From March to September 2016 the team is joined by Guest Kats Emma Perot and Mike Mireles.

From April to September 2016 the team is also joined by InternKats Eleanor Wilson and Nick Smallwood.

Wednesday, 31 August 2016

SUPER KAT-EXCLUSIVE: Here's draft Directive on copyright in the Digital Single Market

Further to the leaked draft version of the Commission Staff Working Document - Impact Assessment on the modernisation of EU copyright rules, here's a new leak from Brussels!

It is the draft version of the forthcoming [it should be presented next month as part of the second copyright package] Directive on copyright in the Digital Single Market.

Taking into account digital and cross-border uses of copyright content, this new piece of legislation will change the copyright acquis

More specifically, it will: introduce new exceptions and limitations, facilitate licences, and set rules aimed at ensuring a well-functioning marketplace for the exploitation of works and other subject-matter [translated: address the so called 'value gap'].

Mandatory exceptions (without freedom of panorama?)

Contrary to the general structure of Article 5 of the InfoSoc Directive which - with the exception of temporary copies in Article 5(1) - provides an optional list of exceptions and limitations that Member States are free to implement into their own legal system, the new directive [if adopted in its current form, ça va sans dire] mandates upon Member States to adopt the following exceptions or limitations:
  • [Article 3] Text and data mining for the benefit of research organisations [so, the beneficiaries are limited] in relation to works or other subject-matter to which they have lawful access for the purposes of scientific research [interestingly, the exception cannot be overridden by contract and is not limited to non-commercial uses]
  • [Article 4] Teaching on the premises of an educational establishment or through secure electronic network only accessible to staff and students, as long as the source is acknowledged and is for non-commercial purposes [but note that Member States can provide that exception does NOT apply if an adequate licence is easily available on the market] 
  • [Article 5] Preservation of cultural heritage [this is not really surprising, and in my opinion it already followed from the decision of the Court of Justice of the European Union in Ulmer, C-117/13]
Interestingly, despite everything [including a public consultation], it seems that freedom of panorama will not be part of the directive.

Out-of-commerce works

Title III of the draft directive is devoted to use of this type of works by cultural heritage institutions through a collective management mechanism. 

In other words, when a collective management organisation concludes a non-exclusive licence for non-commercial purposes with a cultural heritage institution, such a licence may be extended or presumed to apply to rightholders of the same category as those covered by the licence who are not represented by the collective management organisation, provided that a number of conditions are satisfied [whether this is actually OK is uncertain, especially further the Advocate General Opinion in the pending Soulier reference]

Rights in publications

Here it is: the much feared and criticised 'ancillary copyright'. 

Draft Article 11 introduces in fact a right for publishers of news publications to authorise the online use [reproduction and marking available] of their news publications. 

This new sui generis right is due to last for 20 years from the date of publication or the relevant news publication.

Value gap

Draft Article 13 [see also Recital 39] addresses the so called 'value gap' by requiring intermediaries that store and provide access to large amounts of works uploaded by users of their services to "take appropriate and proportionate measures to ensure the functioning of agreements concluded with rightholders and to prevent the availability on their services of works or other subject-matter not covered by such agreements, including through the use of effective content identification technologies" [translated: intermediaries need to become licensed and implement filtering technologies. Mmm: how can this be achieved without also reforming Article 3 of the InfoSoc Directive (see here), and Articles 14 and 15 of the Ecommerce Directive?]

Fair remuneration for authors and performers

Articles 14 and 15 implement a mechanism by which Member States will be required to ensure that authors and performers are entitled to have their contract adjusted when the agree remuneration is disproportionately low compared to the subsequent revenues and benefits derived from the exploitation of the works or performances" 

***

The text of the draft Directive is available here.

Milan Court of First Instance rejects application for 'blank' blocking order

Every woman's dream:
a decoder card to watch
Champions League matches with her beau
Can a blocking injunction concern a target website as well as any possible top-level domains and other sites - without specifying which - associated with it? 

This is the question that the Tribunale di Milano (Milan Court of First Instance) addressed and answered in the NEGATIVE in an interesting interim decision (an ordinanza, RG No 31892/2016 - Mediaset Premium v Orlando and Others) on 27 July 2016, as reported by and commented on very useful online resource Marchi & Brevetti.

Background

In late May 2016 Mediaset Premium - which holds the exclusive broadcasting rights for the Italian territory of the football matches of some of the principal teams of the Serie A and UEFA Champions League - brought an action seeking an interim injunction against a number of major Italian internet service providers (ISPs) to block access to Calcion.

The latter (most recently operating as calcion.at) allowed users of its portal to watch in live streaming Mediaset Premium's broadcasts of relevant matches. Similarly to the Swedish ice hockey saga of C More as addressed by the Court of Justice of the European Union (CJEU) [here], Calcion did so by circumventing Mediaset Premium's paywall.

