What is the role of the Legal Expert in Intellectual Property?

Written by Dreyfus02/03/2023

The Legal Expert’s role is to give an opinion on precise technical points. He or she can be designated by the Judge or by parties to the proceeding. Legal experts are present in all fields where a technical opinion may be required, for example for medicine, architecture, law, which of course includes Intellectual Property law.

What is the “specific” role of the Legal Expert in Intellectual Property?

Technicality and technicity are at the heart of intellectual property. Innovation and creation are the essence of this subject. Therefore, resorting to Experts is often mandatory to analyze, explain or interpret an Inventor’s invention or a Creative’s creation from a technical point of view.

For example, the Legal Expert in Intellectual Property may be called upon to evaluate the prejudices caused by an infringement of an Intellectual Property Right, which are often difficult to estimate, particularly in the case of Trademarks. More generally, the expert may examine the technical evidence or question parties in order to provide an impartial opinion.

It is important to note, that the judge is not required to follow the Expert’s recommendations, however they may rely on the Expert’s report or testimony at the hearing as a basis for their decision.

How are Legal Experts in Intellectual Property appointed?

There are two distinct ways to designate a Legal Expert during a legal proceeding.

Firstly, a Judge will call upon the experts registered on the National lists. The Experts are specialized and there are several lists available that classify Experts by specialty and subspecialties. . One list is made by the French Cour de cassation (Supreme Court) and there is also one list via the Appeal Courts. Secondly, the parties to the proceeding may also directly contact a Legal Expert of their choice. This Expert may not be on the lists of the Cour de cassation or the Appeal Courts. In this case, the Expert will have to take an oath before a Judge at the time of the hearing.

What is the role of Dreyfus & associés ?

Dreyfus is an Industrial Property law firm based in Paris.

Nathalie Dreyfus, founder of Dreyfus & associés, is a registered Legal Expert before the Paris Court of Appeal for specialty E.09.02 Industrial Property – Trademarks. In December, 2022, she was named as a Legal Expert before the French Cour de cassation (Supreme Court) for the same specialty.

The Legal Expert in Intellectual Property is above all a technical and Legal Expert in one or more Intellectual Property specialties, having several years of experience practicing Intellectual Property Law.

The process involves the Legal Expert intervening in a legal proceeding to provide their expertise on a Trademark, a Patent or a design’s technical aspects and in so doing, they help the Judge to motivate towards a decision.

For further information, do not hesitate to contact us:

contact@dreyfus.fr.

We offer our clients a dedicated and unique experience of expertise that is necessary for the exploitation of intangible assets. We will also endeavor to keep you informed and up-to-date about intellectual property and digital economic issues through our articles and newsletters written by the Dreyfus Legal Team.

Are Perfumes and Clothing Similar Products Under Trademark Law ?

Written by Dreyfus17/02/2023

Paris Judicial Court, 3rd section, April 5, 2022, 20/12763

Sun Consulting SARL and M. Y W vs H&M Hennes & Mauritz LP et H&M Hennes & Mauritz SARL

In a judgment dated April 5, 2022, the Third Chamber of the Paris Court of Justice ruled on an infringement action between the European Union trademark “CREMIEUX” covering clothing, footwear and apparel products and the trademark “RUE CREMIEUX” under which perfumes are marketed.

In this case, despite the plaintiffs’ argument that stated that clothing and perfumes were similar goods regarding their complementarity and the close connection of their aesthetic function, the Court rejected the infringement action for lack of similarity between these products.

The owner of a trademark may prohibit the use, without their consent of a sign identical or similar to their trademark by a third party. This is to be noted in such circumstances, for example

• when such use occurs in the course of a trade,
• when relating to identical or similar goods and services to those for which the trademark has been registered and
• when there is the possibility for a likelihood of confusion, ie. undermining or initiating liability that could undermine the guarantee of the identity of origin, which is an essential function of the trademark.

Although French and European courts regularly encounter the issue of similarity between perfumes and clothing, uncertainties persist concerning the assessment of this similarity.

Which factors should be used to assess the degree of similarity between goods?

On several occasions, the Court of Justice of the European Union has stated different relevant factors to be used in assessing the degree of similarity between goods or services. The nature, purpose, use, distribution channels, or the competitive or complementary nature of the goods or services concerned, are taken into account.

Nevertheless, if such criteria is lacking, the European Court of Justice admits that a degree of similarity can remain if the goods present a certain aesthetic complementarity.

This complementarity will be retained when three cumulative conditions are fulfilled.

i) One product must be indispensable or important over the use of another.
ii) Consumers must consider the use of the goods together as usual and normal.
iii) Consumers must consider it common place for these goods to be marked under the same trademark.

The Court of Cassation (Supreme Court) adopts a different approach in comparison to that of the Court of Justice, whereby they look at whether the consumer is able to attribute to a common origin the goods and/or services at issue. However, if this interpretation is applied too widely, it could lead to qualifying goods as similar, thereby confirming that a risk of confusion is not altogether impossible or out of the question.

Even though the condition of trademark infringement must be interpreted in light of the risk of confusion, Article 9 of Regulation 2017/1001 states that the concept of similarity is both a necessary condition and an interdependent criteria of the risk of confusion. Therefore, the similarity of goods or services cannot depend on the possibility of a likelihood of confusion as it is the latter that depends in part on the similarity.

