Friday, 29 March 2019

DSM Directive Series #1: Do Member States have to transpose the value gap provision and does the YouTube referral matter?

A change or just a clarification?
As reported by The IPKat, earlier this week the European Parliament adopted the latest version of the new Directive on Copyright in the Digital Single Market (DSM Directive).

The IPKat will now run a series of posts discussing some of the key aspects of this new instrument which, following publication in the Official Journal of the EU, will need to be transposed by EU Member States within 2 years.

Today I begin with a provision or, rather, a recital that, at least in certain respects, makes national transpositions somewhat redundant. It relates to the 'value gap' provision in what is now Article 17 of the Directive (formerly Article 13).

Article 17(1) states:
Member States shall provide that an online content-sharing service provider performs an act of communication to the public or an act of making available to the public for the purposes of this Directive when it gives the public access to copyright-protected works or other protected subject matter uploaded by its users. [...]
In addition, Article 17(3) provides:
When an online content-sharing service provider performs an act of communication to the public or an act of making available to the public under the conditions laid down in this Directive, the limitation of liability established in Article 14(1) of Directive 2000/31/EC [that is the E-commerce Directiveshall not apply to the situations covered by this Article.
Is the idea that an online content-sharing service provider (OCSSP) communicates to the public and is ineligible for safe harbour protection a change in the law, which will require EU Member States to change their approach to platform liability and the construction of the right of communication to the public under Article 3 of the InfoSoc Directive?

This question of of no little importance, at least on two levels.

The YouTube referral

First of all, as reported by The IPKat, last September the German Federal Court of Justice made a referral to the CJEU (YouTube, C-682/18) asking, among other things, whether "the operator of an internet video platform on which videos containing content protected by copyright are made publicly accessible by users without the consent of the rightholders carry out an act of communication within the meaning of Article 3(1)" of the InfoSoc Directive, insofar as certain conditions are satisfied.

The YouTube referral was made amidst the uncertainties arisen in the aftermath of the CJEU decision in Ziggo (The Pirate Bay case; Katposts here and see also here), which held that the operators of a platform could be directly responsible for users' infringing activities.

Could the conclusion achieved in relation to The Pirate Bay be applied also to YouTube considering, as the German court did, that:
  • the operator earns advertising revenue by means of the platform,
  • the upload process takes place automatically and without material being seen in advance or controlled by the operator,
  • in accordance with the conditions of use, the operator receives a worldwide, non-exclusive and royalty-free licence for the videos for the duration for which the videos are posted,
  • in the conditions of use and during the upload process, the operator points out that copyright-infringing content may not be posted,
  • the operator provides tools with which rightholders can take steps to block infringing videos,
  • on the platform, the operator prepares search results in the form of rankings and content categories, and displays to registered users an overview that is oriented towards previously seen videos and that contains recommended videos which can be displayed to registered users,
if the operator is not specifically aware of the availability of copyright-infringing content or, after having become aware, expeditiously deletes that content or expeditiously disables access thereto?

The German court also asked the CJEU to say (Question 2) whether, in the event that Question 1 is answered in the affirmative (ie YouTube communicates to the public), the doing of an act of communication to the public rules out the availability of the safe harbour within Article 14 of the E-commerce Directive.

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Brexit

The second reason why the question asked is relevant relates to Brexit: if the UK leaves the EU after the DSM Directive enters into force but before the deadline for national transpositions has passed, will it have to transpose the DSM Directive into its own law?

This is a matter of discussion and, lacking precedent, might become quite contentious.

Why neither matters or matters too much

This said, the DSM Directive - at least insofar as Article 17(1) and (3) is concerned - might not require Member States to do much.

The reason is found in Recital 64 of the Directive:
It is appropriate to clarify in this Directive that online content-sharing service providers perform an act of communication to the public or of making available to the public when they give the public access to copyright-protected works or other protected subject matter uploaded by their users. Consequently, online content-sharing service providers should obtain an authorisation, including via a licensing agreement, from the relevant rightholders. This does not affect the concept of communication to the public or of making available to the public elsewhere under Union law, nor does it affect the possible application of Article 3(1) and (2) of Directive 2001/29/EC to other service providers using copyright-protected content.
So, Article 17 would not change the law as it already exists under the InfoSoc Directive and as transposed at the national level: it would merely clarify it.

