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.

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.

Can the French public be advertised for the sale of non-prescription drugs on the Internet?

Written by Dreyfus21/03/2022

In France, the online sale of non-prescription drugs is strictly regulated, for public health considerations. Thus, some advertisements are prohibited, including paid referencing on the Internet.

In a dispute opposing a Dutch company to French pharmacists and e-pharmacists, the Paris Court of Appeal ruled, on September 17, 2021, that the Holland based seller who advertised his products on French soil, as well as on the Internet did not, in doing so, carry out acts of unfair competition.

In 2015, shop-pharmacie.fr, an online sales site for non-prescription drugs administered by a Dutch company, launched a large-scale advertising campaign on French soil. Millions of flyers were thus included in postal packages sent by major e-commerce players such as Zalando and La Redoute. The Dutch company also carried out a paid referencing strategy on the Internet, targeting the French audience.

This campaign, which French companies could not in any case have carried out, appeared excessive and even unfair for some of the associations representing the profession. The Union des groupements de pharmaciens (the Union of pharmacists’ consortium) and the Association française des pharmaciens en ligne (the online pharmacists Association) thus sought to have this campaign qualified as an act of unfair competition, basing their request on legal provisions of the French Public Health Code.

The Paris Commercial Court granted this request but the Dutch company appealed this ruling. The Paris Court of Appeal then referred the matter to the Court of Justice of the European Union. The question raised was whether France could apply to e-pharmacies established in another EU Member State the same limitations it imposed on French e-pharmacists in regards with the promotion of their business and products on its territory.

Greater interests of the Internal Market and rejection of the French protectionism

Can European regulations, in particular Article 34 TFEU and the provisions of Directive 2001/83, allow an EU Member State to impose on pharmacists, who are nationals of another EU Member State, rules derived from Articles R.4235-22 and R.4235-64 of the Public Health and good practices Code issued by the public authority of the Member State?

The Court of Justice of the European Union answered this question in its October 1^st 2020 decision C-649/18 by the negative. This legal and political decision relied namely on the fundamental notion of the European internal market.

This decision brought the protectionism of the French provisions to a standstill but it was initiated in 2016 by the French Competition Authority which at the time stated that the French legislation introduced “additional constraints that appear to be disproportionate for the intended purpose of public health protection” (French Competition Authority, 20^th April 2016, notice n°16-A-09 §91). In 2019, another notice further supported this opinion and stated that online sale was “obstructed in its development by excessive constraints that limit the development of players established in France compared to their European counterparts” (French Competition Authority, 4^th April 2019, notice n°19-A-08).

Thus, the European justice system decided to mitigate the implementation of the French legal limitations in order to protect the Internal Market.

Possibility of limiting advertising on French territory through targeted legal provisions

The Court of Justice of the European Union has established a first principle whereby a Member State can impose limitations on advertising if its legislation is strictly circumscribed. The Paris Court of Appeal followed this clarification in the dispute between French pharmacists and the Dutch e-pharmacy and ruled that the provisions invoked from the French Public Health Code were not specific enough. More precisely, they did not solely target drugs, but referred to the general term of “pharmaceutical products”.

The door is therefore left open for the French legislator to specify its legal provisions relating to the framework of pharmaceutical drugs online advertising.

Paid referencing on the Internet in principle possible for companies established in another Member State of the European Union

In order to prevent the over-consumption of pharmaceutical drugs, French law prohibits French e-pharmacies from carrying out paid referencing campaigns in the digital space, particularly on search engines and price comparators.

In this case, the Court of Justice of the European Union stated that such referencing is in principle possible, unless it is limited by a measure that is necessary and proportionate to the purpose of safeguarding public health. Therefore, the general rule is that referencing is possible, unless the opposing Member State provides a targeted, proportionate and necessary legal rule.