Can perfumes and clothing be considered similar goods under these factors?

In the present case, the Third Chamber of the Court of First Instance, considers that clothes and perfumes do not share the same nature or purpose and are not usually sold in the same stores.

Although they may have a similar function of enhancing the wearers appearance, this function is secondary and not convincing.
The primary function of clothing obeys and follows the rules of a purely functional purpose while perfume has for finality, the diffusion or intermingling of a pleasant smell. Therefore, the common use of both clothes and perfume during daily outdoor activities is not sufficient enough to characterize a relevant factor of similarity.

But what about aesthetic complementarity?

The Court found that perfumes were not important or even indispensable for the use of clothing, and that clothing was not important for the use of perfumes either.

This judgment may seem surprising regarding the jurisprudence issued by the Court of Appeal on the similarity between perfumes and clothing.

Indeed, in a decision dated September 23, 2021, the Court of Appeal of Aix-en-Provence had recognized as justified, the opposition to the registration of a trademark filed with the INPI for clothing. This was purely on the basis of an earlier trademark registered for perfumes and cosmetics.

The decision by the Court of Appeal was mainly based on the presence of identical distribution networks.

The Court of Appeal also attributed a significant role to the aesthetic function, which, according to the Court of Justice, cannot be considered as a sufficient factor.

This trend, which aims to make the principle of speciality more flexible, is mainly reflected in the luxury sector where well-known trademarks are very present.

In consideration of this fact, many decisions recognize the similarity between goods in class 3 (perfumes and cosmetics), goods in class 25 (clothing) or even classes 14 (jewellery) and 18 (leather goods).

Indeed, houses such as Louis Vuitton or Maison Margiela offer both clothes for sale and, to conquer a wider audience, perfumes. However, this diversity of products can also be found in non-luxury brands, with different ranges, such as Zara or Lacoste.

In this judgment, the Court of Justice goes against a French jurisprudential trend which qualifies perfumes and clothing as similar. Furthermore, according to the Third Chamber of the Court, the fact that fashion companies market perfumes under their own brand name, cannot be a sufficient factor to make these products similar.

Is it impossible to file an infringement action against a trademark offering perfumes for sale on the basis of an earlier trademark registered for clothing? And is this also the case vice versa?

In retrospect, it must be noted that even though it may not be necessarily so, the decision shows that the chances of success could very well be limited.

Nevertheless, French courts do not yet give a unified and homogeneous answer on this subject and decisions remain casuistic and sophistically cautious.

For example, the Paris Court of Appeal recently ruled in a decision dated September 14, 2022 that there was a risk of confusion between an earlier trademark filed for perfumery and cosmetics and a trademark intended to designate clothing. To determine this similarity, the Court based its decision on the fact that these products belong to the field of fashion, have the same aesthetic function, are targeted at the same clientele and can be marketed under the same trademarks by the same companies and distributed through the same distribution network.

Therefore, we will surely have to wait for the Court of Cassation‘s decision on this matter to obtain a standard and clearer answer in determining and ensuring a more specific and higher level of legal security and protection for trademark owners.

How do you protect a trademark in the metaverse?

Written by Dreyfus01/02/2023

As a new technology of the future digital world, the metaverse has become important to society and to such an extent and rapid pace, that many companies are entering this new world and making their goods available there.

There is no official definition of what metaverse is. The vision of the Metaverse is to allow us to build a digital representation of anything in the physical world. Furthermore, this technology can be defined as a virtual world where individuals interact through the use of Avatars.

Although full of opportunities and promises, the metaverse raises some legal questions, especially when it comes to trademark law. And because the metaverse is a combination of new digital technologies , few answers are given by National or European courts.

On September 13, 2022, in the webinar “Trademarks and Designs in the metaverse: legal aspects/EUIPO practice” trademarks and designs in the metaverse was discussed.

Lots of companies and individuals have decided to take a step forward by entering the metaverse. The metaverse can be considered an extension of the physical world. Consequently, some companies decide to put their products or services into this new world.

What about trademark protection in the metaverse?

Trademark protection in the metaverse begins with the filing of a trademark. To explain this simply, it is at the actual time of filing that protection of a trademark begins.

The choice of wording is therefore essential for the protection of one’s trademark in the metaverse. In fact, the protection goes hand in hand with the list of goods and/or services covered. In this regard, article L.713-1 of the French Intellectual Property Code states that the registration of the trademark confers to its owner a property right in the trademark for the goods and services designated.

However, it can be complicated to register a trademark for the metaverse. In practice, it is indeed difficult to classify goods or services in order to provide proper protection in this new world. The EUIPO, for example, only accepts the registration of goods or services in the metaverse under certain specific classes.

The EUIPO has set out the classes in which individuals/companies can register trademarks in the metaverse. In this respect, an individual wishing to register a trademark for the metaverse will only be able to do so if the registration covers certain classes.
A few examples are outlined here:

For example: class 9 (downloadable virtual goods, i.e., computer programs presenting footwear and clothing for use online in online virtual worlds or collectibles in the form of non-fungible tokens), class 35 (providing an online environment for the exchange of virtual art and virtual tokens), class 36 (financial services including digital tokens) and class 41 (entertainment services, i.e., the provision of virtual environments in which users can interact for recreational, leisure, or entertainment purposes).

