Tuesday, 30 January 2018

Protection of traditional knowledge and cultural expressions: the case of 'Maasai IP'

Maasai people
Over time the issue of whether and how to protect cultural heritage and folklore has attracted increasing attention. Discussions in this sense have famously taken place in a number of jurisdictions, including Australia and some African countries.

With particular regard to the latter, a few days ago the Financial Times published an interesting article, discussing the case of 'Maasai IP'.

Maasai are are an ethnic group that has traditionally led a semi-nomadic life across southern Kenya and northern Tanzania. They are are famous as warriors and cattle-rustlers.

The Financial Times article discusses how awareness has arisen among Maasai as regards effective protection of the name, image, symbols, and reputation of Maasai people. 

In particular, Isaac ole Tialolo, a member of Kenya’s Maasai tribe, is credited as the initiator of a "more legalistic approach to protecting - and monetising - [the] cultural heritage" of Maasai people. As reported by the article, in fact, Tialolo went from breaking the camera of a tourist who was attempting to take photographs of Massai warriors to initiating and becoming the chair of the Kenyan branch of the Maasai Intellectual Property Initiative Trust (MIPI).

MIPI's objective is to reclaim "the Maasai ownership of its famous iconic cultural brand. The Maasai name, image and reputation is used around the world on products ranging from cars to shoes, and exercise equipment and is worth billions of dollars" [Washington-based Light Years IP estimates that more than 1,000 companies have used Maasai imagery or iconography without permission, including well-known fashion brands - eg here - and luxury car manufacturers].

Louis Vuitton Fall/Winter 2011
and Maasai man
(here
With the goal of redistributing licensing revenue among a community where 80% of people live below poverty levels, MIPI intends to increase awareness about Maasai's IP rights and license the use of Maasai's name, image, brand, culture, and artefacts (eg shoes and fabric). 

Besides actively seeking protection for their IP (eg by means of trade mark registrations) - which in any case might be a costly, complex, and lengthy process - one could wonder whether local laws afford any protection to cultural heritage in the sense intended by MIPI.

The answer seems to be in the affirmative, at least in part.

Kenya has for instance recently adopted an Act for the Protection of Traditional Knowledge and Cultural Expressions. Both terms - 'traditional knowledge' and 'cultural expressions' - are broadly defined. Protection is granted to every 'community' (to be intended as a homogeneous and consciously distinct group of the people who share any of the following attributes: (a) common ancestry; (b) similar culture or unique mode of livelihood or language; (c) geographical space; (d) ecological space; or (e) community of interest) against any unauthorised third-party exploitation of their traditional knowledge and cultural expressions.

In addition, both the Kenyan Copyright Act and the Tanzanian Copyright Act contain a specific regulation of the use of folklore, which is defined as:

- "a literary, musical or artistic work presumed to have been created within Kenya by an unidentified author which has been passed from one generation to another and constitutes a basic element of the traditional cultural heritage of Kenya and includes - (a) folktales, folk poetry and folk riddles; (b) folk songs and instrumental folk music; (c) folk dances and folk plays; and (d) the production of folk art, in particular drawings, paintings, sculptures, pottery, woodwork, metalware, jewellery, handicrafts, costumes and indigenous textiles" (Kenya);
- "production consisting of characteristic elements of the traditional artistic heritage developed and maintained over generations by a community or by individuals reflecting the traditional artistic expectations of their community" (Tanzania)

However, it would appear that neither Tanzania nor Kenya recognise a self-standing image rights [but readers' insights would be appreciated]. In this sense it is unclear how one could control the unauthorised use of his/her own image, if not by attempting to rely - at least in specific instances - on other areas of the law, eg passing off. Recently the Ugandan High Court issued an interesting decision that to some extent echoes the outcome of the Fenty v Arcadia UK litigation. 

Overall the case of 'Maasai IP' is part of a broader trend towards the recognition of certain groups' elements of identity as deserving of legal recognition. However, lacking specific legislation, traditional tools may only provide sporadic, limited, and fragmentary protection.

