How are restaurants trademark portfolios evolving?

Written by Dreyfus02/08/2021

To protect a trademark and minimize the risk of potential legal action, restaurateurs should employ an ongoing research strategy, registration and monitoring.

What impact could the pandemic have on restaurant brand portfolios?

The pandemic has pushed restaurants to innovate. Delivery services, technological services, and even innovative uses of restaurant real estate are leading to an increase in trademark demands beyond traditional restaurant services.

Foodservice companies have expanded the use of “ghost kitchens” (also known as “dark kitchens” or “virtual kitchens”).

In ghost kitchens, chefs prepare food only for delivery or pickup without a seat for customers. A ghost kitchen can serve as a cooking space for multiple brands, allowing operators to expand their customer base without investing in a separate area for each brand.

The ghost kitchen concept also encourages experimentation because a brand can get started quickly with little additional cost.

The legal consequences arising from the different classes and descriptions of services requested by kitchens and brands continue to evolve. Regardless of what lies ahead, restaurants and related entities need to extensively think when filing for trademark protection and enforcing their rights.

The Covid-19 pandemic has put innovative pressure on the restaurant industry. As restaurants have changed or expanded their products and services since the start of 2020, their trademark portfolios have also expanded to include new classes of trademark registration.

How to effectively manage restaurants trademark portfolios?

In this context and after having created the name, the question of the company’s trademarks protection and international extension quickly arises, even for restaurants.

Today, there is a craze for trademark registration, which has a considerable impact on the strategy of their management by companies. It is increasingly complex to create a distinctive and solid brand or to maintain a monopoly on a word coveted by many.

In addition, legal risks have accelerated with e-commerce, market globalization and the company’s international exposure to the Internet.

As the demand for contactless food delivery grows, restaurants and related brands have adopted broad strategies, including partnering with ghost kitchens or selling food through temperature-controlled lockers.

At the same time, these new business areas have created an increased need to examine restaurant trademark portfolios and identify areas for which brands should be protected.

What precautions should you take to protect your IP rights?

It is of great importance to protecting your IP rights to take several precautions:

Ensure that you included confidentiality clauses in your contracts;
Provide for non-disclosure agreements;
Be vigilant on the terms of transfer of rights between the creator and the company.

It is necessary to establish a protection strategy in the real world and in the digital world to protect your trademark portfolio.

Why bet on the brand?

It is about obtaining an operating monopoly, which can be renewable indefinitely and will constitute the pillar in your marketing and commercial strategy.

It is necessary to register the trademark from the genesis of the project. Determine a limited but suitable territory is also of great necessity. Likewise, it is about thinking globally and digitally by protecting domain names when registering the trademark.

The domain name is an important asset!

Today, insurers identify the intellectual property of which domain names are a part as one of the top three risks facing businesses.

The domain name occupies a special place in that it serves as a vector for ever more sophisticated and varied frauds. Managing your trademark on the Internet is not just about filing and renewing but also building a strategy.

It is crucial to invest in protection and preventive defense strategy and also set up surveillance on your brand.

Finally, you must be particularly vigilant about the use that is made of your brand on the Internet to avoid any “bad buzz”, which would be particularly harmful to your reputation.

A restaurant’s brand portfolio is a true intellectual and economic investment that must be protected.

In order to offer our clients a unique expertise, necessary for the exploitation of intangible assets, we keep you informed of the current issues of intellectual property and digital economy through articles written by the legal team of Dreyfus & associés.

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♦ Why is the well-knownness of an earlier trademark not enough to qualify bad faith?

♦ Why is claiming unregistered trademark rights over a geographical name a difficult challenge in UDRP proceedings?

Written by Dreyfus29/07/2021

Directive (EU) No. 2018/1808 of the European Parliament and of the Council, adopted on November 14, 2018 and amending Directive 2010/13/EU (AVMS Directive), has (finally) been transposed into French law, via the Order of December 21, 2020. This directive is part of a context of international competition on the one hand and profound transformation of the audio-visual and the evolution of demand on the other hand.

Redefinition of the essential concepts of the 2010 European Directive

The Order deals with essential concepts that one needs to fathom to understand the issues at stake. First of all, what are audio-visual media services (AVMS)? There are two types:

Linear television services (traditional services);
Non-linear services, e.audio-visual content-on-demand services or media-on-demand services (MOS). These SMAD services allow the customer to choose both when and what they wish to watch.

