The CJEU clarifies when stem cells can be patented in Europe

 

Anna Dannreuther; all views are the author's own

In its judgment yesterday in International Stem Cell Corporation on biotechnology patents, the CJEU qualified its ruling in Brüstle by shifting the emphasis of what it takes for a non-fertilised human ovum stimulated by parthenogenesis to constitute a ‘human embryo’ and thus be unpatentable under the Biotechnology Directive. The Court ruled that in order to constitute a ‘human embryo’ for the purposes of the Directive, the stimulated ovum must have the ‘inherent capacity to develop into a human being’. This is in contrast to its previous ruling in Brüstle where it held that such an ovum would only constitute a ‘human embryo’ if it were ‘capable of commencing the process of development of a human being’.

Background

The case concerns the patentability of living material under the Biotechnology Directive 98/44.  The aim of the Directive is to strike a balance between encouraging biotechnological research by way of patent law and protecting the dignity and integrity of the person. As such, while the Directive treats biotechnological inventions generally no differently from any other inventive science that comes forward with patent claims, it forbids patenting certain processes on ethical grounds. In addition to a general prohibition on inventions whose patentability would go against public order or morality, it specifically forbids patenting the following processes: cloning human beings, modifying the germ line of humans, and using human embryos for industrial or commercial purposes.

In the 2011 judgment in Brüstle, the CJEU had the opportunity to define ‘human embryo’. This was in the context of a German neurobiologist who held a patent in Germany for the production of neural precursor cells from human embryonic stem cells (confusingly, this term is used even when they are not stem cells derived from human embryos). He claimed his methods offered promising methods of treatment for neurological diseases. Greenpeace challenged the validity of the patent on the ground that the process involved using human embryos. The referring court asked the CJEU several questions relating to the nature of the concept ‘human embryo’ under the Directive. The Court held that:

 any human ovum after fertilisation… and any non-fertilised human ovum whose division and further developments have been stimulated by parthenogenesis constitute a ‘human embryo’.  [para 38]

The Court justified the unpatentability of both fertilised ova and non-fertilised ova on the basis that the latter were, just like embryos created by fertilisation of an ovum, ‘capable of commencing the process of development of a human being’ [para 36].

In the present case, International Stem Cell Corporation seeks to register as a patent in the UK the process of ‘parthenogenetic activation of oocytes for the production of human embryonic stem cells’ (for ease, I will refer to the activated oocytes (ova) as ‘parthenotes’). Essentially, the process involves ‘activating’ a human ovum by a variety of chemical and electrical techniques. Such an activated ovum can develop into the blastocyst phase (about 200-300 cells following cell division) but it is unable to develop further, as it lacks the paternal DNA necessary to form extra-embryonic material (placenta).  The process falls into the third category of processes which Brüstle deemed unpatentable by virtue of constituting a ‘human embryo’.

Henry Carr QC, sitting as Deputy Judge of the High Court, queried whether the Court’s interpretation in Brüstle can be correct if, in light of current scientific knowledge, parthenotes are incapable of developing into a human being. He decided to refer a question to the CJEU on the point. In his judgment, he strongly suggested that the Court should rule in favour of excluding this particular process from the notion of ‘human embryo’. At paragraph 35 he observes:

Stem cells have the potential to revolutionise the treatment of human disease because of their capacity to differentiate into almost any type of adult cell. The recitals to the Biotech Directive express two competing policy considerations. On the one hand, the research in the field of biotechnology is to be encouraged by means of the patent system, and on the other hand, that patent law must be applied so as to respect the fundamental principles safeguarding the dignity and integrity of the person…The Biotech Directive is to be interpreted in a way that balances these competing policy considerations.

Judgment

The Court states that the principle in Brüstle must be taken to mean that in order to be classified as a ‘human embryo’, an unfertilised human ovum whose division and further development have been stimulated by parthenogenesis (a parthenote) must necessarily have the ‘inherent capacity of developing into a human being’ [para 28]. Endorsing the Advocate General’s Opinion, the Court thus stresses that the emphasis is on whether the parthenote can develop into a human being, rather than whether it can commence this process. The determination of whether a parthenote has such a capacity is left for the national courts to determine [para 36 – 38].

The Court does not explain its reasoning for the change in emphasis. It does acknowledge a divergence of scientific information in the written observations before the court in the present case and in Brüstle. Whereas in the present case the information provided suggested that parthenotes could not develop into human beings, the information in Brüstle suggested that parthenotes could develop into human beings [paras. 31. 33]. This seems to be one of the ‘foregoing considerations’ mentioned in paragraph 38 that the Court bases its judgment on. The Court did not deal with the eventuality that the parthenote could be genetically manipulated in such a way that it can develop to term as International Stem Cell Corporation had amended their applications for registration to exclude the prospect of additional genetic information.

 

Comments

The Court’s decision is to be welcomed. It qualifies Brüstle so that parthenotes are not automatically included in the definition of ‘human embryo’ and hence excluded from patenting. It thus allows for the patenting of biological research involving alternative methods of obtaining embryonic stem cells. However, two points of contention should be noted.