Yet, such legislation does not exist in France. Moreover, the provisions of the Public Health Code that have been included in the debate seem inadequate for e-commerce. Indeed, e-commerce has its own constraints, namely its universal, instantaneous and continuous access via the Internet. Consequently, it seems very difficult to provide a sufficiently concrete and specific framework for the practice of paid referencing on the Internet for this type of activity.

To sum up, French e-pharmacists and e-pharmacists located in other EU Member States are not on an equal footing regarding advertisements carried out in France.

This case provided the Paris Court of Appeal the opportunity to reaffirm the right to paid referencing by stating that the decree of December 1^st 2016 “relating to the technical rules applicable to e-commerce websites for pharmaceutical drugs ” and relating in particular to the prohibition on referencing in search engines or price comparators in return for payment, was unenforceable. Furthermore, the French Council of State had annulled this decree on March 17, 2021.

What are the new provisions of the April 17, 2019 European Directive on copyright?

Written by Dreyfus03/09/2021

Aside from including related rights for press publishers and press agencies, and rebalancing relations between rights holders and content sharing platforms, the April 17, 2019 Directive strengthens the position of authors vis-à-vis assignees. These last provisions about copyright have just been transposed into French law.

The transposition marks a significant step forward in protecting creators and cultural organizations in the digital age. While cultural pieces of work are becoming more and more accessible online, this provision reaffirms the importance of copyright.

Copyright begets fair remuneration of artists and creative enterprises in the member states of the European Union. The Directive’s purpose is to establish a global framework, where intellectual creators, authors, content editors, service providers and users will all be able to benefit from clearer, modernized and adapted rules of the digital era. As such, the Directive aims to ensure that online press publishers and authors/artists receive better renumeration – especially when leading platforms such as Google News or Youtube use their work. The adoption of this Directive is the result of negotiations that lasted more than two years.

What are the new provisions of the Directive?

The Directive aims at modernizing the European Union copyright law, taking into account the increase in digital and cross-border uses of protected content. This directive mainly provides:

1) measures to adapt certain exceptions and limitations to the digital and cross-border environment, among which are exceptions concerning:

– text and data mining (TDM exception),

– the use of works in digital and cross-border teaching activities, in particular the accessibility needs of people with disabilities, and

– conservation of cultural heritage;

2) measures to improve licensing practices and ensure more extensive access to content, which consist of harmonized rules facilitating:

– the exploitation of works that are not commercially available,

– the extension of collective licensing contracts by collective management organizations to rightsholders who have neither authorized nor excluded the application of these mechanisms to their works,

– the negotiation of agreements to make works available on video-on-demand platforms (VoD platforms), and

– entry into the public domain reproduction of works of visual art at the end of the initial term of protection; and

3) measures to ensure fair market practices with respect to copyright, liability of content sharing platforms, and contracts for the remuneration of authors and performers.

Similarly, Article 15 of the said Directive creates a new neighbouring right for press publishers. Remember, neighbouring rights are exclusive rights, more recent than copyright, and are exercised independently of the latter. They were born from the need to make the auxiliaries of creation benefit from making their works available to the public. Finally, article 17 (ex-article 13) created a liability regime adapted for internet content sharing platforms, while establishing a new exception for the monopoly of rightsholders.

What are the new obligations of content-sharing platforms?

The targeted main players (Title IV of the Directive) are platforms for mass sharing of copyright and related rights protected content – such as such as Google, YouTube, Dailymotion, or Facebook. The Directive more precisely defines it as:

“The provider of an information-focused service, whose main objective or one of its main objectives is to store and give the public access to a significant quantity of copyrighted works or other protected subject matter that has been uploaded by its users, which it organizes and promotes for profit.”

There are cumulative criteria that determine their obligations. Platforms that have been active for less than three years and have an annual turnover of fewer than 10 million euros will be subject to reduced obligations. On the other hand, platforms exceeding this limit will be subject to a proactive obligation provided for by the Directive regarding works distributed without authorization. The Directive excludes from the liability regime non-profit online encyclopedias such as Wikipedia, non-profit educational and scientific directories, open-source software platforms, online marketplaces like Amazon, Cdiscount or eBay, and individual cloud storage services with no direct access to the public. With regard to the regime applicable to content sharing platforms falling within the above-mentioned scope, the most important thing is to have the rightsholders’ authorization, which allows copyrighted work to be available to the public through, for example, a license agreement.

