Friday, 16 February 2018

Linking under US copyright law: green light to its inclusion in the scope of public display right comes from New York

A day in the life of a Kat:
from Playboy bunny to ...
In late 2017 The IPKat reported that, after Europe, it appeared that the interplay between linking and copyright protection had re-surfaced also in the US [use of the term 're-surfaced' is justified in light of the fact that US courts have already had the chance to address these issues, eg in the well-known Perfect 10 case].

After a few months, earlier this week two decisions have been issued on this matter ... with two rather different outcomes.

Linking to unlicensed content Round #1: KO - Playboy v Boing Boing

First, on 14 February US District Judge Fernando Olguin (US District Court for the Central District of California) dismissed (but with leave to amend) Playboy's complaint against Boing Boing.

What is (was?) at stake here?

Basically Playboy [European readers will promptly recall that indeed the landmark decision of the Court of Justice of the European Union (CJEU) in GS Media - Katposts here - was prompted by means of a reference for a preliminary ruling made in litigation brought by the publisher of ... Playboy] sued the owner of website Boing Boing over linking in 2016 to "Every Playboy Playmate Centerfold Ever". 

While the Boing Boing page is still up, the content it links to and the YouTube video it embeds have been removed.

In its decision this week, Judge Olguin referred to the Tarantino v Gawker case, ie the litigation (which however never resulted in a decision) concerning the linking, by now-defunct Gawker, to the 146-page script for Tarantino's The Hateful Eight (which had the time had yet to be produced), to hold that liability for linking to unlicensed content "exists if the defendant engages in personal conduct that encourages or assists the infringement."

According to the judge, Playboy failed to demonstrate convincingly that Boing Boing has supported the infringement through inducement or material contribution. 

Now Playboy has time until 26 February to file a second amended complaint. [why not just bringing the litigation to Europe ... or New York (see below), wonders Merpel?]

... quarterback ...
Linking to unlicensed content Round #2: Victory - Goldman v Breitbart

The plaintiff in the second linking case has been luckier than Playboy (at least so far).

A photographer working with Getty Images, Justin Goldman, sued a number of publishers over the unauthorised embedding, by their relevant publications, of a tweet containing an unlicensed image of American football quarterback Tom Brady that he had taken.

According to the complaint filed with the US District Court for the Southern District of New York, tthe defendants - by embedding content hosted elsewhere (Twitter, although the photograph had been first uploaded onto Snapchat) - had infringed the plaintiff's public display right under §106(5) of the US Copyright Act. There was no evidence that the photo had been downloaded or stored anywhere though.

According to §106(5) of the US Act, the copyright owner has the right, "in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly". 

In a judgment issued yesterday, US District Judge Katherine B Forrest held that "when defendants caused the embedded Tweets to appear on their websites, their actions violated plaintiff’s exclusive display right; the fact that the image was hosted on a server owned and operated by an unrelated third party (Twitter) does not shield them from this result."

The judge noted how a review of the legislative history underlying adoption of the current Act reveals that its drafters intended copyright protection to broadly encompass new, and not yet understood, technologies. 

After referring the US Supreme Court in Aereo, whose language was found "instructive", the judge turned to the server test and its application in Perfect 10. She highlighted how Perfect 10 is not really part of an “unbroken line of authority” (as argued, instead, by the defendants). 

Rather, "the Server Test has not been widely adopted. Even a quick survey reveals that the case law in this area is somewhat scattered." In any case, according to the judge, the server test has not been adopted for the display right.

Also in Flava, the 7th Circuit did not touch upon the issue of direct liability. Nonetheless the lower court had opined that “[t]o the extent that Perfect 10 can be read to stand for the proposition that inline linking can never cause a display of images or videos that would give rise to a claim of direct copyright infringement, we respectfully disagree. In our view, a website’s servers need not actually store a copy of the work in order to ‘display’ it".

In sum, the Court sided with the plaintiff and held that "[t]he plain language of the Copyright Act, the legislative history undergirding its enactment, and subsequent Supreme Court jurisprudence provide no basis for a rule that allows the physical location or possession of an image to determine who may or may not have “displayed” a work within the meaning of the Copyright Act."