First, as the Advocate General point outs in paragraph 43 of his Opinion, Member States are still able to prohibit patentability of parthenotes under Article 6(1) of the Directive on the grounds of public order or morality. Although the shift from outright exclusion to determination by Member States will be welcomed by more biologically protective States (such as Poland, who intervened in the case to argue for parthenotes’ exclusion from patentability in the interests of safeguarding human dignity) there are risks in this. As the patentability of parthenotes is now dependent solely on Member States’ cultural norms, a ‘patent tourism’ could emerge, whereby parthenote stem cell researchers will locate in jurisdictions which welcome their processes and avoid those which do not. Given the economic disadvantages for parthenote researchers locating in unwelcoming patent jurisdictions, this may not bear well on freedom of establishment and free movement of services. Although this is a potential risk for all biotechnological processes, the shifting classification of parthenotes may lead to greater divergence in their treatment across Member States.

Second, the judgment lacks any kind of discussion on at what point the organism develops into a human being and is thus excluded from the concept of ‘human embryo’. The Court leaves it to the national court to determine whether the parthenote has the ‘inherent capacity to develop into a human being’. This is unhelpful as the national court has to decide both whether the parthenote has the inherent capacity to develop into a human being, and if not, whether it is prohibited from being patented on grounds of morality and/or public order. This seems like a lot to labour national courts with, who could have done with some guidance on the principle. Equally, the principles to be deduced from the cases are tricky. Seeing as Brüstle still maintains that fertilised human ova constitute ‘human embryos’, are national courts to assume that parthenotes do not constitute human beings to the extent that they fail to make extra-embryonic tissue and therefore differ from fertilised human ova? What if parthenotes were created which could make extra-embryonic tissue? Would the case law suggest that these parthenotes could lead to the development of a human being? Even if this seems simple or obvious, it would have been useful for the Court to clarify this.

Equally, a comment on the patentability of parthenotes, which could then be subject to later genetic manipulation, would have been useful.

Conclusion

As it stands, patenting parthenotes is no longer definitively prohibited due to their classification as ‘human embryos’ under Brüstle. However, their patentability is determined wholly by Member States, either on the grounds of public order or morality, or whether the Member State classifies them as ‘human embryos’ under the new definition. The judgment would have been more helpful if it had given guidance to national courts on what constitutes ‘development into a human being’.

 

 

Photo credit: Daily Telegraph

Has UKIP lost all sense of humour? Another parody tale…

By Sabine Jacques

PhD student focussing on the parody exception 

at the School of Law, University of Nottingham (UK)

 

Introduction

Last September 2014, a Twitter account called ‘UKIP Trumpton’ was established by Mike Dicks, stating that ‘After the recent defection of the Mayor of Trumpton and Mr Troop the town clerk this is the new home of UKIP tweets from Trumptonshire’ and used as logo of its own the official logo of UKIP (a right wing political party). This weekend, the creator of the account shared on his Facebook profile that the aim was to ‘gently take the mickey out of UKIP - It struck me that most ukip supporters or 'Kippers' were reminising about a Britain of their youth that was more like the classic kids show Trumpton than the reality I remembered so I chose to start Trumpton UKIP and pretend the Mayor and Mr Troop had defected to the people’s army’. After learning the existence of this account, UKIP MEP David Coburn announced the account as ‘fake’ and asked his 9000 followers to report/block the parody account. The creator of the account recently reported that the Mr Coburn threatened him to take legal action for the use of the party’s trade mark. Against this backdrop, this post presents an overview of the legality of the parody under copyright and trade mark laws (but not libel law), as well as Twitter’s policy on parodies.It’s relevant also by analogy to other parodies of UKIP, or other political parties besides.

Should UKIP Trumpton account be maintained?

1)    Is the parody exception applicable to the use made by Mr Dicks?

With the recent introduction of the fair dealing exception for the purpose of parody under copyright law and its recent interpretation by the Court of Justice of the European Union (discussed here and here), this case could be the first interpreting the UK provision. UKIP could argue that the logo is copyright protected as artistic work under section 4(1)(a) CDPA and that by reproducing this logo, Mr Dicks infringed the exclusive right of reproduction of UKIP. UK law would apply, and the UK courts would have jurisdiction, in accordance with the EU’s Rome II and Brussels Regulations.

If infringement is found, Mr Dicks could argue the application of the parody exception. To do so, he needs to prove that the use was for the purpose of parody and that the use was fair.

Regarding the purpose, the Court of Justice of the European Union established that the use needs to constitute the expression of a humour and the absence of confusion between the use and the original. In this particular case, the humoristic character derives from the association made between the political party’s possible view on the ideal Britain and a children’s television series called ‘Trumpton’ whereby apart from the ice cream vendor, there were no immigrants featuring. Despite the lack of guidance from the Court on how the humour element should be appreciated, it is argued that courts must interpret this requirement broadly as to include spoofs and other form of parodies. It is also argued that this requirement must be appreciated based on the parodist’s intent. In this case it appears that that Mr Dicks aimed ‘to gently take the mickey out of UKIP’. Hence, this requirement should be easily fulfilled. Moving on to the absence of confusion, this requirement might be more difficult to reach. While most of the viewers will not be confused as to the parody character of the account, the study of the fairness factors should help determining whether the use is allowed or not.

