diritto d’autore | Independent legal firm

09/12/2016

The Court of Milan, with partial judgment published on 1 August 2016, upheld the claims of Business Competence s.r.l., finding the defendants Facebook s.r.l., Facebook Inc. and Facebook Ireland Ltd liable for copyright violation of the electronic database made of the plaintiff’s application “Faraound”, as well as for acts of unfair competition pursuant to article 2598 no. 3 of the Civil Code. The Court also issued an injunction – together with a penalty – for any further use of the application “Nearby” of Facebook, and the publication of the judgment, and adjourned the case in order to assess and quantify damages.

In the present case Business Competence s.r.l., a company which is active in the industry of online marketing services, developed in 2012 an application for mobile phone that selected and organized data of users’ Facebook profiles and allowing to view the nearest shops, together with the relevant data, offers and reviews, called “Faround”. The application was registered in the Facebook App Center, which contains applications tested and approved by Facebook, and then included in the App Store of the latter. About two months later, however, Facebook announced the launch of “Nearby”, an application similar to “Faround” and that copied the core of the same, according to the plaintiff’s interpretation, changing only the layout.

The Court of Milan – after having rejected the objections of lack of jurisdiction and lack of locus standi submitted by the defendants – has confirmed the liability of Facebook Inc., Facebook Ireland Ltd and Facebook Italia s.r.l. both for copyright infringement on database and for unfair competition acts under article 2598, no. 3, of the Civil Code.
The Judges first of all qualified “Faround” as database, implemented in the form of a computer program, having a creative character – as confirmed by the court-appointed expert during the proceedings on the merits – and stated that in order to assess such creative character only the selection or arrangement of the material should be relevant.
The Court held that Facebook’s “Nearby” is an elaboration of the program “Faround” of Business Competence, that was made possible by the analysis of the same program by the defendants and in particular by the delivery of the executable file of “Faround” for testing purposes. On the other hand, Facebook has not demonstrated that it has developed autonomously and independently its own application, nor – despite the judge’s request – has never filed in the proceedings the related source code, thus impeding the analysis and detailed comparison with the other party’s application.
The Court also confirmed the responsibility of the defendants for infringing article 2598 no. 3 of the Civil Code, as it exploited unfairly others’ investments for the creation of a work of considerable economic value, abusing the relationship of trust based on the contacts and the contractual relationships established with the developer Business Competence and violating the obligations of good faith, trust and fairness.

In this regard, the Court stated that Facebook was not allowed to analyze the “Faround” program to develop a similar application that was also addressed to the same users. That is because article 64ter of the Copyright Law allows analysis activities only to the extent that they are intended for using the program and for its typical functioning, while it prohibits such activities for commercial purposes, under penalty of nullity of the related contract clause. Therefore, the clauses in the agreement between the parties, that allowed Facebook to “analyze the applications, contents, and data for any purpose, including commercial ones”, should be considered void.

COMPUTER PROGRAMS AND (RE) SALE OF COPIES VIA NON ORIGINAL SUPPORTS

14/10/2016

With recent decision of 12 October 2016, the Court of Justice of the European Union has once again dealt with the issue of exhaustion of the right of distribution for the sale of used computer program copies. The matter reached the European Court following referral for a preliminary ruling by the Regional Court of Right, Special Panel for criminal matters, in Latvia, where criminal proceedings were pending against Messrs. Aleksandrs Ranks and Jurijs Vasiļevičs. The defendants were accused of the sale of several online copies of software produced by Microsoft and protected by copyright.

The national judge asked the Court whether articles 4, letters a) and c), and 5, paragraphs 1 and 2, of Directive 91/250/EEC of the Council, should be interpreted in the sense that the purchaser of a “used” copy of a computer program, registered on a non original physical support, could, following application of the rule governing exhaustion of the right of distribution of the rightholder, sell to third parties such copy if (i) the original physical support for such program, delivered to the first purchaser, has deteriorated and (ii) the first purchaser has cancelled the copy of the software installed on his own PC or has ceased using it.

