The contents of the July 2013 issue are as follows:
July issue available onlne -- and here are the contents
The July 2013 issue of the Journal of Intellectual Property Law & Practice (JIPLP) is now available in full to subscribers to the online version. Non-subscribers are welcome to browse the content s (which are also listed below) and can purchase short-term access to any of the items published via JIPLP's website here. Eleonora Rosati's guest editorial will soon be published in full on this weblog so that it can be read and enjoyed by all.
The contents of the July 2013 issue are as follows:
The contents of the July 2013 issue are as follows:
More books for review
Here are three more books for review in JIPLP. By coincidence all are published by the increasingly prolific Anglo-American publishing house of Edward Elgar. If you would like to volunteer to review one of these titles, please email Sarah Harris at Oxford University Press at sarah.harris@oup.com by Wednesday 20 June and let her know your particular interest or expertise in the subject that would qualify you to tackle the task. After that date, you will receive either confirmation that your offer to review has been accepted or a grateful acknowledgement of the fact that you have offered, even though the review has been given to another. Suitably qualified volunteers to review who are unsuccessful will be given priority when next they request to review a book.
Research Handbook on Intellectual Property Licensing
Edited by Jacques de Werra
Published by Edward Elgar
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Business Innovation and the Law: Perspectives from Intellectual Property, labour, Competition and Corporate Law
Edited by Marilyn Pittard, Ann L Monotti and John Duns
Published by Edward Elgar
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Intellectual Property in Common Law and Civil Law
Edited by Toshiko Takenaka
Published by Edward Elgar
Research Handbook on Intellectual Property Licensing
Edited by Jacques de Werra
Published by Edward Elgar"‘The Handbook brings together a unique collection of world renowned experts providing detailed discussion in every chapter. The brilliance of this collective work is found in its broad two dimensional focus – beyond patents to all key IP assets on the one hand, and country specific discussion for key regions around the world on the other. . . Whether read cover-to-cover as a compilation of current best practice or used as a true reference guide, the Research Handbook on Intellectual Property Licensing is a must have for anyone seeking to capture value from intangible assets.’".Further information available from the book's website here
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Business Innovation and the Law: Perspectives from Intellectual Property, labour, Competition and Corporate Law
Edited by Marilyn Pittard, Ann L Monotti and John DunsPublished by Edward Elgar
"Business Innovation and the Law analyses the topical issue of protecting and promoting business research and development. It does so by examining business innovation through the lens of different legal disciplines – intellectual property, labour and employment laws, competition and corporate laws.".Further information available from this book's website here
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Edited by Toshiko Takenaka
Published by Edward Elgar
"‘Intellectual Property in Common Law and Civil Law presents the perspectives of common as well as civil law, on global IP Law’s most pertinent issues ranging from inventive step all the way to injunctive relief. Edited by Professor Takenaka, director of the University of Washington’s renowned Center for Advanced Studies and Research on IP (CASRIP), the book assembles deep but easy to read essays by some of the world’s leading IP scholars. In short, IP Law’s most important issues from a global perspective; by the world’s leading scholars, yet in a nutshell. Excellent!’".Further information available from the book's website here
A triple strike against piracy as the music industry secures three more blocking injunctions
Author: Darren Meale (SNR Denton UK LLP)
EMI Records Ltd and others v British Sky Broadcasting Ltd and others [2013] EWHC 379 (Ch), Chancery Division, England and Wales, 28 February 2013
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt097, first published online: June 13, 2013
It looks as though s 97A blocking injunctions may now be the film and music industries' weapon of choice against peer-to-peer file sharing. The Pirate Bay, a notorious BitTorrent tracker, was blocked this way last year and now the music industry has succeeded in an application for blocks against three more culprits by the names of KAT (KickassTorrents), H33T and Fenopy.
Legal context
The United Kingdom's Digital Economy Act 2010 was one of the most controversial pieces of legislation in recent years, particularly insofar as it sought to force British internet service providers (ISPs) to write to their users and notify them when they were suspected of indulging in unlawful file sharing. The same legislation contemplates users being punished if they continue to indulge. With 2013 now well underway, the Act's anti-piracy measures have still to come into effect. Meanwhile, the content industries are enjoying much greater success targeting ISPs—the businesses which provide UK consumers with access to internet content, lawful or otherwise—and in compelling them to block those consumers from accessing offending sites. With this victory, there have now been five victims: Newzbin2, The Pirate Bay, KAT, H33T and Fenopy.
Facts
Earlier “Current Intelligence” pieces provide the background to blocking injunctions (Darren Meale ‘Avast, ye file sharers! The Pirate Bay is sunk’ (2012) 7(9) JIPLP 646). Section 97A of the UK's Copyright, Designs and Patents Act 1988 (CDPA) provides that
This provision, implemented to comply with the Information Society Directive (2001/29/EC), was first used successfully by the film industry in NewzBin2 [2010] EWHC 608 (Ch). In this case, a group of record companies sought to force the six leading UK ISPs to block three popular BitTorrent trackers. These sites provide users with links which can be used to download infringing copies of films, television programmes, computer games and other material using the BitTorrent file-sharing protocol.
The evidence was that KAT enjoyed around 3.7 million UK visitors a month, making as much as US$22 million a year in advertising revenue; H33T 400 000 and US$2.6 million and Fenopy about 500 000 and US$1.3 million. Each was found to be a ‘substantial profit-making business’.
Analysis
Before considering the substantive decision, one must bear in mind the following:
Turning to the substance of the decision, four matters had to be established if the blocks were to be ordered. Each was carefully considered by Arnold J as follows.
Were the ISPs ‘service providers’?
The defendants did not deny this and, as the judge had held in previous s 97A applications, they were indeed ‘service providers’ within the meaning of regulation 2 of the Electronic Commerce (EC Directive) Regulations 2002, implementing the E-Commerce Directive (2000/31).
Do the users and/or the operators of the websites infringe copyright?
Users
Yes, by copying or downloading unlawful copies of copyright protected material. A further ‘yes’ in respect of uploaders (ie users who allowed material on their computers to be uploaded to the internet and passed on to others), by ‘communication to the public’ of copyright works, contrary to s 20 of the CDPA. Infringement by ‘communication to the public’ is a less than straightforward infringing act; it continues to be subject to significant attention from the Court of Justice of the European Union (CJEU), as well as domestic courts in Europe. Mr Justice Arnold updated his analysis from The Pirate Bay litigation (see here Meale ‘Avast, ye file sharers! The Pirate Bay is sunk’). One issue was whether the users communicated works to a ‘new public, that is to say a public which was not taken into account by the rightholders when authorizing the distribution of the recordings’. Arnold J recounted Case C-135/10 Societá Consortile Fonografici v Del Corso [2012] ECR I-0000, in which the CJEU held that a dentist playing background music in his private dental practice did not partake in communication to the public. Relevant to this finding were the facts that (1) the patients constituted a determinate circle of potential listeners, who only heard the recordings one at a time; (2) the patients attended for the purposes of dental treatment and had no choice over the recordings they listened to; and (3) the broadcast was not of a profit-making nature.
The judge also referred to Case C-173/11 Football Dataco Ltd v Sportradar Gmbh [2012] ECR I-0000. In essence, this case asked whether, where a server in jurisdiction A sends data to a user in jurisdiction B, there could be an infringing act in A, B or both jurisdictions. The CJEU held that the act takes place ‘at least’ in B provided that ‘there is evidence from which it may be concluded that the act discloses an intention on the part of the person performing the act to target members of the public’ in B. Although it did not explicitly deal with the point, Arnold J opined that the CJEU also accepted that, in this situation, an infringing act occurred in jurisdiction A as well.
Applying this case law, Arnold J held that uploaders communicated works to a new public, a ‘large and indeterminate class of people’, in the hope that other users would make other recordings available which they could download free, thereby providing them with an indirect financial benefit as a result of their activity. He found that there would be infringement in the UK where the uploader, who made recordings available, was in the UK. He was not so sure if there would be infringement where only the person receiving the work, the downloader, was in the UK, ‘since it is not clear to me that the act of communication by the uploaders is targeted at members of the public in the UK’. Having already found infringement by UK uploaders, he did not reach a conclusion on this point.
Operators of the websites
Operators were also held to infringe in three ways: (1) by communication of works to the public; (2) by authorizing the infringements of UK users; and (3) on the basis of joint liability with UK users as accessories.
On (1), Arnold J held that both the operators of the websites (who provide a mechanism designed to achieve the act) and its users (who provide the actual sound recordings etc) were involved in the act of communication to the public. Like the users, the operators made the relevant works available to a ‘large and indeterminate class of people’ and benefitted financially from doing so. Each of three websites was found to be targeting the UK with factors such as the number of UK users, the large number of UK artists whose recordings were available, and the default language of the sites being English was considered as relevant. It was also thought relevant that KAT served its users with adverts with prices in sterling (although it was not discussed whether this was KAT's doing or the action of the adserving provider responsible for managing KAT's adverts). These factors led the judge to conclude that KAT clearly targeted the UK, while H33T and Fenopy did as well, albeit less clearly.
On (2), all three sites had made obvious efforts to afford their users ‘the easiest and most comprehensive service possible’, going to great lengths to facilitate and promote the download of torrent files by users (eg providing an easy-to-use interface, indexing torrents in specific categories, explaining how to download and how to get round court-ordered blocks). Infringement was not merely an inevitable consequence of the provision of torrents on the site, but their objective and intention. Mass copyright infringement was the ‘cornerstone’ of the sites' business models; each site showed an obvious disregard for copyright law; and each had sought to evade international investigations by constantly changing domain registrant details and moving ISPs. Stated content removal policies were mere window-dressing. H33T asks for payment of a US$50 fee before it will take a torrent down.
On (3), Arnold J applied much the same reasoning and found accessory liability in the same way as he did in NewzBin2 and The Pirate Bay.
Do the users and/or the operators of the websites use the ISPs' services to infringe?
Again, Arnold J answered this question in the affirmative following his reasoning in the earlier blocking cases. He did, however, note that the pending CJEU reference in Case C-314/12 UPC v Constantin, a reference from the Austrian Supreme Court, had asked for guidance in this area. The judge noted that the Austrian Supreme Court's preliminary view was in agreement with his.
