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Co-branding: Strategy, Opportunities, and Challenges

Written by Dreyfus28/10/2024

By Dreyfuslawfirm

 

Co-branding has emerged as an indispensable strategy for companies aiming to extend their influence, enhance brand equity, and foster product innovation. However, this form of multi-brand collaboration necessitates meticulous planning and rigorous scrutiny due to its inherent risks. This article delves into the essential elements of co-branding, both from marketing and legal perspectives, while also identifying the opportunities and challenges associated with these strategic alliances.

 

Strategic Alignment and Value Convergence

The success of co-branding hinges on the precise strategic alignment between partner brands. These entities must share fundamental values and pursue compatible strategic goals, a condition necessary to establish a seamless collaboration and leverage potential synergies. Furthermore, each brand must target similar or complementary audiences to ensure a positive market impact and maximize the partnership’s overall outcome.

Mutual Benefits and Complementary Competencies

The core of successful co-branding lies in the creation of shared value. Co-branding thrives when each partner leverages its unique strengths: one brand may possess cutting-edge technological expertise, while another has established market recognition. By merging these distinct competencies, brands can offer high-value products or services unattainable independently, generating synergistic outcomes that exceed the sum of individual contributions.

Reputation and Risk Management

The reputation of partners is a critical factor in co-branding initiatives. Associating with a brand that has a questionable or undeveloped reputation can impair the overall image of the initiating company. Thus, thorough due diligence is paramount to evaluate the prospective partner’s stability and ensure their alignment with the project’s dynamics. Risks, including those related to consumer perception, must be identified and thoroughly assessed.

Legal Considerations: Intellectual Property and Contractual Agreements

Legal considerations are fundamental in ensuring the stability and viability of a co-branding partnership. Intellectual property (IP) rights concerning trademarks, logos, and co-created content must be clearly defined from the outset. Comprehensive contractual agreements are necessary to delineate each party’s roles and responsibilities, including revenue-sharing clauses and financial obligations. These agreements should incorporate predetermined dispute resolution mechanisms aimed at preventing and managing potential conflicts throughout the collaboration.

 

Quality Control and Consumer Perception

Quality control is another major aspect of co-branding. The perceived quality of co-branded products or services must be maintained to avoid damaging the brand image, which could negatively impact both entities. Quality standards must be established early and adhered to strictly to ensure consistency and protect the reputation of each partner.

 

Recent Statistics: Growth and Evolution of Co-branding

Recent data underscores the growing prevalence of co-branding: approximately 65% of marketing executives view these partnerships as essential for brand growth. Moreover, 71% of consumers report being more inclined to purchase a product co-branded with a trusted brand. These statistics highlight the importance of selecting strategic partners to maximize growth and reinforce consumer trust.

 

Expanding Industries and Digital Integration

Several sectors are distinguished by their effective use of co-branding:

– Technology: Partnerships between technology firms and health applications.

– Food and Beverages: Creation of unique products through collaborations between snack and confectionery brands.

– Fashion: Limited-edition collections that are often highly publicized and impactful.

– Automotive: Integration of advanced technologies through collaborations with high-tech companies.

 

These industries leverage co-branding to innovate, reach new market segments, and create unique value propositions, often utilizing digital strategies such as video marketing on social media platforms.

Challenges and Risks of Co-branding

Despite its numerous benefits, co-branding also presents challenges. Among the most significant are brand dilution, differences in corporate culture, and quality control issues. A major difficulty is ensuring equitable benefit distribution between partners to avoid tensions or resentment. Proactive management, through clear contracts and regular communication, is crucial to prevent these issues and guarantee the partnership’s success.

Conclusion: Optimizing Co-branded Collaborations

Co-branding offers a unique opportunity to expand each brand’s reach and enhance overall credibility, provided that the inherent challenges are fully understood. Rigorous strategic planning, structured risk management, and a clear delineation of roles and responsibilities are essential for maximizing success. With a methodical approach and anticipation of obstacles, companies can effectively leverage the unique advantages of co-branding while mitigating potential pitfalls.