[Originally published on The IPKat on 30 January 2018]

Thursday, 25 January 2018

When does copyright protection arise in works of applied art and industrial models and designs? A new CJEU reference

What is the standard of originality for copyright in works of applied art, and industrial models and designs? Is there an EU rule or can Member States decide to set their own threshold to protection?

This, in a nutshell, is the very interesting and potentially controversial issue that the Court of Justice of the European Union (CJEU) has just been asked to address in a brand-new reference from Portugal, ie Cofemel, C-683/17.

The application of the Portoguese Supreme Court is not yet available on the Curia website, but these are the questions referred (via @titorendas):
At this stage I am not aware of the nature of the Portuguese litigation but - from the way in which the questions are formulated - it would appear that:

(1) The reference is not really about EU law as such, but rather CJEU's interpretation of EU law ("the CJEU's interpretation"). 

(2) This suggests that the reference may be about whether and to what extent the string of CJEU originality cases - in this instance these are likely to be in particular InfopaqBSAFAPLPainer and, above all, Flos - has removed the possibility for Member States to set their own standard of originality for works of applied art, and industrial models and designs.

CJEU-made originality standard

As readers know, EU legislature has harmonized the originality standard to a limited extent, in the sense that relevant directives have touched upon it solely with regard to computer programs (Article 1(3) of the Software Directive), databases (Article 3(1) of the Database Directive), and photographs (Article 6 of the Term Directive). 

In relation to such subject-matter protection arises any time the work in question is sufficiently original, ie it is "its author's own intellectual creation".

Yet, in its landmark Infopaq decision - by attempting to define the concept of reproduction 'in part' within Article 2 of the InfoSoc Directive [ie the same provision that is now at stake in Cofemel] - the CJEU also undertook the de facto harmonization of the standard of originality. 

Dreaming of freedom
By relying on a teleological interpretation of the various EU directives, as well as the Berne Convention, the Court stated in fact that also for works protected under the InfoSoc Directive - which, as such, does not envisage any particular notion of originality - the applicable standard would be that of "author's own intellectual creation".

The Court clarified further the concept of originality in subsequent decisions. In particular, in BSA it held that the standard of originality requires that the author expresses “his creativity in an original manner”. In FAPL it added that originality as author’s own intellectual creation requires exerting “creative freedom”. The CJEU refined further its construction of the standard of protection in its subsequent decision in Painer. There, it held that what is required is for the author “to express his creative abilities in the production of the work by making free and creative choices”, so that he “can stamp the work created with his ‘personal touch’”. 

Member States' freedom in respect of works of applied art, models and designs

For designs that are also eligible for copyright protection, things might seem straightforward. Article 17 of the Design Directive, in fact, provides that:

"A design protected by a design right registered in or in respect of a Member State in accordance with this Directive shall also be eligible for protection under the law of copyright of that State as from the date on which the design was created or fixed in any form. The extent to which, and the conditions under which, such a protection is conferred, including the level of originality required, shall be determined by each Member State."

However, the Flos case has made things rather complicated. 

This was a reference from Italy, essentially asking about the compatibility with EU law of certain Italian provisions that the Court of First Instance of Milan had deemed potentially incompatible with the principle of cumulation envisaged under EU law (for a while the Italian approach to protection was based on the principle of scindibilità (separability)).

The CJEU held that EU law prohibits Member States from denying copyright protection to designs that meet the requirements for copyright protection - including designs other than registered ones (subject to Article 17) - and suggested (although rather ambiguously) that Member States cannot set any particular requirements as to how protection is achieved. 

In this sense, the implication may be that - if a design is eligible for protection under the InfoSoc Directive and is, as such, original in the sense clarified by the CJEU - then Member States cannot deny such protection.

Such reading of the Flos case is the one that - rather concisely - Advocate General Jääskinen proposed in Titus Donner

"the judgment in Flos indicates that the items here in issue, although unprotected under Italian copyright law during the relevant period, were entitled to protection under EU copyright law" [para 31]

How ... ehm ... original
And by "EU copyright law" what is meant is the InfoSoc Directive. In Flos the CJEU stated in fact that:

"it is conceivable that copyright protection for works which may be unregistered designs could arise under other directives concerning copyright, in particular Directive 2001/29, if the conditions for that directive’s application are met, a matter which falls to be determined by the national court." [para 34].