Can platforms be exonerated from liability?

Platforms may be exonerated from liability if it meets the following three cumulative conditions:

– That it has “made its best efforts” to obtain permission from the rightsholder to release the work to the public,

– That it has “made its best efforts” “in accordance with high industry standards of professional diligence” to ensure the unavailability of the copyrighted work once the unauthorized communication of it has been reported by the rightsholder by means of “relevant and necessary information,“

– That it acted promptly to withdraw or block access to the work upon receipt of “sufficiently motivated” notification from the rightsholder.

Finally, the platforms must be transparent towards rightsholders about the measures taken within their area of responsibility. This Directive gives certain platforms greater responsibility for the content they publish. Meanwhile, the liability system for online selling platforms, where counterfeits abound, will not change. Their status as host or publisher will always determine their liability regime.

In France, in addition to the debates surrounding compliance with the Intellectual Property Code, it will be interesting to see to the court’s decisions in the months to come.

We are a law firm with a unique expertise in the exploitation of intangible assets. We keep you updated on issues related to intellectual property and the digital economy through articles written by the Dreyfus legal team.

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♦ The « Copyright in the Digital Single Market » Directive: transposition is on the way!

Transposition of the AVMS Directive in France: what impact on the audio-visual sector?

Written by Dreyfus29/07/2021

Directive (EU) No. 2018/1808 of the European Parliament and of the Council, adopted on November 14, 2018 and amending Directive 2010/13/EU (AVMS Directive), has (finally) been transposed into French law, via the Order of December 21, 2020. This directive is part of a context of international competition on the one hand and profound transformation of the audio-visual and the evolution of demand on the other hand.

Redefinition of the essential concepts of the 2010 European Directive

The Order deals with essential concepts that one needs to fathom to understand the issues at stake. First of all, what are audio-visual media services (AVMS)? There are two types:

Linear television services (traditional services);
Non-linear services, e.audio-visual content-on-demand services or media-on-demand services (MOS). These SMAD services allow the customer to choose both when and what they wish to watch.

The Order also calls into question certain principles, such as the old principle of media chronology resulting from a 1960 legislation. This legislation coordinated the diffusion of films, after their release in cinemas, to optimise their profitability.

Modernisation and adaptation of the rules to the transformation of audiovisual services

The Order transposing the Directive has implemented several measures aiming to ensure the effective contribution by market players and to protect both the minors and the public.

The system of financing national cinematographic and audio-visual creations has indeed been completely revised by the Directive. From now on, the country of origin principle applies: each EU Member State may exercise its production contribution regime to foreign VOD (Video On Demand) channels and platforms offering a service on the territory of that Member State.

While this principle is a leading point of the reform, the AVMS Directive also acknowledges the profound changes in multimedia by extending audio-visual regulation to video-sharing platforms, social networks and live video platforms. This way, Brussels wishes to protect minors against certain harmful content and harmonise the legal framework of the European audio-visual sector.

Reform of the 1986 Act and safeguarding the French cultural exception

France wanted to implement the directive and collaborate in the European project while defending the French cultural exception. The Order is mainly concerned with reinforcing the rules of transparency for service publishers and with establishing more complete objectives, such as the inclusion of the system of funding for production (particularly independent production) over time, but also the guarantee that French broadcasters and global platforms are on an equal footing.

Article 19 of the Order, therefore, now requires “publishers of television services and on-demand audio-visual media services aimed at French territory” “when they are not established in France and do not fall under the jurisdiction of France”, to financially contribute in the same way as French publishers do.

Article 28 substantially reforms the principle of media chronology and now allows the industry players to negotiate an agreement with the professional organisations within six months to reduce broadcasting delays.

