Wednesday, 30 September 2015

JIPLP 10th Anniversary event: registration now open

On Sunday this weblog announced the date of a special symposium to mark the 10th Anniversary of the launch of JIPLP -- 26 November -- and asked readers who were interested in attending if they'd like to save that date. An indication of the agreed speakers and topics was also given. The venue is the London office of leading international IP practice Freshfields Bruckhaus Deringer.

This event will also mark the editorial change-over, as founder editor Jeremy Phillips steps down and hands over to the new team of editors Eleonora Rosati, Stefano Barazza and Marius Schneider.

Registration is now open, via Eventrbrite, here. It's free; it will be instructive and it will be fun. Do join us for what will be a very special occasion.

Sunday, 27 September 2015

JIPLP's 10th Anniversary Conference: save the date

The Journal of Intellectual Property Law & Practice (JIPLP) is marking the 10th Anniversary of its launch with a conference, to be held on Thursday 26 November 2015 in the London offices of international law firm and JIPLP supporter Freshfields Bruckhaus Deringer.  

Apart from being a celebration of a decade of thoroughly enjoyable and thankfully successful intellectual property law publishing, this conference marks the hand-over of its editorial functions.  Founder editor Jeremy Phillips is stepping down and is passing the reins to three of the speakers listed below -- the new editors Eleonora Rosati (currently Deputy Editor), Stefano Barazza and Marius Schneider.   Incidentally this is also Jeremy Phillips's last public participation in any intellectual property event before he retires. 

The final programme for this event will be confirmed within the very near future. Meanwhile, we can confirm that it will include the following papers from editorial board members and/or contributors:

“Let It Be or We Can Work It Out?”: Fair use, quotation and the Beatles case" (Sir Richard Arnold, of the Patents Court, England and Wales)

* "Marks and names, labels and litigants" (Anna Carboni, of Redd, solicitors and a former Appointed Person to hear trade mark appeals

* "Dealing with commercial change: from Scandecor to Starbucks" (Neil Wilkof, of Bressler & Co., Ramat Gan, Israel)

* "Competition law and IP: a new era of encroachment?" Christopher Stothers, of Arnold & Porter, London)

* "A decade of random copyright (reform) in Europe" (Eleonora Rosati, of the University of Southampton and e-LAWnora)

* "Patents in perspective" (Stefano Barazza, of the University of South Wales)

* "Policing and enforcing IP" (Marius Schneider, Ipvocate)

* "Second medical use claims: why are they so difficult to understand?" (Darren Smyth, of EIP)

* "The Big IP Picture: is there one?" (Jeremy Phillips)

The event will commence at 9.30 am (following registration, which opens at 9.00 am) and will conclude at 5.00 pm, being followed by a reception,

Registration for this event, which is free to attend, is not yet open, but will be so in the near future. Registration details will be announced first on this weblog.

Friday, 25 September 2015

Criminal enforcement of counterfeiting in post-sale contexts

Author: Jesus Ivan Mora Gonzalez (Post-Doctoral Researcher, Max Planck Institute for Innovation and Competition)

United States v Foote, 413 F 3d 1240 (10 Cir, 2005) 6 July 2015

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpv145, first published online: September 2, 2015

The Court of Appeals for the Tenth Circuit, in United States v Foote, holds that the statutory elements, ‘likely to cause confusion’ ‘to cause mistake’ or ‘to deceive’ (s 2320, Title 18 of the United States Code), are not restricted to instances in which direct consumers are misled by the counterfeit goods, but extends to post-sale contexts where the general public could be confused about their commercial origin.

Legal context and facts

In 2002, Mr Jerome Foote was convicted in the District Court of Kansas of trafficking in counterfeit goods based on the selling of one single counterfeit Mont Blanc in violation of the s 2320, Title 18 of the United States Code. The court sentenced Mr Foote to thirty-seven months' imprisonment, three years of supervised reliance and a fine of US$104.000. Mr Foote appealed to the Court of Appeals for the Fourth Circuit claiming that he had openly advertised that he sold counterfeit merchandise, which he called ‘replicas’, and that he had informed each customer that his merchandise was fake. Because his customers were never misled into thinking that they were purchasing authentic merchandise, the s 2320 should not be applicable to his conduct.