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France’s IP Legislation: Mastering Trademarks in a Global Playground

Written by Dreyfus21/10/2024

The French Intellectual Property Legal Framework: A Comprehensive Overview

The foundation of intellectual property (IP) law in France is a testament to its historical influence on legal traditions and reflects its progressive adaptation to new technological developments and globalization. The French IP system, particularly in the realm of trademarks, is robust, detailed, and harmonized with international conventions. It is structured to protect the creativity and innovations of individuals and companies alike.

 

The Core of French Trademark Law

 France’s trademark law is primarily governed by Law No. 91-7 of January 4, 1991, which was amended by Ordinance No. 2019-1169 of November 13, 2019. These laws are codified in the French Intellectual Property Code (FIPC), which forms the backbone of domestic regulations. The amendments have largely been driven by the need to align French law with broader European Union directives and international standards.

 

Trademarks in France serve as legal instruments that safeguard distinct business identifiers, names, logos, designs, and even sounds by ensuring exclusive rights to their use. The legal system also extends protection to non-traditional trademarks, including motion marks, holograms, and multimedia representations. The core requirements for trademark protection in France are quite clear: a trademark must be capable of distinguishing goods or services from those of others and be capable of being represented clearly in the official registry. The National Institute of Industrial Property (INPI) is the official body responsible for regulating trademarks in France.

 

A Global Player in Intellectual Property

France is not isolated in its legal approach to intellectual property. It actively participates in several key international agreements that shape global IP law. Among these, the Paris Convention for the Protection of Industrial Property (1883) and the Madrid Agreement (1892) have been foundational. Additionally, France’s signature on the TRIPS Agreement (1994) aligns it with international trade obligations, while agreements such as the Nice Agreement (1957) ensure a harmonized classification of goods and services worldwide. These treaties facilitate the international registration of trademarks and create a cohesive framework that allows French businesses to compete globally while protecting their intellectual property.

 

International agreements simplify the process of cross-border trademark registrations and provide mechanisms for French entities to enforce their rights in other jurisdictions. For instance, the Madrid Protocol (1997) and the Vienna Agreement (1973) offer frameworks for international classification and protection of figurative marks.

 

Establishing and Enforcing Rights: The Role of Registration

While registration is not mandatory to establish trademark ownership in many jurisdictions, in France, unregistered trademarks are not afforded legal protection. The concept of “common law” trademarks does not exist in French law. However, owners of well-known marks, defined under Article 6-bis of the Paris Convention, can use provisions under French tort law to prevent the misuse of similar signs. In practical terms, registration with the INPI ensures a more straightforward path to enforcement, including access to specialized courts and legal remedies in infringement cases.

 

Once registered, a French trademark is valid for a period of 10 years, and the registration can be renewed indefinitely. The registration also provides a presumption of validity, simplifying legal disputes related to ownership and use. Notably, the non-use of a trademark over a five-year period opens the door for third-party cancellation actions.

 

Challenging a Trademark: Opposition and Cancellation Proceedings

The French trademark system allows third parties to challenge applications and existing registrations. Once a trademark application is filed, it is published in the Trademark Gazette, opening a two-month window for opposition. Oppositions can be based on prior rights, including existing trademarks, copyright, company names, or geographical indications.

 

Cancellation proceedings are equally vital in maintaining the integrity of the trademark register. Such actions may be based on grounds including the lack of distinctiveness, bad faith, or non-use. The process typically involves multiple exchanges of evidence and legal arguments between the parties. Moreover, if a trademark is found to be misleading, deceptive, or descriptive, it can be invalidated.