Extension of the powers of the CSA and protection of minors

As platforms are now part of the regulatory landscape, the CSA has seen its competencies and powers broadened and, in particular, has been assigned two new essential missions: the accessibility of AVMS programmes, and the protection, in particular of minors, against content that is violent, incites hatred or constitutes a criminal offence. The CSA will then have jurisdiction if the head office or a subsidiary of the platform is established in France.

Furthermore, the CSA is also in charge of ensuring that publishers have issued guidelines of best practice (particularly regarding food advertising to which minors could be exposed) and highlighting audio-visual services of general interest on new audio-visual platforms.

In addition, the Order completes Article 15 of the 1986 Act by prohibiting in programmes not only incitement to hatred and violence but also a provocation to commit acts of terrorism, while entrusting the CSA with the task of ensuring that these provisions are respected.

If the Oder is already a significant step forward, the implementing decrees are just as important. In particular, on June 23, 2021, the audio-visual media services on-demand decree (or SMAD decree n°2010-1379 of November 12, 2010) was published in the French Journal Officiel, which probably represents the most valuable step in the project to modernise the financing of French and European audio-visual services. Among other things, SMADs will have to devote at least 20% of their turnover in France to finance the production of European or original French cinematographic and audio-visual works.

Finally, negotiations are underway between TV channels and producers’ representatives about reviewing a second decree known as “DTT” (Digital Terrestrian Television decree No. 2010-747 of July 2, 2020), which defines the production obligations of TV channels. The points discussed concern particularly the sharing of copyright on works between producers and TV channels and the lasting of these rights.

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♦ How will the Digital Services Act change the legal framework for Internet services?

How will the Digital Services Act change the legal framework for Internet services?

Written by Dreyfus26/05/2021

Digital Services Act : For the first time, a common set of rules on the obligations and liability of intermediary services within the single market will open up new possibilities to provide digital services on the Internet across borders, while ensuring a high level of protection to all users, wherever they live in the European Union.

On December 15, 2020, the European Commission published the Digital Services Act (DSA) and Digital Market Act (DMA) draft regulations, which should allow the implementation of a new regulatory framework, to put an end to the lack of responsability of digital giants.

Said regulations should come into force at the beginning of 2022.

The legal framework relating to digital services on the Internet remained mainly governed by the so-called “Electronic Commerce” directive of June 8, 2000, which for several years has already been met with numerous criticisms on the grounds that it has become obsolete and no longer allows to respond effectively to the new digital challenges and the difficulties posed by the emergence of Web giants, often referred to by the acronym “GAFAM” (for Google, Apple, Facebook, Amazon and Microsoft).

It is in this context that the European Commission officially announced its desire to modernize the regulatory landscape relating to digital platforms on the Internet.

As part of its strategy for a digital single market and alongside the Digital Market Act, the European Commission is proposing a regulation on digital services which will be subject to the ordinary legislative procedure of the European Union.

For Margrethe Vestager, executive vice-president for a Europe adapted to the digital age, “the two proposals serve the same purpose: to ensure that we, as users, have access to a wide choice of products and services online, securely. And that businesses operating in Europe can compete freely and fairly online just as they do offline. They are two sides of the same world. We should be able to shop safely and trust the information we read. Because what is illegal offline is also illegal online”.

According to the press release from the European Commission, the rules provided for by this regulation aim to better protect consumers and their fundamental rights on the Internet, to put in place a solid framework for the transparency of online platforms and clear rules with regard to their responsibility, and finally to foster innovation, growth and competitiveness within the single market.

For the first time, a common set of rules on the obligations and liability of intermediaries within the Single Market will open up new possibilities to provide digital services across borders on the Internet, while ensuring a high level of protection for all users, wherever they live in the European Union.

In order to protect Internet users against the proliferation of illegal content and to adapt the existing legal framework to the emergence of new players on the Internet, public authorities have considered various regulatory strategies.

What is illegal content?

