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IP and social media: a brief update

The EU Copyright Directive

On March 26, the European Parliament adopted the “Directive on copyright in the Digital Single Market”. The Directive amends the current legal framework, to make it fit for the digital environment we live in today. The new provisions seek to ensure more adequate protection for authors and media professionals, while opening up new possibilities for accessing and sharing copyright-protected content online throughout the EU. The Directive has already repeatedly been the subject of heated debates.

This article briefly discusses two of the most controversial articles of the Directive: article 15 and article 17.

 

Article 15 : “Protection of press publications concerning online uses”

Article 15 provides publishers of press publications established in a Member State of the EU with a reproduction right and right to communicate to the public for online use of their press publications by information society service providers. In concrete terms, this means that those information society service providers will have to obtain licenses prior to using press publications. The rights provided to press publishers shall expire two years after the press publication is published. That term shall be calculated from 1 January of the year following the date on which that press publication is published.

“Press publications” are defined by the Directive as “a collection composed mainly of literary works of a journalistic nature, but which can also include other works or other subject matter, and which: 

    1. constitutes an individual item within a periodical or regularly updated publication under a single title, such as a newspaper or a general or special interest magazine;
    2. has the purpose of providing the general public with information related to news or other topics; and
    3. is published in any media under the initiative, editorial responsibility and control of a service provider.

There are however very important exceptions. The rights provided for shall for example not apply to private or noncommercial uses of press publications by individual users nor in respect of the use of individual words or very short extracts of a press publication. The protection shall also not apply to acts of hyperlinking. Important to note as well is that periodicals that are published for scientific or academic purposes, such as scientific journals, are not press publications for the purposes of the Directive.

Press publishers throughout Europe generally welcome this new right while information society service providers such as Google and Facebook will continue to contest this. In any case both press publishers and information society service providers will have to negotiate applicable tariffs and licenses.

 

Article 17 : “Use of protected content by information society service providers storing and giving access to large amounts of works and other subject-matter uploaded by their users”

Article 17 seeks to reinforce the position of authors of works used by content sharing providers. It intends to target giant internet platforms and news aggregators (such as YouTube, GoogleNews, Facebook,…) to oblige them to obtain an authorization from the authors concerned when using their content and to pay the authors what they truly owe them. This authorization will most probably occur in practice in the form of a license agreement.

In the absence of such license agreements, the online platforms will be liable for any copyright infringement resulting from protected content that users may have uploaded to their platform, unless the platform can demonstrate that they have: 

  • Made best efforts to obtain an authorization; and
  • Made best efforts to ensure the unavailability of specific works for which the rightsholders have provided the service providers with the relevant and necessary information; and
  • Acted expeditiously, upon receiving a sufficiently substantiated notice from the rightsholders, to disable access to the notified work and made best efforts to prevent its future uploads.

There will obviously be a lot of discussion on what “best efforts” means. The most controversial part is the filter and blocking mechanism which is imposed, although it does not impose a “general filtering and blocking mechanism” since the platforms only have to filter and block works for which the right holders have provided them with the ‘fingerprinting’ and other information which is necessary to filter and block. Finally, the third condition imposes a “notice and keep down” mechanism.

Exceptions are foreseen for start-up platforms. Platforms set up less that than 3 years ago, with an annual turnover lower than EUR 10 million, and average monthly unique visitors below 5 million, will be subject to much lighter obligations than the large, established ones.

Another criticism is that the Directive will result in over blocking. Things will get blocked which should not be blocked, either because the material is not protected, or either because there is no infringement, for instance because a limitation to copyright applies. The Directive simply states that “the cooperation between online content-sharing service providers and rightholders shall not result in the prevention of the availability of works or other subject matter uploaded by users, which do not infringe copyright and related rights, including where such works or other subject matter are covered by an exception or limitation”. The Directive does however not make clear how Member States should avoid this problem. The only precision foreseen is that Member States will have to ensure that users are able to rely on the following exceptions or limitations quotation, criticism, review, use for the purpose of caricature, parody or pastiche.It is inevitable that tons of disputes over the removal of or disabling access to protected works will occur. The Directive states that the platforms must put in place an effective and expeditious complaint and redress mechanism with human review. It remains unclear how effective these mechanisms will be in practice, as a case-by-base assessment by a human being requires a lot of time and does not seem very efficient, considering the fact that the amount of requests will be huge.

