Where a trademark lawsuit has to be initiated in case of online sales in the EU?

buy-3692440_960_720.jpgThe European Court has ruled in case C‑172/18 AMS Netve Ltd, Barnett Waddingham Trustees, Mark Crabtree v Heritage Audio SL, Pedro Rodríguez Arribas. This case concerns the territory where a trademark lawsuit has to be initiated in case of online sales. In details:

AMS Neve is a company established in the United Kingdom which manufactures and sells audio equipment. BW Trustees, also established in the United Kingdom, is the trustee of the AMS Neve executive pension scheme. Mr Crabtree is a director of AMS Neve.

Heritage Audio is a company established in Spain which sells and supplies audio equipment. Mr Rodríguez Arribas, who is domiciled in Spain, is the sole director of Heritage Audio.

On 15 October 2015 AMS Neve, BW Trustees and Mr Crabtree brought an action against Heritage Audio and Mr Rodríguez Arribas before the Intellectual Property and Enterprise Court (United Kingdom) claiming infringement of an EU trade mark of which BW Trustees and Mr Crabtree are the proprietors and for the use of which AMS Neve is exclusively licensed.

Their action concerns, in addition, the alleged infringement of two marks registered in the United Kingdom of which BW Trustees and Mr Crabtree are also the proprietors.

The EU trade mark relied on consists of the figure 1073 and was registered for goods within Class 9 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended. The description of the goods covered is in part as follows: ‘sound studio recording, mixing and processing equipment’.

The defendants in the main proceedings are alleged to have offered for sale to consumers in the United Kingdom imitations of goods of AMS Neve bearing a sign that is identical or similar to that EU trade mark and to the national trade marks or referring to that sign, and to have advertised those products.

The applicants in the main proceedings have submitted documents in support of their action, including the contents of the Heritage Audio website and the latter’s Facebook and Twitter accounts, an invoice issued by Heritage Audio to an individual residing in the United Kingdom and correspondence between Heritage Audio and a person established in the United Kingdom concerning possible deliveries of audio equipment.

The applicants in the main proceedings have in particular submitted screenshots from that website on which they claim appeared offers to sell audio equipment bearing a sign identical or similar to that EU trade mark. They have stressed that the offers for sale are worded in English and that a section headed ‘where to buy’ lists distributors established in various countries, including the United Kingdom. Further, they claim that it is apparent from the general sale conditions that Heritage Audio accepts orders from any EU Member State.

The defendants in the main proceedings pleaded that the court before which the action was brought had no jurisdiction.

While the defendants do not deny that Heritage Audio products might have been purchased, in the United Kingdom, through other companies, they assert that they have not, themselves, either advertised in the United Kingdom or made any sales in that Member State. They further assert that they have never appointed a distributor for the United Kingdom. Last, they contend that the content displayed on the Heritage Audio website and on the platforms to which the applicants in the main proceedings refer was, by the time of the period covered by the infringement action, obsolete and ought not therefore to be taken into account.

By judgment of 18 October 2016, the Intellectual Property and Enterprise Court held that it had no jurisdiction to hear the infringement action in so far as that action is based on the EU trade mark at issue.

That court states that the applicants in the main proceedings submitted evidence capable of proving that the Heritage Audio website was directed to, inter alia, the United Kingdom. That court considers, further, that the facts of the dispute before it enable it to find that Mr Rodríguez Arribas is jointly liable for the acts of Heritage Audio and that the courts of the United Kingdom have jurisdiction to hear the case in so far as that dispute concerns the protection of national intellectual property rights.

The Intellectual Property and Enterprise Court considers, on the other hand, that that dispute, in so far as it concerns infringement of the EU trade mark, is subject, in accordance with Article 97(1) of Regulation No 207/2009, to the jurisdiction of the courts of the Member State in whose territory the defendant is domiciled, in this case the Kingdom of Spain. The Intellectual Property and Enterprise Court adds that the jurisdiction of the Spanish courts also stems from Article 97(5) of that regulation, under which infringement actions may also be brought before the courts of the Member State in whose territory the act of infringement has been committed.

As regards the latter provision, the Intellectual Property and Enterprise Court considers that the court which has territorial jurisdiction to hear an action brought by the proprietor of a mark against a third party that has used signs identical or similar to that mark in advertising and offers for sale on a website or on social media platforms is the court with jurisdiction over the place where the third party decided to place that advertising or to offer for sale products on that site or on those platforms and took steps to give effect to that decision.

