venue statute untouched since the Fourco decision. The Court accordingly held that the amendment of the former did not affect the meaning of the latter. That statute therefore continues to mean what it meant in Fourco: A suit against a domestic corporation for patent infringement must be brought either where the corporation has an established place of business and commits an act of alleged infringement, or in the state in which it is incorporated. 
Takeaway:  Patent trolls no longer pick the playing field - most of the time
TC Heartland is a game-changing decision for a large majority of NPE lawsuits, but it will not end such suits, nor will it keep all of them out of the Eastern District of Texas. Although the majority of such cases will need to be filed elsewhere, venue will remain proper against any domestic defendant that maintains a “regular and established place of business” in the District and is alleged to infringe there—by making, using, selling, or offering to sell the allegedly infringing product or service. The remaining troll suits are likely to concentrate to a certain extent in Delaware, where many companies are incorporated, and in technology centers such as the Northern District of California, where many NPE targets are headquartered.
But what all this means for foreign corporate defendants is uncertain—the Supreme Court studiously avoided opining on the subject in its opinion in TC Heartland. In its last word about foreign defendants in patent lawsuits, however, the Court held that “suits against aliens are wholly outside the operation of all federal venue laws, general and special.” The statutory framework has changed since that decision, but the general principle has not: “a defendant not resident in the United States may be sued in any judicial district.” The Court’s decision this week means that the question will be subject to litigation anew—but in all likelihood, venue for patent suits against foreign corporations will continue to lie anywhere in the United States."

Shinder, Shinder, Shinder … will you ever be like Tinder?

Shinder's founder
and only available match,
Shed Simove
Move on Tinder: there is a new dating app on the market, conveniently named Shinder
Katfriend Nedim Malovic (Sandart & Partners) looks into the IP implications of this genius entrepreneurial/'romantic' idea by Shed Simove [if you are wondering who that is, here is his website].
Here’s what Nedim writes:
“Shed Simove, a British author, performer, self-proclaimed motivational speaker and entrepreneur has successfully created his own web-based dating app where you get one chance to swipe right on just one man: Shed Simove himself. 
The app specifically targets women, although men can also sign in. However, men who try to match with Mr Simove are greeted with a brief message informing them that Mr Simove prefers dating women.
The idea of a Shinder app came after using other apps. Mr Simove tried to come across as quirky as possible on other dating apps to attract better matches (this smells of too many left swipes), but had little luck.
Mr Simove employed several techniques, including: photoshopping a Tinder photo of himself bursting out of a Kinder Surprise egg (“Tinder Surprise”) [should be swiped right just for this]; and making a “Bumble pick of the month” logo (“No one cared”). 
UK IPO trade mark application for 'Shinder'
All this until he decided that he needed to adopt a different strategy: Shinder was thus born.

Shinder works in a way similar to Tinder (apparently it also employs an algorithm similar to the one of Tinder): you set up a profile and get to swipe. If users swipe left, the app tells you “You dodged a bullet there, Shed is extremely high maintenance.” If you swipe right, the app promises to notify you if it’s a match. If Mr Simove likes you back, the app opens up a dialogue between the two parties.
A blatant trade mark infringement… or not?
The first IP implication of all this is the use of Shinder as the name of the app: can something like this be tolerated in a Tinder-dominated trade mark world?
A simple trade mark search reveals that Tinder has filed and obtained an international trade mark registration for territories including the EU and the US. There is therefore a 'Tinder' trade mark registered for services in classes 9, 42 and 45 of the Nice Classification.  
As the UK IPO trade mark database promptly reveals, a while ago Mr Simove filed a domestic trade mark application – for 'Shinder' for services in classes 9, 42 and 45 of the Nice Classification.
This brings into consideration whether Tinder (arguably also a trade mark with a reputation) may successfully oppose the application on the basis of a conflict with its own registered trade mark (Tinder has indeed opposed the application).
The Tinder and Shinder signs are phonetically and graphically similar, although the sign above the letter “i” is a small flame for Tinder and a devil’s silhouette for Shinder.
Another noteworthy feature is the colour of the logos, both in not so dissimilar shades of red. In addition to the similarity of the signs, both signs are also used for identical services.
There seems to be indeed a serious likelihood that Tinder’s opposition (already filed) will succeed.