Illegal content is defined as any content that does not comply with European Union law or the national law of a Member State (Article 2, g). In other words, the proposed regulation does not define what is illegal, but refers to European and national laws and regulations.

The directive of June 8, 2000 did not define the concept of illegal content either.

Who will be affected by the new rules?

The proposed regulation aims to apply to any provider of intermediary services, whether established in the EU or not, as long as the recipients of such services are established or reside in the EU.

As for intermediary service providers, the proposal maintains the qualifications as provided for in the directive of 8 June 2000, namely network access and data transmission providers, caching operators and hosting providers.

Tthe proposal introduces a new qualification: online platforms. These are defined as hosting service providers who, at the request of the recipient of the service, store and distribute content to a potentially unlimited number of third parties (Article 2, h). Thus, unlike hosting providers, these players also allow content to be distributed.

Note that the proposed regulation makes a distinction between platforms and “very large” platforms. The latter are those that exceed the threshold of 45 million users per month. Said threshold will be reassessed every six months. Indeed, in addition to a set of common rules applicable to any platform, the proposal provides for a reinforced legal framework for “very large” platforms.

Under the directive of June 8, 2000, the platforms were qualified as hosts on several occasions by the courts. Consequently, they currently benefit from a reduced liability regime provided for in that directive.

Thus, these actors are only responsible with regard to the published content if they have effective knowledge of its illegal nature or if, once they have become aware of it, they have not acted promptly to remove it or to make its access impossible.

Is a new liability regime planned?

The proposed regulation does not introduce a new liability regime. Like hosting providers, the platforms will remain subject to the reduced liability regime provided for by the directive of 8 June 2000. The principle of the prohibition of imposing a general surveillance obligation on hosting providers, including the platforms, is also maintained.

However, compared to hosting providers, platforms will have additional obligations which may vary depending on their size.

In addition, unlike the directive of June 8, 2000, the proposal clarifies that content moderation systems voluntarily put in place by intermediary service providers (hosts, platforms, etc.) do not call into question the benefit of the lightened liability regime provided for in the proposal.

The DSA will thus set up control and monitoring mechanisms. At European level, this will be done through a new, fully independent body: the “European Digital Services Committee” (Art. 47-49) in charge of the committee’s advice and national coordinators.

At the level of the Member States, each will have to designate one or more authorities to ensure the application of the future regulation, including one responsible for the coordination of digital services (Articles 39 to 45). The entire framework will be supplemented by soft law: standards, code of conduct, in particular with regard to online advertising (art. 36).

The DSA is thus presented as an ambitious overhaul of the European legislative framework for digital services on the Internet.

A major project in Brussels, the Digital Services Act (DSA) tends to govern digital technology on the old continent for the years to come. In preparation for many months, the text was officially presented in mid-December 2020 and should enter into force in the next 18 to 24 months after agreement of the Member States and vote of the European Parliament.

In order to offer our clients a unique expertise, necessary for the exploitation of intangible assets, we keep you informed about intellectual property and digital economy issues with our articles written by the Dreyfus’ legal team.

Why does the willingness to sell a domain name is not conditioned on an active approach?

Written by Dreyfus18/05/2021

(OMPI, Centre d’arbitrage et de médiation, 23 février 2021, affaire n° D2020-3322, Netflix Inc. c. WhoisGuard, Inc. / Siddharth Sethi)

Avons-nous encore besoin d’introduire Netflix ? Cette plateforme proposant des services de streaming vidéo compte 195 millions de membres dans plus de 190 pays et semble être connue dans le monde entier. Pourtant, certaines personnes tentent de se soustraire à cette notoriété pour tenter de se construire une légitimité artificielle et justifier l’enregistrement d’un nom de domaine .

En effet, alors que la société Netflix détient de nombreux enregistrements dans le monde pour le signe « NETFLIX » en tant que marque , la société a détecté l’enregistrement du nom de domaine <netflix.store> . En conséquence, elle a déposé une plainte auprès du Centre d’arbitrage et de médiation de l’OMPI pour obtenir son transfert.

