Intellectual property (IP) litigation is an important tool for protecting and enforcing rights in IP assets, such as patents, trademarks, and copyrights. When an IP owner’s rights are infringed or someone else is using their IP without permission, the owner may have the right to take legal action against the offender. IP litigation can help the owner to protect their valuable IP assets, as well as their reputation and market position.
The benefits of IP litigation include:
1. Protection of IP Rights IP litigation is an effective way to protect your IP assets from infringement. It allows you to enforce your IP rights and stop unauthorized use of your IP, while also deterring future infringers. By filing a lawsuit, you can also seek damages or other relief to make up for any losses caused by the infringement.
2. Strengthening of IP Rights Through the process of IP litigation, you can also strengthen your IP rights. This is because the court may issue an injunction that requires the infringing party to stop using your IP or to pay you for any profits they made from using your IP. This can help to bolster your IP rights and make it more difficult for others to infringe on them in the future.
3. Deterrence of Unlawful Use The threat of IP litigation can also act as a deterrent to others who may be considering using your IP without permission. By demonstrating that you are willing to take legal action to protect your IP rights, you can create a deterrent effect that can help to discourage others from infringing on your IP.
4. Valuable Legal Remedies IP litigation can also provide you with valuable legal remedies that can help you to recover the costs of defending your IP rights. In some cases, you may be able to recover damages or other relief to compensate you for any losses caused by the infringement.
In addition to these benefits, IP litigation can also provide you with a sense of satisfaction that you are protecting your IP rights and standing up for what is right. It can be a powerful way to make sure that your IP is respected and protected. So how can you make the most of IP litigation? Here are a few tips:
1. Understand Your IP Rights The first step to making the most of IP litigation is to understand your IP rights. You should be familiar with the different types of IP protection and what rights they provide, as well as any related laws or regulations. This will help you to identify potential infringements and determine whether or not you have the right to take legal action.
2. Seek Professional Advice It is also important to seek professional advice when it comes to IP litigation. An experienced IP lawyer can provide you with guidance on your legal rights and remedies, as well as help you to pursue a successful legal action.
3. Take Action Quickly Acting quickly is key when it comes to IP litigation. You should take action as soon as you become aware of a potential infringement, as the longer you wait, the more difficult it may be to prove your case.
4. Gather Evidence The more evidence you have to support your case, the stronger it will be. This means gathering evidence such as documents, emails, and other records that show the infringement occurred.
By following these tips, you can make the most of IP litigation and protect your valuable IP rights.
We offer our clients a dedicated and unique experience of expertise that is necessary for the exploitation of intangible assets. We will also endeavor to keep you informed and up-to-date about intellectual property and digital economic issues through our articles and newsletters written by the Dreyfus Legal Team.
The domain name in dispute, <emmanuel-macron.com>, had been registered on the 3rd October 2015, during the time when Emmanuel Macron was still the Minister of Economy, Industry, and Digital Technology. Far from merely imitating the future president’s name, this litigious domain name would redirect to this website, which in fact, was the official website of the adverse polemist candidate during the 2022 presidential election. In this respect, we note that the domain name did not redirect to content related to Mr. Eric Zemmour before 2022 (according to an Archive.org search).
The complainant logically argues in their complaint that they must fulfill the requirements of paragraph 4(a) of the Policy, where it is specified that there are three cumulative elements necessary to claim the transfer of the disputed domain name. These are :
♦ The similarity of the domain with a right of the complainant.
♦ The lack of right or legitimate interest in the domain name on the respondent’s part.
♦ The proof of bad faith registration and use by the registrant.
The interest of this case stands within two main points : the assessment of the similarity between the disputed domain name and the complainant’s prior rights, and the characterization of the registrant’s legitimate interest.
The complainant presents his arguments based on the existence of non-registered rights to the trademark “EMMANUEL MACRON”, a concept no longer existing under French law (except for well-known trademarks). If, by the simple fact that a domain name contains a family name that is not sufficient enough to justify an interest in bringing an action, it is important to note that under the Policy, the Experts’ assessment varies depending on the use of the family name made by the complainant. Here, the domain name was reproducing both the first name and the family name of Mr. Macron.
The Expert considers that when a person’s name is used as a trademark-like identifier in commerce, a complainant may be able to establish unregistered rights from that name to succeed in the UDRP proceedings. In this case, the Expert explains and outlines that the complainant’s use of the name “Emmanuel Macron” is not limited to his political activities but also extends to a commercial use being in this case, the publication and sale of books. Therefore, from the commercial use of his name, the complainant satisfies the requirements of the Expert. The Expert in retrospect acknowledges him as holding a non-registered trademark right. Therefore, the identity of the signs in comparison is established.
As trademark specialists, we would have appreciated a more puristic demonstration. In France, trademark rights cannot be acquired through simple use without registration (except for well known trademarks). In this case, it was up to the complainant to demonstrate that he had acquired trademark rights under Common Law or that the name “EMMANUEL MACRON” was a well-known trademark for certain goods and/or services.
We assume that the case was urgent and that the Expert wanted to do the right thing in this unacceptable situation. The complainant was fortunate that the case was assigned to an Expert who wanted to achieve a fair decision at the expense of trademark laws.
The Expert then raises the question of legitimate non-commercial or fair use of the domain name, according to paragraph 4(c)(iii) of the Policy.
In this case, the disputed domain name, redirects to the website of another opposing political figure. Therefore, the use of this domain name does not seem commercial and therefore, could more likely fall into the scope being freedom of speech.
