Indexing Free-for-All - US District Court Issues Injunction against Canadian Supreme Court De-indexing Order

After the decision in the Canadian Supreme court in the Equustek case, many, including this writer, raised concerns about the possible abuse of the precedent set by the case. The de-indexing of online content, while well-intentioned in the removal of infringing content, could still be used as a sword more than a shield against legitimate infringement, including against free speech. This writer for one awaited the first application of the case, particularly in a jurisdiction that leans more towards free speech, and seems like the wish has been granted by the District Court of the Northern District of California only a few weeks ago.

The case of Google LLC v Equustek Solutions Inc. concerns the same subject matter as the Canadian case. In short, Equustek sued Google seeking to force Google to block websites selling infringing goods all over the world, not just in Canada where Google had blocked the websites selling the goods. The Supreme Court of Canada ultimately issued the order, and forced Google to block access to the websites all over the world.

Google challenged this ruling in the United States, arguing that the order conflicts with the First Amendment right to free speech, and disregards the Communication Decency Act, which affords immunity to interactive service providers.

Justice Davila first looked at the CDA, which affords immunity from claims to "…providers of interactive computer services against liability arising from content created by third parties". This means that should another publisher, using these services, publish infringing content Google couldn't be sued for that infringement. Even so, to qualify for immunity three criteria need to be satisfied: (1) the company is a "provider or user of an interactive computer service"; (2) the information in question was "provided by another information content provider"; and (3) the Canadian order would hold it liable as the "publisher or speaker" of that information.

Looking at the first criterion, Justice Davila concluded that Google was a 'provider of interactive computer services'. This means that the company provides "…any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server", which encompasses Google's search facility, among other services.

As the content, i.e. the website and the information contained in it (including the infringing goods for sale), was provided by Datalink and not Google, the second criteria was also easily fulfilled. The provision of Google's search facility relies on the company 'crawling' websites on the Internet, which it then indexes and makes available through search results. This allows for users to discover the content, which Google does not post, clearly being provided by 'another information content provider'.

The First Amendment - the best kind of pop-up

Finally, the third criterion looks at whether Google would be held liable for the content provided by another under the order made by the Canadian Supreme Court as the 'publisher or speaker' of that content. According to the order Google has to "…de-index the Datalink websites [from its global search results]… [because it is] the determinative player in allowing the harm to occur".

Per the decision in Barnes v Yahoo!, "…removing content is something publishers do, and to impose liability on the basis of such conduct necessarily involves treating the liable party as a publisher of the content it failed to remove". This liability as a third party for the non-removal of content, should Google not do so when ordered, clearly treats Google as the publisher of that content rather than a mere intermediary with no liability.

Justice Davila therefore considered that Google was immune from the claim under the CDA.

The Court then turned to the question of free speech and irreparable harm. Justice Davila swiftly determined that the Canadian order restricts Google's activity protected by the CDA, and deprives of it of benefits given by US federal law. Similarly an injunction wouldn't serve the public interest, as free speech would be restricted if websites "…were to face tort liability for hosting user-generated content". This has been particularly legislated against through the CDA. As the Internet and other interactive computer services "…offer a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity", the legislature deemed it required protecting for that purpose to flourish.

Justice Davila issued the injunction against the Canadian order as it "…undermines the policy goals of [the CDA] and threatens free speech on the global internet".

The decision is a very interesting one, and strongly advocates for the protection of the Internet from blanket orders requiring the removal of content globally. This writer is very much a proponent of this approach, as, amongst its faults, the Internet is a bastion of freedom and dissemination of information (including this blog as a very example of that). Infringements should be dealt with appropriately, but blanket de-indexing orders might not be the best way; however, with this in mind, third-party service providers do have to take some responsibility on the removal of content when needed.

Indistinct Taxi Service - London Taxi Design not Distinctive, says UK Court of Appeal

Shape trademarks have always been a difficult issue for the courts. The balancing act of trying to protect the general shape of something while being distinctive to get protection is a difficult line to tread, as the recent Kit Kat cases have shown among other decisions. One such saga that is currently being waged is over the design of the London black taxi, which many, this writer included, have used on a regular basis in the city. After a defeat at first instance, The London Taxi Company pursued the matter further into the Court of Appeal, who rendered their decision very recently.

The case of The London Taxi Corporation Ltd (t/a the London Taxi Company) v Frazer-Nash Research Ltd dealt with, as mentioned above, EU and UK trademarks over the design of the London black taxi (EUTM 951871 and UKTM 2440659). Frazer-Nash Research, a vehicle research and design company, designed and were ready to launch a new London taxi called the Metrocab (a hybrid electric car). In anticipation of infringement, LTC sued FNR for trademark infringement and passing off.