Le nom de domaine, enregistré le 3 septembre 2017, pointe vers une page qui présente une animation composée d’un effet d’éclatement de couleur et se termine par un écran de couleur vierge.
Le titulaire soutient que le nom de domaine ne reproduit pas la marque NETFLIX mais est plutôt composé de deux termes , “net” et “flix”. Or, comme prévu, l’expert considère que la marque NETFLIX est reproduite à l’identique dans le nom de domaine.
L’expert considère que si l’utilisation du nom de domaine n’est pas commerciale, son enregistrement ne serait pas non plus considéré comme légitime. En effet, le site mis en place vise à légitimer l’enregistrement afin de dissimuler l’intention de vendre le nom de domaine au Plaignant. Ni la reproduction de la marque NETFLIX dans le nom de domaine litigieux, ni l’extension <.store> n’ont de sens si le projet devait effectivement être non commercial.

En conséquence, il estime que l’intimé n’a aucun droit ou intérêt légitime sur le nom de domaine .
Par ailleurs, l’expert constate que le Défendeur connaissait le Plaignant et son activité et prévoyait qu’en achetant le nom de domaine, il serait en mesure de le revendre au Plaignant avec un bénéfice significatif. Cette stratégie a été partiellement couronnée de succès, car Netflix a fait une offre que l’intimée a refusée, essayant d’obtenir une somme considérablement plus élevée.

Or, l’enregistrement d’un nom de domaine qui correspond à la marque d’un Plaignant avec l’intention de le vendre au Plaignant lui-même , établit la mauvaise foi. L’expert précise que le titulaire « [n’aurait pu] raisonnablement penser qu’un tiers serait en mesure d’utiliser commercialement le Nom de domaine litigieux ». Il convient également de noter que l’intimé a tenté de faire croire à la personne qui l’a contacté qu’il avait reçu d’autres offres plus élevées. En effet, le représentant de Netflix, qui n’avait pas indiqué qu’il agissait pour Netflix, ce qui était un secret de polichinelle, avait proposé la somme de 2 000 USD, que le déclarant jugeait trop faible.

L’expert commente ce comportement récurrent de certains cybersquatteurs : « Peu importe que le Défendeur n’ait pas proposé activement à la vente le Nom de domaine litigieux. Il n’est pas rare que des déclarants opportunistes de noms de domaine incluant une marque tierce attendent d’être approchés, réalisant qu’une offre active de vente du nom de domaine peut faciliter un procès UDRP à leur encontre ».

En conséquence, l’expert conclut que le nom de domaine litigieux a été enregistré et est utilisé de mauvaise foi et ordonne ainsi son transfert au Plaignant.

Sauf dans les cas où un nom de domaine reproduisant une marque notoire telle que NETFLIX est utilisé à des fins de critique sans usage commercial, ou pour un usage commercial minimal, il est quasiment inconcevable d’imaginer qu’un tel nom de domaine ait pu être enregistré de bonne foi . Netflix savait évidemment qu’elle gagnerait le procès, mais a visiblement choisi d’essayer de négocier un rachat à l’amiable pour un budget légèrement inférieur à celui d’une procédure UDRP, si l’on compte les 1 500 USD d’honoraires et les honoraires d’avocat. Cette approche, si elle réussissait, aurait permis d’économiser du temps et de l’argent, mais la simple offre de rachat a pour effet d’encourager le cybersquattage.

How does the bad faith duplicate between registration and bad faith use?

Written by Dreyfus29/04/2021

UDRP While one generally refers to the “three criteria” of the UDRP (a trademark similar to the domain name; the absence of rights or legitimate interests of the defendant in the disputed domain name; and the bad faith of the registrant), it should be kept in mind that bad faith in UDRP matters has two aspects: the first is bad faith registration and the second is bad faith usage. Therefore, proving only one of these elements is insufficient even though it may be considered “fair” that a name used in bad faith should be transferred to the applicant.
In the present case, Great American Hotel Group, Inc. complained that its former vice-president retained the domain name <greatamericanhg.com> and changed the password of the account used to manage this name with the registrar.