The Order also calls into question certain principles, such as the old principle of media chronology resulting from a 1960 legislation. This legislation coordinated the diffusion of films, after their release in cinemas, to optimise their profitability.

Modernisation and adaptation of the rules to the transformation of audiovisual services

The Order transposing the Directive has implemented several measures aiming to ensure the effective contribution by market players and to protect both the minors and the public.

The system of financing national cinematographic and audio-visual creations has indeed been completely revised by the Directive. From now on, the country of origin principle applies: each EU Member State may exercise its production contribution regime to foreign VOD (Video On Demand) channels and platforms offering a service on the territory of that Member State.

While this principle is a leading point of the reform, the AVMS Directive also acknowledges the profound changes in multimedia by extending audio-visual regulation to video-sharing platforms, social networks and live video platforms. This way, Brussels wishes to protect minors against certain harmful content and harmonise the legal framework of the European audio-visual sector.

Reform of the 1986 Act and safeguarding the French cultural exception

France wanted to implement the directive and collaborate in the European project while defending the French cultural exception. The Order is mainly concerned with reinforcing the rules of transparency for service publishers and with establishing more complete objectives, such as the inclusion of the system of funding for production (particularly independent production) over time, but also the guarantee that French broadcasters and global platforms are on an equal footing.

Article 19 of the Order, therefore, now requires “publishers of television services and on-demand audio-visual media services aimed at French territory” “when they are not established in France and do not fall under the jurisdiction of France”, to financially contribute in the same way as French publishers do.

Article 28 substantially reforms the principle of media chronology and now allows the industry players to negotiate an agreement with the professional organisations within six months to reduce broadcasting delays.

Extension of the powers of the CSA and protection of minors

As platforms are now part of the regulatory landscape, the CSA has seen its competencies and powers broadened and, in particular, has been assigned two new essential missions: the accessibility of AVMS programmes, and the protection, in particular of minors, against content that is violent, incites hatred or constitutes a criminal offence. The CSA will then have jurisdiction if the head office or a subsidiary of the platform is established in France.

Furthermore, the CSA is also in charge of ensuring that publishers have issued guidelines of best practice (particularly regarding food advertising to which minors could be exposed) and highlighting audio-visual services of general interest on new audio-visual platforms.

In addition, the Order completes Article 15 of the 1986 Act by prohibiting in programmes not only incitement to hatred and violence but also a provocation to commit acts of terrorism, while entrusting the CSA with the task of ensuring that these provisions are respected.

If the Oder is already a significant step forward, the implementing decrees are just as important. In particular, on June 23, 2021, the audio-visual media services on-demand decree (or SMAD decree n°2010-1379 of November 12, 2010) was published in the French Journal Officiel, which probably represents the most valuable step in the project to modernise the financing of French and European audio-visual services. Among other things, SMADs will have to devote at least 20% of their turnover in France to finance the production of European or original French cinematographic and audio-visual works.

Finally, negotiations are underway between TV channels and producers’ representatives about reviewing a second decree known as “DTT” (Digital Terrestrian Television decree No. 2010-747 of July 2, 2020), which defines the production obligations of TV channels. The points discussed concern particularly the sharing of copyright on works between producers and TV channels and the lasting of these rights.

We are a law firm with a unique expertise in the exploitation of intangible assets. We keep you updated on issues related to intellectual property and the digital economy through articles written by the Dreyfus legal team.

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♦ How will the Digital Services Act change the legal framework for Internet services?

Written by Dreyfus21/07/2021

The Third Session of the 13th National People’s Congress (NPC) voted and passed the “Civil Code of the People’s Republic of China” on May 28, 2020. This law came into force on January 1, 2021.

The fundamental objective of this Civil Code is to facilitate the protection of people’s extensive civil rights and provide sufficient remedies for right holders whenever their IP rights are infringed upon especially when it comes to counterfeiting.

Apart from serving as a policy instrument for stimulating innovation, intellectual property (IP) rights have always been considered a significant category of private rights. The intellectual property regime, thus, is deeply rooted in and closely related to the civil law system.

While referred to by the Chinese press as the Encyclopedia of Social Life, the new Civil Law includes many provisions related to intellectual property (IP). At first read, the most striking IP provision is for punitive damages for intentional infringement, which will be potentially most valuable in patent infringement cases and especially in cases related to counterfeiting.

Article 1185 (out of 1260 articles) states, with reference to IP, “if the circumstances are serious, the infringed person shall have the right to request corresponding punitive damages”. This actually aligns with the newly amended trademark law that provides for increased punitive damages.

