The Authors' Take - Stella McCartney v IMAX Srl

The protection of the ‘eco-friendly’ Falabella bag by Stella McCartney in a recent decision of the Court of First Instance of Milan

by Mario Pozzi

Roedl&Partner Law Firm, Milan – Italy

On 9 March 2017, the Court of First Instance of Milan granted protection to the Falabella Bag by Stella McCartney (Tribunale di Milano, Stella McCartney Ltd v IMAX Srl, Decision No 2790/2017). A competitor, Imax S.r.l., was found to have infringed the Community designs and trade marks owned by Stella McCartney Ltd. 

The Milan court first ascertained the validity of the designs and trade marks owned by Stella McCartney (in terms of novelty, individual character, distinctive character) and then declared Imax’s conduct infringing of the rights in the Falabella bag (thus ascertaining the likelihood of confusion risk). The bag marketed by Imax was very similar to Falabella, in that it replicated all its main characteristics (shape, chain with a faceted shape that follows the whole edge of the bag fixed to the bag with a visible stitching). In particular, the court considered that the fact that the materials of the bags were different was not sufficient in order to avoid a finding of infringement. 

For these reasons, the Court of First Instance of Milan ordered the withdrawal of the infringing bags from the market as well as prohibiting any repetition of the unlawful activity. 

As far as damages are concerned, the court awarded a sum of €80.000,00 calculated on the basis of the advantages obtained by the infringer. Moreover, the court awarded Stella McCartney moral damages. According to the court, the fact that Imax S.r.l. produced the infringing bags with leather was capable of causing a damage to Stella McCartney’s eco-friendly brand image.

Italian court have become more sophisticated and severe in assessing infringing activities. The “new” trend to compensate also moral damages is such as to grant IP owners, especially those operating in the field of fashion, greater protection and confidence in starting proceedings for the protection of their rights. Overall, decisions like the Falabella one could represent a good deterrent for wannabe infringers.

[This is an Authors' Take post, which provides readers with an insight into current IP scholarship, featuring preliminary comments and thoughts from authors of articles accepted for publication in forthcoming issues of the Journal of Intellectual Property Law & Practice (OUP).]

The Authors' Take - Stichting Brein v Jack Frederik Wullems (Filmspeler)

CJEU applies right of communication to the public to sale of multimedia players

by Karin Cederlund and Nedim Malovic

Sandart&Partners AdvokatbyrÄ KB

In a 2017 decision (Case C‑527/15, Stichting Brein v Jack Frederik Wullems (Filmspeler)), the Court of Justice of the European Union (CJEU) held that the sale of a multimedia player, with pre-loaded hyperlinks to pirate websites, constitutes a communication to the public, within the meaning of Article 3(1) of Directive 2001/29/EC (InfoSoc Directive). The CJEU also excluded that consumers’ streaming from illegal sources would be exempted from the reproduction right under Article 5(1) of the InfoSoc Directive (temporary copies exemption).

Communication to the public

The CJEU referred to its previous case law and held that an act of communication to the public under Article 3(1) of the InfoSoc Directive requires the fulfillment of two conditions: (1) an 'act of communication' (2) directed to a 'public'. The CJEU concluded that the sale of the multimedia player at issue must be considered as a ‘communication’. The communication would encompass all persons purchasing the media player and having an internet connection. According to the CJEU, those persons could access the protected works at the same time, by streaming the works on the internet. Hence, the communication would be aimed at an indeterminate number of potential recipients and involve a large number of persons. It would be therefore a communication to a ‘public’ within the meaning of Article 3(1) of the InfoSoc Directive.

When assessing whether the works are communicated to a ‘new’ public, the CJEU recalled the presumption adopted in Case C-160/15GS Media, i.e. the user/defendant’s profit making intention. The court noted that multimedia players were supplied with a view to generate a profit, the price for the players being paid to obtain direct access to protected works available on streaming websites without the consent of the copyright holder. Hence, the provider of the device must be presumed to have knowledge of the unlicensed character of the works accessed this way.

