Dreyfus

Last summer, GoDaddy, a domain name registrar, was denied Safe Harbor protection by the Federal Court of California in relation to its parked pages program. (Academy of Motion Pictures Arts and Sciences v GoDaddy.com Inc., California 2013)

The US Department of Commerce established the Safe Harbor to protect personal data; the program certifies that companies provide an adequate level of protection of personal data, which is at least as stringent as that of the European Economic Area.

In 2010, the Academy of Motion Pictures Arts and Sciences (organizer of the Oscars) initiated legal proceedings against GoDaddy for violation of the provisions of the ACPA, a US law protecting consumers against cybersquatting. The Academy claimed that GoDaddy was a cyber-squatter and that it made profits out of the domain names <academyawardz.com>, <2011Oscars.com> and <Osccarlist.com> by displaying pay-per-click commercial links. GoDaddy called uponthe Safe Harbor protection granted to registrars in its defence.

Indeed, the ACPA grants Safe Harbor immunity to domain name registrars when they’re the subject of claims relating to registration activities and in the absence of malicious intent to profit. This immunity offers a limited liability to the registrar for its passiveness during the course of its activities.

The Academy successfully established that GoDaddy did not just carry out mere registrations and renewals of domain names. In relation to the ACPA, the commercial exploitation of domain names through parked pages is interpreted as “use” of the domain name. The registrar claimed for lack of evidence showing the revenues it made, but the Court held that it falls within the definition of use even in the absence of actual monetization and that GoDaddy is a cyber-squatter.

However, GoDaddy has not yet had its final say and the case is still pending.

The UK Law Commission, a body established to keep statutes under review and to recommend reforms, submitted, mid-April, a report suggesting the review of the provisions on groundless threats of infringement proceedings. This report was commissioned by the Department for Business, Innovation and Skills and the UK Intellectual Property Office.
A threat is groundless when there is no actual trademark or patent infringement or when there is no genuine intention to litigate, e.g when right-owners are aware that their rights are weak or no longer protected. The threats aim at frightening alleged infringers or distributors so that they discontinue their activities.
This remedy was created in an attempt to reduce groundless threats. It is currently subject to reform proposals which are under discussion. The proposed amendments aim at increasing the efficiency of the judiciary and limit the abuse thereof.
What are the amendments recommended by the Commission?

• The protection against groundless threats should be maintained for patents, trademarks and industrial designs, but it should be reformed.
• The conditions governing communication between right-owners and alleged secondary infringers should be reformed. This provision aims at fostering negotiation prior to litigation.
• Legal counsels should no longer be liable in respect of threats made in their professional capacity on behalf of a client. This provision effectively implements a limited liability regime for agents to the extent that they act on behalf of their clients.

Through these recommendations, the Commission insists on the importance of negotiation and communication to limit litigation. This is the reason why it wants to see the rules change soon.

Despite being only a decade old, Facebook, has risen to the top of social media and networking services, reaching a market peak in 2012 with a capitalization of $104 billion. In today’s evermore digitized World, Facebook is much more than just a networking site; it is a form of identity and community through which individual people base and narrate their hypermodern experiences. Staying true to its prodigious reputation, the young Facebook, which inhabits an increasingly fast past and technologically driven society, has started to contribute to a conversation that ancient and modern philosophers alike, who lived in a world much different than ours, have battled with for centuries: the intersection of private and public interests.

Although clashes resulting from the intersection of such instances are certainly not limited to this event, the Manhattan district attorney’s office are currently battling it out with Facebook over a government demand for the contents of hundreds of Facebook accounts. Invoking the Fourth Amendment, that is the constitutional right to be free of unreasonable searches, Facebook claims that the Manhattan prosecutors infringed this right by violating the privacy of the data of 381 people, including photos they had liked and private messages.

At first instance, the ruling of a New York judge favored public interests as opposed to private and stated that Facebook had no standing to contest the search warrants because it acts as an online repository of data, and was not the actual target of the criminal investigation. In terms of the investigation itself, the case’s prosecution attorneys sought to bring claims against a variety of civil servants accused of defrauding the Social Security system with fake disability claims. According to Joan Vollero, a spokeswoman for the Manhattan district attorney, there were as many as 1,000 people who defrauded the government for more than $400 million in benefits. Evidence for these claims was derived from Facebook photos showcasing the supposed disabled civil servants participating in a variety of sports, deep-sea fishing and riding personal watercrafts, to say the least.

Although in this particularly case, which is now on appeal, the justification for the violation of the Fourth Amendment and the preference of public interests to private seems relevant, especially considering the excess waste in government money, not all cases pertaining to digital searches and seizures have warranted such a response. In the landmark U.S. decision Riley v. California (2014) the question as to whether an arrest alone could allow a police officer to search the data available on a person’s smartphone, which could include their Facebook, was posed. The decision, attaching itself to the tag line “New rule for a new world” purports to effectuate that police should not have absolute access to all of the information on one’s cell phone just because it is on one’s person during an arrest.