The Court of Justice initially observed that it is a well known principle pursuant to which the right of distribution of a copy of a computer program must be considered exhausted if the rightholder has (i) authorized the first sale of the copy itself and (ii), upon gaining an economic benefit, has assigned the right of use without temporal limitations (as stated by the Court of Justice in the known UsedSoft ./. Oracle judgment of 3 July 2012, case C-128/11).

The above mentioned rule of exhaustion of the right of distribution applies to copies of licensed software both in the case where such copies have been registered on analog support as well as downloaded from the website of the right holder in so far as, according to the Court, the directive makes no distinction between the tangible or intangible form of the copy. However, the first purchaser, if he intends to resell the copy of the purchased software, must render it unusuable or remove it from his or her PC.

The case under scrutiny concerns resale to third parties by Messrs. Aleksandrs Ranks and Jurijs Vasiļevičs of copies of Microsoft software registered on non original supports in so far as, according to the defendants, the original support had deteriorated or been destroyed. No evidence was brought forth in the course of the proceedings such as to prove that the copies of the Microsoft software, the object of the resale, had been legitimately purchased by Messrs. Aleksandrs Ranks and Jurijs Vasiļevičs.

Faced with these arguments, the Court excluded that the reserve copy of a computer program, albeit legitimate pursuant to art. 5, para. 2 of the above mentioned Directive, could constitute object of sale to third parties without the consent of the rightholder. However, the Court also observed that if the support on which the licensed program deteriorates or is destroyed, then the legitimate purchaser of an unlimited license for a copy of the computer program must be left in a position to download the aforesaid copy via the web site of the right holder for his own exclusive use.

In conclusion, the Court of Justice clarified that the first purchaser of an unlimited license for software has the right to resell to third parties the copy installed on his own PC without, however, being able to assign the reserve copy of said software if the origina support on which the copy has been registered deteriorates or is destroyed. In any case, it falls upon those who invoke the application of the principle of exhaustion of the right of distribution to prove, by any evidence, that they have legitimately purchased an unlimited license for the individual resold copy (and that they have rendered unusuale / have cancelled the copy originally installed on their PC).

DECISION OF THE EURUPEAN COURT OF JUSTICE: THE SALE OF COMPUTERS WITH PRE-INSTALLED SOFTWARE DOES NOT OF ITSELF CONSTITUTE AN UNFAIR COMMERCIAL PRACTICE

20/09/2016

The CJEU, with judgment C-310/15 filed on 7 September 2016, has decided that the sale of a pc that comes with a pre-installed operative system does not contravene the norms on professional ethics and, especially, does not distort the economic behavior of consumers. Additionally, the Court held that omitting the price of each of the pre-installed programs does not amount to an unfair commercial practice.

With the above mentioned judgment the Court put an end to a sequence of events that started in France in 2008, when a consumer purchased a Sony computer that came with a Windows Vista operating system: upon using the software for the first time, the purchaser refused to enter into the software license agreement, requesting that Sony refund the price of the pre-installed program. Sony rejected the request of the client, and instead proposed to annul the complete purchase and refund the entire price. The dispute reached the French Supreme Court, which decided to remand the issue to the EU judges, in order to obtain clarifications concerning directive 2005/29 on unfair commercial practices of corporations in their relations with consumers of the internal market.

The European judges held that the sale of a computer having pre-installed computer programs does not, of itself, amount to an unfair commercial practice, considering that an offer of this type does not contravene the norms on professional diligence and does not distort the economic behavior of consumers. In the case at hand, the Court observed that “as noted by the connected market survey, the sale by Sony of computers having pre-installed computer programs meets the expectations of the vast majority of consumers, who prefer the purchase of a computer having such software pre-installed and immediately utilizable as opposed to purchasing separately the computer and the programs”. The judges of the Court of Justice stated that, in any case, it is the duty of the national judge to evaluate whether the consumer has been properly informed, before the purchase, of the fact that a given model of computer is sold with pre-installed programs. In the case under scrutiny, Sony had conformed to the norms on professional diligence, having provided the consumer with the option of receding from the sale.

As concerns the second question, the Court held that the omission of the prices of the pre-installed programs does not prevent the consumer from making an informed commercial decision nor does it provoke him or her to make a commercial decision that he or she would not have taken otherwise. Indeed, considering that the price of these programs does constitute relevant information which the vendor is obliged to give to the purchaser, the failure to indicate the price of each of the pre-installed computer programs cannot be considered an unfair commercial practice.

