Thursday, 28 November 2019

Copyright protection of fictional characters: is it possible? how far can it go?

The IPKat's favourite fictional character
Last year, I was fortunate enough to be invited by Associate Professor Yann Basire (Director-General of CEIPI) to participate in a great (and cool!) conference he organized in Strasbourg on Pop Culture and IP. The topic I was asked to discuss was trade mark protection of fictional characters, and the contribution will be published in 2020 as part of a collection edited by Yann and entitled Propriété Intellectuelle et Pop Culture (LexisNexis, coll. IRPI).

But what about copyright protection of fictional characters: is it possible? how far could it go?

Copyright protection is available to any work in a Berne and, now, EU sense. While no particular issues arise in relation to the literary, artistic or dramatic works that feature certain characters, in that they are regarded as ‘traditional’ copyright subject matter, whether copyright also vests in fictional characters as such has occasionally proved controversial. 

Difficulties are linked to the fact that, first, one might wonder whether a character is to be considered a ‘work’ in a copyright sense and, secondly, assuming that it is, what type of work a character is. While the latter appears to be less fundamental question than the former, it might still be a problematic one to answer in those European jurisdictions that envisage an exhaustive list of protectable works. 

A ‘work’ that is sufficiently ‘original’

There is no statutory definition of ‘work’ in EU copyright directives, including the InfoSoc Directive.

However, recently the Court of Justice of the European Union (CJEU) tackled the notion of ‘work’ in its judgment in Levola Hengelo [Katposts here] (the CJEU confirmed its findings in that case in its more recent decision in Cofemel [Katposts here]).  

Noting that the InfoSoc Directive provides both a set of exclusive rights relating, in the case of authors, to their ‘works’ and relevant exceptions and limitations to such rights but makes no express reference to the laws of individual Member States for the purpose of determining the meaning and scope of the concept of a ‘work’, such concept is to be considered an autonomous concept of EU law. As such, it is to be given a uniform application throughout the EU, in compliance with the principle of autonomy of EU law. 

As I also discuss here, this conclusion on the side of the CJEU is not surprising, also considering its frequent use in copyright case law: the CJEU has indeed often employed this interpretative standard in its copyright case law, with the practical effect of strengthening harmonization of copyright laws across the EU.

The CJEU considered that two cumulative conditions must be satisfied for subject matter to be classified as a ‘work’ within the meaning of the InfoSoc Directive. First, the subject matter concerned must be original in the sense that it is the author’s own intellectual creation, in accordance with the decision in Infopaq and subsequent case law. Second, only something which is the expression of the author’s own intellectual creation may be classified as a ‘work’ within the meaning of that directive. Recalling both the wording of Article 2(1) of the Berne Convention and the idea/expression dichotomy in Articles 2 of the WIPO Copyright Treaty and 9(2) of the TRIPs Agreement, the Court concluded that
for there to be a ‘work’ as referred to in Directive 2001/29, the subject matter protected by copyright must be expressed in a manner which makes it identifiable with sufficient precision and objectivity, even though that expression is not necessarily in permanent form.
In the case of a fictional character, the definition of ‘work’ may be satisfied when the character at issue appears in a single work and its features are identifiable in accordance with the CJEU criteria. The assessment, however, might be potentially more complex when the character is one with a longstanding history and which has appeared and changed to some extent over time. Would it be possible to identify with sufficient precision and objectivity the protectable expression which renders such character a ‘work’? 

Under US law, the answer appears to be in the affirmative, insofar as certain requirements are satisfied. In 2015, the U.S. Court of Appeals for the Ninth Circuit was called to decide whether defendant Mark Towle had infringed DC Comics’ exclusive rights under a copyright when he built and sold replicas of the Batmobile, as it appeared in the 1966 television show Batman and the 1989 film BATMAN. “Holy copyright law, Batman!”, noted Circuit Judge Ikuta at the beginning of his opinion. 

The court considered whether the Batmobile itself could a protected character under US law by adopting a 3-part test: 
  1. the character must generally have physical as well as conceptual qualities; 
  2. the character must be sufficiently delineated to be recognizable as the same character whenever it appears (this requires the presence of identifiable character traits and attributes, but the character does not need to have a consistent appearance); 
  3. the character must be especially distinctive and contain some unique elements of expression, meaning that it cannot be a stock character such as a magician in standard magician garb. Even when a character lacks sentient attributes and does not speak (like a car), it can be a protectable character if it meets this standard.
Applying this test, to the case at issue, the court concluded that the Batmobile would be protected by copyright and that the defendant had infringed it. 

