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Mobile app Snapchat, which allows user to send temporary messages, reached a settlement with the US Federal Trade Commission (FTC). The two parties found a compromise to avoid a lawsuit which would have been severely detrimental to the company.

In a lengthy statement, the Commission reported multiple misrepresentations made to consumers by Snapchat, particularly with regards to how the app works. The ephemeral nature of messages, which made the app successful, was extensively questioned. The FTC noted that messages can be saved easily through screen shots. In previous versions of Snapchat, the sender received notice of any screen shot by the recipient, but it is no longer the case now. The statement further noted that there are several ways whereby photo or video messages can be saved without impediment.

The FTC listed a significant number of complaints concerning Snapchat: transmission of the user’s geolocation and address book information without his/her consent or even lack of security in message encryption. In late 2013, the personal data of nearly 5 million users was retrieved by hackers owing to this lack of security.

It is precisely to avoid a lawsuit that Snapchat agreed to the settlement, which inter alia prohibits the company from altering its confidentiality, security and privacy policies. The settlement specifically provides that the activities of the company in respect of the aforementioned will be subject to independent monitoring for the next 20 years.

The settlement between the company and the Commission will be subject to public comments until June 9, 2014, at which point it should be signed by the two parties and thereafter approved in court. The FTC’s commitment towards a responsible collection of personal data is commendable. While increasing volumes of data are collected on a daily basis, consumer privacy must be remain a key concern for companies and states.

Dreyfus is specialized in online infringement cases. Please do not hesitate to contact us for any information.

On March 28, as part of the Economic Action Plan 2014, the Canadian government proposed amendments to the Trademarks Act. These will be the most significant changes since the 1953 act.
According to the government, the goal is to bring Canada in line with major international trademark treaties. Yet, some expert observers of trademark law believe that these changes are more closely linked to achieving administrative efficiency rather than complying with these treaties.
Amongst the major changes, Canada seeks an expansion of the definition of trademark in order to cover “a sign or combination of signs”. The international Nice Classification of goods and services classes 1-45 will also be adopted.
The trickiest question remains the acceptance of the registration of trademarks without taking into consideration previous use in Canada or abroad. There is currently a close link between trademark law and good faith in Canada. Such dissociation would contradict 140 years of case law which confirmed previous use and good faith as prerequisites for the protection of a Canadian trademark. This prerequisite of use prevents the accumulation of trademark applications that are standard in Europe.
The main effect will be an increase in objections to trademark applications by legitimate users or if the trademark has not been used for over 3 years. This bill may indeed increase the number of trademark applications made in bad faith. This simplification of the process may also lead to a loss in value of the trademark itself.
The commercial dimension of this bill through its integration in the Economic Plan seems to disappear with the trademark’s previous use prerequisite. Thus, some believe that this novelty is in violation of the Canadian constitution.
Important developments are thus expected in response to these proposed amendments to the Canadian Trademarks Act.

The manufacturing of the French beret is in the hands of a 174 year old company, Laulhère. Recently Laulhère purchased its sole French competitor, Blanq – Olibet, with a view to keeping beret production in France. However, international competitors from countries such as China, Pakistan, India and the Czech Republic are casting a shadow over French production by offering lower priced berets.

Laulhère’s willingness to save the French beret industry has been welcomed by the heart of the current government. Over the last few months, Prime Minister Jean-Marc Ayrault and Minister of “Productive Revival” Arnaud Montebourg, have both encouraged the manufacture of “Made in France” products to improve French production and create local jobs.

One wonders, however, whether the “Made in France” designation is the most appropriate one. Whilst it is clear that the “Made in Switzerland” designation makes sense in relation to watch manufacturing given the extraordinary reputation of Switzerland in that respect, it is not clear that French production enjoys the same reputational status.

Thus, why not explore the slogan “Designed in France” rather than “Made in France”? This is the choice made by US company Apple as its products are not manufactured in the US. Only its design and related activities are US based. Similarly, French products are renowned worldwide, not for their manufacturing but rather for their design and their own distinctive style.

Such a designation could constitute a real competitive advantage vis-à-vis international competitors and may create new jobs while adding value to French products. It is essential that countries pay close attention to their national brand identity as an instrument of economic policy.