Mediaset Premium's action had been preceded by several applications for blocking orders with Italian Communication Authority AGCOM. AGCOM had ordered major Italian ISPs to block access to a number of top-level domains of Calcion, including .be, .xyz, .co, .in, and .md.

Just to use the slightly abused reference to a whac-a-mole game, despite Mediaset Premium's enforcement efforts Calcion kept resurrecting under new top-level domains. Hence, Mediaset Premium's action before the Tribunale di Milano, seeking an order to block Calcion, independently from the top-level domain used, and any site associated with it.

The ISPs objected to Mediaset Premium's request, arguing - among other things - that: 
  1. the remedy sought would impose on them a general monitoring obligation that would be contrary to the system envisage by the Ecommerce Directive (Article 15) as implemented into Italian law (Article 17 of D.Lgs. 70/2003); and
  2. the conditions for adopting an interim decision (in particular the urgency of it, ie the periculum in mora) were not present in the case at hand.
As such, the ISPs asked for Mediaset Premium's request to be dismissed or limited to the .at top-level domain of Calcion.

A Kat of the future
The decision

The judge (Pierluigi Perrotti) noted how Mediaset Premium's request - if granted - would result in imposing on ISPs a general monitoring obligation and this would be contrary to the system envisaged by the Ecommerce Directive/D.Lgs. 70/2003.

According to the judge, not even Mediaset Premium's suggestion to indicate relevant sites to ISPs would help, because its request "appears in contrast with some fundamental principles in the procedural system":
  • First, extending the order to any top-level domain and site that in the future would be associated with Calcion and whose content is still unknown would be tantamount to protecting from infringements that have yet to occur [this is true as far as interim proceedings are concerned, but for other types of proceedings the L'Oréal principles should apply].
  • Secondly, the law does not allow a private party (Mediaset Premium) to exert the kind of control that only a judicial authority could exert as regards which sites ISPs should block.
  • Thirdly, not all IP addresses indicated by Mediaset Premium would just concern Calcion. Currently some of those IP addresses host third-party sites that have nothing to do with Calcion. By referring to the CJEU decision in Telekabel [here], the judge recalled that IP protection must be balanced against other fundamental rights, including freedom to conduct a business and freedom of expression/information.
In conclusion, the judge only ordered ISPs to block the .at top-level domain of Calcion.

Overall, the judge acknowledged that "the illicit broadcasting of football matches in live streaming ... is a source of serious and irreparable harm for Mediaset Premium". Yet, this does not mean that Mediaset Premium can seek and obtain a blank blocking order whose content (ie the websites that ISPs should block) it is itself free to decide.

Finally

Small statistical tip for proceedings against ISPs in Italy: go to Rome if you are a rightholder [here, here, and here]; try to move all proceedings to Milan if you are an ISP!

Tuesday, 30 August 2016

A triple dose of defeat - three antibiotic patents of Cubist revoked in one trial

This judgment [Hospira UK Ltd v Cubist Pharmaceuticals LLC [2016] EWHC 1285 (Pat) (10 June 2016)] was handed down a little while ago, but this Kat only recently got round to studying it properly, containing as it does decisions relating to three rather different patents.  This report was co-written with chemist and IP enthusiast Benji Gibber, to whom this Kat is very grateful.

Daptomycin
This case concerns three patents owned by the defendant Cubist Pharmaceuticals LLC relating to the antibiotic daptomycin, originally discovered by Eli Lilly in the 1980s. Patent EP1115417 (“the 417 patent”) claims a range of doses of the drug to be administered once a day. The other two patents, EP1252179 and EP2264047 (“the 179 patent” and “the 047 patent” respectively), claim different methods of purifying daptomycin. The claimant, Hospira UK Limited, sought the revocation of all three patents, which were all considered in a single trial.  Mr Justice Carr found all three patents to be invalid.

The 417 patent:
This patent claimed daptomycin doses of 3-10 mg/kg to be taken once every 24 hours. Hospira alleged that the patent was not entitled to either of its priority dates. If the claim to the first priority date was found invalid, Hospira asserted that a press release by Cubist on 01/03/1999 anticipated the claims of the patent and also made them obvious. They also alleged that the patent lacked inventive step over a paper published by Lilly in 1992, referred to henceforth as Woodworth, a Phase I trial of daptomycin.

The first priority document was a very short and simple document, with limited disclosure and a single claim:

“A method for the reducing muscle toxicity of daptomycin comprising the steps of administering to a patient in need of such therapy a therapeutically effective amount of daptomycin at a dose of 2-10 mg/kg of daptomycin and re-administering the same dose at intervals of between 12 and 24 hours”.