Article 63 of the trademark law, as amended in November 2019, increased punitive damages from three times to five times the amount of assessed damages when infringement is “committed in bad faith and the circumstance is serious.”

The United States has called China the “world’s principal IP infringer”. In a 2017 report, the US bipartisan Commission on the Theft of American Intellectual Property estimated that counterfeit goods, pirated software and the theft of trade secrets cost the US economy between US$225 billion and US$600 billion annually, not including the full cost of patent infringement.

China, meanwhile, has signaled that IP protection is a priority in its 14th five-year plan for 2021 to 2025, as part of its strategy to move towards self-reliance in critical technology.

Government economic planners detailed how they intended to strengthen the protection of IP and raise high-value patent ownership over the next five years, and Beijing is this year set to reveal its strategic plan to make China a global IP power by 2035.

In both the Chinese Patent Law and the Copyright Law, which will come into effect on June 1 2021, the applicable elements of punitive damages are “intentional infringement” and “aggravated circumstances“ according to the China Civil Code.

Therefore, punitive damages will be more actively applied by the Chinese courts when handling IP cases in the future.

The introduction of punitive damages into IP infringement disputes will help improve the protection of intellectual property rights, promote technology progress and innovation, and build a healthier market for investment.

The implementation of the Civil Law in China is not just a declaration to strengthen the protection of civil rights. It opens a new era by protecting IP rights.

The new Civil Code is demonstrating China’s resolute attitude toward malicious IP infringement, concrete articles and complementary civil principles could enhance the protection of IP rights in China.

In order to provide our clients with a unique expertise, necessary for the exploitation of intangible assets, we keep you informed about intellectual property and digital economy issues with our articles written by the Dreyfus legal team.

About this topic…

♦ Fragrance and intellectual property : which protection ?

♦ How to protect store layout -Visual Merchandising with Intellectual Property law?

Written by Dreyfus09/07/2021

Reverse domain name hijacking constitutes an abuse of procedure. On this topic, the WIPO issued on April 4, 2021 a decision reminding Complainants of their failings: it was their duty to proceed to relevant checks before initiating the complaint and to build their case properly. The examiner was all the more severe given that Complainants were represented by counsel.

The complaint in question was filed by three applicants.

First Complainant is an Indian company notably specializing in the manufacture and sale of sanitary products and kitchen appliances. First Complainant was originally known as Hindustan Twyfords, but later changed its name to HSIL Ltd. in 2009. Second Complainant, Somany Home Innovation Limited, was incorporated in 2017. It manufactures and sells, among other goods, air and water purifiers, water heaters, air coolers. Like Second Complainant, Third Complainant, Brilloca Ltd, results from the split of First Complainant.

Having detected the registration of the domain names <hsil.com> registered on November 16, 1999 and <shil.com> on December 9, 1999, Complainants filed a complaint with the WIPO Arbitration and Mediation Center to request the transfer of the domain names.

Respondent is a UK registered company, established on October 7, 1998, which provides web development services to help small businesses gain visibility on the Internet, initially focusing on the health club and leisure equipment market. In addition to the main site « health-club.net », Respondent has registered a number of short acronymic domain names.

First Complainant owns trademarks for the sign « HSIL », the first of which dates from 2004. Complainants further argue that Somany Home Innovation is widely known by the sign « SHIL », the acronym that corresponds to its corporate name.

First and foremost, the panelist notes that the applicants have not submitted any evidence showing the use of the sign « SHIL » to the point of making it a distinctive identifier for their benefit. Therefore, the latter considers that they are in default concerning the proof of likelihood of confusion between the <shil.com> domain name and an earlier trademark in which they potentially have rights. On the other hand, the likelihood of confusion was recognized for the name <hsil.com>.

Then, regarding the issue of legitimate interest and/or rights in the domain names, the panelist takes into account the fact that Respondent registered the disputed domain names in 1999, before the alleged filing and use of Complainants’ « HSIL » and « SHIL » marks. As opposed to Complainants, Respondent has provided evidence to support its claims that the names were used as acronyms for « Sports / Health in London » and « Health / Sports in London ».

Besides, the disputed domain names were registered in 1999, many years before the filing of the HSIL marks and the registration of domain names containing « HSIL ». In addition, the Complainants have no trademark rights for the sign « SHIL ».

Also, Respondent has demonstrated a use of the disputed domain names in connection to a bona fide offering of goods and services.

The complaint is therefore dismissed.