 Online and Digital Dimensions of Trademark Protection

As the world becomes increasingly digitized, the protection of trademarks in online environments has gained prominence. Under the Electronic Post and Telecommunications Code, French law provides mechanisms to cancel or transfer infringing domain names. Domain names, which hold significant commercial value, can form part of opposition proceedings if they have established sufficient recognition among the public.

 

Infringement in the online space is treated similarly to traditional forms of infringement, with courts recognizing the unique challenges posed by digital platforms. Trademarks can also be enforced under the French unfair competition law, which extends protection against unfair commercial practices, particularly in cases where foreign well-known trademarks are involved.

 

Licensing and Assignment: Managing Trademark Rights

Trademarks, as valuable business assets, can be licensed or assigned, partially or wholly, for specific goods and services. Licensing agreements, when recorded with the INPI, allow for easier enforcement of trademark rights and enable the licensee to pursue infringement claims if authorized. The assignment of trademarks, which can be for tax purposes or business restructuring, must be executed in writing and signed by both parties.

 

Recording such transactions is not mandatory for validity, but it is crucial for enforceability against third parties. The INPI manages the recorded licenses and assignments with processes designed to be efficient and cost-effective.

 

Conclusion: The Future of French Intellectual Property Law

France’s intellectual property legal framework is a dynamic system that balances tradition with modern innovation. Its alignment with international standards and robust domestic regulations ensures that businesses operating within its jurisdiction can effectively protect and enforce their intellectual property. As new technologies emerge, the French legal system will likely continue to adapt, ensuring that its IP laws remain relevant and responsive to the needs of creators and businesses alike.

 

At Dreyfus Law Firm, our team is well-versed in the intricacies of the French IP legal framework, ensuring that our clients confidently navigate the complexities of trademark registration, enforcement, and international agreements. We understand the unique challenges that arise in today’s digital landscape and are committed to providing tailored solutions that protect your creative assets.

 

By partnering with Dreyfus Law Firm, companies can effectively manage their intellectual property portfolios and safeguard their innovations. Our comprehensive approach facilitates smooth registration processes and equips clients with strategies to tackle potential infringements and disputes. With our guidance, businesses can focus on what they do best, innovating, while we handle the legal intricacies of IP management. Choose Dreyfus Law Firm to ensure your intellectual property is in expert hands!

 

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The EU AI Act and Its Implications for Global Business

Written by Dreyfus14/10/2024

Rapid artificial intelligence (AI) technology development has created the need for clear and harmonized regulation to ensure ethical use, safety, and innovation. The European Union’s AI Act (EU AI Act) is poised to become the world’s first comprehensive legal framework regulating AI, impacting not only European businesses but global industries operating within or interacting with the EU market. This article delves into the key aspects of the EU AI Act and its far-reaching implications for global business operations.

 

Overview of the EU AI Act

The Scope of the AI Act. The EU AI Act categorizes AI systems into different risk levels—unacceptable, high, limited, low, and minimal—each requiring varying degrees of regulatory scrutiny. The legislation primarily targets high-risk AI systems that significantly impact people’s safety, rights, and freedoms. These include AI applications in healthcare, transportation, and critical infrastructure sectors.

Compliance Requirements for High-Risk AI Systems. Under the AI Act, businesses must adhere to stringent compliance requirements for high-risk AI systems. These compliance requirements include conducting conformity assessments, ensuring robust risk management systems, and maintaining transparency and accountability throughout the AI lifecycle. Companies must also prepare for regular monitoring and audits, which designated authorities across EU member states will enforce.

 

Implications for Global Businesses

Direct Impact on AI Developers and Providers. Any company developing or providing AI systems based within or outside the EU must comply with the EU AI Act if its products are used within the Union. This extraterritorial reach of the regulation means that global businesses, particularly those in tech-heavy industries, must prioritize legal compliance to avoid penalties, including fines of up to 6% of their global annual turnover.