The applicants in the main proceedings brought an appeal against that judgment before the Court of Appeal (England & Wales) (Civil Division).

The referring court considers that the court of first instance, while referring in its judgment to certain judgments of the Court, such as those of 19 April 2012, Wintersteiger (C‑523/10, EU:C:2012:220), and of 5 June 2014, Coty Germany (C‑360/12, EU:C:2014:1318), misinterpreted those judgments and the case-law of the Court in general.

The referring court is of the opinion that such an interpretation would lead, in essence, to a finding that ‘the Member State in which the act of infringement has been committed’, within the meaning of Article 97(5) of Regulation No 207/2009, is the Member State in which the defendant set up its website and its social media accounts. According to the referring court, it follows, however, from the wording, purpose and context of that provision that the territory of the Member State subject to that provision is that in which the consumers or traders to whom the advertising and offers for sale are directed are resident.

The referring court adds that the Bundesgerichtshof (Federal Court of Justice, Germany), in its ‘Parfummarken’ judgment of 9 November 2017 (I ZR 164/16), held that the interpretation of the wording ‘law of the country in which the act of infringement was committed’, in Article 8(2) of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) (OJ 2007 L 199, p. 40), adopted in the judgment of 27 September 2017, Nintendo (C‑24/16 and C‑25/16, EU:C:2017:724), can be transposed to Article 97(5) of Regulation No 207/2009. However, the referring court has some doubts with regard to that finding of the Bundesgerichtshof.

In those circumstances, the Court of Appeal (England & Wales) (Civil Division) decided to stay proceedings and to refer to the Court the following question for a preliminary ruling, adding in its decision that that question concerns the interpretation of Article 97(5) of Regulation No 207/2009:

‘In circumstances where an undertaking is established and domiciled in Member State A and has taken steps in that territory to advertise and offer for sale goods under a sign identical to an EU trade mark on a website targeted at traders and consumers in Member State B:

(i)  does an EU trade mark court in Member State B have jurisdiction to hear a claim for infringement of the EU trade mark in respect of the advertisement and offer for sale of the goods in that territory?

(ii)  if not, which other criteria are to be taken into account by that EU trade mark court in determining whether it has jurisdiction to hear that claim?

(iii)  in so far as the answer to (ii) requires that EU trade mark court to identify whether the undertaking has taken active steps in Member State B, which criteria are to be taken into account in determining whether the undertaking has taken such active steps?’

The Court’s decision:

Article 97(5) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the [European Union] trade mark must be interpreted as meaning that the proprietor of a European Union trade mark who considers that his rights have been infringed by the use without his consent, by a third party, of a sign identical to that mark in advertising and offers for sale displayed electronically in relation to products that are identical or similar to the goods for which that mark is registered, may bring an infringement action against that third party before a European Union trade mark court of the Member State within which the consumers or traders to whom that advertising and those offers for sale are directed are located, notwithstanding that that third party took decisions and steps in another Member State to bring about that electronic display.

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How a trademark can become a generic term and what is the danger in that regard?

door-green-closed-lock.jpgThe US-based company Safe Skies successfully revoked a European trademark ‘TSA lock’  registered by Travel Sentry for classes:

Class 6:      Metal locks (for luggage).

Class 18:    Bags; backpacks, canvas backpacks, athletics bags, carry-on bags, gym bags, travel bags, beach bags, briefcases, purses, suitcases, trunks, luggage, straps for luggage, waist packs, and wallets.

Class 20:    Non-metal locks (for luggage).

The ground for this revocation was Article 58(1)(b) and (c) EUTMR:

The rights of the proprietor of the EU trade mark shall be declared to be revoked on application to the Office or on the basis of a counterclaim in infringement proceedings:

  • (b) if, in consequence of acts or inactivity of the proprietor, the trademark has become the common name in the trade for a product or service in respect of which it is registered;
  • (c) if, in consequence of the use made of the trademark by the proprietor of the trademark or with his consent in respect of the goods or services for which it is registered, the trademark is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods or services.

According to Safe Skies, this trademark hadn’t been used as a trademark sign but only as a product name. In the case at hand, TSA lock’ was in use for special type of lock for luggage which allows Border Agencies to open it using a universal master key.

EUIPO revoked the trademark dismissing the owner’s arguments that nobody in the EU understands TSA as an abbreviation for Transportation Security Administration.

According to the Office, this is irrelevant because the consumers of this product named it as TSA lock not perceiving it as a trademark sign.