Infringement proceedings?
In addition to the opposition aspect, should Mr Simove use his ‘Shinder’ sign in the course of trade, could Tinder also succeed in an action for trade mark infringement?
Also here the answer appears to have an answer in the affirmative. 
A question that might be raised is whether Mr Simove could successfully argue that Shinder is a parody of Tinder.
At the moment there is no statutory defence for parody at the EU level, despite the timid opening made by the new Trade Mark Directive and the Trade Mark Regulation as revised in 2015.
The reason for a non-existent parody defence under trade mark law may be that a sign that distorts one that has been registered as a trade mark may take unfair advantage of its distinctive character and repute. This is at least what the German Bundesgerichthof thought in its decision of 2 April 2015 - I ZR 59/13 - Springender Pudel (see here for a summary of the decision). The eminent risk of allowing a parody defence seems to be that the defendant might profit from the similarity of his and the trade mark owner’s signs to attract a level of attention for his products that it would have otherwise not been able to have."  

Monday, 22 May 2017

BREAKING: Supreme Court limits US patentee's forum shopping capabilities

What do you mean I need to curtail my
forum shopping habit?
Hot off the presses in DC this morning is the much-awaited decision in TC Heartland LLC v Kraft Foods Group Brands LLC (2017).  In a unanimous (8-0) decision, the justices found in favor of TC Heartland in holding that 28 U.S.C. §1400(b)  - the patent venue statute - is to be interpreted narrowly.  The provision states that:
“[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” (empahsis added)
The Court held that "resides" means the State of incorporation (see Fourco Glass Co v Transmirra Products Corp 352 US 222 (1957)).  It does not extend to mere business activity.  

A broader definition of "residence" set out in the the general venue statute - 28 U.S.C. §1391(c) - had been amended twice to provide that "“[e]xcept as otherwise provided by law” and “[f]or all venue purposes,” a corporation 
“shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question.” (emphasis added)
The question for the Court was whether this definition overrode §1400(b).  The answer was "no". Delivering the opinion of the Court, Justice Thomas wrote:
"In Fourco, this Court definitively and unambiguously held that the word “reside[nce]” in §1400(b) has a particular meaning as applied to domestic corporations: It refers only to the State of incorporation. Congress has not amended §1400(b) since Fourco, and neither party asks us to reconsider our holding in that case. Accordingly, the only question we must answer is whether Congress changed the meaning of §1400(b) when it amended §1391. When Congress intends to effect a change of that kind, it ordinarily provides a relatively clear indication of its intent in the text of the amended provision. See United States v. Madigan, 300 U. S. 500, 506 (1937)
. . .
The current version of §1391 does not contain any indication that Congress intended to alter the meaning of §1400(b) as interpreted in Fourco. Although the current version of §1391(c) provides a default rule that applies “[f]or all venue purposes,” the version at issue in Fourco similarly provided a default rule that applied “for venue purposes.” 353 U. S., at 223 (internal quotation marks omitted). In this context, we do not see any material difference between the two phrasings
. . .
Fourco’s holding rests on even firmer footing now that §1391’s saving clause expressly contemplates that certain venue statutes may retain definitions of “resides” that conflict with its default definition. In short, the saving clause makes explicit the qualification that this Court previously found implicit in the statute. "  (emphasis added)
Heartland had challenged the decision by Kraft Foods to commence infringements proceedings in Delaware (where Kraft is incorporated) on the basis that Heartland shipped the allegedly infringing products into the state.  Heartland, otherwise, had no meaningful local presence in Delaware.  Heartland applied to dismiss the case or transfer venue to Indiana, where it is headquartered.  The case has now been remanded.

So will this be the blow to the much loved (by patentees, anyway) Eastern District of Texas that so many defendants have been dreaming of?  Is this a further blow to patent trolls in the US?  Will patentees look to other global venues where forum shopping presents more opportunities, for example in Europe and under Article 33 of the UPCA?  Or is this just balance returning to forum shopping in the US and it will be business as normal? What do readers think?  

Judge sounds alarm of weakened US patent system, while industry groups start amending Section 101

Is the  US patent alarm really going off or is it just
time to hit snooze ?  