It appears that, even if this test is only directly applicable under US law, it could be useful also in a European context. We could indeed consider that fulfilment of all requirements of the test is substantially what is required under EU law to identify a ‘work’ that is sufficiently ‘original’. Indeed, whilst the first and third step seem to relate to the originality of the character and, thus, what makes it its ‘author’s own intellectual creation’, the result of their ‘free and creative choices’ and ultimately what carries their ‘personal touch’, the second step entails the consideration of whether such character is “identifiable with sufficient precision and objectivity” and is, thus, a ‘work’ in the sense clarified in Levola Hengelo

A work of the ‘right kind’

In European jurisdictions that envisage a closed list of protectable subject matter, an additional difficulty surrounding copyright protection of fictional characters relates to their classification: what types of works are they? A question of this kind, whose compatibility with EU law (or, rather: CJEU case law) is highly questionable, remains formally a fundamental one to answer, in that impossibility to determine what category a work belongs to (usually) leads to a finding that copyright protection is not possible. 

So, under UK law (a jurisdiction in which copyright protection is only available to a limited number of works), leading commentaries explain that a ‘work’ is "a thing which satisfies the statutory description of a literary, dramatic, etc. work."

Such ‘thing’ must be, first, a production in the Berne sense and, second, fall within one of the categories provided by the Copyright, Designs and Patents Act 1988 (CDPA). Categorization has implications not just for determining whether a certain work may be actually protected by copyright under UK law, but also what rights attach to such work. So, for instance, section 21(1) CDPA excludes the right of adaptation for artistic works, while providing expressly for it in relation to literary, dramatic and musical works. Similarly, section 17(3) includes conversion of a work into a three-dimensional form within the scope of the right of reproduction only for artistic works, not also literary works. In addition, differences between the various categories subsist also in relation to the topic of infringement. While copyright in a literary, dramatic, musical or artistic work may be infringed without copying the medium on which the work was recorded by the author or published by the publisher, copyright in sound recordings, broadcasts, published editions and films may only be infringed by reproducing the medium produced by the author. 

In UK copyright case law, there have been a few instances in which works have been denied copyright protection due to the very impossibility of placing such works within one of the categories provided by the CDPA. Examples include the assembly of a scene (the scene was that which would be photographed for the cover of Oasis’s Be Here Now album) and the Stormtrooper Helmet from the Star Wars films. Until recently, uncertainties have also surrounded the protectability of TV formats by means of copyright, due to uncertain categorization thereof [Katpost here]

The same difficulties of categorization seem likely to subsist also in relation to fictional characters: are they a literary work? a dramatic work? an artistic work? 

All this said, as mentioned, it is highly questionable whether an approach of this kind is (still) allowed under EU law. Most recently, in Cofemel, the CJEU considered that the notion of work solely presupposes the fulfilment of two cumulative requirements: first, it implies the existence of an original object, in the sense that said object is the intellectual creation of its author; second, the notion of work is reserved to those elements which are the expression of such creation. When an object is a ‘work’ in this sense, “it shall be eligible, in this respect, for copyright protection, in compliance with Directive 2001/29”. 

All this rather clearly suggests that no other criteria can be imposed to determine copyright subsistence, not even the requirement that the work at issue is one of the right kind. This conclusion is also in line with certain enlightened UK case law, which has noted how – in light of a number of CJEU rulings – it may be arguable that it is not a fatal objection to a claim that copyright subsists in a particular work that the work is not one of the kinds of work listed in section 1(1)(a) CDPA and defined elsewhere in that Act. Nevertheless, it remains clear that the putative copyright work must be a literary or artistic work within the meaning of Article 2(1) of the Berne Convention.

Which and how many copyrights?

Copyright protection of a character (if available) is in principle limited in time; in Europe, it will last for the life of the author and seventy years after their death. This means that in principle, upon falling in the public domain, it will become possible to use a character without the need for a licence to, eg, create a new adaptation of the story featuring said character. 

