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Late last week, on 21 March 2019,  the General Court dismissed an appeal by trade mark owner, Mr Xianhao Pan, in relation to an invalidity action brought by Entertainment One and Astley Baker Davies Ltd. 

Entertainment One and Astley Baker Davies Ltd brought the invalidity action against EUTM Registration No. 11775509 TOBBIA and Device in Class 25 covering "clothing, footwear, headgear" in 2015. The EUIPO Cancellation Division held that the marks were not similar. Entertainment One and Astley Baker Davies Ltd had relied upon EUTM No. 10186261 PEPPA PIG and Device and copyright subsisting in the Peppa Pig device element. Entertainment One appealed the decision at the Board of Appeal and received a favourable decision in 2017. The Board of Appeal concluded that, as a result of the identity of the goods and the visual and conceptual similarities, the differences between the signs were not sufficient to dispel the existence of a likelihood of confusion.

In November 2017, Mr Pan brought an appeal to the General Court. The EUIPO defend the appeal and Entertainment One joined as Intervener. Mr Pan relied upon four pleas in law which we have discussed in detail below:

First plea: alleged infringement of the period for bringing an appeal

Mr Pan alleged that the Board of Appeal did not properly examine his plea that Entertainment One belatedly filed its appeal. Mr Pan maintained that the period for bringing the appeal began to run on 28 July 2016 (notification of the Cancellation Division’s decision) and expired on 28 September 2016. However, he submitted that the notice of appeal was filed with EUIPO on 28 November 2016, which was late. The General Court dismissed the first plea in law. Whilst the notice of appeal must be filed within two months of the date of notification of the decision, the written statement of grounds must be filed within four months. Although the Board of Appeal did not expressly rule on this point, the fact it dealt with the appeal, shows that it regarded the appeal as admissible.

Second plea: alleged that the documents submitted before the Board of Appeal were inadmissible

Mr Pan submitted that the Board of Appeal took into account documents which Entertainment One had submitted for the first time before it, even though those documents should have been deemed inadmissible. The documents constituted evidence from the Italian customs authorities of seizures of TOBBIA branded goods and further information regarding the copyrights relied upon. The General Court dismissed the second plea in law on the basis the Board of Appeal decision was based exclusively on a comparison between the marks and the resulting likelihood of confusion (nothing to do with the evidence submitted). In addition, the General Court held that it was not apparent that the Board of Appeal actually took the evidence submitted for the first time before it into account.

Third plea: alleging failure to state the reasons for the contested decision

Mr Pan alleged that the Board of Appeal failed to state the reasons for the contested decision. In its argument, both the EUIPO and Entertainment One noted that the Board of Appeal's decision was as a result of a clear and exhaustive analysis, which were even included in a section of the decision entitled ‘Reasons’. The General Court further noted that there is no obligation on the Board of Appeal to highlight all of the incorrect aspects in the first-instance decision – it is sufficient to state the reasons on which it based its own decision. The third plea in law was therefore rejected.

Fourth plea: alleging infringement of Article 8(1)(b) of Regulation No 207/2009 

Mr Pan submitted that the Board of Appeal had erred, first in comparison of the signs, and second, in its assessment of likelihood of confusion.

Mr Pan argued that there were no similarities between the signs. From a visual perspective, he alleged that the Peppa Pig registration ‘depicts the design of a head resembling a pig whose style follows the elementary perception of a child’, whereas the TOBBIA registration has ‘graphical features that are not elementary but tend to humanize an animal, the tapir’. The General Court found that the Board of Appeal had considered the comparison of the signs in detail. It had found that the signs were similar to the extent they represented closely similar stylized illustrations of a pig. Whilst the Board of Appeal had noted that there were some differences between the signs, these were not capable of outweighing the similarity. The General Court further held that whether the public viewed the signs as two pigs or two tapirs did not alter the assessment of the visual similarity of the marks.

Mr Pan further submitted that the Board of Appeal had erred in its finding that there was phonetic similarity between the signs. The Board of Appeal found that there was a certain correlation between the element ‘peppa’ and the element ‘tobbia’, in the sense that both of those elements are disyllabic words containing the repetition of a strong consonant. Whilst the General Court admits, there are differences in the prefixes of the signs, it held the Board of Appeal was correct to note these similarities.