In the context of trademark licensing, it is important to ensure that use is authorized or adapted to the virtual world, or, failing that, to ensure future contracts can be adapted accordingly.

One may also wonder what territorial pAll Postsrotection is needed or required in order to protect a trademark in the metaverse. The Internet is by definition free of all borders.

Is a French trademark enough to obtain protection in the metaverse?

No answer has been given by the courts at the moment. However, it can be assumed that the criteria, for determining when a metaverse area/service is directed to a certain audience, would remain the same as for any Web 2 website, such as the proposed language (as an example).

Finally, in order to secure an optimal protection, registering the trademark among decentralized domain names, such as .ETH, has to be foreseen.

National, European and international jurisdictions have understood the importance of the metaverse. As a result, by extending classes, the jurisdictions are allowing the protection of trademarks in this new world.

♦ Afin d’offrir à nos clients une expertise unique, nécessaire à l’exploitation des actifs immatériels, nous vous tenons informés des enjeux actuels de la propriété intellectuelle et de l’économie numérique à travers les articles rédigés par l’équipe juridique du Cabinet Dreyfus & associés.

♦ This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

eSports: Reflective Points to Consider in Regard to Intellectual Property

Written by Dreyfus25/01/2023

eSports viewers may reach 29.6 million per month by the end of 2022, beginning of 2023, according to Insider Intelligence.

The eSports ecosystem may surpass $1 billion in revenue this year. NewZoo the leading resource for analytics and market research, projects a potential revenue to hit $1.8 billion.

eSports is most certainly a new industry with projected high value and the intellectual property rights of eSports needs to be protected adequately.

So, what are eSports?

As defined by the website dictionary.com, eSports refers to competitive tournaments of videogames, especially among professional gamers. This covers all videogames, including virtual simulators of traditional sports and their tournaments.

Protecting the brand for eSport tournaments

The eSport tournament is a sports competition but it is also an entertainment as well. Therefore, it is recommended to secure trademark rights targeting both “sports activities” and “entertainment” in class 41 (although the links between sports and eSports are somewhat controversial, it is recommended to aim at a larger scope of services). Services, which are more specifically related to competitions, must also be designated such as “organisation of competitions” or “organisation of games and competitions, using the Internet”.

If the company organising the competition, where in some cases, may be the Game Publisher, also offers promotional products for sale, the trademark must be protected in the corresponding classes. For example: class 25 for clothing, class 9 for NFT collectibles, class 16 for posters.

This is essential, especially if licences are subsequently granted to certain partners. The “Advertising” in class 35 may be referred to if the organiser offers advertising services for the benefit of sponsors during tournaments.

Protection must be considered for the verbal element to be protected and for the logo that will be used. In respect to this point, it is necessary to ensure the transfer of the copyright in regard to the visual is obtained, especially if it is realised by a third party or an employee.

Exploitation of a tournament: What happens with the copyright licences?

A traditional sporting event, such as a football match, cannot be protected by copyright as an intellectual creation or work. (See Football Association Premier League v QC Leisure and Karen Murphy v Media Protection Services Limited C-403/08 and C-429/08).

In comparison, according to the Court of Justice of the European Union (CJEU), the “video games […] cannot be regarded simply as computer programs but complex multimedia works expressing conceptually autonomous narrative and graphic creations. Such games must therefore be regarded as intellectual works protected by copyright” (see Nintendo Co. Ltd, Nintendo of America Inc., Nintendo of Europe GmbH v. PC Box Srl, 9Net Srl Decision No. C-355/12).

In retrospect, there is no owner of a traditional sport. However, with videogames, the Game Publisher may have property rights to the game or its elements including source codes, characters, music, landscape, etc. These are all protected through copyright, providing that they are actually original.

In the decision of the French Court of Cassation dated 25 June 2009, the judge found that a video game is a complex work requiring the application of a distributive regime. It should include the regimes of software, audio-visual work, as well as the musical work, and other specific elements.

The Publisher acquires the different rights for distribution and commercial exploitation purposes. The exploitation may be done in the form of video game sales, tournaments, or sales of licenses to “players” for non-commercial use.

It is important to note that the organizers of eSports events will be required to obtain the necessary user rights to make the videogames publicly available at tournaments or through other distribution channels, such as online streaming services (eg. Twitch or Youtube).

In the ecosystem of eSports, competitions are filmed and broadcast on social networks and on video.

Earlier, in 2022, Goldman Sachs predicted that for eSports, revenue streams for media rights and sponsorship could amount to 40% and 35% respectively. To date, however, there has not been an applicable regime associated to eSports in respect of broadcasting rights, sponsorship and gamers’ Intellectual Property rights under French jurisdiction. Therefore, concerned Actors would be well advised to integrate these revenue numbers into their operating strategy.

Most recently, the French Ministry of Culture has proposed a new law No. 2021-1382 dated 25 October 2021 seeking to find a comprehensive solution for videogames whereby the legislator has given the Chairman of the National Gaming Authority the power to block injunctions after an accelerated judicial procedure on request, against circumvention websites.

It is crucial to have a legal plan to self-protect before organising an eSport competition, interms of trademarks, to be ready to come up against infringements, as well as in terms of copyright, to avoid infringing the publisher’s rights.