Did the ISPs have actual knowledge of this?
Indeed, not least as a result of their involvement in the case. The industry also wrote to ISPs on a weekly basis prior to their application to notify them of infringing activity.
With all these affirmative answers, Arnold J then considered whether he should exercise his discretion to order a block. Again he answered yes, holding that blocks would be proportionate here and could be implemented at a modest cost. Noting that they might easily be circumvented, he remarked that evidence indicated that blocking orders could be reasonably effective: a block in Italy of The Pirate Bay had led to a reduction of 73 per cent of those visiting it and a 96 per cent reduction in page views. While questions of proportionality were pending before the CJEU in UPC v Constantin, he felt able to make a decision and order the blocks.
Takedown policies not good enough?
The websites in this case had what are fairly standard takedown policies, offering to take down infringing content once notified by way of the provision of a specific URL (though none of them did this). Arnold J remarked that such a policy was, even if complied with, ‘overly burdensome’, impractical and ineffective. One URL was no good when multiple users might have uploaded multiple versions of each infringing recording and were constantly uploading additional ones. In order to ensure the cessation of infringing activity in respect of a particular copyright work, a rightholder would have to monitor a website on a continuous and on-going basis. Arnold J concluded:
Practical significance
As with NewzBin2 and The Pirate Bay, this was another example of an attack on an unlawful website in circumstances where the traditional route—going after the infringing service itself—was not practical (these services are generally based outside of the jurisdiction, move around a lot and generally have no regard for the law or legal process). Being no different on the facts to The Pirate Bay, it is no surprise the application succeeded. The music and film industries will continue to pursue blocks by ISPs against other infringing services, and it will be interesting to find out whether other service providers become targets (this author has previously wondered whether search engines like Google might be asked to block users from accessing The Pirate Bay etc).
Now that the content industries have secured a number of favourable decisions, it can be seen that they and their lawyers are becoming quite practised at the exercise. ISPs do not appear to be interested in actively opposing blocking applications, and the courts have been clear that there is no need to even attempt to involve the offending websites themselves (or their offending users). On this occasion, the record companies used the streamlined CPR Part 8 alternative claims procedure and Arnold J made his decision without need of an oral hearing. All of these factors will have reduced the cost of the application, probably making it quicker and easier to do. The evidence put in by the record industry will also be similar each time and therefore cheaper on each occasion. That points to s 97A applications becoming fairly fixed in terms of time and cost and so much easier for the industry to fund and to evaluate their effectiveness by way of a cost/benefit analysis. The author's instinct is that we will see several more of these applications within the next 12 months (indeed, as this article was being proofed, there were reports that the UK music industry was readying an application against as many as 25 more services and domain names).
EMI Records Ltd and others v British Sky Broadcasting Ltd and others [2013] EWHC 379 (Ch), Chancery Division, England and Wales, 28 February 2013
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt097, first published online: June 13, 2013
It looks as though s 97A blocking injunctions may now be the film and music industries' weapon of choice against peer-to-peer file sharing. The Pirate Bay, a notorious BitTorrent tracker, was blocked this way last year and now the music industry has succeeded in an application for blocks against three more culprits by the names of KAT (KickassTorrents), H33T and Fenopy.
Legal context
Facts
Earlier “Current Intelligence” pieces provide the background to blocking injunctions (Darren Meale ‘Avast, ye file sharers! The Pirate Bay is sunk’ (2012) 7(9) JIPLP 646). Section 97A of the UK's Copyright, Designs and Patents Act 1988 (CDPA) provides that
The High Court … shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright.
The evidence was that KAT enjoyed around 3.7 million UK visitors a month, making as much as US$22 million a year in advertising revenue; H33T 400 000 and US$2.6 million and Fenopy about 500 000 and US$1.3 million. Each was found to be a ‘substantial profit-making business’.
Analysis
Before considering the substantive decision, one must bear in mind the following:
No claim for copyright infringement had been brought against KAT, H33T, Fenopy or any of their users. Further, the judge found that there was no need to serve the operators of the sites, as it would be ‘impracticable and pointless’ to try to do so. The ISPs were not represented. They did not oppose the making of the orders sought provided that the court felt it was proper and appropriate to make them.Mr Justice Arnold considered the application on paper, without a hearing.
The applications were brought by way of the CPR Part 8 alternative claims procedure.
Turning to the substance of the decision, four matters had to be established if the blocks were to be ordered. Each was carefully considered by Arnold J as follows.
Were the ISPs ‘service providers’?
The defendants did not deny this and, as the judge had held in previous s 97A applications, they were indeed ‘service providers’ within the meaning of regulation 2 of the Electronic Commerce (EC Directive) Regulations 2002, implementing the E-Commerce Directive (2000/31).
Do the users and/or the operators of the websites infringe copyright?
Users
Yes, by copying or downloading unlawful copies of copyright protected material. A further ‘yes’ in respect of uploaders (ie users who allowed material on their computers to be uploaded to the internet and passed on to others), by ‘communication to the public’ of copyright works, contrary to s 20 of the CDPA. Infringement by ‘communication to the public’ is a less than straightforward infringing act; it continues to be subject to significant attention from the Court of Justice of the European Union (CJEU), as well as domestic courts in Europe. Mr Justice Arnold updated his analysis from The Pirate Bay litigation (see here Meale ‘Avast, ye file sharers! The Pirate Bay is sunk’). One issue was whether the users communicated works to a ‘new public, that is to say a public which was not taken into account by the rightholders when authorizing the distribution of the recordings’. Arnold J recounted Case C-135/10 Societá Consortile Fonografici v Del Corso [2012] ECR I-0000, in which the CJEU held that a dentist playing background music in his private dental practice did not partake in communication to the public. Relevant to this finding were the facts that (1) the patients constituted a determinate circle of potential listeners, who only heard the recordings one at a time; (2) the patients attended for the purposes of dental treatment and had no choice over the recordings they listened to; and (3) the broadcast was not of a profit-making nature.
The judge also referred to Case C-173/11 Football Dataco Ltd v Sportradar Gmbh [2012] ECR I-0000. In essence, this case asked whether, where a server in jurisdiction A sends data to a user in jurisdiction B, there could be an infringing act in A, B or both jurisdictions. The CJEU held that the act takes place ‘at least’ in B provided that ‘there is evidence from which it may be concluded that the act discloses an intention on the part of the person performing the act to target members of the public’ in B. Although it did not explicitly deal with the point, Arnold J opined that the CJEU also accepted that, in this situation, an infringing act occurred in jurisdiction A as well.
Applying this case law, Arnold J held that uploaders communicated works to a new public, a ‘large and indeterminate class of people’, in the hope that other users would make other recordings available which they could download free, thereby providing them with an indirect financial benefit as a result of their activity. He found that there would be infringement in the UK where the uploader, who made recordings available, was in the UK. He was not so sure if there would be infringement where only the person receiving the work, the downloader, was in the UK, ‘since it is not clear to me that the act of communication by the uploaders is targeted at members of the public in the UK’. Having already found infringement by UK uploaders, he did not reach a conclusion on this point.
Operators of the websites
Operators were also held to infringe in three ways: (1) by communication of works to the public; (2) by authorizing the infringements of UK users; and (3) on the basis of joint liability with UK users as accessories.
On (1), Arnold J held that both the operators of the websites (who provide a mechanism designed to achieve the act) and its users (who provide the actual sound recordings etc) were involved in the act of communication to the public. Like the users, the operators made the relevant works available to a ‘large and indeterminate class of people’ and benefitted financially from doing so. Each of three websites was found to be targeting the UK with factors such as the number of UK users, the large number of UK artists whose recordings were available, and the default language of the sites being English was considered as relevant. It was also thought relevant that KAT served its users with adverts with prices in sterling (although it was not discussed whether this was KAT's doing or the action of the adserving provider responsible for managing KAT's adverts). These factors led the judge to conclude that KAT clearly targeted the UK, while H33T and Fenopy did as well, albeit less clearly.
On (2), all three sites had made obvious efforts to afford their users ‘the easiest and most comprehensive service possible’, going to great lengths to facilitate and promote the download of torrent files by users (eg providing an easy-to-use interface, indexing torrents in specific categories, explaining how to download and how to get round court-ordered blocks). Infringement was not merely an inevitable consequence of the provision of torrents on the site, but their objective and intention. Mass copyright infringement was the ‘cornerstone’ of the sites' business models; each site showed an obvious disregard for copyright law; and each had sought to evade international investigations by constantly changing domain registrant details and moving ISPs. Stated content removal policies were mere window-dressing. H33T asks for payment of a US$50 fee before it will take a torrent down.
On (3), Arnold J applied much the same reasoning and found accessory liability in the same way as he did in NewzBin2 and The Pirate Bay.
Do the users and/or the operators of the websites use the ISPs' services to infringe?
Again, Arnold J answered this question in the affirmative following his reasoning in the earlier blocking cases. He did, however, note that the pending CJEU reference in Case C-314/12 UPC v Constantin, a reference from the Austrian Supreme Court, had asked for guidance in this area. The judge noted that the Austrian Supreme Court's preliminary view was in agreement with his.
Did the ISPs have actual knowledge of this?
Indeed, not least as a result of their involvement in the case. The industry also wrote to ISPs on a weekly basis prior to their application to notify them of infringing activity.
With all these affirmative answers, Arnold J then considered whether he should exercise his discretion to order a block. Again he answered yes, holding that blocks would be proportionate here and could be implemented at a modest cost. Noting that they might easily be circumvented, he remarked that evidence indicated that blocking orders could be reasonably effective: a block in Italy of The Pirate Bay had led to a reduction of 73 per cent of those visiting it and a 96 per cent reduction in page views. While questions of proportionality were pending before the CJEU in UPC v Constantin, he felt able to make a decision and order the blocks.
Takedown policies not good enough?