So?

The Flos decision has given rise to contrasting interpretations [for a thoughtful analysis of the judgment, see here], and led to the repeal of national provisions (including, in the UK, section 52 of the Copyright, Designs and Patents Act).

Hopefully in Cofemel the CJEU will reflect upon the actual breadth and legacy of its earlier case law on originality, which has been arguably prompted by - yes - a significant judicial activism, but an activism motivated and supported by internal market-building concerns. 

While doing so, the Court will also (possibly) answer the questions referred by the Portuguese Supreme Court and clarify the conditions for copyright protection in works of applied art and industrial models and designs. This is not an easy area of IP law, as - across the Atlantic - the recent decision of the US Supreme Court in Star Athletica demonstrates.

More to follow! 

[Originally published on The IPKat on 24 January 2018]

Wednesday, 24 January 2018

Blocking injunctions and their costs: some details of the forthcoming Supreme Court round of Cartier

The possibility to seek an injunction against an intermediary whose services are used by third parties to infringe an IP right has proved an important tool in the hands of rightholders, including in the online context. 

The reason why the role of intermediaries is central is because, as Recital 59 in the preamble to the InfoSoc Directive [but the same is true also for the Enforcement Directiveexplains, 

“[i]n the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many cases such intermediaries are best placed to bring such infringing activities to an end.”

However, how should responsibility for the costs of injunctions be allocated? [here are some slides I prepared, and here's a more detailed discussion]

The UK approach to costs

In the UK, since the first copyright blocking injunction granted in Newzbin 2 the rule has been that, while rightholders/applicants bear the costs of application for an injunction, internet service providers (ISPs) have to pay the implementation costs. 

The reason given is that an ISP is a commercial enterprise that makes a profit from the provision of the services that the operators and users of target websites use to infringe the applicants’ IP rights. Accordingly [Newzbin 2, at 32]

“the costs of implementing the order can be regarded as a cost of carrying on that business. It seems … to be implicit in recital (59) of the Information Society Directive that the European legislature has chosen to impose that cost on the intermediary. Furthermore, that interpretation appears to be supported by the Court of Justice’s statement in L'Oréal v. eBay at [at 139] that such measures ‘must not be excessively costly’.”

The issue whether this approach is correct, including from a domestic - rather than EU - law standpoint, is at the centre of the UK Supreme Court instalment of the Cartier litigation [also the French Supreme Court has recently weighed in on this issue, as Mathilde reported here].

The Cartier case

Readers will remember that both the High Court [here and hereand the Court of Appeal [here] confirmed the availability of blocking injunctions in cases other than copyright. 

Despite the lack of specific implementation into UK law of the third sentence of Article 11 of the Enforcement Directive, the provision contained in Section 37(1) of the Senior Courts Act 1981 could be in fact regarded as the appropriate legislative basis to grant jurisdiction also in this area.

In line with his earlier judgment in Newzbin 2, Arnold J also took the view that “the rightholders should pay the costs of an unopposed application … [and] the ISPs should generally bear the costs of implementation as part of the costs of carrying on business in this sector”. However the judge did “not rule out the possibility of ordering the rightholder to pay some or all of the implementation costs in an appropriate case.” [at 240]

The “entirely correct” decision of Arnold J was confirmed in appeal

How much, did you say?!
The Court of Appeal decision contains the dissent of Briggs LJ (as he then was) regarding the responsibility for the costs of an injunction. In particular, he held the view that what has become the traditional cost allocation for intermediary injunctions would not be correct under English law.

The Supreme Court round

The Court of Appeal decision has been subsequently appealed to the UK Supreme Court [as The IPKat reported here]. Thanks to a very good Katfriend, the IPKat has learned something more about this latest round.

In particular:

"The Cartier appeal is listed for a full day in the Supreme Court next Tuesday 30 January 2018. 