Finally, Mr Pan alleged that the signs were different from a conceptual perspective. He submitted that PEPPA PIG was a female pig, whereas TOBBIA was a male tapir.  He also alleged that the tapir was a well-known animal in Italy as a result of the TV show, 'Striscia la Notizia’, which depicts a golden tapir. The General Court held that it is unlikely that the public will associate TOBBIA with a tapir, given that both signs contain various characteristics more readily associated with pig.  As a result, the General Court concluded that the Board of Appeal did not err in finding that the signs at issue are similar.

Mr Pan also alleged that the Board of Appeal erred in its assessment of the likelihood of confusion. However, given that the General Court concluded that the Board of Appeal was right in finding that the signs were similar, there was also no basis for contesting the Board of Appeal's finding of likelihood of confusion. As a result the fourth plea in law was also rejected.

Entertainment One was successfully represented before the General Court by Hastings Guise and Fiona Morris of Fieldfisher.

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Whilst we may not have any clarity in the land of Brexit at the moment, the UK Intellectual Property Office has now confirmed the new numbering system for re-registered International designs (both RCDs and International (EU) designs) and International trade marks. The recently released UKIPO guidance confirms that the new numbering system will happen immediately before exit day (although we don't know when, or even if, that will be just yet).

Re-registered designs 

These are existing RCDs which will be automatically re-registered to become a UK re-registered design right. The UKIPO has confirmed that to distinguish these re-registered designs, they will simply prefix the existing 13-digit RCD number with a "9". 

International Design Registrations designating the EU 

These are existing International (EU) designs which will be automatically re-registered to become a re-registered International UK design. To distinguish these re-registered design rights, the UKIPO will simply prefix the existing International (EU) Registration number with an "8". 

International Trade Marks Registrations designating the EU 

These are International Trade Mark Registrations designating the EU which will automatically be re-registered to designate the UK. To distinguish these re-registered UK designations, the last eight characters of the International Trade Mark Registration Number will be prefixed with "UK008". (For the position concerning EU trade marks, see our recent trade mark blog.)

So in a world of current uncertainty, at least we have clarity on registration numbers!

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Amongst the Brexit turmoil in the UK Parliament this week, preparations are continuing on the ground for the continual protection of intellectual property whatever the eventual outcome. Here we take a brief look at the latest guidance from the government for the protection of patents and Supplementary Protection Certificates (SPCs) in the UK in the event of a no-deal Brexit.

This guidance document published on 8 March 2019 provides further clarity to business and is the latest in a series of publications from the government, following on from the no-deal trade marks guidance it published very recently (see our No-deal trade marks: latest government guidance blog for details.) It sets out the main changes to UK law if the UK leaves the EU without a deal that will be made through the Patents (Amendment) (EU Exit) Regulations 2019 (the Regulations), which it is envisaged will enter into force on exit day.

This latest guidance is described as complementing the technical notice on patents and SPCs published in September 2018 and covered in our no-deal intellectual property briefing note.

Key points to note in this latest guidance and underlying Regulations include the following:

  • Current SPCs will remain in effect after exit day as anticipated.
  • Pending applications for SPCs at the Intellectual Property Office (IPO) will continue to progress. Applicants of those based on authorisations from the European Medicines Agency (EMA) may need to provide the IPO with information on the equivalent converted UK authorisation. (EMA authorisations will automatically become UK marketing authorisations on exit day) .
  • Future SPCs for the UK will only be granted by the UK IPO and must be based on a UK patent (either national or European GB) and a UK marketing authorisation. The application procedure will be the same and there will be no change to the fees.
  • After exit day, as in other areas of law, it will no longer be possible for UK courts to make references to the CJEU for interpretation of the SPC legislation. CJEU judgments issued before exit day will continue to apply, but subsequent decisions will not be binding on the UK courts.

As we've discussed in previous blogs uncertainty still remains over the Unified Patent Court and the UK's future involvement should it come into force. (A date for the hearing of the German constitutional challenge is awaited.) In line with previous commentary from the IPO and the UK government the guidance document simply notes that "We intend to explore staying in the systems with our European partners."