As mentioned, there is no decision interpreting the UK provision to this day. The reasoning will be inherently purely speculative. It is established that fairness is a question of degree, a matter of impression. Hence, the factors generally include the amount taken, the use made (commercial motives), consequences of the dealing (competition with the original?), whether the work is published, the motives of the dealing (such as dishonesty) and the availability of other means. As not all these factors would be relevant for parody uses, it seems that the most problematic is the amount reproduced. This factor requires the courts to consider the number of extracts and their extent. As in this case Mr Dicks’ account reproduces the entire logo with the addition of Trumpton, this could lead to the conclusion that the use is infringing. Yet it seems that UK case law does not rule out the possibility to copy the entire original work as long as the nature and purpose of the use fit the goal of the exception. This should create some margin for courts to acknowledge the parody use of Mr Dicks. By relying on the overall appearance of the alleged infringing Twitter account, the use should be found covered by the exception.

2)    Could Mr Coburn be successful in his action under trade mark law?

Unlike under copyright law, there is currently no specific parody exception under the Trade Mark Act 1994 creating a defence for parody use. Essentially, trademarks differ from copyright insofar as the primary function of trade mark law is the identification of goods and services in the market place. Other functions are also recognised depicting mostly added value of the trade mark such as communicator or social functions. Following the harmonisation of trade mark laws by the Trade mark Directive, the Trade Mark Act broadened the scope of infringement to encompass similar and dissimilar goods or services (article 5.2 of the Directive and section 10 of the Trade Mark Act). Against this backdrop, it appears that Mr Coburn has a strong position to argue for the infringement of the graphic and verbal trade marks of UKIP and consequently, the ban of the Twitter account.

Yet, section 10 of the Trade Mark Act requires the use to take place ‘in the course of trade’ and ‘in relation to goods or services’. In a nutshell, the reasoning is twofold: (a) we need a use in the course of trade; (b) there needs to be a use as a trade mark. Despite the broad interpretation of ‘in the course of trade’, it is hardly arguable that Mr Dicks’ use fulfils this requirement. Due to this requirement, most parodies would fall outside the scope of the Trade Mark Act. Additionally, as the parody use made by Mr Dicks is constitutes a vehicle for non-commercial expression for the primary purpose of political comment, it could be argued that the use of UKIP’s trade mark is not in relation to goods and services.

If the use were to be found as ‘in the course of trade’ and ‘as a trade mark’ then there needs to be likelihood of confusion or association.

Under the Trade Mark Act, likelihood of confusion requires 3 elements: (a) a distinctive trade mark, (b) the similarity between the goods and services, (c) the similarity between the sign used and the protected mark. This is different from the confusion requirement under copyright as the latter mainly refers to the similarities between the altered work and the protected work to assess whether the public is likely to believe that the parody originates from the original author or was supported by the author. Although the existence of these differences, it is argued that most parodies should be found lawful under trade mark law as the very nature of parody requires the absence of confusion between the use and the original.

As the likelihood of confusion is rare, what remains is the likelihood of association with the original. This occurs when consumers are in a position to make a mental connection between the parody and the registered mark. Despite Laddie J.’s statement in the well-known Wagamama case rejecting its application in UK Trade mark law (retaining as the only possibility the likelihood of confusion as to the origin), the Court of Justice of the European Union held that the likelihood of confusion includes the likelihood of association (Lloyd Schuhfabrik Meyer & Co. GmbH v. Klijsen Handel BV, at 17; SABEL v. Puma at 18-19). Yet if section 10(2) of the Trade Mark Act includes all associations which recalling UKIP, parodies will inherently infringe based on their very nature unless it can be shown that the use is outside the course of trade.

If there is no confusion, could there be dilution of UKIP’s trade mark? To be successful under section 10(3) of the Trade Mark Act, UKIP will have to show that the registered mark has a reputation in the UK and that Mr Dicks' use of an identical or similar sign, without due cause and in the course of trade, takes unfair advantage of, or is detrimental to the distinctive character or the repute of UKIP's mark. Therefore, confusion is no longer a requirement under this provision. UKIP’s reputation will probably be easy to prove in front of the court. Hence, Mr Dicks will have to attempt to argue due cause. Currently, there this concept of due cause leave extensive room for judicial interpretation and could enable courts to build the bridge with the fair dealing defence under copyright or refer to the freedom of expression. Nevertheless given the commercial context of the Act, the courts could restrict due cause to commercial necessity.

This being said, in case of unfair advantage (in such way that the use of the trade mark aims to gain an advantage) where no harm is proven to UKIP, the freedom of expression argument should prevail over the enforcement of the trade mark rights of the UKIP. The difficulty lies in the fact that the interpretation of this provision fails to distinguish between taking unfair advantage of the distinctive character and taking unfair advantage of the reputation of a trade mark. As trade mark law does not distinguish between uses of marks for the purpose of market communication and uses in other domains such as parody, it’s not clear explains how right holders are in a position to bar parody uses.

3)    How does Twitter manage parody accounts?

Under its rules and policies, Twitter provides guidelines  as to manage parody accounts. Following these, several requirements have to be met: (a) ‘The avatar should not be the exact trademark or logo of the account subject’; (b) ‘The name should not be the exact name of the account subject without some other distinguishing word, such as "not," "fake," or "fan."’; and (c) ‘The bio should include a statement to distinguish it from the account subject, such as "This is a parody," "This is a fan page," "Parody Account," "Fan Account," "Role-playing Account," or "This is not affiliated with…"’. Therefore, users are enable to create parody accounts as long as they meet the requirements set here above.