Increased Costs of Compliance and Innovation. The need for AI system conformity assessments, data governance policies, and risk management frameworks can significantly improve operational costs. For non-EU businesses, navigating the complex compliance landscape may require engaging local legal and technical experts, further driving up costs. However, these compliance measures also encourage responsible AI development and consumer trust, potentially opening new markets for companies able to demonstrate adherence to ethical AI standards.

 

Strategic Considerations for Businesses

Risk Mitigation and Liability. Understanding the liability risks associated with AI implementation under the EU AI Act is critical for global businesses. Companies must proactively establish comprehensive risk management processes to mitigate the legal and financial risks tied to AI systems that are deemed high-risk. Compliance can help reduce liability exposure and enhance operational security.

Competitive Advantages of Early Compliance. While compliance with the EU AI Act may initially seem burdensome, businesses that invest in early compliance efforts stand to gain significant competitive advantages. These include improved consumer trust, better market positioning in Europe, and reduced risk of facing regulatory penalties. Additionally, businesses that adhere to the Act’s principles will likely see enhanced brand reputation globally as ethical AI becomes a growing concern for consumers and regulators worldwide.

 

Broader Global Impact of the EU AI Act

Influence on Other Jurisdictions. As the EU AI Act sets a global precedent, other jurisdictions, including the U.S., China, and the UK, are expected to follow suit with their own AI regulations. This cascading effect may lead to the global harmonization of AI laws, pushing businesses to simultaneously adapt their AI strategies in multiple markets.

The Role of AI in International Trade. AI has become integral to various industries, and its regulation will affect international trade agreements, especially those involving digital products and services. Global companies must prepare for AI-related clauses to appear in trade negotiations, with compliance with the EU AI Act becoming a critical element of future international agreements.

 

Conclusion

The EU AI Act represents a landmark regulatory effort that will have significant implications for global businesses. While the compliance requirements are rigorous, they offer opportunities for companies to lead in the AI space by embracing ethical AI practices. The key for businesses is to view this regulatory shift not as a burden but as a pathway to building trust and ensuring sustainable growth in the ever-evolving world of artificial intelligence.

 

Our expertise in intellectual property enables us to guide companies through the regulatory challenges related to artificial intelligence. The European AI Act imposes strict requirements for compliance, transparency, and risk management, particularly for high-risk AI systems. With our deep understanding of intellectual property and emerging technologies, we help our clients navigate this complex framework, protecting their innovations while ensuring they meet the new standards.

 

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Combating Counterfeiting: Organizing European Customs Surveillance

Written by Dreyfus14/10/2024

Counterfeiting represents a major challenge to modern economies. Each year, between four and twenty million counterfeit goods are intercepted by European customs, highlighting the extent of this phenomenon and the crucial importance of customs interventions in the fight against counterfeiting.

Extent of Counterfeiting and its Impacts

Although the collective imagination often associates counterfeiting with luxury products, statistics reveal a more nuanced reality. Toys rank first in the sad ranking of the most counterfeited products, followed by sports articles, empty packaging and labels, then food and beverages, which present significant risks to consumers. Clothing and accessories only come in fifth place. This diversity of products underscores the need for constant vigilance adapted to each category of goods.

Economically, counterfeiting represents a colossal threat, with a market valued at 410 billion euros, or 2.5% of global trade—far surpassing the drug trafficking market valued at 320 billion euros. Within the European Union, counterfeiting is estimated at 119 billion euros and accounts for 5.8% of imports. Beyond the economic impact, counterfeiting also harms the environment and public health, with products often manufactured under deplorable conditions and waste discharged into nature.

Legislation and Customs Actions

In the face of this challenge, the French Customs Code plays a predominant role. Article 414 provides for specific offenses such as smuggling and the importation or exportation of prohibited goods without declaration. These offenses lead to sanctions independent of those for counterfeiting.

The Code also grants customs extensive control powers, allowing them to conduct inspections on public roads, in businesses, and even, under certain conditions, in private homes.

