Intellectual Property

CJEU ruled on likelihood of confusion of trademarks when the confusion exists only in part of the EU

In its judgement C-223/15 combit Software GmbH v. Commit Business Solutions Ltd of 22 September 2016, the Court of justice of the European Union ("CJEU") stated that articles 1 (2), Article 9(1)(b) and Article 102 (1) of Regulation No 207/2009 on the Community Trademark must be interpreted so that in case a EU trademark court finds that the use of a sign creates likelihood of confusion with an EU trademark in one part of the European Union but does not create such in another part of the European Union, the court is to decide that there is an infringement of the exclusive right of that EU trademark. Further, the court shall issue an order prohibiting such use of the trademark in the entire EU but however not in the parts where no likelihood of confusion has been found.

The owner of the prior trademarks (EU and national German registrations) in the case was combit Software GmbH, a company functioning under the German law who had registered the marks for computer industry goods and services. The defendant Commit Business Solutions, is a company governed under Israeli law which is in the business of selling software that bears the sign "Commit". The sale takes place in many countries through its website and, at the time the case was initiated, there even was a German version of the website available with an option for delivery in Germany. The German court referring the case to the CJEU concluded that the likelihood of confusion between "Commit" and "combit" only existed in the German-speaking Member States.

The CJEU found that a prohibition encompassing the whole of EU would in this case be in excess of the exclusive right of the EU trademark. Based on this ruling, the EU courts in Member States must from now on identify the part of the European Union in which the trademark does suffer adverse effects and also where is doesn't. This might create a challenge for the EU courts concerned with this question as it must be very clear from the court order which part of the Union is not covered by the prohibition.

IT & Communications

EU Commission Proposes New Copyright Legislation in Accordance with the Digital Single Market Strategy

On 6 May 2015, the European Commission launched a Digital Single Market Strategy which includes 16 initiatives opening up new digital possibilities for people and business. The aim is to enhance Europe's position as a world leader in the digital economy. In connection to this, on 14 September 2016, the European Commission issued proposals for Directive COM(2016)593 on copyright in the Digital Single Market and for Regulation COM(2016)594 laying down rules on the exercise of copyright and related rights applicable to certain online transmissions of broadcasting organizations and retransmissions of television and radio programs. In addition, on 14 September 2016, the Commission proposed a Connectivity Package, which for example aims to support public authorities in offering free Wi-Fi access in public spaces.

The proposed directive on copyright focuses on simplifying the use of works and other subject-matter in digital and cross-border teaching activities, protection of press publications concerning digital uses, claims to fair compensation for the uses of a work and the 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. Also, one important goal is to preserve cultural heritage by permitting institutions to make copies of works that are permanently in their collections for the sole purpose of preservation of such works.

The proposed regulation includes for example the application of a so called ''country of origin principle'' to broadcasting organizations providing ancillary online services. It also legislates the rights in retransmission of television and radio programs by right holders other than broadcasting organizations.

The copyright proposals are part of the Modernization of the EU copyright rules which aims to create a well-functioning, modern copyright framework to balance the protection of creators and cultural industries. The directive and the regulation will ensure better access to content online and across borders, improved copyright rules on research, education and inclusion disabled people, as well as a fairer and sustainable marketplace for creators, the creative industries and the press.

Marketing & Consumer

CJEU: Selling a Computer with Pre-installed Software does not Constitute an Unfair Commercial Practice 

In the ruling Sony Europe Limited v Vincent Deroo-Blanquart (C-310/15) of 7 September 2016, The Court of Justice of the European Union ("CJEU") ruled on the interpretation of Article 5 and 7 of the Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market. The CJEU held that the sale of a computer equipped with pre-installed software without any option for the consumer to purchase the same computer without the software does not in itself constitute an unfair commercial practice.

Mr. Vincent Deroo-Blanquart purchased a laptop from Sony Europe Limited. The laptop was equipped with pre-installed software including Windows Vista Home Premium operating system and some other software applications. Mr. Deroo-Blanquart refused to subscribe to the operating system's "end-user license agreement" and requested reimbursement from Sony of the part of the purchase price of the computer corresponding to the cost of the pre-installed software. The basis of his request was that since he had bought his Sony laptop for its mechanical parts and technical qualities, he had no need for the pre-installed software. Sony turned down his request, resulting in court proceedings between Mr. Deroo-Blaquart and Sony. The French court (Cour de Cassation) requested preliminary ruling on the area of unfair commercial practice.