The websites in this case had what are fairly standard takedown policies, offering to take down infringing content once notified by way of the provision of a specific URL (though none of them did this). Arnold J remarked that such a policy was, even if complied with, ‘overly burdensome’, impractical and ineffective. One URL was no good when multiple users might have uploaded multiple versions of each infringing recording and were constantly uploading additional ones. In order to ensure the cessation of infringing activity in respect of a particular copyright work, a rightholder would have to monitor a website on a continuous and on-going basis. Arnold J concluded:
A ‘provision of URL’ policy might work for a website which generally hosts legal content, but which suffers from isolated instances of infringing content. It is entirely unworkable where the website is geared towards offering a constantly replenished stock of infringing content.‘Provision of URL’ policies are fairly standard for online service providers. The world's largest video sharing website, YouTube, operates one. While it cannot be said that YouTube is ‘geared towards’ infringement, it does suffer more than isolated instances of infringing content, as do many other such services. Do Arnold J's comments suggest that this kind of policy will not be enough for the service provider to benefit from the ‘hosting’ safe harbour provided by Article 14 of the E-Commerce Directive, which is only available where a service provider acts expeditiously to remove an infringement once it becomes aware of it? Do they also indicate that, following the CJEU's decision in Case C-324/09 L'Oréal v eBay, 12 July 2011, Article 11 of the Enforcement Directive (2004/48) may require intermediaries to take more active steps when it comes to removing infringing content present on their services, rather than just reacting to notifications on a piecemeal basis?
Practical significance
As with NewzBin2 and The Pirate Bay, this was another example of an attack on an unlawful website in circumstances where the traditional route—going after the infringing service itself—was not practical (these services are generally based outside of the jurisdiction, move around a lot and generally have no regard for the law or legal process). Being no different on the facts to The Pirate Bay, it is no surprise the application succeeded. The music and film industries will continue to pursue blocks by ISPs against other infringing services, and it will be interesting to find out whether other service providers become targets (this author has previously wondered whether search engines like Google might be asked to block users from accessing The Pirate Bay etc).
Now that the content industries have secured a number of favourable decisions, it can be seen that they and their lawyers are becoming quite practised at the exercise. ISPs do not appear to be interested in actively opposing blocking applications, and the courts have been clear that there is no need to even attempt to involve the offending websites themselves (or their offending users). On this occasion, the record companies used the streamlined CPR Part 8 alternative claims procedure and Arnold J made his decision without need of an oral hearing. All of these factors will have reduced the cost of the application, probably making it quicker and easier to do. The evidence put in by the record industry will also be similar each time and therefore cheaper on each occasion. That points to s 97A applications becoming fairly fixed in terms of time and cost and so much easier for the industry to fund and to evaluate their effectiveness by way of a cost/benefit analysis. The author's instinct is that we will see several more of these applications within the next 12 months (indeed, as this article was being proofed, there were reports that the UK music industry was readying an application against as many as 25 more services and domain names).
Liability of data providers and enablers for downloading infringing but undisplayed material
Authors: Rachel Montagnon and Joel Smith (Intellectual Property Group, Herbert Smith Freehills LLP, London)
Football Dataco Ltd and others v Stan James plc and others, Sportradar and others [2013] EWCA Civ 27, Court of Appeal, England and Wales
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt079, first published online: June 7, 201
The court has held that the provision of facilities to download infringing material on to a user's computer is inevitably a joint act of infringement of sui generis database right, even if the material is not displayed.
Legal context
Both the online betting company (based outside the UK) and the providers of the infringing database (from servers outside the UK) to which the betting site provided links were found by the Court of Appeal to be liable as joint tortfeasors with the betting site's customers in the UK who unknowingly downloaded the infringing data.
UK sui generis database right was created by the UK implementation of Article 7 of the Database Directive 96/9. The relevant provisions of the Directive in relation to subsistence of the right are:
There may be infringement even where the defendant extracts or re-utilizes insubstantial parts of the contents of the database in a repeated and systematic fashion, implying acts which conflict with a normal exploitation of that database or which unreasonably prejudice the legitimate interests of the maker of the database shall not be permitted (Article7(5)).
Facts
Football Dataco owns a database called ‘Football Live’ which consists of ‘live’ data on football matches in the English and Scottish Leagues, the Carling Cup and other English and Scottish matches. The data is obtained by Football Dataco through the use of ‘football analysts’ (FBA) who go to the matches and watch them, these usually being ex-professional footballers who report to a person called a ‘sports information processor’ (SIP) at the central information centre run by Football Dataco by mobile phone. The FBAs give a running commentary on the game, providing the SIPs with events as they happen, including factual matters such as goals and their times, the scorer, misses, assists, type of shot (for both goals and misses), cards given, fouls, saves, corners and substitutions, as well as more subjective commentaries such as opinions on who is the man of the match or the dominant player in the last 10 minutes, or the severity of a foul. The SIP also has to confirm back the details to the FBA, so the process is not all one-way. The cost of the operation was estimated at £600,000 per season—a substantial investment. Football Dataco licenses the data to customers which include the BBC.
Sportradar (based in Austria and German) maintained a large database called Betradar, which contained a section called Live Scores. Live Scores' data was acquired from viewing live broadcasts of matches but, where none were available (such as for many non-Premier League matches), they gathered information from Sky Sports News live TV broadcasts. Online, textual services were also used, some of which used data from the company which licenses Football Dataco's rights, while others were independent of this data service. Thus data from Football Live was used in Live Scores. After submission of the defence, Sportradar limited Live Scores to information on goals and timings. This case considered whether that data was taken directly or indirectly from Football Live and whether it was extraction of a substantial part (as required for database right infringement).
The other defendant at first instance, also appealing aspects of Floyd J's decision, was the betting website Stan James, hosted in Gibraltar but aimed at UK punters. The website has a ‘button’ labelled ‘Live Scores’. Clicking on this generates a pop-up box. The user's (punter's) web-browser communicates with the Live Scores section of Betradar (Sportradar's database hosted in Austria) and all the Live Scores data is downloaded into the punter's computer. This data is, however, only in machine-readable form; what the punter sees is a list of featured games and a magnifying glass icon against each match. By clicking on the icon the punter sees the detailed facts about that match.
Subsistence of sui generis database right
Sir Robin Jacob gave the leading judgment with which Lloyd and Lewison LJJ agreed. He confirmed that Football Live was a database which qualified for sui generis database right: there was nothing in the Directive to deny sui generis rights to a database which was also part of a copyright work, as the Court of Justice of the European Union (CJEU) had established in C-442/02 Fixtures Marketing v OPAP [2004] I-8961.
Sir Robin then considered whether it was a database which qualified for protection under Article 7 (there having been investment in obtaining, verification or presentation of the contents). He commented that the CJEU decision not to grant sui generis rights in British Horseracing board (BHB) v William Hill CBHB C-203/02, and Fixtures Marketing was based on the premise that ‘investment in creating data was not the right kind of investment’. As for the Football Live database, the defendants contended that there was no independent investment in the database, that the data was created and thus the investment was in the creation rather than in the required ‘obtaining, verification and presentation’. Counsel for Sportradar argued that, until the data was recorded, it did not exist, and that Article 7 was confined to pre-existing data collected together to form a database.
Sir Robin preferred to start with what he described as ‘the common sense position’, that the factual data provided by the FBA to the SIP in the Football Live database was pre-existing data: ‘only a metaphysicist would say a goal is not scored until the FBA tells the SIP that it has been scored’. Counsel for Sportradar has suggested that data about physical phenomena such as temperature or pressure at a particular time and place only come into existence when someone measures and records them. Sir Robin's view was that ‘the same metaphysicist would feel hot in a Turkish bath even without a thermometer’. A scientist taking a measurement ‘is recording data, not creating it’. If one followed the logic through, held Sir Robin,
Sir Robin looked at the policy behind the Directive, stating that there were understandable policy reasons behind excluding substantive data creation (such as football fixtures and lists of runners and riders) but not cases where people collect data by measurement or similar processes and assemble that data in a database (the latter being excluded if Sportradar's submissions were followed, he held): ‘The policy of the Directive is that databases which cost a lot of investment and can readily be copied should be protected. The right is created to protect the investment which goes into the creation of a database.’ The Directive is concerned with creation of a commercial right so as to encourage the creation of valuable databases.
There were submissions that only the investment in gathering the objective data elements of the database would gain a sui generis right (ie the goals scored, time of the goal and scorer, for example) and investment in subjective elements (ie who was the dominant player in the last 10 min or who should be the man of the match) would not count for sui generis right purposes. Sir Robin drew an analogy with a scholar creating a database of all Charles Dickens's references to law and lawyers. This would involve expenditure of significant resources and the database would qualify for protection. If the scholar then added commentary, he would not lose protection for the database (although the commentary was subjective), but these sui generis rights would not prevent extraction of information from the database which he himself had generated ‘because the rules as to what amounts to infringement focus on whether infringer is making undue use of the relevant resources which went into the database. The scholar's own commentaries would not be relevant resources’, although he might have copyright protection in these commentaries:
Infringement
Football Dataco contended that the UK-based users of the Stan James betting website were infringers pursuant to Article 7(1), (2) and (5).
Stan James submitted that, although all the Lives Scores data on Sportradar's database were uploaded onto its customers' computers, the user could not see it all at once because the data were encrypted (although by applying a magnifying glass decryption key the user could see any part of the data). Stan James claimed that data was only ‘extracted’ when it was read by the punter. Since punters only applied the magnifying glass to relatively few matches, this could not be a substantial part of the Sportradar database (Live Scores), let alone the Football Live database (from which elements of Live Scores were derived).
Sir Robin was unable to accept this argument. He held that the ‘temporary transfer of the contents’ of the Sportradar database to another medium (the punter's computer) and was of an ‘all or nothing’ sort. ‘The point is hopeless’ he said of the Stan James submission:
What proportion of the matches did Live Scores get its data directly or indirectly from Football Live? Sir Robin held that there was ample material for Floyd J to hold that Sportradar's Live Scores data was taken directly or indirectly from Football Live. The appearance of seeded errors in Live Scores data which could only have come from the Football Live database (implanted so as to furnish evidence of unauthorized use) evidenced such copying.
Was a substantial part copied? Floyd J had held that infringement by extraction had occurred, since a qualitatively substantial part had been extracted from the pre-defence into the Live Scores database. Post-defence, where much more limited data was used in Live Scores (goals and times only), Floyd J had held that a substantial part had not been extracted. The test was one of substantiality, based on the investment in the data that is extracted. ‘Even if only a small part is taken, it can be qualitatively a substantial part if it represents significant investment’, stated Sir Robin, when discussing the test (as set out in BHB). He found that very significant investment had been made in the costs of the SIP and the FBA and the overall set-up and confirmed Floyd J's finding that that the pre-defence data extracted infringed the sui generis rights.