It all started in 2011 when the applicant decided to adopt the name Great American Hotel Group. Its president at the time asked Mr. Greene, then vice-president of the company, to reserve the domain name <greatamericanhg.group>.
The latter did so, but – apparently without notifying his superior – reserved the domain name in his name instead of that of the company. He did, however, record the company’s postal address, and pay with the company card. In 2012, he hired an anonymity service to hide his data.

Since its registration, the name had been used for the company and Mr. Greene had always treated the domain name as part of the company’s assets.

However, following disagreements, Mr. Greene was suspended from office in 2015 and dismissed in 2016. In 2017, the name was renewed by the company’s technical teams even though Mr. Greene was no longer present. However, the latter subsequently changed the password so that the name could no longer be renewed by the company. The applicant’s counsel proceeded to send Mr. Greene a letter of formal notice, which remained unanswered, leading to the filing of a UDRP complaint.

The panellist acknowledged that the applicant had common law trademark rights through the use of the sign “Great American” and that the registrant did not have any legitimate rights or interest in the name as it was created for the applicant company.
He also acknowledged that the domain name was used by Mr. Greene in bad faith.

Nevertheless, the panellist was more sceptical regarding the issue of bad faith registration. Indeed, the name had been reserved by Mr. Greene at the request of the president of the applicant company, which, in principle, had, in fact, been a registration in good faith.

In order for registration by an employee to qualify as having been done in bad faith, the panellist specified that the employee must have, from the beginning, had “an intention to cause harm”. Therefore, the evaluation must be factual and done on a case-by-case basis.

In this case, Mr. Greene had registered the domain name in his own name. The panellist found that “this may be subject to questioning, and the fact that he did not mention the company does not constitute a good domain name management practice”, however, the president and the company seemed to be equally as uninterested in formalizing the reservation of the name.

For four years, until he was suspended from his functions, the registrant had always displayed conduct that demonstrated that he understood that the name belonged to the company. Thus, there is no reason to suppose that by reserving the name four years earlier, he had intended to compete with the applicant or to benefit from some type of tactical advantage against him.

Consequently, the plaintiff’s complaint was dismissed as the registration in bad faith had not been established. Nevertheless, the panellist specified that the applicant could turn to other avenues to try to obtain relief.

The significance of this decision, in addition to highlighting the dual condition of bad faith, is that it reiterates the need to set up an internal naming charter to avoid any dispersion of assets, both in terms of trademarks and domain names.

How to protect your brands in the digital era?

Written by Dreyfus26/04/2021

“Intellectual property was viewed with passion – and in a style steeped in pre-Romanticism! – as “the most sacred, the most legitimate, the most unassailable […], the most personal of properties”; “The least likely to be contested, the one whose increase can neither hurt republican equality, nor overshadow freedom,” said Patrick Tafforeau in his book Intellectual Property Law published in 2017.

It should be borne in mind that intellectual property is protected by law. This protection is notably achieved through patents, copyright and trademark registrations. These intellectual property rights allow creators to obtain a certain form of recognition or even a financial advantage from their inventions, plant varieties or creations.

In this sense, paragraph 1 of article L111-1 of the Intellectual Property Code provides that: “The author of a work of the mind enjoys on this work, by the sole fact of his creation, of an exclusive and intangible property right enforceable against all”.

In fact, the Internet has created tremendous opportunities for companies in terms of communicating their brand message. However, its global reach, openness, versatility and the fact that it is largely unregulated are all elements that have created fertile ground for trademark infringement such as counterfeiting.

For a long time, real world activity and Internet activity were separated. Today, the two worlds undeniably tend to come together. Trademark law is therefore very useful in defending yourself in the digital era. By appropriately balancing the interests of innovators with those of the general public, the intellectual property system aims to foster an environment conducive to the flourishing of creativity and innovation.