Customs do not just control; they can also detain suspect goods. This detention can be initiated with or without a prior request for intervention by the rights holder. The verification process and the initiation of legal action are governed by strict deadlines (10 days if there is a request for intervention or 4 days without this document), thus providing a quick and effective response to combat counterfeiting.

Cooperation and Responsibilities

Collaboration between customs and rights holders is essential in determining whether goods are counterfeit. The goal is to decide whether to maintain the goods in retention.

However, in the event of seizure of non-counterfeit goods, the rules of liability are clear: customs may be held responsible for their employees’ errors, and rights holders may also be involved, according to applicable national law. This shared responsibility ensures a certain caution in seizure operations.

On a global scale, the fight against counterfeiting is supported by organizations such as the World Customs Organization and Interpol. At the European level, EUIPO, Europol, and OLAF (European Anti-Fraud Office) play a key role. Nationally, customs wield considerable power, often being the first to intercept goods upon their entry into the territory. Again, the cooperation is important.

Perspectives and Evolution

Counterfeiting is inseparable from other forms of criminality, such as drug trafficking and tax fraud, making its combat all the more complex and essential. By strengthening cooperation mechanisms and continuously adapting legislative measures, it is possible to hope for a significant reduction in this scourge. Vigilance remains crucial to protect consumers, support legitimate businesses, and preserve the integrity of global economic markets.

Dreyfus law firm, with its expertise in intellectual property law, is committed to continuing the fight against counterfeiting and contributes every day to stopping infringements on your trademark, designs, as well as domain names…

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Plagiarism of art by fashion: inspiration or violation of intellectual property?

Written by Dreyfus29/03/2023

In a world where the lines between different artistic disciplines are becoming increasingly blurred, fashion designers often draw inspiration from art to bring their collections to life or to promote their brands.

 

This issue echoes the recent dispute between the brand Zadig&Voltaire and artist Julian Charriere over a promotional video for the brand that features a flaming fountain, similar to the one captured by the artist in his “And Beneath it all Flows Liquid Fire” video in 2019.

 

Many fashion designers are inspired by works of art to create their collections and advertising campaigns. However, some of them cross the line and copy the work of established artists almost exactly, without giving them the credit they deserve. This practice is not only ethically questionable, but can can also be harmful to the original artists in terms of violating their intellectual property (“IP”) rights.

 

 

  1. Legal issues of intellectual property in fashion and art

 

Copyrighting protects original works of the mind, whether they are literary, musical, graphic, plastic or photographic creations. Fashion designers may be tempted to take inspiration from a work of art to design a new piece or an advertising campaign, but it is essential to consider the legal issues related to IP.

 

Plagiarism, or mindless copying of a work, is a violation of copyright. In the case of fashion, it can mean using a work of art without permission to create prints, patterns or even the shape of a garment. If the copying is obvious, the original artist can sue for damages.

 

The fine line between fashion and art is even more blurred as many luxury brands have launched their own art foundations such as the Cartier Foundation or the Louis Vuitton Foundation.

 

However, it is important to note that copyright does not protect ideas, only their expression. Thus, taking inspiration from a work of art in order to create a fashion piece is not necessarily illegal, so long as the creation is suitably original and does not directly copy the work in question. Additionally, some artists occasionally can collaborate with fashion designers, such as Louis Vuitton, who recently worked with Japanese artist Yakoi Kusuma to produce a new collection as well as to transform the Louis Vuitton store in Paris, now decorated with a monumental silhouette of the artist.

 

  1. Consequences of intellectual property infringement

 

IP infringement can have negative consequences for artists and the fashion industry.

 

Plagiarism robs original artists of recognition and fair compensation for their work. When a piece of work is copied without permission, the original artist is not credited or paid for their work. This can lead to a loss of income for artists, causing them to abandon their creative work or settle for less than their talent.

