Dreyfus

The issue of net neutrality, and particularly that of leading players such as Google, Apple or Amazon, is currently of interest to the French Government.

The Digital Council, an advisory body for all matters relating to digital development, presented a report on “platform neutrality” on Friday, June 13. This report aims at initiating discussions with Internet stakeholders for the development of a set of the best practices in order to ensure a free and open Internet that can reconcile innovation, freedom of trade and industry as well as respect for individual freedoms.

The objective of net neutrality is achieved through the fairness and transparency of the platforms. The major recommendations of the report are as follows:

• impose a certain degree of fairness in the overall process of collecting and processing personal data;
• acknowledge the principle of neutrality as a “fundamental principle which is necessary for the exercise of the freedom of communication and freedom of expression” and provide for its inclusion in the law “at the highest level in the hierarchy of norms”;
• set up rating agencies to evaluate and grade platforms. The rationale seems to rest upon staking the reputation of businesses so that the latter rectify their behavior on their own accord out of their apprehension of reputational damage.

Despite the regrettable lack of recommendations with regard to Internet access providers in this report, the proposals of the National Digital Council shall, in France, pave the way for the informed preparation of an effective draft legislation in respect of the French digital technology and the country’s digital strategy in Europe.

It remains to be seen, however, whether major Net players will be compelled to adhere to the French rules.

On April 9, 2014, the Paris Court of Appeals[1] ruled on Google’s status regarding its AdWords services. It found that Google is a passive host provider for these specific services, which awards it limited liability destined for passive hosts provided by the E-commerce Directive.[2]

Google’s AdWords service is frequently the cause of legal disputes. This decision follows, inter alia, a decision of the Court of Justice of the European Union (CJEU), which ruled that hosting keywords corresponding to trademarks does not amount to a “use in the course of trade” that the right owner can prevent.[3]

A decision was rendered in lower court in January 2009, which found Google liable for unfair competition and misleading advertising. On appeal, the Court excluded the misleading character of the ads, stating that the display allowed any average internet user to perceive the difference between the advertising and the natural results.

The Court then focused on Google’s role in the keywords selection for its AdWords service. Google’s intervention was qualified by the judges as “merely technical, automatic and passive […], consequently lacking control and knowledge of the hosted information”. The Court also pointed out that the hosting provider had no monitoring obligation regarding illegal content.

Indeed, European law distinguishes active service providers from passive hosts to whom it offers partial immunity. This immunity exempts the hosting providers from liability for third-party content hosted on its platform. However, if there is actual knowledge of information, facts or circumstances of an illegal nature and no action was taken expeditiously to remove or disable access to the illegal content, the host may be held liable.

The Paris Court of Appeals’ decision confirms the trend set by previous French case law as well as the Spanish Court in the Telecinco v Youtube case[4] whereby automatic services do not contravene to the neutral nature of the services provided. Therefore, the Courts recognize that there is no reason to exclude such passive service providers from liability immunity according to the E-commerce Directive.

As part of its monitoring activities, Dreyfus offers watch services covering AdWords campaigns as well as domain names and social networks.

[1] CA Paris, April 9, 2014, Google France, Inc. et Ireland / Voyageurs du monde, Terres d’aventures

[2] Directive 2000/31/CE on E-commerce

[3] CJEU, March 23, 2010, Google France v Louis Vuitton Malletier, joined cases C-236/08 to C-238/08

[4] CA Madrid, January 14, 2014, Telecinco v Youtube, N° 11/2014

Recently, the U.S. Food and Drug Administration (“FDA”) released two sets of guidance surrounding how pharmaceutical, medical devices and prescription drug companies should utilize social media platforms, particularly those like Twitter with limited character space, in order to effectively provide information on products to consumers.  Specifically, the FDA is concerned with accurately regulating communications of medical devices and prescription drug products in terms of the benefits and risks associated with their usage.  However, a #FDAMedia post on Twitter dated June 27^th, approving a new product to treat diabetes, “a rapid-acting inhaled insulin”, appears to follow none of the newly conceived guidance.

The new set of media guidance, which goes as far as to provide “Twitter Rules”, reminds the Regulated Entities that “beneficial claims in product promotion should be balanced with risk information (U.S. Department of Health and Human Services Food and Drug Administration, Guidance for Industry Internet/ Social Media Platforms with Character Space Limitations- Presenting Risk and Benefit Information for Prescription Drugs and Medical Devices (June 2014).”  A thorough examination of the guidance reveals that Regulated Entity’s should qualify with the following criteria (Id., page 5 and 6):

• Be relevant and responsive to the misinformation;
• Be limited and tailed to the misinformation ;
• Be non-promotional in nature, tone and presentation;
• Be accurate;
• Be consistent with the FDA-required labeling for the product;
• Be supported by sufficient evidence, including substantial evidence, when appropriate, for prescription drugs;
• Either be posted in conjunction with the misinformation in the same area of forum (if posted directly to the forum by the firm), or should reference the misinformation and be intended to be posted in conjunction with the misinformation (if provided to the forum operator or author); and
• Disclose that the person providing the corrective information is affiliated with the firm that manufactures, packs, or distributes the product.

