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Introduction

Artificial intelligence (AI) generally refers to a scientific discipline. According to the European Parliament, artificial intelligence (AI) is a tool that machines use to simulate human-like behaviours such as reasoning, planning, and creativity (1). One key feature of AI is machine learning, which allows it to learn from its own experiences, giving it autonomy.

The introduction and rapid development of generative AI in the legal industry have raised concerns among legal professionals. Currently, these generative AIs are capable of producing creative works based on user instructions and collected data. Given the widespread use of these technologies in professional settings, the legal implications, particularly those relating to copyright law, raise concerns.

The use of generative AI and copyright

The use of generative AIs such as ChatGPT (dialogue generator) or Midjourney (image generator) raises concerns about how copyright law applies to the generated content. It is necessary to establish who is entitled to ownership of the content produced in this manner and whether it qualifies for copyright protection. ChatGPT is an advanced language model developed by OpenAI. It uses a deep learning algorithm known as GPT (Generative Pre-trained Transformer) to generate human-like responses to text inputs.

Should we expect copyright protection for AI-generated works?

The framework for protecting works of mind is laid out in Article L.112-1 of the Intellectual Property Code, which specifies that an item must be a formalised and original intellectual creation in order to be protected.

The Court of Justice of the European Union (CJEU) has evolved the definition of originality over time to reflect advancements in technology and digital media. Taking a more objective approach in the Infopaq (2) case in 2009, the CJEU defined originality as “an intellectual creation that is an expression of the author’s own intellectual creation.” In addition, the CJEU does not rule out the possibility that a work can be considered original even if it was influenced by technical factors during its creation (3).

The CJEU has also confirmed that it is possible to create original works by involving a machine or device in the creative process (4). In this case, it did not involve AI but photography, a domain that was long considered by scholars to not be eligible for copyright protection due to the mechanical nature of the creation process.

Therefore, not all works involving the contribution of AI can be considered original under the current understanding of originality in positive law. To what extent the user has participated in the creative process is a balancing act that must be performed to determine whether or not the work can be considered original.

Several cases illustrate the international dimension of these questions, sometimes reaching different conclusions. For example, in a dispute between Tencent and Shanghai Yingxun Technology (5), the Chinese court ruled in favour of copyright protection for a work generated using an algorithmic programme. This decision supports the extension of copyright protection to works generated by AI. On the contrary, the United States Copyright Office confirmed on February 21, 2023 (6), the absence of copyright protection for images produced using the AI Midjourney, concerning the comic book “Zarya of the Dawn ” by New York artist Kris Kashtanova.

Ownership of AI-generated content

Copyright law protects the intellectual creations of individuals. It grants authors the right to express themselves through their works and recognises their awareness and intent during the creative process. It is clear at this time that AI does not currently have these specific qualities.

AI is not recognised as an author in the current legal framework, and according to existing copyright laws, the attribution of authorship is reserved for humans who can be identified as the creators of the work produced by AI. These individuals are acknowledged as authors based on their influence on the outcome and their active participation in the creative process.

The jurisprudence, both at the European and French levels, has not yet pronounced on the question of who, between the user and/or the AI developer, will hold the rights to an original work created using AI. However, the terms of service of OpenAI (the developer of ChatGPT) state that the rights to the content belong to the users. This contradiction highlights the urgent and definitive need to address these questions.

There are several hypotheses currently under consideration to ensure the adequate protection of AI and its development. These include exploring potential changes to copyright law, such as redefining the originality requirement or even establishing a framework  dedicated specifically for AI. 

The High Committee for Literary and Artistic Property (CSPLA) released a report (7) that examines various viewpoints on copyright ownership while delving into the fields of artificial intelligence and culture. The report explores copyright ownership in relation to artificial intelligence and culture and suggests adopting an English law-based model that establishes specific regulations for “computer-generated works.” The aim is to address the implications of these concepts and provide clarity within copyright frameworks.

Copyright infringements and generated AI content

Since works generated by AI often rely on existing content, there is a possibility that they could constitute infringements of copyright. The absence of mention of the sources used by ChatGPT to generate content illustrates the risk of infringement of third-party rights.

The ongoing legal conflict involving photographer Robert Kneschke and AI entity LAION has raised concerns regarding potential copyright infringements. Kneschke uncovered that some of his photographs were present in LAION’s database and promptly requested their removal. The case has been escalated to the District Court of Hamburg, making the progress of this case worth monitoring.