The post-defence data had been found at first instance not to infringe, since it was only goals and timings and required neither the running commentaries of the FBAs nor any significant investment. This sort of data that could be recorded ‘at virtually no additional cost’ (per Floyd J, para 76) was held by him not to be a substantial part. Sir Robin Jacob did not agree: it was irrelevant that the data could have been collected at virtually no additional cost, as what mattered was the investment which in fact went into collecting the data: ‘If you want universal and reliable coverage you would still have to have reliable people at every ground and a reliable method of reporting it.’ Further, Floyd J had ‘overlooked’ the fact that the punter's computer had all the data within it albeit in encrypted form.
Thus Sir Robin emphatically allowed the appeal against this aspect of Floyd J's decision:
Sir Robin reviewed the common law on joint torfeasorship under English law, contrasting L'Oréal v eBay [2009] RPC 21 (where eBay were not joint tortfeasors), with those who sold trade mark infringing goods via their online auction system. eBay merely provided the facility used by the infringers.
Sir Robin repeated the dictum of Lord Templeman in CBS v Amstrad [1988] AC 1013: joint infringers are two or more persons who act in concert with one another pursuant to a ‘common design in the infringement’; and per Peter Gibson LJ in Sabaf v Meneghetti [2002] EWCA Civ 976: ‘Unless he has made the infringing act his own, he has not himself committed the tort.’
Sir Robin found that Stan James had acted in concert with Sportradar and was thus a joint tortfeasor. The question on appeal was, however, whether Stan James was a joint tortfeasor with the UK punters who availed themselves of the pop-up Live Scores on Stan James's website. From the fact that Stan James and Sportradar ‘act together’, said Sir Robin, Stan James's pop-up Live Scores should be treated just as if it were Stan James's own link. Sir Robin said the question boiled down to this: ‘[I]f A has a website containing infringing material which will inevitably be copied into the computer of B if he enters that website, is A a joint tortfeasor with B?’. He was
Practical significance
Off-shore companies providing access to infringing off-shore databases can now be sued in British courts with relative ease. The days of applying the rules of secondary liability seem long gone. The ability to target both the infringing database provider and those enabling access to it, whether from the UK or not, will be welcomed by those who have invested in databases in the UK.
The effect of this decision is to make parties that might otherwise avoid infringement as being merely an ‘intermediary’, liable as joint tortfeasors. In this case, a provider of a link to information, which was provided by a third party, was jointly liable with those accessing the link (its customer), even where the customers themselves do not realize they are infringing any rights and do not see the infringing material being downloaded onto their computers as it is not necessarily displayed.
This decision has implications for website operators as a whole. They must be vigilant in their provision of data and confident that it is not infringing, since lack of knowledge by the provider of the infringing material is not a defence to joint tortfeasorship, according to Sir Robin, as it is not for the customers.
Football Dataco Ltd and others v Stan James plc and others, Sportradar and others [2013] EWCA Civ 27, Court of Appeal, England and Wales
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt079, first published online: June 7, 201
The court has held that the provision of facilities to download infringing material on to a user's computer is inevitably a joint act of infringement of sui generis database right, even if the material is not displayed.
Legal context
Both the online betting company (based outside the UK) and the providers of the infringing database (from servers outside the UK) to which the betting site provided links were found by the Court of Appeal to be liable as joint tortfeasors with the betting site's customers in the UK who unknowingly downloaded the infringing data.
UK sui generis database right was created by the UK implementation of Article 7 of the Database Directive 96/9. The relevant provisions of the Directive in relation to subsistence of the right are:
Article 1.2. For the purposes of this Directive ‘database’ shall mean a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means.The sui generis right entitles its owner to prevent extraction and/or re-utilization of the whole or a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database (Article 7(1)). ‘Extraction’ is defined as ‘the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means or in any form’ (Article 7(2)).
Article 7. 1. Member States shall provide for a right for the maker of a database which shows that there has been qualitatively or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents to prevent extraction and/or re-utilization of the whole or a substantial part, evaluated qualitatively and/or quantitatively, of the contents of that database.
There may be infringement even where the defendant extracts or re-utilizes insubstantial parts of the contents of the database in a repeated and systematic fashion, implying acts which conflict with a normal exploitation of that database or which unreasonably prejudice the legitimate interests of the maker of the database shall not be permitted (Article7(5)).
Facts
Subsistence of sui generis database right
Sir Robin Jacob gave the leading judgment with which Lloyd and Lewison LJJ agreed. He confirmed that Football Live was a database which qualified for sui generis database right: there was nothing in the Directive to deny sui generis rights to a database which was also part of a copyright work, as the Court of Justice of the European Union (CJEU) had established in C-442/02 Fixtures Marketing v OPAP [2004] I-8961.
Sir Robin then considered whether it was a database which qualified for protection under Article 7 (there having been investment in obtaining, verification or presentation of the contents). He commented that the CJEU decision not to grant sui generis rights in British Horseracing board (BHB) v William Hill CBHB C-203/02, and Fixtures Marketing was based on the premise that ‘investment in creating data was not the right kind of investment’. As for the Football Live database, the defendants contended that there was no independent investment in the database, that the data was created and thus the investment was in the creation rather than in the required ‘obtaining, verification and presentation’. Counsel for Sportradar argued that, until the data was recorded, it did not exist, and that Article 7 was confined to pre-existing data collected together to form a database.
Sir Robin preferred to start with what he described as ‘the common sense position’, that the factual data provided by the FBA to the SIP in the Football Live database was pre-existing data: ‘only a metaphysicist would say a goal is not scored until the FBA tells the SIP that it has been scored’. Counsel for Sportradar has suggested that data about physical phenomena such as temperature or pressure at a particular time and place only come into existence when someone measures and records them. Sir Robin's view was that ‘the same metaphysicist would feel hot in a Turkish bath even without a thermometer’. A scientist taking a measurement ‘is recording data, not creating it’. If one followed the logic through, held Sir Robin,
there is never anything but creation of data when it is put in a database. For even if the make of the database seeks to use only ‘pre-exiting’ materials, all he can in fact use is his own perception of what those materials are. So always in making his database he is in a sense ‘creating’ information, using his own mind to judge what the ‘old’ material is to put into his database. It makes no difference whether he is trying to record it himself for the first time or trying to use what he perceived to be a pre-existing record: there is no reality, only an observer's perception of it. Always ultimately a database will be subjective in that sense'.If this is right, following Sportradar's counsel's logic, there could never be any protected database, held Sir Robin. Neither was he impressed by attempts to distinguish between a database made up of data consisting of pre-existing items collected by the database make and one made up of items ascertained by the database maker himself. He gave as an example, the communication from the FBA being recorded and the SIP listening to that recording, rather than using the current direct communication. The former arrangement would benefit from database right, according to Sportradar's submission, whereas the latter would not: ‘The legislators cannot have intended anything as silly as that’, said Sir Robin.
Sir Robin looked at the policy behind the Directive, stating that there were understandable policy reasons behind excluding substantive data creation (such as football fixtures and lists of runners and riders) but not cases where people collect data by measurement or similar processes and assemble that data in a database (the latter being excluded if Sportradar's submissions were followed, he held): ‘The policy of the Directive is that databases which cost a lot of investment and can readily be copied should be protected. The right is created to protect the investment which goes into the creation of a database.’ The Directive is concerned with creation of a commercial right so as to encourage the creation of valuable databases.
There were submissions that only the investment in gathering the objective data elements of the database would gain a sui generis right (ie the goals scored, time of the goal and scorer, for example) and investment in subjective elements (ie who was the dominant player in the last 10 min or who should be the man of the match) would not count for sui generis right purposes. Sir Robin drew an analogy with a scholar creating a database of all Charles Dickens's references to law and lawyers. This would involve expenditure of significant resources and the database would qualify for protection. If the scholar then added commentary, he would not lose protection for the database (although the commentary was subjective), but these sui generis rights would not prevent extraction of information from the database which he himself had generated ‘because the rules as to what amounts to infringement focus on whether infringer is making undue use of the relevant resources which went into the database. The scholar's own commentaries would not be relevant resources’, although he might have copyright protection in these commentaries:
When a referee says the ball was over the line and signals a goal has been scored, it has. Any spectator who tells someone that it has been scored is not creating data. If he adds his opinion that it could be the goal of the month, that is his creation.Sir Robin therefore agreed with Floyd J that the Football Live database had sui generis protection.
Infringement
Football Dataco contended that the UK-based users of the Stan James betting website were infringers pursuant to Article 7(1), (2) and (5).
Stan James submitted that, although all the Lives Scores data on Sportradar's database were uploaded onto its customers' computers, the user could not see it all at once because the data were encrypted (although by applying a magnifying glass decryption key the user could see any part of the data). Stan James claimed that data was only ‘extracted’ when it was read by the punter. Since punters only applied the magnifying glass to relatively few matches, this could not be a substantial part of the Sportradar database (Live Scores), let alone the Football Live database (from which elements of Live Scores were derived).
Sir Robin was unable to accept this argument. He held that the ‘temporary transfer of the contents’ of the Sportradar database to another medium (the punter's computer) and was of an ‘all or nothing’ sort. ‘The point is hopeless’ he said of the Stan James submission:
Moreover if right it would be quite subversive of the database right altogether. For no user of any database wants to see all of the data in it. Users want just the elements they are interested in—just as a purchaser of a dictionary never expects to consult more than a small proportion of the definitions in the dictionary never expects to consult more than a small proportion of the definitions in the dictionary. If you only count the data actually accessed as the part taken and not what is actually down loaded, there would seldom be a substantial part taken.So does the punter infringe? Sir Robin held that, if Live Scores infringes Football Live, so does the punter.
What proportion of the matches did Live Scores get its data directly or indirectly from Football Live? Sir Robin held that there was ample material for Floyd J to hold that Sportradar's Live Scores data was taken directly or indirectly from Football Live. The appearance of seeded errors in Live Scores data which could only have come from the Football Live database (implanted so as to furnish evidence of unauthorized use) evidenced such copying.