As it currently stands, the Directive will probably create a lot of uncertainty for both right holders and platforms, and it is expected that a lot of questions will have to be answered by the CJEU.

 

Terms & Conditions Twitter Facebook Google vs. Tribunal Paris

The Paris Tribunal looked at the terms and conditions of Twitter[1], Google[2], and Facebook[3]in decisions rendered on 7 August 2018, 12 February 2019 and 9 April 2019.

The proceedings of all three cases were brought by the French consumer association “UFC Que Choisir?” (UFC). UFC applied to the Paris Tribunal that the terms of Twitter, Google and Facebook be declared unlawful under French privacy law, data protection regulation, contract and copyright law.

The Tribunal’s review declared null and void most of the clauses challenged by UFC, including the contract’s copyright licensing provisions for user-generated content.

 

Users are consumers

In all three cases, the Tribunal of Paris considered that the users of Twitter, Google and Facebook were consumers. Whilst the users of Twitter, Google and Facebook do not ‘pay’ for the services, using the platforms is not gratuitous. The Tribunal emphasized that users consented to their personal information and other data being used by the platforms (and its commercial partners), in exchange for the right to avail themselves of the platform’s services. Consequently, since the platforms are not free, the consumer protection law does apply to their terms and conditions.

 

Copyright clauses

The Copyright licensing provision for user-generated content consisted of two parts for Twitter, Google and Facebook. In the first clauseit was mentioned that users retain allrights to anycontentwhile in the second clause it was mentioned that users grant a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to Twitter, Google and Facebook.

For example, in the T&C’s of Google, the following clauses were used:

    1. Some of our Services allow you to upload, submit, store, send or receive content. You retain ownership of any intellectual property rights that you hold in that content. In short, what belongs to you stays yours
    2. When you upload, submit, store, send or receive content to or through our Services, you give Google (and those we work with) a worldwide license to use, host, store, reproduce, modify, create derivative works(such as those resulting from translations, adaptations or other changes we make so that your content works better with our Services), communicate, publish, publicly perform, publicly display and distribute such content.The rights you grant in this license are for the limited purpose of operating, promoting, and improving our Services, and to develop new ones. This license continues even if you stop using our Services (for example, for a business listing you have added to Google Maps). Some Services may offer you ways to access and remove content that has been provided to that Service. Also, in some of our Services, there are terms or settings that narrow the scope of our use of the content submitted in those Services. Make sure you have the necessary rights to grant us this license for any content that you submit to our Services.

In all three cases, more or less the same reasoning was followed by the Tribunal.

With regard to the first clause, in which was mentioned that users retain allrights to anycontent, the Tribunal ruled that this clause must be nullified because it recognizes users’ Intellectual Property Rights over their content, contradicting the terms of the second clause, which provides that users grant the online platform a full license for the exploitation of that content.

With regard to the second clause, the Tribunal ruled that the clause was so broad that it contravenes the French Intellectual Property Code (“Total transfer of future works shall be null and void”) which provides for stricter treatment of what can be licensed or assigned than what most common law countries do. The contractual obligations between the platforms and their consumers regarding the transfer of copyright were therefore significantly disproportional and constituted an infringement within the meaning of the French Consumer Code and thereby breaches the provisions of the French Intellectual Property Code.

Despite the very clear decisions of the Tribunal of Paris, neither Twitter, Google or Facebook has changed in the meantime their copyright clauses. To be continued…

Hashtags

The use of social media is soaring, and people are increasingly using #hashtags. As the importance of hashtags increases, two issues often come up. The first is whether a business can or should protect its hashtags. The second is whether your use of someone else’s trademark as a hashtag constitutes a trademark infringement, or conversely, whether a third party is infringing your trademark when it uses a hashtag that includes your mark.

