Sunday, 28 May 2017

Appointed Person issues first appeal decision in a design case

Union Jack Kat
Readers with an interest in UK design law will remember that the Intellectual Property Act 2014 introduced a new appeal regime for designs. 

The system of appeals to an Appointed Person, as an alternative to the route of appealing to the High Court in heavier and more complex cases, was intended to mirror the longstanding system of appeals to an Appointed Person (AP) in trade mark appeals. In fact, the relevant rules for design appeals are modelled on those for trade mark cases.

Readers will also remember that Sir Richard Arnold had advocated the extension of the Appointed Person appeal route for registered designs instead of the appeal route to the Patents County Court, which was enacted but never brought into force in place of the Registered Designs Appeal Tribunal.

Now via Sir Richard Arnold comes the news that last week Martin Howe QC issued the first decision of an AP in a registered design (Appeal O/253/17).

The appeal concerned a request to invalidate two registered designs (both consisting of a garment on the chest of which a somewhat modified Union Jack flag) on the ground that they lacked novelty or individual character under section 1B(1) of the Registered Designs Act 1949, as amended. 

Valid design?
The argument was that similar designs have been sold in the London souvenir market for many years prior to the application dates for the concerned designs and, as a result, their owner "had registered existing generic designs, hijacking the London souvenir market." 

Despite the lack of systematic evidence, the Hearing Officer relied on two (a photograph published on Facebook and two witness statements) of the many items produced to conclude that - on the balance of probabilities - these had been made available to the public prior to the concerned designs. Following a comparison of the designs at hand, she concluded that those registered were invalid.  

The decision was appealed to the AP together with a request to introduce additional materials, as well as allegation of fraud and forgery against the publication date of the Facebook photograph. 

Martin Howe QC dismissed such requests, and upheld the Hearing Officer’s findings on the evidence that the Facebook photograph and the garment identified in the two witness statements were prior art as against the two registered designs in suit. 

However, the AP found that the Hearing Officer’s comparison of the designs in suit to the prior art had incorrectly characterised the features of the designs in suit. Nonetheless, having carried out the comparison myself, the AP came to the same conclusion that the two registered designs lack individual character in the light of the above prior art. As a result, he dismissed the appeal.

[This post was first published on The IPKat on 28 May 2017]

Wednesday, 24 May 2017

Is there copyright in the taste of a cheese? Sensory copyright finally makes its way to CJEU

Heks'nkaas
Readers with an interest for copyright in unusual or, rather, less conventional 'objects' [I will explain below why the word 'works' might not be appropriate] will know that for quite some time it has been disputed whether IP protection - particularly in the form of copyright - is available to, say, perfumes or culinary creations.

So far proponents of sensory copyright have not been really met with widespread approval [for the sake of a debate organised in London a while ago by IPKat founder Jeremy Phillips and BLACA, I supported the motion that there is indeed such thing as sensory copyright - my slides are available here; Jeremy's report can be read here].

Not long time ago, contrary to some lower instances' decisions, the French Supreme Court dismissed for instance the idea that copyright could subsist in a perfume [herehere for a Dutch take on the matter], and in 2015 a Dutch court (Gelderland District Court) refused to acknowledge that copyright would subsist in the taste of a cheese, Heks'nkaas [see here and here].

Speaking of cheese, the Dutch saga of Heks'nkaas is - thankfully - not over.

The case is in fact making its way to the Court of Justice of the European Union (CJEU) for guidance on whether EU law allows copyright protection in taste (in this case, the taste of a cheese). 

Despite its subject-matter this new reference is anything but cheesy. 

The content of the CJEU reference

As explained by Amsterdam-based Syb Terpstra (De Brauw Blackstone Westbroek N.V), counsel to one of the parties in the Heks'nkaas case, yesterday the Arnhem-Leeuwarden Court of Appeal issued an interim decision, in which it held that guidance from the CJEU is needed to determine:

  1. Whether EU law [read: the InfoSoc Directiveallows copyright protection in taste;
  2. If so, what requirements must be met in order to determine subsistence of copyright protection? 