By shutting down accounts which do not meet these requirements, Twitter decides to resolve internally a possible infringement leading to a possible curtailment of freedom of expression. While the authorisation process is more transparent than it used to be, it might still stifle the freedom of information and ideas.

Conclusion

As this blog post shows, the regime of parodies is not a peaceful journey and uncertainties remain. While copyright infringement appears hard to argue, UKIP is in a stronger position regarding the infringement of their trade marks due to the current trajectory of trade mark protection. Also, UKIP could file a complaint directly to Twitter as the alleged infringing account fails to expressly mention its parody nature in the bio.

Should consumers be expected to know foreign languages? The CJEU ruling in the Golden Balls case

 

Anna Dannreuther, Trainee, Research Department of the CJEU (All views author’s own)

In its judgment of 20 November in the case of Intra-Presse SAS v OHIM (the 'Golden Balls' case), the CJEU notably did not end the 7 year trade mark battle between the UK family-run company Golden Balls Ltd. and Intra-Presse, the French organisers of FIFA’s Ballon d’Or or European Footballer of the Year Award. In a dispute concerning the registration of the word mark ‘Golden Balls’, the eighth chamber of the CJEU sent the case back to the Office for Harmonization in the Internal Market (“OHIM”) to be decided on one of the grounds of appeal at issue in the case, and has given firm instructions on the assessment to be pursued.

Background

In 2007, Gus and Inez Bodurs of Golden Balls Ltd., sought registration of the word mark ‘Golden Balls’ as a Community Trade Mark. In 2008, Intra-Presse filed opposition proceedings against the registration in respect of their earlier registered Community Trade Mark ‘Ballon d’Or’. They did so on the grounds of Article 8(1)(b) and 8(5) of the Community Trade Mark Regulation No 40/94, now found in Regulation 207/2009.  

Under Article 8(1)(b),  the ‘confusion ground’, registration may be refused if there exists a likelihood of confusion on the part of the relevant public because of the similarity between the two trade marks and  the similarity of the goods and services covered by them.  Under Article 8(5), the ‘reputation ground’, if the later mark is similar to the earlier mark and the earlier mark has a reputation in the Community and the Member State concerned, registration can be refused even for goods and services not covered by the earlier trade mark, where such registration would take unfair advantage of, or be detrimental to the repute of the earlier trade mark.

The First Board of Appeal of the OHIM held that the two word marks were ‘extremely similar’ [para 15]. On that basis they upheld Intra-Presse’s opposition under Article 8(1)(b), and only registered Golden Balls’ mark for goods not covered by the mark ‘Ballon d’Or’, thereby dismissing Intra-Presse’s  opposition under Article 8(5).

On appeal, the General Court of the European Union found that the signs ‘Ballon d’Or’ and ‘Golden Balls’ only had a weak degree of conceptual similarity, which was not enough to offset their visual and phonetic dissimilarities [para 28] to create confusion. It also found that the signs lacked the requisite similarity for the purposes of applying Article 8(5). It thus rejected Intra-Presse’s opposition in entirety.

Intra-Presse appealed this judgment on three grounds; (i) distortion of the facts in the assessment of the abilities of the relevant public; (ii) infringement in Article 8(1)(b) of Regulation No 40/94; and (iii) infringement of Article 8(5) of Regulation No 40/94.

Judgment

As regards the first two grounds, the Court held that it had no jurisdiction to rule on appraisals of fact, as appeals to the CJEU are limited to points of law under Article 256(1) TFEU and Article 58 of the Statute of the Court of Justice of the European Union [paras 38 and 63]. It accordingly found Intra-Presse’s pleas manifestly unfounded and manifestly inadmissible respectively.

Regarding the third ground of appeal, the Court reiterated its case law, notably Ferrero v OHMI, and stated that the degree of similarity required under Article 8(1)(b) and under Article 8(5) of the Regulation is different. For the former there must be such a degree of similarity as to lead to a likelihood of confusion on the part of the relevant public. For the latter, any degree of similarity triggers an overall assessment of the possibility whether registration of the later trade mark might be detrimental to the reputation of the former. Included in this assessment is whether the former trade mark has a reputation in the Community and Member State concerned. Accordingly, the Court sent the case back to the OHIM to adjudicate afresh on these matters, taking into account the guidance given in the judgment.

Comment

Not quite the judgment that any party wanted, the case nevertheless serves as a useful reminder that the degree of similarity needed in order to establish injury under both Article 8(1)(b) and Article 8(5) is different. Notably, under Article 8(5) any degree of similarity triggers an overall assessment of whether registration of the later mark would be injurious to the earlier mark. Integral to this assessment is the earlier mark’s reputation.

Of greater interest is the parties’ argumentation concerning the linguistic capabilities of the relevant public in relation to conceptual similarity. As the Court dismissed these grounds as appraisals of fact, OHIM’s findings in this respect may be interesting. Intra-Presse argued that the General Court had erred in law by stating that prior translation of the word marks was needed before it could be recognised by the relevant public as conceptually similar.  It added that when word marks are composed of basic words in various languages understood by the public, then there is no ‘intellectual process of translation’, nor does the consumer engage in ‘prior translation’ or ‘begin by translating’ [para 57]. It asserted that the meaning of those words would be immediately understood by the relevant public, whatever its mother tongue.