The AmeriKat has been spending some time back working in her motherland recently.  No matter where she turns she hears some rhetoric about the "failing US patent system".  What is going on? While she is delving into the doomsday PR and the opposition who claim this is all tactical scaremongering, she brings news of a recent interview, for the new online IP video series Clause 8, with retired former Chief Judge of the Federal Circuit, Paul Michel.  In the interview he sounds an alarm about the condition of America’s patent system:

“I think it’s doing badly, I think it’s highly distressed, has been substantially weakened and needs serious repair, revival, and strengthening.”
His heightened sense of alarm stems from a concern that America’s patent system has been going in the wrong direction while other patent systems have been improving.  He believes that America’s system needs to be immediately improved for America to remain globally competitive.  In particular, he points out:

“While we’ve been weakening our patent system in many ways in recent years, China and other countries have been greatly upgrading their patent systems.  And patent enforcement in countries like Germany is much faster, much stronger, much cheaper, much less disruptive, and much more certain.  So, investment is shrinking here and it’s growing elsewhere because the investors follow the incentives.  If it’s too hard to get patents or defend patents or enforce patents, people who control money will invest in something other than research and development and the follow-on commercialization.  So I think the stakes are really high. We need a really a big course correction.  We need it very badly.And, we need it right now!

Judge Michel provides a stern warning
During the video interview, Judge Michel focuses on the immense uncertainty created by the U.S. Supreme Court’s patent eligibility decisions.  Because of “bad law,” he argues, “whether you get your patent or whether it’s declared ineligible” now often depends on “the luck of the draw” in America. His views echo those of previous USPTO Director David Kappos, who has repeatedly argued - and extensively documented - that it is now much easier “to get patents on software and biotechnology inventions in China and Europe than it is in the U.S.”

Watch the entire Clause 8 interview to hear Judge Michel discuss his role in the Watergate investigation, why a strong patent system is necessary for economic growth, immediate fixes that should be made by the USPTO, congressional action necessary to fix patent eligibility law in America and more.  

Patent eligibility has been a hot topic following recent US Supreme Court decisions - Mayo v Prometheus,Bilski v. KapposMyriad Genetics and Alice Corp v. CLS - so much so that AIPLA and IPO have issued legislative proposals on patent eligibility focused on pushing Section 101 into some technically neutral language.  AIPLA's legislative proposal, similar to the earlier IPO proposal, states that:
"The Supreme Court’s subjective interpretation of patent eligibility law is undermining the fundamental principles underlying the 1952 Patent Act on which our modern innovation economy rests. Section 101 of Title 35 was intended as an enabling provision, identifying particular categories of subject matter that qualified for patent protection; it was not intended to provide the standard for deciding whether a particular technical advance should receive patent protection. Sections 102, 103, and 112 set out the “conditions of patentability,” and were intended to provide a yardstick for judging novelty, non-obviousness, and the sufficiency of disclosure in the specification and claims. The Supreme Court has applied its own subjective rules of patent ineligibility that have increasingly blurred these statutory functions, causing significant uncertainty in the law and driving innovation investments abroad."
The IPO proposal (which Judge Michel expressed support for) document continues:
"After the Alice decision, the Federal Circuit quoted from Bilski that “In choosing such expansive terms . . . modified by the comprehensive ‘any,’ Congress plainly contemplated that the patent laws would be given wide scope.” Further, the Federal Circuit has recently recognized that “[a] too restrictive test for patent eligibility under 35 U.S.C. § 101 with respect to laws of nature (reflected in some of the language in Mayo) might discourage development and disclosure of new diagnostic and therapeutic methods in the life sciences, which are often driven by discovery of new natural laws and phenomena.” “[I]t is unsound to have a rule that takes [certain] inventions…out of the realm of patent-eligibility on grounds that they only claim a natural phenomenon plus conventional steps, or that they claim abstract concepts.”"
AIPLA's proposed amendment to Section 101 is as follows:
"a) Eligible Subject Matter.—Whoever invents or discovers any new and
 useful process, machine, manufacture, composition of matter, or any useful improvement thereof, may obtain  shall be entitled to a patent therefor, subject only to the conditions and requirements of set forth in this title.
(b) Sole Exceptions to Subject Matter Eligibility.—A claimed invention is ineligible under subsection (a) only if the claimed invention as a whole exists in nature independent of and prior to any human activity, or can be performed solely in the human mind.  
(c) Sole Eligibility Standard.—The eligibility of a claimed invention under subsections (a) and (b) shall be determined without regard to the requirements or conditions of sections 102, 103, and 112 of this title, the manner in which the claimed invention was made or discovered, or whether the claimed invention includes an inventive concept."
Or is Dave Kappos' suggestion of just scrapping the section to be preferred? Too many words, after all, are only there to be misinterpreted by the Courts.  But while Congress is tied up with the Russia investigation,  the IPKat cannot foresee a huge amount of legislative attention on this issue (no matter how important) in the immediate future.  Or at least until after former FBI Director Comey testifies....