... and a few moments' rest
Finally, the judge rejected the argument that a conclusion of this kind would have 'chilling effects'. The Court held that - among other things - even assuming that the public display right is engaged in acts of linking, US law still retains "a very serious and strong fair use defense, a defense under the Digital Millennium Copyright Act, and limitations on damages from innocent infringement." 

Comment

The decision in Goldman is very interesting and signals somewhat of an alignment between the understanding of the public display right under the US Copyright Act and the right of communication to the public under Article 3 of the InfoSoc Directive.

In addition, the decision seems to complement the conclusions of the US Copyright Office's Making Available Study. There the Office held that under existing (at that time) case law "it remains uncertain whether a court might deem certain forms of inline linking or framing distinguishable from the technology in Perfect 10 for purposes of the server test.  As will be discussed further below, application of the making available right to activities such as these raises complex issues that require consideration of a number of important factors.  While some of these issues have been addressed preliminarily, U.S. courts have not made definitive rulings as to how the server test might apply to activities potentially raising greater concerns for visual artists’ ability to exploit their works online than have been addressed so far."

Now, after this decision, some sort of response seems to have been provided. At least for now.

[Originally published on The IPKat on 16 February 2018]

Thursday, 8 February 2018

The new AG Opinion in Louboutin: is it really bad news for the famous red sole?

As this blog reported a couple of days ago, following his first Opinion in June 2017, last Tuesday Advocate General (AG) Szpunar issued his new Opinion in Louboutin, C-163/16.

Since then, the content and value of the Opinion have not been arguably correctly picked by some media, with some even summarizing it as follows: “Can Christian Louboutin Trademark Red Soles? An E.U. Court Says No” [there are so many reasons why this headline is just wrong …].

All this has led Christian Louboutin to issue a press release, suggesting that some of the reports of the Opinion could be considered … ‘fake news’ [hereherehere]:

While ordinarily Christian Louboutin does not comment directly on pending matters, we are making an exception in this instance to correct what appears to be misleading reports of the opinion of M. Szpunar, advocate general, which is seen to impact our trademark adversely. We disagree”

According to Louboutin, in fact, the Opinion of AG Szpunar, if nothing else, “supports trademark protection for our famous red sole, rather than threatening it.” This would be because: “Advocate general Szpunar states that ‘The concept of a shape which ‘gives substantial value’ to the goods … relates only to the intrinsic value of the shape, and does not permit the reputation of the mark or its proprietor to be taken into account.” It would follow that: “Applying Mr. Szpunar’s opinion to our case support the validity of our trademark since the shape of the outsole to which the red color is applied is not intrinsically valuable … As for the Christian Louboutin’s red color, the only reason it has value is because of our marketing efforts as well as the public’s association of such color applied to a women’s heeled shoe outsole with Christian Louboutin.”

Is Louboutin correct in its reading of the Opinion? In my view, yes. 

Similarly to the previous Opinion, in fact, the AG appeared to suggest that – while the red sole could not be considered just a colour mark – this trade mark might not fall in concreto (although yes potentially) within the absolute ground for refusal concerning signs consisting exclusively of shapes (or other characteristics) that give substantial value to the goods or services, as per Article 3(1)(e)(iii) of Directive 2008/95/EC.

Let’s take a closer look at the second Opinion of AG Szpunar.

Classification of the mark at issue

First, the AG confirmed his view that the mark at issue should not be considered a colour mark. Rather, what is at stake is not protection of a colour as such (which, on its own, would not be possibly even capable of performing the essential trade mark function as badge of origin), but rather a colour that has a certain spatial delimitation (that of the shoe sole to which it is attached).

Then, the AG tackled the issue of classifying the Louboutin trade mark as a ‘position mark’ within the meaning of Article 3(3)(d) of Implementing Regulation 2017/1431 (which in any case applies with effect from 1 October 2017). Also taking into account the reformed language of the absolute ground for refusal for signs consisting exclusively of shapes or other characteristics that give a substantial value, the AG concluded that classification of a sign as a ‘position mark’ does not exclude that a mark of this kind could fall within the scope of such ground.

Change in the language of the absolute ground

The AG then turned to consider the change in language between Article 3(1)(e)(iii) of the previous Trade Mark Directive and Article 4(1)(e)(iii) of Directive 2015/2436.