In addition, the panelist found that the complaint constituted reverse domain name hijacking, an attempt to obtain a domain name by artificially proving infringement.

Complainants, who are represented by counsel, should have anticipated the weakness of their argument and the fact that the acronyms « Hsil » and « Shil » could not refer exclusively to them, as alleged in the complaint without any evidence.

The panelist also notes that Complainants tried to make it look like trademarks were rejected in India because of the « well-known status and enormous goodwill » acquired by their earlier marks. This, despite the fact that the defendant has proven that third parties have been able to obtain registration of trademarks for the sign « SHIL » in India.

The panelist also targets Complainants’ representative and denounces an « unfamiliarity with the UDRP » and raises the fact that the latter has listed the registrar as respondent simply because it had allowed the registration of an available domain name, even though it is not in its power to decide whether or not to allow a registration.

Source: WIPO, Arbitration and Mediation Center, April 4, 2021, Case No. D2020-3416, HSIL Limited, Somany Home Innovation Limited v. SHIL Ltd, Brilloca Limited v. GOTW Hostmaster, Get on The Web Limited, India

Written by Dreyfus06/07/2021

The Public Interest Registry (PIR), registry for the .org top-level domain, launched the domain name system Abuse Institute on February 17, 2020. The purpose is to help protect Internet users from the threat of domain name system abuse.

The institute’s mission includes helping to identify and report DNS abuse, establishing best practices in the area of domain name system abuse and funding domain name system research.

The Institute’s activities cover three main areas:

– Innovation: Developing best practices for registries and registrars and funding research on cyber security and domain name system abuse;

– Education: Through the development of a library of available information and practices;

– Collaboration: The Institute will operate as a networking forum and sharing centre for stakeholders interested in these issues.

A hotline has also been created to assist registries and registrars with questions about DNS abuse.

Sources :

https://dnsabuseinstitute.org/about-the-dns-abuse-institute/

Written by Dreyfus15/06/2021

The protection of intangible assets as well as the efficient management of zombie trademarks or patents portfolio contribute to the proper development of a company and its business.

Building a reputation is the very goal of any brand. This reputation is normally attached in law to the sign and to the company that filed and operates it. However, in the context of zombie trademarks, the mark does not symbolize the reputation of the current owner but that of the original owner.

Indeed, these zombie trademarks are signs that have been abandoned but still have marketing potential, a reputation.

A zombie trademark presupposes an indisputable relinquishment, that is to say an abandonment both in fact and legally. It then falls into the public domain.

As long as a brand continues to be used and is renewed every ten years, it can exist perpetually, contrary to patents and the author’s economic rights. However, sometimes a company discontinues the use of some of these signs.

This abandonment can occur any time, whether while the filing is still under review or even when the sign has been in use for a long time. In terms of non-use, a sign is abandoned when a holder stops using it without the intention of resuming its operation, for five consecutive years according to Article L 714-5 of the French Code of Intellectual Property.

Although perpetually renewable, in practice the vast majority of brands have a limited lifespan. They are born and they die. However, it happens that some experience a different fate. They are resurrected.

As we can see with the zombie trademarks, abandonment doesn’t have to be permanent.

A company that has given up its rights to a trademark cannot normally prevent a newcomer from bringing a trademark “back from the dead”. Indeed, the disputed sign has returned to the public domain, which theoretically allows anyone to be able to dispose of it freely.

An abandoned trademark is in principle available to everyone.

In France, it is possible to take action against a so-called deceptive brand. Article L. 711-3 c) of the French Intellectual Property Code provides that signs “likely to deceive the public, in particular as to the nature, quality or geographical origin of the product or service” cannot be adopted as a trademark. The former owner also sometimes has the opportunity to initiate unfair and parasitic competition claims.

Resurrecting a brand can thus be of major asset for a company wishing to take advantage of the notoriety of a distinctive sign that has returned to the public domain. However, some of these marks are not legally neither quite dead, nor quite alive, and it is advisable to be very careful, given that the case law is still rare and uncertain on this subject.

Dreyfus is experienced in anticipating, securing and optimizing IP portfolios, which ultimately adds value to our clients’ businesses.

In order to offer our clients a unique expertise, necessary for the exploitation of intangible assets, we keep you informed about intellectual property and digital economy issues with our articles written by Dreyfus’ legal team.

Written by Dreyfus07/06/2021

On April 1, 2020, a new trademark action nullity or revocation procedure entered into force, with the PACTE law.