 

In addition, intellectual property infringement hinders innovation in the creative industry. When artists are not rewarded for their work, it can discourage innovation and the creation of new works. Companies that copy original works do not need to devote resources to research and development of new ideas, as they can simply copy those of others.

 

Finally, intellectual property infringement can have a negative impact on the brand image of companies that engage in this practice. Consumers are increasingly aware of the importance of ethics and corporate social responsibility. When a company is accused of plagiarism or intellectual property infringement, it can damage its brand image and consumer confidence in the company.

 

In summation, the phenomenon of plagiarism of art by fashion raises complex questions and considerable stakes, both artistically and legally. The line between inspiration and copying can sometimes be unclear, and the fashion industry seems to navigate these murky waters in search of creativity and innovation.

 

While some see this appropriation as a democratization of art and a way to enrich fashion, others see them as a threat to the value and integrity of original works. At a time when legislation is struggling to adapt to these issues, it is the responsibility of fashion designers and consumers to commit to ethical fashion that respects art and its creators.

 

It is critical to continue the dialogue between the different actors involved and to rethink the mechanisms of intellectual property protection to ensure a fair balance between creative freedom and respect for copyright. Creators, as well as artists, can call upon professionals such as Industrial Property Attorneys, with their networks of lawyers specialized in intellectual property, to ensure that no IP rights are infringed upon.

 

 

 

 

 

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.

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.

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What Are The Latest Trends In IT Law And How Can You Leverage Them?

Written by Dreyfus13/03/2023

The legal landscape of the tech industry is constantly changing, making it difficult to keep up with the latest developments in IT law. Companies must stay up to date with the latest laws and regulations to ensure that their businesses remain compliant. Understanding the latest trends in IT law can help companies ensure that they are taking advantage of the latest legal opportunities and protecting their intellectual property.

 

One of the most important trends in IT law is the increasing focus on data privacy. As technology has advanced, companies have begun collecting and storing more information about their customers than ever before. In response, governments around the world have implemented new regulations to protect consumer data and ensure that companies are held accountable for how they store and use customer information. Companies must understand these laws and make sure that their practices are compliant. Another important trend in IT law is the emergence of cloud computing.

 

Cloud computing allows companies to store and access data remotely, eliminating the need for physical storage devices. However, this also creates a new set of legal issues, as companies must consider the legal implications of storing and accessing data in a cloud environment. Companies must be aware of the applicable laws and regulations in order to ensure that their use of cloud computing is compliant. Finally, IT law is also increasingly focusing on cyber security. Companies must be aware of the legal requirements for protecting their networks and data against cyber attacks. Companies must also be aware of the legal implications of any cyber security breaches that may occur. Understanding the latest trends in cyber security law can help companies ensure that they are taking the necessary steps to protect their networks and data.

 

So, how can companies leverage these trends in IT law? Firstly, they should ensure that they are up to date with the latest laws and regulations. Companies should also consider the legal implications of any new technologies they are using, such as cloud computing or cyber security solutions. Companies must also make sure that they are taking the necessary steps to protect their networks and data against cyber attacks. Finally, companies should consult with an experienced IT lawyer to ensure that they are taking advantage of the latest legal opportunities and protecting their intellectual property.

 

 

 

 

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.

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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.

See also…

Metaverse: is it necessary to register specific trademarks for protection?

♦ 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.

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What are the design issues in the metaverse ?

Written by Dreyfus13/12/2022

the design issues in the metaverseWhen 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.

 

 

SEE ALSO …

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

 

 

 

 

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How to protect Building information modelling (BIM)?

Written by Dreyfus08/12/2022

Article protection des dessins et modèles et le droit d'auteur pour la modélisation des informations du bâtiment (BIM)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.

 

 

 

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 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.

 

 

 

SEE ALSO …. 

 

https://www.dreyfus.fr/en/expertise-eng/intellectual-property-law/copyright-en/

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

Written by Dreyfus22/11/2022

Article MetaversThe 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/

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