The Court had to look at 8 different points of appeal focusing on the validity of the trademarks and infringement of the trademarks if deemed valid.

The first point dealt with the definition of the average consumer in the case, particularly whether it would be the taxi driver who purchases the taxi or the same together with members of the public who hire taxis. Having extensively considered case law on the definition of 'average consumer', Lord Justice Floyd saw that the 'average consumer' is "…any class of consumer to whom the guarantee of origin is directed and who would be likely to rely on it". It followed from this that the 'average consumer' could include both the purchaser and the hirer of the services, but the Court didn't make a full decision on this point.

The second point dealt with the trademarks' inherent or acquired distinctive character.

In terms of inherent distinctive character, Lord Justice Floyd observed that the test for assessing distinctiveness for 3D trademarks, as set in Freixenet, is whether "…the appearance of the product itself [is] no different from those applicable to other categories of trade mark". Additionally, the trademark has to depart significantly from the norm of the customs of the sector would have distinctive character. Lord Justice Floyd then set out his test for determining whether a mark departs significantly from the norms and customs of the sector (1) determine what the sector is; (2) identify common norms and customs, if any, of that sector; and (3) whether the mark departs significantly from those norms and customs. Following this test, Lord Justice Floyd determined that the trademarks didn't have inherent distinctive character, since none of the features in the design registered were a significant departure from features in other taxis in the sector.

Therefore, the only way for the trademarks to have distinctive character is for them to have acquired it through use. As set in the recent Court of Appeal judgment in Nestle (see more in the link above), the test for acquired distinctiveness is that "…the mark must have come to identify the relevant goods as originating from a particular undertaking and so to distinguish those goods from those of other undertakings". In other words, the London Taxi Company's taxis would have to be distinguishable from other taxis through their design.

Blake loved the design of his taxi a little too much

Following the decision of Justice Arnold at first instance, Lord Justice Floyd decided that the trademarks had not acquired distinctive character among taxi drivers, and that consumers were not concerned with the origin of the taxis they hired and therefore the trademarks wouldn't have acquired distinctive character in the mind of the average consumer. Lord Justice Floyd ultimately considered the marks to be invalid, but still went through the other points of appeal for the sake of clarity.

The third point is whether the shape of the mark gives substantial value to the goods, exclusive of any goodwill in the shape. Lord Justice Floyd found the guidance on this point unclear, and would have referred the matter to the CJEU if this point would still have been relevant.

The fourth point was revocation for a lack of use of the EUTM. If the mark hasn't been used in five years within the EU, the trademark is revoked. The only activity that LTC had undertaken in the EU in relation to the marks was to sell them second-hand, as production had ceased some time ago (the EUTM model was an older model of the taxi). Lord Justice Floyd, in his hypothetical answer, saw that the mark had been used in the EU, although only through the later models that were sold.

The fifth and sixth points dealt with infringement of the trademarks under Article 9(1)(b) and 5(1)(b), and Articles 9(1)(c) and 5(2). As the Metrocab and the trademark designs differed significantly, there would likely be no infringement on the marks under the former two Articles, according to Lord Justice Floyd. With regards to the latter two, there could be infringement, had distinctive character been established in the marks, as the Metrocab would've caused detriment to the trademarks' distinctiveness.

The seventh point concerned a defence of using an EUTM as an indication of, among others, quality, quantity and geographical origin. As set in Maier v ASOS, the legitimacy of the use is considered looking at "…whether there exists a likelihood of confusion; whether the trade mark has a reputation; whether the use of the sign complained of takes advantage of or is detrimental to the distinctive character or repute of the trade mark; and whether the possibility of conflict was something which the defendant was thought to have been aware".

Having considered the matter briefly, Lord Justice Floyd accepted LTC's assertion that there would be no defence of legitimate use, as the rights of a trademark holder should not be trumped by the conveying of a message that the vehicle is a licenced London taxi. This would be possible to be displayed otherwise, without infringement (although none happened in the matter).

Finally, the Court looked at the point of passing off. Lord Justice Floyd swiftly dismissed the claim of passing off, as, similarly to acquired distinctiveness above, LTC would struggle to prove goodwill in the design of the trademark. Even so, the design of the Metrocab is very different to LTC's design, and therefore wouldn't infringe even if goodwill were present in the case. The Court ultimately dismissed the appeal.