The submitted pieces of evidence weren’t enough to overcome this conclusion.

This case, although rare, is very essential when it comes to trademark protection because it shows clearly what is the danger when one trademark is used as a product name which sometimes is very tempting from marketing point of view.

Source: WIPR.

Poland attacks the new EU Copyright Directive before the EU Court

notebook-614213_960_720.jpgPoland initiated a legal proceeding against the new EU Copyright Directive and in particular against the texts that require automatic filtering of content. According to the complaint:

The Republic of Poland seeks the annulment of Article 17(4)(b) and Article 17(4)(c), in fine (i.e. the part containing the following wording: ‘and made best efforts to prevent their future uploads in accordance with point (b)’) of Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC (OJ EU L 130 of 17.5.2019, p. 92) and an order that the European Parliament and the Council of the European Union are to pay the costs.

In the alternative, should the Court find that the contested provisions cannot be deleted from Article 17 of Directive (EU) 2019/790 without substantively changing the rules contained in the remaining provisions of that article, the Republic of Poland claims that the Court should annul Article 17 of Directive (EU) 2019/790 in its entirety.

The Republic of Poland raises against that the contested provisions of Directive 2019/790 a plea alleging infringement of the right to freedom of expression and information guaranteed by Article 11 of the Charter of Fundamental Rights of the European Union.

The Republic of Poland claims specifically that the imposition on online content-sharing service providers of the obligation to make best efforts to ensure the unavailability of specific works and other subject matter for which the rightholders have provided the service providers with the relevant and necessary information (point (b) of Article 17(4) of Directive 2019/790) and the imposition on online content-sharing service providers of the obligation to make best efforts to prevent the future uploads of protected works or other subject-matter for which the rightsholders have lodged a sufficiently substantiated notice (point (c), in fine, of Article 17(4) of Directive 2019/790) make it necessary for the service providers — in order to avoid liability — to carry out prior automatic verification (filtering) of content uploaded online by users, and therefore make it necessary to introduce preventive control mechanisms. Such mechanisms undermine the essence of the right to freedom of expression and information and do not comply with the requirement that limitations imposed on that right be proportional and necessary.

Why ‘Botanical Origin’ cannot be a European trademark?

water-lily-1857350_960_720The EUIPO Board of Appeal has rules in case R 881/2019-5, which concerns an attempt for registration of a word European trademark for ‘Botanical Origin’ in class 3:

All purpose cleaning preparations for household, commercial, industrial and institutional use; cleaning preparations for toilets, bath tubs, sinks and floors; cleaning preparations for kitchen and bathroom surfaces; disposable wipes impregnated with cleaning compounds for use in bathrooms and kitchens; polishing preparations for kitchen and glassware; oven cleaning preparations; stove-top cleaning preparations; cleaning preparations for vitroceramic and kitchen surfaces; glass and metal cleaning preparations; window cleaning preparations; bleaching preparations and other substances for laundry use, whether in solid, fluid or gel form; laundry preparations; carpet cleaning preparations; decalcifying and descaling preparations for household purposes; fabric softeners; laundry detergents and additives; stain removing preparations; scent boosters; prewash and stain loosening preparations; starch; laundry blue; bleaching preparations and other substances for use in dishwashing; cleaning, polishing, scouring and abrasive preparations; dishwasher cleaners, fresheners and deodorizers; rinsing agents; preparations for cleaning and de-clogging dishwashers; decalcifying and descaling agents for household purposes; dish detergents; all the above-mentioned products with or without disinfecting components; soaps; detergents; rust removers and grease removers; drain and sink unblocking preparations; preparations for prevention of limescale, rust or grease

EUIPO refused to register this sign based on absolute grounds art. 7(1)(b) EUTMR, lack of distinctiveness. The decision was appealed.

The Board of Appeal upheld the initial EUIPO position. The arguments for this is that the expression Botanical Origin would be perceived by the relevant public as information that the goods come from a botanical source and/or contain ingredients that have a plant-based origin.

The applicant argued that the sign is distinctive at least for some of the goods where there is no such connotation.

This was dismissed too. According to the Board, the phrase would be “perceived by the relevant public as only providing promotional information on the nature, purpose, performance and subject matter of the goods and services concerned and not as indicating their [commercial] origin”.

Source: WIPR.