Nevertheless, the facts of these two respective cases do not match up, and the varying legal analysis can be explained accordingly. In the case of Facebook’s contestation to the government seizure of user’s information, it seems unlikely that the privacy of an individual can overcome the public right to benefit from government expenditures, especially in light of the amount of money that stood at stake and was ultimately misused and lost.

Perhaps this case presents an even larger question: is Facebook a private or public realm to begin with? As Facebook is continually changing privacy settings for users and becoming more of an advertising agent than a human networking platform, indicators can arguable be pointed towards the fact that those that occupy Facebook are in fact occupying a more public domain to begin with. Nevertheless, on the other hand, users need to have trust in Facebook that their private messages will remain private, a statement that has not always remained true.

Like some of the ancients answered, one age old solution that remains applicable to this problem is to simply be cautious as to what you reveal about yourself on the internet. Should you feel that your private rights have been violated by a social media service and or government official, or know someone who is exploiting either service, trusted advice or a solution can be brought to you by Dreyfus.

The French Data Protection Authority (CNIL) adopted a recommendation on January 23, which provides a frame of reference for the concept of a “digital safe” and for the implementation of a certification label in relation to these storage services.
The term “digital safe” is now defined by the CNIL as “secure data storage space, accessible online, allowing storage of electronic documents under various formats (texts, photos, scanned papers).” The emergence of this new storage system raises many issues, especially in terms of the integrity and confidentiality of personal data stored there.
The Commission, which specializes in the protection of personal data, has created this trust indicator in order to show the high level of protection of personal data provided by online data storage services when they implement appropriate measures.
In order to benefit from the label, two cumulative requirements have to be met by service providers: the provider must operate the online data storage service and offer services directly to the general public.
In its recommendation, the CNIL also provided a specific regime in relation to health data. Due to their sensitivity, the storage of such data requires prior certification of the provider by the CNIL.
This certification label is the first label made in relation to products, following the path of the pre-existing labels created by the CNIL in relation to training and audit practices.

From knock-off Louis Vuitton purses to imitation iPhones, the International Chamber of Commerce estimates that ten percent of world trade is in counterfeit goods and that the counterfeit market is worth $500 billion. With this number hitting just “the tip of the iceberg”, the World Customs Organization (WCO) has claimed counterfeit items reported worldwide hit 3 billion for the first time last year. Despite appealing to some consumers wanting to take advantage of a trademark or trademark’s social capital and reputation, counterfeited goods should be recognized as inherently criminal. Not only do these products come into existence on the global market through organized crime, thereby impacting negatively on businesses, more importantly, the social and ethical effects of these products are all too often overlooked.

Published within the WCO’s Illicit Trade Report, the “tremendous increase” of fake goods underlines this growing problem, which is evidenced in the fact that more countries are reporting IP-related infringements, a rise numerically represented from 58 to 69. The seizures of pharmaceutical products, clothing and accessories, electronic appliances and food items are most common with China remaining the biggest hotbed for the production of counterfeits and the US being the country they are most destined to hit.

The ten-day clamp in Africa called “Operation Biyela”, where 23 countries sought to perform one of the biggest hauls of counterfeit pharmaceuticals, resulted in the interception of more than one billion illicit products; nearly 50 percent of them being pharmaceuticals. The World Health Organization (WHO) developed this definition of counterfeit medicines:

А counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging.

Clearly, counterfeit medicines can post a serious health risk to consumers. What is even more frightening is that information derived from Operation Biyela reports findings of a variety of different types of counterfeit medicines including diet pills, anti-malaria tablets and antibiotics. The extensive range of these products, from lifestyle medicines to those which are used to treat cancer and heart disease should be concerning to consumers, yet the demand proves otherwise.

Ethical issues brought on by counterfeit products should also be brought be exposed, especially as they apply to labor exploitation and low paid workers facing safety and security concerns. On the other end of the spectrum, Rachel K. Ward, PhD, a media specialist in fashion art and luxury sectors appeals to Utilitarian terms to justify the abolishment of counterfeit goods. According to Ward, “the utilitarian argument is the most used in the fashion industry because it points to the fact that “intellectual property needs to be protected in order to provide sufficient incentive to develop new technology and creative products.” Similarly, Ward goes on to point out the low-quality of counterfeit goods and how easy counterfeit products can be to discern, counteracting the consumer original faith in the product.

Among trademarks, Nike, Apple, Samsung, Rolex and Louis Vuitton make up the top five to be common targets of counterfeiting. In fact, Louis Vuitton was engaged in extensive legal battles with Google over the promotion of counterfeit goods on the search engine.