So, if we take the example of Sleeping Beauty in the version by Charles Perrault (as also subsequently collected and printed by the Brothers Grimm), both the story and the characters are no longer protected by copyright. However, subsequent adaptations of the public domain stories would warrant their own copyright protection, insofar as they are original. 

The same is true with regard to the relevant characters: so, if we apply the criteria mentioned above, this means that, eg, Disney’s version of Sleeping Beauty as a character with a certain appearance and personality would enjoy its self-standing copyright protection and the same would be true of Dreamworks’s own version, which also has an original appearance and personality. Insofar as no original features of a copyright-protected character are reproduced, it remains possible to use a third-party character to create, eg, new adaptations of well-known story. 


Different IP rights are available for the protection of fictional characters. As far as copyright is concerned, doubts may subsist regarding the classification of characters as self-standing works which enjoy copyright protection separate from the works in which they are contained. In addition, copyright protection is limited in time and encompasses the external appearance of such characters. 

Other types of IP rights, including trade mark protection, might thus present a certain attractiveness, due to the fact that (in the case of trade marks) protection could be virtually perpetual and relate to elements that are not necessarily connected with the external appearance of the character (eg, their name). 

However, it is doubtful whether trade mark registration could be effectively pursued in each and every instance, particularly on consideration of the applicability of the absolute grounds for refusal or invalidity concerning distinctiveness, public policy and morality and aesthetic functionality. In addition, the scope of protection – where available – would go only as far as allowing the trade mark owner to repress third-party uses of identical or similar signs, insofar as such uses are uses in a trade mark sense and affect the functions of the registered trade mark (the latter is true also in double identity scenarios, as the CJEU considered in Arsenal). 

All this suggests that the most effective way to protect a fictional character through IP is a comprehensive strategy that relies on different rights allowing the pursuit of different objectives of exclusivity, but is also conscious of the limitations that are inherent to each and every right.

[Originally published on The IPKat on 28 November 2019]

Friday, 22 November 2019

CJEU follows up on Soulier and Doke and rules that presumption of consent of performers in relation to exploitation of recordings is not necessarily contrary to EU law

Readers will recall that back in 2015 the Court of Justice of the European Union (CJEU) decided the important Soulier and Doke case [Katposts here], ruling that EU law mandates the recognition of the ‘author principle’, that is the need for the consent - whether express of implied (the latter is however to be strictly defined) - of authors to the doing, by third parties, of acts restricted by copyright in relation to their works.

Indeed, the protection afforded by copyright is not solely concerned with the enjoyment of rights, but also with their exercise.

The CJEU held that that authors must be individually informed of the future third-party uses of their works and the means available to prohibit them if so they wish. In the absence of any actual prior information relating to that future use, authors are not in a position to prohibit such use, if necessary, so that the very existence of implicit consent appears purely hypothetical in that regard. Thus, without guarantees that authors are actually informed as to the envisaged use of their works and the means at their disposal to prohibit it, it is virtually impossible for them to adopt any position whatsoever as to such use.

All this said, a few days ago, the CJEU ruled in another case - Spedidam v INA, C-484/18 - that focused on similar issues to those at the centre of Soulier and Doke, with however the factual difference that: (a) the relevant rightholders are performers, and (2) the mechanism whose lawfulness appeared doubtful is a rebuttable presumption that the performer authorized the fixation and exploitation of their performances, where that performer is involved in the recording of an audiovisual work so that it may be broadcast.

In its decision, the CJEU substantially confirmed the approach taken in Soulier and Doke, but it also qualified and - importantly - softened it, albeit the one at issue was a rather specific factual background.

Let’s see more in detail what happened and how the Court reasoned.


Article 49 of Loi No 86-1067 of 1986 vests INA, the French National Audiovisual Institute (a publicly owned industrial and commercial State body), with the responsibility to preserve and promote the national audiovisual heritage.

The manner in which INA can undertake these activities is governed by agreements concluded by INA with relevant companies. Whilst INA is required to exercise the exploitation rights having due regard for the personal and economic rights of holders of copyright and related rights, the terms on which the works of performers in the archives to which this provision refers are exploited and the remuneration for that exploitation shall be governed by agreements concluded between the performers themselves or the employee organizations representing performers and the Institute.

In 2009, the claimants in the background proceedings became aware that INA was marketing – online and without their authorization – video recordings and phonograms reproducing the performances of a musician (to whom the claimants were successors in title) in the years 1959 – 1978. Those recordings and phonograms had been produced and then broadcast by national broadcasting companies.