The case is yet another painful reminder of the difficulty in registering and particularly maintaining 3D trademarks. Distinctiveness is the hurdle most fall on, and the LTC taxi was no different. LTC have indicated that they might appeal to the Supreme Court, so the fight over taxis might not be over just yet.

Database Error - UK High Court Takes on Copyright Infringement of Cloud Databases

Databases are a curious creature within the world of IP, existing on the fringes of protectability, at least when considering from the perspective of originality. Specific rights attach to databases outside of mere copyright protection, and the remit of those rights has been debated by the courts for some time. Since the advent of cloud computing, database rights in purely 'cloud-based' technologies haven't been debated much in the courts, and the question therefore arises: do you have database rights in a cloud database? The High Court took on this issue in a recent decision handed down in late August 2017.

The case of Technomed Ltd v Bluecrest Health Screening Ltd concerned electrocardiograms and the analysis of the data created through the ECG measurements. An ECG measures the movement of electricity through a patient's heart, giving details of its health to varying degrees based on the ECG technology used. Technomed supplied ECG equipment, systems and services, including an online ECG analysis and reporting system called "ECG Cloud". The platform allows for ECG information to be analysed externally (the information itself is reviewed remotely by a qualified cardiologist) when taking the readings, offering a simplified analysis using three colors to indicate the heart's health status. The analysis is done using resources in Technomed's database, including characteristics of ECG readings and their associated issues. Technomed licenced its technology to Bluecrest, and after a relationship breakdown proceedings were initiated to protect the rights in the database and its reporting format, which were passed onto a competitor (the second Defendant in the case) by Bluecrest.

The crux of the case revolved around sui generis rights in the database (protection of the money, time and effort put into the database, rather than), copyright in the database, copyright in the reporting software that produces the results from ECG Cloud in XML format, and copyright in various other peripheral elements of the system, e.g. images and explanatory materials.

After assessing the decision of Fixtures Marketing Limited v OPAP, Deputy Judge Stone concluded that Technomed's database was a database as defined under the Database Directive, meaning "…a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means". Even so, Technomed still had to establish a sui generis right in that database.

Sui generis rights are afforded to a database under the Directive, in essence, when the maker shows substantial investment in obtaining, verifying and presenting the data in the database, derived from pre-existing information. The Court quickly determined that there had been substantial investment in the above by Technomed (taking hundreds of hours to do so), affording them a sui generis right in the database.

Infringement of sui generis rights in databases falls under the Directive as well, happening when the data is 'extracted' and 're-utilized' by another party. As Bluecrest had extracted the whole database, which was then provided to the competitor, it infringed Technomed's right in the database. Additionally, should a party repeatedly and systematically reproduce the database, it will also infringe on the sui generis rights afforded. Bluecrest repeatedly produced the XML reports from the database, prejudicing Technomed's legitimate interests in the database until the reports were updated to no longer infringe in 2016.

Even databases have feelings

The Court then moved onto the matter of copyright in the database under section 3A of the Copyright, Designs and Patents Act 1988. As both parties agreed that the assessment for copyright protection is the same as for the sui generis right (as set in Football Dataco v Brittens), Judge Stone quickly concluded that the database had copyright in it. Similarly, as the sui generis right was infringed, the copyright in the database was also infringed. While he didn't need to address the alternate pleading in infringement of a literary work in the database, Judge Stone nonetheless concluded that the database was a literary work (a PDF copy of it) and that it was infringed by Bluecrest by copying the same.

Judge Stone then moved onto the other works, including the XML report format. For them to qualify as protected works, the works will have to be the "…author's own intellectual creation". Even though no rights were claimed in the XML format itself, the reports did, as agreed by Judge Stone, contain the personal stamp of its authors, and was protected by copyright. As Bluecrest had the report format copied by a competitor, it clearly was infringed as well.

The Court also decided that further documents, such as explanatory materials and patient definitions were also protected by copyright, but only the explanatory materials were infringed, as the patient definitions were only used as a starting point to create new definitions by the defendants.

Bluecrest did combat the infringement claims through an argument against causation, i.e. that they didn't cause any damage to Technomed through their alleged infringement. Judge Stone dismissed this out of hand, as through the clear infringement detailed above there would have been loss caused to Technomed.

Judge Stone concluded that all of the rights in the works had been infringed, but there would be no continuing threat of infringement.

While the case is by no means a landmark one, it is still a continuing reminder in database rights and their infringement, including copyright and sui generis rights. This writer always seems to forget about the strength of these rights, particularly as databases don't come across ones desk too often, so the case was an interesting and refreshing read.