It is important to note that many AI systems do not provide guarantees regarding the absence of infringement of third-party rights in the generated outputs. As a result, users are advised to refer to the terms of use of the specific AI system to understand the responsibilities and liabilities related to copyright and potential infringement issues.

If the rights holders of the collected data find that their rights are violated, they have the option to pursue legal action based on infringement or unfair competition. This highlights the necessity for a distinct framework governing the use of AI, as demonstrated by OpenAI, which already outlines in its terms of service that users are responsible for their use of the tool and must ensure that it does not infringe upon the rights of third parties.

Risks Related to Result Reliability, Privacy, and Right to Image

The use of AI carries additional risks beyond copyright infringement. The reliability of the generated results can be a concern, as can the potential risks to privacy and the right to an individual’s image. In the case of AI-generated content, such as ChatGPT, the results may contain inaccurate, discriminatory, or unjust information. However, according to the European Parliament, AI-generated content cannot be classified as “Your Money Your Life” (YMYL) content, but verifications should still be performed.

At the same time, the European Union is currently considering legal initiatives to regulate AI systems, such as the European Commission’s proposed AI Act (8) regulation and two directive proposals published on April 21, 2021, and September 28, 2022. These legislative frameworks aim to address the issue of civil liability for AI systems.

AI’s use of personal and confidential information

The malfunction of ChatGPT that resulted in a data leak in March 2023 illustrates the challenges related to data confidentiality. Similarly, a study by security publisher Cyberhaven, as reported by “Le Monde Informatique (9),” raised concerns about the dangers connected with employees using ChatGPT. The study highlighted the risks of data leaks by employees, including sensitive project files, client data, source code, or confidential information.

In order to operate as intended, conversational agents like ChatGPT use and collect data, although they are not specifically designed for personal data collection. The nature of the collected data needs to be examined to determine whether it is protected or not. If the data is protected, the developer of the AI has an obligation to seek permission from the data rights holders.

Some countries adopt a cautious position regarding the processing of personal data by ChatGPT. In Canada, the Office of the Privacy Commissioner has initiated an investigation against OpenAI (10). In Italy, the President of the Italian Data Protection Authority, GPDP, temporarily banned access to ChatGPT on March 31, 2023 (11), accusing it, among other things, of not complying with European regulations and lacking a system to verify the user age. Since then, modifications have been made, and ChatGPT is available again in Italy.

Indeed, OpenAI’s privacy policy does not appear to comply with the requirements of the GDPR and the Data Protection Act, particularly regarding the absence of information about the retention period of processed data.

The National Commission for Informatics and Liberties (CNIL) published guidelines in 2021 to ensure that Chatbots respect individuals’ rights (12). It also issued guidelines and recommendations in 2021 (13) on the use of cookies and other trackers governed by Article 82 of the Data Protection Act (14) (transposition of Article 5.3 of Directive 2002/58/EC “ePrivacy” (15)).

The goal of these recommendations and guidelines is to ensure informed consent from users and provide transparency about trackers. The CNIL also has the power to impose sanctions in cases of non-compliance by relevant actors. It is crucial for the involved parties to ensure adherence to the requirements of the General Data Protection Regulation (GDPR) and the ePrivacy Directive.

These potential legal hurdles must be considered if we are to make ethical and responsible use of this technology, and concerns such as copyright infringement, data collection, and ownership must be carefully considered by all parties involved in the creation and use of AI.

The Current Legal Framework of AI and Future Perspectives

The European Union intends to establish an artificial intelligence regulatory framework. In 2020, the European Parliament passed resolutions on artificial intelligence and its applications (17), and new European proposals aim to ensure the smooth operation of the internal market. The goal is to make the Union a world leader in developing ethical and trustworthy AI that protects ethical principles, such as fundamental rights and Union values.

The European Regulation Proposal: “AI Act”

On April 21, 2021, the European Commission proposed new rules to set uniform rules (18) for the commercial release, deployment, and use of artificial intelligence. The legislative process is long, though, so the project has not yet been put into action.  

The European Parliament, the Council of the European Union, and the European Commission will need to adopt the text in the same terms. For now, the European Parliament has just reached a provisional agreement on the aforementioned regulation on April 27, 2023, which was voted on May 11, 2023. Once adopted, it will take some time before it comes into effect.