He reiterated his view that the change is merely formal, in the sense of clarifying the law as it was already under the 2008 directive. The rationale of this ground is (and was) to ensure that certain signs remain available to use and do not result in anti-competitive restrictions.

Hence, Article 3(1)(e)(iii) of Directive 2008/95 can be potentially interpreted as meaning that it applies in the case of a sign consisting of the shape (or another characteristic) of the goods and which seeks protection for a certain colour.

The mark at issue
The ‘substantial value’ given by a shape may change over time

The AG achieved the conclusion above but with an important caveat (also discernible in his first Opinion). 

Recalling his earlier Opinion in Hauck [the Tripp Trapp chair case], the AG highlighted that in assessing the ground in Article 3(1)(e)(iii) of the 2008 directive, “account must be taken both of the perception of the sign at issue by the relevant public and the economic effects which will result from reserving that sign to a single undertaking.” [para 48]

The AG also stressed that not all absolute grounds for refusal for shapes should be intended in the same way. 

In particular, when it comes to the ‘substantial value’ ground, he noted how the rationale may be such that a shape (or another characteristic) remains “available for all market participants over the period during which that characteristic has a particular effect on the value of the goods.” However,

“From the point at which that is no longer the case — inter alia, as certain interested parties allege, because the public’s preferences have changed and that characteristic is no longer sought and valued by the public –, the trade mark at issue would no longer potentially be caught by the prohibition laid down in Article 3(1)(e)(iii) of Directive 2008/95.
Under those circumstances, it would follow that — unlike the grounds for refusal or invalidity laid down in Article 3(1)(e)(i) and (ii) of Directive 2008/95 — Article 3(1)(e)(iii) of that directive would relate to characteristics which are dependent on external factors.” [paras 51-52]

The AG continued by stressing that:

“the fact that the characteristics giving substantial value to the goods are, in part, determined by the public’s perception does not, in my view, mean that account may be taken of the reputation of the trade mark or its proprietor as part of the assessment to determine whether the shape at issue ‘gives substantial value to the goods’ within the meaning of Article 3(1)(e)(iii) of Directive 2008/95. Indeed, if the concept of a ‘shape [giving] substantial value to the goods’ were to be acknowledged as being, even in part, determined by characteristics which are perceived as attractive by the public, it would then be necessary to exclude the characteristics linked to the reputation of the trade mark or its proprietor, in order to prevent the appeal created by that reputation being attributed to a shape which, taken on its own, would not be attractive. Otherwise, the ground for refusal or invalidity laid down in Article 3(1)(e)(iii) of Directive 2008/95 could be interpreted very broadly and improperly having regard to its objective” [para 54]

The AG ruled out that the trade mark’s reputation is to be considered as part of the assessment for this ground for refusal. 

By suggesting an ‘evolutionary’ interpretation of the ‘substantial value’ ground and rejecting the idea that a sign’s reputation (and distinctive character) matters, it would appear that – similarly to his previous Opinion – the AG tried implicitly to ‘save’ the Louboutin trade mark. 

In other words, in a case like Louboutin, the question to ask would be: is the red sole sign which gives substantial to the shoe, or is it rather the reputation of the trade mark represented by that particular sign that confers such value?

This suggestion may be read also in light of the AG’s considerations regarding assessment of distinctiveness for signs which are indissociable from the appearance of the goods in question.

Merpel's
favourite Louboutins ...
Distinctiveness of signs indissociable from the appearance of the goods

This part of the Opinion is considered useful “in the event that the Court were to take the view in its future judgment that, in the present case, Article 3(1)(e)(iii) of Directive 2008/95 cannot be applied.” [para 59]

By referring once again to Libertel, the AG reiterated that public policy considerations (including pre-competitive ones) underpin the decision whether to allow registration of signs of this kind.

In a case like the one at issue, the correct approach would be one that also takes into account case law on 3D signs, and acknowledges the existence of a distinctive character only for those signs that depart significantly from the norm or customs of the sector [wouldn’t that be indeed the case of the Louboutin soles as opposed to black, brown, or grey soles?].

In addition, if a sign has acquired a distinctive character following a normal process of familiarization of the public concerned, then Article 3(1)(b) of the 2008 directive, read in conjunction with Article 3(3) thereof, would not apply.

Conclusion

The Opinion of AG Szpunar is not binding on the CJEU, and it will be important to see whether and to what extent the latter follows his Opinion.