However, previous experts have ruled that the right to legitimate criticism does not necessarily extend to the registration or use of a domain name which is identical to a trademark or a right, when it could create a risk of confusion through impersonation. Therefore, the use of the name EMMANUEL MACRON to redirect to his opponent’s website, Eric Zemmour, would incur a risk of implicit affiliation with the complainant. This would also constitute, on the part of the respondent, an attempt to misleadingly divert Internet users, especially since the respondent cannot claim to be known or be recognized under the name “EMMANUEL MACRON”.
As a result, and according to paragraph 4 (c) (iii) of the Policy, the Expert has determined and decided that it cannot therefore, be considered as a legitimate non-commercial or fair use status. In conclusion, the registration and use in bad faith were also acknowledged for the same reasons. As the domain name was registered at the end of 2015, the panel observed that the complainant had already acquired significant notoriety as a public figure in France. Moreover, the redirection to the website of a political opponent was likely to mislead Internet users and disrupt the complainant’s activities.
In retrospect, this case could have been subject to much harsher and serious consequences, as the intent seemed to take the form of manipulating an electorate in the run up to the presidential election, rather than taking advantage for commercial purposes.
When changing Facebook to Meta, Mark Zuckerberg tried to justify Meta as the future. The metaverse is indeed a reality for millions of online players, a place to meet, interact, and create in this new world.
There is no sole definition of what metaverse is. However, it can generally be defined as a 3D immersive world, in which individuals can interact through the use of Avatars.
Metaverse is a promising technology with a possibly bright future. In fact, as an immersive world, users can do everything they do in the real world. Since this new technology is winning over millions of users, scores of industries, and companies are beginning to enter this world where they can extend and offer their products and services.
One of the industries that has benefited the most from this new technology is the luxury industry. During the Covid 19 pandemic businesses were severely disrupted.
The metaverse began to appear as a very attractive alternative for companies to continue to exist and have a presence in the marketplace. Many luxury houses have adopted a presence and entered the metaverse where they are able to offer a full immersion of styles, clothes, accessories and peripherals to Avatars. The industry has even started to conduct fashion shows with this new environment. A Metaverse Fashion Week was even created. Besides, the perk of digital fashion is that it allows to create designs which could not exist in the real world, due to technical constraints.
These digital clothes can be sold as NFTs and they can broaden the public of a luxury house, which until now could only touch the masses through more affordable goods such as perfumes and cosmetics. These houses are able – from now on – to attract them with virtual clothes.
With this change, and with the potential in this new world, there are legal issues arising. In fact, we can confirm that there is most definitely a grey area when it comes to this virtual world, especially due to the fact that rules and legal frameworks have not yet been fully developed and adapted to this world. One could even wonder whether specific legal rules should apply to the metaverse.
These questions are all the more relevant for companies to consider seriously considering that Offices have not yet brought clear and precise responses. The metaverse therefore, remains a grey legal world, where enforcing intellectual property rights is an uphill struggle.
Here, we will focus on the questions connected to protection of designs in the metaverse.
The European Intellectual Property Office (EUIPO) has been looking at the metaverse and the issues it raises. In its webinar of September 13, 2022 “Trademarks and Designs in the metaverse”, the EUIPO raises some legal issues that trademarks and designs are facing in the midst of the metaverse.
1. The use of designs in the metaverse
Registering the feature of a product is all the more important for some individuals or companies. When an individual or company is granted design protection, it obtains a monopoly on the exploitation of the design.
This is explained in Article 19 of the Council Regulation (EC) on Community designs which concludes “a registered Community design shall confer on its holder the exclusive right to use it and to prevent any third party not having his consent from using it. The aforementioned use shall cover, in particular, the making, offering, putting on the market, importing, exporting or using of a product in which the design is incorporated or to which it is applied, or stocking such a product for those purposes”.
The EUIPO noted that the term “use” is understood in a broad sense. Therefore, it can include the use of a product on the Internet and thus, in the metaverse. This makes sense since the metaverse is a new “market” for business.
2. The availability of unregistered designs in the metaverse
For a design to be protected, it is essential that it meets the condition of novelty.
Under both European and French law, a design is considered to be new if, at the date of filing of the application for registration or at the date of ownership claimed, no design has been disclosed. According to article 11 (2) of the Council Regulation (EC) on Community designs “a design shall be deemed to have been made available to the public within the Community if it has been published, exhibited, used in trade or otherwise disclosed in such a way that, in the normal course of business, these events could reasonably have become known to the circles specialized in the sector concerned, operating within the Community. The design shall not, however, be deemed to have been made available to the public for the sole reason that it has been disclosed to a third person under explicit or implicit conditions of confidentiality”.
When a luxury house suggests new designs on the metaverse, is it disclosure ?
From a certain perspective, metaverse is a world without any borders where individuals can have access to a bunch of different goods or services.
Consequently, when a company or an individual publishes or exposes a design in the metaverse, the notion of novelty is undermined. So far, there has been no clear answer concerning this question. This question also induces another one: does the uploading of new creations in the metaverse give rise to unregistered design rights in certain territories, such as the United Kingdom?
3. Protection of designs in the virtual world
The last issue raised by the EUIPO concerns the protection of designs in the virtual world.
In fact, one of issues that may be considered is whether products in the metaverse meet the same definition as a product in the real world.
Article 3 of the Council Regulation (EC) on Community designs enounces that a “product means any industrial or handicraft item, including inter alia parts intended to be assembled into a complex product, packaging, get-up, graphic symbols and typographic typefaces, but excluding computer programs”.
A handicraft item is a product made in one-off pieces or in a small series of pieces. It requires the knowledge and skill of one or more craftsmen.
Therefore, some will argue that a product in the metaverse cannot be considered as a handicraft or industrial product.