The proposed regulation focuses on transparency, accountability, and safety to promote the ethical and responsible development of AI within the European Union. The goal is to ensure trustworthy AI. The proposal includes a risk-based approach:

Unacceptable risks : AI systems that are prohibited because they contradict the values of the Union (e.g., facial recognition AI).

High-risk AI : These AI systems present risks to the health, safety, or fundamental rights of individuals (e.g., biometric identification AI). These systems are subject to strict obligations for developers, providers, and users.

Limited risks : Specific transparency obligations are established for these AI systems towards users. Users must be aware that when using AI systems such as Chatbots, they are interacting with a machine and must make an informed decision to proceed or not. As conversational agents are not categorised as high-risk AI systems, they will not be subject to the strict requirements applicable to high-risk systems.

Negligible risks : The proposal does not require intervention for these AI systems due to their minimal or non-existent risks to the rights or safety of citizens.

As mentioned earlier, the negotiating team of the European Parliament has reached a provisional agreement on the regulation, which includes generative AI (19). In this regard, “general-purpose AI systems,” capable of performing multiple functions, are distinguished from “foundational models,” which are techniques based on a large amount of data and can be used for various tasks. Providers of such models, like OpenAI, would be subject to stricter obligations, including the adoption of risk management strategies and ensuring the quality of their data.

The European Parliament announced in a press release (20) that the Members of the European Parliament have adopted the negotiation mandate project. This project still needs to be approved by the entire Parliament in a vote scheduled for June 12th to 15th.

Furthermore, on September 28, 2022, the European Commission published two directive proposals aimed at establishing rules on liability adapted to AI systems. These directive proposals seek to evolve the law of civil liability for AI systems. However, neither of these proposals specifically addresses issues related to intellectual property infringement or the corresponding liability framework.

Proposal for a Directive on Liability for Defective Products

The European Commission proposes a revision of the directive on liability for defective products (21) to adapt it to technological developments in recent years. The aim is to overhaul Directive 85/374/EEC of July 25, 1985 (22).

This revision proposes several changes, including redefining the concept of a product, reevaluating the concept of damage, imposing requirements on companies to disclose certain information, and altering the burden of proof for victims, including the introduction of specific presumptions and apply to liability for defective products without restriction and cover products stemming from AI or any other product.

Proposal for a Directive on Liability in the Field of AI

The second proposal for an AI directive aims to align the rules of non-contractual civil liability with the field of AI (23). This proposal addresses legal uncertainties identified by the European Commission for businesses, users, and the internal market. Multiple factors present challenges, including the enactment of rules of civil liability, the identification of the party responsible for the damage, the establishment of evidence, and the risk of fragmentation concerning applicable legislation.

The Commission’s cautious approach is demonstrated by provisions that shift the burden of proof in favour of victims of AI-based products or services. As a result, victims will have the same level of protection and may be less discouraged from filing civil liability claims. Thus, civil actions based on fault for damages caused by AI systems can be facilitated.

The risks in terms of liability for the actors involved in these fields are high and require particular attention. The proposed regulation provides for the establishment of a deterrent sanction system. Indeed, any breach of the established rules may be subject to an administrative fine of up to 20 million euros, or 4% of the company’s total annual turnover.

Companies and AI system providers are advised to closely monitor legislative developments and comply with future regulatory requirements to avoid any litigation.

Conclusion

While many options are being considered to establish AI regulations, the contractual aspect should not be overlooked. Contracts can complement or compensate for deficiencies in the forthcoming legislative framework. By leveraging this tool, a comprehensive strategy can be devised to regulate the use of AI, its consequences, the dynamics among various stakeholders, individual responsibilities, and other relevant aspects.

As users of AI systems, it is important to take certain precautions. These include establishing an internal written policy, being well-informed about the terms of use of AI systems, avoiding the disclosure of confidential information during their use, and verifying the reliability of the information provided. The role of general terms and conditions is vital, as they offer valuable information, such as the applicable law and jurisdiction, the extent of the service provider’s liability, indemnification, and disclaimer clauses. As a result, AI providers must prioritise the careful drafting of these terms and conditions.

Further reading

Copyright in front of artificial intelligence

Can an Intellectual Property Lawyer Help Me with Copyright Infringement in the EU ?