Nestlé loses yet another KitKat battle

The KitKat Kat
It will not have escaped readers that last week the Court of Appeal handed down its decision in Nestlé v Cadbury [2017] EWCA Civ 358, ie the KitKat trade mark dispute. 

Why?  Because every where you looked the mainstream media was pushing out the puns and mangling the IP rights.  

Roland Mallinson (Taylor Wessing) provides his comments on the recent decision:

Here's what Roland writes:
"The decision of the Court of Appeal not to accept Nestle's evidence of acquired distinctiveness in the UK conflicts with the acceptance of such evidence in the parallel EU action by the EU General Court only five months ago. As the Court of Appeal observed, it is bound by the rulings of the General Court on the interpretation of EU law but it is not bound to follow the latter's rulings of fact. It has deliberately chosen not to do so here. Not only that but, in the leading judgment, Kitchin LJ made observations to suggest that he considered the General Court had applied the wrong test as set out by the CJEU. In fact, the evidence in the two cases was not quite identical. Curiously, it was the seemingly more flawed initial survey evidence that was held to be sufficient by the General Court and yet the later "improved" version of the consumer survey was rejected by the Court of Appeal.

There seems to be somewhat of a trend for senior national courts and the EU courts to disagree about the perceptions of relevant consumers. The reverse occurred last summer when the EU's General Court held that the word NEUSCHWANSTEIN (the name of Ludwig II's fantasy castle in Bavaria) was inherently distinctive for merchandising goods throughout the EU (and so also in Germany), despite the fact that four years earlier the Bundesgerichtshof had held that, for German people, it emphatically was not. Indeed the EUIPO Cancellation Division and the Board of Appeal had likewise ruled contrary to this earlier ruling of Germany's most senior court on the matter.

Considerable semantics have been at play in this case. Nuanced interpretations of the words "perception" and "reliance" feature heavily in the judgments. The Court of Appeal has sided with Mr Justice Arnold in effectively applying a line of English cases that require evidence of acquired distinctiveness to show that consumers rely on the mark as an indicator of origin. This is despite the fact that, when answering Arnold J's questions referred to it in the same case, the CJEU had clearly declined to take the opportunity of endorsing the reliance test that Arnold J was propounding. To be fair, all three appeal judges took pains to deny that they were applying a test of reliance. The court's position is that evidence of such reliance clearly suffices and also that Nestle's evidence did not show reliance. Whilst the latter is not supposed to mean Nestlé loses, it is hard not to see this as having been the test in effect. The original registry decision by senior officer Allan James was held to be not open to challenge, although (without the benefit of Arnold J's reference and the CJEU ruling) it had the concept of reliance woven through much of it. Rather than repeating that, the Court of Appeal articulated the primary ground for its decision as being that Nestlé did not appear to have used the shape in a "trade mark sense". It weighed heavily on the judges' minds that the evidence showed no recent promotion of the shape in advertising or packaging (it seemingly stopped featuring in the 1960s). This meant the impressive survey results were not the result of any trade mark use and just reflected mere recognition and association arising from widespread non-trade mark use of the shape.

It means that with some concerted use in this manner and fresh evidence, the shape could still be registrable with a new application. However, it is probably easier and cheaper for Nestle just to appeal and that seems the likely course. It is certainly open to question whether the English courts are choosing to re-interpret the CJEU's ruling through Brexit-tinted glasses. This could be the first area of trade mark law where the EU and UK regimes start diverging."

An EU text and data mining exception: will it deliver what the Digital Single Market Strategy promised?

At the time of unveiling its Digital Single Market Strategy in May 2015, the EU Commission linked the establishment of a fully connected digital single market to the objective of creating a favourable environment for European start-ups and SMEs.

With specific regard to copyright, however, it soon appeared that start-ups and SMEs were not really part of the picture as far as Commission’s action in this area of the law is concerned. In this sense, the proposal for a directive on copyright in the Digital Single Market, which was released in September 2016, is a telling example.