There was no disclosure in its description of a once daily dose of 3-10mg/kg. For this reason, the claim to the first priority date of 25/09/1998 was held invalid.

The second priority document contained more detailed information about trials of the drug on dogs, with an explicit disclosure of the dose range and the once daily regime of taking the dose. As a result, the judge held valid the second priority date of 24/03/1999.

Woodworth was a phase I trial study of daptomycin in which healthy individuals were given varying doses followed by monitoring of drug plasma concentration over 72 hours. Woodworth observed that 4 and 6mg/kg doses had few side effects, and stated that the activity of daptomycin at the 6mg/kg dose would be expected to last 14-20 hours. From these results, it was predicted that a dosage of 4-6mg/kg of daptomycin in a day, in one or more doses over the day, would be the most effective. A person skilled in the art would know that for practical reasons, 24 hour doses were advantageous. The judge decided that a person skilled in the art, upon reading Woodward, would expect that a once daily dose of the quantities claimed in the 417 patent would be effective.

Lilly failed to achieve a viable treatment using daptomycin around the time of the research for Woodworth, and Cubist argued that this meant that it was not obvious to the skilled person to reconsider this line of research into this drug. However, the judge noted that the need for new antibiotics had increased dramatically between the publishing of Woodworth and the 417 patent filing, so the lack of success by Lilly did not preclude the finding of obviousness.

The Cubist press release announced phase II and III trials of daptomycin as a treatment for combatting life-threatening infections. In this press release, the dose of 4mg/kg administered every 24 hours was explicitly disclosed. It was ruled that this press release did not anticipate any of the claims, as the trials had not been carried out yet. However, it was ruled that a skilled person would expect that, as a phase III trial had been approved, efficacy must have been demonstrated in Phase II trials at doses which were sufficiently safe to proceed to Phase III trials, indicating a very good prospect of success and thus rendering obvious the claimed range in the 417 patent.

The 179 patent:
This patent claimed a purification of daptomycin using an anion exchange column (AEC) comprising an ion exchange resin, a modified buffer, and a chaotropic agent, to prevent aggregation. Hospira alleged that the 179 patent lacked inventive step over both general knowledge in the field, and an earlier patent granted on 15/11/1988, US4784843 (henceforth referred to as “US 843”.)

US 843 discloses a method for separating and purifying a wide variety of fermentation products, one of which is daptomycin.  The invention utilises a reverse phase non-functional HP-20 SS resin, a standard resin in this field, in a method known as hydrophobic interaction chromatography (HIC), with adsorption being carried out in aqueous phase and resolution in organic phase. Hospira alleged that it was obvious to use AEC in place of, or in conjunction with, HIC in the invention disclosed in US 843. Cubist argued that AEC was not an obvious process to combine with the HIC process of US 843, and therefore their claimed method was not obvious. Similarly to their defence of the 417 patent, they also argued that the fact Lilly did not adopt the AEC method, would lead the skilled person to assume it was ineffective. However, the judge noted that there was considerable motivation to improve on the 93% purity of US 843. The judge also rejected the allegation that the skilled person would simply use HIC multiple times to purify the daptomycin, as it would make sense to use more than one different method of purification to obtain a higher purity. It was also noted that AEC is well known to be an advantageous first step in a purification as it greatly reduces the volume of solvent in a general fermentation broth. As US 843 makes no mention of AEC being an unsuitable method for the purification of daptomycin specifically, it would be obvious to a skilled person to start with this method. Finally, US 843 refers to a feedstock of “partially purified” daptomycin. The judge decided that a skilled person would deduce that the feedstock would be compatible with US 843 if it had undergone a method of purification such as AEC, prior to the application of the invention disclosed in US 843.

The judge held that all the claims for which independent validity was contended were obvious.

With regard to lack of inventive step over general knowledge alone, the Judge held claim 1 to be obvious, since AEC is a standard method of purification, and tris(tris(hydroxymethyl)aminomethane), the buffer, and urea, the chaotropic agent, are both standard agents employed in such purifications. Furthermore, there was no disclosure in the prior art that such agents are ineffective in the purification of daptomycin. However, claim 3 was held to be inventive over general knowledge alone, as while Hospira argued that the steps outlined in claim 3 are well known in the field, Cubist asserted and the judge agreed that the order in which they are carried out is important, and this was not known in the common general knowledge.