This law, transposing European Directive 2015/2436 commonly known as the “Trademark Package”, establishes a new administrative action for trademark invalidity before the National Institute of Intellectual Property (“INPI”).

Since April 2020, it is possible to bring an action for nullity or revocation of a trademark before the INPI, a competence so far reserved for the courts.

The INPI’s e-procedures portal now makes it possible to introduce trademark invalidity or revocation requests. These new provisions entered into force with the PACTE law on April 1, 2020.

The procedure is instructed at the INPI by a team of specialized lawyers. It potentially makes unused trademarks available for new actors to use them, and enables to remove invalid trademarks or trademarks contrary to public order.

Applications for nullity or revocation of a trademark are only made electronically through a simple and fast tool, including online help and a secure payment area.

This administrative procedure replaces the procedure for contesting a trademark in court, which remains possible in certain specific cases, such as for infringement actions.

Who can request the invalidity of the trademark?

In the past, it was necessary to justify an interest in taking action to request the invalidity of a trademark. This interest in acting could, moreover, be strictly assessed.

From now on, when the request is based on an absolute ground of nullity, it is no longer necessary to prove an interest in bringing proceedings.

Absolute grounds for nullity relate to the intrinsic value of the trademark. For example, if the trademark is descriptive of the products it designates (such as “white chocolate” for … white chocolate), then any person can request that it be void, without justifying any damage that would be specific to them.

What are the characteristics of the procedure?

The procedure for nullity or revocation of a trademark opened before the INPI is a written and exclusively electronic procedure, accessible via the INPI e-procedures portal.

This procedure is subject to the adversarial principle, allowing the parties to exchange and confront their arguments several times throughout the procedure. The duration of the procedure is therefore dependent on the will of the parties, up to three contradictory written exchanges can be organized.

Finally, said procedure allows the presentation of oral observations. This hearing, at the request of one of the parties or the INPI, is organized at the end of the written exchanges.

Can we appeal the decision?

The decision is subject to appeal before a court, the appeal being devolutive and suspensive.

The decision of the INPI, like a court decision, can be appealed to the Court of Appeal of the applicant’s domicile.

The Parties will have one month to file an appeal, by electronic means, upon notification of the INPI decision. Some mandatory information are required, otherwise the claim could be deemed inadmissible.

This appeal has a suspensive but also a devolutive effect, which means that the judges will have the obligation to retry the case in its entirety.

During the appeal process, the Parties have three months to hand in their submissions together with all of their substantive claims.

If necessary, a cassation appeal may be lodged subsequently, by the director of the INPI or the Parties.

What is the current state of this new procedure?

This new procedure made it possible to reduce a disparity that existed between France and the European Union, since this option was already offered before the European trademark office EUIPO.

Saving time and money for those who introduce the action but at the same time more risk of seeing your brand attacked if it is vulnerable.

The INPI case law databases show that 131 decisions have since been issued on April 1, 2021 ruling on the revocation or maintenance of a mark and 55 on the invalidity of a mark. It takes about six and a half months for a decision to be rendered.

By its simplicity and speed, the new trademark invalidity action procedure before the INPI helps relieve the congestion in the courts. Thus, decisions can be rendered relatively quickly and above all, more actions will be taken thanks to the limited costs of an administrative procedure.

Benefit from the new nullity and revocation proceedings before the INPI (French Office), Dreyfus can help you!

In order to offer our clients a unique expertise, necessary for the exploitation of intangible assets, we keep you informed about intellectual property and digital economy issues through articles written by Dreyfus’ legal team.

Written by Dreyfus28/05/2021

Visual Merchandising (VM) represents all store layout techniques. It is the art of implementing the identity dimension through scenarization of points of sale.

The term Visual Merchandising is born in the United States in the 1950s with the rise of art in business. Andy Warhol made the first storefronts in New York. After the years of the Depression, it was necessary to boost the economy with eye-catching storefronts.

The industry is branded, every brand is unique and represents your business in the market.

It is the art of implementing the identity dimension of a store through a scenarization of spaces. It is a true creation of the company which displays its own identity in its store.

Visual merchandising makes it possible to reconcile commercial efficiency, aesthetics and enhancement of the image of the brand in order to attract customers and retain them. There are different channels to seek legal protection of your investments in visual merchandising.

How to protect store layout -Visual Merchandising with copyright law?

Interior design is likely to be protected by copyright, provided that the criteria of form and originality are met! In the “Ladurée” case, the Paris Court of Appeal acknowledged the originality of the layout: “The elements and spaces created bore the imprint of the author’s personality and in the choice of style, colors and decoration the personality of the author was reflected”.