Balsamico and an Italian-German legal conflict

food-3360720_960_720.jpgThe Advocate General of the European Court G. HOGAN has issued his opinion in case C‑432/18 Consorzio Tutela Aceto Balsamico di Modena v BALEMA GmbH. The case concerns the following:

BALEMA GmbH produces vinegar-based products and markets them in the Baden region (Germany). For at least 25 years, it has been selling products under the designations ‘Balsamico’ and ‘Deutscher Balsamico’. The labels on its products bear the legend ‘Theo der Essigbrauer, Holzfassreifung, Deutscher Balsamico traditionell, naturtrüb aus badischen Weinen’ [Theo the vinegar brewer, matured in wooden barrels, German balsamic vinegar, traditional, naturally cloudy, made from Baden wine] or ‘1. Deutsches Essig-Brauhaus, Premium, 1868, Balsamico, Rezeptur No 3’ [first German vinegar brewery, premium, 1868, balsamic, recipe No 3].

It is agreed that BALEMA’s products designated as ‘Balsamico’ are not covered by the registration ‘Aceto Balsamico di Modena (PGI)’ pursuant to Article 1 of and Annex I to Regulation No 583/2009 because they do not fulfill the product specifications contained in Annex II of that regulation.

Consorzio Tutela Aceto Balsamico di Modena (‘the Consorzio’) is a consortium of producers of the products designated by the name ‘Aceto Balsamico di Modena’. It considers that BALEMA’s use of the designation ‘Balsamico’ infringes the protected geographical indication ‘Aceto Balsamico di Modena’. The Consorzio thus served a warning notice on BALEMA. BALEMA, in turn, brought an action in the German courts against the Consorzio seeking a negative declaration to the effect that there had been no trade mark infringement. That action was unsuccessful.

In the appeal on the merits, BALEMA sought a declaration that it is not obliged to refrain from using the designation ‘Balsamico’ for vinegar-based products produced in Germany. The appeal on the merits was upheld as the court considered that the use of the name ‘Balsamico’ in respect of vinegar did not infringe Article 13(1)(b) of Regulation No 1151/2012. According to that court, the protection for the name ‘Aceto Balsamico di Modena’ granted by Regulation No 583/2009 was conferred only on the entire name and not on the non-geographical components of the term as a whole, even if used jointly.

The case was appealed to the referring court.

The referring court considers that the appeal on a point of law will succeed if the names ‘Balsamico’ and ‘Deutscher Balsamico’ used by BALEMA infringe Article 13(1)(a) or (b) of Regulation No 1151/2012. According to that court such a finding would require that the protection of the entire name ‘Aceto Balsamico di Modena’ granted by Article 1 of Regulation No 583/2009 also covers the use of the individual non-geographical components of the term as a whole (‘Aceto’, ‘Balsamico’, ‘Aceto Balsamico’).

The Federal Court of Justice notes that it is clear from the second subparagraph of Article 13(1) of Regulation No 1151/2012 and the case-law of the Court that, pursuant to Article 13(1)(a) or (b) of that regulation, a protected geographical indication that consists of several terms can be protected against not only the use of the entire indication, but also against the use of individual terms of that indication. The second subparagraph of Article 13(1) of Regulation No 1151/2012 governs the specific case in which a protected geographical indication contains within it the name of a product which is considered to be generic. That provision stipulates that the use of that generic name is not to be considered to be contrary to Article 13(1)(a) or (b) of that regulation. The Federal Court of Justice also refers to the fact that the Commission regulation registering the name may restrict the scope of the protection of a protected geographical indication that consists of several terms so that it does not cover the use of individual terms of that indication. In that regard, the fact that an applicant may state that it does not seek protection for all elements of a name shows that the protection granted by its registration can be restricted.

The Federal Court of Justice considers that recitals 3, 5 and 10 of Regulation No 583/2009 militate in favor of a restriction of the scope of protection to the name ‘Aceto Balsamico di Modena’ as a whole, to the exclusion of individual non-geographical components. It also considers that, contrary to the view taken in the appeal on a point of law, the assumption that protection is granted to the name ‘Aceto Balsamico di Modena’ as a whole did not give rise to an inconsistency with the registration of the protected designations of origin ‘Aceto balsamico tradizionale di Modena’ and ‘Aceto balsamico tradizionale di Reggio Emilia’. Contrary to Regulation No 583/2009, the references to a restricted scope of protection in Regulation No 813/2000, which may be attributable to the fact that there was no opposition by Member States pursuant to Article 7 of Council Regulation (EEC) No 2081/92 (now Articles 51 and 52 of Regulation No 1151/2012) in the preceding registration procedure, does not preclude a restriction of the protective effect of the name ‘Aceto Balsamico di Modena’ as a whole.