The EUIPO’s response on this issue does not provide any clear answer due to the lack of case law on the matter. As a matter of fact, it is difficult to say that digital designs are industrial or handicraft items. Nonetheless, the EUIPO accepts digital designs, which are generally classified in class 14-04 of the Locarno classification (such as “icons (for computers)”). Hence, we could completely envision the extension of this class or alternatively, the possibility to add the virtual version of goods in their traditional class (such as class 2 for clothing).
The metaverse is the technology of the moment. However, it raises numerous questions, particularly in relation to designs as to the use of products, their availability and protection within the metaverse. Although the EUIPO gave us some answers as to the use of a product within the metaverse, most of the answers will come with case law.
Over the past decade, the architecture, engineering, construction and Operations (AECO) industry has undergone several developments, particularly in the area of information technology. Building Information Modelling (BIM) is now globally considered a better solution to enormous building problems, which made a huge effect on the building and construction industry. The industry is facing a practical challenge in protecting design when conflict arises between owner’s and architect’s proprietary rights.
There was a time when pencil, paper and complex drawing were the base of construction planning, creating a tiring process with lots of loopholes. However, things have changed. It is now all about Building Information Modelling (BIM) which has been part of the construction industry for some time now. It connects the AECO professionals to design, build and operate infrastructure more efficiently. It is more than just 2D or 3D modelling. It is the process of designing a building collaboratively using one cohort system of computer models rather than as a separate set of drawings.
So, what does make BIM so exciting?
It provides insights into design constructability, reduces errors, and improves the efficiency and effectiveness of the construction phase. It can help owners in predictive maintenance, asset tracking and facilities management for future changes and renovation work. It does not solely refer to buildings, but to all sectors that have to do with construction, including roads, railways, utilities, bridges, tunnels, structures, architecture, topography, etc. BIM can be classified into different levels.
Where does intellectual property come into this conversation?
Let’s take a situation- an architect draws a design plan for the construction of a cafeteria. The contractor executes the work as per plan. However, the owner decides to reuse the design with some small changes for a second cafeteria. In such a case, apart from monetary consideration for services of design, does the architect have any other rights? Can he stop the owner from making changes to the design suggested by him? The answer to all such questions lies in Copyright and Design Law.
BIM models created in the tendering process before the award of the contract will not usually be registered. Therefore, BIM models cannot be protected by Design Law. Article 10 of Directive 98/71/EC, provides that the protection of designs is subject to their registration. However, unregistered designs can be covered by copyright under the concept of artistic work although EU Member States differ in how national copyright law protects unregistered designs. For instance, the French Intellectual Property Code (Code de la propriété intellectuelle) article L112-2.7, and the Danish Consolidated Act on Copyright 2014, Consolidated Act No 1144 of 23 October 2014 (Bekendtgørelse af lov om ophavsret (LBK nr 1144 of 23/10/2014)) in section 1.1, all list works of architecture under copyright law.
Determining the ownership of IP rights over the BIM model and its elements is necessary to determine the lawful exercise of ownership. Generally, an owner of a model is granted exclusive right regarding the use of Intellectual Property, and consequently to copy and disclose it as it wishes. In BIM Level 3, however, the authors of the model are regularly indistinguishable. However, if the contracting authorities are services of design, does the architect have any other rights ? Can he stop the owner from making changes to the design suggested by him ? The answer to all such questions lies in Copyright and Design Law.
BIM models created in the tendering process before the award of the contract will not usually be registered. Therefore, BIM models cannot be protected by Design Law. Article 10 of Directive 98/71/EC, provides that the protection of designs is subject to their registration. However, unregistered designs can be covered by copyright under the concept of artistic work although EU Member States differ in how national copyright law protects unregistered designs. For instance, the French Intellectual Property Code (Code de la propriété intellectuelle) article L112-2.7, and the Danish Consolidated Act on Copyright 2014, Consolidated Act No 1144 of 23 October 2014 (Bekendtgørelse af lov om ophavsret (LBK nr 1144 of 23/10/2014)) in section 1.1, all list works of architecture under copyright law.
Determining the ownership of IP rights over the BIM model and its elements is necessary to determine the lawful exercise of ownership. Generally, an owner of a model is granted exclusive right regarding the use of Intellectual Property, and consequently to copy and disclose it as it wishes. In BIM Level 3, however, the authors of the model are regularly indistinguishable. However, if the contracting authorities are to be granted ownership of a BIM model jointly with a tenderer or winner, exercising their right by disclosing it to a third party would be contrary to the interest of the other joint owner. Therefore, the French, German and Danish legislatures grant joint ownership of jointly developed BIM models and regulate in their copyright laws the right of the owners in exercising ownership rights.
In this regard, the French Intellectual Property Code Article L.113-3 provides:
‘The collaborative work is the common property of the co-authors. The co-authors must exercise their rights by an agreement. In the event of disagreement, it is for the civil jurisdiction to rule.’
The developers of a BIM model in a tendering process will be the joint owners of the model and the exercise of their rights is governed by the copyright law of the relevant EU Member State. Since the exercise of its ownership rights by each owner can potentially conflict with the interests of another owner, such exercise would generally only be permitted with the consent of the other owner(s). Therefore, the contracting authorities would not have the right to disclose the BIM model to third parties without the prior consent of the tenderer with whom they developed the BIM model.
The possibilities of BIM are endless, the trend in the construction industry is, and when there is something new, people immediately want to assign more risk to it. Thus, companies/individuals have Thus, companies/individuals have started getting the intellectual property right registered during the initial stage of a project.
