Tuesday, 15 September 2020

Copyright is for losers … and so are trade marks: Banksy’s EUTM declared invalid due to bad faith

 Can a sign representing an artwork be registered as a trade mark? Can trade mark registration be used to monopolize artworks? If so, can any such intention and behaviour be repressed?

The answer to all these questions is in the affirmative, as Pest Control – a handling service acting on behalf of elusive artist Banksy – learned yesterday, when the Cancellation Division of the European Union Intellectual Property Office (EUIPO) ordered that its EU trade mark (EUTM) registration representing one of Banksy’s best known artworks, the Flower Thrower, be declared invalid on the ground of bad faith.


Background


In 2014, Pest Control obtained the registration of the figurative mark represented below as an EUTM in relation to goods and services in classes 2, 9, 16, 18, 19, 24, 25, 27, 28, 41, and 42.

In 2019, Full Colour applied to obtain a declaration of invalidity for all relevant goods/services on grounds of bad faith under Article 59(1)(b) EUTMR and also pursuant to Article 59(1)(a) EUTMR in connection with Article 7(1)(b) and (c) EUTMR.


The parties’ arguments


The registered trade mark represents one of Banksy’s most iconic artworks. According to the applicant, the trade mark proprietor has never used the sign as a trade mark and Banksy himself has only ever reproduced the sign as an artwork.


Furthermore, the artwork at hand is a graffiti sprayed in a public place, which has been widely photographed and disseminated also thanks to Banksy’s personal stand that "copyright is for losers". According to the applicant, Banksy would be seeking trade mark protection to avoid protecting his rights under copyright law, which would require him to lose his anonymity [though it should be noted that some copyright enforcement attempts have been made in the recent past].


In sum, the trade mark – argued the applicant – was registered without any intention other than to monopolize this and other registered images (Pest Control does hold other figurative EUTMs for Banksy's artworks) for an indefinite period, contrary to the principles of copyright law. It would also seek to use the EU registrations as the basis for obtaining US trade mark registrations. As such, the present registration would have been done in bad faith.


In turn, the trade mark proprietor submitted that the applicant had failed to demonstrate bad faith. Furthermore, the evidence provided would not demonstrate that Banksy has given ‘free reign’ to the general public to use his works for purposes other than non-commercial ones. In any case, what Banksy said or did would neither change the law nor prohibit him or the proprietor from seeking rights and protections available under the law. Holding otherwise would be inter alia contrary to the principles of freedom of expression and equality before the law under, respectively, Articles 11 and 20 of the EU Charter of Fundamental Rights.


In addition, in accordance with NEUSCHWANSTEIN, a party that registers a trade mark in pursuit of a legitimate objective to prevent another party from taking advantage by copying the sign would not be acting in bad faith. The recent Sky decision [Katposts herewould also support this conclusion.


The decision: bad faith (Article 59(1)(b))


The Office recalled that, as Advocate General (AG) Sharpston noted in her Lindt Goldhase Opinion, for a finding of bad faith there must be:

  1. some action by the EUTM proprietor which clearly reflects a dishonest intention, and
  2. an objective standard against which such action can be measured and subsequently qualified as constituting bad faith.

In accordance with KOTON, bad faith subsists when the trade mark owner lacked any intention to use a trade mark or engaging fairly in competition. Rather, they acted with the intention to undermine the interests of third parties, in a manner inconsistent with honest practices, or with the intention to obtain, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin.


The Office noted that, in 2019, that is after the date of filing of the application for a declaration of invalidity, Banksy launched a shop - Gross Domestic Product – which, while not not opened to the public, would allow customers to look at the window displays and buy the products online, after a vetting procedure to ensure that they were not going to re-sell the items and were not art dealers. The motivation for this venture was "“possibly the least poetic reason to even make some art” – a trademark dispute", ie to show use of the registered signs as trade marks.


According to the Office, this behaviour shows that the EUTM proprietor never had any intention to use the contested EUTM as a trade mark in relation to the relevant goods and services. As a result, it concluded that the trade mark should be declared invalid under Article 59(1)(b). Since the applicant succeeded on this ground, the Cancellation Division did not examine the request based on the other grounds.


Comment


This is an interesting decision for several, different reasons.


Starting from the trade mark-related ones, the decision seems to adopt quite a generous reading of the concept of bad faith, by treating in the same way situations in which one seeks to use trade mark law to 'extend' an expired copyright and situations in which one seeks to use trade mark law in parallel to an existing copyright. 