Presided by Lord Mance, the other four judges will be Lord Kerr, Lord Sumption, Lord Reed & Lord Hodge.

The two key questions concern:

1.    The threshold conditions for the imposition of an order requiring ISPs to block (or attempt to block) access to websites infringing registered trade marks.

2.    Whether ISPs should be required to bear the costs of trade mark driven website blocking.

The Internet Service Providers’ Association (ISPA) sought permission to intervene in the appeal, but such permission was refused.

However, the Supreme Court granted applications for permission to intervene to the following:

·       The mobile network operators;
·       BPI;
·       The Open Rights Group;
·       The Motion Picture Association."

More to come: stay tuned!  
[Originally published on The IPKat on 24 January 2018]

Sunday, 21 January 2018

Image rights and the unauthorized use of one's own portrait on cigarette packs

Plescia's image and
the warning that
"Smoking causes strokes and disability"
Can someone's own image be used without permission?

This question may have different answers, depending on both the context in which the relevant image is used and the legal system considered. With particular regard to the latter, in countries that envisage 'image rights' (or publicity rights), the availability of protection may be even irrespective of the context in which one's own image is being used.

Italian law

This is for instance the case of Italy which, similarly to other continental European jurisdictions, has a long-standing history of protecting image rights. 

The relevant provision in the Italian Civil Code, ie Article 10, states that if one's own image is displayed or published outside the cases in which the display or publication is allowed by law, or in situations which are prejudicial to the honour or reputation of the person, a court may - upon application by the interested person - order that such use is brought to an end, as well that damages are awarded.

In a similar tone, Article 96 of the Italian Copyright Act states that - subject to some limitations pursuant to Article 97 thereof - the portrait of a person cannot be put on display, reproduced or used commercially without their consent. 

The image rights story that a number of Italian newspapers [eg here and here] have reported is therefore quite interesting.

Maurizio Plescia
Becoming a health warning ... without knowing it

A man from Ischia (one of the islands in the Naples Gulf), Maurizio Plescia, was quite shocked when he found out that his image was reproduced on the cigarette packs marketed by different multinationals, as part of what the EU Tobacco Products Directive calls ‘combined health warning’, ie health warnings consisting of a combination of a text warning and a corresponding photograph or illustration illustrating the risks of smoking.

The image of Plescia represented him while hospitalized in Colombia. He had gone there to visit his former partner and - further to certain breathing issues - had taken a medication to which he happened to be allergic. Together with the initial symptoms of pneumonia, such allergic reaction resulted in his hospitalization.  

Apparently while he was lying in his hospital bed, someone took a photograph of him. Subsequently such photograph was included in the picture library administered by the EU Commission pursuant to Schedule 2 of the Tobacco Products Directive, which contains images to be used for the marketing of tobacco products [if you wish to know more about the rationale of health warnings, see here].

Apparently Plescia was not the only one to come forward as the person allegedly depicted in the image of the man in bed, and this has complicated the matter further for him. However, he eventually managed to obtain an expert certification that there are no doubts that the person represented in the image is really him. He first contacted the companies marketing the relevant cigarette packs, but these said that they have no control over or responsibility for the use of the images selected for use on packaging of cigarettes, and that the EU Commission would be rather the one to address.

What's in one's own image?
Other cases

There is abundant case law concerning the unauthorized use of one's own image, and this blog has reported on decisions which have found an infringement of image rights even lacking use of one's own actual image. 

Protection has been granted also in instances relating to the unauthorized use of one's own image in situations in which one was filmed during a public event. For instance, the Italian Supreme Court has held that a TV programme could not use one's own image, captured during a football match, after that event's current character has ended (in this specific case, 6 years after the match).

Some readers might have also read news reports [hereherehere] that a judge in Rome has recently ordered - at the risk of a financial penalty - the mother of an teenager to refrain from publishing pictures of her son on social media. Although the text of the decision is not particularly detailed in the legal reasoning part, it seems that also the protection of one's own image has played a role in the conclusion reached.

A comment

Newspapers do not report whether Plescia’s case has come to an end, but it seems quite incredible – if true - that one could be photographed without their authorization and the resulting image could be included in the Directive's picture library and subsequently used for combined health warnings without obtaining all necessary permissions.