Science and technology are developing faster than intellectual property legislation. As a result, previously unknown products of intellectual activity are regulated by general rules. While working and exchanging digital data on a collaborative platform can cause problems related to intellectual property such as if a copyright violation of models and intellectual property enters the court process, it poses a great financial risk and can cause project delays that will result in its loss. Before a project is implemented, there needs to be a clear understanding not only of who owns the model but also of who is responsible for the model. Then, we must consider which actors have the potential to retain the collaborative product for its sustainability. Therefore, it is necessary to conduct a review and synthesis of the related studies to identify the model ownership and intellectual property rights.
Off-Chain NFTs are the most common NFTs, as they are cheaper, but the legal protection behind them is much weaker and the risks associated with ownership of the NFT much greater.
For some time now, companies have been launching NFT collections, a move that follows on from their social media presence, in order to establish a full online presence beyond the traditional website operation. However, establishing a Web3 presence is not as clear-cut as it sounds, and brands may take legal risks especially, not knowing what they are actually offering for sale on the blockchain. Thus, legal advice by trademark attorneys and lawyers specialised in NFTs should not be considered secondary, as it helps to avoid unpleasant surprises as to what is being offered for sale, once the NFT is presented on a platform.
What are NFTs ?
NFTs, or Non-Fungible Tokens, are tokens with a unique identifier and metadata operating on a blockchain. There are two types of NFT, the main difference being the nature of their smart contract.
On-chain NFTs are tokens written entirely on the blockchain: both the metadata and the accompanying smart contract exist on the blockchain. It is said that NFTs live and breathe on the blockchain.
On the other side, off-chain NFTs are not stored on the blockchain. Several options then exist to store the NFT off-chain, such as storage on a cloud (Google Cloud, iCloud, etc.), or storage on a centralized hardware server. Cloud storage is the simplest and cheapest, while physical servers are expensive to purchase, operate and maintain. The most common storage method, by far, is IPFS storage. IPFS is a more secure method of data storage, using a distributed and decentralised peer-to-peer storage network. The NFT thus includes, for an artwork for example, information about the title of the work, the original author, etc., as well as a URL link to a location on the IPFS system where the artwork is usually stored.
The hidden legal risks behind the use of Off-Chain NFTs?
There is an obvious reason behind the preferential use of Off-Chain NFTs over On-Chain NFTs. In fact, a file bigger than a few bytes cannot be kept on the blockchain itself since storing even a small image file would cost tens of thousands of dollars in gas. Thus, 95% of NFTs in circulation are Off-Chains NFTs, which are not integrated on the blockchain: only their Smart Contract is. In this contract, the location of the asset will refer to an address external to the blockchain, but this location of the asset in an external server is not without consequences.
There are truly legal risks attached to such use, which are not obvious to the general public. It is therefore necessary to seek the advice of a legal expert, trademark attorney or lawyers specialised in NFTs to understand the consequences of creating an Off-Chain NFT.
Firstly, the Cloud remains a fairly hackable object, and centralised off-chain servers can be subject to technical malfunction quite easily. Thus, if there is a disruption to the Off-Chain storage network, the link provided by the Smart Contract written into the blockchain is useless. Off-Chain NFTs therefore leave the door open for the asset to disappear temporarily. In the same sense, storage on a Cloud is also host-dependent, and it is not possible to have full control over what is stored. In the same way, the asset can die, if for example, a brand that hosts the asset outside the Blockchain on a hosting outside the chain, stops paying for that hosting.
We can see that the promise of NFTs of the object’s perennitý over time and its in principle unfalsifiable and non-fungible nature which make it rare, as it is part of a very secure technology is compromised. In fact, if the digital asset is not encrypted on the blockchain it can easily be replaced by another file or worse disappear, which is impossible if the digital object lives completely on the Blockchain.
Finally, from a legal point of view, as long as the NFT is physically hosted on IFPS or on a traditional cloud, the owner of the NFT in reality only owns the address where the asset is located and not the asset itself. More simply, since only the address is mined on the blockchain, it is the only object that really belongs to the NFT buyer. The buyer can then only claim ownership of the GPS coordinates of the asset’s location.
In conclusion, a brand wishing to extend its presence to Web 3 should seek legal advice from a trademark attorney or an attorney specialised in NFTs on the intrinsic quality of both the NFT and the Smart Contract they issue, and take all precautions to protect the assets they own, to avoid these objects disappearing or worse, being modified, due to a lack of precaution.
What are the legal issues involved in using Smart Contracts to issue NFTs?
Smart contracts are contracts stored in a blockchain that are automatically executed when predetermined terms and conditions are met. They are used to automatically execute an agreement so that all participants are certain of the outcome, without the intervention of an intermediary or loss of time. In particular, they are used to generate NFTs on the blockchain, or point to locations where NFTs are stored.
In the context of NFTs, these Smart Contracts contain the metadata of these assets, such as its unique characteristics, the location where the digital copy is stored (On-Chain or Off-Chain), the description of the NFT, and much more. But one point should be kept in mind. In fact, although this technology could represent a real progress in many areas, from a strictly legal point of view, smart contracts are not contracts. They are simply supports for the classic contract, and represent its terms of execution. So the programmer who drafts a smart contract will need legal know-how to support him in drafting certain clauses and inserting mandatory clauses, as well as clauses granting trademark rights in the event of future transfer of the trademark. Simply put, a smart contract will have no legal value if and only if it is not accompanied by a classic contract concluded in due form.
It will therefore be important for a brand to establish whether it is feasible to move towards On-Chain NFTs, which although more expensive, offer the owner full protection on the Blockchain with the certificate and the object itself permanently engraved on the chain and the guarantee of a much more substantial title. The right to claim ownership must cover the asset in question to the fullest extent possible, and a brand that establishes an Off-Chain NFT without seeking legal advice may find itself facing problems as to the actual ownership of the NFT held.