With regard to the first issue, the symbol « # » is internationally used in social media for tagging messages with a specific theme or content and is therefore of secondary importancein the overall impression created by a sign. Accordingly, the symbol « # » is weak and does not have any distinctive character.[4]
A number of interesting recent cases are briefly discussed hereunder:

 

  1. Align Technology vs. Strauss Diamond Instruments[5]  

Align Technology is a provider of the Invisalign teeth-straightening-system and also produces the iTero Element intraoral scanner that allows dentists to obtain three-dimensional scans of a patient's mouth, teeth, and gums. To complement this product, Align sells single-use protective sleeves that cover the portion of the iTero Element scanner inserted into a patient's mouth. Strauss Diamond Instruments produces a version of the protective sleeve meant to compete with the sleeves produced by Align.

Align sued Strauss in federal court for preliminary injunctive relief to enjoin, among other activity, Strauss' allegedly infringing use of "#invisalign" and "#itero," both of which are Align's registered trademarks, in various advertisements. On April 12, 2019, the Court granted Align's motion in part, granting a preliminary injunction on Strauss' use of the hashtags.

Firstly, Strauss used the marks to refer to its own products, not Align's products, which is the foundational assumption of nominative fair use. Secondly, Strauss' use of the marks was not reasonably necessary to identify its product, especially because the hashtags did not perform an identification function. Instead, they indicated a vague association with Align's products.
Accordingly, Strauss' nominative fair use defense failed and the Court enjoined Strauss' use of Align's marks as hashtags.

 

  1. Chanel vs. The RealReal[6]       

Chanel asserted claims of false advertising or endorsement, trademark infringement, and unfair competition under the Lanham Act against What Goes Around Comes Around (WGACA), a retailer of luxury preowned accessories and apparel. WGACA offers preowned Chanel products on its website and stores.

Chanel alleged that WGACA tagged photos of Chanel products with hashtag #WGACACHANEL on its social media pages, and that WGACA’s use of the hashtag #WGACACHANEL served “to create the impression that WGACA is affiliated with Chanel or is an authorized Chanel retailer,” thus infringing Chanel’s trademarks.

The Southern District Court of New York denied WGACA’s motion to dismiss the Lanham Act claims, stating that Chanel’s allegation was adequate, and that the nominative fair use doctrine did not change this outcome. The Court explained that WGACA’s Chanel-branded items would be readily identifiable as Chanel without the hashtag #WGACACHANEL. In addition, WGACA’s use of Chanel’s trademark was extensive as WGACA displayed Chanel-branded goods more prominently than other luxury-brand goods, and repeatedly used Chanel’s name in the hashtags and posted Chanel-branded products photos on social media. Finally, the Court found that the hashtag #WGACACHANEL and WGACA’s guarantees of authentication of themselves may be taken as suggesting sponsorship or endorsement by Chanel.

 

  1. Frank Industries vs. Nike[7]     

Frank Industries owns UK and EU trade marks for “LNDR” in Class 25 and Class 35. In January 2018, Nike launched a London-centric advertising campaign, with the hashtag #LDNR and tagline “Nothing Beats a Londoner”, to promote and inspire young local athletes.

Frank commenced proceedings against Nike for infringement and passing off claims and successfully obtained an interim injunction to stop Nike’s use. Nike argued that LNDR is “inherently descriptive” as an abbreviation meaning “Londoner” while Frank argued that the likelihood of confusion between the brand name LNDR and #LDNR was high.

Despite the fact that the judge agreed that #LDNR could be understood to mean “Londoner” in a certain context, he said it did not mean “that LNDR would have been perceived by the average consumer as meaning Londoner when used in respect of clothing … in the absence of some context suggesting that meaning”. Therefore, in this case, the judge held that LNDR only had a “moderately strong distinctive character”. Despite the presence of the Nike Swoosh, Frank had built up enough reputation and goodwill, in selling their goods under the LNDR trade mark, that there would be sufficient confusion, in the eyes of the average consumer, that #LDNR was the brand name of LNDR and not just an abbreviation of “Londoner”. Accordingly, Nike’s campaign was found to infringe upon Frank’s LNDR trade mark, due to the use of the #LDNR hashtag.

 

Trademark, Copyright and other infringements on social media

Social media is a real spanner in the IP works, since it’s all about sharing content that IP is in the business of restricting. The two recent cases below demonstrate the issue of copyright infringements on social media:

  1. Gigi Hadid vs. Xclusive[8]

Hadid manages her own Instagram account, which has over 44 million followers worldwide. On 12 October 2018, she posted a picture of herself to her Instagram account. The copyright holder of the image in question, which was captured on October 11, 2018 in New York City is Xclusive (a photo agency that represents over 40 photographers worldwide).