The content of the proposed text and data mining exception

The draft provisions intended to remedy the so called ‘value gap’ (Article 13) and establish a new right for press publishers (Article 11) have been extensively criticized for – among other things – having the potential to raise barriers to entry in the markets for, respectively, hosting platforms and news aggregators, and also push out of these markets existing start-ups and SMEs that may be ‘too small to compete’.

Also the Commission’s proposal for a new mandatory exception that would be vital to EU tech-intensive businesses, ie a text and data mining exception (Article 3), falls short of what an ambitious and competitive digital single market may need.

By text and data mining it is intended as “any automated analytical technique aiming to analyse text and data in digital form in order to generate information such as patterns, trends and correlations” (Article 2(2)). A couple of examples of mining tools developed and employed by European SMEs and start-ups are those of Treemetrics (Ireland; a forest management platform) and XDiscovery (Italy; a search engine that allows mapping correlations between different topics).

Although including commercial and non-commercial uses alike, the scope of the proposed text and data mining exception appears particularly narrow as regards its catalogue of beneficiaries. These would be, in fact, only research organizations. They would be able to rely on the exception solely to carry out text and data mining of works or other subject-matter to which they have lawful access for the purposes of scientific research. In addition, the definition of ‘research organization’ itself is narrow: it only includes (Article 2(1)) universities, research institutes, non-profit or public interest research-intensive organizations.

In principle the draft directive does not exclude applicability of the text and data mining exception to public-private partnerships (Recital 10), but rules out that this could be possible when a commercial undertaking has a decisive influence and control over the research organization in question (Recital 11).

Waiting to mine some data ...
But would they be able to do so?
The UK experience

The proposed EU exception would be also narrower than the existing UK exception for text and data analysis (s29A of the Copyright, Designs and Patents Act 1988). The UK introduced it in 2014 on belief that the existing legislative framework (Article 5(3)(a) of Directive 2001/29) would already allow Member States to permit text and data mining activities under the umbrella of the exception for scientific research. Most importantly – albeit limited to non-commercial uses – the beneficiaries of the UK exception are not just research organizations, but also individual researchers (‘any person’ who has lawful access to a work).

The reactions of the SME and start-up community

Further to the release of the proposed directive on copyright in the Digital Single Market, EU start-ups and SMEs have noted how the current drafting of Article 3 fails to provide legal certainty, and regrettably excludes anyone who cannot be regarded as falling within the definition of ‘research organization’.

In this sense, Allied for Startups has pointed out that innovative start-ups would be left outside the scope of Article 3, being unable to benefit from the text and data mining exception. This would be so also on consideration that the limited resources of a start-up would make it difficult, if not impossible tout court, to consider entering public-private partnerships that are both time-consuming and challenging to handle.

The draft Comodini Cachia report

The next step for the overall process that would eventually lead to the adoption of a new directive on copyright in the Digital Single Market is the European Parliament vote (originally scheduled for 19-20 June, but currently it is unclear when this will take place) on the draft report that MEP Therese Comodini Cachia has been preparing on the Commission’s proposal. On 10 March a first draft version of the report was unveiled; possible amendments are currently being considered.

As far as text and data mining is concerned, the draft report seeks to clarify what copyright-relevant act (normalization of information) the new exception would cover. It also proposes to broaden to a certain extent the scope of the exception, by envisaging – subject to a compensation requirement – the possibility for research organizations that do not have lawful access to information to have nonetheless access to normalized data for text and data mining.

The draft report for the moment also appears to consider broadening the types of beneficiaries of the exception.

More ambition is needed

When considering different options for a text and data mining exception, the Commission held the view that an exception that would not restrict types of uses and beneficiaries would go too far.

Yet, considering the general framework for exceptions and limitations that already exists under EU copyright (Article 5 of Directive 2001/29), there are no particular legal reasons as to why an exception should in principle exclude certain subjects from the range of beneficiaries, as long as the conditions in the three-step test (these being that an exception is to be only applied in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder: Article 5(5) of Directive 2001/29) are respected.

As noted by the German Bundesrat in a recent opinion, the exclusion of beneficiaries other than research organizations from the scope of the EU text and data mining exception would be not just impractical, but also cause the end for many providers of data analysis in Europe.

The EU approach to text and data mining could and should be more ambitious. This would be necessary to develop the full potential of SMEs and start-ups arising and operating in Europe, thus also making Europe more competitive on the global scale and permitting the creation of a functioning digital single market. More ambition is also needed to encourage and make possible the work of individual researchers, and allow European citizens to have access to information that can be only generated through text and data mining activities and whose potential awaits to be unlocked. 