The Court of Appeals rejected Mr Foote's claim and confirmed the conviction and sentence based on the following arguments:
Section 2320, Title 18, of the United States Code defines a counterfeit mark as a spurious mark that is likely to cause confusion, mistake or deceive, which includes post-sale confusion, that is, the proof of likelihood of consumer confusion is not restricted to the point of sale where direct purchasers are confused or deceived by the counterfeit goods.

The trade mark holder's ability to use its mark to symbolize its reputation is harmed when potential customers see counterfeit goods and identify these goods with the trade mark holder in post-sale contexts.

The correct test to be applied in the commercialization of counterfeit goods is whether the defendant's use of the mark was likely to cause confusion, mistake or deception in the general public.

The decision of the Court of Appeals highlights the normative controversy over trafficking genuine fake goods and the best normative strategy to forbid its commercialization. For those who sell ‘replicas’ to consumers, the legal justification of this conduct could be explained as follows. A system of exclusive entitlements for distinctive signs implies a restriction in free competition that cannot be legitimized by itself since that would mean putting ‘the cart before the horse’, ie, trade mark exclusive rights must identify the public interest that justifies any restriction in free competition. If a trade mark is defined as a distinctive sign that communicates the real origin of goods to consumers, the reliability of this information has the ability to justify trade mark exclusive rights by means of protecting the consumer interest in not being misled about the real source of the goods. Consequently, if consumers know that they are buying counterfeit goods and wish to acquire them as reasonable substitutes at a lower price, the trade mark reputation of the original source would not be damaged and the commercialization of ‘replicas’ should be regarded as fair competition.

Trade mark holders obviously reject this normative approach, claiming that counterfeiting is always unfair competition and the place where goods are sold should not be taken into account as the paradigm to delegitimize the criminal law enforcement of trade mark exclusive rights. According to the post-sale confusion test, the statutory element ‘likely to cause confusion’ should not be examined from the perspective of the average consumer who buys reasonable substitutes at the point of sale, but from the general perspective (real and potential purchasers) in post-sale contexts where the proof of consumer confusion at the point of sale is irrelevant since the defendant's use of the mark could lead individuals, other than the real purchasers, to mistakenly believe that a product was manufactured by the trade mark holder.

In most federal cases where post-sale confusion has been proved, the trade mark holder's loss is justified through the potential damage to trade mark reputation, that is, when manufacturers of counterfeit goods offer these goods to consumers, those manufactures allow consumers to acquire the prestige of owning what appears to be the more expensive product. A loss in the trade mark reputation, therefore, could occur when a sophisticated buyer purchases a knockoff or ‘replica’ and passes it off to the public as the genuine article, thereby confusing the viewing public and achieving the status of the genuine article at a knockoff price.

The aim of the post-sale confusion test, therefore, seems very clear. If the point of sale is the main obstacle to forbidding the selling of counterfeit goods, the point of sale must be removed and replaced by a post-sale context that enables trade mark holders to prove the existence of the risk of consumer confusion. This approach, however, faces serious difficulties when mens rea is a key element to justify a prison sentence:
The scope of trade mark exclusive rights is extended to futuristic consumer behaviour where those who have bought counterfeit goods could interact with other individuals that could be potential purchasers of genuine goods. Any evidence of ‘likely to cause confusion’, therefore, is examined in a context where the point of sale has no legal value, but this context is simply hypothetical. At the point of sale, consumers are not only misled about the real origin of the goods, they also wish to acquire them in order to get reasonable substitutes at a lower price. Would it be reasonable to extend the evidence of mens rea to hypothetical contexts where the statutory element ‘likely to cause confusion’ is easier to prove?
The proof of ‘likely to cause confusion’ is transformed dramatically. The traditional relationship between consumer and trade mark holder is replaced by a peer-to-peer consumer inter-relationship regarding the ability to buy social distinctiveness, that is, the proof of ‘likely to cause confusion’ should be based on who is really able to consume original goods. Is it reasonable to justify a prison sentence based on the evidence of mens rea in those situations where some consumers could ‘cheat’ other consumers about their ability to buy social distinctiveness?