The 047 patent:
Micelle formation explained
This patent claimed a method of purifying daptomycin by inducing its molecules to form micelles by varying the pH of a liquid mixture containing impure daptomycin while the mixture undergoes ultrafiltration. A micelle is a sphere made up of a number of surfactant molecules, characterised by each molecule having a lyophilic end (attracted to the surrounding liquid) on the surface of the sphere and a lyophobic end (little attraction to the surrounding liquid) pointing into the sphere. By switching between the larger micelles and the smaller surfactant monomers, it is possible to remove both very small and very large impurities with ultrafiltration. At surfactant concentrations above what is known as the critical micelle concentration (CMC), micelles begin to form. According to the invention, the CMC is changed by variation of the pH.

Cubist argued that while it was common general knowledge that daptomycin is a lipoprotein, it was not obvious that it is a surfactant capable of forming micelles. This was rejected by the judge as it was recognised that the shape and structure of a daptomycin molecule, having a hydrophilic head and a hydrophobic tail, and its similarity to the well-known surfactant surfactin, would lead the skilled person to recognise its potential to form micelles. Standard tests could be carried out, which would confirm that this expectation was correct.

The IPKat likes to explore micelle formation in his spare time
Hospira argued that the invention disclosed in the 047 patent was obvious in light of a paper (Lin and Jiang, 1997) on the purification of surfactin, which stated that “this process can be further modified and employed for the recovery and purification of most surfactants from aqueous solutions at concentrations above the critical micelle concentration”. The process involved changing the CMC of the surfactant using the addition of methanol to filter out different sized impurities. Cubist argued that from Lin and Jiang it was not obvious that pH should be controlled to affect the CMC rather than methanol, and that at the priority date varying pH was not recognised as a method to control CMC, only temperature control, varying of the solvent, or adding an inert electrolyte.
The judge decided that the fact daptomycin was a drug molecule would immediately deter the skilled person from using methanol in a purification process, given its toxicity. Also, a large amount of methanol would be required to induce the change in CMC, leading to the skilled person to look for ways to change the CMC that involved less toxic methods that are easy to control and require little addition of fluid to the mixture. It was considered obvious to the skilled person to explore how varying the pH would affect the properties of a substance, such as its CMC. Cubist also alleged that the process described in the paper would not remove all impurities from the surfactin mixture, so it would not be obvious to apply this imperfect purification concept to daptomycin. This too was rejected as at no point in Lin and Jiang or indeed in 047 does it state that this method alone would be used to remove all impurities, and that, as discussed earlier with regards to 179, the skilled person would be inclined to use this method in conjunction with other purifications to obtain the best results, and therefore would not dismiss the teaching of Lin and Jiang simply because it didn’t yield a completely pure biosurfactant. The judge decided that 047 was obvious in light of Lin and Jiang:  even though the process it disclosed was for purifying surfactin, it explicitly stated that it could be reasonably applied to other biosurfactants; also, the use of methanol in the method would prompt the skilled person to seek a different way, one easy to control, to vary the CMC of the surfactant, and pH was a standard variable to change.

Insufficiency:
Hospira argued that all the Cubist patents were insufficient as they described a method that obtained daptomycin with a D-Asn residue (the L’s and D’s indicate the “handedness” of each component amino acid) in the peptide, as detailed by Miao et al in a paper published in 2005, but daptomycin was earlier described by Balz in a textbook in 1997 (wrongly) as having an L-Asn residue in its peptide sequence (see figure 1A from Balz Biotechnology of Antibiotics). They argued that “daptomycin” as referred to in all of the Cubist patents would be understood as referring to the Baltz structure, but the patents did not enable a method of making daptomycin, characterised as having an L-Asn residue.

The judge rejected this argument as the inventions disclosed in the Cubist patents did not entail characterization of a particular daptomycin isomer, since they were concerned with dose and purification techniques. Furthermore, the judge decided that a skilled person would recognise the large number of possible isomers of daptomycin due to the handedness of each component amino acid, and recognise that the inventions claimed in the Cubist patents reference the general daptomycin structure rather than a specific isomer. Lilly’s work was carried out between Balz and Miao, and was unaffected by a lack of knowledge of the stereochemistry of the daptomycin they were working with, so while the general understanding of the field changed over time, it was clear that the actual methods Lilly and Cubist used were effective without knowing the stereochemistry.

The final verdict was that all three Cubist patents were to be revoked. The 417 patent was entitled to its second priority date, but was deemed obvious in light of both Woodworth and Cubist’s own press release. The 179 patent was decided to lack inventive step over US 843, and claim 1 was also obvious in light of the general knowledge alone. The 047 patent lacked inventive step over Lin and Jiang.

Monday, 29 August 2016

Never Too Late: if you missed the IPKat last week

Did you miss the IPKat last week? Bring yourself bang up to date by browsing through the latest edition of Never Too Late (the 111th)

The branding and rebranding of infidelity


Kat readers may not recognize Avid Life Media, but they are (more) likely to be familiar with the website under which the company used to provide its services—Ashley Madison. Neil Wilkof reflects on how a brand can recover from disaster.