The claimants successfully sued INA to obtain compensation for the infringement of the performers’ rights which they held.

The TGI Paris considered that, despite the wording of Article 49, INA was not exempted from having to obtain a performer’s prior authorization for the use of the fixation of their performances. The court considered that the sole purpose of the collective agreements provided for in Article 49 is to determine the remuneration due for new exploitations, provided that an initial exploitation has been authorized by the performers concerned.

The Court of Appeal of Paris upheld the decision at first instance, but then the Court of Cassation found that no such requirement as the one of authorization was present in Article 49. As a result, it sent the case to the Court of Appeal of Versailles for a new assessment, and this sided with INA.

The original claimants and Spedidam (which intervened in the proceedings) appealed (again) to the Court of Cassation, which – this time – expressed doubts concerning the compatibility with the InfoSoc Directive of Article 49.

According to the original claimants, INA would offer on its website the downloading in return for payment of performances by performers, without having to prove their authorization for such use. In response to this, INA had submitted that such provision is neither an exception nor a limitation on performers’ rights: it merely concerns evidentiary rules governing those rights – more specifically a rebuttable presumption that performers’ exploitation rights would have been transferred to it.

A referral to the CJEU was the next, unavoidable step in this complex dispute.

The question referred

First of all, the CJEU noted that it was irrelevant when the recordings of the performances had been made, since the InfoSoc Directive applies to all subject matter which, at the date of 22 December 2002, was protected by copyright or related rights in accordance with Member States’ legislation.

Secondly, the CJEU simplified the question asked by the French Court of Cassation. What the national court wished to know, in essence, was whether the InfoSoc Directive rights of reproduction (Article 2(b)) and making available to the public (Article 3(2)) preclude a Member State from providing a rebuttable presumption that a performer has authorized the fixation and exploitation of their performances where that performer is involved in the recording of an audiovisual work so that it may be broadcast.

The decision

In providing a response to this question, the CJEU could not but refer to its earlier Soulier and Doke decision. Similarly to authors, also performers are entitled to a high level of protection, with the result that resulting rights must be broad in scope.

By analogy with Soulier and Doke, the Court reasoned that: 
protection must be understood, in particular, in the same way as the protection conferred by copyright, as not being limited to the enjoyment of the rights guaranteed by Article 2(b) and Article 3(2)(a) of Directive 2001/29, but [as also extending] to the exercise of those rights (see, to that effect, judgment of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraph 31). 
It is also important to note that the rights guaranteed to performers by Article 2(b) and Article 3(2)(a) of Directive 2001/29 are of a preventive nature, in that any act of reproduction or making available to the public of the fixations of their performances requires their prior consent. It follows that, subject to the exceptions and limitations laid down exhaustively in Article 5 of the directive, any use of such protected subject matter by a third party without such prior consent must be regarded as infringing the holder’s rights (see, to that effect, judgments of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraphs 33 and 34, and of 7 August 2018, Renckhoff, C‑161/17, EU:C:2018:634, paragraph 29 and the case-law cited). 
That interpretation is in line with the objective of providing a high level of protection for performers’ rights referred to in recital 9 of Directive 2001/29, as well as the need, mentioned, in essence, in recital 10 of that directive, for performers to obtain appropriate remuneration for the use of fixations of their performances in order to enable them to continue their creative and artistic work. [paras 37-39] 

All this said, the CJEU also recalled that consent can be expressed in different ways, including implicitly.

With regard to the rebuttable presumption envisaged in the French law, the Court considered that: 
a performer who is himself involved in the making of an audiovisual work so that it may be broadcast by national broadcasting companies, and who is thus present at the place where such a work is recorded for those purposes, first, is aware of the envisaged use of his performance (see, by analogy, judgment of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraph 43) and, second, gives his performance for the purposes of such use, with the result that it is possible to take the view, in the absence of evidence to the contrary, that he has, as a result of that involvement, authorised the fixation of that performance and its exploitation. [para 42] 
In addition, the particular structure of the French presumption – notably the possibility to rebut it – suggests that such provision only concerns the procedures for proving that such authorization has been granted (that is the rule of consent in writing as per Article L. 212-3 IPC), not the actual authorization of the concerned performer.