In those circumstances, the Bundesgerichtshof (Federal Court of Justice) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Does the protection of the entire name “Aceto Balsamico di Modena” extend to the use of the individual non-geographical components of the term as a whole (“Aceto”, “Balsamico”, “Aceto Balsamico”)?’

The Advocate’s position is:

The protection of the entire name ‘Aceto Balsamico di Modena’ under Commission Regulation (EC) No 583/2009 of 3 July 2009 does not extend to the use of the individual common words or non-geographical components, namely, ‘Aceto’, ‘Balsamico’ and ‘Aceto Balsamico’.

Thumb and privacy issues – a European Court’s decision

like-4350896_960_720.jpgThe European Court has ruled in case C‑40/17 Fashion ID GmbH & Co. KG v Verbraucherzentrale NRW eV, interveners: Facebook Ireland Ltd, Landesbeauftragte für Datenschutz und Informationsfreiheit Nordrhein-Westfalen.

This case concerns the following:

Fashion ID, an online clothing retailer, embedded on its website the ‘Like’ social plugin from the social network Facebook (‘the Facebook “Like” button’).

It is apparent from the order for reference that one feature of the internet is that, when a website is visited, the browser allows content from different sources to be displayed. Thus, for example, photos, videos, news and the Facebook ‘Like’ button at issue in the present case can be linked to a website and appear there. If a website operator intends to embed such third-party content, he places a link to the external content on that website. When the browser of a visitor to that website encounters such a link, it requests the content from the third-party provider and adds it to the appearance of the website at the desired place. For this to occur, the browser transmits to the server of the third-party provider the IP address of that visitor’s computer, as well as the browser’s technical data, so that the server can establish the format in which the content is to be delivered to that address. In addition, the browser transmits information relating to the desired content. The operator of a website embedding third-party content onto that website cannot control what data the browser transmits or what the third-party provider does with those data, in particular whether it decides to save and use them.

With regard, in particular, to the Facebook ‘Like’ button, it seems to be apparent from the order for reference that, when a visitor consults the website of Fashion ID, that visitor’s personal data are transmitted to Facebook Ireland as a result of that website including that button. It seems that that transmission occurs without that visitor being aware of it regardless of whether or not he or she is a member of the social network Facebook or has clicked on the Facebook ‘Like’ button.

Verbraucherzentrale NRW, a public-service association tasked with safeguarding the interests of consumers, criticises Fashion ID for transmitting to Facebook Ireland personal data belonging to visitors to its website, first, without their consent and, second, in breach of the duties to inform set out in the provisions relating to the protection of personal data.

Verbraucherzentrale NRW brought legal proceedings for an injunction before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany) against Fashion ID to force it to stop that practice.

By decision of 9 March 2016, the Landgericht Düsseldorf (Regional Court, Düsseldorf) upheld in part the requests made by Verbraucherzentrale NRW, after having found that it has standing to bring proceedings under Paragraph 8(3)(3) of the UWG.

Fashion ID brought an appeal against that decision before the referring court, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf, Germany). Facebook Ireland intervened in that appeal in support of Fashion ID. Verbraucherzentrale NRW brought a cross-appeal seeking an extension of the ruling made against Fashion ID at first instance.

Fashion ID argues before the referring court that the decision of the Landgericht Düsseldorf (Regional Court, Düsseldorf) is incompatible with Directive 95/46.

First, Fashion ID claims that Articles 22 to 24 of that directive envisage granting legal remedies only to data subjects whose personal data are processed and the competent supervising authorities. Consequently, it argues, the action brought by Verbraucherzentrale NRW is inadmissible due to the fact that that association does not have standing to bring or defend legal proceedings under Directive 95/46.

Second, Fashion ID asserts that the Landgericht Düsseldorf (Regional Court, Düsseldorf) erred in finding that it was a controller, within the meaning of Article 2(d) of Directive 95/46, since it has no influence either over the data transmitted by the visitor’s browser from its website or over whether and, where applicable, how Facebook Ireland uses those data.

In the first place, the referring court has doubts whether Directive 95/46 gives public-service associations the right to bring or defend legal proceedings in order to defend the interests of persons who have suffered harm. It takes the view that Article 24 of that directive does not preclude associations from being a party to legal proceedings, since, pursuant to that article, Member States are required to adopt ‘suitable measures’ to ensure the full implementation of that directive. Thus, the referring court concludes that national legislation allowing associations to bring legal proceedings in the interest of consumers may constitute such a ‘suitable measure’.