To be continued…

Named “word of the year” in 2013 by Oxford dictionary, the selfie is a self-portrait taken by the user’s smartphone. This practice has become the pièce de résistance of some social networks, like Instagram or Snapchat, each equipped with their own unique attractions to selfie takers, like filters or the option to add commentary.
Whether it is considered as a hobby or a heightening of societal individualism, the usage of the selfie raises many legal issues. From a legal standpoint, the selfie is governed by the right of publicity, which, in turn, derives from the right to privacy. Since the selfie is a photograph, the foremost issue is that of publicity rights. Whilst the situation is straightforward when a person takes their own photograph, it inevitably differs when a selfie becomes a group photograph. This matter is often resolved by assuming, correctly, that those featuring in the picture have consented to be photographed.
But consent usually does not go any further, which frequently gives rise to other problems. In this era of social networks, the author of the selfie will feel the urge – if not a reflex – to post the photograph on social platforms without having obtained the express agreement of relevant individuals. However, consent to be photographed and consent to having one’s photograph posted online are different. It is thus recommended to obtain the express consent of the persons photographed in order to publish and share the picture. For the record, the consent of individuals appearing on the photograph, albeit not as the chief object (including people in the background), is not required.
The selfie may also raise the question of image rights in relation to property. When the photograph is taken indoors, the right to privacy is of significance and it may be necessary to obtain the consent of the occupier of the premises. More importantly, when the selfie is inclusive of a good covered by copyright or other IP rights, the right holders are entitled to request the withdrawal of the photograph.
Finally, during the last election, there was a surge of selfies taken in the booth. In France, there is no rule against self-photographs in the booth provided the secrecy of the vote is not infringed. The Interior Minister stated that “it should be noted that the “ballot is secret”(article L. 59 of the Electoral Code). In addition, the presiding officer may expel anyone in case of disturbance of public order.” The act of taking a picture of oneself in the booth is not in itself a disturbance to public order but can challenge the independence of the voter.
The selfie thus presents specific issues that should be handled with care, especially in respect of publication on social networks.

Dreyfus specializes in managing your online presence. Please do not hesitate to contact us for more information.

The Uniform Dispute Resolution Policy (UDRP) is a rights protection mechanism which allows the transfer or cancellation of domain names infringing trademark rights in cybersquatting cases. Currently, five centres are qualified to entertain UDRP complaints namely the World Intellectual Property Organization (WIPO) in Geneva, the Czech Arbitration Court (CAC), the National Arbitration Forum (NAF) in the United States, as well as an Asian centre (ADNDRC) with branches in Beijing, Kuala Lumpur, Hong Kong and Seoul, and more recently, the Arab Centre (ACDR) based in Jordan.

The UDRP rules constitute a common foundation enacted by ICANN, the Internet regulatory authority, and they must be adhered to by all arbitration centres. They make reference to a set of additional rules namely the Supplemental Rules defined by the centres themselves and which govern matters not covered in the main rules. Each centre has thus adopted its own rules, which evolve from time to time.

In respect of the form, most of the centres restrict the complaint to 5,000 words, but the NAF limits it to 15 pages and the ADNDRC curbs it to 3000 words.

The Czech Arbitration Court has provided for group actions (class actions) in the case where a similar legal argument can be applied to multiple domain names reserved by the same entity. A third person who shall be responsible to file the complaint on behalf of the complainants must then be appointed. The Arab Centre has a similar consolidating mechanism by virtue of which multiple claimants can merge their actions into a sole claim.

Only NAF authorizes applicants to submit additional arguments or documents within a period of 5 days from the day the registrant has or should have responded. It is to be noted however that any amendment to the complaint is prohibited. In other centres, the Supplemental Rules have not made allowance for this possibility.

With regard to the answer, it must in all cases be made within 20 days of notification of the complaint. The UDRP Rules provide for the possibility of granting the defendant additional time upon request, but not all centres have incorporated this provision into their rules. Thence, at the NAF, the applicant must specify the period of time requested, within a maximum of 20 additional days. Similarly, the ACDR allows the registrant to request for an extension to submit a response, where it has been agreed between the parties or where there are exceptional circumstances, which must be established by said registrant. These additional time limits are not automatically granted.