Was a substantial part copied? Floyd J had held that infringement by extraction had occurred, since a qualitatively substantial part had been extracted from the pre-defence into the Live Scores database. Post-defence, where much more limited data was used in Live Scores (goals and times only), Floyd J had held that a substantial part had not been extracted. The test was one of substantiality, based on the investment in the data that is extracted. ‘Even if only a small part is taken, it can be qualitatively a substantial part if it represents significant investment’, stated Sir Robin, when discussing the test (as set out in BHB). He found that very significant investment had been made in the costs of the SIP and the FBA and the overall set-up and confirmed Floyd J's finding that that the pre-defence data extracted infringed the sui generis rights.
The post-defence data had been found at first instance not to infringe, since it was only goals and timings and required neither the running commentaries of the FBAs nor any significant investment. This sort of data that could be recorded ‘at virtually no additional cost’ (per Floyd J, para 76) was held by him not to be a substantial part. Sir Robin Jacob did not agree: it was irrelevant that the data could have been collected at virtually no additional cost, as what mattered was the investment which in fact went into collecting the data: ‘If you want universal and reliable coverage you would still have to have reliable people at every ground and a reliable method of reporting it.’ Further, Floyd J had ‘overlooked’ the fact that the punter's computer had all the data within it albeit in encrypted form.
Thus Sir Robin emphatically allowed the appeal against this aspect of Floyd J's decision:
Sportradar's business model in part relied on extraction for nothing of data from Football Live (and possibly other databases too) and selling it on as part of its own wider package. It could provide a lesser package by avoiding this extraction. But then it would not be comprehensive. I see no reason why it should not pay for the comprehensive coverage which, by extraction, it is able to sell on. It puts at risk the investment made by others. Joint tortfeasorshipThe CJEU ruled that parties which upload data from a protected database and sends data to users' computers in a second Member of State (as Sportradar did) infringes the database right in both states (by re-utilisation). This would make Sportradar liable as a primary infringer if it targeted UK punters. Sportradar ‘admittedly does’ target UK consumers, stated Sir Robin, so the joint tortfeasorship appeal against Floyd J's finding that Sportradar was not a joint infringer with the punters (but that Stan James was) became academic.
Sir Robin reviewed the common law on joint torfeasorship under English law, contrasting L'Oréal v eBay [2009] RPC 21 (where eBay were not joint tortfeasors), with those who sold trade mark infringing goods via their online auction system. eBay merely provided the facility used by the infringers.
Sir Robin repeated the dictum of Lord Templeman in CBS v Amstrad [1988] AC 1013: joint infringers are two or more persons who act in concert with one another pursuant to a ‘common design in the infringement’; and per Peter Gibson LJ in Sabaf v Meneghetti [2002] EWCA Civ 976: ‘Unless he has made the infringing act his own, he has not himself committed the tort.’
Sir Robin found that Stan James had acted in concert with Sportradar and was thus a joint tortfeasor. The question on appeal was, however, whether Stan James was a joint tortfeasor with the UK punters who availed themselves of the pop-up Live Scores on Stan James's website. From the fact that Stan James and Sportradar ‘act together’, said Sir Robin, Stan James's pop-up Live Scores should be treated just as if it were Stan James's own link. Sir Robin said the question boiled down to this: ‘[I]f A has a website containing infringing material which will inevitably be copied into the computer of B if he enters that website, is A a joint tortfeasor with B?’. He was
‘conscious that this question is important’ and said that the answer ‘would seem to apply equally to copyright as to database rights. If the answer is yes, then the owner of any website anywhere in the world will be a joint tortfeasor with a UK user of that website if the inevitable consequence of access to that site by the user is infringement by that user.’Sir Robin held the answer to be ‘yes’:
[T]he provider of such a website is causing each and every UK user who accesses his site to infringe. His very purpose in providing the website is to cause of procure acts which will amount in law to infringement by any UK user of it. The case is not one of a mere facilitator, such as eBay or Amstrad [as discussed above] where the choice to infringe or not ultimately law with the consumer. … Stan James is in reality responsible for the punter's infringement.Arguments based on it being the punter's option whether to click on the pop-up box, or that neither the punter nor Stan James knew that the whole of Sportradar's Live Scores was downloaded, encrypted, into the punter's computer, did not find favour with Sir Robin: no non-infringing choice was available to the user of the pop-up box, unlike the situation with eBay or Amstrad where the user of the facility could decide whether to infringe (to sell the trade mark-infringing goods or make infringing copies). In relation to the defence of innocence, Sir Robin rejected submissions on behalf of Stan James that, where the law created secondary liability by statute (as it has for patent and copyright infringement), there was a requirement of knowledge on the part of the alleged secondary infringer. Thus the common law should have the same approach. Sir Robin did not accept this:
Once a party has procured an act which amounts to infringement by another he has effectively made it his own act. Here the acts of infringement by the punters do not require knowledge. I see no reason why Stan James which causes those acts to happen by providing a link which makes infringement inevitable should have a defence not available to those whose acts it procures (the punters'). This is not a case of secondary liability but one of primary liability along with another.He criticized what he called Stan James's Nelsonian blindness of the ‘obvious risks’ of using the Sportradar database. It used the Sportradar facility to enhance the attractiveness of its own site and chose not to inquire into the details of where Sportradar got its data from and how it was sent to the users. Stan James could have asked Sportradar to indemnify it; if it chose not to do so, it would be taking a risk if all was not well with what Sportradar were providing.
Practical significance
Off-shore companies providing access to infringing off-shore databases can now be sued in British courts with relative ease. The days of applying the rules of secondary liability seem long gone. The ability to target both the infringing database provider and those enabling access to it, whether from the UK or not, will be welcomed by those who have invested in databases in the UK.
The effect of this decision is to make parties that might otherwise avoid infringement as being merely an ‘intermediary’, liable as joint tortfeasors. In this case, a provider of a link to information, which was provided by a third party, was jointly liable with those accessing the link (its customer), even where the customers themselves do not realize they are infringing any rights and do not see the infringing material being downloaded onto their computers as it is not necessarily displayed.
This decision has implications for website operators as a whole. They must be vigilant in their provision of data and confident that it is not infringing, since lack of knowledge by the provider of the infringing material is not a defence to joint tortfeasorship, according to Sir Robin, as it is not for the customers.
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Gold Bear Wars
Author: Birgit Clark (Baker & McKenzie LLP)
Regional Court of Cologne (Landgericht Köln), 33O 803/11, 18 December 2012
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt072, first published online: May 31, 2013
Upholding a claim brought by confectionery manufacturer Haribo, the Regional Court of Cologne decided that competitor Lindt's three-dimensional gold-foiled chocolate bears amounted to an infringing ‘visual representation’ of Haribo's well-known GOLDBÄREN gummy bear word marks.
Legal context
In accordance with Article 5(1) of the European Union's Trade Mark Directive, Article 14(2) No 3 of the German Trade Mark Act (MarkenG) provides that it constitutes trade mark infringement ‘if a third party without having consent of the trade mark owner in the course of trade exploits the distinctive character or the repute of a well-known trade mark in relation to goods or services which are not similar to those for which the trade mark is registered without due cause and by such use takes unfair advantage of the distinctive character or the repute of the trade mark’.
Facts
German confectioners Haribo had sold its multi-coloured gummy bears wrapped in gold-coloured packaging since the 1960s and owned various registered trade mark rights relating to them including, inter alia, GOLDBÄR (in English: gold bear) and its plural form GOLDBÄREN as well as its ‘Goldbär device’: a yellow-gold coloured bear device wearing a red ribbon bow covering confectionery. Haribo's competitor, Swiss confectioner Lindt, who produces the well-known chocolate Gold Bunnies, has made and sold gold-foil wrapped chocolate bears (called Lindt Teddy and wearing a red ribbon bow) since 2011. Haribo took objection and brought a claim against the distribution of Lindt's chocolate bears in Germany based on its trade mark rights. In addition, Haribo asked for information, damages and the destruction of Lindt's products. Lindt saw things differently and contended that the gold foil and red ribbon used on its chocolate Lindt Teddies were the same as those used on its well-known Easter chocolate Gold Bunnies. Lindt explained that it had intentionally refrained from using brand names such as ‘Goldbär’ or ‘Gold Teddy’ and that gold was a traditional Christmas colour. The Swiss chocolate maker thus invited the court to find that the competing products did not look in any way similar so that consumers would not be confused.
Analysis
The court agreed with Haribo. While Haribo based its infringement claim on a likelihood of confusion (Article 14(2) No 2 MarkenG), dilution (Article 14(2) No 3 MarkenG) as well as unfair competition law, the court chose to focus solely on trade mark dilution.
The court confirmed that Haribo's trade mark registration for GOLDBÄREN amounted to a well-known mark in the sense of Article 14(2) No 3 MarkenG insofar as it covered fruit gum, being known to over 90 per cent of the relevant German consumers as evidenced by a market survey Haribo submitted in support of its claim. While it acknowledged that Lindt did not use the word sign GOLDBÄREN for its products, the court nonetheless found that Lindt's Teddies amounted to a ‘visual representation’ of and were thus of a ‘high similarity’ to Haribo's trade marks. The court explained that the sight of the shape of Lindt's three-dimensional chocolate bears inevitably produced connotations with Haribo's bears as being protected by its various trade mark registrations.
The court further agreed with Haribo that consumers were likely to refer to Lindt's bears as ‘Goldbären’ due to their visual appearance which could in turn result in a dilution of Haribo's trade mark rights under Article 14(2) No 3. MarkenG Lindt had claimed that its bear had been named the Lindt Teddy as an intentional variation of its well-known gold foil wrapped bunny. In this respect, the court took the view that the majority of consumers would not use terms such as ‘gold bear figure’, ‘bear wrapped in gold foil’ or ‘gold-coloured chocolate teddy bear’ but would pick the closest and most obvious term when describing Lindt's bears, which was ‘Goldbär’. While ‘Goldbär’ was not a term that could be found in a dictionary, it was nonetheless the most obvious term to describe Lindt's bears, not least due to the fame of Haribo's trade mark.