This recital likely has the effect of rendering the YouTube referral irrelevant or diminish substantially its relevance. As the answer to Question 1 would be 'Yes', the other questions - which depend on a negative answer to that question - would not need to be considered. 

The additional implication of the recital is making Brexit and the issue of transposition less of a pressing matter: if Article 17(1) and (3) is a clarification of the law as it already exists, then there is no need to change one's own law: only the interpretation should change and be in accordance with what the DSM Directive 'clarifies'.

The further effect of Recital 64 is that initiatives against user-uploaded content platforms - whether by means of licensing demands and/or contentious initiatives - might be taken already now, without the need to wait for national transpositions of the DSM Directive: according to the DSM Directive, it is the law already ...

[Originally published on The IPKat on 29 March 2019]

Monday, 25 March 2019

Italian Supreme Court confirms approach to damage determination in image rights cases

Mirror, mirror on the wall,
who's the fairest of them all?
When it comes to the violation of one's own image rights, what damages can be awarded? Is it just the damage due to the moral prejudice caused or also damages for the economic prejudice suffered by the person whose rights have been violated? Does the fact that the claimant ruled out any possibility for third parties to use their image influence at all the identification of what damages are due, eg because there is no actual market for the licensing of the claimant's image?

These are all issues that the Italian Supreme Court recently considered in a case (sentenza 1875/19) concerning the violation of a well-known actor's image rights.

Unsurprisingly, the court confirmed its earlier approach that, when it comes to image rights violations, the damage that can be compensated is both of a moral and economic nature.

Let's see how the court reasoned.

Background

The Milan Court of First Instance accepted the request for compensation made by an actor in the context of proceedings brought against a magazine for publishing, without his consent, a number of photographs taken of him. 

Some of these photographs portrayed the claimant in an intimate setting together with a TV personality whom, at that time when the pictures were taken, he was in a relationship with. 

The court found that the defendant had violated the claimant’s image rights ex Article 10 of the Italian Civil Code and Article 96 of the Italian Copyright Act, thus rejecting the argument made by the defendant that publication of the pictures had been in the public interest, since the actor and his girlfriend were celebrities. The judge found that this behaviour was also against the Italian Privacy Code, and amounted to an undue interference with the claimant's private life (this being punishable as a crime under Article 615-bis of the Italian Criminal Code). 

The compensation had both an economic and moral component. The former (EUR 80,000) was calculated on the basis of the price of a hypothetical licence that the actor would have granted for the publication of the pictures in question. The latter (EUR 40,000) took into account the non-economic damage caused by the undue invasion of the claimant’s private sphere, which had caused him distress and psychological suffering. 

The defendant appealed. 

The Milan Court of Appeal upheld the decision at first instance, but found that this had erred in awarding also an economic damage. There could be no economic damage, as the claimant had expressly stated – through his spokesperson – that he excluded any consent to the publication of images of him in a private setting, thus ruling out any possibility of economic exploitation of his image. As such, there would be no market for licensing use of the images published by the magazine. As regards the non-economic component, the appellate court reduced it, on consideration that the intrusion would be less painful than what the first instance court had established. 

The actor appealed to the Italian Supreme Court (as IPKat readers may know, appeal to this court is only on points of law, not fact), over the exclusion – by the appellate court – of compensation of the economic damage, and the reduced compensation of the non-economic damage. With particular regard to the former, the appellant stated that, if not the ‘price of consent’ (for the hypothetical licence), the Milan Court of Appeal should have at least considered the number of copies that the magazine had sold, the profits made or the licensing fee requested by the actor in more recent instances.

What damages will be awarded?
The Supreme Court's decision 

The Supreme Court began its analysis by reviewing its earlier case law on violation of image rights. 