In any case, the advice of a trademark attorney or an attorney specialised in NFTs on the drafting of the smart contract and their valuable assistance even before launching an NFT collection should not be overlooked to avoid unpleasant surprises.
Just like the Internet at the end of the last century, NFT domain names have seemed to gain popularity among the general public as many people are considering investing in various blockchains. As a new tech tool, the fees that accompany the registration of a domain name on certain platforms can pose a major obstacle for any project to register a Web3.0 domain name. A sudden drop in Ethereum ‘Gas’ fees on the first weekend of July illustrated the public’s enthusiasm for Web 3.0.
What is the place of domain names in Web 3.0?
Transactions on blockchains are now seen as a potential solution to the middlemen of common real-world transactions, who take a commission for every money transfer. NFT marketplaces such as Opensea have recently become more popular for places to trade and sell NFT domain names.
Transactions on Web 3.0 still have a cost. In fact, miners are being paid for their role in validating transactions that circulate within the blockchain. This validation process requires solving complex mathematical problems, and the miner who solves it first is rewarded with a remuneration based on the transaction fees (called Gas fee) paid by the users responsible for the transaction. Thus, before an NFT domain name can be used, first it must be transferred to the blockchain and it is during this transfer that the transaction fee must be paid to the blockchain operator.
A long-standing problem with the Ethereum ecosystem, and its main obstacle to attracting the general public, is often attributed to extremely high transaction fees. Notably, in January 2021, Ethereum’s Gas fees jumped due to the enthusiasm around NFTs and decentralised finance. For example, between January 2021 and May 2022, the average Gas cost required by Ethereum was around $40 per transaction, with a peak of $196 recorded on May 1st, 2022. As a result, many users had chosen to abandon Ethereum in favour of blockchains with significantly lower fees such as Solana or Avalanche.
What about the latest notable events on the Ethereum blockchain?
In the first week of July, an unexpected phenomenon was observed on the Ethereum platform: the dashboard of the Ethereum Name Service, the decentralised autonomous organisation that runs the service, showed an increase of almost 200% in .eth domain name registrations between the 2nd and 3rd of July. The following week, the ENS platform recorded more than 100,000 registrations. This astonishing increase illustrates the growing interest of the general public in Web 3.0 registrations. The ENS platform had already been gaining popularity since April, when holders of certain categories of domain names started to form clubs. One example is the formation of the 10K club for owners of ENS domains consisting of numbers between 0 and 9999. As a result, in May, a record was reached with 365,652 new Ethereum domain name registrations, and the 122,000 new registrations in June brought in some $6.6 million.
Alongside this surge in domain name registrations, the second largest sale on the ENS platform was recorded on July 3rd, for the domain name “000.eth” which sold for ETH 300 (around $320,000 at the time of sale). These events had a strong impact as they rocketed Ethereum to the top of the seven-day NFT sales chart on news tracking site Dapp Radar. In addition, social media interactions related to ENS also spiked. According to the crypto-currency social tracking platform, Lunar Crush, engagements with the keyword increased by 108.4% in seven days.
So, what is the explanation for the surge in domain name registrations on the platform?
Just like on Web2.0, owners of “.eth” domain names have to pay a fee on a regular basis, and in addition to this fee, they also pay a Gas fee. So, naturally, when the latter fall, the number of new registrations increases. Experts have claimed that the explosion in demand for ENS domain names is mainly due to the drastic drop in Gas fees seen over the weekend of July 2nd and 3rd, whose value wavered between from $1.67 to $1.97,the lowest levels in over a year.
The question then arises as to the explanation behind this sudden drop in transaction fees on the Ethereum network. The answer is mainly related to the equally large drop in daily transactions. In fact, according to Cointelegraph, daily NFT sales also reached their lowest level in over a year on Saturday. Globally, the NFT ecosystem recorded its worst performance during the month of June 2022, with an overall number of daily sales around 20,000 for an estimated value of $13.8 million.
Any events to watch for regarding the Ethereum blockchain?
The Merge is the name given to a highly anticipated event on the Ethereum blockchain. In fact, on September 19th, the Proof of Work (PoW) model will be replaced by the Proof of Stake, (PoS) which will then become the only way to verify transactions on the Ethereum protocol. The Merge will be one of the most important steps in the history of blockchain technology, because once it is operational, this new process will reduce the energy consumption of node validation operations by 99%, going against one of the main criticisms it has received for being environmentally unfriendly.
In fact, these two main consensus protocols dominate blockchains and ensure synchronisation between all nodes in the network. With Proof-of-Work, miners have to solve a complex mathematical problem requiring significant computing power in order to confirm a transaction. In contrast, Proof-of-Stake is a much less expensive consensus, requiring no energy expenditure and no special hardware. Validating a block simply involves nodes pledging a large amount of cryptocurrency. The larger the amount, the more likely a node will be chosen to update a blockchain’s registry.
Ultimately, this change in the process of validating transactions on the platform could have a significant positive effect on Gas fees. If Gas fees continue to fall, it is likely that the general public will be more inclined to develop a Web 3.0 business and register domain names on blockchains, particularly to extend the protection of various brands.
To find out more about branding processes in Web3 and the issues surrounding this mechanism click here !
As the world becomes progressively dependent on technology, the increasing intertwinement of intellectual property and compliance is evident in the business setting. In the face of unprecedented yet inevitable legal transformations, it is crucial to identify the risks and solutions associated with compliance in both the virtual and real intellectual property world.
How are intellectual propertyand compliance related?