Noting the significance of the legal issues raised, the court allowed an appeal to the Higher Regional Court of Cologne, explaining that this was a special case since there had so far been no decision by the German Federal Court of Justice (Bundesgerichtshof) on the question of a conflict between a word mark and a three-dimensional product design. The Cologne court did, however, stress that there could be a similarity between different ‘categories of trade marks’ and applied legal principles which the Bundesgerichtshof had previously developed in precedents concerning a conflict between word marks and figurative trade marks (BGH GRUR 1971, 251, 252—Oldtimer; BGH GRUR 2004, 779, 783 Zwilling/Zweibrüder). The judges pointed out that the Bundesgerichtshof had held that there could be similarity where there was not only a ‘concordance in theme’ but where a term was the ‘obvious, unforced and exhaustive description’ adopted by consumers. To avoid a general protection of a mere theme (‘kein allgemeiner Motivschutz’) the threshold for trade mark infringement had to be set high and be restricted to signs that had a ‘particularly memorable and distinctive’ meaning. In cases of three-dimensional marks this would only apply in rare cases, the Cologne judges concluded. In this context the judges also agreed with Haribo that Lindt's gold-coloured packaging could lead consumers to make a mental connection since Haribo's packaging also featured a gold bear wearing a red ribbon.
Lindt's use of its Teddy was also use of the GOLDBÄREN trade mark insofar as it was used as an indicator of trade origin. The court pointed out that Lindt itself had argued that the Teddy was meant as a logical extension of the Gold Bunny product line and was thus meant to refer to the defendant's business.
Lindt's three-dimensional shape and packaging of its Teddy was also ‘unfair’ in the sense of Article 14(2) No 3 MarkenG since there was a serious and real danger that it could dilute the distinctive character of Haribo's mark. Not only would the strength of Haribo's mark as an indicator of origin be reduced, but there was a genuine risk that the mark GOLDBÄREN could become a generic term. The court did not accept the argument that the term GOLDBÄREN was purely descriptive for chocolate products and that their chocolate bears were high priced premium chocolate, whereas Haribo sold ‘low priced sweet nibbles in plastic bags’. Conceding that there may be other gold foil-wrapped chocolate bears available on the German market the judges nonetheless considered that consumers would not automatically describe these as ‘Goldbär’. Further, the relevant market could not be compartmentalized into a market for fruit gums and a market for chocolate since that there was a homogenous market for sweets. Indeed, both the defendant's and the claimant's products were sold in close proximity in supermarket shelves.
The imprint ‘A Teddy’ on some of Lindt's bear did not remove the serious and real danger of a dilution of Haribo's trade mark. Even if an observant consumer would notice the imprint, this would not remove the risk of an association of both marks in the mind of consumer, who could be led to believe that there were contractual connections between defendant and claimant or that Lindt's Teddy was a co-operation of two different manufacturers of confectionery, in particular since Haribo had recently introduced fruit gum products that were a cooperation with another chocolate maker. Accordingly, in light of the (potential) damage to Haribo's trade mark rights it was proportionate for Lindt to pay damages, recall and destroy all products as demanded by Haribo.
Practical significance
The question of conceptual similarity is not always straightforward, as this case illustrates. While it has long been acknowledged that word and figurative marks can be similar, the question of similarity between a word mark and a three-dimensional shape mark appears to arise less frequently. In order to maintain legal certainty for trade mark owners and their competitors alike, it seems crucial that there is a high threshold—as rightly demanded by the Cologne court—and clear guidance as to when similarity may arise.
It is not easy to determine whether the guidance developed by the Bundesgerichtshof for conflicts between word and device marks (similarity, where the later mark is an ‘obvious, unforced and exhaustive description’ of the earlier mark) should equally be applied to all conflicts between word marks and three-dimensional shapes or whether it should be limited to cases where the earlier mark is well-known—as it was the case here with Haribo's mark. Bearing in mind the impact this point may have on search strategies and advice when it comes to clearing any category of (shape) trade mark—and potentially also designs—for use and registration in Germany, it is good news that Lindt has already announced that it will appeal the decision. It thus appears safe to predict that it may only be a question of time until we have a Bundesgerichtshof decision on this issue.
Regional Court of Cologne (Landgericht Köln), 33O 803/11, 18 December 2012
Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt072, first published online: May 31, 2013
Upholding a claim brought by confectionery manufacturer Haribo, the Regional Court of Cologne decided that competitor Lindt's three-dimensional gold-foiled chocolate bears amounted to an infringing ‘visual representation’ of Haribo's well-known GOLDBÄREN gummy bear word marks.
Legal context
In accordance with Article 5(1) of the European Union's Trade Mark Directive, Article 14(2) No 3 of the German Trade Mark Act (MarkenG) provides that it constitutes trade mark infringement ‘if a third party without having consent of the trade mark owner in the course of trade exploits the distinctive character or the repute of a well-known trade mark in relation to goods or services which are not similar to those for which the trade mark is registered without due cause and by such use takes unfair advantage of the distinctive character or the repute of the trade mark’.
Facts
Analysis
The court agreed with Haribo. While Haribo based its infringement claim on a likelihood of confusion (Article 14(2) No 2 MarkenG), dilution (Article 14(2) No 3 MarkenG) as well as unfair competition law, the court chose to focus solely on trade mark dilution.
The court further agreed with Haribo that consumers were likely to refer to Lindt's bears as ‘Goldbären’ due to their visual appearance which could in turn result in a dilution of Haribo's trade mark rights under Article 14(2) No 3. MarkenG Lindt had claimed that its bear had been named the Lindt Teddy as an intentional variation of its well-known gold foil wrapped bunny. In this respect, the court took the view that the majority of consumers would not use terms such as ‘gold bear figure’, ‘bear wrapped in gold foil’ or ‘gold-coloured chocolate teddy bear’ but would pick the closest and most obvious term when describing Lindt's bears, which was ‘Goldbär’. While ‘Goldbär’ was not a term that could be found in a dictionary, it was nonetheless the most obvious term to describe Lindt's bears, not least due to the fame of Haribo's trade mark.
Noting the significance of the legal issues raised, the court allowed an appeal to the Higher Regional Court of Cologne, explaining that this was a special case since there had so far been no decision by the German Federal Court of Justice (Bundesgerichtshof) on the question of a conflict between a word mark and a three-dimensional product design. The Cologne court did, however, stress that there could be a similarity between different ‘categories of trade marks’ and applied legal principles which the Bundesgerichtshof had previously developed in precedents concerning a conflict between word marks and figurative trade marks (BGH GRUR 1971, 251, 252—Oldtimer; BGH GRUR 2004, 779, 783 Zwilling/Zweibrüder). The judges pointed out that the Bundesgerichtshof had held that there could be similarity where there was not only a ‘concordance in theme’ but where a term was the ‘obvious, unforced and exhaustive description’ adopted by consumers. To avoid a general protection of a mere theme (‘kein allgemeiner Motivschutz’) the threshold for trade mark infringement had to be set high and be restricted to signs that had a ‘particularly memorable and distinctive’ meaning. In cases of three-dimensional marks this would only apply in rare cases, the Cologne judges concluded. In this context the judges also agreed with Haribo that Lindt's gold-coloured packaging could lead consumers to make a mental connection since Haribo's packaging also featured a gold bear wearing a red ribbon.
Lindt's use of its Teddy was also use of the GOLDBÄREN trade mark insofar as it was used as an indicator of trade origin. The court pointed out that Lindt itself had argued that the Teddy was meant as a logical extension of the Gold Bunny product line and was thus meant to refer to the defendant's business.
Lindt's three-dimensional shape and packaging of its Teddy was also ‘unfair’ in the sense of Article 14(2) No 3 MarkenG since there was a serious and real danger that it could dilute the distinctive character of Haribo's mark. Not only would the strength of Haribo's mark as an indicator of origin be reduced, but there was a genuine risk that the mark GOLDBÄREN could become a generic term. The court did not accept the argument that the term GOLDBÄREN was purely descriptive for chocolate products and that their chocolate bears were high priced premium chocolate, whereas Haribo sold ‘low priced sweet nibbles in plastic bags’. Conceding that there may be other gold foil-wrapped chocolate bears available on the German market the judges nonetheless considered that consumers would not automatically describe these as ‘Goldbär’. Further, the relevant market could not be compartmentalized into a market for fruit gums and a market for chocolate since that there was a homogenous market for sweets. Indeed, both the defendant's and the claimant's products were sold in close proximity in supermarket shelves.
The imprint ‘A Teddy’ on some of Lindt's bear did not remove the serious and real danger of a dilution of Haribo's trade mark. Even if an observant consumer would notice the imprint, this would not remove the risk of an association of both marks in the mind of consumer, who could be led to believe that there were contractual connections between defendant and claimant or that Lindt's Teddy was a co-operation of two different manufacturers of confectionery, in particular since Haribo had recently introduced fruit gum products that were a cooperation with another chocolate maker. Accordingly, in light of the (potential) damage to Haribo's trade mark rights it was proportionate for Lindt to pay damages, recall and destroy all products as demanded by Haribo.
Practical significance
The question of conceptual similarity is not always straightforward, as this case illustrates. While it has long been acknowledged that word and figurative marks can be similar, the question of similarity between a word mark and a three-dimensional shape mark appears to arise less frequently. In order to maintain legal certainty for trade mark owners and their competitors alike, it seems crucial that there is a high threshold—as rightly demanded by the Cologne court—and clear guidance as to when similarity may arise.
It is not easy to determine whether the guidance developed by the Bundesgerichtshof for conflicts between word and device marks (similarity, where the later mark is an ‘obvious, unforced and exhaustive description’ of the earlier mark) should equally be applied to all conflicts between word marks and three-dimensional shapes or whether it should be limited to cases where the earlier mark is well-known—as it was the case here with Haribo's mark. Bearing in mind the impact this point may have on search strategies and advice when it comes to clearing any category of (shape) trade mark—and potentially also designs—for use and registration in Germany, it is good news that Lindt has already announced that it will appeal the decision. It thus appears safe to predict that it may only be a question of time until we have a Bundesgerichtshof decision on this issue.