This case thus raises important linguistic issues. Given the multilingual nature of citizens of the European Union, to what extent do differences in the language of the word marks affect the likelihood of confusion of the relevant public? To what extent does this take into account cultural differences, such as U.K citizens’ lesser ability to speak languages, as compared to, say, Luxembourgish citizens? Specifically, what is the degree of linguistic knowledge of the average French or British consumer? We have seen cases where conceptual similarity is established when the languages of opposing word marks are both official languages of the territory of the relevant consumer (Organismos Kypriakis Galaktokomikis Viomichanias v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), Garmo AG, Case T-534/10, 13 June 2012[2012] E.T.M.R. 55) and where German, Finnish, Dutch, Danish and Swedish consumers are able to understand the English word ‘shark’ with prior translation (Osotspa Co. Ltd, established in Bangkok (Thailand) v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), Case T-33/03, 9 March 2005 E.C.R. 2005 page II-00763). However, we have not seen a case where the notion of ‘prior translation’ is discussed in detail, or a case assessing the language capabilities of the francophone and anglophone public. Here’s hoping that the case rises through the ranks and we see a CJEU ruling on this imminently.
 

 

Photo credit: Daily Mail

Whatever it takes: the Advocate-General’s opinion on the EU’s unitary patent

 

Steve Peers

Today’s two opinions (see here and here) on the legality of the EU rules on the unitary patent would, if followed by the Court of Justice, finally make way for the EU’s patent plans to bear fruit. However, this would be at the cost of compromising some established principles of the EU legal order.

Background

The European Union (and previously, the European Community) have struggled for decades to agree on patent rules. Treaties between Member States on patents were signed in 1976 and 1989, but never came into force. A proposed EU Regulation was agreed in principle in 2003, but the deal was regarded as unworkable because of its translation requirements.

The Treaty of Lisbon, in force 2009, then created a specific legal base for the adoption of EU intellectual property rules (Article 118 TFEU). It provides for the main rules to be adopted by the ordinary legislative procedure (qualified majority voting in Council, joint power for the European Parliament). However, the languages rules, which apply to translations of the patent (or patent claims), must still be agreed by unanimity.

Discussions on a proposed EU patent were revived starting in 2008, and the rules on the patent were agreed by the time that the Treaty of Lisbon entered into force, except for the languages issue. Due to a deadlock on that point, most Member States eventually agreed to trigger the process of ‘enhanced cooperation’, ie adopting EU legislation that applied to some Member States, but not others.

The enhanced cooperation process is different from the specific opt-outs that some Member States have as regards EU economic and monetary union and justice and home affairs law. The relevant Treaty rules set out a two-step procedure. First, enhanced cooperation must be authorised by the Council (by a qualified majority vote of all Member States): this requires also a request by a group of Member States, a proposal by the Commission, and the consent of the European Parliament (EP). Secondly, the legislation to implement enhanced cooperation must then be adopted using whichever EU procedure would usually apply, with the exception that only the Member States participating in enhanced cooperation get to vote.

This process was applied first of all in 2010, to authorise a group of Member States to adopt EU rules on choice of law in divorce. That case was not controversial. Since the authorisation of enhanced cooperation as regards patents in 2011, the process has been used once more to date, to authorise a group of Member States to adopt a financial transaction tax. The UK challenged the latter decision, but the CJEU rejected its challenge this spring, essentially on the grounds that the UK was only challenging the legality of the substance of the planned tax. But that issue cannot not be raised, as long as the participating Member States have not yet adopted the EU law implementing enhanced cooperation as regards the tax (see the earlier discussion on this blog). Those Member States still haven’t adopted such a law; when and if they do, a second challenge by the UK is likely.  

Similarly, the EU patent legislation has been challenged at both steps of the enhanced cooperation procedure. The initial authorisation of enhanced cooperation regarding patents was challenged by both Spain and Italy, each of which objected to the languages rules in the planned legislation, which provided for the key translations to be in English, French and German only. They lost this initial legal challenge in 2013, when the CJEU ruled that the conditions for authorisation of enhanced cooperation were satisfied.

In the meantime, the participating Member States adopted two Regulations implementing enhanced cooperation in this area at the end of 2012: one of them concerns the substantive rules governing a ‘unitary patent’, while the other governs the language rules.  Spain (this time without Italy) challenged these measures in turn; those two challenges are the subject of today’s opinion.

The EU legislation on this issue is closely linked to two international treaties. First of all, the European Patent Convention, agreed in 1973, which binds all EU Member States and a number of non-Member States as well. That treaty sets up a legal framework for registering a patent in a number of European countries, by means of an application to the European Patent Office which it sets up. This results in a ‘European patent’, but the legal title concerned is not genuinely uniform, but depends on the national law of each of the countries where the patent is registered. The point of the EU legislation is to create a form of European patent that will have uniform existence in all of the participating Member States, also reducing the costs of translation that would otherwise apply.