It is not a matter for the Court (or its AGs) to comment on the facts of the cases referred (although in recent times this has not always been so … let’s think for instance of copyright cases like DeckmynGS Media or The Pirate Bay). In the present instance, I am not convinced that the Opinion of AG Szpunar can be necessarily interpreted as a defeat for Louboutin.

Nonetheless, as the AG mentioned in his Opinion, the referring court (which will be tasked with applying the forthcoming CJEU decision to the background dispute) seems to think that the red colour of the sole gives substantial value to the goods [para 13 of the Opinion], and hence the Louboutin trade mark might be an invalid one. But would an outcome of this kind be correct? 

[Originally published on The IPKat on 8 February 2018]

Thursday, 1 February 2018

Can ‘public morals’ prevent the use of religious symbols and motifs in advertising? No, says the European Court of Human Rights

The first ad
Is the prohibition to use in advertising the image of Jesus and Mary on grounds of public morals an undue compression of one’s own freedom of expression?

This is essentially the issue that the European Court of Human Rights (ECtHR) had to address in Sekmadienis v Lithuania (Appl No 69317/14).

In yesterday’s judgment the Court answered … in the affirmative.

The decision is interesting because the ECtHR reviewed the application of freedom of expression within Article 10 of the European Convention on Human Rights (ECHR) in the context of commercial advertising and in light of the vague concept of ‘public morals’.

Background

The applicant, Sekmadienis, is a Lithuanian clothing company that in 2012 ran an advertising campaign featuring three advertisements:

1.    The first showed a young man with long hair, a headband, a halo around his head and several tattoos wearing a pair of jeans. A caption at the bottom of the image read “Jesus, what trousers!” (Jėzau, kokios tavo kelnės!).
2.    The second advertisement showed a young woman wearing a white dress and a headdress with white and red flowers in it. She had a halo around her head and was holding a string of beads. The caption at the bottom of the image read “Dear Mary, what a dress!” (Marija brangi, kokia suknelė!).
3.    The third advertisement showed the man and the woman together, wearing the same clothes and accessories as in the previous advertisements. The man was reclining and the woman was standing next to him with one hand placed on his head and the other on his shoulder. The caption at the bottom of the image read “Jesus [and] Mary, what are you wearing!” (Jėzau Marija, kuo čia apsirengę!).

In 2013, further to a number of complaints, the State Consumer Rights Protection Authority  (SCRPA) – having consulted the Lithuanian Advertising Agency and the Lithuanian Bishops Conference – held that the applicant’s advertising campaign was contrary to ‘public morals’ within Article 4 §2(1) of the Lithuanian Law on Advertising.

This provision states that “[a]dvertising shall be banned if … it violates public morals”.

Although the concept of ‘public morals’ is not defined in any legal instrument, according to the SCRPA it implies in any case the respect for the rights and interests of others. That would not be the case of the applicant’s campaign, which would be instead distasteful and offensive to religious people. Furthermore, “the elements of the advertisements taken together – the persons, symbols and their positioning – would create an impression for the average consumer that the depicted persons and objects were related to religious symbols”.

The SCRPA imposed a fine of approx EUR 580 on Sekmadienis. This appealed the decision, but all attempts were unsuccessful.

Having exhausted all internal legal remedies, the clothing company decided to sue Lithuania before the ECtHR, claiming that the interference with its own freedom of expression within the Lithuanian law was not justifiable in light of Article 10 ECHR, and went beyond the limitations allowed under paragraph 2 thereof. The applicant claimed that the restriction had not taken place in accordance with the law (when the advertisements were issued, the Law on Advertisement did not any include any reference to the use of religious symbols or motifs), did not pursue a legitimate, and was not necessary in a democratic society.

The Lithuanian Government submitted that the applicant’s freedom of expression had been compressed, but such restriction was compliant with Article 10(2) ECHR. As regards the notion of ‘public morals’, according to the Government this must be understood as broad: although the relevant provision in the Law on Advertising did not ban the use of religious symbols or motifs in advertising per se (at least at the time when the restriction was imposed, because later on the law was amended), morals could be based on religious views, especially taking into account the historic importance of Christianity in Lithuania (eg, in the context of anti-Soviet resistance), and the number of Christians among the population (nearly 80% of population is believed to be Catholic).