Reverse engineering and copyright in programming languages and data file formats
Author: Francis Davey
SAS Institute Inc v World Programming Limited [2013] EWHC 69 (Ch), High Court of Justice, England and Wales, 25 January 2013
Journal of Intellectual Property Law & Practice (2013), doi: 10.1093/jiplp/jpt068, first published online: May 31, 2013
In rejecting an application to amend by SAS Institute, the High Court expressed the provisional view that computer languages and data file formats were probably not capable of being works protected by copyright within the meaning of the Information Society Directive (Infosoc). The court also held that WPL was permitted to reverse engineer the SAS Institute's software even though, in doing so, WPL went beyond the scope of their software licence.
Legal context
The vendor of a software product will often want to reduce the risk that a competitor will use reverse engineering to produce a competing product. Such a vendor might want to rely on copyright in their computer program, which is protected by copyright harmonized as a result of the Computer Programs Directive (91/250), or they might rely on copyright in other aspects of their work, for example the user interface or the data file formats.
In principle, these might be protected as computer programs or as more ‘general’ copyright works as defined in the Information Society Directive (Infosoc Directive 2001/29) or even as works subject to database copyright, harmonized by the Database Directive (96/9).
In C-393/09 Bezpečnostní softwarová asociace—Svaz softwarové ochrany v Ministerstvo kultury [2010] ECR I-13971 the Court of Justice of the European Union (CJEU) held that a graphical user interface was not protectable as a computer program, but that it could be a work protected by general copyright. In a reference to the CJEU in the instant case, the court held that none of the functionality of a computer program, ‘the’ programming language (ie the programming language which it interprets) nor its data file formats were protectable as computer programs (Case C-406/10 SAS Institute Inc v World Programming Ltd (2 May 2012), discussed in David Nickless, ‘Functionality of a computer program and programming language cannot be protected by copyright under the Software Directive’ (2012) 7(10) JIPLP 709).
The CJEU left open the question of whether a programming language or a data file format could be protected as a general copyright work.
Article 5(3) of the Software Directive is intended to permit reverse engineering the purpose of which is to create a new, but differently expressed, computer program that will behave equivalently to the one reverse engineered—in other words a clone.
In the High Court, Arnold J considered (among other things) two questions: first, could a computer language or data file format be works protected by general copyright and, secondly, could the licensor of software place restrictions on the use of their licensed software which would have the effect of restricting the purchaser of the licence from carrying out reverse engineering?
Facts
The SAS Institute (SAS) sells a data analysis system consisting of a core system (SAS Base) and numerous optional components which may be separately licensed. The system is driven by a special purpose programming language (the SAS language). SAS originated in the late 1960s and has been continuously developed since. A very large body of programs has been written in the SAS language.
WPL created a competitor system (WPS) that was intended to emulate the behaviour of several SAS components, including the core, referred to collectively in the case as the ‘SAS components’. Of necessity, WPS needed to be able to run the SAS programming language and to read and write the same file formats as SAS.
In order to ensure compatibility, WPL licensed a version of the SAS system known as the ‘Learning Edition’ in order to reverse engineer the behaviour of the SAS components. The licence under which SAS distributed the Learning Edition restricted it to use by a single individual for the purposes of their learning how to use the SAS system and prohibited its use for production purposes.
WPL also produced documentation (the WPL manuals and the WPS guides), which included a description of the operation of each command. Those descriptions inevitably bore a strong resemblance to descriptions of SAS commands in SAS's manuals.
SAS claimed infringement of copyright of (i) the SAS Manuals by creating WPS and the WPL Manuals and WPS guides; (ii) the SAS components by copying the SAS Manuals; and (iii) the Learning Edition, by contravention of the terms of use.
At the trial ([2010] EWHC 1829 (Ch)) the judge found that WPL had infringed copyright in the SAS Manuals by creating the WPS Manual, but he thought that further assistance was required from the CJEU on the remaining points. Nine questions were referred to the court.
On return to the High Court, SAS sought to argue that the SAS language and data file formats were works protected by general (Infosoc) copyright.
Analysis
The SAS Institute had pleaded that the SAS language and data file formats were protected by software copyright rather than that they were works protected by general copyright. The judge ruled that in order to argue for general copyright protection, the SAS Institute would have to apply to amend its pleadings. He would refuse an application on two principal bases. First, the application to amend would be at a very late stage, after trial and after the matter had been referred to the CJEU. Secondly SAS's case would require the investigation of wholly new factual issues.
For example, in order to decide whether the SAS language was a copyright work, its authorship would need to be determined—the language's very long history would make that a complex inquiry—and then there would have to be an assessment as to whether it exhibited its authors' own intellectual creation. This would require expert evidence. SAS had argued that a computer language was an abstraction, much like the plot of a novel, but in that case was it an abstraction from the computer programs or the manuals? That would again require factual inquiry.
In considering whether the SAS Language was capable of being a work, Arnold J thought that, even if, in the light of decisions of the CJEU such as C-5/08 Infopaq v Danske Dagblades Forening [2009] ECR I-06569, a work did not have to be one of the kinds of work listed in s 1(1)(a) of the Copyright, Designs and Patents Act 1988 it must still be a literary or artistic work within the meaning of Article 2(1) of the Berne Convention. That definition was not unlimited in scope.
The SAS Institute had argued that because the SAS Language was an intellectual creation it was therefore a work. Arnold J rejected this as a non sequitur. A scientific theory is an intellectual creation but it is not a work.
Arnold J expressed the provisional view that a programming language could not be a ‘work’ within the meaning of Infosoc at all. In the same way that a dictionary and a grammar describe a language but the language itself is not a work. A grammar and dictionary are a set of rules for generating meaningful statements. Even if the statements are protected by copyright, it does not follow that the language ought to be.
The same considerations arguing against copyright protection applied at least as strongly to the data file formats but here there was a further question of fixation. It was also hard to see where the authors had stamped their ‘personal touch’ through the creative choices they have made—a required element of the ‘own intellectual creation’ threshold according to the CJEU (C-145/10 Painer v Standard Verlags, 1 December 2011). Evidence would be needed to be adduced to show that this requirement was satisfied.
On the licence question, the CJEU held that:
The judge disagreed. Although the Learning Edition licence was a single-user licence, and the licensee was defined to be the individual who had purchased the licence online from the SAS Institute, the licensee had done so on behalf of WPL. That meant that WPL was ‘a person who [had] obtained a copy of a computer program under a licence’. It was immaterial that the WPL was not the licensee.
The judge held that the ‘acts’ referred to by the CJEU were the acts of loading and running necessary for the use of the Learning Edition. The CJEU had not meant to narrow the definition of ‘acts’ to those that were permitted by the licence. To do so would be to bypass the anti-contracting-out provisions of Article 5(3). This meant that even though unlicensed employees of WPL had used the Learning Edition in order to carry out reverse engineering and even though doing so went beyond the scope of the Learning Edition's licence, that reverse engineering was lawful under Article 5(3).
Practical significance
The creators of general purpose programming languages rarely try to restrict their use by asserting intellectual property rights. This is partly due to computer science tradition—computer languages were never treated as ‘owned’ by their authors in that sense—but it will also usually make sense. It will almost always be true that the wider the community of those using a language the better it is for the language's development. The copying of a programming language by making compatible interpreters or compilers is a driver for that broader reach.
But application-specific programming languages such as the SAS language or the commands used in Navitaire v Easyjet [2004] EWHC 1725 (Ch), are intended to drive specific programming systems. The vendors of those systems have a strong commercial interest in preventing the creation of a competing system. Such a system would need to be able to interpret exactly the same programming language so that if that language is protected by copyright, the system vendor could prevent competition.
The situation with data file formats is the same. Where a data file format has become a de facto standard, for example Microsoft Word documents and Adobe's Portable Document Format, any competitor seeking to enter the market will need to be able to create a compatible application capable of reading the same file formats. File format compatibility is implicated in a much wider class of software applications than programming languages, so the decision on data file formats is more significant for the market as a whole.
More significant is the analysis of Article 5(3) of the software directive. If the phrase ‘which he is entitled to do’ were limited to those acts permitted under the licence and if a licensor were able to limit the purpose for which those acts were done, it would be very easy to prevent reverse engineering of by writing suitably restrictive licences. Such an interpretation would make the phrase ‘without the authorization of the rightholder’ useless.
Being able to obtain a restricted licence to software but still to be able to reverse engineer it sufficiently so as to create a competing—but original in the copyright sense—work is very important. If followed, this decision will make life easier for those seeking to break into existing software markets.
SAS Institute Inc v World Programming Limited [2013] EWHC 69 (Ch), High Court of Justice, England and Wales, 25 January 2013
Journal of Intellectual Property Law & Practice (2013), doi: 10.1093/jiplp/jpt068, first published online: May 31, 2013
Legal context
The vendor of a software product will often want to reduce the risk that a competitor will use reverse engineering to produce a competing product. Such a vendor might want to rely on copyright in their computer program, which is protected by copyright harmonized as a result of the Computer Programs Directive (91/250), or they might rely on copyright in other aspects of their work, for example the user interface or the data file formats.
In principle, these might be protected as computer programs or as more ‘general’ copyright works as defined in the Information Society Directive (Infosoc Directive 2001/29) or even as works subject to database copyright, harmonized by the Database Directive (96/9).
In C-393/09 Bezpečnostní softwarová asociace—Svaz softwarové ochrany v Ministerstvo kultury [2010] ECR I-13971 the Court of Justice of the European Union (CJEU) held that a graphical user interface was not protectable as a computer program, but that it could be a work protected by general copyright. In a reference to the CJEU in the instant case, the court held that none of the functionality of a computer program, ‘the’ programming language (ie the programming language which it interprets) nor its data file formats were protectable as computer programs (Case C-406/10 SAS Institute Inc v World Programming Ltd (2 May 2012), discussed in David Nickless, ‘Functionality of a computer program and programming language cannot be protected by copyright under the Software Directive’ (2012) 7(10) JIPLP 709).
The CJEU left open the question of whether a programming language or a data file format could be protected as a general copyright work.
Article 5(3) of the Software Directive is intended to permit reverse engineering the purpose of which is to create a new, but differently expressed, computer program that will behave equivalently to the one reverse engineered—in other words a clone.