In order to better understand and solve this global phenomenon, consumers must begin to educate themselves on the effects of their decisions to participate and fund a sphere of illicit trade. If you, or your business requires assistance and or advice when it comes to counterfeit goods, Dreyfus is available for consultation.

A revolution is bound to occur in the chain of e-commerce with the advent of new domain name extensions (new gTLDs). Generic extensions such as .search or .shop will have a lasting impact on the Internet. The .wine and .vin gTLDs are, of late, the subject of intense debate between the Internet community and European institutions.

None of the French and Europeans actors in the wines and spirits industry have filed any application for these extensions. Foreign companies, most of them from the US, have been the forerunners in applying for the management of these new gTLDs. Donuts Inc filed the sole application for the .vin gTLD while three companies have solicited the .wine gTLD. As a result, ICANN announced that an auction will be held in January 2015 for the .wine gTLD. While these gTLDs are primordial for the online trading of wine-related products, they nevertheless generate major problems.

The GAC, an advisory body of ICANN representing governments, issued a warning in respect of the .vin gTLD in 2012. European regulations establish a strict framework with regard to oenological practices and specifically for the “vin” designation. The GAC underscored that the registry should fully prohibit open registrations so that consumers are not misled.

Recently, there was an outcry within the European governments, and particularly from the French government concerning the protection of geographical indications such as Champagne or Bordeaux. Indeed, while registered marks are protected, the same does not hold true for geographical indications. Nothing would prevent anyone from registering the ‘champagne.vin’ domain name to market wines hailing from Alsace or Provence or even completely different products. In the end, the consumer would thus inevitably be duped. Moreover, none of the three applications affords any protection with regard to the geographical indications. The French Secretary of State in charge of digital affairs, Axelle Lemaire, has repeatedly reiterated the request of the French government to provide for a procedure similar to the UDRP in respect of geographical indications in these extensions.

At this point in time, a consensus is yet to be reached. In September 2013, the Chairman of the GAC conveyed a letter to the Board of ICANN recommending that the applications in respect of the .wine and .vin gTLDs undergo the usual evaluation process. This does not seem to account for the majority of the opinions expressed in GAC.

Indeed, the GAC statement issued in November 2013, after the ICANN meeting in Buenos Aires, clearly reveals such contradictions. Opponents of these gTLDs asked that the applications be halted until additional protection mechanisms are arranged. The proponents, on the other hand, deem that the existing safeguards are sufficient and that the prerogative of ICANN does not rest in the regulation of geographical indications.

Yet, the issue which arises is a live one, insofar as other industry-specific extensions such as .archi and .bio have established strict registration requirements so that consumers are not misled. But as applications are not amendable; in practice it would be almost impossible to amend the rules with regard to the .wine gTLD to accommodate the requests of everyone.

The French Government expressed its regrets at the fact that ICANN rejected the safeguards proposed by organizations for the protection of geographical indications. These were deemed necessary to ensure that producers of wine with the label of origin and consumers likewise are afforded the requisite protection against Internet abuse.

As the ICANN meeting was being held in London in June, no consensus has been reached. To be continued!

At the end of May 2014, the French data protection authority (CNIL) published an IP Report (Cahier IP) on the human body as a new connected object, focusing on personal health data resulting from “quantified self” apps and connected objects.

In its publication, the CNIL has defined this phenomenon of “quantified self. This somewhat confusing expression covers various practices which all tend to measure and compare with others the variables related to our lifestyle: nutrition, physical exercise, sleep and even mood, etc.”

The data automatically captured by the connected objects is then mass processed. The development of this practice calls for user attention vis-à-vis the future of their data. As such data relates to the health of individuals, it is sensitive in nature. There is no definition of “sensitive data” but they are listed extensively.

The Commission highlights the gap between professed privacy policies and actual practices. This often goes unnoticed due to the lack of attention and knowledge of users regarding personal data.

A “client empowerment” movement giving more power and control to the client would allow a rebalancing of the user/data collector relationship. As a matter of fact, the voice of the clients is often neglected by companies. This “empowerment” may also allow the commercialisation of the data with the client’s direct consent, which would be beneficial to data brokers.

Another solution for the protection of user data would be to impose the concept of “privacy by design” as soon as the connected object is conceived, although the CNIL makes no mention of this in its report. The aim is to make the protection of users’ privacy the primary characteristic of the object. Thus, by default, the collected data will not be extensively shared or re-sold.

As French and European laws are very protective of personal data, particularly sensitive data, one must remain vigilant when collecting such data.

Dreyfus will assist you in auditing your data and will help you to implement privacy policies compliant with French and European regulations.

At the close of April, Brazil hosted NetMundial, the global multi-stakeholder meeting on Internet governance, coinciding with the time when the World Wide Web was celebrating its 25th anniversary. Delegates from 87 countries, including civil society, government, international organization and technical community representatives, have agreed to sign a final declaration, in an élan to answer the question namely “how to govern the web?”