References

1. Parlement européen. Intelligence artificielle : définition et utilisation | Actualité. 9 juillet 2020. URL : https://www.europarl.europa.eu/news/fr/headlines/society/20200827STO85804/intelligence-artificielle-definition-et-utilisation 
2. CJCE, 16 juill. 2009, aff. C-5/08, Infopaq
3. CJUE, 11 juin 2020, aff. C-833/18, Brompton
4. CJUE, 1er déc. 2011, aff. C-145/10, Eva-Maria Painer
5. Dreyfus, N. [Chine] Le droit d’auteur à l’épreuve de l’intelligence artificielle. Village de la Justice. 1e décembre 2021. 
6. United States Copyright Office, Zarya of the Daws (Registration #VAu001480196), 21 février 2023.
7. Rapport du CSPLA. Mission intelligence artificielle et culture. 27 février 2020.
8. Proposition de règlement du Parlement européen et du Conseil établissant des règles harmonisées concernant l’intelligence artificielle (législation sur l’intelligence artificielle) et modifiant certains actes législatifs de l’union, Commission européenne, 21 avril 2021, COM/2021/206 final.
9. Coles, C. 11 % of data employees paste into ChatGPT is confidential – Cyberhaven. 21 avril 2023. URL : https://www.cyberhaven.com/blog/4-2-of-workers-have-pasted-company-data-into-chatgpt/ 
10. Commissariat à la protection de la vie privée du Canada. Le Commissariat ouvre une enquête sur ChatGPT. 4 avril 2023. URL : https://www.priv.gc.ca/fr/nouvelles-du-commissariat/nouvelles-et-annonces/2023/an_230404/ 
11. Garante Per la protezione dei dati personali. Intelligenza artificiale : il Garante blocca ChatGPT. Raccolta illecita di dati personali. Assenza di sistemi per la verifica dell’età dei minori. 31 marzo 2023. URL :https://www.garanteprivacy.it/web/guest/home/docweb/-/docweb-display/docweb/9870847 
12. CNIL. Chatbots : les conseils de la CNIL pour respecter les droits des personnes. 19 février 2021. URL :https://www.cnil.fr/fr/chatbots-les-conseils-de-la-cnil-pour-respecter-les-droits-des-personnes#:~:text=Une%20telle%20action%20est%20encadr%C3%A9e,%C3%A0%20l’activation%20du%20chatbot. 
13. CNIL. Lignes directrices et recommandations de la CNIL. URL :https://www.cnil.fr/fr/decisions/lignes-directrices-recommandations-CNIL 
14. Article 82 de la loi n° 78-17 du 6 janvier 1978 relative à l’informatique, aux fichiers et aux libertés, modifiée par Ordonnance n°2018-1125 du 12 décembre 2018 – art. 1
15. Directive 2002/58/CE du Parlement européen et du Conseil du 12 juillet 2002 concernant le traitement des données à caractère personnel et la protection de la vie privée dans le secteur des communications électroniques (directive vie privée et communications électroniques)
16. Règlement (UE) 2016/679 du Parlement européen et du Conseil du 27 avril 2016, relatif à la protection des personnes physiques à l’égard du traitement des données à caractère personnel et à la libre circulation de ces données, et abrogeant la directive 95/46/CE (règlement général sur la protection des données).
17. Résolution du Parlement européen du 20 oct. 2020 (2020/2012(INL)) ; (2020/2015(INI)) ; (2020/2014(INL)) ; Résolution du Parlement européen du 19 mai.2021 (2020/2017(INI)) ; Résolution du Parlement européen du 6 oct. 2021 (2020/2016((INI)) ; Résolution du Parlement européen du 3 mai. 2022 (2020/2266(INI))
18. Proposition de règlement du Parlement européen et du Conseil établissant des règles harmonisées concernant l’intelligence artificielle (législation sur l’intelligence artificielle) et modifiant certains actes législatifs de l’union, Commission européenne, 21 avril 2021, COM/2021/206 final.
19. Sophie Petitjean, Le Parlement enfin prêt à voter sur le règlement pour l’IA, Contexte Numérique, 27 avril 2023. URL : https://www.contexte.com/article/numerique/le-parlement-enfin-pret-a-voter-sur-le-reglement-pour-lia_167920.html  
20. Parlement européen, Un pas de plus vers les premières règles sur l’intelligence artificielle, Actualité, 5 nov. 2023. URL : https://www.europarl.europa.eu/news/fr/press-room/20230505IPR84904/un-pas-de-plus-vers-les-premieres-regles-sur-l-intelligence-artificielle 
21. Proposition de directive du Parlement européen et du Conseil relative à la responsabilité du fait des produits défectueux, COM (2022) 495 final, 28 sept. 2022 
22. Directive 85/374/CEE du Conseil du 25 juillet 1985 relative au rapprochement des dispositions législatives, réglementaires et administratives des États membres en matière de responsabilité du fait des produits défectueux
23. Proposition de directive du Parlement européen et du Conseil, COM (2022) 496 final, 28 sept. 2022 