In the High Court, Arnold J considered (among other things) two questions: first, could a computer language or data file format be works protected by general copyright and, secondly, could the licensor of software place restrictions on the use of their licensed software which would have the effect of restricting the purchaser of the licence from carrying out reverse engineering?
Facts
The SAS Institute (SAS) sells a data analysis system consisting of a core system (SAS Base) and numerous optional components which may be separately licensed. The system is driven by a special purpose programming language (the SAS language). SAS originated in the late 1960s and has been continuously developed since. A very large body of programs has been written in the SAS language.
WPL created a competitor system (WPS) that was intended to emulate the behaviour of several SAS components, including the core, referred to collectively in the case as the ‘SAS components’. Of necessity, WPS needed to be able to run the SAS programming language and to read and write the same file formats as SAS.
In order to ensure compatibility, WPL licensed a version of the SAS system known as the ‘Learning Edition’ in order to reverse engineer the behaviour of the SAS components. The licence under which SAS distributed the Learning Edition restricted it to use by a single individual for the purposes of their learning how to use the SAS system and prohibited its use for production purposes.
WPL also produced documentation (the WPL manuals and the WPS guides), which included a description of the operation of each command. Those descriptions inevitably bore a strong resemblance to descriptions of SAS commands in SAS's manuals.
SAS claimed infringement of copyright of (i) the SAS Manuals by creating WPS and the WPL Manuals and WPS guides; (ii) the SAS components by copying the SAS Manuals; and (iii) the Learning Edition, by contravention of the terms of use.
At the trial ([2010] EWHC 1829 (Ch)) the judge found that WPL had infringed copyright in the SAS Manuals by creating the WPS Manual, but he thought that further assistance was required from the CJEU on the remaining points. Nine questions were referred to the court.
On return to the High Court, SAS sought to argue that the SAS language and data file formats were works protected by general (Infosoc) copyright.
Analysis
The SAS Institute had pleaded that the SAS language and data file formats were protected by software copyright rather than that they were works protected by general copyright. The judge ruled that in order to argue for general copyright protection, the SAS Institute would have to apply to amend its pleadings. He would refuse an application on two principal bases. First, the application to amend would be at a very late stage, after trial and after the matter had been referred to the CJEU. Secondly SAS's case would require the investigation of wholly new factual issues.
For example, in order to decide whether the SAS language was a copyright work, its authorship would need to be determined—the language's very long history would make that a complex inquiry—and then there would have to be an assessment as to whether it exhibited its authors' own intellectual creation. This would require expert evidence. SAS had argued that a computer language was an abstraction, much like the plot of a novel, but in that case was it an abstraction from the computer programs or the manuals? That would again require factual inquiry.
In considering whether the SAS Language was capable of being a work, Arnold J thought that, even if, in the light of decisions of the CJEU such as C-5/08 Infopaq v Danske Dagblades Forening [2009] ECR I-06569, a work did not have to be one of the kinds of work listed in s 1(1)(a) of the Copyright, Designs and Patents Act 1988 it must still be a literary or artistic work within the meaning of Article 2(1) of the Berne Convention. That definition was not unlimited in scope.
The SAS Institute had argued that because the SAS Language was an intellectual creation it was therefore a work. Arnold J rejected this as a non sequitur. A scientific theory is an intellectual creation but it is not a work.
Arnold J expressed the provisional view that a programming language could not be a ‘work’ within the meaning of Infosoc at all. In the same way that a dictionary and a grammar describe a language but the language itself is not a work. A grammar and dictionary are a set of rules for generating meaningful statements. Even if the statements are protected by copyright, it does not follow that the language ought to be.
The same considerations arguing against copyright protection applied at least as strongly to the data file formats but here there was a further question of fixation. It was also hard to see where the authors had stamped their ‘personal touch’ through the creative choices they have made—a required element of the ‘own intellectual creation’ threshold according to the CJEU (C-145/10 Painer v Standard Verlags, 1 December 2011). Evidence would be needed to be adduced to show that this requirement was satisfied.
On the licence question, the CJEU held that:
a person who has obtained a copy of a computer program under a licence is entitled, without the authorisation of the owner of the copyright, to observe, study or test the functioning of that program so as to determine the ideas and principles which underlie any element of the program, in the case where that person carries out acts covered by that licence and acts of loading and running necessary for the use of the computer program.SAS argued that WPL's acts were not ‘covered by [the] licence’ of the Learning Edition because it had gone beyond the scope of the licence. As a result, WPL could not take advantage of Article 5(3)'s protection of reverse engineering.
The judge disagreed. Although the Learning Edition licence was a single-user licence, and the licensee was defined to be the individual who had purchased the licence online from the SAS Institute, the licensee had done so on behalf of WPL. That meant that WPL was ‘a person who [had] obtained a copy of a computer program under a licence’. It was immaterial that the WPL was not the licensee.
The judge held that the ‘acts’ referred to by the CJEU were the acts of loading and running necessary for the use of the Learning Edition. The CJEU had not meant to narrow the definition of ‘acts’ to those that were permitted by the licence. To do so would be to bypass the anti-contracting-out provisions of Article 5(3). This meant that even though unlicensed employees of WPL had used the Learning Edition in order to carry out reverse engineering and even though doing so went beyond the scope of the Learning Edition's licence, that reverse engineering was lawful under Article 5(3).
Practical significance
The creators of general purpose programming languages rarely try to restrict their use by asserting intellectual property rights. This is partly due to computer science tradition—computer languages were never treated as ‘owned’ by their authors in that sense—but it will also usually make sense. It will almost always be true that the wider the community of those using a language the better it is for the language's development. The copying of a programming language by making compatible interpreters or compilers is a driver for that broader reach.
But application-specific programming languages such as the SAS language or the commands used in Navitaire v Easyjet [2004] EWHC 1725 (Ch), are intended to drive specific programming systems. The vendors of those systems have a strong commercial interest in preventing the creation of a competing system. Such a system would need to be able to interpret exactly the same programming language so that if that language is protected by copyright, the system vendor could prevent competition.
The situation with data file formats is the same. Where a data file format has become a de facto standard, for example Microsoft Word documents and Adobe's Portable Document Format, any competitor seeking to enter the market will need to be able to create a compatible application capable of reading the same file formats. File format compatibility is implicated in a much wider class of software applications than programming languages, so the decision on data file formats is more significant for the market as a whole.
More significant is the analysis of Article 5(3) of the software directive. If the phrase ‘which he is entitled to do’ were limited to those acts permitted under the licence and if a licensor were able to limit the purpose for which those acts were done, it would be very easy to prevent reverse engineering of by writing suitably restrictive licences. Such an interpretation would make the phrase ‘without the authorization of the rightholder’ useless.
Being able to obtain a restricted licence to software but still to be able to reverse engineer it sufficiently so as to create a competing—but original in the copyright sense—work is very important. If followed, this decision will make life easier for those seeking to break into existing software markets.
Paradoxes and intellectual property law
"Paradoxes and intellectual property law" is the title of the June 2013 Guest Editorial, penned by Dr Neil J. Wilkof -- a respected commentator on many areas of intellectual property law and one of the original members of the JIPLP editorial Board. Writes Neil:
"An oft-underappreciated aspect of intellectual property law is the presence of paradoxes. By ‘paradox’ we mean some aspect of a given intellectual property right that exhibits contradictory features. It is instructive to consider several such paradoxes and to speculate what we can learn from them.
A mark can become generic by two quite different routes. First the mark can be guilty of original generic sin. We do not allow the registration of the mark ‘Table’ for tables because to do so would be to grant the trade mark owner a monopoly over the common name of the product itself. As a result, we would allow the trade mark owner to gain an unfair competitive advantage. A generic mark in this sense is a legal non-starter.
There is, however, a second way that a mark can become generic, namely, to acquire genericness after initially having been a distinctive identifier of source. Examples are aspirin and linoleum. Each of these was once protected as a distinctive trade mark. However, the product identified by each of these marks became so successful that the mark no longer served to identify the source of the product, but became the name of the product itself. The paradox is that it is the very success of the product that sows the seeds of its ultimate legal downfall. It is possible that one can be too successful for trade mark purposes, when success leads to a result that contradicts a bedrock proposition of trade mark law, namely that a trade mark must function as an indicator of source.
Two decades ago, the courts in Israel, in a case popularly known as ‘The Dead Sea Scrolls Case’, were called upon to decide whether the textual reconstruction of certain ancient parchment fragments was protectable under copyright. The physical fragments themselves were first reassembled as best as possible, much as a jig-saw puzzle; however, there were still a number of lacunae in the text (similar to missing pieces in the puzzle). A scholar was called upon to complete the missing text but, before he could publish his finished scholarly work, a copy was published without permission by a popular biblical studies journal.
The court (upheld on appeal) ruled that the text as reconstructed was a protected copyright work. But in so doing, the court chose to ignore the paradox inherent in its decision. If one assumes that the scholar did his job properly, then there is only one possible (correct) text. But if that is true, then in effect there is a merger of the text with its underlying idea. Under the merger doctrine (which is recognized in various countries, such as the USA, but apparently not in Israel), when there is the merger of idea and expression, there is no copyright protection in the work.
That upshot is a paradox—only if the scholarly work is not an accurate reconstruction of the original text is it protected under copyright; the more accurate the work of reconstruction, the less likely copyright protection should apply. Another scholar who wishes to do his own independent reconstruction of the text will be more likely to infringe the original work the more that his reconstruction is accurate (unless there is an explicit exception to infringement under such circumstances that will save him). The paradoxical result—the better the scholarship, the more likely the infringement.
So what do these two examples of IP paradox teach us? The generic trade mark issue is an example of where doctrinal coherency prevails. If the mark no longer serves to identify the source of the goods, for whatever reason, the mark is no longer worthy of trade mark protection, no matter how ‘successful’ the product. This is so, even if the trade mark owner has taken all possible steps to blunt genericity. The Dead Sea Scrolls Case shows how a paradox that results from applying first principles of copyright law to the specific circumstances of academic research can simply be ignored by the court. Indeed, the presence of an explicit statutory exception would have made it easier for the court to recognize the paradox, safe in the knowledge that the paradox would be sanctioned as a matter of law".
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