Comment

Although, the guidance document and draft Regulations do not as a whole contain any surprises and provide reassurance that it will be business as usual, there are some aspects of concern. For example, while the government is keen to say that the changes will not impact on the duration of SPCs, in practice, this might not be the case. The duration of an SPC will be calculated on the basis of the first authorisation to place to the product on the market in the UK or the EEA. Many are speculating that Brexit may lead to a delay in the launch of products on the UK market relative to the rest of the EEA, with marketing authorisation for the UK coming later. In circumstances where the duration of the SPC can be determined by reference to the date of the EEA authorisation, the duration of UK SPCs could be shorter under the proposed UK regime.

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In this recent case before the Court of Appeal, PulseOn, an optical heart rate technology company, sued Garmin, a competitor, for infringement of its registered community design (RCD) rights. 

The RCDs in question depict features of a heart rate monitor which can be worn on the wrist, as shown below:

The key elements of RCD No. 2473769-0004 are: (i) the central rectangle feature which is interpreted as a photo sensor aperture; (ii) three oblong features which are interpreted as LED apertures; and (iii) a pair of concentric circles which are interpreted as a circular raised platform which allow the LEDs and sensor to be closer to the wearer's skin.  RCD No. 2473769-0005 contains the same elements except for the circular platform which is shown in broken lines and therefore excluded from the design.

PulseOn claimed that a number of Garmin's heart rate monitors infringed its RCDs.  One of the models in question, Garmin's Forerunner 235, is shown below:

The High Court held that PulseOn's RCDs were valid but not infringed.  In coming to this conclusion, the High Court observed that the degree of design freedom for heart rate monitors is limited and that the scope of protection of PulseOn's RCDs is also limited.  After comparing PulseOn's RCDs and Garmin's products, the High Court found that they did not produce the same overall impression and so there was no infringement. 

PulseOn appealed, claiming that the High Court: (i) applied the wrong test for infringement; (ii) incorrectly found that there was limited design freedom for the arrangement of LED apertures; (iii) wrongly compared the RCDs with enlarged 3D models of Garmin's products; and (iv) placed too much weight on features which were determined by technical considerations.  However, all four grounds of appeal were rejected and it was held that there was no basis for the Court of Appeal to interfere with the High Court's assessment of overall impression.  The Court of Appeal found as follows:

  • The test for infringement is whether the allegedly infringing design produces on the informed user a different overall impression from the earlier registered design.  The High Court applied this test correctly, even though the judge asked himself whether the accused devices produced an "identical" overall impression to PulseOn's RCDs, rather than a "different" one.   By saying that the designs did not create an identical overall impression, the High Court judge was deciding that the impressions were different.  And despite omitting the word "overall" on several occasions, the judge clearly adopted and applied the correct test; 
  • Although the High Court judge may have stated the design freedom a little more narrowly than he should have done in relation to the arrangement of LED apertures, this did not result in a significantly wider scope of protection for PulseOn's RCDs.  In any case, there was a limited number of ways of arranging three LED apertures around a central sensor aperture.  Overall, the High Court correctly concluded that there was limited design freedom in this highly functional environment;
  • The High Court legitimately examined an accurate model of the accused devices and compared it to PulseOn's RCDs.  In this case, the comparison was hampered by the fact that the products and features in question were very small and the eye was drawn to what was behind the aperture rather than the aperture itself.  Provided they were accurate, enlarged models overcame these difficulties and did not unfairly exaggerate any perceived differences;
  • The High Court judge must have been aware of the technical reason behind differences in the spacing of certain apertures in PulseOn's RCDs and Garmin's products.  The weight given to this difference was a matter for the High Court judge.  It had to be balanced against the fact that the spacing was not amongst the features found in the design corpus, and was therefore entitled to more weight in the overall assessment.  There was no reason for the Court of Appeal to interfere with that assessment.

Comment

This decision illustrates how design freedom and technical considerations can influence a design case.  Although the degree of design freedom and technical considerations will vary depending from product to product, these factors play a major part in determining the scope of protection afforded to a design, and whether a later product produces the same overall impression and therefore infringes.

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On 1 March 2019, the government published a comprehensive document providing further welcome clarity on the position of EU trade marks (EUTMs) in the UK in the event of a no-deal Brexit.

The guidance relates to EUTMs only and sets out the main changes that the government is making to trade mark law if the UK leaves the EU without a deal. It essentially explains in practical terms the changes to UK law that will follow from the implementation of the Trade Marks (Amendment etc.) (EU Exit) Regulations 2019, which is ready to come into force on exit day, as we recently blogged about (see our blog last month).