In this sense, it elaborates further - without mentioning it - on the suggestion already advanced in case law – including recently in the EFTA Court’s decision in Vigeland [Katposts here(referring to the AG Opinion in Shield Mark) – that “a trade mark based entirely on copyright protected work carries 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 which not even the author of the work or his estate enjoyed”. As a result, “[t]he interest in safeguarding the public domain … speaks in favour of the absence of individual protection for, or exclusive rights to, the artwork on which the mark is based.”


One may wonder whether bad faith is the right tool to employ to purse such public interest goals or whether, instead, a simple assessment made on, e.g., distinctiveness (or lack thereof) would avoid casting a 'judgement' on the trade mark owner’s overall intentions and behaviour, while allowing for more straightforward approaches.


Moving on to copyright, the decision has some (patronizing) notes which deserve more careful consideration. Two in particular stand out.


The first one concerns Banksy’s “disdain for intellectual property rights”. Thankfully, the Cancellation Division concluded that what the author thinks is irrelevant to determine copyright subsistence. In any case, the Office could have not held differently, as CJEU case law – including the recent judgment in Brompton Bicycle [Katposts here– suggests that no subjective considerations find place in the context of inter alia determining copyright subsistence.


The second, and possibly more concerning one, relates to the consideration – not elaborated in any way – that, since the Flower Thrower is a piece of street graffiti placed on a wall on the side of a garage in Jerusalem,

There is an argument that street graffiti, which is not carried out with the express permission of the owner of the property on which it is placed, is carried out in commission of a criminal act. To such extent, no copyright rights might accrue from such a work (or there is an argument that the copyright may be assumed to be gifted to the owner of the property). Moreover, graffiti is normally placed in public places for all to view and photograph, which might also possibly annul any ownership rights in copyright, although this is expressly denied by the proprietor.

Conflicts between real and intellectual property are not novel, and there is interesting case law on this point. However, it would be problematic to hold in principle that only works realized out of legality, and not also works realized out of illegality, would be eligible for copyright protection. Possibly even more problematic is the Office’s suggestion that the public display location of an artwork may “annul” any ownership rights in copyright. Both are unacceptable conclusions.


In any case, let's stay tuned for the next episodes in the ‘Banksy in IPland’ saga …


[Originally published on The IPKat on 15 September 2020]

Thursday, 3 September 2020

AG Hogan advises CJEU to rule that disclosure of evidence containing protected content to a court is not a communication to the public

IPKat posts as evidence in court? Why not!
Image credits: Riana Harvey
Does the disclosure in court proceedings of a work protected by copyright or related rights amount to InfoSoc Directive? Is the notion of ‘public’ in the right of communication/making available to the public in Article 3 therein to be intended in the same way as the notion of ‘public’ in the right of distribution in Article 4? How can copyright protection be reconciled with transparency obligations?
a ‘communication to the public’ and/or a ‘distribution to the public’ within the meaning of the 

These, in a nutshell, are the issues that the Court of Justice of the European Union (CJEU) will have to address when it decides BY, C-637/19, a referral made by the Svea Court of Appeal, Patent and Market Court of Appeal, Stockholm, Sweden.

This morning, Advocate General (AG) Hogan issued his Opinion, in which he advised the Court to rule that the electronic transmission by a litigant or a party to proceedings of protected materials as evidence to a court does neither constitute a communication nor a distribution to the public. In any case, the mere fact that a document qualifies as a public document does not entail that the underlying material is also in the public domain.

Let’s see more in detail how the AG reasoned.

Background

This request for a preliminary ruling was made in the context of a dispute between two private persons, each of whom operates a website. One of them (CX) sent a copy of a page of text, including a protected photograph, from the other party (BY)’s website as evidence in the court proceedings. BY holds the rights to the photograph and claimed that the disclosure made by CX amounted to infringement of copyright and/or related rights.

At first instance it was ruled that such disclosure did not qualify as a rights infringement in light of Swedish constitutional law on access to documents. 

BY appealed. 