Finally, the CJEU considered that the mechanism envisaged in Article 49 would also to safeguard the fair balance of rights and interests between different categories of rightholders, as mandated by Recital 31 in the preamble to the InfoSoc Directive: 
because the INA does not hold in its archives the written authorisations of the performers or their successors in title, or the employment contracts concluded by them with the producers of the audiovisual programmes in question, it would be impossible for that institute to exploit part of its collection, which would be detrimental to the interests of other rightholders, such as the rights of the directors of the audiovisual works in question, of the producers of those works, namely the national broadcasting companies, the legal predecessors of the INA, or of other performers who may have performed in connection with the production of the same works. [para 44] 
In conclusion, the CJEU ruled that EU law does not prevent an arrangement like the one envisaged in Article 49 of the French law. 

Studio executive on a break

As mentioned, the decision may be considered substantially in line with the main tenets of the earlier Soulier and Doke judgment. However, it adds important qualifications to the rigorous criteria envisaged therein. In doing so, the INA judgment softens the sharpest – and most radical – edges of earlier case law.

Indeed, in Soulier and Doke, the CJEU had considered that: 
  • the circumstances in which implicit consent can be admitted must be strictly defined. This would be required not to deprive of effect the very principle of the author’s prior consent; 
  • authors must be individually informed of the future third-party use of their works and the means available to prohibit it if so they wish. Without guarantees that authors are actually informed as to the envisaged use of their works and the means at their disposal to prohibit it, it is virtually impossible for them to adopt any position whatsoever as to such use [paras 31-40]; and, most importantly,
  • mere lack of opposition on an author’s part cannot be regarded as the expression of their implicit consent to the use in question.
If one had considered these three principles alone, then a situation like the one of Article 49 would arguably be at odds with the author principle as envisaged in Soulier and Doke.

This is the conclusion that Advocate General (AG) Hogan had reached in his Opinion. By also considering the decision in Luksan, the AG found that the situation at issue in INA would be different. He concluded that Article 49 "seems to organise and effect a transfer of the performer’s rights on the basis of an implicit consent in favour of the INA". In his view, "this would amount in the circumstances to a disproportionate interference with the exclusive nature of the performer’s rights." It would follow from Soulier and Doke (at least implicitly) that, "transfer of this kind must operate in a proportionate manner and cannot take from the exclusivity of this right save to the extent that it is clearly necessary for this purpose."

Going back to the Court's reasoning in INA, it was probably on consideration of the ‘disproportionate’ effects that a strict application of the author principle would have on the interests of other rightholders, including other performers who may have performed in connection with the production of the works for which certain performers did not grant an authorization in writing, that at least a qualification of the earlier stance in Soulier and Doke appeared necessary.

In doing so, the CJEU also placed greater emphasis on certain considerations that it had expressed in that decision, including the fact the author principle would be still respected if the author at issue (or, as in this case, the performer) is in a position to put an end to the future exploitation of their content.

A rebuttable presumption to this effect would serve to achieve this outcome, standing in any case its qualification as an evidentiary tool, rather than a system to circumvent the need for the performer's  prior consent.

[Originally published on The IPKat on 22 November 2019]

Tuesday, 12 November 2019

Can an employee's freedom of expression trump their confidentiality obligations? The ECtHR weighs in (in a case concerning an employee's personal website)

From confidentiality to disclosure in 3 Kat-steps
(DIY instructions here)
By reading the very interesting EU Law Live Blog, The IPKat has discovered an intriguing decision (Herbay v Hungary, Appl. No. 11608/15) that the European Court of Human Rights (ECtHR) issued just a few days ago on the thorny issue of whether an employee’s own confidentiality obligations trump their freedom of expression and information under Article 10 of the European Convention on Human Rights (ECHR). 

The answer? Great news for IPKat bloggers An employment contract can go far, but not too far.

Let's see what happened and how the Court ruled.


In 2006, the applicant worked as a human resources management expert at a financial institution (Bank O.) in Hungary. In this capacity, he undertook the analysis and calculation of salaries and staffing management. Among other things, he contributed to his employer’s remuneration policy reform. 

According to the code of ethics of the bank, he was under an obligation not to publish formally or informally any information relating to the functioning and activities of his employer. 