Temporary copies exception under Article 5(1) of the InfoSoc Directive

Among the conditions of this exemption there is that the sole purpose of the act of reproduction is to enable transmission in a network between third parties by an intermediary or a lawful use of a protected work. 

According to the CJEU, the reproduction acts at issue (streaming by users of the multimedia player) would not seek to enable transmission in a network, nor the lawful use of a work. Hence, unlicensed streaming of copyright content could not fall within the scope of Article 5(1). Holding otherwise would also conflict with the three-step test in Article 5(5) of the InfoSoc Directive. 

[This is an Authors' Take post, which provides readers with an insight into current IP scholarship, featuring preliminary comments and thoughts from authors of articles accepted for publication in forthcoming issues of the Journal of Intellectual Property Law & Practice (OUP).]

The Authors' Take - find out what JIPLP authors are writing about!

In the fast-moving world of intellectual property law, JIPLP has always sought to guarantee not only the highest quality of legal analysis (for which we are indebted to dedicated, enthusiastic and passionate authors and reviewers), but also the most timely publication, to ensure that readers can access the most up-to-date and relevant scholarship. Our reviewers normally complete their reviews within 2 weeks and the articles are then edited and sent into production within a short period of time, thus resulting in a production cycle that rarely exceeds 6 - 9 weeks from final acceptance to advance online publication (inclusion in a paper issue may require an additional period of time, as issues are planned months ahead). We are extremely proud of these results and a great thank you goes to everyone involved in JIPLP, from our authors and reviewers, to our commissioning editor, Sarah Harris, and the entire team at OUP, led by Guy Edwards.

To give readers a chance to find out what our authors are writing about, even before their works are published in JIPLP, we are starting a new section on this blog - "The Authors' Take". In this section, selected authors of accepted pieces (articles and Current Intelligence notes) will share some preliminary thoughts and comments with our readers, providing a "sneak peek" into their work and analysis. Through these new and original contributions, we hope to give an even more timely overview of the latest IP scholarship and to allow readers and authors to connect more directly. As always, we welcome your feedback and suggestions on how we can improve or build upon this initiative.

On behalf of our editorial team, a heartfelt thank you to all the authors that will be involved in this series.

Editorial - Control of content on social media

In our latest issue, Gill Grassie's editorial reflects on the applicability of the online IP infringement framework to the policing of extreme comment and hate speech by social media platforms. Which are the valuable lessons that the experience of IP enforcement online can teach to the legislator? What is their relevance in the field of hate speech? Do technological advancements provide potential solutions to this issue? Should law and policy intervene at all in this context? Gill touches upon all these questions, suggesting that the IP online experience should inform policy in this new field.