It started by noting that the unauthorized publication of a well-known person’s image causes a damage that requires compensation based, not on the undue invasion of one’s own private sphere, but rather the reasons why the claimant is well-known, in that it is because of that that there is a market for licensing use of one’s own image. 

It follows that the unauthorized publication of one’s own image causes an economic damage, which consists of missed licensing opportunities. 

The fact that the claimant excluded any consent whatsoever to the use of images of him in a private setting did not exclude that the unauthorized publication of that person’s images caused them a damage. 

The Supreme Court had already established this principle back in 2004. On this occasion, the Court added that the refusal to license the use of one’s own image is not tantamount to a waiver or even an abandonment of one’s own image rights. 

In addition, the economic character of the damage cannot be considered limited to the loss of hypothetical licensing revenue, but should also take into account the possible damage to one’s own professional reputation. 

In conclusion, in the event of unauthorized publication of one’s own image, the economic damage can be calculated by taking into account the price of an hypothetical licence that the claimant would grant for the use of their image or, lacking this, it can be determined equitably.

Comment

The decision of the Supreme Court appears correct. The very fact that one had denied licensing of their own image in the past does not mean that there is no market for such licensing activities or that in the future that person would not license use of their image. In this sense, it is not that because one has not given permission to undertake a restricted activity - the use of their image - they would lose the right to control all third-party interferences.

In addition, the economic damage suffered for the violation of one's own image rights is not limited to the loss of licensing revenues, but also the actual or potential harm to one's own professional reputation which, in turn, might have an effect on the licensing market for one's own image.

One might draw a parallel with the well-known Rihanna case in the UK (this being a country where self-standing image rights are not recognized). At first instance, Birss J found [Katpost here] that the unauthorized use of Rihanna's image on T-shirts sold by the defendant (Topshop) would amount to passing off. One of the (cumulative) requirements for an action in passing off is the subistence of a damage. According to the judge, this would lie not just in "sales lost to [Rihanna's] merchandising business", but also in the "loss of control over her reputation in the fashion sphere." 

The decision was upheld in appeal [Katpost here], which also cited extensively Laddie J's take in Irvine, in which the learned judge considered that "The law will vindicate the claimant's exclusive right to the reputation or goodwill. It will not allow others to so use goodwill as to reduce, blur or diminish its exclusivity."

[Originally published on The IPKat on 25 March 2019]

Wednesday, 20 March 2019

Italian Supreme Court clarifies availability of safe harbours, content of notice-and-takedown requests, and stay-down obligations

Yesterday, the Italian Supreme Court issued two key decisions concerning the liability of intermediaries for third-party IPR infringements.

The judgments are: Decision 7708/19 Reti Televisive Italiane SpA v Yahoo! Inc and Decision 7709/19 Reti Televisive Italiane SpA v Yahoo! Inc. The former relates to Yahoo!’s videosharing service, while the latter concerns Yahoo!’s search engine. 

The Yahoo!'s videosharing service decision is particularly important in that it:
  • clarifies at what conditions a hosting provider would be eligible (and ineligible) for the safe harbour under Italian law (where the divide passive/active host has been subject to extensive discussions in case law and scholarly literature alike);
  • holds that a notice-and-takedown request does not necessarily have to indicate the URLs at which infringing content is to be found (this being yet another contentious issue under Italian law); and
  • finds that a notice-and-takedown request imposes on the provider at which it is addressed a stay-down obligation (also this is a major point, both under Italian law and the law of other EU Member States).
Let’s see more in detail how the Court reasoned. 

Yahoo!’s videosharing service decision 

In 2001 the Milan Court of First Instance found Yahoo! liable for hosting user-uploaded unlicensed audiovisual content owned by Radio Televisive Italiane (RTI) on its videosharing portal. 

In 2015 the Milan Court of Appeal reversed the first instance decision and held that Yahoo! would qualify as a hosting provider eligible for the safe harbour protection under the relevant national provision corresponding to Article 14 of the E-commerce Directive

RTI appealed to the Supreme Court (it should be noted that an appeal to this court is only possible insofar as the lower court has erred in its application of legal provisions: in this sense, the Italian Supreme Court is not a court on the merits), claiming - among other things - that Yahoo! could not qualify for protection under the safe harbour, it being an ‘active host’. 