As a complex ecosystem, the intellectual property rights to eSports are governed by a web of contractual documents due to the lack of national and international regulations. They are usually drawn up by the Publisher in collaboration with their intellectual property counsels. While a complete specific legal framework is still pending, the rules today are mainly in the hands of the Publisher.

Legal Watch : A public figure’s name constitutes a right that can be the basis for UDRP proceedings

Written by Dreyfus23/12/2022

Less than a month after the 2022 presidential elections, a WIPO Arbitration and Mediation Center’s Expert rendered a decision regarding a domain name reproducing the name of the re-elected candidate Emmanuel Macron.

The domain name in dispute, <emmanuel-macron.com>, had been registered on the 3^rd October 2015, during the time when Emmanuel Macron was still the Minister of Economy, Industry, and Digital Technology. Far from merely imitating the future president’s name, this litigious domain name would redirect to this website, which in fact, was the official website of the adverse polemist candidate during the 2022 presidential election. In this respect, we note that the domain name did not redirect to content related to Mr. Eric Zemmour before 2022 (according to an Archive.org search).

The complainant logically argues in their complaint that they must fulfill the requirements of paragraph 4(a) of the Policy, where it is specified that there are three cumulative elements necessary to claim the transfer of the disputed domain name. These are :

♦ The similarity of the domain with a right of the complainant.

♦ The lack of right or legitimate interest in the domain name on the respondent’s part.
♦ The proof of bad faith registration and use by the registrant.

The interest of this case stands within two main points : the assessment of the similarity between the disputed domain name and the complainant’s prior rights, and the characterization of the registrant’s legitimate interest.

The complainant presents his arguments based on the existence of non-registered rights to the trademark “EMMANUEL MACRON”, a concept no longer existing under French law (except for well-known trademarks). If, by the simple fact that a domain name contains a family name that is not sufficient enough to justify an interest in bringing an action, it is important to note that under the Policy, the Experts’ assessment varies depending on the use of the family name made by the complainant. Here, the domain name was reproducing both the first name and the family name of Mr. Macron.

The Expert considers that when a person’s name is used as a trademark-like identifier in commerce, a complainant may be able to establish unregistered rights from that name to succeed in the UDRP proceedings. In this case, the Expert explains and outlines that the complainant’s use of the name “Emmanuel Macron” is not limited to his political activities but also extends to a commercial use being in this case, the publication and sale of books. Therefore, from the commercial use of his name, the complainant satisfies the requirements of the Expert. The Expert in retrospect acknowledges him as holding a non-registered trademark right. Therefore, the identity of the signs in comparison is established.

As trademark specialists, we would have appreciated a more puristic demonstration. In France, trademark rights cannot be acquired through simple use without registration (except for well known trademarks). In this case, it was up to the complainant to demonstrate that he had acquired trademark rights under Common Law or that the name “EMMANUEL MACRON” was a well-known trademark for certain goods and/or services.

We assume that the case was urgent and that the Expert wanted to do the right thing in this unacceptable situation. The complainant was fortunate that the case was assigned to an Expert who wanted to achieve a fair decision at the expense of trademark laws.

The Expert then raises the question of legitimate non-commercial or fair use of the domain name, according to paragraph 4(c)(iii) of the Policy.

In this case, the disputed domain name, redirects to the website of another opposing political figure. Therefore, the use of this domain name does not seem commercial and therefore, could more likely fall into the scope being freedom of speech.

However, previous experts have ruled that the right to legitimate criticism does not necessarily extend to the registration or use of a domain name which is identical to a trademark or a right, when it could create a risk of confusion through impersonation. Therefore, the use of the name EMMANUEL MACRON to redirect to his opponent’s website, Eric Zemmour, would incur a risk of implicit affiliation with the complainant. This would also constitute, on the part of the respondent, an attempt to misleadingly divert Internet users, especially since the respondent cannot claim to be known or be recognized under the name “EMMANUEL MACRON”.

As a result, and according to paragraph 4 (c) (iii) of the Policy, the Expert has determined and decided that it cannot therefore, be considered as a legitimate non-commercial or fair use status. In conclusion, the registration and use in bad faith were also acknowledged for the same reasons. As the domain name was registered at the end of 2015, the panel observed that the complainant had already acquired significant notoriety as a public figure in France. Moreover, the redirection to the website of a political opponent was likely to mislead Internet users and disrupt the complainant’s activities.

In retrospect, this case could have been subject to much harsher and serious consequences, as the intent seemed to take the form of manipulating an electorate in the run up to the presidential election, rather than taking advantage for commercial purposes.

What are the design issues in the metaverse ?

Written by Dreyfus13/12/2022

When changing Facebook to Meta, Mark Zuckerberg tried to justify Meta as the future. The metaverse is indeed a reality for millions of online players, a place to meet, interact, and create in this new world.

There is no sole definition of what metaverse is. However, it can generally be defined as a 3D immersive world, in which individuals can interact through the use of Avatars.

Metaverse is a promising technology with a possibly bright future. In fact, as an immersive world, users can do everything they do in the real world. Since this new technology is winning over millions of users, scores of industries, and companies are beginning to enter this world where they can extend and offer their products and services.

One of the industries that has benefited the most from this new technology is the luxury industry. During the Covid 19 pandemic businesses were severely disrupted.