The person who commercializes ‘replicas’ knows simply the circumstances of the point of sale as the meaningful context for those consumers who are willing to acquire those products. Would it be reasonable to extend the proof of mens rea beyond the real context where the ‘replicas’ are sold?

The counterfeit goods' capability to be viewed and examined by the general public becomes a discriminatory approach to marginalize all those cases where consumers decide to not display those goods. How could mens rea be proved when consumers decide not to show off the ‘replica’ in front of other potential consumers?

Practical significance

The post-sale confusion test highlights that any normative reasoning based on the evidence of likelihood of consumer confusion gives unsatisfactory solutions when mens rea must be proved in order to justify a prison sentence against those who commercialize genuine fake goods. If the target of selling ‘replicas’ is not to mislead consumers about the real origin of goods, but to be a parasite on trade mark reputation by offering substitute goods at a lower price, the proof of ‘likely to cause confusion’ is not an efficient strategy, unless it is accepted as distortion in the source theory.

The key thing to be discussed is not the point of sale and what kind of argumentative strategy based on the proof of likelihood of consumer confusion is more efficient to solve that problem, but the incorrect use of this paradigm for situations that demand an alternative approach to protect the trade mark holder's interests. This is especially relevant when trade mark holders have to face the trafficking of genuine fake goods with the ability to challenge the traditional justification of trade mark exclusive rights based on the indication of origin. The post-sale confusion test appears as an easy way to prove the ‘likely to cause confusion’ when there is not consumer confusion at the point of sale; however, that easy way brings serious difficulties justifying a prison sentence.

An alternative approach could be the removal of ‘likely to cause confusion’, ‘to cause mistake’ or ‘to deceive’ as a necessary statutory element, but this removal would raise another important question: What is the legal justification of trade mark exclusive rights? This raises two additional key questions. Who is responsible in the event that a product injures consumers? Would trade mark holders be responsible in the event that counterfeit goods injured consumers? The concept of implicit representation of product safety in the marketplace protected by trade mark holders could be a new path for the criminal enforcement of trade mark exclusive rights when the aim is not to mislead consumers but to take unfair advantage of the reputation of famous marks.

Monday, 21 September 2015

Taking a close look at the big picture: Munich hosts next GRUR Int-JIPLP event

You don't need one of these
to spot the legal issues ...
If you enjoyed this month's JIPLP-GRUR Int London seminar on the impact of the IP Enforcement Directive on national law (reported here and here on this weblog), you won't have long to wait for the next cooperation between the two journals, which takes place in Munich on 28 October 2015. The subject is "Internet Search Engines in the Focus of EU Competition Law -- a Closer Look at the Broader Picture" and it is to be hosted at the Max Planck Institute for Innovation and Competition, Munich.  What is this seminar about? Let our colleagues from GRUR Int explain in their own words:
Against the background of the EU Commission’s current investigation regarding Google Search, the 6th GRUR Int. / JIPLP Joint Seminar will examine and discuss the challenges concerning the application and enforcement of competition law in digital markets in particular with regard to search engines. Further, it will explore whether an adaptation of established concepts and instruments of competition law is warranted in order to adequately account for the distinct economic characteristics of digital markets.

Experts in law and in economics from Germany and the UK will
  • inform on the allegations against Google in the EU Commission’s current investigation;
  • identify the economic characteristics of the relevant digital markets and discuss the potential competition concerns;
  • develop principles on the definition of the relevant markets that necessarily has to precede the identification of market dominance;
  • discuss potential theories of harm as a basis for enforcement action;
  • look at justifications available to dominant operators of search engines;
  • discuss the potentials of public and private enforcement of competition law in digital markets;
  • analyse the competition, consumer protection and privacy concerns that arise from the use of data in such markets;
  • and discuss whether in view of the particular features of digital markets competition law is in need of reform.
The Seminar will take place from 14.00 – 19.30 in the English language without simultaneous translation. The seminar is open and free of charge. Room availability is limited to 100 seats so that we recommend an early registration. There will be a cocktail reception for all participants.
You can check out the full programme and the list of topics and speakers here
Online registration opens on Monday 21 September here.