The Supreme Court reviewed relevant case law of the Court of Justice of the European Union (CJEU), including the most recent decision on Article 14 of the E-commerce Directive – that is SNB-REACT [commented on The IPKat here– and the decision in Ziggo [The Pirate Bay case, commented here], in which the CJEU acknowledged the possibility for a provider to be directly liable for copyright infringement. 

The Italian court also recalled the fairly recent Communication from the Commission on Illegal Content Online, in which the Commission noted that - as per Recital 42 in the preamble to the E-commerce Directive, as well as the CJEU decision in Google France and L'Oréal - the safe harbour only applies to hosting providers that do not play an ‘active role’ of such a kind as to give them knowledge of, or control over, unlawful information

Interestingly, the Supreme Court also mentioned the initial proposal for a Directive on Copyright in the Digital Single Market [Katposts here], notably the attempted ‘codification’ [the language actually employed omitted to mention that the CJEU held that the active role must be such as to give the provider knowledge of or control over the infringing content] made by the Commission concerning safe harbour eligibility in the original version of Recital 38.

Having somewhat criticized EU law for lacking sufficient theoretical strength (“tendenziale sottoteorizzazione”), the Supreme Court said that there is a need to ensure the certainty of the law and bring also EU-derived norms within an “effective conceptual system”. 

When does a provider lose the safe harbour? 

Following this rant these considerations, the Supreme Court held that a provider would be active and, therefore, ineligible for the safe harbour, when it would perform activities like, eg: 
  • Filtering 
  • Selection 
  • Indexing 
  • Organization 
  • Classification 
  • Aggregation 
  • Evaluation 
  • Use 
  • Modification 
  • Extraction, or 
  • Promotion 
of content as performed through an entrepreneurial management of the service and the adoption of tools aimed at evaluating user behaviour to enhance the ‘retention’ thereof.

As such, any refusal in abstracto to consider Yahoo! as a hosting provider would be incorrect. The Milan Court of Appeal performed a well-reasoned assessment of why Yahoo! would qualify as a ‘passive’ host. The provider would become liable only when, upon becoming aware of the users' infringing activity, it would fail to act expeditiously to bring the infringing activity to an end. 

How to write a
notice-and-takedown request?
How should the notice and take-down request be made and what should it contain? 

The Supreme Court held that, for a provider to become aware, it is not required that the rightholder send a formal cease-and-desist letter: a simple communication suffices.

The Court also tackled an issue that in Italy has been contentious for a long time: what should the notice include?

While some courts have required the indication of the relevant URLs [see, eg, here and here], other courts – notably those in Rome – have considered the indication of the mere title of the work sufficient [see, eg, here]

The Supreme Court found that this is something for a judge on the merits to determine (and this was something that, according to the Court, the lower court had failed to do). However, it did not exclude that simple indication of the title of the work could be enough, especially for those works whose title consists of “words combined in an original way, so that they can be distinguished from common language”. A URL is required only when "indispensable" to identify the infringing content.

Is a notice-and-takedown enough to trigger a notice-and-stay-down obligation?

The Court also tackled the issue whether a notice-and-takedown request imposes on the relevant provider an obligation of ‘stay-down’, ie an obligation to prevent the re-uploading of the same infringing content. 

The Supreme Court answered: YES. 

An obligation to prevent the re-uploading of the same infringing content has nothing to do with imposing a general monitoring obligation (which would be contrary to Article 15 of the E-commerce Directive). The Supreme Court found that this conclusion would be also in line with CJEU case law, notably the decisions in UPC Telekabel and L’Oréal

In conclusion, the Supreme Court sent the case back to the Milan Court of Appeal for it to re-assess whether, at the time when the infringing activity occurred, it was possible for Yahoo! to identify the infringing videos through mere indications of the titles of the works. 

Yahoo!’s search engine decision 

In 2014, the Milan Court of First Instance considered RTI’s claim that Yahoo! would have failed to comply with the injunction granted in the 2011 decision mentioned above, for allowing the re-posting of infringing content. Also, by providing hyperlinks and embedded links to said infringing content, also made discoverable through suggest search, Yahoo! would have directly infringed RTI’s copyrights. 