Customs seizures of counterfeit goods increased significantly in 2022. While French customs intercepted 5.6 million counterfeit items in 2020, seizures increased to 11 million in 2022. On February 23, 2023, the Ministry of Public Accounts stated, “Counterfeiting no longer spares any sector of the economy1.”

Customs seizures are a crucial measure to protect industrial property rights against counterfeits. In addition to financial losses, counterfeit goods can damage a company’s brand image and reputation in the marketplace. Customs, therefore, play a crucial role in preventing the importation of counterfeit goods into their territory.

The customs detention procedure

A procedure with multiple implications

France is a pioneer in customs detention because it was the first EU Member State to classify imported counterfeit goods as illegal goods. Thus, the Longuet law2 codified this particular procedure into French law. According to the Regulation of 12 June 20133, the laws of the European Union also apply. However, items released for free circulation pursuant to the regime of the specific destination and items without commercial character contained in the personal luggage of travellers are not subject to detention.

This is a necessary procedure for strengthening the protection of one’s intellectual property right(s) by allowing customs officers to temporarily block goods suspected of infringing on them. During this detention, the rights holder can request that counterfeit goods be destroyed if certain conditions are met, or even file a legal action.

The prerequisite for filing an intervention request

This is a highly structured and regulated procedure. It begins with the rights holder (or licence beneficiaries under certain conditions) filing a request for customs intervention with the competent customs service in France or the European Union. This allows the market to be monitored and the applicant to be notified in the event of a counterfeit capture. This is a preventive and free (as of the July 29, 20224 decree) step that can be taken even if the applicant is unaware of any infringement of his or her right(s). The customs intervention request is valid for one year and can be renewed with a simple written request. It must include information on authentic goods and common counterfeits, as well as identification of rights and their holders.

On the one hand, the national intervention request allows customs officials to detain goods that have already crossed French borders and have been cleared throughout French territory. The European intervention request, on the other hand, allows customs authorities to detain third-party goods in customs prior to their introduction into European Union territory.

The effectiveness of the detention request stems from its submission to the appropriate customs services. This enables rights protection to be tailored to each vector of counterfeit introduction, such as targeting cells in ports and airports to control commercial freight, brigades to conduct roadside checks on people and vehicles, specialised services for postal checks and express freight, and even Cybercustoms, a service in charge of tracking fraud on the Internet.

The customs seizure procedure

Evaluation of the similarity between authenticity and suspected forgery

Customs officers do not have expertise, but it is their responsibility to identify products that appear to be counterfeit. The customs service that carried out the detention subsequently notifies the applicant. In order to confirm or refute the suspicion of counterfeiting and determine the subsequent course of action, this notification includes photos and the quantities detained. If this set matches, they then proceed to a customs seizure.

A procedure subject to defined deadlines

According to Article 3 of Regulation (EEC) of June 3, 19715, the customs seizure procedure allows goods suspected of counterfeiting to be detained for a maximum of 10 days (3 days for perishable goods), which can be extended by 10 days on a reasoned request. This time frame allows for the goods to be inspected.

Procedure for Simplified Extrajudicial Destruction

The allotted time also allows for the applicant to request a simplified destruction procedure. If applicable, three conditions must be met. First, the applicant must confirm in writing that he agrees to the destruction of the goods under his control. Second, he must be able to ensure the authenticity of the goods by providing detailed expertise. Finally, the presumed counterfeiter (also known as the “holder” of the counterfeit goods) must confirm in writing to customs services within 10 working days of being notified of the detention that he wishes to express himself regarding the destruction of the goods. If no action is taken, it will be assumed that he agrees to this destruction. If he objects, the holder is notified and given an additional 10 working days to take legal action or take probative measures for the same purpose.

The potential legal ramifications of the customs seizure

When a counterfeit is discovered but the simplified destruction procedure is not used, the rights holder has the following options:
Appeal to the territorially competent court to obtain authorization for conservatory measures,
Justify the filing of a complaint with the Public Prosecutor,
Take legal action in criminal or civil court.