THE “BETTY BOOP” JUDGEMENT OBTAINED BY LGV IS SUPPORTED BY LEGAL COMMENTS

30/08/2016

On the third volume of the Italian legal periodical “Rivista di diritto industriale”, the first comment on the historic judgement held by the Court of Bari on February 22, 2016 (whereof it has already given notice on LGV’s website – https://www.lgvavvocati.it/en/news/page/3/) appeared. The comment supports the position taken by LGV in the proceedings, and essentially embraced by the Court, according to which the attempt to perpetuate the monopoly on the character of Betty Boop through the trademark protection must be rejected when the copyright on that character has expired (Court of Bari, February 22, 2016, in “Rivista di diritto industriale”, p. 293, with comment of Bixio, “Long live Betty Boop, the extra-protection of the fictional character”).

In a previous news of our website we talked about the historic decision of the Court of Bari in the “Betty Boop” case, where LGV defended the US company Avela, active in the field of posters and merchandising of fictional characters, supporting the thesis according to which – once a fictional character enters the public domain – a trademark covering the same character could not prevent the use of the character in other graphic representations, not having trademark function. The Journal of Industrial Law recently published a case note to the decision of the Court of Bari, which supports the correctness of the judgement in question, expressly affirming that “the line held by the Court of Bari it is more than appreciated where it wants to ward off the attempt to create upon the famous character of Betty Boop a revival of broader and longer-lasting rights than copyright’s ones”. The comment also points out – correctly – that an attempt of this kind is increasingly common, even in terms of prolongation of the duration of the protection and/or extension of the right’s object. Instead, it clearly arises from the comment on the decision of the Court of Bari, as well as from the previous case-law regarding the fictional character, the need to avoid any deceptive use of industrial and intellectual property tools (in this case the trademark), in a pro-competition perspective which is typical of the field of industrial and intellectual property. In fact, it should not be forgotten that such monopolies are born and live in accordance with their pro-competition effects, and more generally for the creation of values for a company as a whole: as a consequence, any use of the tools of industrial and intellectual property aiming – “extra legem” – at an undue extension of the protection shall be avoided (and considered out of the system), in order to prevent such an use from turning into an ultra-monopolistic defense in favor of people – already holders of an economically dominant position – who can perpetuate this position only by virtue of the economic investments that they are able to make, without having to actually perform any creative or innovative activity. The system of intellectual and industrial property, instead, never protects the investment “per se”, but only if it is aimed at creating a value (differently qualified by law as creative, original, distinctive, etc.). This is the strength and the function of the institutes analyzed herein, which must be defended by the operators, in order to avoid a drift of the institutes that could lead to their delegitimization and therefore – ultimately – to a boomerang effect for all the owners of rights of this kind.

SIMONA LAVAGNINI AMONG THE AUTHORS OF “THE DIGITAL SINGLE MARKET COPYRIGHT. INTERNET AND COPYRIGHT LAW IN THE EUROPEAN PERSPECTIVE”

07/07/2016

The last monographic volume of the series “Law and Policy of New Media” has been published. The volume, supervised by Mr. Mario Franzosi, Mr. Oreste Pollicino and Mr. Gianluca Campus, collates the documents of the Seminar organized in November 2015 by the Permanent Judicial Organization in collaboration with AIPPI. The work studies in depth the issues concerning circulation of digital contents within European territories, in light of the most recent technical and legislative innovations.

Ms. Simona Lavagnini has contributed by redacting the chapter titled “The Directive 2014/26/EU on collecting societies and the user’s perspective”, critically analyzing the points concerning the monopoly of which collecting societies de facto benefit from in individual European states. Specific attention is given to the user’s perspective, who is forced to negotiate with a single entity.

Ms. Simona Lavagnini has considered various possible solutions at a European level, such as to guarantee the right balance between the positions of the individuals involved. Ms. Lavagnini’s work examines the tendency to extend the application of competition rules to collecting societies, as well as the option of applying stringent norms with a view to imposing greater transparency for the protection of users and of the public interest.