The Milan court dismissed the action, and found that Yahoo! would qualify as a caching provider and would be eligible for the safe harbour as available under Article 13 of the E-commerce Directive and the corresponding provision under Italian law. 

RTI appealed, but with no success. So, it lodged a further appeal to the Supreme Court, claiming wrongful application of law provisions by the Milan Court of Appeal. 

The Supreme Court found that the Milan court had correctly applied the legal principles on caching providers to Yahoo! Italia Search. As regards the linking activities performed by Yahoo!, the Supreme Court held that these would not remove Yahoo! from its condition of neutrality and would be also in line with the content of Recitals 42 to 44 in the preamble to the E-commerce Directive.


[Originally published on The IPKat on 20 March 2019]

Sunday, 10 March 2019

Can a CJEU ruling on the European system of central banks pave the way towards an even greater impact of CJEU IP rulings?

The IPKat's Central Bank
What has the Statute of the European System of Central Banks have to do with IP law? 

Directly, perhaps not much. 

However, a case recently decided in this area and concerning the provisional suspension of the Governor of the Central Bank of Latvia pending criminal investigations might have potentially important implications also in the field of IP. 

In particular, it might be relevant in the case in which an EU Member State has incorrectly transposed an EU directive into its own national law.

Rimsevics


Last month the Court of Justice of the European Union (CJEU) issued a decision, Rimsevics, C‑202/18 and C‑238/18, which for the first time saw the highest EU court directly annulling an act rendered by an authority of a Member State (Latvia) and extricated it from that domestic legal order. 

In her Opinion in that case, Advocate General (AG) Kokott had simply suggested that the CJEU should declare that Latvia had failed to fulfil its obligations under EU law (this was also the request of the applicants). However, the Court went beyond that and did the 'job' directly.


The Court did not declare that a Member State had failed to fulfill its obligations under EU Law. What the Court did was much more ambitious, for it annulled an act rendered by an authority of a Member State and extricated it from the domestic legal order. For the very first time, EU Law entered fully into the legal order of a Member State, declared a breach within the domestic legal order and eradicated the national legal act ipso iure. There was no need for the Member State to take any appropriate measures. No need for national courts to ensure the fulfilment of the duties enshrined in EU Law. The EU legal order did the job for them.
Sarmiento adds:
[B]y stepping into national law and purging its legal order in a way that is unparalleled in international law, the Court of Justice has finally and fully stepped into the shoes of a national court. In fact, if this judgment is seen together with the Court’s efforts to protect the independence and integrity of national judiciaries, the overall effect is one in which a new Court has emerged. A Court sitting at a constitutional apex, assisting national courts when their integrity is undermined, confronting Member States that drift away from the rule of law, and annulling national acts when necessary, particularly in areas in which a less marked distinction between the EU legal order and national legal orders prevail.
If the implications of this (technical) decision are really those described above, then they might be significant also in the field of IP. 

By taking the specific case of copyright, readers of this blog will be aware that - especially in more recent years - the CJEU has found a few national transpositions of key directives like the InfoSoc Directive incorrect. Member States had simply thought they enjoyed greater freedom in the transposition of EU provisions than what they actually had.

Incorrect transposition of EU directives


As I discuss at greater length in this book, there are arguably provisions in EU copyright directives that are drafted in such a way that EU Member States enjoy limited freedom when transposing them into national legal systems. 

The CJEU has clarified that this may be the case when a provision in a EU directive imposes on EU Member States, in unequivocal terms, well-defined obligations as to the result to be achieved that is not coupled with any condition regarding application of the rule laid down in them. 

The very issue of direct effect of EU directives has been tackled in a copyright context in OSA, C-351/12 [here]

That reference for a preliminary ruling from the Czech Republic asked the CJEU, among other things, whether Articles 3(1) of the InfoSoc Directive is unconditional enough and sufficiently precise for a certain individual or organization (a copyright collecting society in that case) to rely on in a dispute between individuals before a national court in case of incorrect transposition of that directive by a certain EU Member State. 