The actual questions are available (in Dutch) here [thanks to @TreatyNotifier for providing the link].

Mac'n'cheese
Why this reference is important

This new case promises to be a very interesting and important one, if the CJEU deems it admissible. 

The reason is essentially that the CJEU will need to clarify at last what is meant by 'work', thus revisiting and elaborating further on its earlier case law, notably Infopaq and its progeny [particularly BSA and FAPL].

In that string of cases the CJEU held that under EU law copyright protection should arise any time a work is 'its author’s own intellectual creation', ie a work is sufficiently original. In FAPL, for instance, the CJEU had to determine whether football matches as such can be eligible for copyright protection. The court denied that that would be the case of football matches because they "cannot be classified as works. To be so classified, the subject-matter concerned would have to be original in the sense that it is its author’s own intellectual creation." [paras 96 and 97]

There is no legislative definition of 'work'. I argued elsewhere that CJEU case law appears to suggest that the notions of 'originality' and 'work' conflate, in the sense that the assessment of originality entails that of whether a certain 'object' is to be regarded as a 'work'. Possibly the reason for this is that in the Infopaq line of cases (and even in BSA), the focus of the questions referred to the CJEU was more on what originality means, rather than what a work is. In this sense, the Heks'nkaas case will be to some extent different [at least as long as the CJEU does stick to the text of the questions as referred, instead of re-writing them]. The focus will be primarily on defining the notion of 'work' and then perhaps re-visit the topic of originality.

Guidance as to what a 'work' is - at least in the context of the InfoSoc Directive - must be found outside the body of EU law, possibly in Article 2 of the Berne Convention. The InfoSoc Directive, in fact, implemented into the EU legal order the WIPO Internet Treaties; the WIPO Copyright Treaty mandates compliance with Articles 1 to 21 of the Berne Convention.

The Berne Convention adopts an open-ended definition of 'literary and artistic works'. Article 2(1) does not define the term ‘works’, although it clarifies that such expression “shall include every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression”. 

According to the relevant WIPO Guide, from the general tone of the Convention it follows that “these must be intellectual creations (the words appear in paragraph (5) of Article 2).” The same Guide adds that “[f]or this reason many national laws … provide that, to enjoy protection, the works must be original in the sense that they possess creativity.” 

In general terms, it may be said that “[t]he term ‘production’ … only indicates that the protected object must have emerged from the mind of a person, left the sphere of the mind and become realized. This coincides with the term ‘expression’ also contained in the definition.” [§5.66]

Does the taste of a cheese fall within such definition of 'work'? 

'Say cheese'
Why this reference could have been is important for the UK

An additional profile of relevance of this new CJEU case is that there is the potential for the CJEU to hold - particularly, but not necessarily only, if it acknowledges the possibility of sensory copyright - that EU law envisages an open-ended subject-matter categorisation.

While this is already the case of continental copyright traditions (relevant statutes do not limit the types of works in which copyright can subsist), the same is not true for the UK.

The Copyright, Designs and Patents Act 1988, in fact, envisages a closed list of eligible copyright subject-matter [see also my guidance for students here]. As UK-based readers know, this has proved challenging for less conventional works, in the sense that not always a suitable category can be identified. This has resulted in denying copyright protection in, say, the assembly of a scene (Creation Records) or the Stormtrooper helmet (Lucasfilm).

In a piece published on GRURInt I argued that EU law - or, rather, CJEU case law - mandates the opening up of UK subject-matter list. Although 1709 Blog readers did not agree with this proposition, in his judgment in SAS v WPL, Arnold J [at para 27] held that: "In the light of a number of recent judgments of the CJEU, it may be arguable that it is not a fatal objection to a claim that copyright subsists in a particular work that the work is not one of the kinds of work listed in section 1(1)(a) of the Copyright, Designs and Patents 1988 and defined elsewhere in that Act." At the same paragraph, however, referring to Infopaq the learned judge added that: "it remains clear that the putative copyright work must be a literary or artistic work within the meaning of Article 2(1) of the Berne Convention ... While the definition of "literary and artistic works" in Article 2(1) is expansive and open-ended, it is not unlimited."