The metaverse began to appear as a very attractive alternative for companies to continue to exist and have a presence in the marketplace. Many luxury houses have adopted a presence and entered the metaverse where they are able to offer a full immersion of styles, clothes, accessories and peripherals to Avatars. The industry has even started to conduct fashion shows with this new environment. A Metaverse Fashion Week was even created. Besides, the perk of digital fashion is that it allows to create designs which could not exist in the real world, due to technical constraints.

These digital clothes can be sold as NFTs and they can broaden the public of a luxury house, which until now could only touch the masses through more affordable goods such as perfumes and cosmetics. These houses are able – from now on – to attract them with virtual clothes.

With this change, and with the potential in this new world, there are legal issues arising. In fact, we can confirm that there is most definitely a grey area when it comes to this virtual world, especially due to the fact that rules and legal frameworks have not yet been fully developed and adapted to this world. One could even wonder whether specific legal rules should apply to the metaverse.

These questions are all the more relevant for companies to consider seriously considering that Offices have not yet brought clear and precise responses. The metaverse therefore, remains a grey legal world, where enforcing intellectual property rights is an uphill struggle.

Here, we will focus on the questions connected to protection of designs in the metaverse.

The European Intellectual Property Office (EUIPO) has been looking at the metaverse and the issues it raises. In its webinar of September 13, 2022 “Trademarks and Designs in the metaverse”, the EUIPO raises some legal issues that trademarks and designs are facing in the midst of the metaverse.

1. The use of designs in the metaverse

Registering the feature of a product is all the more important for some individuals or companies. When an individual or company is granted design protection, it obtains a monopoly on the exploitation of the design.

This is explained in Article 19 of the Council Regulation (EC) on Community designs which concludes “a registered Community design shall confer on its holder the exclusive right to use it and to prevent any third party not having his consent from using it. The aforementioned use shall cover, in particular, the making, offering, putting on the market, importing, exporting or using of a product in which the design is incorporated or to which it is applied, or stocking such a product for those purposes”.

The EUIPO noted that the term “use” is understood in a broad sense. Therefore, it can include the use of a product on the Internet and thus, in the metaverse. This makes sense since the metaverse is a new “market” for business.

2. The availability of unregistered designs in the metaverse

For a design to be protected, it is essential that it meets the condition of novelty.

Under both European and French law, a design is considered to be new if, at the date of filing of the application for registration or at the date of ownership claimed, no design has been disclosed. According to article 11 (2) of the Council Regulation (EC) on Community designs “a design shall be deemed to have been made available to the public within the Community if it has been published, exhibited, used in trade or otherwise disclosed in such a way that, in the normal course of business, these events could reasonably have become known to the circles specialized in the sector concerned, operating within the Community. The design shall not, however, be deemed to have been made available to the public for the sole reason that it has been disclosed to a third person under explicit or implicit conditions of confidentiality”.

When a luxury house suggests new designs on the metaverse, is it disclosure ?

From a certain perspective, metaverse is a world without any borders where individuals can have access to a bunch of different goods or services.

Consequently, when a company or an individual publishes or exposes a design in the metaverse, the notion of novelty is undermined. So far, there has been no clear answer concerning this question. This question also induces another one: does the uploading of new creations in the metaverse give rise to unregistered design rights in certain territories, such as the United Kingdom?

3. Protection of designs in the virtual world

The last issue raised by the EUIPO concerns the protection of designs in the virtual world.

In fact, one of issues that may be considered is whether products in the metaverse meet the same definition as a product in the real world.

Article 3 of the Council Regulation (EC) on Community designs enounces that a “product means any industrial or handicraft item, including inter alia parts intended to be assembled into a complex product, packaging, get-up, graphic symbols and typographic typefaces, but excluding computer programs”.

A handicraft item is a product made in one-off pieces or in a small series of pieces. It requires the knowledge and skill of one or more craftsmen.

Therefore, some will argue that a product in the metaverse cannot be considered as a handicraft or industrial product.

The EUIPO’s response on this issue does not provide any clear answer due to the lack of case law on the matter. As a matter of fact, it is difficult to say that digital designs are industrial or handicraft items. Nonetheless, the EUIPO accepts digital designs, which are generally classified in class 14-04 of the Locarno classification (such as “icons (for computers)”). Hence, we could completely envision the extension of this class or alternatively, the possibility to add the virtual version of goods in their traditional class (such as class 2 for clothing).

The metaverse is the technology of the moment. However, it raises numerous questions, particularly in relation to designs as to the use of products, their availability and protection within the metaverse. Although the EUIPO gave us some answers as to the use of a product within the metaverse, most of the answers will come with case law.

How to protect Building information modelling (BIM)?

Written by Dreyfus08/12/2022

Over the past decade, the architecture, engineering, construction and Operations (AECO) industry has undergone several developments, particularly in the area of information technology. Building Information Modelling (BIM) is now globally considered a better solution to enormous building problems, which made a huge effect on the building and construction industry. The industry is facing a practical challenge in protecting design when conflict arises between owner’s and architect’s proprietary rights.