Monday Miscellany

Starting the week with the right paw the IPKat brings you news of exciting IP-related events to be soon held around the world. Since it is Monday morning, this sleepy Kat will start from the closest to its doorstep...

First stop - Brussels:  The Liège Competition and Innovation Institute at the Université de Liège (LCII) together with the Tilburg Law and Economics Center (TILEC) will host the Conference on Innovation, Research and Competition in the EU: The Future of Open and Collaborative Standard Setting on 29-30 May in Brussels. Public officials, industry experts, legal practitioners and prominent academics from EU institutions, the private sector and academia will gather to discuss SEP-related questions at the intersection of IP and competition law. The full programme of the event can be found here. Admission fee is €150 or €75 (academics and public officials), + 21% VAT. Registration closes on 25 May 2017 and can be done here.

London calling:  On the other side of the Channel, the Competition Law Association (CLA) will host the lunchtime event Flynn Pharma and Pfizer: the IP and competition aspects of Phenytoin Sodium Flynn on 7 July 2017 at the Arnold & Porter Kaye Scholer LLP offices in London. The speakers of the event will be James Killick (White & Case, Brussels) and Michael Silverleaf (Barrister, 11 South Square). Attendance is free for CLA members, for non-members an enrolment fee of £50, £35 (full time academics/public sector employees) or £10 (students, trainees, pupil barristers) is applied. Registration closes on 6 July 2017 and can be done here and here (members).

Are Non-Traditional Trademarks Aesthetically Functional? Professor Irene Calboli (Singapore Management University) will address this question at a seminar hosted by the City Law School in Central London on 12 June 2017. In the course of the seminar, she will discuss the problems arising from the protection of those trade marks in, inter alia, the United States and Singapore, by examining first the legal developments in this area and then recent controversial court cases. In this context she will address the doctrine of functionality, adopted by some courts. Attendance to the event is free but booking is required. Places can be booked here.

Did someone just call me a copycat?
Tomorrow, 23 May 2017, in the framework of the Clerkenwell Design Week, the City Law School together with Intellectual Property Awareness Network (IPAN), will host the workshop Combat the Copycats, an event aimed at designers interested in getting acquainted with IP rights relevant for their work and how to combat infringement. Attendance to the event is free but booking is required. Places can be booked here.

Bem Vindo ao Brazil:  Crossing the Atlantic, the Ligue Internationale du Droit de la Concurrence/International League for Competition Law (LIDC) will host its Congress in Rio de Janeiro on 5-8 October 2017. The Congress focuses on topical areas of competition and IP law and features panels and speakers covering a wide range of subjects. This year's programme will cover two questions: (A) what are the major competition/anti-trust issues generated by the growth of online sales platforms and how should they be resolved; and (B) to what extent current exclusions and limitations to copyright strike a fair balance between the rights of owners and fair use by private individuals and others. Registration prices vary, enrollment until 30 June 2017 gives access to early bird fees. Registration can be done here.

Back to Blighty:  Building up to the LIDC Brazilian event, the Competition Law Association (CLA), member association of the LIDC, will host a Workshop on 13 June 2017 at Redd Solicitors LLP in London  to discuss the Congress' two central questions. The discussion will be based on the UK national reports drafted by Vineet Budhiraja (Watson Farley & Williams LLP) and Kat Eleonora Rosati (University of Southampton). Attendance is free for CLA members, for non-members an enrollment fee of £50, £35 (full time academics/public sector employees) or £10 (students, trainees, pupil barristers) is applied. Online registration closes on 12 July 2017 and can be done here and here (members).

Ending up in Israel:  Looking to the shores of the Mediterranean, the University of Haifa in collaboration with the National Cyber Bureau established The Center for Cyber, Law and Policy (CCLP). The Center seeks to develop the academic research necessary to inform public policy while addressing cyber challenges by integrating legal research, computer science, data science, social science and innovative technologies. The CCLP will support selected research proposals related to cyber policy challenges. Applications should be sent by 1 June 2017 at The full list of research themes and additional information on the Center can be found here

IPSoc Event Report: The ever-evolving law on the "communication to the public" right