With hard Brexit [ie a situation in which the UK will be no longer bound by EU law and CJEU judgments] on the horizon, some might think that the Heks'nkaas case will have a more limited relevance for the UK. However:

  • According to latest CJEU statistics [the average duration of CJEU proceedings in the context of references for a preliminary ruling is 14.7 months: see p. 28], when the Heks'nkaas case is decided the UK will be still part of the EU;
  • As clarified by UK Government in its White Paper accompanying the Great Repeal Bill, this bill "will provide that historic CJEU case law be given the same binding, or precedent, status in [UK] courts as decisions of [UK] Supreme Court" [p. 14].

In conclusion

The Heks'nkaas case is one to watch. Not only will it determine to what extent copyright protection can be stretched [let's not forget that since Sieckmann, trade mark protection has not been really available to sensory 'signs', and things will not really change in my view with the disappearance of the graphic representation requirement], but also what system of copyright categories EU law or, rather, the CJEU envisages.

[Originally published on The IPKat on 24 May 2017]

Monday, 22 May 2017

An EU text and data mining exception: will it deliver what the Digital Single Market Strategy promised?

Kat-mining
At the time of unveiling its Digital Single Market Strategy in May 2015, the EU Commission linked the establishment of a fully connected digital single market to the objective of creating a favourable environment for European start-ups and SMEs.

With specific regard to copyright, however, it soon appeared that start-ups and SMEs were not really part of the picture as far as Commission’s action in this area of the law is concerned. In this sense, the proposal for a directive on copyright in the Digital Single Market, which was released in September 2016, is a telling example.

The content of the proposed text and data mining exception

The draft provisions intended to remedy the so called ‘value gap’ (Article 13) and establish a new right for press publishers (Article 11) have been extensively criticized for – among other things – having the potential to raise barriers to entry in the markets for, respectively, hosting platforms and news aggregators, and also push out of these markets existing start-ups and SMEs that may be ‘too small to compete’.

Also the Commission’s proposal for a new mandatory exception that would be vital to EU tech-intensive businesses, ie a text and data mining exception (Article 3), falls short of what an ambitious and competitive digital single market may need.

By text and data mining it is intended as “any automated analytical technique aiming to analyse text and data in digital form in order to generate information such as patterns, trends and correlations” (Article 2(2)). A couple of examples of mining tools developed and employed by European SMEs and start-ups are those of Treemetrics (Ireland; a forest management platform) and XDiscovery (Italy; a search engine that allows mapping correlations between different topics).

Although including commercial and non-commercial uses alike, the scope of the proposed text and data mining exception appears particularly narrow as regards its catalogue of beneficiaries. These would be, in fact, only research organizations. They would be able to rely on the exception solely to carry out text and data mining of works or other subject-matter to which they have lawful access for the purposes of scientific research. In addition, the definition of ‘research organization’ itself is narrow: it only includes (Article 2(1)) universities, research institutes, non-profit or public interest research-intensive organizations.

In principle the draft directive does not exclude applicability of the text and data mining exception to public-private partnerships (Recital 10), but rules out that this could be possible when a commercial undertaking has a decisive influence and control over the research organization in question (Recital 11).

Waiting to mine some data ...
But would they be able to do so?
The UK experience

The proposed EU exception would be also narrower than the existing UK exception for text and data analysis (s29A of the Copyright, Designs and Patents Act 1988). The UK introduced it in 2014 on belief that the existing legislative framework (Article 5(3)(a) of Directive 2001/29) would already allow Member States to permit text and data mining activities under the umbrella of the exception for scientific research. Most importantly – albeit limited to non-commercial uses – the beneficiaries of the UK exception are not just research organizations, but also individual researchers (‘any person’ who has lawful access to a work).

The reactions of the SME and start-up community

Further to the release of the proposed directive on copyright in the Digital Single Market, EU start-ups and SMEs have noted how the current drafting of Article 3 fails to provide legal certainty, and regrettably excludes anyone who cannot be regarded as falling within the definition of ‘research organization’.