The #FDAMedia tweet, which reads “FDA approves Afrezza, a rapid-acting inhaled insult to treat diabetes go.usa.gov/97P9” does not hold any risk information and the generic and chemical name is also not noted.  Mark Senak of Fleishman-Hillard’s Washington, D.C. office, who is the blog author of Eye on FDA commented that the, “FDA is not so contrained when it sends out news of its own,” which appears to be an accurate statement concerning this case (“To Tweet or Not to Tweet? Or Even Retweet? FDA, Tweeting and Twitter”).

In the future, it should be expected that the FDA will uphold and abide by its own guidance when posting on social media platforms, or else the expectation that companies will follow suit, is not a realistic one.

The Hamon law of March 17, 2014 on consumption came into effect on June 13 of this year. This law has been transposed from a European Directive of 2011 that aims to enhance consumer protection.

A summary of the changes brought about by this law:

According to the Hamon law, a consumer should be provided with a number of information about his order on a «durable medium» after executing the contract. In practice, this concerns the general terms and conditions that contain the complete clause on the right of withdrawal and the standard withdrawal form, as well as a summary of the order (product or service ordered, price, delivery time). In practice, there are 3 options:

• Send the general terms and conditions and the form in PDF format as an attachment to the confirmation email
• Insert the text of the general terms and conditions and the form in the body of the confirmation email
• Print the general terms and conditions and the form, and attach them to the parcel containing the goods ordered

These do not apply to B2B websites:

• “Order with obligation to pay” feature
• Right of withdrawal
• Automatic responsibility for transportation risks
• Penalty scheme andwithdrawal from the contract in case of late delivery

The following continues to apply to B2B websites:

• Obligations relating to the protection of personal data (CNIL notices, privacy policy, cooky rules)
• Complete legal notice
• Permanent feature allowing for an order to be confirmed at the check-out stage

These are not new additions brought forth by the Hamon law.

This article contains general recommendations but does not, in any case, constitute a legal opinion for which Dreyfus can be held liable in case of inaccuracy. Do not hesitate to contact us for advice regarding your specific situation.

French Food Blogger Caroline Doudet was ordered to amend her blog review of II Giardino, a restaurant in the Aquitaine region of the South of France and pay thousands of Euros in damages to cover harm to the business and the complainant’s costs.  The owner of the restaurant, who has been working on building and maintaining its reputation seven days a week for a total of fifteen years , took issue with the entire article, however, the decision was limited to the blog posts title, “the place to avoid in Cap-Ferret: II Giardino”.  Nevertheless, according to Doudet in a BBC interview, the “decision creates a new crime of ‘being too highly ranked [on a search engine], or of having too great an influence.’

Ms. Doudet’s fashion and literature blog, “Cultur’elle” has roughly 3000 followers.  These followers, as well as the general public with access to the site could have discovered from her post that she received poor serviceduring her visit in August of 2013 with particular regard to the owner, who was described as having a poor attitude.  The restaurateur commented on the website Arrêt sur Images that, “maybe there were some errors in the service, which happens sometimes in the middle of August.” Moreover, the restaurateur was extremely troubled by the fact that the article showed in Google search results and that the criticism was not appropriately done.

So, what are the effects of this decision, if any? 

Despite the fact that Ms. Doudet has brought forward the idea that she is being penalized for having too great of an influence as a blogger, currently, under French law, this type of decision does not create legal precedent.  An emergency order can be issued by a judge to force a person to cease any activity they find to be harming the other party in the dispute.  This is done to protect a person who is deemed to be a victim in a given situation.  To issue such an order under French law requires a judge to identify a wrong on the defendant’s part, a negative effect on that of the appellant and a causal relationship between the two.

In terms of an appeal, Ms. Doudet, who pleaded her own case in court, has stated she will not appeal further.  Although French law remains relatively unchanged, this decision surely acts as a warning sign to bloggers to mind what they say, and where they eat!

The French data protection authority (CNIL) published its annual report for the year 2013. For 2014, the Commission will focus on the “construction of well-being” and assess the impact of new health-related digital trends on privacy.

Ranging from connected bracelets and watches to connected scales, connected health has recently invaded the stalls of specialized stores. These items make it possible to gather a vast amount of data on their users. For instance, it is easy to collect data pertaining to the heart rate, the number of steps made per day, sleep quality and blood pressure. And this, according to the CNIL’s report, is only the beginning. It is expected that by 2017, half of the population of smartphone users will have at least one well-being or health related application installed.  Apple Inc., to mention but one example, is expected to launch the so-called Healthbook application later this year, which will be installed as a default application on all its handsets.