The second treaty concerned is a treaty among Member States creating a Unified Patent Court, in order to reduce the costs of litigation concerning European patents and the planned unitary patent. (Although the CJEU had objected to aspects of these plans in its Opinion 1/09, Member States believe that they have addressed the Court’s concerns). That treaty will come into force once thirteen Member States, including France, Germany and the UK, have ratified it. So far five Member States have, including France (UK ratification is imminent). The application of the EU’s unitary patent law is dependent upon this treaty coming into force, and the unitary patents will only be valid in Member States which have ratified the treaty (all Member States except Spain, Poland and Croatia have signed it; all Member States except Spain, Italy and Croatia participate in the Regulations).

The opinion

Spain’s legal arguments against the two EU Regulations differ somewhat. As regards the main Regulation, Spain argues that it is invalid because it creates a unitary patent dependent upon the acts of the European Patent Office, whose acts are not subject to judicial review. Secondly, the Regulation does not create ‘uniform protection’ within the meaning of Article 118 TFEU. Thirdly, there is a ‘misuse of power’, ie enhanced cooperation has been used for a purpose other than the Treaties allow for. Next, the Regulation breaches the rules concerning the conferral of implementing power upon the Commission, because it gives power to the Member States to decide on issues such as renewal fees.

As regards the languages Regulation, Spain argues that the special status of the French, English and German languages is discriminatory. Also, it argues that there is no legal power for the EU to regulate language issues in the event of a dispute, as the Regulation does, and that the Regulation violates the principle of legal certainty.

In both cases, Spain argues that the rules on adopting implementing measures are invalid, since powers to implement EU law have been granted to a non-EU body, the European Patent Office. Also, it argues that making the application of the Regulations dependent upon the ratification of the treaty creating the unified patent court breaches the principle of the autonomy of EU law.

The opinion of Advocate-General Bot rejects all of these arguments. In his view, the main Regulation does create ‘uniform protection’, since it gives unitary status to a European patent that would otherwise be dependent upon different national laws. While the Regulation does refer back to national law, it does so as a form of (in effect) mutual recognition, ensuring that the national law governing each unitary patent governs the validity of that patent in other participating Member States. He does not believe that the argument regarding judicial review of the European Patent Office has merit.

Next, he argues that the EU legislature could confer power on issues such as renewal fees back to the Member States, rather than the Commission, since there was no need for uniform rules at EU level (which is when the Treaty requires implementing powers to be conferred upon the Commission) in this case.

As for the autonomy of EU law, he argues that the CJEU cannot review the validity of the treaty creating a unified patent court. It does not violate the autonomy of EU law to make the implementation of the Regulations dependent upon the entry into force of that Treaty, given the close link between the judicial system for patent protection and the patent system as a whole. Indeed, he suggests that the ‘principle of sincere cooperation’ set out in the Treaties requires Member States to ratify the treaty creating the separate court, in order to ensure that the unitary patent is effective. 

The translation rules are also acceptable. While it is discriminatory to confine translations to three languages only, it is not disproportionate in light of the need to ensure the cost-effectiveness of the patent. Finally, the Advocate-General argues that the principle of legal certainty is satisfied, since only one language version is authentic. 

Comments

In principle, this case is important because it raises questions about the substantive grounds governing the implementation of enhanced cooperation. However, in practice only the argument relating to discrimination touches upon those substantive issues. And furthermore, in this case the discrimination argument doesn’t concern the nature of enhanced cooperation as such: the languages argument could equally be made against an EU legal measure which applies to all Member States, but which allows for the use of a limited number of languages only. Indeed, such an argument was made (unsuccessfully) against the translation regime of the EU trademark (the Kik judgment), which differs from the EU patent because it puts Spanish and Italian on an equal footing with the other three languages.  It looks as if we might have to wait for the legal challenge to the future financial transaction tax before the substantive rules on enhanced cooperation are interpreted by the CJEU.

But while the opinion doesn’t have much to say about enhanced cooperation as such, it has a lot to say about other forms of unorthodox law-making by the EU institutions. While the details and the substantive rules are of course different, it’s clear that on this front, there’s a lot in common between the EU’s unitary patent rules and the recent developments regarding economic and monetary union. Admittedly, in the former case, the EU is trying to kick-start a major harmonisation project for the umpteenth time, whereas in the latter case, it is trying to save the flagship of European integration from sinking. But in both cases, it is resorting extensively to treaties outside the legal order, such as the treaty approved by the CJEU in its Pringle judgment, as well as differentiated integration within it. Equally, it is creating new rules for the EU institutions (such as the powers for the European Central Bank being challenged in the pending Gauweiler case), including the deferral of power to Member States or international bodies (approved here by the Advocate-General, in spite of the Kadi precedent in which the CJEU frowned on decisions being made for the EU by a committee of the UN Security Council).

As with economic and monetary union, EU patent law will therefore (if the Court follows the opinion) be established and survive in a sui generis environment, in which many of the usual rules which govern the EU legal order do not apply.  Time will tell whether these two areas of law remain the exception in this respect, or begin to become the rule.

Barnard & Peers: chapter 5

‘We can laugh at everything, but not with everyone!’ Parody and limits to freedom of expression: the CJEU decision in the Deckmyn case

By Sabine Jacques

PhD student focussing on the parody exception 

at the School of Law, University of Nottingham (UK)

Since the Advocate-General’s opinion (still not available in English; but this opinion has been commented upon here), parody has attracted a lot of attention. Today, the Court of Justice of the European Union (CJEU) issued its judgment which is likely to attract twice as much attention. As a reminder, the eventful introduction of a parody exception in UK copyright law is scheduled to enter into force on 1^st October 2014.