The CJEU assessed that the sale by Sony of computers with pre-installed software met the expectations of a significant proportion of consumers who prefer purchasing a computer that is already equipped and ready for immediate use, rather than purchasing a computer and software separately. The court also stated that the failure to indicate the price of each of those items of pre-installed software does not constitute a misleading commercial practice.

Media & Entertainment

CJEU Rules on the Interpretation of "Private Use" in the Context of Private Copying Exception and Fair Compensation

In the judgment Microsoft Mobile Sales International (C-110/15) of 22 September 2016, the Court of Justice of the European Union ("CJEU") assessed the interpretation of Article 5(2)(b) of Directive 2001/29/EC (the "Information Society Directive") in the context of private copying exception and fair compensation for copyright owners. The CJEU found that EU law precludes national legislation that obliges legal persons to pay private copying levy and provides that the reimbursement of an unduly paid levy may be requested only by the final user, not by the manufacturer, of the devices and media.

The ruling was given in a dispute between eight companies which produce and sell technical devices, e.g. Microsoft Mobile Sales International Oy, and the Italian Ministry of cultural assets and activities and tourism (the "MIBAC") and four other associations. The companies maintained that Italian legislation in question is contrary to the EU law on account of the private copying levy for persons acting for purposes clearly unrelated for private copying. Further, they claimed that the delegation of powers by MIBAC to the body in charge of the collective management of copyright in Italy "SIAE", is discriminatory, since it empowers the SIAE to determine the criteria for exemptions from payment of the levy.

Eventually the case reached the Italian Council of State, which referred the matter to the CJEU for a preliminary ruling on whether it is prohibited that the SIAE determines the criteria for providing exemptions for professional use of the devices and media, and that the request for reimbursement of compensation is confined to the end user of those devices and media.

In its ruling, the CJEU referred to its earlier case-law (Copydan Båndkopi, C-463/12) and reminded that fair compensation system must be linked to the harm resulting for the right holder from the making of copies for private use. The court held that the levy must not be applied to the supply of reproduction equipment to legal persons for purposes clearly unrelated to private copying. Moreover, the exceptions must be applied in a manner consistent with the principle of equal treatment. The CJEU found that EU law must be interpreted as precluding national legislation which goes against these principles.

In Brief

The Finnish Supreme Court Dismissed the Consumer Ombudsman's Claim on the Issue of Charging for a Paper Invoice

The Finnish Supreme Court overruled (KKO:2016:49) a Market Court decision on 16 August 2016. The Market Court had prohibited Elisa Oyj from applying a separate fee to issuing of paper invoice.

The Supreme Court did not consider charging for a paper invoice being unreasonable in view of Consumer Protection Act (1978/38). Elisa offered several different billing methods and the price of each method was clearly stated. The Court found that even where a billing method which does not require the use of the internet must be provided, such a method does not need to be free of charge.

The Swedish Patent Market Court of Appeal Dismissed Copyright Infringement Claim due to Lack of Evidence 

The recently formed Swedish Patent and Market Court of Appeal ruled on copyright relating to a portrait photo in a dispute between two individuals (PMFT 1257-15) on 28 September 2016. In essence, the Court found that although the original photo did not reach the threshold of originality required to constitute a work, it did enjoy copyright protection as a photograph, according to 49 a § Swedish Copyright Act.

The Court ruled that the plaintiff had not submitted sufficient evidence to prove that the allegedly infringing photos were depictions of the original photo. When investigating the low resolution photos submitted as evidence, the Court, among other things, noted that the haircuts of the people portrayed in the photo appeared to differ between the photos.

EGC: A Simple Sound Mark Shall Not Be Registered as a Trade Mark if it Lacks Distinctive Character

The General Court of the European Union ("EGC") dismissed an application for a sound mark in a dispute between Globo Comunicação e Participações S/A and the European Union Intellectual Property Office ("EUIPO") (T‑408/15). The EGC assessed the interpretation of Article 7(1)(b) of Regulation No 2009/207/EC on the Community Trade Mark as regards the distinctive character of the trade mark. The Regulation has subsequently been replaced with a new codification, and is now called the on the Regulation on European Union trade mark.

The applicant observed that the mark applied for, which consisted of a simple ringing sound, is widely known in Brazil and that other similar marks have been registered in France and United States. However, the Court held that the mark applied for could not be perceived as an indication of the origin of the goods. According to the Article 7(1)(b) a lack of distinctive character is an absolute ground for refusal and therefore the EGC dismissed the application.