In this sense, Allied for Startups has pointed out that innovative start-ups would be left outside the scope of Article 3, being unable to benefit from the text and data mining exception. This would be so also on consideration that the limited resources of a start-up would make it difficult, if not impossible tout court, to consider entering public-private partnerships that are both time-consuming and challenging to handle.

The draft Comodini Cachia report

The next step for the overall process that would eventually lead to the adoption of a new directive on copyright in the Digital Single Market is the European Parliament vote (originally scheduled for 19-20 June, but currently it is unclear when this will take place) on the draft report that MEP Therese Comodini Cachia has been preparing on the Commission’s proposal. On 10 March a first draft version of the report was unveiled; possible amendments are currently being considered.

As far as text and data mining is concerned, the draft report seeks to clarify what copyright-relevant act (normalization of information) the new exception would cover. It also proposes to broaden to a certain extent the scope of the exception, by envisaging – subject to a compensation requirement – the possibility for research organizations that do not have lawful access to information to have nonetheless access to normalized data for text and data mining.

However, the draft report for the moment does not appear to consider broadening the types of beneficiaries of the exception.

More ambition is needed

When considering different options for a text and data mining exception, the Commission held the view that an exception that would not restrict types of uses and beneficiaries would go too far.

Yet, considering the general framework for exceptions and limitations that already exists under EU copyright (Article 5 of Directive 2001/29), there are no particular legal reasons as to why an exception should in principle exclude certain subjects from the range of beneficiaries, as long as the conditions in the three-step test (these being that an exception is to be only applied in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder: Article 5(5) of Directive 2001/29) are respected.

As noted by the German Bundesrat in a recent opinion, the exclusion of beneficiaries other than research organizations from the scope of the EU text and data mining exception would be not just impractical, but also cause the end for many providers of data analysis in Europe.

The EU approach to text and data mining could and should be more ambitious. This would be necessary to develop the full potential of SMEs and start-ups arising and operating in Europe, thus also making Europe more competitive on the global scale and permitting the creation of a functioning digital single market. More ambition is also needed to encourage and make possible the work of individual researchers, and allow European citizens to have access to information that can be only generated through text and data mining activities and whose potential awaits to be unlocked. 

[Originally published on The IPKat on 23 May 2017]

Sunday, 21 May 2017

Latest leak reveals that review of EU IP enforcement framework is currently in a deadlock

KAT-LEAK:
exclusive image of Brussels cabinet meeting
Leaks of internal EU Commission documents have seemingly become unavoidable events in-between one official release and another from this EU institution.

The latest leak, published by Politico, is that of an internal note to the attention of Commissioner Bieńkowska's Head of Cabinet concerning the forthcoming (?) review of the enforcement framework, including the Enforcement Directive.

As readers will remember, the Commission itself announced that this is part of the agenda when it unveiled its Digital Single Market Strategy (DSMS) two years ago (May 2015). Despite the timeframe indicated in the 2015 DSMS, a more thorough review of the enforcement framework is (or, rather, was?) expected in the first half of 2017, including the release of proposals to review existing EU legislation.

So far nothing has happened on this front. 

The reason - as this latest leak appears to suggest - is that there is no agreement within the Commission itself as to what direction should be taken. In other words, as the document admits, the reform process is currently in a "deadlock".

D(r)eadlock Kat
In addition, there might have been also a change of heart within some of the key players, possibly even including Commission's Vice-President Ansip

According to the document, it appears presumable that Commissioner Ansip has gone from strongest supporter to most vocal opponent of a review of the Enforcement Directive. The reason would be that at the beginning it appeared that rightholders would somewhat lose in the reform of the copyright acquis, so that a stronger enforcement would be needed as a "trade-off" [yes, the document employs this term]. Apparently this has not been the case. Hence, "such trade-off is no longer considered necessary given the final scope of the copyright proposals which do not materially cut into right holders positions."

The document then reviews a number of possible options on the table. 

An important (and unsurprising) aspect is the focus on the role intermediaries. According to the note, any proposals to harmonise intermediary liability in the context of a review of the Enforcement Directive and require intermediaries to take more pro-active measures "is a very far reaching call which does not fit into [the Enforcement Directive] systematically and it is at least doubtful if such an initiative would be in line with the E-Commerce Directive and the announcements made by the Commission in the 2016 Communication on platforms to respect the liability regime for platforms."