This digital well-being phenomenon, also called “quantified self”, is interesting in several respects. It should be noted that the data are generated by the users. Nevertheless, even though these data are of a private nature, users very often share them.

Yet the CNIL is concerned by the fine line between well-being and health. Indeed, health data are treated as sensitive and are more strictly regulated. Section 8 of the Data Protection Act (loi Informatique et Libertés) of July 6, 1978 provides that the collection and processing of such data are prohibited as a matter of principle. However, the many exceptions linked to this rule have allowed the aforementioned trend to emerge.

Furthermore, the Commission is concerned about the security of such data and its use by the companies which collect them. The report states that users feel that they are directly connected to these data “for they come from them”, although companies could sell them or use them for purposes unknown to the users.

Finally, the report points to the fact that so-called “quantified self” practices could become the norm. Some American insurers reportedly treat clients who do not self-measure their medical data as suspicious and refuse to compensate them in the event of damage. According to the CNIL, the challenges of connected health are only just beginning and risks abound. However, with the support of the G29 and European Commissioner Viviane Reding, the Commission will undoubtedly be committed to protecting those very private data.

Dreyfus can assist you in better protecting your data and in managing your online presence. Please contact us for further details.

The once unmarked territory of designs, which has been in need of a good sprucing from both the IP community and the Luxembourg Courts, has finally received the attention that it requires from the Court of Justice of the European Union (CJEU).  The recent Irish Supreme Court decision,Karen Millen Fashions Ltd v Dunnes Stores (Limerick) Ltd [2013]has begun to shape the United Kingdom’s case law surrounding designs by smoothing out some ambiguities pertaining to the area of unregistered designs.

Starting with a striped shirt and a black knit top, made and sold originally by Karen Millen, this case was spun into motion when Dunnes admittedly copied and sold these women’s luxury clothing items.  In 2007, Karen Millen responded to these actions in a proceeding against Dunnes in the Irish High Courts where the company claimed infringement of an unregistered Community design under the Community Design Regulation 6/2002 (CDR).

In their defense, Dunnes claimed that their clothing items were new and furthermore challenged the validity of Karen Millen’s unregistered Community design on the grounds that it lacked “individual character”.  Evidently, Dunnes assumed that Millen’s designs were simply a combination of features drawn from earlier designs, such as a grey Dolce & Gabana knit top and a Paul Smith Blue striped shirt.  Lastly, Dunnes alleged that Karen Millen also had to prove that their respective design was individual in character.

Dunnes’ assessment of the Karen Millen design, taken with uncertainty, formed the basis of the questions posed to the CJEU.  After Millen’s claims were initially granted in the Irish High Courts, Dunnes appealed to the Supreme Court, which decided to pass the decision over to the CJEU.

The outcome of this decision on designs begins to define the lines that shape the way in which courts can assess individual character, the overall impression and the issue of the burden of proof pertaining to designs; the quintessential accessories of any valid unregistered design.  In effect, the concision of this decision has equally provided designer brands with statutory tools of protection against knock-off and look-alike designs that seek to emulate their brand’s appeal at a lower price.  Therefore, this decision will certainly be welcomed by high end designers and retailers.  At the same time, designers working in the lower end of the market, so to speak, “fast fashion” retailers must now take further precautions when seeking to replicate higher end looks for a lower price given the higher threshold introduced in this case for challenging the validity of an unregistered design.

The CJEU had to design on the following matters: within the purpose of the Community Design Regulation No 6/2002, should the overall impression of a design produced on an informed user be considered in whether it differs from the overall impression produced on such a user by any individual design made public, or any combination of known designs and/or their features, drawn from more than one such earlier designs? Furthermore, within the purpose of Article 85(2) of Regulation No 6/2002, is a Community design court bound to uphold the validity of an unregistered Community design where the right holder merely indicates what constitutes the individual character of the design or is the right holder bound to prove that the design has individual character in order to assert its validity?

As it was decided, Article 6 is to be interpreted as meaning that the overall impression that is produced on an informed user must differ from individual designs made public, not from a combination of different designs and/or their features. Next, Article 85(2) of Regulation No 6/2002 is to be interpreted as meaning that the right holder must merely indicate what constitutes the individual character of the design, and therefore is not bound to prove that the design has individual character in order to assert the validity of the design.  In practice this means that designers can explain the individual character of their design by drawing attention to certain elements that they feel give it individuality as opposed to proving that the design itself is has individual character.

