9 September 2010

The Austrian gambling monopoly has survived. So far.

Spinphoto © 2009 Conor Ogle | more info (via: Wylio)

Somewhere in the beginning of this year I wrote a blog post asking “is the Austrian gambling monopoly coming to an end?“. The reason behind was the pending case of Engelmann before the European Court of Justice (ECJ). In this lawsuit the Court was asked to address three questions, the most important of which was the one above. Today this very Court delivered an answer that seems to read “no, it is not”.

Not unusual, the ECJ has omitted to press the hot button that this gambling monopoly issue represents. Court’s reluctance appears even more blatant when reading the related statement “In view of the answers given to the first and third questions and of the fact that the national court, as pointed out in paragraph 26 of the present judgment, has established a link between the facts satisfying the definition of the offence with which Mr Engelmann has been charged and the question whether he was lawfully excluded from the possibility of obtaining a concession, it is not necessary to answer the second question.” I may remind my readers that the second question was the one particularly challenging the Austrian state monopoly over games of chance.

In this respect my forecast regarding the survival of the monopoly has proven correct. On the other hand I feel somewhat confused about our supreme judicial authority’s denial to address an issue referred to it. Do we need a judicature deliberately missing its chance to provide for legal certainty and stability? I personally do not!


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26 May 2010

Will Ireland eventually overthrow data retention?

The Four Courts Dublinphoto © 2008 William Murphy | more info (via: Wylio)

There has not been much discussion in the aftermath of the German Constitutional Court’s ruling on data retention and the matter somehow started to collect legal dust. The recent Irish involvement, however, could cause the necessary aeration and preserve the issue from getting buried in oblivion.

Digital Rights Ireland, a non-governmental organization formed as a limited liability company under the Irish Companies Act, brought proceedings before the Irish High Court against the Minister for Communication, Marine and Natural Resource, the Minister for Justice, Equality and Law Reform, the Commissioner of An Garda Siochana, Ireland and the Attorney General because of latter authorities’ breaches against rights provided for by Irish statutes and Constitution as well as by European legislation. Claimant’s proceedings were triggered by Minister for Public Enterprise’s direction, issued in 2002, to the telecommunications providers in Ireland to retain data generated by customers of the telecommunications providers, purportedly in compliance with Section 110 (1) of the Postal and Telecommunications Services Act 1983. This direction was addressed by the Data Protection Commissioner who then threatened said Minister with the issuance of judicial review proceedings to challenge the validity of any and all such directions.

The response of the Irish Government was to pass the Criminal Justice (Terrorist Offences) Act 2005, and specifically the incorporation therein of the provisions of Part 7 thereof. Under that part of the Act, the Garda Commissioner may request a service provider to retain, for a period of 3 years, traffic data or location data or both.

This is also what claimant is combatting. They have asked the High Court to refer the matter to the European Court of Justice (ECJ). The questions the ECJ needs to deal with all relate to the validity of Directive 24/2006, in particular with rights under the EU and EC Treaties, the Charter of Fundamental Rights (CFR) and the European Convention on Human Rights (ECHR). The High Court, in its ruling, granted this motion of claimant.

It is somewhat surprising that another “Irish issue” will land before the ECJ in less than a year following ECJ’s ruling agaisnt Ireland in the Case C·301/06. In the latter, the ECJ found that Art 95 of the EC Treaty represented a sound fundament for the enactment of the Directive 24/2006 since it was apparent that differences between national rules adopted for the retention of data were liable to have a foreseeable direct impact on the functioning of the internal market which would become more serious over time.

However, following the debates in Bulgaria, Romania and Germany it was high time to have the ECJ rule on data retention’s – this time hopefully – not only procedural, but also material aspects. In a somewhat best case for the preservation of our all’s digital rights the ECJ might find against the Directive.

The hope, as is well-known, springs eternal – so let us hope the best.


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15 April 2010

Consumers need not pay for delivery, when withdrawing from a distance contract

logo300 (2)photo © 2010 Pierre Rattini | more info (via: Wylio)

Have you been dispirited to buy things online due to uncertainty as to how far is the reach of your consumer rights? Then if you have, I may hereby present a ruling of the Court of Justice of the European Union (ECJ) that provides for more legal clarity and encourages consumers to rely on their rights guaranteed by the Directive 97/7/EC on the protection of consumers in respect of distance contracts.

In particular, the ECJ ruled that suppliers must not seek to recover delivery cost from consumers deciding to withdraw from a distance contract. Funny enough, but the expense underlying the instant case amounted to only EUR 4,95. Yes, you are reading it correct: EUR 4,95. I know, the question as to who on earth would bother the ECJ for that laughable sum would be fully appropriate, however to the extent that, German meticulosity was not concerned. I believe, we should thank the Germans for their soft spot for accuracy and morality thereby resulting in consumer protection in particular and in legal certainty in general.

Having said the above, one should, however, not forget the somewhat special German scheme to protect consumer rights. Germany maintains so-called “Verbraucherzentrallen” or associations for consumer protection which are in charge to observe and enforce consumer rights and interests. In the instant case the association for consumer protection in the province of Nord Rhine – Westphalia succeded in obtaining an injunction against an online supplier and will eventually win the case. As such associations are publicly funded, they do not necessarily fear a defeat in court proceedings. That is most probably the reason for said association’s zeal to go through all the instances for such a case.

From a legal point of view, the ECJ’s ruling is remarkable as it precludes national legislation that does not grant a buying consumer, upon their withdrawal, with an explicit right to reimburse the cost of delivering the goods previously ordered. By so ruling, the ECJ strengthens the consumer protection and bars a possible imbalance between suppliers and consumers in distance contracts.


