24 March 2010

Google’s AdWords do not infringe trade marks!


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Google AdWords logophoto © 2010 Martin Lafrance | more info (via: Wylio)

One of my blog’s posts that has been attracting a huge user attention and hence traffic is the one relating to the case of Louis Vuitton et al vs Google. I wrote it some months ago with the purpose to cover the highly controversial opinion of Poiares Maduro, being the Advocate General assigned to this case. As many others interested in this matter, I was waiting for the final ruling to be delivered by the European Court of Justice. Well, yesterday was the day – the ruling, having the potential to prove not lesser controversial than the preceding opinion, is out and I will fulfil my promise and discuss it hereunder.

The Court had to deal with the separate proceedings that the three claimants, Louis Vuitton, Viaticum and Mr Thonet had raised against Google in France. All three claims had reached the highest French court – the Cour de Cassation. That court decided to stay the proceedings and to refer the following questions to the ECJ:

  • Must Article 5 (1) (a) and (b) of  the First Trade Mark Directive (the Directive) and Article 9 (1) (a) and (b) of the Community Trade Mark Regulation (CTMR) be interpreted as meaning that Google who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by its AdWords to create and favourably display, on the basis of those keywords, advertising links to sites offering infringing goods is using those trade marks in a manner which their proprietor is entitled to prevent?
  • In the event that the trade marks have a reputation, may the proprietor oppose such use under Article 5 (2) of the Directive and Article 9 (1) (c) of the CTMR?
  • In the event that such use does not constitute a use which may be prevented by the trade mark proprietor under either the Directive or the CTMR, may Google be regarded as a “hosting” provider within the meaning of Article 14 of the E-Commerce Directive, so that that Google cannot incur liability until it has been notified by the trade mark proprietor of the unlawful use of the sign by the advertiser?

In answering the first question, the Court addressed whether Google (through its AdWords service) used the trade marks in the first place. The Court thereby opined that Google did not and I personally find the Court’s reasoning more than remarkable. Accordingly, not even the fact that Google operates its AdWords “in the course of trade” as it enables advertisers to select signs identical with trade marks as keywords and stores those signs and displays its clients’ ads on the basis thereof suffices to open Google’s dealing to a “use” within the terms of Article 5 of the Directive and Article 9 of the CTRM. This conclusion, the Court holds, is neither called into question by the fact that Google is paid by its clients for the use of those signs.

The Court, at least, grants a cold comfort to the trade marks proprietors by stating that Google’s clients used the signs identical with, or similar to, the proprietors’ trade marks and that, Google allowed its clients to use signs which are identical with, or similar to, trade marks, without itself having used those signs.

The logical questions that demands an answer would be respectively: is a proprietor entitled to prevent a client of Google to use signs which are identical with, or similar to, proprietor’s trade marks? The Court’s opinion thereto is rather restrictive and conveys once again bad news for trade marks proprietors: the exercise of that right must be reserved only to cases in which third party’s use of the sign affects or is liable to affect the functions of the trade mark. A proprietor, accordingly, cannot in general terms oppose the use of a sign identical with the mark if that use is not liable to cause detriment to any of the functions of that mark. With regard to the instant cases, the Court concluded that proprietors cannot prevent third parties from using keywords selected on Google’s AdWords and displayed in connection with goods or services identical with those for which that mark is registered, unless that ad enables an average internet user to ascertain that the goods or services referred to therein originate from a third party.

In answering the second question, the Court denied a “use” of Google within Article 5 (2) of the Directive  or within Article 9 (1) (c) of the CTMR. However, third parties free-riding over well known and reputable trade marks and by this gaining advantages may be considered infringing such trade marks and be very well restrained from doing so.

In answering the third question, the Court found that Google was an information society service provider and was thus entitled to benefit from the liability exemptions guaranteed by the E-Commerce Directive with respect to such providers. The Court further pointed out that the mere facts that Google’s services were subject to payment,  could not have the effect of depriving Google of the above exemptions from liability.