When you create a company or launch a product, know that it is recommended to protect your trademark (which can be the name of your company, a logo, numbers, letters, etc. …). This registration will protect your company from counterfeiting.

Once registered, the trademark is an industrial property title which gives you a monopoly of exploitation for a period of ten years, renewable indefinitely.

Registering your trademark gives you an exclusive right to a sign that distinguishes the products or services you offer from those of your competitors, which is a significant competitive advantage ! As such, your sign is protected for the categories of goods and services referred to in your trademark registration and in the territory for which said registration is accepted.

In this perspective, it is necessary to put in place a strategy for the protection of your brand as soon as possible. Before filing a trademark, it is important to make sure that it is available and that there is no owner of an earlier right to that trademark. You must therefore be the first to register this mark.

The reasons why trademark registration is becoming a necessity are multiplying in the face of the phenomenon of cybersquatting. Thus, owners of registered trademarks benefit from new advantages in the defense of their rights on the Internet.

First, it has become increasingly important to protect your brand on social media. Since 2009, Facebook has allowed its members to create usernames, easily accessible, but which can include brands. Prior to 2009, Facebook allowed registered trademark owners to identify their trademarks and prevent their use by other members.

Most social networks register user names on a “first come, first served” basis. In order to defend your rights, it is preferable to have a registered trademark in order to report a violation of trademark rights, according to the general conditions of use of social networks.

Secondly, the presence of a mark on the Internet also imposes its protection in referencing on search engines and in particular paid referencing. Through the AdWords system, Google allows advertisers to select keywords so that their ads will appear to Internet users after entering those words into a search. Conflicts arise when advertisers buy keywords that contain brands, but do not have rights to them.

Owning a trademark right then also becomes extremely useful in the fight against unfair practices.

Thirdly, the proliferation of new gTLD domain name extensions must also attract the attention of trademark owners. To date, more than 300 new gTLDs have been delegated, and gradually hundreds more will follow. Faced with the risk of conflicts with protected trademarks, a new tool is made available to trademark rights holders: The Trademark Clearinghouse. It is a centralized declarative database of registered trademarks. Once the trademark is registered, the holder benefits from the priority registration period for new gTLDs – Sunrise Period – and is notified when a third party wishes to register a domain name identical or similar to its trademark. The registrant of the disputed domain name is also informed that he may infringe trademark rights.

Finally, if a domain name reproducing or containing a trademark is registered, the trademark rights holder has the possibility of taking action against cybersquatters using dedicated extrajudicial procedures such as the Uniform Rapid Suspension (URS) and the Uniform Domain Resolution Policy (UDRP). These dedicated procedures are only open to trademark holders.

It should be remembered that the business landscape has changed with the rise of the Internet and, in order to thwart the risks of intellectual property infringements on online markets, it is important that companies adapt their management of industrial property rights portfolio accordingly.

Nathalie Dreyfus – Industrial Property Attorney, Expert at the Paris Court of Appeal, Founder & Director of Cabinet Dreyfus in Paris – Dreyfus.fr

Dreyfus can assist you in the management of your trademarks portfolios in all countries of the world. Do not hesitate to contact us.

How to prepare for the next round of applications to the <.mark>?

Written by Dreyfus14/04/2021

Next applications for new <.mark> extensions will finally be expected towards the end of the year 2022. Unlike the last application period in 2011, this period gives the opportunity for companies to evaluate the economic and strategic opportunity that the <.mark> represents and prepare their file carefully. An effective application process is divided into three phases: in the first phase, companies must assess the practicality of having their own extension.

Then, the application, which includes a business plan, can be prepared.
Finally, the third phase is the submission of the application. ICANN’s applications processing includes other stages that can slow down the process, such as an assessment of the wholeness of the application and a verification of fees of presentation. For this reason, companies must submit their complete applications as soon as possible.

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