When the IPKat is communicating to the public,
unlike with the CJEU, no one is left in any doubt...
Last week, members of IPSoc descended on Simmons & Simmons’ offices for a gallop through some recent developments in copyright law, given by IPKat’s own Dr Eleonora Rosati. For those who couldn’t be there, KatFriend Alex Woolgar (Allen & Overy) reports on the highlights:
"To paraphrase the noted fictional fashion designer Mugatu, the economic right which is “so hot right now” is of course the right of communication to the public (CTP) (Article 3(1) InfoSoc Directive). Readers who were present at the Views from the Judiciary session at Fordham 2017 will know that Mr Justice Arnold agrees, as does Marco Giorello (Acting Head of Unit – Copyright, DG Connect, European Commission). The CTP right, whose modern roots can be found in Article 8 of the WIPO Copyright Treaty, is being buffeted by the fast-moving currents of the digital age. The strongest of these currents include ubiquitous Internet hyperlinking, and the shift from consumption of content away from non-transient download and towards streaming (whether via YouTube, Spotify or otherwise) – streaming made up 35.37% of EU Internet traffic in 2012, and continues to grow.

The CTP right appears on one level deceptively simple – there must be (i) an act of communication, (ii) to the public. Since the 2003 implementation deadline of the InfoSoc Directive, there have been 18 CJEU decisions (plus two pending decisions) on the CTP right. This is perhaps indicative of the CJEU’s struggle to clarify what is essentially a sparsely-defined right, as the technological means and trends in communication and consumption of content change over time. Eleonora noted that CJEU jurisprudence on the CTP right is at times inconsistent – compounded, no doubt, by the fact the CJEU has no binding precedent to follow.

The seminar focused firstly on two recent decisions – GS Media and Filmspeler – and then touched briefly on the Commission’s role in all of this, and the ever-popular topic of the impact of Brexit. 
GS Media has already been reported on extensively (not least on this very blog). The photographs in question were leaked (i.e. made available without the right holder’s permission) on an Australian file-sharing website, to which GS Media provided a hyperlink. AG Wathelet reviewed the state of the law following Svensson and BestWater, and went on to conclude that there was no act of communication, because this requires the alleged infringer to “make available” the content. The photographs were already freely accessible via the file-sharing website, so GS Media merely facilitated access, which the AG considered not to be an act of communication. In other words, GS Media’s intervention in the process was not “indispensable”. A significant reason for the AG’s opinion seems to have been policy: specifically, that hyperlinking is essential to the architecture and proper functioning of the Internet. In this way, the AG’s opinion was perhaps correct to steer away from an overly rigid interpretation of Svensson, but the CJEU took a different approach. Mindful of the delicate balance between right holders and the public as a whole, the CJEU in effect chose not to exempt hyperlinking to freely accessible content from copyright infringement completely. The CJEU paid little heed to AG Wathelet’s neat making available / facilitation distinction. Instead, the CJEU emphasised two non-autonomous and interdependent criteria: did the alleged infringer (i) have a profit-making intention; and (ii) know that the linked-to content was unlawful? As the law now stands, the lawfulness of providing a link to freely-accessible content will be determined by the answer to these two questions, as Eleonora’s helpful table summarises far more succinctly than the author could hope to.

The CJEU’s judgment does however leave open some interesting questions. Is a profit-making intention to be determined by reference to the link itself in isolation, or to the context of the website as a whole? National courts seem best placed to weigh the two non-autonomous interdependent criteria on the evidence, but this issue may require further clarification from the CJEU (although in applying GS Media, the German and Swedish courts seemed comfortable enough to decide it was the context of the whole website which is relevant). Also, is the notion of an “indispensable intervention” dead, or just resting?

The more recent Filmspeler judgment (reported on this blog here and here) seems to answer the second question, and more besides. The defendant, Mr Wullems, sold online a multimedia player, which acts as a medium between a source of audio-visual data and a television screen. The underlying software included several hyperlinks to copyright content online, some of which was originally made available without the consent of the relevant right holders, so that such content could be played seamlessly on TV via the Filmspeler app (the author wonders aloud whether there was also scope for discussion as to whether interfacing between computer and TV screen is quite the same technical means as “traditional” hyperlinking). The CJEU held that this hyperlinking was a CTP within the meaning of Article 3(1). While Mr Wullems’ actions were held to be an “intervention” for CTP purposes, the word “indispensible” was conspicuously absent. Instead, in its judgment the CJEU focused on the two non-autonomous and interdependent criteria as used in GS Media.