Overall, the Court acquitted Google, so to say, of all charges.

What does the ruling mean for the proprietors of trade marks? Well, I believe there are both, bad but also good news for those. The bad news are that the ruling weakens the proprietors’ exclusive rights in their trade marks. It literally scrapes a layer or even two from the exclusivity to use such trade marks.

The good news, however, consist in the legal certainty that this ruling provides for, as it also regards a row of questions that are of general importance for trade marks law. Put it another way – it is nothing but the eternal dilemma: is the glass half empty or just half full?

 

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20 March 2010

How to hit a misappropriating fly on the wall


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My fly on the wallphoto © 2009 Clare Bell | more info (via: Wylio)

Imagine you were a farmer and invested lots of time and effort to sow seeds and watched the crops grow. Now imagine another farmer who attempted to harvest your crops without having invested any time and labour therein. Would you allow such farmer to reap your crops? You most probably would not.

In a very recent case , the New York District Court for the Southern District had to deal with a question pretty much like the one above. The claimants Barclays Capital Inc, Merril Lynch, Pierce, Fenner & Smith Inc and Morgan Stanley & Co Inc accused the defendant theflyonthewall.com of copyright infringement and of hot-news misappropriation relating to claimants’ recommendations that claimants have researched for their paying clients.

In particular, the claimants accused the defendant to have undertaken a regular, systematic, and timely taking of claimants’ hot-news and to have disseminated them through unauthorised channels of electronic distribution before the claimants had an opportunity to share these recommendations with their clients.

As for the claim regarding copyright infringement,  defendant did not dispute ther arrangement therein. As for the claim relating to hot-news misappropriation, however, defendant contested its liability thereunder.

Not surprisingly, the Court found defendant liable in both instances.

This ruling, albeit delivered by a lower court, is, I believe, remarkable for Court’s dissection of the law of unfair competition and, misappropriation, in particular. The Court started with INS vs AP, went through Cheney Bros vs Doris Silk and Capitol Records vs Mercury Records and ended up with NBA vs Motorola. A very important thing in my view, is Court’s dedication to the question as to whether federal law preempted  forms of state-law misappropriation, and particularly,  misappropriation of time-sensitive “hot news”. The Court further cited a “mysterious footnote” from Feist, according to which the protection for “hot news” should not be sought under copyright law, but under an INS-type misappropriation theory.

Finally Justice Denise Cote spent some considerations on the public policy. Besides the value of claimants’ hot-news to the market, she thereby noted that such recommendations were not mere objective facts, but rather, subjective judgments based on complex and imperfect evidence and could therefore attract copyright protection. With respect to public’s interest to access financial information on reasonable terms, the Court stated that a balance need be struck between establishing rewards to stimulate socially useful efforts on the one hand, and permitting maximum access to the fruits of those efforts on the other. However, no other was the purpose of the INS-tort or the one of the traditionally accepted goal of intellectual property law – and this is – to provide an incentive for the production of socially useful information without either under- or overprotecting the efforts to gather such information.

Put it all together, the 89 pages long ruling of the New York District Court for the Southern District definitely hits the misappropriating fly on the wall. Bearing its unique dissection of the US law of unfair competition, this ruling and any acompanying comments should be communicated to as many practitioners or just people interested in the matter as only possible.

 

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18 March 2010

When a rapper equals a tazo


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Do you remember when you lastly unleashed a pog from a bottle or a cup containing a light drink? Such pogs are also referred to as “rappers” or – in Spain and Mexico – as “tazos”. Never mind when, I bet you never thought of those things as of subjects of intellectual property protection. Well, that being not enough, I guess you will be surprised again to find out that such rappers/tazos caused the Court of First Instance or, the General Court of the European Union, as it was renamed in the course of the Treaty of Lisbon, to deliver its first ruling on a Community Design case ever.