In January 2011, whilst he was still employed by Bank O., the applicant launched a knowledge-sharing website for human resources management-related publications (including articles) and events. The website also contained a presentation of the applicant with his photograph, describing him as an expert in human resources management and indicating that he worked in the human resources department of a large domestic bank, without mentioning his employer. 

In February that year, after two articles appeared on the website, the applicant's employment was terminated due to a breach of Bank O.'s confidentiality standards. The bank argued that the applicant’s conduct in providing educational services in the field of human resources management had infringed its economic interests. Moreover, given the nature of his position, the applicant was in possession of information the publication of which would have interfered with the bank’s business interests. 

The applicant unsuccessfully challenged his dismissal before the Budapest Labour Court, which found that he had unduly revealed information relating to his employment. The decision was reversed on appeal, but then the Kúria (the Hungarian Supreme Court) upheld a request for review made by the bank. 

At this point, the applicant lodged a constitutional complaint, claiming that his activities fell within the scope of his freedom of expression, which had not been taken into proper account by courts. The articles published on his website raised issues of professional and public interest concerning changes to the personal income tax regulations affecting four million employees. The discussion was conducted in a general manner and the articles had not contained confidential information from his employer. 

However, his action was dismissed: the Constitutional Court found that reporting on matters which an employee had learned in general in the course of his or her employment was protected by the Fundamental Law to the extent that those matters were of public interest. This was not the case here, as the information at issue had a commercial nature. 

At this point, the applicant brought the case to the ECtHR, arguing that Hungarian law which allowed for the termination of his employment based on articles published on his website had infringed his Article 10 freedom. 

The Hungarian Government’s key point before the ECtHR was that the applicant’s expression did not qualify for Article 10 protection since his articles had not contributed to a discussion on a public matter, but had instead related almost exclusively to a specific profession. 

At work
The judgment

The Court recalled that freedom of expression also applies in the context of private employment relations (Heinisch v Germany, No 28274/08) and that the State has a positive obligation to ensure that a fair balance is struck between the competing interest of the individual and of the community as a whole. All this is, in any event, subject to the margin of appreciation enjoyed by the State, which – in the case of commercial speech – is quite broad. 

In the context of employment relations, there must be a mutual trust between employer and employee. This means that certain manifestations of freedom of expression that may be legitimate in other situations, would not be so in the context of such relations (Palomo Sánchez and Others, Nos 28955/06). 

In the present case, the issue for the ECtHR to consider was whether domestic authorities, in dismissing the applicant’s claims, had adequately secured his right to freedom of expression in the context of labour relations and balanced it against the employer’s right to protection of its commercial interests. To this end, the court considered the following:

(1) The nature of the speech 

The ECtHR found that domestic courts had erred in considering that the nature of the speech at hand would be relevant to the determination of whether Article 10 applies: freedom of expression, in fact, is not limited to certain types of information or ideas or forms of expression: 
In other words, workplace-related free speech does not only protect comments that demonstrably contribute to a debate on a public matter. The Court cannot therefore agree with the finding of the Constitutional Court that comments made by an employee do not fall within the scope of protection of the right to freedom of expression on the grounds that they are of a professional nature and do not disclose any “public link” which would enable to clearly characterise them as part of a discussion on matters of public interest
(2) The motives of the author 

Turning to the examination of this point, the ECtHR recalled that speech motivated by personal grievance or antagonism or by the expectation of personal advantage is not deserving of a particularly high level of protection (Kudeshkina, No 29492/05). However, this was not the case of the applicant. 

(3) The damage caused by the speech to the employer 

This part of the judgment is very interesting. The ECtHR noted that, according to Hungarian courts, the fact that the applicant had featured on the website as an expert and had authored a contribution on human resources management reflecting knowledge acquired through his work was sufficient to conclude that he had acted to his employer’s detriment. 

The ECtHR ruled that, while under Hungarian law employers are entitled to a degree of deference in deciding which conduct could lead to the disruption of working relations even without such disruption being manifest, “neither the applicant’s employer nor the Kúria made any attempt to demonstrate in what way the speech in question could have adversely affected the business interests of Bank O.” 

(4) The severity of the sanction imposed 

With regard to this point, the ECtHR noted that the decision to terminate the applicant’s employment had been taken without assessing whether a less severe measure could be imposed instead. 