This latest guidance is described as complementing the technical notice on trade marks published in September 2018 and covered in our no-deal intellectual property briefing note.

We have been reassured for some time that on exit day the government will provide holders of existing EUTMs with a comparable UK trade mark. The guidance deals with the creation of this right, which will be recorded on the UK register at no cost to the EUTM holder. They will be fully independent UK trade marks which can be challenged, assigned, licensed or renewed, separately from the original EUTM. As noted in our recent blog, these rights will be shown on the register prefixed with UK009.

The guidance explains the position concerning pending applications, how to opt out of the new right and other practical implications of the changes including how renewals will be dealt with by the UK IPO and the effect of priority and seniority claims.

One issue which was uncertain last year was how genuine use and reputation would be assessed. The new law is designed to ensure that any use of the mark in the EU, whether inside or outside of the UK, which has been made prior to exit day, will count as use of the comparable UK right. A similar approach is being applied to the assessment of reputation.

Other areas covered by the guidance include licences, security interests and assignments, and pending proceedings before the UK courts and Trade Marks Tribunal.

Designs and international trade marks: the government intends to publish separate guidance about these rights.

We will continue to monitor developments and provide further updates as they emerge.

 

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It has been one and a half years since EU certification marks were launched by the EU Intellectual Property Office following the EU trade mark reforms (see our earlier blog for details of this second wave of reforms). This blog looks at how popular they have been and what the EUIPO has learnt so far.

What are certification marks?

A trade mark, as we all know, is used as a badge of origin to signify that goods or services originate from a particular supplier. Collective trade marks act as a badge of origin for an association of members. Certification trade marks perform a different function altogether and are designed to distinguish certified goods and services from non-certified goods and services.

Trade marks can be owned by any individual or business, and collective marks can be owned by any association, which sells or has an intention to sell the good and services in question. Certification marks, on the other hand, can only be owned by individuals or businesses which do not sell the goods or services in question. The point is that the entity that owns the certification mark should be an independent and neutral entity that is able to objectively ensure that the goods or services being sold meet the required certification standards.

One of the main distinguishing features of a certification mark is that it must have an accompanying set of "regulations of use", which certified users of the mark must comply with.

Some figures

As of 22 February 2019, the EUIPO had received 172 certification mark applications and 100 of those have received deficiency objections. Only 15 have so far been registered and published.

Grounds for refusal

So the figures suggest that it is fairly difficult to obtain a registration for an EU certification mark, but what are the issues that the EUIPO has been encountering?

In addition to being subject to the same absolute grounds for refusal as standard trade marks, EU certification marks can also be refused for several specific reasons. The most common reason why the EUIPO has refused certification mark applications to date is because the regulations filed by the applicant do not meet the required standard.

One of the key points is that the standard/s to be certified by the mark must be linked to all the goods and services applied for and must be clearly defined.

In addition, regulations must:

  1. be filed within two months of the filing date of the application;
  2. comply with public policy and accepted principles of morality (e.g. cannot discriminate without objective criteria);
  3. be drafted in a "clear and accessible" manner (i.e. with sufficient clarity and precision to enable the reader to understand the requirements for using the mark); and
  4. include:
  • a representation of the mark (must be exactly the same as shown in the application);
  • the name of the applicant;
  • a declaration that the applicant does not carry on a business involving the supply of goods or services of the kind certified;
  • a list of the goods or services covered by the mark;
  • the characteristics in respect of which the goods and/or services are to be certified (e.g. materials to be used, mode of manufacture of goods, performance of services);
  • the conditions governing use of the mark, including the sanctions for failing to comply;
  • the persons authorised to use the mark; and
  • how the certifying body is to test those characteristics and to supervise the use of the mark.

Geographical indications

Another important difference between EU certification marks and certification marks in some member states, including the UK, is that an EU Certification mark cannot be used to certify the geographic origin of the goods. The systems of geographical indications already in place under EU law, namely the protected designation of origin (PDO) and protected geographical indication (PGI), were considered to be sufficient for this purpose.

Summary

So, there is no real magic to it. The message is to take care to ensure that the regulations of use filed with an application for an EU certification mark comply with the requirements set out above. If they do then your application should stand a fighting chance of being registered.