Compliance describes the practice of acting in accordance with a set of laws, regulations, global standards and specific internal policies. As regulatory compliance protects and directs a business’s resources and reputation, intellectual property has become an integral part of the assets worthy of protection. A 11.7% increase in trademark filings at the which is a strong testament to the growing significance of intellectual property. Furthermore, with the digitalisation of business models and assets, these codes of conduct should encompass intellectual property protection as external threats such as counterfeiting and cyber-attacks become ever-more rampant. It was estimated that the value of counterfeiting goods amounted to 2.5% of world trade in 2019, along with a 22% surge in domain name disputes in 2021. According to the European Union’s Cybersecurity Agency (Enisa), the number of cyber-attacks against critical sectors and institutions in Europe has doubled (304 incidents recorded) since the beginning of the pandemic.
The interconnection between the two fields had not always been apparent. Initially, the interactions between intellectual property and compliance departments were rather limited. It was common practice to operate each department separately and to focus on matters concerning their own subject. This isolation was later broken by the Vinci case, which led the way to radical changes in the co-working of the two sectors.
The Vinci case concerned the domain name ‘vinci.group’ for the French concessions and construction company Vinci and another fraudulent domain name which was registered. Although Vinci’s monitoring services detected this fraudulent domain name, due to it being inactive for over three weeks, they did not pursue any actions against it. Once it became active, it was associated with a fake website leading Vinci’s customers to believe it was legitimate. Using a fake email address, the fraudsters sent press releases alerting the customers that the performance and revision of the previous year’s account releases were subject to inaccuracy and fraud. As a result, Vinci’s share price fell by 18%.
This highlights how a company’s reputation and financial well-being can be damaged due to the fraudulent use of a domain name. Since then, market regulators have set up guidelines to mitigate domain name risks to avoid similar situations. The Vinci case illustrates the importance of compliance and intellectual property departments working hand in hand – the ultimate goal being efficient risk management. Such a joint effort facilitates the implementation of preventive
measures and timely retaliation to suspected intellectual property infringements.
As such, companies, regardless of their sectors of expertise, should put in place a compliance program for the identification, protection and maintenance of their intellectual property rights. Such a program should be fully comprehensive, taking into consideration all potential risks, especially those concerning intellectual property. As intellectual property takes on increasing importance, it constitutes substantially heightened risks related to other crimes as well. For instance, money laundering is a common consequence of a primary domain name offence. Criminals camouflage their illicit proceeds through the violation of intellectual property ownership by exploiting its commercially viable and flexible nature. While intangible assets have to be appraised to be accounted for as company capital, the assessments of their economic value are often arbitrary. This creates a loophole which enables infringers to transfer to façade companies abroad to round trip dirty money back to its source masqueraded as legitimate earnings. In this sense, the prevention of the primary intellectual property infringement could likely limit the manifestation of any further illegal activity.
Who is at risk?
Banks, particularly online banking, and insurance firms are most likely to be exposed to such risks. As a matter of fact, any industry that engages in e-commerce can be at risk on Web 2.0 and 3.0. As for counterfeiting, the luxury industry falls victim to intellectual property infringement. Recently, the EUI jointly published a report on intellectual property crime & threat assessment, in which a study estimated that 5.8% of all EU imports in 2019 were pirated and counterfeited goods. These luxury fashion brand counterfeits were worth around EUR 119 billion.
Apart from major corporates, everybody is exposed to such risks as well. The degree of exposure depends on different factors, such as the nature of underlying activities, the size of the organisation, the geographical location and the jurisdictions applied. In a nutshell, companies should direct their efforts towards properly comprehending their intellectual propertyrisks and include them in their compliance setup. It is vital for companies’ intellectual property departments to take the lead and show the compliance departments the risks related to intellectual property, specifically those on the internet.
Impact of Web 3.0 on Intellectual Property and Compliance
Over the past few years, the Web 3.0 decentralisation revolution has emerged from obscurity and gained growing acceptance even in the most conservative of practices. One notable example is the enforcement of contracts. Powered by blockchain technology, a smart contract automatically implements itself once the predetermined conditions come to fruition. The irreversible and autonomous nature of smart contracts could translate to vast applications in the realms of intellectual property. Rather than documenting intellectual property registries in the traditional database, the entire life cycle of an intellectual property right could be recorded effectively in a distributed, immutable ledger. It displays clear, authoritative evidence of the use of intellectual property rights and creatorship, which often comes in handy whenever disputes or revocation proceedings arise. These ledgers also allow for provenance authentication, with which consumers and businesses alike could verify genuine products and distinguish them from counterfeits.
However, as with many new technologies, these benefits do come with risks. The resilience of a smart contract heavily depends upon the coding prowess of its developer and whether due diligence was carried out for these protocols. In 2021, one of the most high-profile heists was pulled off when hackers stole $613 million from Poly Network by exploiting a vulnerability in their smart contracts. As blockchains keep transactions out of reach of governments and courts, the distribution of unauthorized, copyrighted materials to encrypted servers could go untraced and unpunished. Even if these illegalities come to light, an injunction would hardly be enforceable since these programs exist on thousands of machines dispersed everywhere around the world.
Despite the rapidly increasing reliance on Web 3.0 technologies, legislations have yet to stipulate a solid legal framework which provides legal certainty in commercial activities. With traditional intermediaries obliterated, there has to be sufficient legal supervision to ensure the compliance of agreements as in conventional contracts. For this reason, a solid technical team is needed in order to work with the legal department to draft a comprehensive compliance plan. An intellectual property compliance program could effectively prevent commitments to activities which undermine or conflict the company’s intellectual property interests. The construction of a compliance framework around Web 3.0 could be complex, yet also immensely valuable.
Additionally, a three-step process is recommended for the protection and enforcement of intellectual property rights for companies; (I) develop audits (II) carry out prior rights searches and (III) put in place a solid monitoringsystem. This includes the monitoring of blockchain domain names and virtual lands in the metaverse and marketplaces.