After work

All the above considered, the ECtHR found that: 
while it was for the domestic authorities to carry out a proper assessment of proportionality, the Court reiterates that the enjoyment of the right to freedom of expression should be secured even in the relations between employer and employee […] In the present case, the Court cannot discern any meaningful balancing of the interests at issue by the domestic courts […] The substantive outcome of the labour dispute was dictated purely by contractual considerations between the applicant and Bank O. […] and voided the applicant’s reliance on freedom of expression of any effect. 
In the light of the above considerations, the Court finds that in the present case the domestic authorities have failed to demonstrate convincingly that the rejection of the applicant’s challenge against his dismissal was based on a fair balance between the applicant’s right to freedom of expression, on the one hand, and his employer’s right to protect its legitimate business interests, on the other hand. They therefore did not discharge their positive obligations under Article 10 of the Convention. 
There has therefore been a violation of this provision [paras 51-53]

This decision confirms that: (1) Article 10 freedom is not limited to certain types of speech or certain types of relations only; and (2) States have a positive obligation to ensure that a fair balance is struck between freedom of expression and other fundamental rights and freedoms, also in the context of private relations.

In the particular context of this case (which would be in particular relevant to employment and breach of confidence matters), it also shows how contractual restrictions on employees' free speech may be overcome by overriding fundamental rights considerations.

Importantly, in enforcing a contractual rule or a workplace policy, it is for the employer to consider the appropriateness of the chosen sanction in light of - in particular and among other things - the motives of the author and the damage that the speech at issue has caused to the employer. The latter, in particular, requires proof of an actual damage that justifies the severity of a sanction like dismissal.

As also noted by the EU Law Live Blog, in an age in which employees tend to be increasingly visible through social media, invitations to speak on certain issues as subject matter experts, etc, a decision like this not only confirms that an employee's personal feed, blog, website, etc conveys their views only, that a tweet is not legal advice (who would think otherwise?), and that one's own opinions are not necessarily those of the employer, etc, but also that all these activities are in principle protected under Article 10 ECHR even in the presence of contractual restrictions. It is for the employer to prove what damage (if any) the employee's speech has caused to its activities and commercial interests.

[Originally published on The IPKat on 12 November 2019]

Friday, 8 November 2019

Airbnb rentals and communication to the public: do you need a specific licence for your TV/radio sets?

When the room you booked
on Airbnb is already occupied
Earlier this week, The IPKat received an intriguing couple of questions from a reader who is currently studying IP law: does someone renting out their spare bedroom on Airbnb around 50% of the time have to acquire a separate licence for the TV set which they have in said room? and what if they also have a radio set that allows guests to play music in said environment? 

From an EU perspective, issues of this kind require consideration of the string of case law of the Court of Justice of the European Union (CJEU) on the right of communication to the public under the InfoSoc and Rental and Lending Rights Directives, including a pending referral - Stim and SAMI, C-753/18 [Katpost here] (the Opinion of the appointed Advocate General is expected on 15 January 2020) - asking whether:
  1. the hiring out of cars equipped as standard with radio receivers qualifies as an act of communication to a public (in succession, since the vehicle can only be accessed by a limited number of persons at a time); and 
  2. the volume of the car hire activities and the duration of the hires has any relevance.
Communication to the public

Readers will remember that the first ever communication to the public case under the InfoSoc Directive to reach the CJEU was the referral in SGAE: the Audiencia Provincial de Barcelona (Spain) had asked the Court whether the installation of TV sets in hotel rooms would qualify as communication to the public (also a public in succession, given that a limited number of persons could be present in each room at any given time), rather than the mere provision of physical facilities as per Recital 27 in the preamble to said directive. 

Noting that Recital 23 in the preamble to the InfoSoc Directive requires the concept of ‘communication to the public’ to be interpreted broadly, the CJEU answered this question in the affirmative:
the hotel is the organisation which intervenes, in full knowledge of the consequences of its action, to give access to the protected work to its customers. In the absence of that intervention, its customers, although physically within that area, would not, in principle, be able to enjoy the broadcast work. (at [42]) 
The Court also considered that:
  1. there is no requirement that customers actually watch TV for there to be an act of communication, as the simple possibility suffices (hence, there is no need for an act of communication to entail the actual transmission of a work);
  2. the fact that the provision of TV sets would have an influence on the hotel’s standing and the price of the rooms (translated: a profit-making intention on the side of the defendant) would not be irrelevant;
  3. the exclusion concerning the “mere provision of physical facilities” does not extend to the installation of such facilities. 
Further to the SGAE decision, however, things have not been considered entirely clear, as referrals have continued flowing. 