The issue of Language of Proceedings also arises. All centres comply with the rule laid down by Article 11 of the UDRP Rules on this matter, namely that save for the agreement of the parties to the dispute or exceptional circumstances, the language of the proceedings is that in which the registration agreement of the contested domain name is penned down. However, the centres approach the concept of exceptional circumstances differently. Indeed, the NAF does not often acquiesce to a change in the language of the proceedings, while the ADNDRC is more likely to do so, especially when the registration agreements are in Chinese and the registrants and/or applicants speak English. As concerns WIPO, the proceedings can be administered in two languages. Moreover, it may be a good idea to resort to the ADNDRC if an Asian registrar is involved so as to facilitate the implementation of the decision.

It is worthwhile to note that in addition to traditional domain names such as .aero, .asia, .biz, .cat, .com, .coop, .info, .jobs, .mobi, .museum, .name, .net, .org, .pro, .tel and .travel, upon which all centres are empowered to adjudicate on, some centres are competent to adjudicate upon UDRP and associated proceedings in relation to several other extensions. Such is the case with WIPO, which has jurisdiction for proceedings relating to 69 national extensions (ccTLDs). Incidentally, the domain name .fr was one of them until 2011 and is anticipated to revert to it in the near future. For instance, ADNDRC experts have jurisdiction over disputes in relation to domain names bearing the ccTLDs .cc, .nu, .pw, .tv and .ws, while the CAC is competent specifically for .eu names. As concerns .us, only the NAF has jurisdiction. Disputes relating to the new domain name extensions (new gTLDs) can be brought before all centres.

Dreyfus specializes in dispute resolution and can help you to choose the most appropriate center to act against cybersquatting. Please do not hesitate to contact us for any queries.

While the U.S. Congress published in February a report about the lawfulness of Bitcoin, the first electronic money still raises many questions across the world. Its quoted price, which was below $1 until 2011, had risen to more than $1,000 in the previous months and is now quoted between $200 and $400. Judicial, tax and other authorities in all countries are studying this crypto-currency to understand its modus operandi. The ultimate aim is to consider all the ins and outs before introducing appropriate legislation. There are reasons to be concerned but Bitcoin is not elusive as it may sound. Below is an overview of the currency in 4 questions.

How does Bitcoin work?
Bitcoin is a peer-to-peer electronic cash system. It relies on the principles of cryptography to validate transactions and generate currency. In short, Bitcoin is a means of payment and a decentralized currency since it does not rely on any central server. The computers of users help the system run by connecting to the network: some will generate “money”, while others will validate the transactions…

The use of cryptography means that Bitcoin transactions are entirely anonymous. Thus, a transaction between a buyer and seller is not made in the traditional way: the buyer loses Bitcoins, but the same Bitcoins are not credited to the seller. The latter will receive the same amount of Bitcoins lost by the buyer, this being the price of the transaction. There is however no flow of money between the buyer and the seller, which allows for complete anonymity.

What are the concerns raised about this system?
Anonymity is the main concern for the authorities. Money laundering, illegal sales and trafficking of all types are some of the transactions which Bitcoin seems to allow. As soon as April 2012, the FBI published a document expressing its concerns that the system may be used for illegal activities, which are most often untraceable.

For example, on Silk Road, a marketplace accessible only through the anonymity network TOR, all transactions are carried out in Bitcoins. Silk Road is mainly used for the sale of narcotic substances, fake identification documents and counterfeit products. Buying on this site is therefore risky and may even prove to be dangerous for the clients since the site also markets counterfeit medications. The only limit imposed by Silk Road is that it prohibits the sales of weapons and child pornography products.

At the instigation of the U.S Senate, Silk Road was closed down in October 2013 by the FBI before reopening some days later. The platform is still operational and trafficking is still ongoing.

What is the legal status of bitcoin?
Legally speaking, Bitcoin cannot be treated as a lawful currency. The right to issue money is a sovereign power. It is therefore only natural that as of now, no State has recognized the Bitcoin as a currency unit in its legal system.

Bitcoin is also not an electronic money, which is defined in the European Union in a 2009 Directive as: “electronically, including magnetically, stored monetary unit as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions (…) and which is accepted by a natural or legal person other than the electronic money issuer”. As Bitcoin transactions are not carried out between two persons, there is no issuer. Besides, Bitcoin is not an electronically stored monetary unit. Hence, the European Directive is not applicable.