“We shape our buildings ; thereafter they shape us.” – Winston Churchill

There was a time when pencil, paper and complex drawing were the base of construction planning, creating a tiring process with lots of loopholes. However, things have changed. It is now all about Building Information Modelling (BIM) which has been part of the construction industry for some time now. It connects the AECO professionals to design, build and operate infrastructure more efficiently. It is more than just 2D or 3D modelling. It is the process of designing a building collaboratively using one cohort system of computer models rather than as a separate set of drawings.

So, what does make BIM so exciting?

It provides insights into design constructability, reduces errors, and improves the efficiency and effectiveness of the construction phase. It can help owners in predictive maintenance, asset tracking and facilities management for future changes and renovation work. It does not solely refer to buildings, but to all sectors that have to do with construction, including roads, railways, utilities, bridges, tunnels, structures, architecture, topography, etc. BIM can be classified into different levels.

Where does intellectual property come into this conversation?

Let’s take a situation- an architect draws a design plan for the construction of a cafeteria. The contractor executes the work as per plan. However, the owner decides to reuse the design with some small changes for a second cafeteria. In such a case, apart from monetary consideration for services of design, does the architect have any other rights? Can he stop the owner from making changes to the design suggested by him? The answer to all such questions lies in Copyright and Design Law.

BIM models created in the tendering process before the award of the contract will not usually be registered. Therefore, BIM models cannot be protected by Design Law. Article 10 of Directive 98/71/EC, provides that the protection of designs is subject to their registration. However, unregistered designs can be covered by copyright under the concept of artistic work although EU Member States differ in how national copyright law protects unregistered designs. For instance, the French Intellectual Property Code (Code de la propriété intellectuelle) article L112-2.7, and the Danish Consolidated Act on Copyright 2014, Consolidated Act No 1144 of 23 October 2014 (Bekendtgørelse af lov om ophavsret (LBK nr 1144 of 23/10/2014)) in section 1.1, all list works of architecture under copyright law.

Determining the ownership of IP rights over the BIM model and its elements is necessary to determine the lawful exercise of ownership. Generally, an owner of a model is granted exclusive right regarding the use of Intellectual Property, and consequently to copy and disclose it as it wishes. In BIM Level 3, however, the authors of the model are regularly indistinguishable. However, if the contracting authorities are services of design, does the architect have any other rights ? Can he stop the owner from making changes to the design suggested by him ? The answer to all such questions lies in Copyright and Design Law.

Determining the ownership of IP rights over the BIM model and its elements is necessary to determine the lawful exercise of ownership. Generally, an owner of a model is granted exclusive right regarding the use of Intellectual Property, and consequently to copy and disclose it as it wishes. In BIM Level 3, however, the authors of the model are regularly indistinguishable. However, if the contracting authorities are to be granted ownership of a BIM model jointly with a tenderer or winner, exercising their right by disclosing it to a third party would be contrary to the interest of the other joint owner. Therefore, the French, German and Danish legislatures grant joint ownership of jointly developed BIM models and regulate in their copyright laws the right of the owners in exercising ownership rights.

In this regard, the French Intellectual Property Code Article L.113-3 provides:

‘The collaborative work is the common property of the co-authors. The co-authors must exercise their rights by an agreement. In the event of disagreement, it is for the civil jurisdiction to rule.’

The developers of a BIM model in a tendering process will be the joint owners of the model and the exercise of their rights is governed by the copyright law of the relevant EU Member State. Since the exercise of its ownership rights by each owner can potentially conflict with the interests of another owner, such exercise would generally only be permitted with the consent of the other owner(s). Therefore, the contracting authorities would not have the right to disclose the BIM model to third parties without the prior consent of the tenderer with whom they developed the BIM model.

The possibilities of BIM are endless, the trend in the construction industry is, and when there is something new, people immediately want to assign more risk to it. Thus, companies/individuals have Thus, companies/individuals have started getting the intellectual property right registered during the initial stage of a project.

Science and technology are developing faster than intellectual property legislation. As a result, previously unknown products of intellectual activity are regulated by general rules. While working and exchanging digital data on a collaborative platform can cause problems related to intellectual property such as if a copyright violation of models and intellectual property enters the court process, it poses a great financial risk and can cause project delays that will result in its loss. Before a project is implemented, there needs to be a clear understanding not only of who owns the model but also of who is responsible for the model. Then, we must consider which actors have the potential to retain the collaborative product for its sustainability. Therefore, it is necessary to conduct a review and synthesis of the related studies to identify the model ownership and intellectual property rights.

Personal data, intellectual property and consumer law: their challenges in the metaverse

Written by Dreyfus22/11/2022

The concept of Metaverse is nothing new. This term was first introduced by Neal Stephenson, in his science-fiction novel “Snow Crash” as a “form of human life and communication in a virtual three-dimensional space through a digital avatar”. As of today, this new world is no more science-fiction but part of our world.

Thus, this new virtual world raises some legal issues as to its use, especially when it comes to personal data, intellectual property and consumer law.

The metaverse is a 3D virtual world. Within this universe, users can live a complete immersive experience since they all can interact, buy, sell products, sell lands, etc.

The metaverse is a world full of opportunities as well as a world still in development. As a matter of facts, more and more individuals and companies have jumped into this new world where they both experience a unique experience. Because this is a virtual world, it is of legal interest and certain questions need to be raised.

What will be the applicable privacy laws in the metaverse?