The facts

This dispute concerns copyright and more specifically the interpretation of Article 5(3)(k) of the Infosoc Directive which allows Member States to introduce an exception to the reproduction right (Article 2 of the Directive) and the right of communication to the public (Article 3 of the Directive) for the purpose of caricature, parody or pastiche. The facts relate to a calendar parodying a well-known Spike and Suzy (Suske and Wiske) album cover to promote a political message of the Vlaams Belang’s party (Flemish nationalist political party). The two works are illustrated above.

Against this background, the Belgian court of first instance granted an interim injunction preventing further distribution of the calendar. Subsequently, the defendants appealed this decision and the Brussels Court of Appeal decided to refer to the CJEU.

The Court’s judgment

First of all, the CJEU ruled, in conformity with the analysis of the Advocate-General in his opinion, that that ‘parody’ is an autonomous concept of EU law, which should be given uniform interpretation throughout the Union. The optional character of the exception does not rule out the principle of uniform application of EU law (see Padawan, C-467/08, paras 32-33).

Moving to the interpretation of the parody exception, the CJEU begins by reminding us that where no definition is provided, the usual meaning of terms is to be preferred. Expanding on the meaning of the term ‘parody’, the Court holds that ‘the essential characteristics of parody are, first, to evoke an existing work while being noticeably different from it, and, secondly, to constitute an expression of humour or mockery’.

Furthermore, the national court had asked if there were further requirements applicable before the parody exception could be invoked. The CJEU answered that parody does not have to be original (besides carrying apparent differences with the original work it is borrowing from), the new work does not have to be attributable to somebody else than the author of the original work nor does it have to relate to or mention its source.

Finally, the CJEU repeats the application of strict interpretation of exceptions to the rights of reproduction and communication, as these are derogations from exclusive rights. However, strict interpretation must enable the effectiveness of the exception (see recital 31 of the Directive, Football Association Premier League and Others, C‑403/08 and C‑429/08, para 163). The CJEU indicates that a fair balance needs to be achieved between the interests of authors and the users’ rights (see Padawan, C-467/08, para 43 and Painer, C-145/10, para 132). This means that courts must balance the exclusive rights of rightholders with the users’ freedom of expression.

To that end, the court takes the example of the facts before it. The drawing at issue presenting original characters distorted as to convey a discriminatory message is likely to have the effect of associating the message with the protected work. If the national court finds that such association is plausible, the court needs to balance freedom of expression with the principle of non-discrimination based on race, colour and ethnic origin (Article 21(1) of the Charter of Fundamental Rights) as rightholders have a legitimate interest in not having their work associated with such a message.

The ball is now in the Belgian court to first determine whether the alleged infringing work falls within the meaning of the Directive and whether the fair balance between rightholders and users is preserved.

Comments

It is not surprising that the Court ruled that parody is an autonomous concept. This is consistent with the CJEU’s case law on the other provisions of the Directive (most notably in Padawan, C-467/08). However it is interesting to see how the Court grasps the concept of parody. By referring to the ordinary meaning of the word, the Court acts as if parody has a similar meaning throughout the Member States. This is absurd as there are so many controversies as to the ordinary meaning of the term already within a single jurisdiction. As a reminder, parody is a multivalent term covering among others satire, pastiche, caricature, spoof, irony and burlesque.

This being said, the Court also established the only two requirements attached to the definition of ‘parody’ under the Directive. Firstly, the new work has to invoke the earlier work while being noticeably different. Essentially, this is the very nature of parody. Through the parody, the parodist aims to bring into the public’s mind the work it is based on without confusing the public as to its creative origin. By the distance operated, the parodist intends to avoid artistic confusion (whereby the public might believe that the new work is a continuation of the protected work) and economic confusion (signifying the public believes that the new work was authorised by the rightholder). In any case, parasitism is excluded.

According to the second requirement, parodies must have a humoristic character. Being a subjective term, this condition could be problematic in practice and calls for further case law. How should ‘humour’ be interpreted? Some jurisdictions have interpreted this concept strictly, but some have quite broadly expanded it to encompass homage and criticism.  Additionally, will this condition be interpreted based on the parodist’s intent or the reaction of the public exposed to the new work? Lastly, the target of the humoristic expression is not specified. Does it have to be the earlier work? The original author? A third subject? Following this, the humoristic element appears difficult to define.

Consequently, it is apparent that other conditions must be set aside. This means that the parodist does not have to acknowledge the borrowings, and the amount reproduced from the original, the motivation of the parodist (such as commercial exploitation), the encroachment of the rightholder’s economic rights, the possible alternatives to the dealing (such as the likelihood to acquire a license) and the originality (understood as the level required to attract copyright protection) are not conditions to the application of the parody exception as enshrined in the Directive.

If the above paragraph is not likely to arouse passion, the developments of the CJEU regarding the balance between the interests of rightholders and the users’ freedom of expression certainly will. The CJEU established that rightholders had a legitimate interest not to have their protected work associated with offensive messages conveyed by the parody. It is dubious how this will be interpreted in practice and whether this will annihilate the effectiveness of the exception. Parody has worn many coats since its origin in Ancient Greece from being playful to dark and acerbic. Today, some of these are likely to be jeopardised.