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We reported just last week on the progress of the draft Copyright Directive (see our blog: Progress finally made on the proposed new Copyright Directive) and confirmed that on 13 February 2019, the European Parliament, the Council of the EU and the European Commission had finally managed to reach political agreement on the text of the new Copyright Directive. On 20 February 2019, the Council of Ministers followed suit and endorsed the agreement. The next stage in the process was for the Legal Affairs Committee to vote on the draft and today, 26 February 2019, the European Parliament issued a press release stating that the Legal Affairs Committee have also now approved the draft text. The draft legislation was approved by 16 votes in favour and 9 votes against, with no abstentions.   

This seems to be a positive step in the right direction given that the draft has caused so much controversy to date. There are still a number of Member States (Italy, Finland, Luxembourg, the Netherlands and Poland) averse to the agreement (and who voted against the deal), claiming that the Directive does not strike the right balance between the protection of rightsholders and the interests of EU citizens and companies.

The final vote in Parliament is scheduled to take place during the 25-28 March II plenary session. It will be interesting to see whether the 751 MEPS will vote to accept or reject the bill and we will of course report back as soon as the results are in. 

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In an uncertain world, we can at least take some comfort from the fact that we are starting to get clarity on the position regarding continued protection of EUTMs in the UK post-Brexit. Collective sigh of relief.

The snappily entitled Trade Marks (Amendment etc.) (EU Exit) Regulations 2019 (the “EUTM SI”) which governs the continued protection of EUTMs in the UK in the event of a no-deal Brexit, has now passed both Houses of Parliament and is ready to come into force on exit day (which currently means 11pm UK time on 29 March 2019).

The EUTM SI says, in summary, that a trade mark which is registered in the EUTM Register before exit day is to be treated on and after exit day as if an application had been made, and the trade mark had been registered in the UK. The owner of an EUTM which is pending on exit day has a period of 9 months beginning the day after exit day to file a comparable UK application and claim priority from its existing EUTM.

Of course, if Parliament votes in favour of the Draft Withdrawal Agreement, then the position will be as set out in our previous blog: Brexit: updated draft withdrawal agreement.

For the time being, the statutory instrument governing the continued protection of EU designations of International registrations (the “IR SI”) remains in draft form, having only been laid before the Houses of Parliament on 31 January 2019. The good news is that a motion to approve the IR SI was tabled by the Government on 20 February 2019 so we are, hopefully, not too far away from certainty on IRs as well.

In other news, we also now have clarification of how the new comparable rights will be identified on the UK Register. The UKIPO published guidance on 21 February 2019 confirming that these rights will be shown on the Register, prefixed “UK009”.

We will be sure to keep you posted on any further updates as they happen.

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In an uncertain world, we can at least take some comfort from the fact that we are starting to get clarity on the position regarding continued protection of EUTMs in the UK post-Brexit. Collective sigh of relief.

The snappily entitled Trade Marks (Amendment etc.) (EU Exit) Regulations 2019 (the “EUTM SI”) which governs the continued protection of EUTMs in the UK in the event of a no-deal Brexit, has now passed both Houses of Parliament and is ready to come into force on exit day (which currently means 11pm UK time on 29 March 2019).

The EUTM SI says, in summary, that a trade mark which is registered in the EUTM Register before exit day is to be treated on and after exit day as if an application had been made, and the trade mark had been registered in the UK. The owner of an EUTM which is pending on exit day has a period of 9 months beginning the day after exit day to file a comparable UK application and claim priority from its existing EUTM.

Of course, if Parliament votes in favour of the Draft Withdrawal Agreement, then the position will be as set out in our previous blog: Brexit: updated draft withdrawal agreement.

For the time being, the statutory instrument governing the continued protection of EU designations of International registrations (the “IR SI”) remains in draft form, having only been laid before the Houses of Parliament on 31 January 2019. The good news is that a motion to approve the IR SI was tabled by the Government on 20 February 2019 so we are, hopefully, not too far away from certainty on IRs as well.

In other news, we also now have clarification of how the new comparable rights will be identified on the UK Register. The UKIPO published guidance on 21 February 2019 confirming that these rights will be shown on the Register, prefixed “UK009”.

We will be sure to keep you posted on any further updates as they happen.