When Facebook changed its name to Meta and introduced their vision of Metaverse, the trust people could have had toward the metaverse shifted. Thus, just as in the real world, the issue of personal data has an important place in the metaverse.

In a more general way, the virtual world is only a reflection of the real world. At the very least, it can be an improved version of reality. As this world is virtual , the use of data becomes a major issue. As the data collected is different than in real world that involves numerous amount of information concerning the user, especially through their avatars as users are accurately represent by their avatars. Through their avatars, facial expressions, gestures or types of reactions that a person might have during their interactions in the metaverse can be collected.

Because facial expressions, gestures, or interactions can be collected, the traceability of users will be even more advanced than in the real world.

The European Union has the user’s data protected from being collected without their consent with the applicability of the General Data Protection Regulation (GDPR). Now the question is does the GDPR apply in the metaverse? Can the GDPR protect European nationals?

As per the Article 4 (1) of GDPR gives a broad definition of “personal data”. According to article 4(1), personal data is any information which are related to an identified or identifiable natural person.

From this definition, the GDPR can indeed be applied in the metaverse. As the personal data is defined in a broad way, even indirect data can be considered as personal data. Therefore, as soon as a gesture or facial expression can be traced back to a person, it will be considered as personal data.

However, what about the territorial application of the GDPR? In fact, this Regulation only protects users when they are within the European Union. Yet, the metaverse, by definition, is a world without any borders.

Is Metaverse, facilitating counterfeiting?

The second issue raised by the metaverse is dealing with intellectual property law, and more specifically, about counterfeiting. There have been recent cases of counterfeiting in the metaverse, the most famous one being the MetaBirkin case.

On January 14, 2022, Hermès sued the artist Mason Rothschild for counterfeiting its Birkin bag. In fact, the latter had created a hundred or so NFTs in the shape of the Birkin bag, which he sold in the metaverse for cryptocurrency.

The French Intellectual Property Code defines counterfeiting as any violation of an intellectual property right, such as the reproduction, imitation, or total or partial use of a trademark, patent, model, copyright or software without the authorization of its owner (article L.335-2 French Intellectual Property Code). If a work or object belonging to a brand or artist is copied into the metaverse, there is a risk of infringement.

However, the question arises as to whether the products of small companies or the works of lesser known artists are counterfeit. While well-known brands or artists can effectively defend themselves against misuse of their brand or work in the metaverse, it is much more complicated for companies or artists who are unknown to the general public. Thus, there could be a disparity between the well-known people/companies and the “others”.

Hence, the best way to avoid such disparity but also to avoid any infringement, would be for companies or artists, whether they are known or not, to register trademarks covering virtual products or services. Similarly, one solution to avoid infringement of artists’ copyrights would be to use the blockchain. In fact, blockchain grants certificates ensuring a follow-up of the transactions and the originality of each world sold. As a result, a traceability of the work is in place, making it possible to avoid future counterfeiting.

Will consumer law apply to Metaverse?

As a mirror of the real world, users can buy and sell products. Because consumers find themselves buying products in this world, consumer law cannot be overlooked.

Generally speaking, consumer law can be defined as all the legal and regulatory provisions designed to protect the consumer. Thus, as in the real world, the virtual world must be regulated and governed by consumer law. The terms applicable in the real world will be applied in the virtual world and sanctioned in the same way.

The Commission National for Information Technology and Civil Liberties (CNIL) has looked into the issue of consumer law in the metaverse and has considered that consumers must receive enhanced information and be able to refuse without suffering the consequences. However, this seems complicated in the metaverse.

The metaverse offers infinite possibilities to its users, and to our society in general. However, the metaverse raises questions, particularly in terms of personal data protection and trademark law. Moreover, the metaverse, like the real world, offers its users the possibility of selling products. Consequently, consumer law must be applied there. In other words, the legal rules applicable in the real world must be respected in the virtual world, and some of them must be adapted to ensure the best protection of goods and users. As this technology is booming, it will be important to see how legislations adapt to this new world.

SEE ALSO…

♦ https://www.dreyfus.fr/en/2022/08/12/what-are-the-legal-issues-behind-the-registration-of-off-chain-nfts/

♦ https://www.dreyfus.fr/en/2022/03/11/metaverse-is-it-necessary-to-register-specific-trademarks-for-protection/

How does the Chinese Hangzhou Internet Tribunal decision set the pace for copyright protection on NFTs platforms?

Written by Dreyfus08/11/2022

NFTs, or non-fungible token is one the biggest digital revolutions of our century. An NFT is a digital token operating on a blockchain.

Because it is non-fungible, an NFT guarantees someone’s property over a digital artwork. When it is combined with an artwork, an NFT can be considered as a certificate of authenticity.

Although an NFT is a revolution within the digital world, some issues may be raised. In fact, what about artists’ copyrights in this digital environment? How can artists’ copyrights be protected within NFT platforms? Can an NFT platform be held liable for copyright infringement? There are many proposals for reasonable responses called forth by intellectual property attorneys.

Copyright law is meant to protect artists’ rights over their artistic or literary artworks. Particularly, copyright law protects books, musical artworks, paintings but also database.