*The translation of the title quotation is mine. Quotation of Pierre Desproges (French comedian known for his acerbic and dark humour): “On peut rire de tout, mais pas avec tout le monde”.

Barnard & Peers: chapter 9, chapter 14

When can Internet service providers be required to block access to websites?

Steve Peers

First of all, a confession. Until very recently, I had a sneaking (and very unfashionable) sympathy for the holders of intellectual property rights who sought to enforce those rights through heavy-handed injunctions against Internet users or service providers. After all, downloading music et al without paying for it is not really any different from shoplifting a CD. But then the BBC, having announced that the second series of The Bridge would be available on Iplayer for two weeks, curtailed that without warning to one week – leaving me unable to watch the final 20 minutes of the final episode of that series. (Note: this is not an invitation to send me spoilers.) I now have rather more sympathy for those who disdain copyright protection.

This brings us to today’s judgment of the CJEU in UPC Telekabel Wien, the latest ruling of the Court addressing the tension between the interests of copyright holders, on the one hand, and the telecom industry, on the other. The starting point is the EU’s Directive on copyright protection in the information society, which provides that:

‘Member States shall ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.’

In this case, two film companies sought an injunction against UPC Telekabel Wien, an Internet service provider, to block access by its customers to a website which offered streaming of the copyright product of the film companies. The Austrian court sent questions to the CJEU to establish whether the relevant rule in the copyright Directive applied in this case, and if so whether the EU’s Charter of Rights prevented the injunction being granted.

This case is the latest in a long line of CJEU judgments on similar issues. First of all, in its 2008 judgment in Promusicae, the Court ruled that EU law did not require Member States to insist that national courts be able to order injunctions against Internet service providers to keep records of their customers’ access to copyright material. But nor did EU law prohibit Member States from doing so. If Member States took up this option, EU law required them to balance the property rights of the right-holders with the data protection rights of individual users of the Internet.

Subsequently, the Court was asked to rule on exactly where that balance lay. In Scarlet Extended, it ruled that it would be a disproportionate breach of the Charter rights to the privacy and freedom of expression of Internet users, and the right to carry on a business of service providers, to order an injunction against the latter to keep records of users’ Internet use indefinitely. However, in Bonnier Audio, it ruled that a much more targeted measure, focussing only keeping records of the users’ access to a particular website where those users were downloading copyright material on a large scale, struck the right balance.

 In today’s judgment, the data protection and privacy rights of the Internet users were not at issue, because there was no element of data retention raised by the proceedings. The Internet users would (if the injunction were granted) simply going to be blocked from accessing the copyright material. So the Charter rights in question were the property rights of the right-holders, on the one hand, and the right to carry on a business of the service provider, and the users’ freedom to receive information, on the other.

The Court first of all ruled that Internet service providers were ‘intermediaries’ for the purposes of the information services copyright Directive. Therefore the right-holders were entitled to apply for an injunction against them. This approach makes sense, as right-holders would hardly be able to enforce their rights in practice if they could not obtain injunctions against service providers.

Next, the Court turned to the Charter issues. In doing so, it provided some useful clarification of the Charter right to carry on a business, which ‘includes, inter alia, the right for any business to be able to freely use, within the limits of its liability for its own acts, the economic, technical and financial resources available to it’. The injunction infringed that right because it ‘constrains its addressee in a manner which restricts the free use of the resources at his disposal because it obliges him to take measures which may represent a significant cost for him, have a considerable impact on the organisation of his activities or require difficult and complex technical solutions’. However, it did not strike at the ‘very substance’ of the right, since it left the service provider free to take different measures and to avoid liability by showing that its steps were reasonable.

As for the freedom of expression, the service provider had to ensure that it ‘strictly targeted’ the actions it took, to ensure that Internet users could still access any information which they had a lawful right to view. Furthermore, in order to enforce that Charter right, Internet users must also have a procedural right to challenge any measure taken by the service provider. However, the service provider nevertheless had to do as much as it reasonably could to limit access to the copyright material.

Comments

The novelty of this case is that there are not just two, but three rights at issue, each held by a different party: the rights holder, the service provider and the Internet users. The service provider is the ‘piggy in the middle’, having to ensure protection of the right-holders’ property rights, as well as the users’ freedom of expression rights, while still being entitled to invoke its own right to carry on a business. While the concept of the right to carry on a business is very broadly defined here, that is counter-balanced by the Court’s reinvocation of its traditional case law making it easy to justify interferences with that right.

Overall, a reasonable balance between the three conflicting rights in this case has been struck by the Court. If it is technically possible to reconcile users’ access to legal information, the service providers’ business interests and the intellectual property rights of the right-holders, this is the ideal solution. Moreover, since a solution of this sort does not involve data retention, it does not infringe upon privacy rights and so it is not possible (or necessary) to bring proceedings against users. In fact, surely data retention is disproportionate when such highly targeted blocking measures can be taken instead. The judgment may not be satisfactory from the perspective of those who dislike the very existence of copyright law, but I still believe that the creators and publishers of music, film and books et al are entitled to a reward for their effort.

In the case of The Bridge, of course, that reward has already been provided for, by means of the payment of British TV-owners’ substantial licence fees to the BBC. So if I happened to download those final 20 minutes of the final episode inadvertently, I would obviously not be betraying my principles.


Barnard & Peers: chapter 9