To be continued ...

[Originally published on The IPKat on 21 May 2017]

Wednesday, 17 May 2017

Digital copies, exhaustion, and blockchains: lack of legal clarity to be offset by technological advancement and evolving consumption patterns?

"Buy digital":
but are you really buying to own?
Can you resell the books, CDs, and DVDs that you are no longer interested in having? The answer to this question is easy: usually, yes.

But what about the case of ebooks, music tracks, and films downloaded from the internet? Well, here, the question is more difficult and - at least at the EU level - does not have a clear answer yet. The issue is particularly complex due to both practical and legal reasons.

The following post can be accompanied by these slides I prepared for a recent lecture at Bocconi University in Milan.

Degradation (or lack thereof)

A perfect analogy between physical and digital copies of a work does not seem really possible to be drawn in the first place. Unlike analogue/physical copies (eg a book), in principle the digital copy of a work is not subject to any sort of appreciable degradation. If you read the same ebook five times, the quality of the copy you have remains substantially unaltered. However, can you say the same about a physical copy of a book?

Control (or lack thereof)

Another argument that is sometimes advanced to highlight the difference between analogue and physical copies is that greater control can be exerted over the transmission of a physical copy. If you allowed someone to transfer his/her digital copy of a work, how can you make sure that this person would not just create a new copy and keep his/her original one?

While this argument may hold some truth in principle, reality is that anti-copying technologies have been in place for years and some (albeit ill-fated) second-hand digital marketplaces [eg ReDigi, which was at the centre of an interesting US case back in 2013] have demonstrated that it is possible to allow the transfer of one's own copy without real possibilities of duplication. Also latest developments (see below) suggest that the control argument may be short-lived.

Legal obstacles

Besides technical considerations the legislative framework appears (problematically) ambiguous, both in Europe and the US. 

As readers will know, the right of distribution (which is relevant to the present discussion) is subject to exhaustion, further to the first lawful sale of a copyright work or a copy thereof. 

While for analogue/physical copies the concept of exhaustion is not difficult to grasp (you buy a book at a bookshop - you become the owner of the copy - you can resell that copy), the same is hardly true in relation to digital copies. Essentially, the issue is twofold, ie whether:

(1) There is ever an actual 'sale' of a digital copy: even if we see 'buy' all the time in relation to Amazon ebooks or iTunes tracks, the actual contract we formally conclude by 'buying' an ebook or a music file is a licence agreement, not a sale.
(2) The person who 'purchases'/'buys' a digital copy ever becomes the 'owner' of that copy.

The answer – at least formally – may be in the negative in both cases.

The US scenario

In relation to the US, it is unclear [the ReDigi decision contains some hints, but these are not decisive, as I suggested here] whether this country's copyright law allows application of the first sale doctrine within §109 of the US Copyright Act to digital copies, although this provision has been said to be technology-neutral in that it would not distinguish between analogue and digital copies. This suggests that there is nothing in US law that states that the notion of ‘copy’ must be intended as confined solely to tangible copies.

This said, however, during a 2013 lecture at Columbia Law School former US Register of Copyright and current president and CEO of the Association of American Publishers, Maria Pallante, suggested that US law does not allow for the possibility to resell digital copies of copyright works, and that this is a matter for Congress to address.

Not entirely uncommon reaction 
to the UsedSoft ruling
The EU scenario

Moving to Europe, readers will remember that this blog has closely followed [Katposts here] the debate arisen in the aftermath of the (controversial) 2012 decision of the Court of Justice of the European Union (CJEU) in UsedSoft, C-128/11, in which our favourite court affirmed the possibility of digital exhaustion under the Software Directive in relation to computer programs downloaded from the internet. 

While the CJEU confirmed the general principle of UsedSoft in its more recent (2016) decision in Microsoft, C-166/15 [here], it remains unclear whether and to what extent this conclusion can be extended to works other than computer programs and that fall under the scope of the general EU copyright directive, ie the InfoSoc Directive.

