All Checked Out - CJEU Decides on e-Lending of Books by Libraries

As previously discussed on this very blog, the issue of e-lending has come up in the European courts recently, specifically relating to whether it is allowed under EU law. While one would think the question is quite straight-forward, especially when specific restrictions have been put in place to prevent any abuse, the matter isn't necessarily answered in one word. Advocate General Szpunar handed down his opinion during the Summer, with many awaiting the ultimate decision of the CJEU; however, the wait is now over, and the Court has handed down its judgment on the future of e-lending a couple of weeks ago.

By way of a brief exposition for those who have not read the previous article above, the case of Vereniging Openbare Bibliotheken v Stichting Leenrecht dealt with the lending of electronic copies of books by libraries in the Netherlands, and the remuneration of collection societies in the country for those activities (given for the lending of physical books). Per government policy, e-lending did not fall under the legislation entitling the authors to be remunerated for the lending of their works, but this was disputed by Stichting Leenrecht, ultimately ending up in the CJEU.

The Court dealt with each question posed by Stichting Leenrecht in turn.

The first question posed, as summarized by the Court, asked "...whether Article 1(1), Article 2(1)(b) and Article 6(1) of Directive 2006/115 [Lending Right Directive] must be interpreted as meaning that the concept of ‘lending’, within the meaning of those provisions, covers the lending of a digital copy of a book".

The Court looked at whether the legislation would cover both electronic copies of books, and the concept of 'lending' could apply to the same. They concluded that, after considering all the applicable authorities, that "...intangible objects and non-fixed copies, such as digital copies, must be excluded from the rental right, governed by Directive 2006/115, so as not to be in breach of the agreed statement annexed to the WIPO Treaty, neither that treaty nor that agreed statement preclude the concept of ‘lending’, within the meaning of that directive, from being interpreted, where appropriate, as also including certain lending carried out digitally". The Lending Right Directive expressly applied to physical books, and thus excluded electronic copies of the same; however, the concept of lending under Article 2(1)(a) of the Directive applied to a more abstract, open interpretation of rights (rather than a right, potentially restricting it to only one form), allowing for the inclusion of digital copies as well as their physical counterparts.

This applies to considerations that the Directive should adapt to "...new economic developments such as new forms of exploitation", and clearly the exclusion of any future forms of media would be short-sighted and undesired, and would limit the protection offered to authors through copyright. The Court also considered the derogation from the rights afforded in the Directive by Member States, and concluded that it could potentially apply in order to protect the public interests underlying the lending of books through libraries.

Also the library of the future?

The Court summarized their findings in relation to question one as "...[the texts of the Articles above] must be interpreted as meaning that the concept of ‘lending’, within the meaning of those provisions, covers the lending of a digital copy of a book, where that lending is carried out by placing that copy on the server of a public library and allowing a user to reproduce that copy by downloading it onto his own computer, bearing in mind that only one copy may be downloaded during the lending period and that, after that period has expired, the downloaded copy can no longer be used by that user". The restrictions set a clear dividing line between lending and selling and/or distribution of the content, since this makes it very much akin to that of lending a physical book.

They then moved onto the second question dealt with the possibility of derogating under Article 6(1) of the Directive, and subjecting it to the condition that the digital copy of a book made available by the public library must have been put into circulation by a first sale or other transfer of ownership of that copy in the European Union by the holder of the right of distribution to the public or with his consent. Quickly dealing with the second question, the Court saw that Article 6 did not preclude Member States from making the application of the provision subject to the above condition, since the condition would reduce the risks of prejudicing the authors of those works.

This was followed by the third question, which asked whether Article 6 precludes "...the public lending exception laid down [in Article 6(1)] from applying to the making available by a public library of a digital copy of a book in the case where that copy was obtained from an unlawful source". Even though the Article is quiet on the legitimacy of the sources of those works, the Court dismissed the possibility, as this would "...amount to tolerating, or even encouraging, the circulation of counterfeit or pirated works and would therefore clearly run counter to [the] objective". This makes perfect sense, since the allowance of the use of illegal copies would be tantamount to legalising copyright infringement, at least in cases such as this. Article 6 therefore was seen to preclude the above possibility.

The Court deemed the fourth question to not require an answer.