The appellate court stayed the proceedings, as it considered it unclear whether:
  1. a court could be considered a ‘public’ for the purpose of copyright law (the referring court would be inclined to say no, although it should be noted that under Swedish law anyone has a right of access to documents received by a court) and
  2. the concept of public should be intended in the same way between Articles 3 and 4 of the InfoSoc Directive. The uncertainty is due to certain earlier CJEU case law, notably Dimensione [Katpost here], in which the Court held that – for there to be ‘distribution to the public’ – it is sufficient that the protected work has been delivered to a member of the public.
The AG Opinion

AG Hogan noted at the outset that this case “raises issues of some importance regarding the interaction of EU copyright legislation and national freedom of information, together with the right to an effective remedy and a fair trial” (as also guaranteed under Article 47 of the EU Charter of Fundamental Rights).

Notion of ‘public’

The AG (correctly) found that it would not be necessary to answer the question concerning the notion of ‘public’ between Articles 3 and 4, since it is apparent that the activity at issue in the background national proceedings would qualify as communication to the public, rather than distribution. 

As the CJEU confirmed in Tom Kabinet [Katpost here], the right of distribution is concerned with physical copies. In this case, the protected photograph was sent by email. Hence, there would be no need to engage Article 4 of the InfoSoc Directive.

Disclosure to a court of protected content

Turning to the other questions, the AG considered them as akin to asking – in a nutshell – whether the disclosure of protected content to a court by email would qualify as an act of communication to the public. 

According to the AG, whilst the communication of protected content to third parties performing administrative or judicial functions may very well surpass ‘a certain de minimis threshold’ (required for that communication to be to a public), it would still fail to be a communication to the public within Article 3(1) of the InfoSoc Directive “precisely because those persons, while not a private group per se, would nonetheless be constrained by the nature of their official functions. In particular, they would not be entitled to treat the copyrighted material as being free from copyright protection.” 

In addition, the exploitation at issue would not have any independent economic significance and would not be directed at an indeterminate number of potential recipients:
The communication would instead be aimed at a clearly defined and limited or closed group of people who exercise their functions in the public interest and who are, subject to verification by the referring court, bound by legal and ethical rules concerning, inter alia, the use and disclosure of information and evidence received in the course of court proceedings.
Court clerks on a break
The fundamental rights angle

The AG further added that, if copyright law were to prevent the disclosure as evidence of protected material, this would seriously compromise the right to an effective remedy and the right to a fair trial as guaranteed by Article 47 of the Charter.

In addition, while IP is protected under Article 17(2) of the Charter, its protection is not absolute and it must be fairly balanced or weighted against other Charter rights.

In any case, also under the Swedish transparency principle, it is not that a protected material enters the public domain “simply because it has been disclosed or exhibited or otherwise made available in evidence during the course of court proceedings.” In sum: “Swedish law does not envisage or permit copyright protection to be lost merely because one of the parties has exhibited that material in the course of civil proceedings and a third party can subsequently gain access to that material by virtue of Swedish freedom of information law.” If the contrary was true, then Sweden would be in breach of its obligations under EU law, including with regard to the InfoSoc Directive and Article 17(2) of the Charter.

Comment

The Opinion of AG Hogan follows a logical approach and the outcome appears to be a sensible one.

This said, despite the rather peculiar factual background, the referral in BY has the potential to allow the Court to reflect on the elusive notion of 'public' in at least the right of communication to the public (it does not in fact appear possible to consider, as the referring court did, that the situation at issue could qualify as distribution. In this sense, the AG was correct in saying that there is no need to address whether the notion of 'public' differs between Articles 3 and 4 of the InfoSoc Directive).

With regard to Article 3, the ‘public’, according to the CJEU and also considered by AG Hogan, in principle refers to an indeterminate and more than de minimis number of people; it thus excludes groups of persons which are too small or insignificant. Elaborating further, the ‘public’ requires “several unrelated persons”. 

This said, what or who qualifies as a ‘public’ still poses interpretative challenges. For instance, in STIM and SAMI (another referral from Sweden), one of the questions referred to the CJEU was whether the volume and characteristics of the defendant’s business activity (car rental companies and the duration of individual car rentals) would be relevant to the determination of whether there is an act of communication to the public. AG Szpunar held in the negative in his Opinion [Katpost here]. In the resulting decision, the CJEU did not consider it necessary to answer this question, having concluded that the activity at issue would not constitute an act of communication. 

The forthcoming BY decision might allow the Court to detail who and what the public is, thus contributing further to the construction of the right of communication to the public and the delineation of its scope.

[Originally published on The IPKat on 3 September 2020]