In his Opinion [here] in VOB, C-174/15 (an e-lending case) Advocate General (AG) Szpunar held the view that the issue remains unaddressed at the EU level, and that the 2015 CJEU decision in Allposters, C-419/13 [Katposts here] did not provide a response to the question whether Article 4 of the InfoSoc Directive envisages digital exhaustion.

While this appears true from a formal standpoint (Allposters is a traditional – albeit unusual - analogue case, and has nothing to do with the digital world), my view is that - if the CJEU was given a real opportunity to address the issue of digital exhaustion - there might be a divergence from the path taken in UsedSoft. First, in Allposters the CJEU was pretty clear that exhaustion only applies to the tangible support (corpus mechanicum) of a work, not the work itself. Secondly, although dismissing the idea that the reference had anything to do with exhaustion, in its 2016 VOB decision [here] the CJEU appeared to think along lines similar to those used in Allposters when it suggested that exhaustion relates to the "physical medium" of a work.

Whether a digital copy can ever have a tangible support remains to be seen …

What is new

Amidst all this uncertainty, the latest news is that technological advancement might reduce - if not remove altogether - technological concerns surrounding the possibility of digital exhaustion (particularly the issue of different degrees of control).

The most recent installment is in fact that blockchain tracking technology [yes, the technology originally invented to make bitcoin transactions safer] is being proposed as an aid to make ebooks increasingly akin to analogue/physical copies. Blockchain technology allows in fact readers to 'own' an ebook and 'borrow' it to others, thank to the possibility to track this peculiar type of transaction.

The first 'disintegrating e-book' has just been placed on the market: you can see how it works here.

IFPI Global Music Report 2017
However

While technological arguments against allowing or denying digital exhaustion may become increasingly weaker, the law around digital exhaustion remains uncertain. In addition, at the moment it appears that the issue of digital exhaustion is not really part of any meaningful policy discussion, whether in the US or EU.

This said, shifting consumer behaviours may ultimately make addressing the issue of digital exhaustion redundant, at least as regards certain types of copyright content. There seems to be in fact an increasing trend towards consuming copyright content not by means of actually possessing (NOTE: ≠ owning) of a digital copy (eg an internet download) but rather through streaming content online. This appears for instance to be the case of music. In its latest Global Music Report, IFPI highlighted how streaming continues to grow, while the number of downloads has been decreasing over time.

Overall, digital exhaustion might become one of those issues that the law has failed to address clearly in a timely fashion but that ultimately might be offset by technological advancement and evolving consumption patterns. Whether this wait-and-see approach is desirable, however, is a different story …

[Originally published on The IPKat on 17 May 2017]

Thursday, 11 May 2017

BREAKING: AG Szpunar says that Uber is a transport activity, not an information society service

Uber or taxi?
Is Uber a transport activity or an information society service? Why does the answer to this matter? Why all this matter?

To the first question, this morning Advocate General (AG) Szpunar has provided a response in his Opinion in Asociación Profesional Élite Taxi v Uber Systems Spain, C-434/15, a reference for a preliminary ruling from Spain (Juzgado Mercantil No 3 de Barcelona).

The answer to the second question is that - depending on how Uber is classified - it can or cannot enjoy one of the founding freedoms of the EU internal market: the freedom to provide services. Article 2(2) of the Service Directive, in fact, excludes transport activities from the scope of the directive. However if Uber was classified as an intermediary between the owner of a vehicle and a person who needs to make a journey within a city, then it could be regarded as an information society service. As such, it could enjoy the freedom to provide its services and not be subject to the relevant local regulations of the various Member States regarding taxi services.

As to the final question, readers will be aware that in certain Member States there has been some resistance towards accepting that Uber can provide its services there. Significant resistance has come - among other things - from representative organisations of taxi drivers. In some Member States, in fact, taxi services are (heavily) regulated: this means that the provision of this type of service is subject to licences and authorisations.

The CJEU reference

As mentioned, this is a reference to the Court of Justice of the European Union (CJEU) from Spain. It was made in the context of litigation between Elite Taxi, a professional organisation representing taxi drivers in Barcelona and Uber Spain (ie the Spanish branch of Uber). 