The Court had to deal with the request of the claimant Grupo Promer Mon Graphic to annul OHIM‘s grant of a Community Design to the defendant PepsiCo Inc.

The defendant had obtained a Community Design for the shape of a “rapper” (see the drawings in the ruling), but faced claimant’s application for a declaration of invalidity based on claimant’s senior Community Design for a “tazo” (see the drawings in the ruling) in pursuance to which defendant’s design lacked the novelty required by Regulation No 6/2002. Claimant further alleged that they had made their design available to defendant on a private and confidential basis and that such disclosure equated with a making available to the public. Thereupon the Invalidity Division of OHIM declared the contested design invalid on the basis of Article 25 (1) (d) of above regulation. PepsiCo appealed against this decision and as a result the Third Board of Appeal of OHIM annulled the decision of the Invalidity Division and dismissed the application for a declaration of invalidity. Accordingly, the Board of Appeal concluded that the difference in the profile of the designs at issue was sufficient to conclude that they produced a different overall impression on the informed user.

Grupo Promer Mon Graphic was reluctant to put up with such an outcome and went to the General Court requesting it to annul the decision of OHIM’s Board of Appeal. In particular, the claimant raised three pleas in law, alleging, (i) defendant’s bad faith and a restrictive interpretation of Regulation No 6/2002 in the contested decision, (ii) lack of novelty of the contested design and, (iii) infringement of Article 25 (1) (d) of Regulation No 6/2002.

With respect to allegations (i) and (ii) the Court made an interesting finding: Article 25 (1) of Regulation No 6/2002 lists the grounds on which a Community design may be declared invalid exhaustively and there is no reference to the bad faith of the proprietor of a contested design. Further, a disclosure on a private and confidential basis cannot be relied upon as it did not target the public and hence did not bar the defendant from novelty.

With respect to allegation (iii) the Court first opined that Article 25 (1) (d) of Regulation No 6/2002 must be interpreted as meaning that a Community design is in conflict with a prior design when that design does not produce  a different overall impression on the informed user from that produced by the prior design. Of course, when determining the above,  the informed user needs to take into consideration the freedom of the designer in developing the Community design. In applying this interpretation to the instant case, the Court held that the two additional circles of the contested design as well as its degree of curvature – when compared to the prior design – were insufficient for the contested design to produce a different overall impression on the informed user. Accordingly, OHIM’s Board of Appeal’s decision had to be annulled.

In my view this decision is very important for two reasons: (i) it is the first ruling of a Court of the European Union that deals with a Community Design and (ii) the Court utilises its ruling to provide for a useful guidance on infringement due to similarity and hence a lack of a different impression on an informed user.

 

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9 March 2010

Spam


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Spam & Baconphoto © 2010 Robert Simmons | more info (via: Wylio)

I guess every Internet and e-mail user has at least once received a spam, scam or any other sort of a junk mail in their inbox. So far, the system admins at my employer have always managed to filter such undesired messages. Yesterday, however, I received an e-mail that has apparently succeeded to overcome the protection designed to restrain it.

It is not the usual marketing spam telling you how to buy cheap watches or to enlarge certain body parts, but rather a scam mocking an urgent situation. The sender pretends to be Marina Encheva and the e-mail reads as follows:

How’s everything on your end? This has had to come in a hurry and it has left me in a devastating state. I travelled to UK for a volunteer Training Program (UTP 2010), unfortunately for me I was robbed and my wallet was taken at the hotel where I lodged. The Embassy only cleared me of my travelling documents and ticketing since I came in on unofficial purposes. I only need to clear the hotel bills before I can leave but ofcourse they stopped billing me since the incident. I didn’t bring my phones here and the hotel telephone lines were disconnected during the robbery, so I have access to only emails. Please can you send me £1370 as early as possible so I can return home. As soon as I get home I would refund it immediately, I need you to get back to me so I can let you know how to send.