Though Web 3.0 could appear challenging and intimidating, one major advantage of blockchain is the traceability of all transactions. Take blockchain domain names as an example. Though it is hard to find the holder of a fraudulent domain name, it is not impossible. Fraudulent domain names can be tracked down through the same blockchain, and a ‘cease and desist’ letter can be sent to try to arrange a transfer, withdrawal or purchase of the blockchain domain.
Web 3.0: a challenge or an opportunity?
It’s both. Web 3.0 offers powerful functionalities relevant to intellectual property rights, for example, the traceability of artistic owners through blockchain technology. Decentralisation is definitely the future of law in terms of ownership rights over virtual assets and personal data, and its protection. Regulation is still needed in order to provide similar protection as in the real world. Web 3.0 should be seen as a double-edged sword where users cannot seek its benefits without being ready to meet its risks and challenges.
Hence, I recommend a three-step strategy to avoid situations like the one encountered in the Vinci case.
First, to conduct prior research among domain names to get an idea of the current situation: identify the legitimate domain names and the fraudulent domain names.
Second, to conduct an audit. The audit allows us to set up the right strategy tailored to the company’s needs. We can then assess the risks and map them out for companies. We also help to put in place a crisis management policy to tackle fake news.
Third, to set up a daily monitoring on domain names and worldwide. This is important because it helps us to identify immediately relevant domain names, analyse them, and assess the level of risk to plan out the right actions.
Finally, I advise a collaboration between intellectual property and compliance departments to tackle the risks. For example, by identifying the key people to contact and having a process in place to secure proofs of a fraud or infringement.
We can also take immediate actions. How do we do so? We start with a technical IP/IT study of the situation. We then set up the right strategy. For example, a request of disclosure of registrant data, blocking a domain, taking down a website and removing e-mail servers. If the domain name is of interest to the company, we initiate action to obtain the amicable transfer of the domain name or we file ADR complaints such as UDRP.
At Dreyfus.io, our experts help with any possible infringements and disputes related to your copyrights, trademarks and NFT projects. Our team would be happy to assist you and answer your questions.
Social media platforms allow their users to create unique usernames which become part of their virtual identity, allowing them to share content and network with other platform users. These accounts become an integral part of our virtual life so many would say they are, in fact, one’s intangible property.
A. Can we know for sure who has right to ownership?
There are different types of social media accounts – personal and business – and although, in most cases they are easily distinguishable, sometimes the lines are blurred especially when employees of companies take on marketing roles.
Personal accounts are straightforward, as long as you read the fine print. You go on vacation, snap a photo and update your status on how your well-deserved vacation is going by uploading it to Instagram or Facebook, a platform you may use to connect with your friends and family. You are the only one who has access to your unique log in details such as username and password, hence a private account.
‘Business’ accounts run by a company’s employees are more complicated, regarding ownership and access to, what would otherwise be, private information. So, who owns business social media accounts accessed and controlled by employees? There are various factors which contribute to making that decision. Ideally, you want to ensure that other platform users recognise the username and associate it with the business, not the employee, like a trademark. The subject of content is still a grey area – is it the intellectual property of the employee or the company itself?
B. The hardships of distinguishing ownership in Hayley Paige v JLM Couture
The former question was the focal topic of discussion in the U.S. case of Hayley Paige Gutman v JLM Couture, where the parties disputed ownership rights of the hybrid Instagram account. Referring to the account as ‘hybrid’ due to the nature of the arguments presented by the parties.
This case was filed as a result of an alleged misuse of the account after Gutman advertised third party products without the approval of her employer, JLM Couture. The defendant, Gutman, argued that due to the style of the posts on her Instagram handle @misshayleypaige, the account was of a private and personal nature, created in personal capacity, even though she has used the account to promote her bridal collection designed for her parent company, JLM Couture.
The appellant, JLM Couture, counter proposed the account being a business account due to the significant percentage (95%) of the content consisting of marketing for the brand, Hayley Paige. The decision favoured the arguments of JLM Couture, stating that Gutman was under a contractual obligation to give her employer access to the account in question since she has signed a contract allowing the company to reserve the right of ownership over any marketing platform and contents published under the name of Hayley Paige or any derivative thereof in relation to her branding. Eventually, multiple negotiations and a restraining order (against Gutman) later, it was agreed that Gutman’s social media account was primarily used for marketing purposes, regardless of the odd personal content here and there, and JLM Couture had the contractual right to access it.
The economic value of a business social media account is often greater than a personal one, especially those which have a large following. Companies rely on these social media platform followings to grow the image and reputation of their establishment. Often, when there are blurred lines regarding the ownership of social media accounts, employees can easily damage a company’s imagine. For instance, in the case of PhoneDog v Kravitz, after the termination of Kravitz’s employment, he used the Twitter account originally created to advertise the services of PhoneDog during his employment, to advertise the services of its competitor. The appellant sued for misappropriation of the account and disclosure of trade secrets. The parties settled and Kravitz continued to use the Twitter account, but the appellant endured financial loss and, without a doubt, a loss of clientele.
A business’ right to ownership of social media accounts used for marketing purposes should be made clear, not only to avoid legal disputes such as those mentioned above but also to protect the integrity and image of the company. Employment contracts should contain social media clauses stating that any content produced and published on the social media account under the management of the business belongs exclusively to the business. So, a business social media account constitutes virtual property so why should you risk losing it?
This Final Report contains certain statements, recommendations, and implementation guidelines, which are defined as “Outputs”. It includes statements about existing policy, recommendations for new policy, and various guidelines on how best to implement it. It addresses some 40 topics that cover all aspects of new gTLD deployment, such as how the deployment should proceed, under what criteria, etc.