How to protect store layout -Visual Merchandising with trademark law?

To be protected, a trademark must be distinctive, lawful and available. Thus, the company Apple Inc was able to obtain the registration of its sales spaces as a three-dimensional trademark.

How to protect store layout -Visual Merchandising with unfair competition and free-riding ?

The main act of unfair competition potentially occurring in visual merchandising is confusion / imitation: causing, in the mind of the customer, an assimilation or a similarity between two companies or between their products and services.

In the Zadig Voltaire v. Bérénice case, the company Zadig France based its claim to protect the fittings of its stores on unfair competition.

Parasitism refers to “the set of behaviors by which an economic agent interferes in the wake of another in order to profit, without investing anything, whether its efforts or its know-how”.

What precautions should you take to protect your IP rights?

To protect your IP rights, it is paramount to take several precautions:

* Ensure that confidentiality clauses are included in your contracts;

* Provide for nondisclosure agreements;

* Be vigilant on the terms of transfer of rights between the creator and the company.

For example, the Court of appeal of Paris considered in the Petit Bateau case that the publication by an employee of photographs revealing the new collection of a clothing brand, even on a private Facebook account, constitutes a serious fault justifying the dismissal.

The Court ruled that the employee at the origin of the publication had committed the serious fault of having communicated to third parties confidential information, while its employment contract expressly provided for an obligation of non-disclosure.

In order to protect your Visual merchandising, it is necessary to establish a protection strategy in the real world and in the digital world.

Why bet on the trademark?

This way you obtain a monopoly, which can be renewable indefinitely and which will constitute the pillar in your marketing and sales strategy.

It is important to register the trademark from the genesis of the project. To that end, it will be necessary to determine a limited but suitable territory. Likewise, it is important to think globally and digitally, and to envision the protection of domain names when registering your trademark.

The domain name is an important asset!

Today, intellectual property of which domain names are a part is identified by insurers as one of the top three risks facing businesses.

Domain names in particular serve as vectors for ever more sophisticated and varied frauds. Managing your brand on the internet is not just about filing and renewing, but also building a strategy.

It is important not only to invest in a protection and preventive defense strategy but also to set up appropriate watch services for your brand.

Finally, you must be particularly vigilant about the use that is made of your brand on the Internet by avoiding “bad buzz” that is harmful to your reputation.

As a creation, Visual merchandising is a real intellectual and economic investment that is essential to protect.

Dreyfus & associés

In order to offer our clients a unique expertise, necessary for the exploitation of intangible assets, we keep you informed about intellectual property and digital economy issues through articles written by Dreyfus’ legal team.

Written by Dreyfus26/05/2021

Digital Services Act : For the first time, a common set of rules on the obligations and liability of intermediary services within the single market will open up new possibilities to provide digital services on the Internet across borders, while ensuring a high level of protection to all users, wherever they live in the European Union.

On December 15, 2020, the European Commission published the Digital Services Act (DSA) and Digital Market Act (DMA) draft regulations, which should allow the implementation of a new regulatory framework, to put an end to the lack of responsability of digital giants.

Said regulations should come into force at the beginning of 2022.

The legal framework relating to digital services on the Internet remained mainly governed by the so-called “Electronic Commerce” directive of June 8, 2000, which for several years has already been met with numerous criticisms on the grounds that it has become obsolete and no longer allows to respond effectively to the new digital challenges and the difficulties posed by the emergence of Web giants, often referred to by the acronym “GAFAM” (for Google, Apple, Facebook, Amazon and Microsoft).

It is in this context that the European Commission officially announced its desire to modernize the regulatory landscape relating to digital platforms on the Internet.

As part of its strategy for a digital single market and alongside the Digital Market Act, the European Commission is proposing a regulation on digital services which will be subject to the ordinary legislative procedure of the European Union.

For Margrethe Vestager, executive vice-president for a Europe adapted to the digital age, “the two proposals serve the same purpose: to ensure that we, as users, have access to a wide choice of products and services online, securely. And that businesses operating in Europe can compete freely and fairly online just as they do offline. They are two sides of the same world. We should be able to shop safely and trust the information we read. Because what is illegal offline is also illegal online”.

According to the press release from the European Commission, the rules provided for by this regulation aim to better protect consumers and their fundamental rights on the Internet, to put in place a solid framework for the transparency of online platforms and clear rules with regard to their responsibility, and finally to foster innovation, growth and competitiveness within the single market.