Elite Taxi is asking a court in Barcelona, inter alia, to impose penalties on Uber Spain for engaging in unfair competition towards Elite Taxi’s drivers. 

Advocate General Szpunar
In particular, Elite Taxi claims that Uber Spain is not entitled to provide the UberPop service, because neither Uber Spain nor the owners or drivers of the vehicles concerned have the licences and authorisations required under Barcelona’s regulations on taxi services. 

Since it considered that an interpretation of several provisions of EU law was necessary to enable it to give a decision in the case before it, the Juzgado de lo Mercantil n° 3 de Barcelona decided to refer a number of questions to the CJEU concerning the classification of Uber’s activity in light of EU law and the conclusions which must be drawn from that classification. 

The AG Opinion

In his Opinion this morning, AG Szpunar advised the CJEU to rule that the Uber electronic platform - whilst innovative and akin to a composite service - falls within the field of transport.

This means that Uber:

·       can be required to obtain the necessary licences and authorisations under national law, and 
·       cannot claim the benefit of the principle of the freedom to provide services guaranteed by EU law for information society services.

The text of the Opinion is not yet available, but according to the relevant press release:

"A composite service may fall within the concept of ‘information society service’ where (1) the supply which is not made by electronic means is economically independent of the service which is provided by that means (as is the case, for example, of intermediation platforms for purchasing flights or making hotel bookings) or (2) the provider supplies the whole service (that is, both the part provided by electronic means and the part provided by other means) or exercises decisive influence over the conditions under which the latter part is provided, so that the two services form an inseparable whole, a proviso being that the main component (or indeed all essential elements of the transaction) is supplied by electronic means (as is the case, for example, of the online sale of goods). 

Typical taxi driver when thinking about Uber
According to the Advocate General, the service offered by Uber does not meet either of those two conditions. In that regard, the Advocate General observes that the drivers who work on the Uber platform do not pursue an autonomous activity that is independent of the platform. On the contrary, that activity exists solely because of the platform, without which it would have no sense. The Advocate General also points out that Uber controls the economically important aspects of the urban transport service offered through its platform. Indeed, Uber (i) imposes conditions which drivers must fulfill in order to take up and pursue the activity; (ii) financially rewards drivers who accumulate a large number of trips and informs them of where and when they can rely on there being a high volume of trips and/or advantageous fares (which thus enables Uber to tailor its supply to fluctuations in demand without exerting any formal constraints over drivers); (iii) exerts control, albeit indirect, over the quality of drivers’ work, which may even result in the exclusion of drivers from the platform; and (iv) effectively determines the price of the service. 

All those features mean that Uber cannot be regarded as a mere intermediary between drivers and passengers. In addition, in the context of the composite service offered by the Uber platform, it is undoubtedly transport (namely the service not provided by electronic means) which is the main supply and which gives the service meaning in economic terms. 

The Advocate General concludes that, in relation to the supply of transport, the supply whereby passengers and drivers are connected with one another by electronic means is neither self-standing (see point 1 above) nor the main supply (see point 2 above). Consequently, the service offered by Uber cannot be classified as an ‘information society service’. Instead, the service amounts to the organisation and management of a comprehensive system for on-demand urban transport. 

Moreover, Uber does not offer a ride-sharing service, since the destination is selected by the passenger and the driver is paid an amount which far exceeds the mere reimbursement of costs incurred. 

Taking account of the fact that the supply of transport constitutes, from an economic perspective, the main component, whilst the service of connecting passengers and drivers with one another by means of the smartphone application is a secondary component, the Advocate General proposes that the Court’s answer should be that the service offered by the Uber platform must be classified as a ‘service in the field of transport’

It follows from that interpretation that Uber’s activity is not governed by the principle of the freedom to provide services in the context of ‘information society services’ and that it is thus subject to the conditions under which non-resident carriers may operate transport services within the Member States".

A more detailed analysis will be provided when the text of the Opinion becomes available: stay tuned!

[Originally published on The IPKat on 11 May 2017]