The case is a very positive step towards accepting and embracing technological change, whether it is in the context of libraries or the use of digital content as a whole. The decision also leaves quite a bit of wiggle room for Member States to implement the Lending Right Directive, which allows for a more nuanced control of copyright protected works in e-lending.

Source: IPKat

A New Era - What Does the Donald Trump Presidency Potentially Mean for IP?

Now that the dust has settled in the long and arduous process that is the American presidential race, it is time to look ahead to the future and the possible implications of the Donald Trump presidency. While it can be appreciated that the next 4 (or even 8) years will be ones of change one way or the other, this writer is not concerned with the wider implications, but only of those impacting intellectual property law. The 45th president's particular focus on this area of law still remains very murky; however, his position has been stated in some amount of press and campaign materials, which will form a basis for this discussion.

In his own policy manifesto for his campaign, Mr Trump set out that he will "...use every lawful presidential power to remedy trade disputes if China does not stop its illegal activities, including its theft of American trade secrets - including the application of tariffs consistent with Section 201 and 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962". Clearly his approach echoes largely a trade-based plan, rather than the change of laws and regulations surrounding IP in the United States. Arguably, these are quite strong deterrents for the infringement of intellectual property rights in China, but these measures have had little effect before due to the massive presence of Chinese manufacturing in the world stage (although the country has taken significant steps forward to better enforce IP rights). Recent changes to the Chinese IP law landscape have possibly mitigated the current issues highlighted by the Trump campaign, but this will undoubtedly not deter him should the president want to go after China in a more direct fashion.

Aside from legislative or policy changes, his 100 day plan encompasses withdrawal from the Trans-Pacific Partnership and the renegotiation of bilateral trade agreements, many of which will touch on IP in one way or another. This will have drastic effects on US trade relations, but the implications for IP will be minimal.

The face of an uncertain future for IP

Some have argued that, per his close ties to the entertainment industry, that copyright regulations would be tightened and copyright enforcement made stricter, with higher sentencing and easier claims by rightsholders (in this writer's thinking anyway). Similarly, his position on copyright might impact the regulation of the Internet, with broad-ranging implications should it be used as a weapon to combat against those who infringe copyright online. Overall Donald Trump has been quite quiet in his views on intellectual property and what his concrete plans are during his presidency.

This can be compared with Hillary Clinton's Initiative on Technology & Innovation, which set out a myriad of action points in this sphere, but specifically targeted copyright as a sub-point. In her initiative she set out to "...modernize the copyright system through reforms that facilitate access to out-of-print and orphan works, while protecting the innovation incentives in the system.  It should also promote open-licensing arrangements for copyrighted material supported by federal grant funding". Her plan seemed to focus more on accessibility than enforcement, but echoes vagueness, as expected in a political campaign. Similarly, she aimed to take on patents with "...reforms to the patent system to reduce excessive patent litigation and strengthen the capacity of the Patent and Trademark Office". Clearly this was to reduce frivolous patent litigation by patent trolls, but more particular reforms were left to be sorted if she were ultimately elected. Mrs Clinton was overall much more up-front with her plans and vision for IP, but even so it left much to decipher as to what might actually happen, rather than what might.

As one can appreciate the future developments of this coming presidency are unknown, and while candidates often give indications as to their stances or policy intentions, these don't necessarily stick once they reach the Oval Office. This writer will remain optimistic, but does wonder whether a more pro-rightsholder position will become the norm, with a clear reduction in fair use and other legitimate uses of copyright materials, especially in an online environment. Odds are the trajectory that IP legislation was already headed will most likely remain the same irrespective of who the president is, as a swooping overhaul of this would lead to too much uncertainty and possibly a negative impact in IP and innovation as a whole (with the rapid pace of technological development making things even worse if not kept up with). While the media has calmed down after the election, it will surely be quite the next 4 years to come.

Ringing Hollow - Ringtone Trademark Rejected by EU General Court

Since the introduction of the new Trade Mark Regulation No 2015/2424, this writer for one has been awaiting the inevitable landslide of unusual trademark registrations, particularly for sounds and even smells. While this rush has yet to materialize, some attempts have been made, and quite recently one of those applications ended up in the EU General Court. This writer laments his lateness in relation to this case; however, it is interesting enough to have to be discussed even a month or two after the fact.