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24 March 2010

Google’s AdWords do not infringe trade marks!

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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23 February 2010

Is the Austrian gambling monopoly coming to an end?

photo © 2010 Bonnie Craven Francis | more info (via: Wylio)

The subject matter of this post is not necessarily related to Information Technology or Intellectual Property. Arguably, it could be deemed to be somewhere in the orbit of regulatory matters, but…”wait a moment” – might some of you ask – “what is the name of this guy’s blog again?”, and that is true – it reads “From Vegas To Legal”! So, in recognition of my blog’s name, I consider the time ripe to risk a dive into gambling’s deep waters.

In the instant case of criminal proceedings against Ernst Engelmann that was filed with the Regional Criminal Court in Linz, Austria, said court referred three questions to the European Court of Justice (ECJ) and asked the latter for a preliminary ruling. In particular, the court in Linz wanted to know whether

– Article 43 EC derogates a national provision mandating that only corporations established in a member state may there operate games of chance in casinos, thereby necessitating the establishment or acquisition of a corporation in that member state?

– Articles 43 and 49 EC derogate a national monopoly on games of chance in casinos, if the member state  in question maintains an inconsistent policy to limit gaming, inasmuch as national licensed organisers encourage participation in gaming – such as public sports betting and lotteries – and advertise such gaming, for instance, on TV?

– Articles 43 and 49 EC derogate a national provision under which a member state may exclude Community competitors (that do not belong to that member state) from a tender where a license to organise games of chance in casinos are granted.

In his today delivered opinion on the above questions, Advocate General Jan Mazak starts with a very good introduction into the federal gambling law of Austria, followed by a dissection of the same. From my perspective it is a must-read for all those interested in the matter.

Having come to the first question referred to the ECJ, the Advocate General opines that the Austrian legislation is incompatible with the freedom of establishment to the extent it reserves the operation of games of chance in casinos exclusively to corporations which have their seat in Austria. Companies registered in other member states of the European Union thus suffer a direct discrimination as they are excluded from the license grant to operate a casino in Austria. Such discrimination would be justifiable only if it grounded on deliberations with respect to public policy, public security or public health and a genuine and sufficiently serious threat affecting a fundamental interest of society existed. In Mr Mazak’s view the latter condition was not satisfied since Austrian authorities would not face a “genuine and sufficiently serious threat affecting a fundamental interest of society”, if the had to administer and supervise gaming operators which reside in other member states. Unfortunately, the Advocate General remained silent as to whether the operation of games of chance in casino should be reserved solely to corporations.

With regard to the second question, the Advocate General states that encouraging of participants in games of chance and advertising undertaken by operators does not necessarily mean that the national policy of limiting games of chance lacks consistency. Moreover, the Advocate General is of the opinion that it is the referring court to determine whether the said advertising is consistent with the objectives of the member state, since, among the various objectives which it pursues, the Austrian legislation seeks to combat fraud and criminality in the games of chance sector, by orienting demand for gaming towards an offer controlled and supervised by the State. Such determination, however, should be limited only to a sector where there is a gaming monopoly which would develop disproportionate and inconsistent advertising.

As to the third question, the Advocate General finds that the exclusion of non-residential Community competitors contradicts the freedom to provide services. Furthermore, and – in the absence of a genuine and sufficiently serious threat affecting a fundamental interest of society – the instant case’s restriction is discriminatory and unjustifiable on the grounds of public policy, public security or public health.

Put it all together, this Advocate General’s opinion has the potential to cause a ruling that would strengthen the principles framing the European Union. By the same token, it could deprive member state of the few sinecures they still possess in the realm of, say, gambling.

As regards the Austrian gambling monopoly, I personally believe that it will survive a ruling (almost) untouched.


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25 September 2009

Google’s AdWords do not infringe trade marks?

Foto0016photo © 2007 Stefan | more info (via: Wylio)

Google has been no stranger to legal controversy in recent years. One of the hotly contested issues courts are currently debating involves the legality of Google AdWords, Google’s lucrative advertising program that is the source of nearly half of its revenue. The AdWords program allows advertisers to purchase words or phrases related to their businesses that will bring up their websites under “sponsored links” when those keywords are typed into Google’s search engine.

The issue at the center of the controversy is whether Google can legally sell and advertise those words which are trademarked terms. For businesses looking to protect their trade marks, Google’s practice of selling and advertising trademarked terms has raised questions as to its liability for trade mark infringement.
The French Cour de Cassation has recently made a referral to the European Court of Justice (ECJ) with questions concerning the use of Google AdWords. These issues arose out of litigation brought against Google by trade mark owners, including Louis Vuitton, who object to the reservation by Google customers of search keywords matching their registered trade marks.

In his Opinion, Advocate General Poiares Maduro suggests that Google has not committed a trade mark infringement by allowing advertisers to select, in AdWords, keywords corresponding to trade marks.

The Advocate General further recalls that trade mark rights cannot be construed as classical property rights enabling the trade mark owner to exclude any other use. Accordingly, internet users’ access to information concerning the trade mark should not be limited to or by the trade mark owner even if it involves a trade mark which has a reputation.

Advocate General’s opinions are not binding on the ECJ, though the Court follws them in about 80% of all cases.

In my personal view this Advocate General’s opinion is very problematic for trade mark proprietors as, given a coresponding judgment of the Court, it will weaken proprietors’ position and ease springboard marketers and imitators to exploit the goodwill and reputation arising out of the trade marks in question.