That court notes, in this regard, that Article 80(2) of Regulation 2016/679, which repealed and replaced Directive 95/46, expressly authorises the bringing of legal proceedings by such an association, which would tend to confirm that the latter directive did not preclude such an action.

Further, that court is uncertain whether the operator of a website, such as Fashion ID, that embeds on that website a social plugin allowing personal data to be collected can be considered to be a controller within the meaning of Article 2(d) of Directive 95/46 despite the latter having no control over the processing of the data transmitted to the provider of that plugin. In this context, the referring court refers to the case that gave rise to the judgment of 5 June 2018, Wirtschaftsakademie Schleswig-Holstein (C‑210/16, EU:C:2018:388), which dealt with a similar question.

In the alternative, in the event that Fashion ID is not to be considered to be a controller, the referring court is uncertain whether that directive exhaustively regulates that notion, such that it precludes national legislation that establishes civil liability for a third party who infringes data protection rights. The referring court asserts that it would be possible to envisage Fashion ID being liable on this basis under national law as a ‘disrupter’ (‘Störer’).

If Fashion ID had to be considered to be a controller or was at least liable as a ‘disrupter’ for any data protection infringements by Facebook Ireland, the referring court is uncertain whether the processing of the personal data at issue in the main proceedings is lawful and whether the duty to inform the data subject under Article 10 of Directive 95/46 rests with Fashion ID or with Facebook Ireland.

Thus, first, with regard to the conditions for the lawfulness of the processing of data as provided for in Article 7(f) of Directive 95/46, the referring court expresses uncertainty as to whether, in a situation such as that at issue in the main proceedings, it is appropriate to take into account the legitimate interest of the operator of the website or that of the provider of the social plugin.

Second, that court is unsure who is required to obtain the consent of and inform the data subjects whose personal data are processed in a situation such as that at issue in the main proceedings. The referring court takes the view that the matter of who is obliged to inform the persons concerned, as provided for in Article 10 of Directive 95/46, is particularly important given that any embedding of third-party content on a website gives rise, in principle, to the processing of personal data, the scope and purpose of which are, however, unknown to the person embedding that content, namely the operator of the website concerned. That operator could not, therefore, provide the information required, to the extent that it is required to, meaning that the imposition of an obligation on the operator to inform the data subjects would, in practice, amount to a prohibition on the embedding of third-party content.

In those circumstances, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Do the rules in Articles 22, 23 and 24 of Directive [95/46] preclude national legislation which, in addition to the powers of intervention conferred on the data-protection authorities and the remedies available to the data subject, grants public-service associations the power to take action against the infringer in the event of an infringement in order to safeguard the interests of consumers?

If Question 1 is answered in the negative:

(2) In a case such as the present one, in which someone has embedded a programming code in his website which causes the user’s browser to request content from a third party and, to this end, transmits personal data to the third party, is the person embedding the content the “controller” within the meaning of Article 2(d) of Directive [95/46] if that person is himself unable to influence this data-processing operation?

(3) If Question 2 is answered in the negative: Is Article 2(d) of Directive [95/46] to be interpreted as meaning that it definitively regulates liability and responsibility in such a way that it precludes civil claims against a third party who, although not a “controller”, nonetheless creates the cause for the processing operation, without influencing it?

(4) Whose “legitimate interests”, in a situation such as the present one, are the decisive ones in the balancing of interests to be undertaken pursuant to Article 7(f) of Directive [95/46]? Is it the interests in embedding third-party content or the interests of the third party?

(5) To whom must the consent to be declared under Articles 7(a) and 2(h) of Directive [95/46] be given in a situation such as that in the present case?

(6) Does the duty to inform under Article 10 of Directive [95/46] also apply in a situation such as that in the present case to the operator of the website who has embedded the content of a third party and thus creates the cause for the processing of personal data by the third party?’

The Court’s decision:

1.  Articles 22 to 24 of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data must be interpreted as not precluding national legislation which allows consumer-protection associations to bring or defend legal proceedings against a person allegedly responsible for an infringement of the protection of personal data.