Do passive hosting providers commit acts of communication to the public in relation to third-party content? 

Eleonora considers this question in light of the Reha Training decision and the AG opinion in GS Media.

Is hosting providers' safe harbour the real problem of copyright owners? A new article

The Ecommerce Directive envisages 'safe harbours' that shield internet service providers (ISPs) from liability for third-party content that they transmit, cache or host. A proposal has been recently advanced in France advocating the removal – at the EU level – of the safe harbour protection for hosting providers that give access to copyright works. Eleonora considers whether this is a good plan.

SUPER-BREAKING NEWS: Leaked draft Impact Assessment shows that Commission intends to introduce new mandatory exceptions, address value gap and introduce related right for publishers

What does the EU Commission intend to propose when it releases its next copyright package next month? This is a question that has been haunting EU copyright enthusiasts (Eleonora Rosati among them) for a few months now. While we wait for the official documents, Statewatch has just leaked a draft version of the Commission Staff Working Document - Impact Assessment on the modernisation of EU copyright rules [here's the link].

Linking & Copyright rapid response event on 13 September: come join us!

Is linking to unlicensed content a potential infringement of copyright? Following the (controversial) decisions in Svensson and BestWater, we will know the answer on 8 September 2016, when the Court of Justice of the European Union (CJEU) issues its decision in GS Media, C-160/15. Come and join Elenora Rosati and other expert panellists at the London offices of Bristows to discuss the implications and enjoy some drinks and canapés. Tickets here.

Singapore Government launches public consultation on major copyright reform

Singapore is reforming its Copyright Act. Eleonora Rosati brings you the news that the government has launched a public consultation [open until 24 October 2016, 5 pm GMT+8] to seek feedback on the proposed changes. Those interested in answering the consultation can do so here.

PREVIOUSLY ON NEVER TOO LATE


Never too late 110 [week ending on Sunday 24 August] | Life after Cartier - the future of blocking injunctions Irish Court of Appeal ruling on Article 8(3) InfoSoc Directive | Wednesday Whimsies| Court fees - do you know what to pay? | Good news and bad news for bio-pharmaceutical patenting in the United States | HP? Hewlett Packard? The legacy of brands following a split |

Never too late 109 [week ending on Sunday 17 August] EPLAW mock trials | CJEU "flat rate" reimbursement of legal fees in C-57/15 | Transmission or retransmission? | Judgement in Actavis v ICOS | Collective management of copyright for images displayed by search engines | Corporates and #Rio2016 | Global branding


Never too late 108 [week ending on Sunday 10 August] Limerick Competition - the results | UK finally speaks out about the "facts" of IP post Brexit| Is "Deadwood really cluttering up trade mark registers? | Weekly roundup: Friday Fun 

Never too late 107 [week ending on Sunday 31 July] Article 28 declarations |Costs of ISP blocking injunctions |Friday Fantasies, featuring legal challenges to Brexit and  more |Huawei v Samsung |Hospira v Genentech |Questions on Article 3(b) SPC referred to CJEU |Book Review: Trade Secret Protection |Pokémon Go

Saturday, 27 August 2016

Do passive hosting providers commit acts of communication to the public in relation to third-party content?

Still on the leaked IA ...
This may not be just a good exam question for undergraduate IP law students [note to self: something for next year], but also lawyers and policy-makers currently discussing EU copyright reform.

As reported by this blog, earlier this week Statewatch leaked a draft version of the Commission Staff Working Document - Impact Assessment on the modernisation of EU copyright rules [it is however unclear whether the one leaked is the version currently being considered by the Commission].

The document is extremely interesting for various reasons. Among the things, the Commission addresses the problem of right holders facing great difficulties, or being unable, "
to negotiate with online service providers that store and give access to large amounts of protected content uploaded by their users. This results in right holders having limited control over the use and the remuneration for the use of their content." [p 124, the so called 'value gap'].

After describing the terms of the problem, the Commission notes [pp 128-129] the following:

"Under copyright law, right holders can exercise their right to authorize and exploit commercially the communication to the public of their works or other protected subject-matter, by the conclusion of licenses in return for payment of remuneration, if they so choose. When content is disseminated online, an act of communication to the public [within Article 3 of the InfoSoc Directive] takes place which may, depending on the circumstances, involve more than one actor. The Court of Justice of the European Union (CJEU) has not addressed the specific case of online services giving access to content uploaded by their users. With some exceptions, national case law is not very clear either as to who engages into an act of communication to the public when content is uploaded on a sharing website. As a result, a case by case assessment is needed for deciding who is communicating to the public."

Is this true however?