The judgment

As is clear from Article 10(2) ECHR, an interference with one’s own freedom of expression is allowed insofar as it:

·       Is prescribed by law;
·       Pursues a legitimate aim; and
·       Is necessary in a democratic society.

Prescribed by law: not really foreseeable but the point is not this

The first requirement, as also clarified in Delfi, entails that the law in question should be accessible, ie formulated with sufficient precision, to the person concerned and foreseeable as to its effects.

The assessment of foreseeability of course depends on the law considered, as well the field it is designed to cover and the number and status of those to whom it is addressed. If the addressees are those carrying on a professional activity who must exercise special care, then a special care in assessing the risks that such activity entails should be also expected.

The second ad
In the case at issue, the ECtHR agreed with the Lithuanian Government that it would not be possible to provide a precise legal definition of ‘public morals’, which accordingly must be intended in a broad sense.

Although the fact that this case was the first in Lithuania addressing the issue of use of religious symbols and motifs in advertising did not exclude the foreseeability of how the concept of ‘public morals’ would be intended in such instance, the fact that the advertisements were found to be contrary public morals because the use of religious symbols in them was “inappropriate” and “distorted the meaning” of those symbols was not foreseeable.

Nonetheless, the ECtHR noted that the real point would not be the foreseeability of such understanding of ‘public morals’, but rather whether the interference pursued a legitimate aim and was necessary in a democratic society.

Pursued a legitimate aim: yes

According to the ECtHR the aim of protecting morals arising from the Christian faith and shared by a substantial part of the Lithuanian population, along with the protection of the right of religious people not to be insulted on the grounds of their beliefs, is a legitimate aim.

Necessary in a democratic society: not really

The Court noted at the outset that the understanding of ‘democratic society’ entails that freedom of expression also includes information and ideas that offend, shock and disturb. Also, the meaning of ‘necessary’ implies that any restrictions to freedom of expression require the existence of a “pressing social need”, in relation to which Contracting States have a certain margin of appreciation. The Court’s task, in this sense, is to exercise a supervisory jurisdiction, not to replace competent national authorities.

The Court further noted that different types of expression may be subject to different degrees of protection. When it comes to religious beliefs, Article 10 freedom must be balanced against “the general requirement to ensure the peaceful enjoyment of the rights guaranteed under Article 9 to the holders of such beliefs including a duty to avoid as far as possible an expression that is, in regard to objects of veneration, gratuitously offensive to others and profane”.

The Court held that the expressions at issue - although they had a commercial purpose and were not intended to contribute to any public debate concerning religion or any other matters of general interest – “at the outset … do not appear to be gratuitously offensive or profane, nor do they incite hatred on the grounds of religious belief or attack a religion in an unwarranted or abusive manner”.

The third ad
In this sense, the Lithuanian authorities had failed to explain “why the reference to religious symbols in the advertisements was offensive, other than for the very fact that it had been done for non-religious purposes”.

Furthermore none of the authorities had addressed the applicant’ argument that “the names of Jesus and Mary in the advertisements had been used not as religious references but as emotional interjections common in spoken Lithuanian, thereby creating a comic effect”.

The Court also noted that the Lithuanian Constitutional Court has held that “no views or ideology may be declared mandatory and thrust on an individual” and that the State “does not have any right to establish a mandatory system of views”.

In conclusion

The ECtHR ruled that the Lithuanian authorities had failed to strike “a fair balance between, on the one hand, the protection of public morals and the rights of religious people, and, on the other hand, the applicant company’s right to freedom of expression.”

The analysis of the ECtHR is very interesting, in that it enlightens the relationship between freedom of commercial expression and the vague notion of ‘public morals’.

In this sense – in addition to providing guidance in the context of advertisement law - the judgment may also serve to elucidate how the absolute ground for refusal of registration of a trade mark on grounds of public policy or morality [Article 7(1)(f) of Regulation 2017/1001 and Article 4(1)(f) of Directive 2015/2424] should be intended, especially considering the frequent occasions in which this ground is relied upon by relevant authorities (for instance, only a few days ago the General Court confirmed that the sign ‘Fack Ju Göhte’ could not be registered as trade mark [here]).

[Originally published on The IPKat on 31 January 2018]