2. The operator of a website, such as Fashion ID GmbH & Co. KG, that embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor can be considered to be a controller, within the meaning of Article 2(d) of Directive 95/46. That liability is, however, limited to the operation or set of operations involving the processing of personal data in respect of which it actually determines the purposes and means, that is to say, the collection and disclosure by transmission of the data at issue.

3. In a situation such as that at issue in the main proceedings, in which the operator of a website embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, it is necessary that that operator and that provider each pursue a legitimate interest, within the meaning of Article 7(f) of Directive 95/46, through those processing operations in order for those operations to be justified in respect of each of them.

4. Articles 2(h) and 7(a) of Directive 95/46 must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, in which the operator of a website embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, the consent referred to in those provisions must be obtained by that operator only with regard to the operation or set of operations involving the processing of personal data in respect of which that operator determines the purposes and means. In addition, Article 10 of that directive must be interpreted as meaning that, in such a situation, the duty to inform laid down in that provision is incumbent also on that operator, but the information that the latter must provide to the data subject need relate only to the operation or set of operations involving the processing of personal data in respect of which that operator actually determines the purposes and means.

Copyrights over music samples – a hot EU Court decision

pexels-photo-2381596.jpegThe European Court has ruled in the case C‑476/17 Pelham GmbH, Moses Pelham, Martin Haas v Ralf Hütter, Florian Schneider-Esleben. The case background is as follow:

Hütter and another are members of the group Kraftwerk. In 1977, that group published a phonogram featuring the song ‘Metall auf Metall’.

Mr Pelham and Mr Haas composed the song ‘Nur mir’, which was released on phonograms recorded by Pelham GmbH in 1997.

Hütter and another submit that Pelham electronically copied (‘sampled’) approximately 2 seconds of a rhythm sequence from the song ‘Metall auf Metall’ and used that sample in a continuous loop in the song ‘Nur mir’, although it would have been possible for them to play the adopted rhythm sequence themselves.

As the phonogram producers, Hütter and another’s principal claim is that Pelham infringed their copyright-related right. In the alternative, they claim that their intellectual property right as performers and Mr Hütter’s copyright in the musical work were infringed. In the further alternative, they claim that Pelham infringed competition law.

Hütter and another brought an action before the Landgericht Hamburg (Regional Court, Hamburg, Germany) seeking a prohibitory injunction, damages, the provision of information and the surrender of the phonograms for the purposes of their destruction.

That court upheld the action, and Pelham’s appeal before the Oberlandesgericht Hamburg (Higher Regional Court, Hamburg, Germany) was dismissed. Following an appeal on a point of law (Revision) brought by Pelham before the Bundesgerichtshof (Federal Court of Justice, Germany), the judgment of the Oberlandesgericht Hamburg (Higher Regional Court, Hamburg) was overturned and the case was referred back to that court for re-examination. That court dismissed Pelham’s appeal a second time. In a judgment of 13 December 2012, the Bundesgerichtshof (Federal Court of Justice) once again dismissed Pelham’s appeal on a point of law. That judgment was overturned by the Bundesverfassungsgericht (Federal Constitutional Court, Germany), which referred the case back to the referring court.

The referring court notes that the outcome of the Revision proceedings turns on the interpretation of Article 2(c) and Article 5(3)(d) of Directive 2001/29 and of Article 9(1)(b) and Article 10(2) of Directive 2006/115.

According to the referring court, it must, in the first place, be determined whether, by using Hütter and another’s sound recording in the production of its own phonogram, Pelham encroached on the exclusive right of Hütter and another to reproduce and distribute the phonogram featuring the song ‘Metall auf Metall’, as laid down in Paragraph 85(1) of the UrhG, which transposes Article 2(c) of Directive 2001/29 and Article 9 of Directive 2006/115. In particular, it must be determined whether such an infringement can be found where, as in the present case, 2 seconds of a rhythm sequence are taken from a phonogram then transferred to another phonogram, and whether that amounts to a copy of another phonogram within the meaning of Article 9(1)(b) of Directive 2006/115.

In the second place, if it is found that there has been an infringement of the phonogram producer’s right, the question arises of whether Pelham may rely on the ‘right to free use’, laid down in Paragraph 24(1) of the UrhG, which is applicable by analogy to the phonogram producer’s right, according to which an independent work created in the free use of the work of another person may be published or exploited without the consent of the author of the work used. The referring court notes, in that context, that that provision has no express equivalent in EU law and therefore asks whether that right is consistent with EU law in the light of the fact that that provision limits the scope of protection of the phonogram producer’s exclusive right to reproduce and distribute his or her phonogram.