Control of content on social media - technology as judge, jury and executioner? 
Gill Grassie 
Can the web regime for IP protection teach us how best to deal with extremist and hate crime materials posted online? 
An enquiry by the UK Commons Home Affairs Committee at the end of April 2017 accused social media companies of putting “profits before safety” when it comes to extreme and hate crime materials posted online. 
MPs called for content platforms such as Facebook, YouTube, Twitter and Google to take action to actively remove content that may be considered extremist or hateful. This may not be as simple to achieve as it first appears. One of the principal challenges is deciding who should be responsible for identifying the posts that should be removed and what parameters they should employ. Also: how can this be achieved without eroding freedom of speech on the web? 
Forced removal of content by such platforms is an issue that is not unfamiliar in the IP sphere. Indeed, the speed with which extremist and hate crime material is being removed by content platforms has been contrasted with the comparatively swift action that has been taken to remove materials which infringe IP rights. However, removal in the latter case takes place usually only after the platform becomes aware of alleged infringements further to a notice by the concerned rightholder. There is no active monitoring obligation. 
Infringing content that has been made available online by users has been an issue that has plagued the holders of IP rights for a number of years and has been a constant theme in many court rooms involving third party platforms such as eBay, Napster, Facebook, Twitter and Google. As a result, there is now at least some clarity around the circumstances in which intermediaries like ISPs and platform providers are required to remove and/or may be liable for the content uploaded by users to their platform. 
When it comes to online protection of IP, the main legal framework lies in several pieces of UK legislation. These include the e-Commerce Directive Regulations (“the Regulations”). The Regulations provide certain limitations on the provider’s liability when it comes to unlawful activities taking place on its platforms. In essence, caching, hosting or acting as a mere conduit will provide a safe harbour defence. However, upon obtaining “actual knowledge” or awareness of relevant unlawful activities, the platform provider must act expeditiously to remove or disable access to the information concerned or face potential liability. The notion of “actual knowledge” stops short of the monitoring that MPs are now calling for in relation to extremist speech online. 
Can this kind of approach to IP infringement also be considered appropriate in the context of extreme comment or hate speech online? The UK Government appears not to think so. However, it could face difficult challenges if it tries to impose monitoring obligations on these platforms. Is it up to the platform itself to decide whether the content is sufficiently offensive to justify its removal? What parameters are to be applied? Can technical measures be meaningfully deployed to identify such material?
In some ways, deciding what constitutes an IP infringement might be considered less of a subjective exercise and possibly less emotive than judging what is acceptable speech online. If control is to be with the ISPs they will hold significant power to decide how and whether to remove material as extreme or not, which is arguably a wholly subjective decision. If the IP model is to be followed, and there is to be a safe harbour-type defence with actual knowledge being required, then at least there might be some scope for debate on the issue. Possibly the third parties who notified might be required to set out some objective reasons for the demanded removal. 
Can technology resolve these issues? As regards technical solutions, there are already examples of these, such as YouTube’s Content ID, an automated piece of software that scans material uploaded to the site for IP infringement by comparing it against a database of registered IPs. The next challenge may be how these types of systems can be harnessed by online platform providers to address extreme and hate crime content. Again the dilemma for policy- and law-makers may be the extent to which they are prepared to cede control over content to technology companies, which will become judge, jury and executioner. 
In addition, it is important to address the question of who should bear the cost of monitoring and removal. The vexed question of who should pay has been revisited in the context of IP blocking injunction cases. These deal with infringing content that has been made available online, where the rights holders have successfully obtained injunctions against ISPs (and not specifically social media platforms) to block access to websites where infringing content has been hosted. In Cartier International AG & Ors v British Sky Broadcasting Ltd & Ors [2016] EWCA civ 658 the Court of Appeal concluded that it is entirely reasonable to expect ISPs to pay the costs associated with implementing mechanisms to block access to sites where infringing content has been made available. In the court’s view, the relevant safe harbour immunities from infringement support and benefit the businesses of the intermediaries. Thus the cost of implementing the order could therefore be regarded as just another overhead associated with ISPs carrying on their business. While this case was limited to the much narrower context of the technical measures that needed to be put in place to comply with an IP blocking injunction - and remains the subject of an appeal to the UK Supreme Court - it may still offer some insight into the likely approach of the courts. 
As pressure mounts on social media platforms to take rapid and effective action to remove inappropriate material, stakeholders will have to consider how comfortable they are for technology companies to provide solutions to these issues. Ultimately, when should the law and policy intervene? Clearly there will be challenges here for any legislator to get the balance right and the IP experiences to date might usefully be borne in mind. 
The author would like to thank Anoop Joshi for his valuable assistance in preparing this editorial.

July issue - the perfect (IP) summer reading list!

Our July issue is now available both online and in print. It features an exciting mix of articles and Current Intelligence notes, including a useful Practice Point article on patent claim drafting, a comprehensive analysis of direct and indirect patent infringement in the EU and under the UPC framework, some interesting and thought-provoking comments on the Opinion of Advocate General Bot in Nintendo v BigBen, and much more. Here is the full table of contents: