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THE IMPLEMENTATION OF THE COPYRIGHT DIRECTIVE IN ITALY AND THE NEW LIABILITY REGIME FOR ONLINE SERVICE PROVIDERS

21/09/2021

On 5 August 2021, the draft legislative decree transposing EU Directive 2019/790, by which the European legislator updates copyright on the internet, was adopted. Of particular importance are the provisions on the liability of “online content-sharing service provider”, even if they are open to divergent interpretations.

On 5 August 2021, the Council of Ministers adopted the preliminary draft legislative decree transposing EU Directive 2019/790 on copyright and related rights in the digital single market, which will now be submitted to Parliament for scrutiny before being introduced into domestic law by the Council of Ministers in its final version.

The transposition of this Directive is far-reaching as it aims to innovate the regulation of online copyright and to balance conflicting interests such as users’ freedom of expression and platforms’ freedom of economic initiative.

The importance of the Directive is constituted, not only by the concession of new rights connected to the publishers, but above all, by an incisive modification of the system of responsibility configurable in the hands of the suppliers of Internet services, holders of the technological ” tools” through which the violations of copyright are committed.

In particular, it must be stressed that the dissemination of copyrighted content has increased thanks to the services offered by providers, which allow the exchange and storage of such content in a very fast and easy way for their users. Therefore, although we are witnessing a dematerialisation of creative works, it cannot be said that their transmission over the network does not maintain a physical component, i.e. the use of the infrastructures provided by the providers. In fact, they constitute a fundamental crossroads for sharing protected content on the network and it is for this reason that the European legislator has identified in them an essential role in combating content that infringes copyright.

The Directive, as far as it is relevant here, is of considerable interest for the change of course adopted by the European legislator with regard to the providers’ liability. The Directive, in fact, identifies a different category from those determined by the Directive 2000/31/EC, sanctioning a responsibility with a positive approach, unlike the exemption regimes provided by the e-commerce Directive. The European legislator focuses on platforms that allow the storage and sharing of copyright-protected content, the real key players in the dissemination of creative works online.

After a very tumultuous legislative process, in particular with regard to the provision concerning the relationship between providers offering services of storage and public access to copyright-protected content and rightholders, a final version of today’s Article 17 of the new Copyright Directive has been reached.

The purpose of this provision can be found in recital 61. According to what is stated in recital 61, the activity carried out by providers of services for the sharing of copyright-protected content contributes to creating “uncertainty” as to the legal situation of those providers. The question arises, first of all, as to whether their activity constitutes a use of content protected by copyright and, secondly, as to whether or not they must request the consent of the right holders in order to be able to use the protected works.

This uncertainty is then also projected onto the rights holders themselves, who find it difficult to understand if and how their works are being used, running into not insignificant obstacles in obtaining fair compensation.

Finally, recital 61 expresses one of the main objectives of the Directive, i.e. the facilitation of the conclusion of licensing contracts between rights holders and suppliers of online services, in such a way that the former achieve fair results also in economic terms, in any case not by imposing contractual conditions “from above”, but in respect of the freedom of economic initiative.

Having established, therefore, the intentions on which the provision is based, the European legislator has established that if an Internet provider acts in such a way that his action can be configured as granting access to copyrighted material to the public, he must request authorisation from the owner of the rights to that material.

An essential element that innovates the scope of the responsibility of the new category of the “online content-sharing service provider”, as defined by the Directive, is that the consent obtained by these last, stipulating, for example, ” licensing agreements” with the holders of the rights, must concern also the “acts carried out by users of the services falling within the scope of Article 3 of Directive 2001/29/EC when they are not acting on a commercial basis or where their activity does not generate significant revenues”. The incidence of this obligation is understandable also in the light of the absence of the operability of the regime of exemption from liability defined by Article 14 of the e-commerce Directive, where providers carry out acts of communication to the public or making available to the public of content uploaded by users.

The strict obligation imposed on these intermediaries, however, is mitigated through a sort of exemption from liability that intervenes for the benefit of those who have not obtained an authorisation from the rightholders, on condition that a number of precautions are observed.

Firstly, (a) providers are required to have made ‘best efforts’ to reach an agreement with the rightholder; (b) secondly, providers must have ensured that the works identified with the rightholder are not made accessible to the public by means of their own technologies, by making, also at this juncture, ‘best efforts’ and by observing ‘high industry standards of professional diligence’; (c) finally, online service providers must, in any event, have acted without delay to disable access to or remove the content identified following a notification received from the rights holder and have made ‘best efforts’ to prevent the further and possible upload of the content identified by the rights holder.

In analysing these legal provisions required of the provider who wishes to benefit from this sort of new safe harbour, the expression “best efforts”, used by the legislator to emphasise the efforts made by the service provider to obtain authorisation from the rights holders, becomes particularly important. This wording risks creating discrepancies between the laws of the various Member States at the transposition stage. The connotation that the expression in question may have, in fact, can be both quantitative and qualitative. More specifically, if, on the one hand, it is interpreted as meaning ‘maximum efforts in an absolute sense’, there is a risk of placing an excessive burden on service providers; on the other hand, if it is interpreted as meaning more like ‘best possible efforts’, it could again place right holders in a situation of legal uncertainty. National legislators will therefore have to be careful to transpose this expression through the principles of reasonableness and proportionality.

In conclusion, the European institutions have become aware of the need to protect copyright in a more effective and efficient way, since it has been identified as a valid driver of creativity, as well as an important economic incentive for the creative industry and the economy in general, although the legislative instrument of the directive could leave room for different internal regulatory texts that would fragment the European Union’s proactive work.

Alfredo Bergolo

THE LIPSTICK THAT LEAVES THE MARK: THE GENERAL COURT OF THE EUROPEAN UNION RECOGNIZES THE REGISTRABILITY OF THE SHAPE OF THE GUERLAIN LIPSTICK AS EU 3D TRADEMARK

14/09/2021

With its decision of July 14, 2021, the General Court of the European Union annulled the decision of the First Board of Appeal of the European Union Intellectual Property Office (EUIPO) of June 2, 2020, finding that the shape of Guerlain’s Rouge G lipstick has distinctive character and, therefore, is eligible for registration as a 3D trademark.

The trademark, by creating a link between the products placed on the market and the company, makes it easier for the consumer to find the products he is looking for, allows the owner to build and strengthen the identity of his company and at the same time rewards efficient producers, to the extent that they are able to capitalize on their business merits within the distinctive sign, becoming a fundamental tool in competitive strategies.

Traditionally, the role of indicator of the provenance of a fashion design item is entrusted to the word trademark and the figurative trademark. In fact, fashion houses tend not to consider the shape of the product itself to be suitable for a distinctive function, since it is believed that consumers find it easier to attribute an indicator meaning to a term or a logo rather than to a shape. This does not mean that the fashion world is devoid of 3D trademarks: Hermès, currently, among registered and applied-for trademarks, has more than thirty shape trademarks, Ferragamo has forty-seven.

The number of companies in the fashion industry that can claim ownership of several 3D trademark registrations has been steadily increasing in recent years. Following the decision of the General Court of the European Union, among these there is also the Rouge G lipstick by Guerlain.

The General Court of the European Union recently annulled the decision rendered by the First Board of Appeal of the European Intellectual Property Office (EUIPO) regarding the application for registration as EU trademark of a three-dimensional sign consisting of the shape of an oblong, conical and cylindrical lipstick proposed by Guerlain.

On October 19, 2018, Guerlain had filed an application for EU trademark registration covering the shape of a lipstick in Class 3 for “lipstick” goods.

The EUIPO had refused the application, deeming the sign to be devoid of distinctive character. This decision was also confirmed by the First Board of Appeal on the grounds that the shape of Guerlain’s Rouge G lipstick did not differ from the other usual shapes on the market.

The General Court of the EU, on July 14, 2021, ruled on the case, annulling the previous decisions, considering that the shape under examination “is uncommon for a lipstick and differs from any other shape existing on the market” (par. 49).

This decision supports the opinion according to which the distinctiveness of a 3D trademark must be assessed on a case-by-case basis, looking at the norm and the customs of the sector concerned, which “all the shapes which the consumer is accustomed to seeing on the market” and verifying whether the product is capable of generating an uncommon visual effect in the public.

The General Court, denying the Commission’s conclusions, pointed out that the mere fact that a shape constitutes a “variant” of one of the usual shapes of a type of product is not sufficient to establish that said shape has distinctiveness. The fact that a sector is characterized by a wide variety of shapes of products does not imply that any new shape is necessarily perceived as one of them (par. 50).

With reference to the capacity of a shape to be perceived as an indicator of origin, the Court has underlined how the fact that certain goods have a quality design does not necessarily imply that a mark consisting of the three-dimensional shape of such goods is distinctive ab initio (par. 42). On the contrary, the aesthetic aspect of the product will have to be assessed to ascertain a departure from the norm and from the customs of the sector, provided that this aesthetic aspect is understood as recalling the objective and uncommon visual effect of the specific design of the said trademark. Consequently, according to the Court, the consideration of the aesthetic aspect of the mark should not result in an assessment of the beauty or lack thereof of the product in question, which would be subjective, but is aimed at ascertaining whether that aspect is capable of having an objective and uncommon visual effect on the relevant public (par. 44).

In the present case, the above analysis led the General Court of the European Union to conclude that the shape of Guerlain’s Rouge G lipstick is uncommon for a lipstick and distinguishes itself from any other shape existing on the market, as:

“the shape recalls that of the hull of a boat or a baby carriage” thus distinguishing itself from the cylindrical or parallelepiped shape presented by most lipsticks on the market;
“the presence of the small oval shape in relief is unusual” and therefore contributes to the uncommon appearance of the mark applied for;
finally, the fact that the lipstick represented by the 3D trademark cannot be placed in a vertical position reinforces the uncommon visual aspect of its shape.

These elements allow to identify the product as coming from a certain firm and therefore to distinguish it from the products of other companies. The same is, therefore, distinctive within the meaning of and for the purposes set out in Article 7(1)(b) of Regulation (EU) 2017/1001 and is therefore capable of constituting a valid trademark.

Giulia Spata

THE FAIT D’HIVER AFFAIRE: JAFF KOONS FOUND GUILTY OF PLAGIARISM (AGAIN)

16/03/2021

With its decision of 23 February 2021, the Cour d’Appel de Paris (CA Paris, 5, 1, 23 February 2021, no 19/09059) confirmed the first instance judgment issued in 2018 and condemned the famous appropriationist artist Jeff Koons for plagiarism: the work “Fait d’hiver” of 1988 was found to infringe copyright in an advertisement of 1985.

The case
Among the numerous court cases involving Jeff Koons, the controversial American artist who has made the appropriation and reinterpretation of other people’s creations his unmistakable stylistic hallmark, the “Fait d’hiver” affair is an interesting one. In a 2018 decision, the Tribunal de Grand Instance of Paris had already found Koons’ porcelain statue, depicting a woman lying in the snow and rescued by a pig, to infringe copyright in an advertising campaign designed by Franck Davidovici in 1985 for the clothing brand “Naf Naf”.

Koons’ Fait d’Hiver

In reaching its decision, the Court of First Instance adopted a subjective conception of originality, which was assessed not on the basis of the nature and result of Jeff Koons’s appropriation, but rather in relation to the work subject to that appropriation. Thus, by assessing the pre-existing work as unquestionably original and by pointing out, by means of a comparison of the works, that in his creations the American artist had slavishly taken over the characteristic elements of Franck Davidovici’s work, the judge applied the general rule according to which the reproduction of original elements of other people’s works without having first obtained the consent of the authors constitutes an infringement. On the basis of a systematic interpretation of the requirements of the law and of the case law, the defence’s objection of parody was also rejected by the TGI of Paris: the judge observed that, in addition to the lack of any intention on the part of the American artist to create a comic effect by means of the work, instead of which it was possible to detect the artist’s intention to make a criticism or a broader reflection, there was also the problem of the popularity of the parodied work. According to the Paris court, the lack of notoriety of Davidovici’s creation could only lead to confusion among the public between the parody and the parodied work.
The decision of the Cour d’Appel de Paris and the Jeff Koons judgment
Jeff Koons’ appeal against the first instance ruling did not have the desired effect. The defence’s attempt to exalt, even in this case, the principle of freedom of expression and the existence of an ideological détournement – a change of meaning between the original creation and the subsequent one – as characteristic features of the poetics of Appropriation Art and fundamental elements of the autonomy and originality of the appropriated work, was of no use. In fact, while not denying the existence of «an inspiration» to the advertisement designed by Davidovici, Koons’ defence reiterated that the porcelain version of “Fait d’hiver” was «a work of art in its own right, bearing the imprint of the personality of its author and an artistic message of is his own». However, the Court of Appeal, essentially confirming what had already been observed by the TGI at first instance and again rejecting the exception of parody due to the absence of the requirements of the law, noted instead that «the work was not presented as a criticism, a caricature or as inspired by a previous work» and that in any case, «if there are differences, the similarities are predominant». With regard to freedom of expression, the Cour d’Appel considered that the restriction of the extent of this principle under Article 27 of the Universal Declaration of Human Rights was necessary and proportionate to Davidovici’s moral and material interests.
Together with the American artist, the Fondazione Prada and the Centre Pompidou, which exhibited “Fait d’hiver” in 2014, were also charged with fines. They will have to pay 190,000 euros to Frank Davidovici for the infringing work, as well as 14,000 euros for having reproduced its image on the website www.jeffkoons.com. A similar sentence was imposed on the Flammarion publishing group, which had sold the catalogue containing the image of the plagiarised work.
It remains to be seen whether the conviction by the Cour d’Appel will put a definitive end to this legal affair, or whether the American artist will appeal to the Supreme Court.

Federica Gattillo

STREET ART AND LAW: THE COUNCIL OF STATE SUSPENDS THE ORDER OF REMOVAL OF A WALL PAINTING UNTIL A NEW ASSESSMENT OF ITS LANDSCAPE COMPATIBILITY IS MADE

02/03/2021

With judgment no. 7872 of December 10, 2020, the Council of State, partially overturning the judgement no. 46 of March 20, 2018 rendered by the Piedmont Regional Administrative Court, provisionally suspended the execution of the order of demolition of a work of street art issued by the Municipality of Avigliana, having the latter denied the request for assessment of the mural’s landscape compatibility without a real assessment of merit and on the basis of purely formalistic arguments.

The case originates from the realization of a wall painting by a famous Spanish street artist on the wall of a building located in an area subject to environmental and landscape restrictions according to the provisions of the Code of Cultural Heritage and Landscape. Following the demolition order issued by the competent local administration, the owner of the building interested by the mural requested, on the one hand, the declaration of the work’s historical and artistic interest and, on the other hand, the verification of its landscape compatibility. Both requests were rejected.

In this scenario, the claimant appealed to the Regional Administrative Court against the demolition order issued by the Municipality of Avigliano and the refusal to issue a declaration of landscape compatibility, but not against the second refusal relating to the declaration of historical and artistic interest of the mural. The Regional Administrative Court, with the above mentioned order, rejected both appeals. Hence the appeal to the Council of State.
The first three grounds of appeal, with which among other the application of art. 50 of the Cultural Heritage Code was requested, according to which the removal of frescoes and graffiti is prohibited without the prior authorization from the competent authorities, were rejected as the appellant’s argument, based on the alleged artistic value of the work in question, was irrelevant for the purposes of the procedure, “in which only the construction, urban planning and landscaping aspects of the work are taken into consideration”, as the appellant had not contested, as seen, the decision to deny the request to declare the mural of historical and artistic interest. This was held despite that the arguments put forward by the appellant regarding the historical and artistic interest of the work were considered by the Council of State as “suggestive”.

On the other hand, the fourth ground of appeal, regarding the denial of the request for landscape compatibility of the work, was upheld. On this point, the Council of State shared the appellant’s claim that the Regional Administrative Court was wrong in not considering relevant the fact that the municipal administration, in denying the request of the interested party, had not previously involved the superintendence authority. On this point, the Council notes that pursuant to art. 146 of the Code of Cultural Heritage and Landscape “the Superintendence no longer exercises a review of mere legitimacy on the authorization act adopted by the Region or the sub-delegated entity […], but an assessment of ‘administrative merit’, an expression of the new powers of co-management of the landscape constraint”. The superintendence should have therefore been involved by the Municipality before issuing its decision, and this regardless of the presumed failure of the interested party to comply with the request for document integration made by the municipal administration which – incidentally – was also judged contrary to the principles of economy, effectiveness and collaboration of the public administration since the Municipality already had all the elements to make an assessment on the merit of the request.
On the basis of these considerations the Council of State, in upholding the appeal against the refusal to grant a declaration of landscape compatibility, ordered the authorities to carry out a new assessment of the compatibility of the mural with the constraints on the area where the work was made, after having consulted the Superintendence. Consequently, in application of art. 167 of the Cultural Heritage Code, in the event of a positive assessment of the landscape compatibility, the measure of restoration of the area – and therefore the demolition of the mural – will have to be replaced by the application of a fine. Until such reassessment, in any case, the demolition order must be considered suspended.

The judgment in question is of particular interest as it deals, albeit indirectly, with the increasingly topical issue of how to resolve the balance between various legally protected assets, i.e. the private rights of property and copyright (in whose scope of protection murals certainly fall) on the one hand and the public interest of environmental and landscape protection and the consequent legislation of the Code of Cultural Heritage and Landscape.
Giorgio Rapaccini

ONLINE PIRACY: THE COURT OF MILAN CONFIRMS THE PASSIVE LEGITIMATION OF A CDN (Content Delivery Network) PROVIDER TO CAUTIONARY INIBITORY ORDERS

16/02/2021

With two orders of 12 and 15 February 2021, the Court of Milan, Business Division, confirmed the full passive legitimacy of an operator of Content Delivery Network (CDN) services to injunction orders aimed at blocking online services that broadcast protected content without authorisation.

The most recent decisions, which came at the end of two complaint proceedings started by an operator of CDN services (one of which contested the order commented HERE), have confirmed what has already been previously held in relation to the obligation also for a CDN provider to comply with the injunction order aimed at blocking the provision of services, qualified or qualifiable, provided for access to illicit IPTV services. In both cases, the Courts rejected the adversary’s claims that there was no passive legitimacy, since the intermediary was merely a provider of transient data storage services consisting in the optimisation of the use of web services.

First of all, the measures acknowledged the unlawfulness of showcase sites, i.e. websites which advertise abusive IPTV and promote them by enabling users to take out the unlawful subscriptions, make the payments and obtain the IT means to access the services themselves, in particular by claiming that the provider of CDN services allows the visibility of those showcase sites, including through the storage of data from such sites, and provides support and optimisation service, thus participating in the flow of data without the authorisation of the rights holder and therefore contributing causally to the infringement as it actually occurs.

As a consequence, such intermediary can certainly be the passive subject of the precautionary injunction falling within the scope of the protection under Articles 156 and 163 of the Civil Code, following the amendment introduced by Legislative Decree No. 70/2003 in implementation of Article 8(3) of Directive 29/2001, which allow the injured party to obtain protection, both as a matter of urgency and as a matter of full verification, against all the persons who contribute causally to the infringement of another person’s right, even though the fraction of conduct individually implemented does not in itself constitute an attributable infringement of copyright.

The technical qualification of the services provided was deemed irrelevant, considering that in all the cases covered by Directive 2000/31 and by Legislative Decree 70/2013 (mere conduit, caching, hosting) it is always provided that the judicial authority may require, even as a matter of urgency, that the service provider prevent or put an end to the infringements committed, regardless of the establishment of any liability in respect of the unlawful act.

Finally, both decisions confirmed the dynamism of such injunction orders, being extended to all ‘alias’ (i.e., further DNS and IP addresses used by IPTV operators to carry out the same illegal activity), following a specific communication from the right holders to the intermediary.

Margherita Stucchi