The case of Globo Comunicação e Participações S/A v EUIPO concerned the registration of a mobile phone ringtone by Globo for goods and services in classes 9, 16, 38 and 41, covering a wide array of tangible and intangible goods (the musical notation for the sound can be viewed here). The mark was rejected by both the Examiner and the Board of Appeal for a lack of distinctive character under Article Article 7(1)(b) of the old Trade Mark Regulation No 207/2009. The matter was subsequently appealed to the General Court, who handed down their judgment in mid-September.

The first matter dealt with by the General Court was a simple procedural point, where Globo argued that no reasons were given by the Board of Appeal as to why the mark was rejected under Article 7(1)(b). While the Court acknowledged that the Board of Appeal does have a requirement to state their reasons for rejecting a mark, this was not omitted in the case at hand, as the reasons issued (namely on the banality of the sign with regard to the relevant goods or services) and their correlation with the classes was clearly given, even if regarding all of the classes of goods as a whole. A single conclusion did not result in reasons only being given to one class, but all classes summarily.

The Court then moved onto the meat of the matter, namely whether the mark infringed Article 7(1)(b) through a lack of distinctive character. Globo argued that, contrary to previous findings, the brevity or the simplicity of the sound in question should not impact the assessment of its distinctive character. 

Some combinations of notes are a little less simple

As with 'traditional' marks, the assessment of distinctive character is based on the goods or services in respect of which registration of the mark is sought and to the relevant public’s perception of that mark. While this is much more straightforward in word or image marks, as observed by the Court: "...although the public is used to perceiving word or figurative marks as signs which identify the commercial origin of goods and services, the same is not necessarily true when the sign consists solely of a sound element". Arguably it is much more difficult to build an association with a sound, but a good example of a an arguable successful campaign to do so is the whistle adopted by McDonald's in their TV advertising.

The unfamiliarity of peoples' perceptions on sound marks is also added to by the classes of goods or services the mark is registered for. The use of sound marks in TV, for example, would lead to a much higher likelihood of consumer identification and association, while physical media does not lend itself to this perception. The Court explained that "...as regards certain goods and services linked, in particular, first, to tools for communicating or entertaining by means of television broadcasting or radio broadcasting and to telephony and, secondly, to IT media, computer software or to the media sector in general, sound elements, such as jingles or melodies, are used in order to enable the product or service at issue to be identified aurally as coming from a particular undertaking". Consumers would therefore have to perceive the sound as indicating a particular brand of goods or services via these mediums.

The Court found that, a sound that only consists of merely a banal combination of notes would not be perceived as referring to any particular brand, as it would cause a 'mirror effect', meaning it only refers back to itself. Following this, the General Court considered whether the sound in the mark in question would be distinctive, and found that it isn't, as the simple two note combination would only "...be perceived by the relevant public only as a mere function of the goods and services covered and not as an indication of their commercial origin". This was further exasperated by the excessive simplicity (only sounding like an alarm or a telephone ringing) and only therefore refers to itself, rather than the goods or services in was applied for. The Court concluded that the Board of Appeal did not err in their findings and dismissed the appeal.

The case shows the difficulty in the registration of simple sound marks, especially ones that are not 'jingle-like', i.e. serve as a longer, more distinctive part of a product or show for example. It will be interesting to see how the change in the requiremet of graphical representation changes things; however, as the sound was played in court, it seems unlikely that the addition of a playable example would sway the pendulum the other way.

Source: Ars Technica

Before the Supreme Court - Copyright Protection of the Design of Uniforms in the US Court of Appeal

In the light of the pending US Supreme Court decision regarding copyright protection in the design of cheerleaders' uniforms, this writer thought it would be good to set the scene for the decision by discussing the decision handed down by the Court of Appeal. The judiciary rarely takes on design copyright cases, as often their value is negligible or protection is not even sought (especially in the US where copyright registration is an important part of IP).

The case of Varsity Brands Inc. v Star Athletica LLC dealt with the design of a cheerleader uniform, comprising of several different designs, incorporating various colors that divide the uniform into specific shapes and segments (visible here). The designs themselves were of non-functional nature, and were only intended to be of aesthetic value. The original works were produced and sold by Varsity Brands, who noticed that a competitor, Star Athletica, also sold similar outfits in competition with Varsity's uniforms, and took the company to court for copyright infringement and a number of other civil claims in competition.

The Court of Appeal first took on the issue of whether Star Athletica has infringed Varsity Brands' copyright in the uniforms; the designs for which have been successfully registered at the US Copyright Office. After lengthy discussions, the Court did agree that successful registration at the Copyright Office could offer prima facie, although rebuttable, protection and acceptance of copyright in a given work. Star Athletica did, however, argue that the designs were in themselves useful article, and thus not protectable by copyright. The designs therefore would need to be "…identified separately from, and are capable of existing independently of, the utilitarian aspects of the article" for copyright protection to be afforded.

What amounts to a useful article is an article that has a utilitarian function that is not there merely to convey the appearance of the article (i.e. for aesthetic reasons). Following the above, the Court established that this would be determined by a two-prong test: "…first, whether the design for which the author seeks copyright protection is a 'design of a useful article,' and if so, second, whether the design of the useful article 'incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the [useful] article'".

Alan's Halloween outfit was totally non-functional

The Court then turned to the first prong of the test on separability, meaning that the article would not be a useful one, but only conveys the items appearance.  As illustrated by the Court's discussion, both appellate and first instance courts have struggled to formulate a concise and uniform approach in determining what would amount to a 'useful article'. The Court moved on to applying what they considered to be the correct approach, which would be applying a number of questions based on the Copyright Act itself. These questions are effectively to ask whether the design is "…a pictorial, graphic, or sculptural work", and if so, whether the design is a useful article within the definition above. The Court would then have to ask "…[w]hat are the utilitarian aspects of the useful article", which can include several aspects (for example, aesthetic, functional and non-functional elements).

Once the Court has identified the relevant utilitarian aspects of the design, it would then finally move onto assessing whether "…the viewer of the design [can] identify pictorial, graphic, or sculptural features separately from... the utilitarian aspects of the useful article", and if these features could exist separately from the design itself (i.e. are removable from the design and don't impact its functionality). If either one, or both, of the final questions fails, the design is not protected by copyright.

The Court subsequently moved onto its consideration of the copyright protection for Varsity Brands' designs. They quickly answered the first two questions in the affirmative, expanding on the second question that the designs, represented in sketches of the uniforms, have an "intrinsic utilitarian function that is not merely to portray the appearance of [clothing] or to convey information". They then set out the particular utilitarian aspects of the designs, which were to "cover the body, wick away moisture, and withstand the rigors of athletic movements". The Court rejected Star Athletica's assertion that the uniforms, through a decorative function, would not be copyrightable, as, rightfully so, this would cause artworks and other similar works to not be protected by copyright by virtue of their decorative function

Finally, the Court sought to answer the final two questions. In determining the separability of the pictorial, graphic or sculptural features (particularly the arrangement of stripes, chevrons, zigzags, and color-blocking), the Court saw that they could indeed be separated, as they do not enhance the uniform's functionality, and the uniforms remain fully identifiable even in the absence of this stylisation due to its distinctive shape. Additionally, purchasers would be able to distinguish each style from each other, and choose accordingly, making the designs separate and individual and therefore protectable. Even so, would they still exist independently of the utilitarian aspects of the uniforms, even if separable? The Court said yes, as the features could be incorporated into a number of garment styles, even if they are not meant for cheerleaders (meaning the designs are transferable), and do not affect the uniform's functionality for those purposes even if used or not. Following the answers to the questions the Court ultimately determined that the designs were copyrightable.

The Court distinguished this from the design of a dress, which, through its shape rather than a mere graphical addition adorning its surface, as its shape, cut and other features are "…inextricably connected with the utilitarian aspects of clothing" and thus can't be identified separately. This illustrates the difference in protectability for fabric designs and dress designs.

As is clear the US courts desperately need a unifying precedent to determine what the correct test is in relation to useful articles and the extent of copyright protection thereof. The Supreme Court's decision is still forthcoming, and this writer will be curious to see whether they follow the Court of Appeal's test, or formulate a different one entirely.