In all this, despite the criticisms made by some commentators, the position of the CJEU has been consistent overall, though there have been some ambiguous messages being sent. 

So, the provision of TV sets in:
  • pubs (FAPL, in which the CJEU considered it relevant that the showing of certain TV content – in that case: Premier League matches – would likely attract additional guests who are interested in that additional service),
  • spas (OSA), and
  • rehabilitation centres (Reha Training
qualifies as an act of communication to the public within Article 3(1) of the InfoSoc Directive.

However, the broadcasting of phonograms by radio in a dental practice would not be communication to the public under Article 8(2) of the Rental and Lending Rights Directive (SCF), on consideration that: (a) the patients would not be a ‘public’ and (b) the radio broadcasts would not have an impact on the “income of that dentist”. 

Anecdotally, it could be also remembered that the SCF ruling was issued the same date as PPL: unlike the patients of a dentist, the provision of TV and radio sets by a hotel operator would qualify as communication to the public under Article 8(2) of the Rental and Lending Rights Directive. In all this, however, hotel rooms are not to be considered as ‘places accessible to the public against payment of an entrance fee’ for the purpose of Article 8(3) of the Rental and Lending Rights Directive (Hotel Edelweiss). 

So, where does all this lead us? 

Airbnb: create your listing and start renting 

Before answering, let’s take a closer look at how Airbnb works. Besides reading the relevant Terms of Service, when you start hosting Airbnb asks you a number of questions to help you decide a listing price that might be ‘right’ for the location, type of rental, and amenities offered. 

Let’s assume that I wished to rent out, as in the example provided by the reader, a spare double bedroom in my apartment which is set up as a dedicated guest space (no personal belongings of mine there). 

When asked whether I am listing on Airbnb as part of a company, I answer ‘No, that doesn’t sound like me’ (cryptic language aside, that does not likely mean that I am renting out not to make a profit).

Then, Airbnb asks me what spaces guests could use and which amenities I would offer them. Besides the essentials (towels, bed sheets, etc) and many other things, one of the options is indeed TV. For my rental, I choose to offer ‘Essentials’ and ‘TV’. 

At the end of this process, Airbnb informs me that if I rented out this hypothetical spare bedroom of mine 15 days a month (so, 50% of the time, as in the reader’s example), based on (1) location, (2) listing type (which also includes the amenities I would offer, and (3) guest capacity, I could make GBP 871 a month. 

If I repeated the questionnaire, only changing my answer in relation to the amenities I would offer and by deselecting ‘TV’, the earnings estimate would not change. 

However, when perspective guests search Airbnb for available listings, they are able to activate filters, including the ability to only view listings where hosts offer the desired amenities, eg TV. 

This suggests that, if two listings were for the same price, the presence or lack of certain amenities could have an impact on perspective guests’ purchasing decisions. 

A communication to the public?

It thus appears that, to paraphrase the language of the CJEU (see PPL, at [44]), the provision of a TV set in my guest bedroom, by which I give access to the broadcast work to my customers (arguably, a public in succession akin to that of hotels), constitutes an additional service which has an influence on the rental’s standing and, therefore, on the price of rooms. Moreover, it is likely to attract additional guests who are interested in that additional service. 

It follows that, in light of existing CJEU case law, Airbnb hosts might perform acts of communication to the public and the provision of TV and radio sets would not be akin to the mere provision of physical facilities. If this conclusion was correct, then could I be at risk of infringing third-party rights if I was not in possession of a valid licence.

While a specific CJEU referral on platform economy services and communication to the public may be unavoidable in the end, the Stim and SAMI case is indeed very interesting because, so far, it has been the closest thing to that. The relevant CJEU findings are likely to apply well beyond car rentals and have an impact on those grey areas (like Airbnb) where the line between private and professional activities has not always been an easy one to draw.

Let's now wait to see what the AG thinks of all this and whether car rentals are more akin to hotels, pubs, spas, and rehabilitations centres (as it appears correct) or, instead, are to be treated as a dentist's practice.

[Originally published on The IPKat on 8 November 2019]