In this sense, Plescia’s case is a useful reminder that, when it comes to using third-party images, wannabe users should not be just concerned about copyright issues (including the non-assignable moral rights of the author of the photograph), but also the rights of the person(s) portrayed in the photograph. The latter may present potentially a risk also in those countries that do not explicitly recognize the existence of self-standing image rights. In this sense, the quite recent Rihanna case in the UK is a telling example [here and here].

[Originally published on The IPKat on 21 January 2018]

Wednesday, 17 January 2018

New presidency of the Council of the European Union ... new position on the EU copyright reform?

Following the conclusion of the 6-month Estonian presidency, the presidency of the Council of the European Union is now Bulgarian, and will be so for the first semester of 2018.

The Council is one of the key EU institutions and brings the voice of Member States' governments into the decision- and law-making process. In fact and among other things - together with the European Parliament - the Council is in charge of adopting EU legislation.

Of course, one of the pending pieces of legislation that might receive a decisive boost towards its formal adoption over the next few months is the Directive - proposed by the EU Commission in September 2016 - on copyright in the Digital Single Market [here; Katposts here].

Since its release, the draft directive has attracted extensive commentary. In particular, the draft provisions contained in Article 11 ('Protection of press publications concerning digital uses', this being a proposal to introduce a new neighbouring right in favour of press publishers) [Katposts hereand Article 13 ('Use of protected content by information society service providers storing and giving access to large amounts of works and other subject-matter uploaded by their users', this being a proposal to be read in combination with Recital 38 in the preamble to the directive and aimed at remedying the so called 'value gap' or 'transfer of value') [Katposts hereare those that have been subject to the most extensive scrutiny, at several levels.

Consensus in the Council regarding the proposed copyright directive

The former Estonian presidency worked indeed on reaching consensus among Member States' governments regarding the position that the Council of the European Union would adopt in relation to Articles 11 and 13 in particular.  

Different versions of the Estonian 'compromise' were made available and, of course, widely commented. 

For the Council to be able to advance its position political consensus among the various Member States' governments is key.

The latest, consolidated, version of the presidency compromise proposal is available here.

Now that the presidency of the Council has passed to Bulgaria, what will change (if anything)?

Bulgarian's questions for Coreper orientation debate

Yesterday, a document prepared by the Bulgarian presidency and aimed at setting up an 'orientation debate' on Articles 11 and 13 of the proposed directive within Permanent Representatives Committee (Coreper) was released.

What's in it?

First, the Bulgarian presidency highlighted the progress made under the Maltese and Estonian leadership, and noted that any progress would have as a basis the latest compromise proposal prepared by the Estonian presidency. 

This said, the Bulgarian document sets up some questions for consideration by Coreper, with the hope that consensus could be reached among Member States.

Press publishers' right: to be kept ... possibly with some nuances

With regard to the proposed press publishers' right, Bulgaria noted that no consensus could be reached on either option advanced by Estonia, ie: (A) an actual right, that would be written in such a way that its scope would be clearer than what the Commission had proposed; or (B) a presumption of entitlement of press publishers to license and enforce the rights in their press publications. 

From the text of the document it would appear that Bulgaria favours option (A). In fact, the document formulates a number of questions around option (A), the answer to which could help Member States achieve consensus in the Council in the form of an acceptable compromise. 

Where do you think you're going?!
In particular, the Bulgarian presidency is asking Member States about:

- determination of the extracts of press publications that would fall within the scope of the right: would that be a matter of originality (and therefore eligibility for protection also under copyright, as per Infopaq) of the part reproduced, or should size be a criterion irrespective of originality?

- whether the type of use made of the press publication (commercial or non-commercial) should be a relevant criterion;

- term of protection: is the original proposal of a 20-year term adequate?

Value gap proposal: also to be kept ... subject to a few clarifications (or not) 

Also here, the Bulgarian presidency seems oriented towards maintaining Article 13 in the text of the directive, but is asking Member States to comment on certain aspects of the provision, hoping that addressing these issues would allow consensus to be reached.