In my view [elaborated in this article], the current legislative framework - including at the CJEU level - already provides a response in this respect: passive [in the L'Oréal sense] hosting providers cannot be held primarily responsible for acts of communication to the public in relation to content provided by third parties and made available through their services.

Exercising at Reha Training
The Reha Training decision

With particularly regard to the right of communication to the public, this conclusion (applicable by analogy to other exclusive rights) appears supported by relevant CJEU case law, including the recent decision in Reha Training [here]

There the CJEU held that, in assessing the existence of an act of communication to the public, several criteria – each of which non-autonomous but rather interdependent in nature – should be taken into account. These criteria may come into consideration differently in different scenarios. This said, the concept of 'communication to the public' combines two cumulative elements: (1) an 'act of communication' that is (2) directed to a 'public'.

The first criterion, ie an ‘act of communication’, includes any transmission of a copyright work, irrespective of the medium used or the technical means employed. Each transmission or retransmission of a work that uses a specific technical means should be in principle individually authorised by the relevant rightholder.

Turning to the second criterion (that the communication at issue be directed to a ‘public’), the term 'public' refers to an indeterminate number of potential recipients, and also implies a fairly large number of people (ie above de minimis). In addition, to fall within the concept of 'communication to the public' a work must be directed to a 'new public", ie an audience that was not taken into account by the relevant rightholder when he authorised the initial communication of the work.In this context, it is necessary to take into consideration the indispensable role of the user without whom the ‘new public’ would not have access to the copyright work in question. More specifically,  

“in order for there to be a communication to the public, that user must, in full knowledge of the consequences of its actions, give access to the … protected work to an additional public and that it appears thereby that, in the absence of that intervention those ‘new’ viewers are unable to enjoy the … works”. [para 46]

Although to have an act of communication to the public several criteria should be considered, it appears that the indispensable role of the user may be a conditio sine qua non for Article 3(1) of the InfoSoc Directive to apply, at least in the interpretation of Article 3(1) recently provided by Advocate General (AG) Wathelet in GS Media [here].

GS Media: where it all started ...
The AG Opinion in GS Media

GS Media is a reference for a preliminary ruling from the Dutch Supreme Court, seeking clarification on whether linking to unlicensed content is to be regarded as an act of communication to the public. 

In his Opinion AG Wathelet reviewed the two relevant cumulative criteria under Article 3(1) of the InfoSoc Directive: (1) an ‘act of communication’ of a work, (2) directed to a ‘public’. In relation to the former in particular, according to the AG in order to establish an act of communication, “the intervention of the ‘hyperlinker’ must be vital or indispensable in order to benefit from or enjoy works.”

Hyperlinks posted on a website that direct to copyright works freely accessible on another website cannot be classified as an ‘act of communication’: the intervention of the operator of the website that posts the hyperlinks is not indispensable to the making available of the works in question to users. It is rather the intervention of the operator of the website that posts the protected works that is indispensable within Article 3(1) of the InfoSoc Directive.

Conclusion

Further to the decision in Reha Training and the AG Opinion in GS Media [yet, it is to be seen whether the CJEU agrees with AG ...], it is arguable that – in the case of a copyright work made available through the service of a passive online intermediary (host) – the latter would not commit an act of (unauthorised) communication to the public (potentially giving rise to primary liability for copyright infringement), because the role that is ‘indispensable’ in the whole process is the one of the third-party/uploader, rather than that of the hosting provider. 

A passive hosting provider does not do any of the acts restricted by copyright per se, nor does it usually authorise others to do so. 

This conclusion is in line with relevant case law at the level of individual Member States.

The situation would be different if: (i) the provider at hand authorised – contrary to current practices and content of most terms of service – users to upload and share content independently from whether these acts would infringe third-party rights; (ii) the provider was aware of the infringing nature of the content uploaded; or (iii) the provider played an ‘active role’ in the L’Oréal sense. These scenarios would however lead to situations similar to the ones envisaged – and sanctioned – by the current wording of Article 14 of the Ecommerce Directive.

***


For those interested, a more detailed discussion is presented in this article of mine. 

Friday, 26 August 2016

The branding and rebranding of infidelity


How far can rebranding take a company after it has experienced a serious challenge to its brand, especially when your branded service
is infidelity. If you are Avid Life Media, Inc., the answer may not be encouraging. Kat readers may not recognize Avid Life Media, but they are more likely to be familiar with the website under which the company used to provide its services—Ashley Madison. Under this brand, the company offered so-called infidelity dating services. Whatever one thinks about the service itself, all would likely agree that the success of the site rests both on discretion of information and the security of the data provided by its customers, and that the company adheres to acceptable standards of business practice. Call this customer credibility. Alas, this credibility has been shattered.