Everybody can sell or buy digital artworks on a blockchain. Therefore, what about platforms’ liability? If every one of us can sell or buy artworks, there is absolutely no guarantee that the artworks has been put on the platform by its author. As such, it is fairly common that an artwork put on a blockchain infringes the author’s copyrights. In such case, it is crucial that the author defends for their rights in collaboration with the intellectual property attorneys.

The answer to know whether an NFT platform can be held liable for copyright infringement has been raised in the case Shenzhen Qice Diechu Culture Creation Co. Ltd v. Hangzhou Yuanyuzhou Technology Co., Ltd a.k.a “Chubby tiger having its shot”.

In this case, Ma Qianli, the author of the cartoon at stake gave to Shenzhen Qice Diechu Culture Creation an exclusive license to use his copyright over the “Chubby tiger having its shot” artwork. Defendant, Hangzhou, owns an NFT platform. This latter authorized a third party to sell NFT derivative products of the “Chubby tiger having its shot” artwork. Shenzhen then brought a lawsuit for copyright infringement against the NFT platform.

This decision is important for two reasons. Firstly, it is the first decision where copyright infringement is involved on an NFT platform in China. Secondly, the action is brought against an NFT platform.

The first question raised by this case deals with NFT platforms liability. By definition, a blockchain is decentralized. That means that nobody nor any entity checks the identity of a person.

Therefore, NFT platforms do not check the paternity of an artwork linked to an NFT. A person can sell or buy NFT-artworks and it is not even the author nor a licensee. Hence, counterfeit artworks can freely circulate on NFT platforms, infringing artists/creators’ copyrights.

Because it is difficult to sanction platforms when a content is illicit or infringe someone’s copyright, it is rare for authors to assert their rights on the Web 3.0.

In this case, defendant raises some arguments to avoid liability. First of all, defendant mentions that his platform is a third-party platform. Artworks are downloaded by the platform’s users. This latter cannot be held liable for its users’ activities. Thus, the platform put the concerned NFT on its address form. Therefore, it fulfilled its notification/deletion obligation. At last, a platform cannot divulgate which blockchain has been used nor where the NFT is.

The Internet Tribunal refuses the arguments raised by defendant. In fact, it considers that the platform at stake is a professional platform. Consequently, the Tribunal highlighted a major distinction between NFT platforms. Here, the platform is considered as being a professional NFT platform. The underlying idea is that as soon as a platform is qualified as professional, its liability can be engaged for copyright infringement.

Even though the Tribunal does not when an NFT platform is a professional, it can still be deduced. In fact, the platform at sake is qualified as professional because it proposed transactional services. Consequently, it is a professional NFT platform when it invoices certain percentages fees for each transaction.

Because a transaction has been made and because the platform obtained a financial gain, the platform must fulfil higher obligations when it comes to copyright protection. For example, a professional platform must proceed with preliminary examination regarding the digital artworks’ property that are sold or bought on their platforms. This activity may be efficiently conducted in collaboration an intellectual property attorney.

The Tribunal here considers that the platform failed its duty of care. In this regard, when an NFT platform is professional, it must put in place reasonable measures to check the artworks’ property once they are put on a blockchain by asking to the seller/artist to prove the artworks’ copyright.

The first Chinese NFT copyright infringement was made against a platform since the appellant could not obtain the name of the seller. Claimant, during the proceeding, asked for the seller’s identity in order to sue him for copyright infringement. Consequently, this case is not over yet.

Nevertheless, this case set the pace as for NFT platforms. This decision can be seen as a warning for every NFT platforms which will have to be careful regarding each NFT digital artworks sold or bought on their platforms.

SEE ALSO…

What are the legal issues behind the registration of Off-Chain NFTs?

The emergence of domain names in the form of NFTs

Written by Dreyfus24/10/2022

NFT Non-Fungible Tokens (“NFTs”) are units of digital data (tokens) stored in the blockchain that are not inherently interchangeable with other digital (non-fungible) assets. They represent real objects such as images, videos, artworks that are bought and sold online, usually with crypto-currency.

NFTs operate as digital signatures attributable to a single owner. The underlying content represented by the NFT is given a unique identifier, making it a certified digital asset that unequivocally belongs to a specific person or entity.

An NFT is stored in the owner’s electronic wallet.

In most cases, these NFTs are backed by decentralized blockchains that are managed autonomously and automatically. The blockchain itself does not belong to anyone. Therefore, only the last owner of the NFT has the possibility to transfer it to another owner.

NFT domain names result from new web extensions linked to the blockchain via smart contracts. These extensions, such as <. eth> (“eth” referring to the Ethereum blockchain), are not recognized by ICANN at this time.

Hence, from a legal point of view, it is not easy to act against an unauthorized use of a trademark in an NFT domain name. For instance, the rules provided by the UDRP do not allow for the resolution of conflicts for this type of blockchain domain name. Thus, blockchain developers have created their own version of the Domain Name System (DNS), which fall outside of ICANN’s regulatory control.

To date, there is no international authority or court that could order the deletion or transfer of NFT domain names. This is a consequence of the decentralized nature of blockchain domain names and the anonymity of the registrants, key elements of the blockchain mechanism. The immutable nature of blockchain also forms an obstacle.

Even if these new extensions will undoubtedly bring many opportunities, the legal framework remains unsettled for the moment. New legislative evolutions on the subject of domain names and the defence of trademarks will certainly be expected in the coming years.

Dreyfus