In particular:

- Should the directive clarify or not what is to be intended as communication to the public by platforms that host and make available user-uploaded content [the original proposal does not clarify]?

- Should the directive exclude that platforms that make acts of communication to the public are eligible for the safe harbour under Article 14 of the E-commerce Directive [the original proposal refers to the safe harbour for hosting providers]?

- If platforms are liable for unauthorized acts of communication to the public, should there be some sort of "targeted liability mitigation provided for to avoid potentially excessive impact on platforms storing and giving access to user uploaded content" [this could be so, assuming the ineligibility of such platforms for the Article 14 E-commerce Directive safe harbour]

- If there is a clarification of the communication to the public, should there also be an obligation to apply measures [likely including pro-active filtering - on this point it might be interesting to look at this and bear in mind the recent EU Commission's Communication on Tackling Illegal Content Online, which includes reference to the so called 'good Samaritan clause' (p 3)] as an additional provision, and if so, should it apply to the same service providers as those concerned by the clarification on communication to the public or should the scope of this obligation be different and potentially wider? 

Where to write one's
own thoughts and responses
Finally, Bulgaria is asking whether a better option could be NOT to include in Article 13 any language relating to communication to the public and safe harbours and include, instead, a new recital that would recall the existing principles of EU law which are relevant to determine the conditions under which user-uploaded content platforms engage, based on existing case law of the Court of Justice of the European Union, into a copyright-relevant act and are not covered by the limited liability in Article 14 of the E-commerce Directive.

Conclusion

From this document released by the new Bulgarian presidency it would appear that neither Article 11 nor Article 13 are going anywhere, Council-wise. 

With regard to Article 11, the idea of replacing a right in favour of press publishers with a presumption of representation seems to have been abandoned. 

There is greater room for manoeuvre in relation to the value gap proposal, and on crucial aspects indeed. 

Let's see what happens over the next few months, also at the Parliament level. The JURI Committee is now expected to vote on the report by MEP Axel Voss (who has replaced MEP Comodini-Cachia) on 26-27 March (the January date has been in fact postponed once again), and it will be crucial to see what the report proposes, and how the vote goes.

[Originally published on The IPKat on 17 January 2018]

Thursday, 4 January 2018

Brands and online ecommerce platforms: a tainted relationship?

What has happened to online ecommerce platforms? Over the past few months news reports have multiplied – or, perhaps, their underlying issues have acquired greater visibility – that brand owners have been increasingly voicing criticisms against, sued, or discontinued sales on ecommerce sites. In particular, after the criticisms made against Alibaba, it seems that Amazon is now making the headlines.

Let’s have a quick look at what has happened over the past few months.

Court actions

First, there have been legal proceedings being brought by trade mark owners, claiming a direct responsibility of Amazon in the sale of counterfeits or invoking a right to prevent sales on such platform.

An example of the former is the lawsuit filed by Daimler against Amazon in late 2017 in the US District Court for the Western District of Washington at Seattle. The well-known German car manufacturer argues that Amazon is directly responsible for the “offer for sale, sale and distribution of wheels which blatantly copy issued design patents in various distinctive and artistic wheel designs owned by Daimler” under the Lanham Act (§ 1051 ff), the US Patent Act (§ 1 ff), and Washington State statutory and common law.

As explained on Forbes here, this is not the first time that a trade mark owner is seeking to have the direct liability of Amazon established. However, back in 2015 a 9-member jury in the same court that has now been asked to rule on the lawsuit filed by Daimler held that Amazon was not liable for the sale of counterfeit Milo & Gabby (now JoliMoli) animal-shaped pillows.

If the case brought by Daimler ended with a finding of liability for Amazon, that would likely have a significant impact on the liability of platforms allowing third-party listings, and set a different approach to platform liability in the US.

As readers knows, the particular issues surrounding platform liability have been at the centre of attention also in Europe. 