Friday, 11 September 2015

Are EU policy-makers fighting the right copyright battles?

The guest editorial for the September 2015 issue of JIPLP is written by current Deputy Editor and future Editor Eleonora Rosati:
Are EU policy-makers fighting the right copyright battles?

Debate is currently being undertaken at the level of EU institutions as to whether the existing legislative framework in the area of copyright should be updated. In May 2015 the EU Commission issued its Digital Single Market (DSM) Strategy. As far as copyright is concerned, despite earlier statements by Commissioners Ansip (from @Ansip: “We are reforming & modernising #copyright rules to get rid of pointless barriers on transfer & access to digital content” (23 February 2015); “#copyright rules fit for digital age? I don't think so” (19 March 2015)) and Oettinger (from @GOettingerEU: “Modern #copyright rules … are the key goals for 2015” (6 January 2015)), the DSM Strategy does not contain much. Policy action is in fact only likely to occur in relation to three issues: (1) (lack of) cross-border access to content and its portability; (2) text and data mining for non-commercial and commercial purposes alike; and (3) discussion around civil enforcement and the role of ISPs. In addition to the very narrow focus of proposed interventions, the DSM Strategy does not clarify what legal instruments (if any) would be adopted to undertake reform in the proposed areas.

In parallel to initiatives on the side of the Commission, the European Parliament has also engaged in the copyright reform debate. Pirate Party member and MEP Julia Reda was tasked with drafting a Report on the implementation of Directive 2001/29 (‘the InfoSoc Directive’). The original version contained a number of ambitious proposals to reform EU copyright. Following its publication in early 2015, numerous amendments were however presented, so that the text approved by the Legal Committee of the European Parliament in mid-2015 represents a significantly watered-down version of the original Report.

Among the things that have generated a heated debate is the so-called freedom of panorama. Article 5(3)(h) of the InfoSoc Directive allows Member States to introduce into their own national copyright laws an exception or limitation to copyright exclusive rights to allow “use of works, such as works of architecture or sculpture, made to be located permanently in public places”. Due to the optional (with the sole exclusion of the temporary copies exemption) nature of exceptions and limitations in Article 5 of the Directive, there is a number of Member States, eg France and Italy, that have decided not to transpose Article 5(3)(h) into their own copyright laws.

In the Report as originally enacted, among other things Ms Reda recommended that freedom of panorama be made mandatory (rather than merely optional) for Member States to implement into their own legal regimes. The amended version of the Report (as approved by the Legal Committee) includes a recommendation that “the commercial use of photographs, video footage or other images of works which are permanently located in physical public places should always be subject to prior authorisation from the authors or any proxy acting for them”.

To translate the latter proposal to reality it would be necessary to amend the InfoSoc Directive. However, at the moment re-opening the InfoSoc Directive does not seem to feature high in the agenda of the Commission (although it is unclear how text and data mining for commercial and non-commercial purposes alike would be achieved).

In any case, besides legal technicalities the current approach to (a lack of) freedom of panorama has generated (outraged) headlines. These have ranged from ‘How the absurd EU copyright law threatens to censor holiday snaps’ of The Times (24 June 2015) to ‘Why the EU wants to stop you posting your vacation photos online’ of Forbes (25 June 2015), and ‘Freedom of panorama: EU proposal could mean holiday snaps breach copyright’ of The Telegraph (25 June 2015). Such reactions suggest a complete lack of support on the side of public opinion. Thus the question that arises is whether relevant EU policy-makers have chosen the right battle to fight: is it so vital to restrict freedom of panorama at the EU level?

Paucity of case law even in those Member States that do not acknowledge freedom of panorama may suggest that this is not really an issue about which relevant rightholders are so passionate that they cannot stand the idea of not suing alleged infringers. All in all, the main message that is being conveyed and perceived by the general public is that copyright imposes unreasonable restrictions and is, ultimately, a ridiculous set of norms. Is this good for creators, copyright owners, and users of copyright-protected works alike? Not really.