In the third place, the national law exceptions and limitations to the reproduction right referred to in Article 2(c) of Directive 2001/29 and to the distribution right referred to in Article 9(1)(b) of Directive 2006/115 are based on Article 5(3) of Directive 2001/29 and the first paragraph of Article 10(2) of Directive 2006/115. However, the referring court harbours doubts as to the interpretation of those provisions in circumstances such as those at issue in the main proceedings.

In the fourth place, the referring court notes that EU law must be interpreted and applied in the light of the fundamental rights enshrined in the Charter of Fundamental Rights of the European Union (‘the Charter’). In that context, it asks whether the Member States have any discretion for the purposes of the transposition into national law of Article 2(c) and Article 5(2) and (3) of Directive 2001/29 and of Article 9(1)(b) and the first paragraph of Article 10(2) of Directive 2006/115. The referring court notes that, according to case-law of the Bundesverfassungsgericht (Federal Constitutional Court), national legislation which transposes an EU directive must be measured, as a rule, not against the fundamental rights guaranteed by the Grundgesetz für die Bundesrepublik Deutschland (Basic Law for the Federal Republic of Germany) of 23 May 1949 (BGBl. 1949 I, p. 1), but solely against the fundamental rights guaranteed by EU law, where that directive does not allow the Member States any discretion in its transposition. That court also harbours doubts as to the interpretation of those fundamental rights in circumstances such as those at issue in the main proceedings.

In those circumstances, the Bundesgerichtshof (Federal Court of Justice) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)  Is there an infringement of the phonogram producer’s exclusive right under Article 2(c) of Directive 2001/29 to reproduce its phonogram if very short audio snatches are taken from its phonogram and transferred to another phonogram?

(2)  Is a phonogram which contains very short audio snatches transferred from another phonogram a copy of the other phonogram within the meaning of Article 9(1)(b) of Directive 2006/115?

(3)  Can the Member States enact a provision which — in the manner of Paragraph 24(1) of [the UrhG] — inherently limits the scope of protection of the phonogram producer’s exclusive right to reproduce (Article 2(c) of Directive 2001/29) and to distribute (Article 9(1)(b) of Directive 2006/115) its phonogram in such a way that an independent work created in free use of its phonogram may be exploited without the phonogram producer’s consent?

(4)  Can it be said that a work or other subject matter is being used for quotation purposes within the meaning of Article 5(3)(d) of Directive 2001/29 if it is not evident that another person’s work or another person’s subject matter is being used?

(5) Do the provisions of EU law on the reproduction right and the distribution right of the phonogram producer (Article 2(c) of Directive 2001/29 and Article 9(1)(b) of Directive 2006/115) and the exceptions or limitations to those rights (Article 5(2) and (3) of Directive 2001/29 and the first paragraph of Article 10(2) of Directive 2006/115) allow any latitude in terms of implementation in national law?

(6)  In what way are the fundamental rights set out in [the Charter] to be taken into account when ascertaining the scope of protection of the exclusive right of the phonogram producer to reproduce (Article 2(c) of Directive 2001/29) and to distribute (Article 9(1)(b) of Directive 2006/115) its phonogram and the scope of the exceptions or limitations to those rights (Article 5(2) and (3) of Directive 2001/29 and the first paragraph of Article 10(2) of Directive 2006/115)?’

The Court’s decision:

1.  Article 2(c) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, must, in the light of the Charter of Fundamental Rights of the European Union, be interpreted as meaning that the phonogram producer’s exclusive right under that provision to reproduce and distribute his or her phonogram allows him to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram, unless that sample is included in the phonogram in a modified form unrecognisable to the ear.

2.  Article 9(1)(b) of Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property must be interpreted as meaning that a phonogram which contains sound samples transferred from another phonogram does not constitute a ‘copy’, within the meaning of that provision, of that phonogram, since it does not reproduce all or a substantial part of that phonogram.

3.  A Member State cannot, in its national law, lay down an exception or limitation, other than those provided for in Article 5 of Directive 2001/29, to the phonogram producer’s right provided for in Article 2(c) of that directive.

4.  Article 5(3)(d) of Directive 2001/29 must be interpreted as meaning that the concept of ‘quotations’, referred to in that provision, does not extend to a situation in which it is not possible to identify the work concerned by the quotation in question.

5.  Article 2(c) of Directive 2001/29 must be interpreted as constituting a measure of full harmonisation of the corresponding substantive law.