Reference in the online trade mark realm goes instinctively to the landmark decision of the Court of Justice of the European Union (CJEU) in eBay, C-324/09, in which the highest EU court clarified that the safe harbour for hosting providers within Article 14 of the E-Commerce Directive does not apply to “an information society service [which is] aware of facts or circumstances on the basis of which a diligent economic operator should have identified the illegality in question and acted in accordance with Article 14(1)(b) of Directive 2000/31.” [para 120]

More recently, the CJEU appears to have pushed the liability of platforms even further than the realm of safe harbours (hence, scenarios of secondary liability) by holding that a platform may be even directly (primarily) liable for third-party infringements. It has done so in the copyright context, especially in the recent Filmspeler decision [Katposts hereand – even more clearly – in the Ziggo ruling [Katposts here].

If we remain in the EU context, the issue of platform liability is not the only aspect that has been touched upon in relation to ecommerce platforms. Readers will in fact remember the recent judgment in Coty Prestige, C-230/16 [here], in which the CJEU tackled the compatibility with EU competition rules of selective distribution agreements for luxury brands, including clauses that would prevent resellers from distributing branded products via Amazon. The CJEU provided an interpretation of relevant EU provisions that allows – at certain conditions – trade mark holders from preventing distribution of their goods via platforms of this kind.

Have you bought
your KatBirki's yet?
Discontinued sales

In parallel with court actions, other brands have recently announced their intention to discontinue sales on Amazon, over issues of counterfeiting and allegedly excessive discounts.

In a timeframe of just a few weeks, this has been for instance the case of Birkenstock and Italian publisher E/O, respectively.

Shoe producer Birkenstock announced that as of 1 January 2018 it would terminate its business relations with Amazon, on grounds that

“there have been a series of violations of the law on the Marketplace platform operated by Amazon which the platform operator has failed to prevent of its own accord. On a number of occasions, BIRKENSTOCK lodged a complaint that counterfeit products of poor quality which infringed BIRKENSTOCK’s trademark rights and misled the consumers regarding the origins of goods were being made available on the platform.
Putting the issue of legal obligations aside, BIRKENSTOCK is of the opinion that an integral part of a trusting business relationship is that, upon being first notified as the operator of the Marketplace platform of such a breach of the law, Amazon would, of its own accord, do everything within its power to prevent this type of and similar infringements. To this day, no binding statement has been made to the effect that no more counterfeit BIRKENSTOCK products would be offered for sale through the platform.”

A couple of weeks ago also E/O [the Italian publisher of Elena Ferrante’s books, amongst others] announced that it would no longer sell on Amazon, on consideration that the discounts requested by the ecommerce provider would be excessive. It is not the first time that a complaint of this kind is made by the publishing industry.

What’s next?

In all this, what does the future hold?

On the one hand, it appears that brand owners' complaints may result in the adoption of new approaches towards responsibilization and liability of online platforms. 

This could occur not just at the court level, but also by means of initiatives of policy- and law-makers. In Europe, for instance, the issue of platform liability, notice-and-stay down obligations (including filtering), as well improved enforcement tools are currently central items to the agenda of the EU Commission and legislature. In the first half of 2018 it is expected that the Commission will unveil further legislative proposals in this area, under the umbrella of its Digital Single Market Strategy.

On the other hand, platforms like Amazon may not rely just on partnerships with brand owners or the making available third-party offerings but, rather, increasingly invest on the making available of their own offerings. In this sense, the trend in fashion seems to be already reality. As noted by The Fashion Law, Amazon has in fact been working on and launched a number of in-house collections that have been already finding success among consumers, “particularly in light of the current retail environment, when brand loyalty is low, consumers are overly price/value conscious, and branding is simply not as significant a player as it used to be.” 

In this sense, the general trend seems to be towards a configuration of platforms' activity as no longer - or just - passive hosts of third-party offerings but, rather, active providers of own offerings. What should the legal treatment of this evolving and evolved scenario be? While the functioning of the internet must be safeguarded [as was also recently stressed by the German Federal Court of Justice, here and herethe questions that lie ahead and require a response are whether new rules are needed, existing rules should be applied differently ... or what else?

[Originally published on The IPKat on 4 January 2018]