Some see Bitcoin as a “parallel” or “anarchistic currency” while others see it as a simple unit of monetary measure. As for U.S. tax agencies, they announced on 25 March that Bitcoin will be treated as an asset rather than a currency. This will allow for the purchases and sales of Bitcoin to be subject to taxes.

Finally, is it legal?
As such, it is difficult to state that the Bitcoin is illegal. It is only the ways in which it is used that may go beyond what is legally permissible and may be characterized as a criminal offense. Whilst Silk Road was used as an example here, various sites use Bitcoin to sell goods and services which are perfectly legal.

In France, the Senate held hearings in January 2014 focussing on the opportunities offered by this technology and on the way the law could evolve to further regulate it. The status of Bitcoin is more advanced in Germany. The German government has set a 25% ceiling for income tax on Bitcoin income and has categorized it as a private currency.

Only Thailand has entirely prohibited the use of Bitcoin in its territory till date.

Established in 2009, Bitcoin is however already outdated from a technical point of view. Having been replaced by technologies that are based on lighter and more secured infrastructure, the Bitcoin is probably dying out. The next issue will be how States can react to these new exchange units.

For the past few years, businesses choose to affix the indication “Made in France” on their products. It consists of a marketing strategy and a competitive advantage since consumers are increasingly attentive and sensitive on the origin of the products they buy.
Today, only food products imperatively bear the indication “Made in + Country” to protect consumers. These are subject to strict regulation in the European Union. However, businesses manufacturing products like textile materials are free to use or not this indication as commercial argument. Indeed, European authorities advocate freedom to trade and free of movement of goods for these types of products. The jurisprudence of the Court of Justice of the European Union authorises national legislations to solely set up optional markings. The “Made in” is thus undefined, facultative and difficult to control.

In the absence of regulation, the manufacturer must bear the risks if he decides to affix the indication “Made in France” on his products. He must ensure that he is respecting the provisions of the Consumer Code and of the French Customs Code in order to protect the consumer.
Furthermore, the manufacturer or importer must be able to prove that the product has entirely been manufactured in France or that the ‘final substantial transformation’ has been carried out in France (Article 24 of the Community Customs Code).
Finally, the prudent and diligent manufacturer must provide the necessary documentation to legitimate the indication “Made in France” affixed on his manufactured products. This documentation shall be clear and intelligible because it aims at informing consumers on the origin of the product.

To protect both consumers and manufacturers, it would be appropriate to consider a European regulation for the manufactured products.

Since the revelations in the Edward Snowden case and the discovery of the Heartbleed flaw which led to the massive theft of personal data, hackers are very much in the news. But now, web hackers are starting to target lawyers and other legal professionals who are supposed to ensure that their clients’ information is duly protected.

The “hacking” consists of a discreet exchange of illegal and/or personal information by breaking into a network. This is becoming common practice and should constitute a real threat, not only to businesses, but also to States, in the years to come. According to the head of Israeli military intelligence, hacking will soon become “the greatest evolution” in warfare techniques, greater than gunpowder or air forces. And this is a matter of great concern for legal professionals.

Indeed, more and more clients are requesting firms to adopt additional measures to monitor their networks and thus prevent the leakage of confidential or valuable information, such as trade secrets. Another major concern is the possibility for hackers to retrieve bids or tenders before these are made public.

The police have for a long time been apprehensive of the fact that law firms do not protect themselves enough against computer hackers. Yet, since 2011, the American FBI has been organising awareness sessions on computer security and industrial espionage. However, according to Mickael Stout, a consultant in computer security, “the hackers will not stop anytime soon, and it is obvious that companies will have to keep up with the latest technology to ward off all threats.”

It must be noted that this movement is in fact gaining more ground, instead of weakening. The emergence of “Hackivists” such as the Anonymous, with a political aim is to make public certain information, left a deep impression globally. It is therefore highly recommended to keep close track of developments in technology and to secure as much as possible all of the companies’ data.

Dreyfus is specialised in the protection of intellectual property online and can assist you in defining your strategiesand reinforcing the measures you plan to implement. Please contact us for further details.