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On Wednesday 13 February 2019, after apparently 13 hours of difficult negotiations, the European Parliament, the Council of the EU and the European Commission spread some copyright love just in time for Valentine's Day and finally managed to reach political agreement on the text of the new Copyright Directive. The provisions aim to make copyright rules fit for the digital age and hope to bring 'tangible benefits' to the creative sectors, the press, researchers, educators, cultural heritage institutions and citizens alike. They aim to enhance the freedoms and rights enjoyed by internet users, allow copyright owners to obtain the money they deserve for their work and clarify the legal framework within which online platforms operate.  

Whilst there has been no doubt that EU copyright law needed updating for the digital age, there has been huge criticism as to how this is being achieved through the Directive. With all the controversy surrounding the proposals, it was clear that the provisional text was never going to please all interested parties. German MEP Axel Voss and the European Parliament's rapporteur for the new copyright legislation was all too aware of that and stated:

"Parliament would have liked a better outcome but… the nature of a compromise is that one is never entirely happy with it."

A quick re-cap of the issues

The four new mandatory copyright exceptions for digital uses in certain areas such as education, research, and cultural heritage have all been welcomed, but controversy has plagued the more controversial Articles 11 and 13 as to whether they will actually be fit for purpose or whether they will be too onerous on online platforms and media companies. Some opponents have expressed concerns that the draft provisions would change the shape of the internet as we know it.

Article 11 concerns the protection for the digital use of press publications and has previously been dubbed the 'link tax'. Article 11 is a new press publisher's right which allows publishers to obtain fair and proportionate remuneration for the digital use of their press publications by information society service providers. (e.g. big news aggregators like GoogleNews). In turn, the provision allows the journalists to seek a fair share of any of the additional revenues that a press publisher may receive for the secondary use of a press publication by information society service providers.

Article 13, which has received the most publicity to date, relates to the use of protected content by online platforms that store and allow access to large amounts of content uploaded by their users. The concern within the creative industries has been that a large amount of copyright protected content has been making its way on to these online platforms without rightsholders' authorisation and they are not being adequately rewarded for the use of that creative content. However, the draft Article 13 has been blasted for being too onerous on online platforms because it essentially requires them to filter content so that infringing material is not available on their services. Large internet platforms have expressed grave concerns that they will lose a lot of internet traffic if the reforms go through and large US companies have said that the reforms would make it difficult for them to enter the European market.

Some of the major tech companies have been actively campaigning against the reforms and have gone as far as accusing the EU of acting against the will of the people. Axel Voss, however, has dismissed and criticised these negative campaigns and has accused these tech giants of disseminating misinformation about how the reforms will damage and restrict the internet. Voss claimed that various slogans being bandied around such as "link taxes" and "censorship machines" are all misleading slogans, aimed at scuppering the reforms.

The current agreement

Whilst we have not yet seen the amended text, the European Parliament, the European Council and the European Commission have published press releases here, here and here and the European Commission has also published a comprehensive Q&A Fact Sheet explaining the reforms in some detail. See below for some of the main important points to note:

Article 11 – the Press

Publishers

This new press publishers' right will apply to online uses of press publications by information society services providers (news aggregators, media monitoring services). The aim is to strengthen the bargaining power of press publishers when it comes to negotiating the use of their content by online platforms.

Journalists/authors

The Directive provides that journalists will also receive a fair share of any of the revenues generated by a press publisher for the secondary use of a press publication by information society service providers. 

The above provision sets out to ensure the 'sustainability of the press sector….. to foster plural, independent and high-quality media, which are essential for the freedom of expression and the right to information…'    

Snippets

According to the text adopted, the use of individual words and 'very short extracts' of press publications does not fall within the scope of the new right. This means that information society service providers can use parts of a press publication (i.e. snippets) without the press publishers' authorisation. The Q&A clarifies that the impact on the effectiveness of the new right will be taken into account when assessing what 'very short extracts' are.

Individual users

The Directive is not aimed at individual users but online uses of press publications by large online platforms/services e.g. news aggregators. Therefore internet users will be at liberty to share content on social media and hyperlink to websites/newspapers, as they do currently.

Article 13 – the value gap

The press release issued by the European Parliament reminds us that "currently internet companies have little incentive to sign fair licensing agreements with rights holders, because they are not considered liable for the content that their users upload". They are of course obliged to remove infringing content once notified of its existence by the rightsholder, but this is not always effective and does not guarantee the rightsholder a fair revenue for their content. The Directive now aims to make internet companies liable for infringing content, which in turn "will enhance rightsholders' chances (notably musicians, performers and script authors, as well as publishers and journalist) to seek and secure fair licensing agreements".  