Within the design and fashion community, as it has been noted, the effects of this decision will depend on where a brand is situated in the market.  Whether or not this decision will be act as a powerful precedent for those to come is still unknown, but future case law will indicate as so.  Unregistered designs are, especially within the workings of the fashion industry, an important Intellectual Property right, given the short lives of designs that may not justify the cost of design registrations.

This decision will now travel back to the Irish Supreme Court where the final decision awaits.  It seems likely that the decision will follow the guidance and advice of the CJEU.

On April 15 2014, the European Parliament adopted a proposal reinforcing consumer product safety. The new regulation creates a mandatory “made in” label for all non-food products.

Manufacturers, importers and distributors will be obligated to state the country of origin of the product, whether it was made in the EU or not. If the good was produced in the EU, the maker can choose to label either the country of fabrication or the EU in general. To prevent abuse and wrongdoing regarding this label, proportionate and dissuasive penalties will be set up.

The aim of the regulation is to improve the monitoring of the market. It represents a major progress for the transparency of the supply chain.

Today, countries which rely on the luxury industry such as France are favorable to the proposal in hopes of promoting its goods.

However several countries, including Germany and the UK, are opposed to the new rule. Indeed, their products are well known for their quality but they are now manufactured mostly outside of the EU. Therefore, the “made in” label might negatively impact those products’ reputation. This new rule would therefore be anti-free-trade and protectionist.

The proposal is now pending validation by the Council before it can become enforceable.

To be continued…

January 14th, 2014− A recent Russian Court decision, Eldorado v Ulmart, found that the use of a trademark’s keywords in advertising can constitute intellectual property infringement and specifically, trademark infringement. This marks a departure to the current global consensus on this issue, as most jurisdictions have refrained from providing any clear legal insight.

The facts of the Eldorado case are as follows: Eldorado sued its competitor Ulmart for trademark infringement. Eldorado is a major Russian electronics retailer and an exclusive licensee of a number of Russian trademarks, including “Eldorado” and “Territory of low prices”. The suit concerned Ulmart’s purchasing and utilization of these keywords from third party search engine, Yandex: “Eldorado of low prices. Here!” “Ulmart: territory of service. Shops, delivery, fair prices, bonuses! Ulmart.ru.”

Evidence presented in the Commercial (Arbitrazh) court of Saint Petersburg and Lennigrand region, suggested that when users typed “Eldorado” into Yandex, that potentially the first three sponsored links were affliated to Ulmart. That being said, the first link contained the keywords, “Eldorado of low prices. Here!” Upon activating the link, users would be transferred to www.ulmart.ru, the defendant’s website.

In agreement with the plaintiff, the court decided that the use of “Eldorado” with “low prices” increased a brand association between the plaintiff and defendant and that such use on the part of Ulmart risked confusion within the public. Additionally, the court noted that the words “Eldorado” and “low prices” appeared in a bigger font than the other textual elements of the advertisement. In drawing attention to these words through an increased font size, trademark affiliation and ultimately confusion with Eldorado seemed even more probable. This also contributed in favor of the plaintiff’s case.

Conversely, Ulmart argued that there could be no confusion between the two websites and that there was no visible link to the name “Eldorado”. Ulmart also put forth the argument that Eldorado was a generic word, which did not deserve protection. The court was not persuaded by either argument and ultimately dismissed both.

The Commercial (Arbitrazh) court of Saint Petersburg and Lenningrand region’s first decision was subsequently supported by the 13th court of appeal, on May 8th, 2014. Although Ulmart claimed that the use of the word “Eldorado” was purely descriptive and too broad of a term, meaning “land rich with gold and other resources” in Russian, the court could not separate the use of the term from the trademark itself and therefore rejected the defendant’s appeal. Ulmart also expressed disagreement to the amount of damages claimed but again, the 13th court of appeal reiterated the court’s decision at first instance. Finally, the appeal court confirmed that so long as a trademark is protected, the owner or exclusive licensee can enforce its rights against third parties.

Here are some preliminary observations that can be noted. Reflected within the decisions of both courts, the use of a protected trademark as a keyword and in the text of a sponsored search result equates to trademark use. Eldorado did not sue Yandex, the third party search engine. The use of a mark or confusingly similar sign in advertising in respect of similar goods is also recognized by Russian law as trademark use. Russian law accounts for “internet use” so the use of a mark in a keyword could fall within “internet use”. The way in which the trademark is used in an advertisement plays a crucial role to the ultimate judicial outcome. The court noted that had the trademarks “Eldorado” and “lower prices” not been placed in the text, the outcome of the case could have been different.

The Eldorado case marks the first of what will predictably be many cases to follow in Russian law that deals with keywords and trademark. In the future, it is still unclear as to whether or not claims will be brought onto advertisers alone, or to advertisers and search engines alike. Similarly, the court did not condemn the keyword practice per se, but only that the use of a trademark as a keyword constituted trademark infringement.