I’m looking forward to hearing from you.


Regards,

Marina.

So what – could the well informed Internet user ask – spam should not bother you anymore in these days – do not overestimate it! To an extent that would be fine – I would reply – but there are not only well informed users surfing the net. The average users’ age is said to amount to 28 years and as a result of Web 2.0’s advent more and more minors are entering the net. No doubt, the Internet brings many advantages that oftenly show its bright side, but spam, scam & Co show definitely its dark one.

Spam mails are in the most times misleading or even fraudulent. Hence they have the potential to cause damage to their recipients. Yes, just look at the above spam mail and consider the “professional” drafting skill applied to create it. The most users, I am sure,  would cross-read and then delete such a mail. A certain, maybe small percentage would read it carefully, and then spend some time questioning its authenticity prior to deleting it. An even smaller percentage might consider some support and probably contact the sender with an offer to help. That’s it, that’s how it works. This is what these guys are aiming at.

It is possible that the sender’s e-mail account has been hacked and misused by a wrongdoer. It is however possible that the sender is truly experiencing the described difficulties.

In any case, I will take the risk and have the sender, whoever she or he may be, wait for my reply until the cows come home.

 

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3 March 2010

German Constitutional Court abrogates provisions on data retention


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Bundesverfassungsgericht Karlsruhephoto © 2006 Johannes Bader | more info (via: Wylio)

Hear ye, hear ye, you all supporters of the fundamental right of privacy – 7 out of 8 German Constitutional Justices voted to declare the data retention provisions as applied in the Telecommunications Act and in the Code on Criminal Procedure null and void!

Enough of enthusiasm, however, we can go on observing the facts some of which may prove unlikely sobering when compared to yesterday’s news titles that went around the world.

You might remember that some months ago nearly 35 000 German citizens filed a mass-complaint in which they asked the Court to abrogate the provisions on data retention.

In reviewing the complaint, the Court makes an initial statement that the Federal German Constitution would not by itself forbid the retention of telecommunications traffic data for a certain time period. However, the data retention as transposed in German legislature interfered with the fundamental right of privacy in such a manner that the legal system was previously not familiar with. Hence to avoid such interference and, similar to the Romanian Constitutional Court, the German authority uses its ruling to create a recipe to be followed by the lawmakers in future. The main point made by the Court in its ruling, is the instruction towards lawmakers to observe the so called principle of proportionality (Verhältnismäßigkeitsgrundsatz).

Under reference of the above principle, the Court distills 5 requirements that need specifically be observed when drafting the prospective laws. In particular, the Court demands

– the adoption of specific provisions relating to enhanced data security and safety which the Court views mandated by the huge amounts of data to be retained;

– to safeguard that the retained data’s direct processing shall be limited to prevent only concrete danger situations arising out of  serious crimes;

– to ensure the transparency of data transfer by notifying the data subject in advance, and – where not appropriate – to subject the transfer to a respective court order and notify the data subject afterwards;

– to provide for the data subject’s legal protection amounting to, inter alia, data subject’s right to challenge the processing and transfer of their data before a court of competent jurisdiction, and – in case of breach of the above protection – to penalise such breach;

– to guarantee that indirect data processing for the purposes of IP address detection and identification, as may be the result of an enforced right of information , is not undertaken to prevent mere misdemeanours. The Court points out the importance of the latter as it states that such indirect data processing need not be subjected to a court order.

Put it all together, this long awaited ruling did hardly hit the jackpot being on stake: is the fundamental right of privacy the long expected silver bullet which is supposed to kill the vampire attempting to quench its thirst by accessing Internet users’ data? I personally read the ruling as a clear “NO”.

The Court does not really question the existence of data retention provisions. Moreover, it determines the borders of their constitutionally acceptable framing. See whether and to what extent the ruling will influence the EU member states that are still defaulting to transpone the Directive 24/2006.

 

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