For the first time, a common set of rules on the obligations and liability of intermediaries within the Single Market will open up new possibilities to provide digital services across borders on the Internet, while ensuring a high level of protection for all users, wherever they live in the European Union.

In order to protect Internet users against the proliferation of illegal content and to adapt the existing legal framework to the emergence of new players on the Internet, public authorities have considered various regulatory strategies.

What is illegal content?

Illegal content is defined as any content that does not comply with European Union law or the national law of a Member State (Article 2, g). In other words, the proposed regulation does not define what is illegal, but refers to European and national laws and regulations.

The directive of June 8, 2000 did not define the concept of illegal content either.

Who will be affected by the new rules?

The proposed regulation aims to apply to any provider of intermediary services, whether established in the EU or not, as long as the recipients of such services are established or reside in the EU.

As for intermediary service providers, the proposal maintains the qualifications as provided for in the directive of 8 June 2000, namely network access and data transmission providers, caching operators and hosting providers.

Tthe proposal introduces a new qualification: online platforms. These are defined as hosting service providers who, at the request of the recipient of the service, store and distribute content to a potentially unlimited number of third parties (Article 2, h). Thus, unlike hosting providers, these players also allow content to be distributed.

Note that the proposed regulation makes a distinction between platforms and “very large” platforms. The latter are those that exceed the threshold of 45 million users per month. Said threshold will be reassessed every six months. Indeed, in addition to a set of common rules applicable to any platform, the proposal provides for a reinforced legal framework for “very large” platforms.

Under the directive of June 8, 2000, the platforms were qualified as hosts on several occasions by the courts. Consequently, they currently benefit from a reduced liability regime provided for in that directive.

Thus, these actors are only responsible with regard to the published content if they have effective knowledge of its illegal nature or if, once they have become aware of it, they have not acted promptly to remove it or to make its access impossible.

Is a new liability regime planned?

The proposed regulation does not introduce a new liability regime. Like hosting providers, the platforms will remain subject to the reduced liability regime provided for by the directive of 8 June 2000. The principle of the prohibition of imposing a general surveillance obligation on hosting providers, including the platforms, is also maintained.

However, compared to hosting providers, platforms will have additional obligations which may vary depending on their size.

In addition, unlike the directive of June 8, 2000, the proposal clarifies that content moderation systems voluntarily put in place by intermediary service providers (hosts, platforms, etc.) do not call into question the benefit of the lightened liability regime provided for in the proposal.

The DSA will thus set up control and monitoring mechanisms. At European level, this will be done through a new, fully independent body: the “European Digital Services Committee” (Art. 47-49) in charge of the committee’s advice and national coordinators.

At the level of the Member States, each will have to designate one or more authorities to ensure the application of the future regulation, including one responsible for the coordination of digital services (Articles 39 to 45). The entire framework will be supplemented by soft law: standards, code of conduct, in particular with regard to online advertising (art. 36).

The DSA is thus presented as an ambitious overhaul of the European legislative framework for digital services on the Internet.

A major project in Brussels, the Digital Services Act (DSA) tends to govern digital technology on the old continent for the years to come. In preparation for many months, the text was officially presented in mid-December 2020 and should enter into force in the next 18 to 24 months after agreement of the Member States and vote of the European Parliament.

In order to offer our clients a unique expertise, necessary for the exploitation of intangible assets, we keep you informed about intellectual property and digital economy issues with our articles written by the Dreyfus’ legal team.

Written by Dreyfus24/05/2021

In a decision handed down on 23 February 2021, the Paris Court of Appeal offers some guidelines in copyright infringement, recalls some key principles and provides an overview of all the usable means of defense.

In this case, the internationally renowned artist Jeff Koons was condemned for copyright infringement, in solidum with his co-defendants and the Court awarded €190 000 in damages. This amount greatly exceeds the amount awarded in the first instance, where the Court ordered Jeff Koons and his co-defendants to pay €135,000 in damages.

Let’s dive into the facts: in 1988, Jeff Koons started his “Banality” series of works, which consisted of creating three-dimensional objects inspired by various images. One of the works in this series, “Fait d’hiver”, shows a young woman in a fishnet corset, lying in the snow, with a small pig wearing a barrel around its neck.

In November 2014, the Centre Pompidou in Paris hosted a retrospective of Koons’ work, in which several works from the “Banality” series were exhibited, two of which have been subject to infringement lawsuits.