Accompanied by much media attention, Ashley Madison in 2015 suffered the embarrassment of hackers leaking information about 37,000,000 users to the public. After this occurred, there were reports that the site had maintained substandard data security, this despite the fact that the site contained trust marks, including an icon called “trusted security award” (since removed), attesting to the site’s high level of security. Public investigations have followed regarding the operation of the website. If this is not enough, it is reported that class action suits have been filed in the U.S. and Canada alleging that the site made use of computer programs, called “fembots”, to impersonate profiles of real women, presumably to encourage paid membership.

Against this backdrop Avid Life Media announced last month that it would engage in a wide-spread rebranding of the site and service. Start with the name itself. “Ashley Madison” is gone; in its place, the site will be known as “ruby”. As the company stated---
"Modern relationships are multi-faceted and that's why we chose ruby as our new name," says newly appointed President James Millership. "We like that ruby has a sensual, feminine quality, connotes value and fits with the fresh start our company is undergoing," he says.
Moreover, the company has replaced its tagline— “Life is short. Have an Affair”, with the slogan--“Find Your Moment”. As the CEO of the company, Rob Segal explains—
“[Life is Short. Have an Affair] … was a limiting label that's out-dated and doesn't speak to the wide variety of connections people find on Ashley Madison," says Segal. "Close to 45% of our members are single, over 50% are attached and they are interested in a wide range of experiences. While remaining true to our roots, Ashley Madison needs to evolve, grow and attune to modern sexuality in 2016," he says.
One can question just how far rebranding the name and tagline of the service and a pivot in the mission statement of the service can take Avid Life Media in light of the continuing legal and regulatory challenges, and the adverse publicity that it generates. While the circumstances are radically different, it is still worthwhile considering the well-known response by Johnson & Johnson to the commercial survival of the market-leader Tylenol brand in October 1982, in the face of the death of seven people in Chicago reportedly after having taken extra-strength Tylenol pain-killer. The cause of these deaths was the tampering by an unknown person, who put lethal quantities of cyanide into the capsules. The immediate impact as reported was that the market share of Tylenol dropped from 37% to only 7%. The company was faced with how to react to this tragedy without doing permanent harm to both the product and the company brand itself. The steps it took included the following:

1. Immediate recall of the Tylenol product from the shelves.

2. Formulate a strategy to re-introduce the product to the market, under the same product name, to seek and recover consumer confidence by--
(i) Providing for triple-seal tamper resistant packaging (being the first company to do so).

(ii) Offering an easily obtained $2.50 off coupon on the purchase of the product.

(iii) Introduce a new program to provide discounted pricing.

(iv) Send thousands of sales personnel to meet with the medical community.

(v) Be credible in conveying the message that the company’s first duty was to maintain the safety of the public in connection with the company’s products.
The lessons of the J&J Tylenol story have been studied and applied many times, sometimes successfully and sometimes less so. The ultimate
test is whether the company has regained its credibility in the eyes of the consumer. Changing, or maintaining, one’s brand name; changing, or maintaining, one’s mission statement, may help in blunting the negative connotations associated with the company, after a crisis has occurred, but they are not direct instruments for regaining consumer confidence. How ruby/Avid Life Media deals with the more existential elements of reestablishing customer confidence has just begun.

Is hosting providers' safe harbour the real problem of copyright owners? A new article

Finding a safe harbour?
A mission that can wait
The Ecommerce Directive envisages a number of immunities (known as safe harbours) that shield internet service providers (ISPs) from liability for third-party content that they transmit, cache or host.

In the context of its Digital Single Market Strategy [Katposts here] the EU Commission is currently engaged in a discussion of whether the liability principles and rules contained in that EU directive for the benefit of ISPs should be amended [the next EU copyright package is awaited for release in the second half of September - see here for a leaked version].

With specific regard to copyright, one of the principal concerns relates to a particular type of ISP, ie hosting providers. 

Unlicensed hosting providers have been increasingly said to invoke the relevant safe harbour immunity in the EU Ecommerce Directive [Article 14] lacking the conditions for its application. This alleged abuse has led to a distortion of the online marketplace and the resulting 'value gap' indicated by some rightholders.

A proposal has been recently advanced in France advocating the removal – at the EU level – of the safe harbour protection for hosting providers that give access to copyright works. This would be necessary to enable the effective enforcement of copyright and related rights in the digital environment, particularly on platforms that disseminate protected content. In particular, the French document considers that the Court of Justice of the European Union (CJEU) has erred in its interpretation and application of relevant principles of online intermediary liability.

I have recently completed a new article [just released as a CREATe Working Paper and due for publication in the European Intellectual Property Review], in which I address some of the points raised by the French proposal. 