According to the agreement, the platforms covered by Article 13 are considered to be carrying out acts of communication to the public or making available to the public, and therefore require authorisation from the relevant content owners. Where no licensing agreements have been concluded with rightsholders, in order to avoid liability, online platforms will need to: (i) make best efforts to obtain an authorisation, (ii) make best efforts to ensure the unavailability of unauthorised content regarding which rightholders have provided necessary and relevant information and (iii) act expeditiously to remove any unauthorised content following a notice received and make also their best efforts to prevent future uploads.

Special regime for smaller enterprises

The Q&A sheet states that 'new small platforms will benefit from a lighter regime in case there is no authorisation granted by rightholders'.

These new small platforms (e.g. start-up platforms) are categorised as those online service providers which have existed for less than three years in the EU and which have a turnover of less than 10 million euros and have less than 5 million monthly users. To avoid liability for unauthorised works, new small companies will only have to prove that they have made their best efforts to obtain an authorisation and that they have acted expeditiously to remove the unauthorised works notified by right holders from their platform.

However, if the audience of the small companies is higher than 5 million monthly viewers, they will also have to prove that they have made their best efforts to ensure that works that have been notified by rightholders do not reappear on the platform at a later stage.

Online platforms not affected

The Directive provides that uploading works to online encyclopaedias in a non-commercial way (e.g. Wikipedia), or open source software platforms (e.g. GitHub), will automatically be excluded.

Fair remuneration for authors and performers

Authors and performers will be able to claim additional remuneration from the distributor exploiting their rights when the remuneration originally agreed is disproportionately low when compared to the benefit derived by the distributor.   

Comment

It will be interesting to see how the new draft compares to the amended draft we saw in September once it comes through. In the meantime, we must just glean what information we can from the press releases and Q&A made available by the European Parliament and Commission.

The provisions certainly seem to enhance the rights of creators by introducing mandatory negotiating mechanisms for them to obtain the remuneration they deserve, so content owners will be pleased with the outcome.  Online platforms, on the other hand, may not be so satisfied. Whilst the new provisions do not appear to require online platforms to actually use filtering technology, in reality, this is perhaps what they will need to do to ensure they avoid liability. The wording surrounding 'best efforts' is also dubious. What exactly is best effort monitoring and how far do online platforms really have to go to ensure they are indeed making these best efforts? Does that wording actually have any value? What some online platforms consider to be onerous provisions, others see as perhaps too vague and possibly an easy way for online platforms to avoid liability.

It does appear to be good news for memes and snippets, despite widespread concerns that the reforms would be tantamount to censorship and restrict freedom of expression. Quick to point out that memes are not banned and can still circulate for the purposes of quotation, criticism, review, caricature, parody or pastiche, Axel Voss clarified that "….this deal contains numerous provisions which will guarantee that the internet remains a space for free expression. These provisions were not in themselves necessary because the directive will not be creating any new rights for rights holders. Yet we listened to concerns raised and chose to doubly guarantee the freedom of expression. The 'meme', the 'gif', the 'snippet' are now more protected than ever before".

And the mandatory exceptions are good news for research organisations, universities, students, teachers and cultural heritage institutions as they will ensure wider access to knowledge by simplifying the copyright law in relation to text and data mining for research and other purposes, education and the preservation of cultural heritage.

Despite some very mixed views on the new draft, at least some progress has been made. The trilogue negotiations needed to come to an end and the final text agreed. However, how all these all these provisions will play out in practice remains to be seen.

Next steps

The Press Release published by the EU Council confirms that the provisionally agreed text still has to be endorsed by the relevant bodies of the Council and there must then be a final plenary vote by the European Parliament – in late March/April, ahead of the EP elections in May. Following that endorsement, it will be submitted for adoption by both institutions. Once the text has been confirmed and published on the Official Journal of the EU, Member States will have 24 months to implement the new rules into national law.

With a Brexit deal still very much up in the air, it remains to be seen whether the UK will have any appetite to implement these provisions into UK law. Whether it is implemented in the UK or not, it will certainly impact on UK businesses operating in Europe.

Watch this space.

For further information on the proposed Copyright Directive, see our previous blogs here, here and here

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