One of the two disputed works is “Fait d’hiver”. The designer of a 1989 advertising campaign for the company Naf-Naf, Frank Davidovici, sued the Centre Pompidou and Jeff Koons, among others, for copyright infringement of the campaign. At that time, the Naf-Naf brand’s Autumn/Winter collection was presented to the general public thanks to a photo of a young woman lying on the snow and accompanied by a pig, wearing a collar reminding one of a Saint Bernard dog.

On November 8, 2018, the Paris Court of First Instance found all the defendants guilty of infringing Frank Davidovici’s economic and moral rights. In their appeal, the defendants then set out all the possible defences in the context of such infringement action.

Was the “fair use” exemption a good idea?

Insofar as Jeff Koons’s work “Fait d’hiver” was conceived in the United States, the artist upheld that United-States law should have applied. To strengthen his argument, he relied on the Rome II Regulation, which seeks to preserve the principle of “lex loc protectionis” about “a non-contractual obligation arising from an infringement of an intellectual property right”. It would have been a mistake for Jeff Koons not to try to benefit from this Regulation, notably since American law provides for the “fair use” exception, which allows the exclusive rights of an author to be limited, in particular, to allow his work to be parodied (17 U.S.C. §107). But let’s remember that in 1992, Koons lost an action in which he had claimed this exception. At the time, the Court charged him with copyright infringement for his sculpture “String of Puppies”, which was considered a copy, with a few differences, of a photo taken by the American photographer Art Rogers. The judges deemed that the slight differences between the original photograph and the sculpture were insufficient to rule out infringement.

That said, and thus contradicting one of Jeff Koons’s arguments showing the differences between his “Fait d’hiver” and that of Naf-Naf, the Court of Appeal recalls that infringement is not assessed regarding the differences, but rather in terms of the similarities between the works involved.

Not too much of a surprise, the Paris Court of Appeal found that French law applied to “Fait d’hiver” insofar as the copyright infringement took place in France. Hence, the exception of fair use was not applicable in the present case.

Did Frank Davidovici have legal standing?

Koons then claimed that Frank Davidovici lacked legal standing. Indeed, the original photograph was a collective work and therefore the property of Naf-Naf. The evidence provided by the appellants was not enough for the Court of Appeal, which came to the same conclusions as at first instance, namely that the advertising campaign was not a collective work but a collaborative work, in which Frank Davidovici’s contribution could be “individualized”, and that the other authors had assigned their economic rights to him.

On the French five-year limitation period for infringement

The appellants argued that the work had been created more than 20 years before the subpoena (which took place on January 9, 2015), that it had been exhibited since 1995 in a Parisian gallery. In addition, they claimed that Jeff Koons displayed the reproduction on his website where he described it as ‘unmissable to anyone interested in [his] work’ and by “anyone”. Koons targeted the respondent.

The Court of Appeal rejected this argument since the respondents were criticising the exhibition at the Centre Pompidou, which had begun in November 214, i.e. two months before the subpoena.

Pleas in law based on the freedom of artistic expression and the parody exception

The appellants invoked Article 10 of the ECHR (European Convention for the Protection of Human Rights) to remind them that judges shall not interfere with the artists’ creative freedom or deny their artistic approach. However, this article also states that the artistic freedom of expression includes limitations, and in this case, the latter was legal since it relied upon Article L.122-4 of the French Intellectual Property Code. This article condemns any adaptation or transformation of a work without the consent of its author. Considering that the sculpture uses the dominant elements of the original photograph (the penguins and the pig’s flower necklace being of little relevance) and that it makes no mention of Davidovici’s work, Koons was obviously at fault. There is a very narrow line between inspiration and infringement of earlier work.

The appellants also sought to invoke the parody defence, relying on the definition given by the CJEU (Court of Justice of the European Union) in 2014 in the Deckmyn case, which stated that “the essential characteristics of parody are, first, to evoke an existing work while being noticeably different from it, and, secondly, to constitute an expression of humour or mockery“. The Paris Court of Appeal considered here that the humorous purpose was certainly not obvious, insofar as Koons described his “Fait d’hiver” as being “a work on renewal“, the illustration of the “process of self-acceptance“. Besides, according to the Court, there was a gap of almost 30 years between the advertising campaign and the sculpture. This period was so long that the public might not have perceived the parody.

The boundary between free inspiration and art infringement is very narrow, and sometimes difficult for artists to apprehend. Despite the solid defence strategy of Jeff Koons, one must acknowledge that it is essential to obtain prior approval before creating a work that may infringe the rights of another artist.

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