My main conclusions are that:
  • Contrary to the view of the French document, the CJEU has correctly applied relevant provisions in the Ecommerce Directive;
  • The removal of the immunity in Article 14 of the Ecommerce Directive for hosting providers that give access to copyright works would not provide rightholders with significantly greater protection than the one already enjoyed under the existing legislative framework, at least as far as their primarily liability is concerned. This is also because the current understanding of the right of communication to the public within Article 3 of the InfoSoc Directive does not seem to suggest that intermediaries otherwise protected by the Article 14 safe harbour could be held primarily liable for the doing of unauthorised acts of communication to the public.
Overall, the current framework already sets an adequate degree of protection: what is required is a rigorous application by national courts of the principles enshrined in the Ecommerce Directive, as interpreted by the CJEU.

Readers' feedback and views are very welcome! My piece is available here.

Thursday, 25 August 2016

SUPER-BREAKING NEWS: Leaked draft Impact Assessment shows that Commission intends to introduce new mandatory exceptions, address value gap and introduce related right for publishers

Brussels correspondent:
Mystery Kat
What does the EU Commission intend to propose when it releases its next copyright package next month?

This is a question that has been haunting EU copyright enthusiasts for a few months now. 

While we wait for the official documents, Statewatch has just leaked a draft version of the Commission Staff Working Document - Impact Assessment on the modernisation of EU copyright rules [here's the link].

While this draft document is composed of nearly 200 pages and IT IS UNCLEAR WHETHER IT IS THE VERSION CURRENTLY BEING CONSIDERED BY THE COMMISSION, these - in a nutshell - are the possible future moves of the Commission:

Access to content

Ensuring wider access to online transmissions of broadcasting organisations by applying country of origin rule to the clearing of rights for broadcasters' online services ancillary to their initial broadcast [this is not surprising: I had suggested something along these lines a while ago].

Exceptions

Introducing three new mandatory [!] exceptions: 
  1. an exception with a cross-border effect covering digital and online uses in the context of illustration for teaching, with the option for Member States to make this (partially or totally) subject to the availability of licences; 
  2. an exception for text and data mining applicable to public interest research organisations covering text and data mining for the purposes of both non-commercial and commercial scientific research; 
  3. an exception for preservation purposes by cultural heritage institutions.
Value gap

In relation to online services storing and giving access to user uploaded content, imposing an obligation on them to seek, in good faith, to conclude agreements with right holders for the use of their content and to put in place appropriate and proportionate measures, in cooperation with right holders, to avoid unauthorized content in their services.


Rights in publications

Introducing in EU law a related right covering online uses of news publications and introducing the possibility for Member States to provide that publishers may claim compensation for uses under an exception.

***

A more detailed analysis will follow soon [see here for an early response]: stay tuned!

Linking & Copyright rapid response event on 13 September: come join us!

Where it all started ...
Is linking to unlicensed content a potential infringement of copyright? 

Following the (controversial) decisions in Svensson [here and here] and BestWater [see here for my table summarising the current state of the art], we will know the answer on 8 September 2016, when the Court of Justice of the European Union (CJEU) issues its much-awaited decision in GS Media, C-160/15

This is a reference for a preliminary ruling from the Dutch Supreme Court. It was made in the context of proceedings between Sanoma (the publisher of Playboy magazine) and GS Media, concerning the publication by the latter on a website that it operates (GeenSijl) of hyperlinks to other websites hosting unpublished photographs taken for a forthcoming issue of Playboy.

Litigation ensued before Dutch courts and eventually the Supreme Court decided to make a reference for a preliminary ruling to the CJEU, asking whether the provision of a hyperlink to a work made available on a certain website without the initial consent of the relevant rightholder and where it is freely accessible is to be regarded as an act of communication to the public.

Not to miss a second:
already on the move to the event venue
In his Opinion on 7 April 2016, Advocate General (AG) Wathelet answered in the negative, also holding that it is not important whether the person who posts on a website a hyperlink to another website on which copyright works are freely accessible to the public is or ought to be aware that the relevant rightholder has not authorised the initial communication. More generally, the AG suggested that linking should not fall within the scope of copyright protection.

***

The IPKat is partnering with Bristows for a free rapid response event to be held on Tuesday 13 September at the London offices of Bristows.

Come join us and a panel of experts, to discuss the impact of the judgment on EU and UK copyright laws!

Here's the programme:  
  • 5:30 Registration
  • 6:00 Panel discussion
  • 7:30 Drinks and canapés
This rapid response event will provide a forum in which to discuss the implications of this important decision. The format will be that of an informal panel discussion, in which panelists and attendees alike will share their views.

Moderated by Mark Brown (Bristows), the panel will feature Eleonora Rosati (University of Southampton and IPKat), Nicholas Saunders (Brick Court Chambers), and Theo Savvides (Bristows).

Click here to register! 

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