Photo:

 

Xclusive brought a civil complaint against Hadid in the United States District Court for the Eastern District of New York seeking damages for copyright infringement under the copyright laws of the United States. Xclusive argues that Hadid’s Instagram account includes at least fifty examples of uncredited photographs of Hadid in public, at press events, or on the runway, posted by Hadid without license or permission from the copyright holder. Xclusive believes these acts of infringement are willful and intentional, in disregard of and with indifference to the rights of copyright holders. To be continued…

 

  1. Chanel vs. The RealReal[9]

In November 2018, Chanel filed a lawsuit against The Real Real (TRR) before the New York district court accusing them of selling fake Chanel bags and violating federal trademark and advertising laws.

Now TRR is fighting back by filing a formal response and a motion to dismiss the case, which TRR described as “an unfounded and anticompetitive attack on a business model [that Chanel] perceives as a threat — a secondary marketplace where consumers exercise their established right to consign, sell, and buy luxury items,”. According to TRR, Chanel is trying to “shut down the secondary market for Chanel goods by permanently preventing TRR from reselling its consignors’ products,” which they say violates the rights of consumers to resell the things they own. Furthermore, TRR asserts that Chanel is attempting to “undermine consumer confidence in the secondary market, and stifle legitimate competition,” on the whole. To be continued…

 

  1. Tommy Hilfiger vs. Facebook[10]

In the Netherlands, the judge of the Court of First Instance has ruled in summary proceedings that Facebook has to pay Tommy Hilfiger 730,000 euros in penalty payments, because the company would have done too little to prevent advertisements for fake Tommy Hilfiger designer clothes via Facebook and Instagram.

Tommy Hilfiger and Facebook concluded an advertising agreement for the aforementioned platforms. Already on 21 December 2018, Facebook was sentenced to take the necessary measures to remove advertisements for fake Tommy Hilfiger items. According to Tommy Hilfiger, those advertisements were easily recognizable by, among other things, the low price or large discounts, descriptions in poor English and mentions of free delivery.

The judge in summary proceedings ruled that Facebook has not (fully) complied with the earlier conviction for a period of 73 days. Therefore, the judge confiscated a sum of 73 x 10,000 euros in penalty payments.

 

Conclusion

The above discussed topics illustrate how the internet and social media raise issues concerning intellectual property law. Legislators and courts have a major role to play in considering the manners in which intellectual property rights should be upheld in a social media context. The internet and social media have not only opened up new avenues for communications and brand promotion such as to purchase “likes” on Instagram, but they have also added entirely new ways to infringe on intellectual property rights.

Ensuring that your business and your brand are protected in cyberspace is important. Please do not hesitate to contact us should you have any questions.

Christine DE KEERSMAEKER                  Katrien MARIS                         Elisabeth VAN NERUM

Partner                                                   Senior Associate                        Associate

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[1]Paris Tribunal de Grande Instance, UFC-Que Choisir v Twitter, 7 August 2018.

[2]Paris Tribunal de Grande Instance, UFC-Que Choisir v Google,  12 February 2019.

[3]Paris Tribunal de Grande Instance, UFC-Que Choisir v Facebook, 9 April 2019.

[4]General Court, Judgment of 26 October 2017, Hello Media Group v EUIPO, T-330/16, EU:T:2017:762, §52.

[5]US District Court for the Northern District of California, Align Technology, Inc.,  v Strauss Diamond Instruments, Inc., 12 April 2019.

[6]US District Court for the Northern District of New York, Chanel, Inc., v Wgaca, LLC,14 September 2018.

[7]London Intellectual Property Enterprise Court,Frank Industries PTY Ltd v Nike Retail BV, 25 July 2018.

[8]US District Court for the Eastern District of New York, Xclusive-Lee, Inc., v Hadid, still pending.

[9]US District Court for the Northern District of New York, Chanel, Inc., v The RealReal, Inc.,14 November 2018.

[10]Amsterdam Court of First Instance, Tommy Hilfiger Europe BV et al. v Facebook Netherlands BV and Facebook Ireland Limited, 12 April 2019.