Historically, the web has been governed by the United States. But the Snowden case and the emergence of players such as China and Brazil regularly propel the polemic to the forefront. While the European Union recently demanded global oversight of ICANN and the National Telecommunications and Information Administration (NTIA) coveted to be relieved of some of the functions it assumes, NetMundial had to decide the delicate issue of governance.

The final statement provides guidelines and the establishment of a roadmap by virtue of which this non-binding document will materialize. It lays down inter alia a number of principles designed to foster a more democratic supervision of the Internet, based on a multi-stakeholder model to strive towards “a stable, decentralized, secure, interconnected network accessible to all.”

It is in this context that, on March 14 NITA imparted its wish to delegate some of its functions to a multi-stakeholder organization. The transition plan, widely debated at NetMundial, will be implemented in the upcoming months. However, U.S. Congress intends to veto the project and has introduced legislation prohibiting any transfer before a detailed report on the subject is rendered.

The final declaration adopted at NetMundial has been generally accepted, particularly by AFNIC which manages .fr domain names and saluted “the success of NetMundial, the transparency of the meetings and the constructive involvement of all stakeholders involved.” In regards to free internet activists, they continue to assert that the text offers “no concrete measures.”

The final declaration covers other important topics. Matters which were extensively explored included reduction of the digital divide, protection against illegal or arbitrary data collection or the fact that the rights of individuals who are off-line should also be protected online. The concept of net neutrality was flagrantly excluded from the final declaration despite having been advocated by many civil society stakeholders. “It may not be perfect, but it is the result of a multilateral process (…), the first stone of a path which we all build together,” argued the Chairman of the summit, Virgilio Almeida.

Internet governance stakeholders will meet in September at the Internet Governance Forum (IGF), which will look at implementing the principles adopted in Sao Paulo. To be followed…

Dreyfus specializes in the digital economy and conflict resolution on the web. Please do not hesitate to contact us for further information.

Mobile app Snapchat, which allows user to send temporary messages, reached a settlement with the US Federal Trade Commission (FTC). The two parties found a compromise to avoid a lawsuit which would have been severely detrimental to the company.

In a lengthy statement, the Commission reported multiple misrepresentations made to consumers by Snapchat, particularly with regards to how the app works. The ephemeral nature of messages, which made the app successful, was extensively questioned. The FTC noted that messages can be saved easily through screen shots. In previous versions of Snapchat, the sender received notice of any screen shot by the recipient, but it is no longer the case now. The statement further noted that there are several ways whereby photo or video messages can be saved without impediment.

The FTC listed a significant number of complaints concerning Snapchat: transmission of the user’s geolocation and address book information without his/her consent or even lack of security in message encryption. In late 2013, the personal data of nearly 5 million users was retrieved by hackers owing to this lack of security.

It is precisely to avoid a lawsuit that Snapchat agreed to the settlement, which inter alia prohibits the company from altering its confidentiality, security and privacy policies. The settlement specifically provides that the activities of the company in respect of the aforementioned will be subject to independent monitoring for the next 20 years.

The settlement between the company and the Commission will be subject to public comments until June 9, 2014, at which point it should be signed by the two parties and thereafter approved in court. The FTC’s commitment towards a responsible collection of personal data is commendable. While increasing volumes of data are collected on a daily basis, consumer privacy must be remain a key concern for companies and states.

Dreyfus is specialized in online infringement cases. Please do not hesitate to contact us for any information.

On March 28, as part of the Economic Action Plan 2014, the Canadian government proposed amendments to the Trademarks Act. These will be the most significant changes since the 1953 act.
According to the government, the goal is to bring Canada in line with major international trademark treaties. Yet, some expert observers of trademark law believe that these changes are more closely linked to achieving administrative efficiency rather than complying with these treaties.
Amongst the major changes, Canada seeks an expansion of the definition of trademark in order to cover “a sign or combination of signs”. The international Nice Classification of goods and services classes 1-45 will also be adopted.
The trickiest question remains the acceptance of the registration of trademarks without taking into consideration previous use in Canada or abroad. There is currently a close link between trademark law and good faith in Canada. Such dissociation would contradict 140 years of case law which confirmed previous use and good faith as prerequisites for the protection of a Canadian trademark. This prerequisite of use prevents the accumulation of trademark applications that are standard in Europe.
The main effect will be an increase in objections to trademark applications by legitimate users or if the trademark has not been used for over 3 years. This bill may indeed increase the number of trademark applications made in bad faith. This simplification of the process may also lead to a loss in value of the trademark itself.
The commercial dimension of this bill through its integration in the Economic Plan seems to disappear with the trademark’s previous use prerequisite. Thus, some believe that this novelty is in violation of the Canadian constitution.
Important developments are thus expected in response to these proposed amendments to the Canadian Trademarks Act.