The CJEU answered in the negative. It is settled case law that even a clear, precise and unconditional provision of a directive seeking to confer rights or impose obligations on individuals cannot of itself apply in proceedings exclusively between private parties (lack of direct horizontal effect). 

It is true that a national court, when hearing a case between individuals, is required, when applying the provisions of domestic law, to consider the whole body of rules of national law and to interpret them, so far as possible, in the light of the wording and purpose of the directive in order to achieve an outcome consistent with the objective pursued by the directive. However, this cannot serve as the basis for an interpretation of national law contra legem

Sunday musings made to entertain
friends and family:

Does a ruling on central banks
mean anything for IP?
The conclusion of the CJEU in OSA, C-351/12 differs from the view that AG Sharpston had taken in her Opinion in that same case. The AG observed that, first, when national courts apply domestic law, they are bound to interpret it, so far as possible, in the light of the wording and purpose of any relevant directive, in order to achieve the result sought by the directive (Marleasing principle). 

That obligation is inherent to the Treaty system and enables national courts to ensure the full effectiveness of EU law when they determine disputes within their jurisdiction. 

Only if such an approach is not possible, eg because it would lead to an interpretation contra legem, is it necessary to consider whether a relevant provision of a directive has direct effect and, if so, whether that direct effect may be relied on against a party to the national dispute. 

The AG also stressed that it is for national courts to do whatever lies within their jurisdiction, for example taking the whole body of domestic law into consideration and applying the interpretative methods recognized by it, to ensure that the InfoSoc Directive is fully effective, and thus achieve outcomes consistent with the objectives pursued by it. 

She concluded that an interpretation of national law that would be inconsistent with the Directive is not permissible. 

The AG did not state expressly what the legal consequences of incorrect implementations of the InfoSoc Directive would be. However, she appeared to agree with OSA’s suggestion that this would be disapplication of incorrect national provisions.

What might happen now?


After the decision in Rimsevics, the conclusion of AG Sharpson in OSA might be indeed the correct one. This might mean that the CJEU could be in a position to directly disapply or even invalidate national provisions that have resulted from an incorrect transposition of relevant EU directives. 

If that was the case, then:
  • EU Member States should be way more careful when transposing EU directives into their own law (this is likely to be true also if and when the transposition of the draft EU directive on copyright in the Digital Single Market [here] takes place);
  • It is likely that, in line with a trend already embraced by the CJEU towards greater harmonization of national copyright laws, there will be less room for diverging national solutions in areas harmonized at the EU level;
  • The consequences of a CJEU referral might be way more 'intrusive' than what has been the case so far, and this might be an incentive for litigants in national proceedings to push for a referral be made by the relevant national court to the CJEU.
[Originally published on The IPKat on 10 March 2019]

Saturday, 2 March 2019

Milan court partly sides with Banksy in interim proceedings for trade mark and copyright infringement

As thoroughly discussed by Enrico Bonadio on The Conversation, a few weeks ago the Milan Court of First Instance issued an interim ruling in favour of mysterious artist Banksy or, rather, the company that manages his IP rights (Pest Control Office). The application sought to repress the unauthorized use of Banksy's registered trade marks and reproductions of his/her artworks in the context of an art exhibition in Milan.

The text of the decision in RG 52442/2018 Pest Control Office Limited v 24 Ore Cultura s.r.l. is available here.

Let's see what happened.

Background

The applicant, Pest Control Office, is responsible for issuing certificates of authenticity re Banksy's artworks, and for selling his artworks and organizing exhibitions on his/her works. It has also registered a number of EU trade marks, including the word mark 'BANKSY' and the following figurative trade marks representing two of his/her best-known works, these being Girl with Balloon (also included in 'derivative' artwork Love is in the Bin) and Rage, the Flower Thrower:

In summer 2018 Pest Control Office, upon being informed that a Banksy exhibition would be organized in Milan, refused permission to use the name "and likeness" [good luck with that] of the artist [yes, this is what the decision says], and threatened the exhibition organizers to rely on its trade mark registrations to prevent, inter alia, the making and selling of Banksy-related merchandising.

Despite all this, last October the opening of the exhibition The art of Banksy. A visual protest, featuring 70 artworks attributed to Banksy, was announced. The website of the exhibition contains a disclaimer that no authorization from the artist has been obtained:


Despite all this, Pest Control Office applied to the Milan Court of First Instance to obtain an injunction against the exhibition organizer, 24 Ore Cultura, as well as the withdrawal from commerce of all relevant merchandising. It claimed that 24 Ore Cultura had infringed its own trade mark rights and copyrights (the latter infringement would be also criminally relevant), as well as committing acts of unfair competition which would be also contrary to the rules on advertising as set out in the Code of Marketing Communication Self-Regulation Italy.

The response of 24 Ore Cultura was quite interesting [more on this in what follows]. Its line was that: 
  • The applicant had provided no proof that it would be able to enforce rights (if any) on behalf of the artist.
  • No copyright infringement could have occurred because [the translation from Italian is mine] "the activity of artist BANKSY would stand as a demonstration of the intention to renounce any copyrights on his/her works, in that such works are permanently located on display in public places". As such, displaying copies of these works and making and selling related merchandising would not be an infringement because these "would reproduce works of the artist that are in the public domain or have been assigned by relevant owners". As regards the publication of the exhibition catalogue, no copyright infringement would subsist also because of the availability of the Italian defence for quotation, criticism or review within Article 70 of the Italian Copyright Act.
  • The trade mark registrations would be invalid because those signs were registered in bad faith: "said trade marks would have been applied for for reasons other than that of distinguishing products: indeed, PEST CONTROL OFFICE Ltd does not undertake any of the activities for which it has registered its trade marks (exhibitions, editorial products, merchandising), but rather uses those registration to prevent third-party lawful activities".
The decision

Invalidity of trade mark registrations due to bad faith: full proof is required

With regard to the latter point, the judge deemed that invalidity of the trade mark registrations could not be established in the context of interim proceedings. In any event, bad faith needs to be clearly demonstrated by taking into account all relevant factors (as per the CJEU Lindt decision), including:
  • That the trade mark applicant knew or ought to know that a third party employed, in at least one Member State, an identical or similar sign for an identical or similar good/service which would be likely confused with the sign for which registration was sought;
  • That the applicant intended to prevent third parties from continuing using that sign; and
  • The degree of protection enjoyed by the third-party sign and the sign for which registration was sought.
Trade mark infringement

i) Communication of the content of the exhibition

Turning to the issue of infringement, the judge ruled that use of the word sign 'BANKSY' and the figurative signs in the context of communicating the content of the exhibition was a descriptive use of those trade marks and, as such, he found it non-infringing:
In the context of such communication - which in itself is not unrelated to the the power of attraction of a trade mark, its function to guarantee quality, as specified in the categories 'communication', 'investment, and 'advertising' (as per the indications of the Court of Justice [in] Interflora) - it is not even possible to detect any parasitism [...], derogatory or in any case prejudicial behaviour that would damage the applicant, also taking into account that the marketing communication realized by [the respondent] expressly indicates the lack of any authorization from the artist and, therefore, the lack of any connection between this and his/her successors in title and such organization."
Referring to the CJEU Gillette decision, the judge concluded that the behaviour of the respondent was not contrary to the principles of professional fairness.

What is Pest Control?
ii) Merchandising

A different conclusion was however reached as regards the respondent's merchandising. The use of the name 'BANKSY' in connection to merchandising "without any specific relation to the exhibition" made it apparent how the intention would be purely commercial and such as to conflict with the scope of the trade mark registrations, which also cover goods in Class 16. Hence, infringement was ascertained.

Trade mark and copyright infringement

Turning to the catalogue (which also contains reproductions of Girl with Balloon and Rage, the Flower Thrower), the judge excluded that peculiar copyright status of street art would require consideration:
[T]he exhibition in progress in Milan consists of copies of works by the artist acquired by private parties and which have been commercialized with the authorization of the artist himself/herself: this means, as a matter of fact, that the peculiar issues of copyright in street art are not relevant to the present case [...] In this context, what applies is Article 109 [of the Italian Copyright Act], which provides that the transfer of a copy of a work does not imply, save for any agreement to the contrary, the transfer of any economic rights vesting in the [underlying] work.
The judge also excluded the application of the defence for quotation, criticism or review, in that Article 70(1) of the Copyright Act only applies to reproductions of 'fragments or parts' of a work, and not to to reproductions of a work in its entirety [also my translation]:
The abridgement, quotation or reproduction of fragments or parts of a work and their communication to the public are allowed insofar as they are made for the purpose of criticism or discussion, within the limits justified for such purposes, and do not conflict with the commercial exploitation of the work; if undertaken for teaching or research purposes, the use shall only occur for illustrative purposes and not for commercial purposes.
Unfair competition: claim dismissed

With regard to the unfair competition claim, the judge rejected it in that for unfair competition to be established what is required is the ascertainment that the behaviour objected to is objectively contrary to the principles of professional fairness and is also likely to cause damage to the subject that advances such claim. In the present case it was not clear whether Banksy had transferred his/her right of reproduction to Pest Control Office: as such, the applicant could not demonstrate that the unauthorized reproduction of Banksy's images by the respondent would be likely to cause damage.

Conclusion


The judge granted the injunction as requested by the applicant in relation to the merchandising. However, at least at this stage, was not able to accept the claims based on copyright and unfair competition, due to the fact that the applicant did not prove unequivocally that it would be entitled to enforce Banksy's economic rights. In any event, he found that the behaviour of the respondent would substantially amount to copyright infringement.

Comment

This interim decision raises a number of important questions, which would be interesting to see developed further in a full judgment on the merits.

Trade mark law meets copyright ... or vice versa

As far as trade mark law is concerned, this cases raises the issue of bad faith registrations and, if one wishes, also broader reflections relating to overlapping IP rights. 

Readers might remember that not long time ago the EFTA Court ruled against trade mark registration of public domain artworks [Katposts here and here]. While in the case of Banksy the issue is not, of course, one of public domain [though the respondent in the Milan proceedings questioned the copyright status of street art], it is important to recall how the EFTA Court also noted how a trade mark based entirely on copyright-protected work presents “a certain risk of monopolisation of the sign for a specific purpose, as it grants the mark’s proprietor such exclusivity and permanence of exploitation" [para 70].

The Italian defence for quotation, criticism, or review: an out-of-sync interpretation?

Turning to copyright, the decision highlights once again the importance of identifying what the work actually being reproduced is: in this case it was not the actual graffitis, so the issue of street art protection was not relevant.

In addition, the decision also calls for caution when considering the availability of potential copyright exceptions. In this case, it is true that Italian law has a quotation, criticism, or review defence; however, its application does not appear to encompass reproductions of works in their entirety.

However, a more modern interpretation of this provision might be not to exclude a priori the reproduction of a work in its entirety, eg, a photograph, from the scope of the exception. This approach would have the merit of being more in synch with what is required under the Berne Convention and the InfoSoc Directive

Article 10 of the Berne Convention appears to mandate the recognition of a quotation 'right' by stating that it shall be permissible to make quotations from a work, as long as the work in question has been lawfully made available to the public, and provided that the making of quotations is compatible with fair practice, and their extent does not exceed that justified by the purpose. Use of the modal verb "shall" would arguably impose on members of the Berne Union (which include Italy) an obligation to acknowledge a right of quotation, which is not necessarily limited to parts or fragments of works. 

In addition, in its relatively recent (2011) decision in Painer, the CJEU held that the quotation exception within the InfoSoc Directive in principle encompasses photographs. 

In light of international and EU law provisions, as well as the principle of non-discrimination, more recent Italian scholarship has indeed held the view that Article 70 of the Italian Copyright Act should not be read as excluding at the outset reproductions of works in their entirety. This was, however, not the view adopted in this recent Milan decision.

[Originally published on The IPKat on 2 March 2019]