On March 24, 2021, this Final Report was transmitted to the ICANN Board of Directors, which must now review the Outputs to determine whether the recommendations are in the best interests of ICANN and its community.
To accomplish this, the Committee requested an “Operational Design Phase (ODP)“, launched in late 2021 and expected to last ten months. It should be transparent to the public and regular reports should be issued . This timeframe could be extended if unforeseen circumstances were to arise.
Therefore, it is very likely that the next round of new gTLDs will be postponed to 2023. All the more so as some of the recommendations raise questions, particularly with regard to the absence of reinforced protection measures against abuse of the Domain Name System (DNS).
Anonymity on the Internet, or the eternal debate about social networks, raises more and more moral and legal questions with an exponential number of disputes brought before the courts.
The popularization of social networks is usually associated with anonymity, and therefore with the eternal debate about the lifting of anonymity in the face of the excesses of certain users. The murder in October 2020 of Professor Samuel Paty, targeted on social networks, or a wave of insults towards a candidate of Miss France at the end of 2020, have re-launched this discussion on the political scene. And especially the desire to add a section to the French legislative proposal “strengthening the respect of the principles of the Republic” to fight against online hate.
As a preliminary, it is interesting to really ask ourselves about anonymity on the Internet: are we really anonymous on the Internet?
The answer is no in most cases. Indeed, when we browse the Internet, an IP address anchors each of our researches. This address makes it possible to identify each device that connects to the Internet, even indicating the geographical location of the person.
This is one of the reasons why it is very difficult to leave no trace of your passage on the Internet, unless you are a very experienced technician.
The difficulty in reality is related to the obstacles linked to the recovery of these data allowing to identify a user, more than to the existence of anonymity stricto sensu. The Internet actors play a preponderant role in the possibility that some users have to hide their identity. This concealment has increased especially with social media.
The position of social networks
Social networks and other platforms argue that they are simply “host” or “technical intermediary” to reject a request to lift anonymity or to delete an account that is the author of contentious content.
Only a court decision can force these platforms to lift anonymity on an account. However, judicial decisions are still discreet. This can be explained on the one hand by the fact that positive law only allows the anonymity of an account to be lifted if the content is clearly illicit. On the other hand, the freedom of expression constitutes an obstacle to the lifting of anonymity.
However, some recent decisions seem to reverse this trend.
French jurisprudence on the move
On February 25, 2021, the Paris Judicial Court (Tribunal judiciaire, Paris, (ord. réf.), February 25, 2021, G. B. c/ Sté Twitter International Company) ordered Twitter to communicate the identification data of a user, in a case against a female Youtuber. Under Article 145 of the French Civil Procedural Code, “if there is a legitimate reason to preserve or establish before any trial the evidence of facts on which the solution of a dispute may depend, legally admissible measures of investigation may be ordered at the request of any interested party, on application or in summary proceedings. The influencer filed a request with the Court for the communication of identification data in parallel with the filing of a criminal complaint for defamation.
This communication of data by hosts is provided for by Article 6-II of the law of June 21, 2004. Indeed, this article provides for an obligation for hosts to hold and retain data allowing the identification of persons who have: “contributed to the creation of the content or of one of the contents of the services for which [they] are a provider”.
The Court granted the applicant’s request, as the existence of a legitimate reason was well established, namely the short duration of the storage of these identification data. The court thus ordered Twitter to disclose the necessary information:
♦ The types of protocols and the IP address used to connect to the platform
♦ The identifier used to create the account
♦ The date the account was created
♦ The first and last names or the company name of the account holder
The question posed to the CJEU, concerns the threshold of seriousness that allows an exception to the GDPR, which protects our personal data, and thus be able to condemn the platform concerned to lift the anonymity on the authors of the contentious content.
The answer of the CJEU, will not come before several months, however it will surely allow to have clearer criteria concerning the balance between the respect of freedom of expression, protection of personal data, and infringement of people.
These decisions could open the way to a more supervised and therefore better regulated anonymity on social networks. A growing body of case law in this area, could encourage the courts to more condemn more easily these platforms, to communicate these identification data in order to punish the illicit content that users publish too easily, taking refuge behind anonymity and freedom of expression.
Dreyfusis at your disposal to assist you in securing these projects.
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Intellectual property (IP) litigation is an important tool for protecting and enforcing rights in IP assets, such as patents, trademarks, and copyrights. When an IP owner’s rights are infringed or someone else is using their IP without permission, the owner may have the right to take legal action against the offender. IP litigation can help the owner to protect their valuable IP assets, as well as their reputation and market position.
When changing Facebook to Meta, Mark Zuckerberg tried to justify Meta as the future. The metaverse is indeed a reality for millions of online players, a place to meet, interact, and create in this new world.
Over the past decade, the architecture, engineering, construction and Operations (AECO) industry has undergone several developments, particularly in the area of 
Off-Chain NFTs are the most common NFTs, as they are cheaper, but the legal protection behind them is much weaker and the risks associated with ownership of the NFT much greater.
Just like the Internet at the end of the last century, NFT domain names have seemed to gain popularity among the general public as many people are considering investing in various blockchains. As a new tech tool, the fees that accompany the registration of a domain name on certain platforms can pose a major obstacle for any project to register a Web3.0 domain name. A sudden drop in Ethereum ‘Gas’ fees on the first weekend of July illustrated the public’s enthusiasm for Web 3.0.
As the world becomes progressively dependent on technology, the increasing intertwinement of intellectual property and compliance is evident in the business setting. In the face of unprecedented yet inevitable legal transformations, it is crucial to identify the risks and solutions associated with compliance in both the virtual and real intellectual property world.
On February 18, 2021, ICANN’s Generic Name Support Organization (gNSO) Board voted to approve the “