It is up for debate whether these cases represent a step-change in the CTP right, or a gentler evolution. But it is apparent that the CTP right is being fleshed out to adapt to the technological and social changes alluded to above. As Eleonora noted, these decisions do seem to open the way for courts to attribute primary liability for copyright infringement to mere “facilitators” (and presumably the CJEU will follow AG Szpunar and make similar findings of liability in the Pirate Bay / Ziggo reference. It remains to be seen whether this jurisprudence will bring high-profile platforms such as YouTube into the sights of national courts – to date there have been no decisions of national courts which definitively say YouTube undertakes acts constituting CTP.

Eleonora further noted that the so-called “value gap” proposal under Article 13 of the draft Directive on copyright in the DSM (to mandate licence agreements with right holders unless the platform is eligible for safe harbour, and to put in place appropriate and proportionate measures to prevent infringement) seems to presuppose that such platforms and content aggregators do undertake acts which are CTP within the meaning of Article 3(1) of the InfoSoc Directive. It does seem that this potential lacuna may have been closed by the CJEU before it arises in practice. 
Finally, Brexit once again reared its ugly head. Eleonora suggested that because copyright is only partially harmonised, how copyright in the UK will look post-Brexit has received less attention than other IP rights. The proposed Great Repeal Bill will likely mean that nothing much will change on Day 1 of actual Brexit (given that the nine relevant Directives have already been transposed into UK law, and the two pending copyright reform package may well be ignored during the Article 50 period). But also, in the medium-term, the law is unlikely to change much. There will be no further CJEU references, but unless and until the law is changed substantively, CJEU judgments are likely to remain persuasive, at Supreme Court level at least. It remains to be seen whether the UK courts will draw any distinction between pre- and post-Brexit CJEU decisions (much will depend on how far UK and EU copyright law diverge). In the longer-term, judgments from other Commonwealth countries may again become more persuasive. Some have suggested that Brexit presents copyright opportunities e.g. to introduce a general US-style “fair use” defence. This may have the advantage of flexibility, but it comes with its own problems, such as uncertainty, and potentially an erosion of right holders’ protection and a dulling effect on publication of creative works.

The author’s “take homes” from the seminar were that copyright, and the CTP right in particular, remain strong candidates for evolution over the next several years, due to technological and social change, the Commission’s and the CJEU’s response to such change, and the as-yet uncertain impact of Brexit."

Sunday, 21 May 2017

Latest leak reveals that review of EU IP enforcement framework is currently in a deadlock

exclusive image of Brussels cabinet meeting
Leaks of internal EU Commission documents have seemingly become unavoidable events in-between one official release and another from this EU institution.

The latest leak, published by Politico, is that of an internal note to the attention of Commissioner Bieńkowska's Head of Cabinet concerning the forthcoming (?) review of the enforcement framework, including the Enforcement Directive.

As readers will remember, the Commission itself announced that this is part of the agenda when it unveiled its Digital Single Market Strategy (DSMS) two years ago (May 2015). Despite the timeframe indicated in the 2015 DSMS, a more thorough review of the enforcement framework is (or, rather, was?) expected in the first half of 2017, including the release of proposals to review existing EU legislation.

So far nothing has happened on this front. 

The reason - as this latest leak appears to suggest - is that there is no agreement within the Commission itself as to what direction should be taken. In other words, as the document admits, the reform process is currently in a "deadlock".

D(r)eadlock Kat
In addition, there might have been also a change of heart in some of the key players, possibly even including Commission's Vice-President Ansip

According to the document, it appears presumable that Commissioner Ansip has gone from strongest supporter to most vocal opponent of a review of the Enforcement Directive. The reason would be that at the beginning it appeared that rightholders would somewhat lose in the reform of the copyright acquis, so that a stronger enforcement would be needed as a "trade-off" [yes, the document employs this term]. Apparently this has not been the case. Hence, "such trade-off is no longer considered necessary given the final scope of the copyright proposals which do not materially cut into right holders positions."

The document then reviews a number of possible options on the table. 

An important (and unsurprising) aspect is the focus on the role intermediaries. According to the note, any proposals to harmonise intermediary liability in the context of a review of the Enforcement Directive and require intermediaries to take more pro-active measures "is a very far reaching call which does not fit into [the Enforcement Directive] systematically and it is at least doubtful if such an initiative would be in line with the E-Commerce Directive and the announcements made by the Commission in the 2016 Communication on platforms to respect the liability regime for platforms."

To be continued ...

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