For this purpose, the rights holder may request that the customs professional secrecy be partially lifted in order to obtain additional information (names and addresses of the recipient, sender, declarant, and holder of the goods, customs regime, origin of the goods, and destination), provided that this information is used for the purposes specified in Article 21 of the Regulation of June 12, 20136.

What happens in case of unjustified detention?
In the event of an unjustified or abusive detention, the rights holder may be responsible for paying all costs incurred by both customs and the owner of the goods. Furthermore, customs cannot order the rights holder to compensate the owner of the goods if the detention is unjustified. However, whether the detention is justified or not, they can always ask the rights holder to cover the storage costs. In most cases, they do not. Such compensation could only be made at the request of the owner of the goods, through a counterclaim, or through a separate legal procedure. In this case, the owner may seek compensation for his entire loss.

Transit policy

This regime is a World Customs Organisation measure that allows goods to cross customs borders without being subject to customs duties or other taxes. On the one hand, internal transit refers to the movement of goods within the community area that are intended to be marketed in the transit country. As a result, customs officers can seize the goods and hold them for a set period of time while waiting for the rights holder’s opinion. External transit, on the other hand, refers to the movement of goods originating in and destined for third countries to the European Union where they will be marketed from one point on the community territory to another.

This customs regime creates a legal fiction in which the goods in question do not exist in the community territory through which they transit. Despite this “non-existence” on the community territory, it seems necessary, as in the case of community transit, to allow customs authorities to use this detention measure to ensure that goods suspected of infringing intellectual property rights do not fraudulently use the customs regimes considered. However, the CJEU7 has applied the fiction of customs law.

This decision is devastating because it establishes the principle that a third-party good in transit, originating in and destined for a third country, can only be detained for suspicion of counterfeiting if it is intended for sale on the European Union market. Customs officers can thus clearly detain counterfeit goods only if the rights holder provides proof of concrete indications of future placement on the Union market.

Dreyfus & Associates Law Firm: intermediary between rights holders and customs

The landscape of industrial property rights is shifting as e-commerce expands and counterfeiting becomes more sophisticated. The owners of intellectual property must now incorporate customs monitoring into their already extensive brand monitoring efforts. In this sense, the request for customs intervention is a complex operation that establishes and conditions the effectiveness of the seizure measure, which is its logical and technical continuation.

The law firm Dreyfus & Associates offers its expertise to its clients, proposing assistance in exchanges with competent customs services.
We have a network of agents throughout the community area to monitor incoming and outgoing goods movements.

We also have a specialised department at the disposal of its clients for the surveillance of industrial property titles, which can make the request for intervention to customs on behalf of the rights holder.

Finally, Dreyfus & Associates allows its clients to participate in customs officer training to improve the identification of genuine articles and, by extension, counterfeit goods.

References

1. Bilan de la lutte contre les fraudes fiscale, douanière et sociale, 23 February 2023
2. Law n˚ 94-102 of 5 February 1994 on the repression of counterfeiting
3. Regulation (EU) n°608-2013 of 12 June 2013
4. Order of 29 July 2022 repealing the order of 11 December 2018
5. Council Regulation (EEC) No 1182/71 of 3 June 1971
6. Regulation (EU) No 608/2013 of the European Parliament and of the Council of 12 June 2013
7. CJEU, 1 December 2011, C495/09 (Philips/Nokia case)

In response to the digital age’s demand for creativity and innovation, the European Union has recommended a new EU designs framework to address current issues and future challenges.  Through this proposal, they seek to refine existing regulations by adding clarity, enhancing definitions of key terms, and aligning them with individual country laws. If passed, the legislation could foster better protection for designs while simultaneously creating balance between legitimate interests involving intellectual property rights – all in an effort to curb counterfeiting activity worldwide.

An overview of European Design Law: Protecting Creativity and Innovation

Models and designs are integral to product artistry and creativity and can be protected by European law. Article 3 of Regulation 6/2002 outlines all the characteristics that can be used to define a design – including lines, contours, colours, forms and textures. Currently, designs and models must be novel and exhibit some degree of individuality for them to be considered protectable. 

The European law on designs and models is an essential tool for protecting creativity and innovation within the European Union. Not only does it help to encourage innovation and competition by providing adequate protection to creators and businesses, but it also encourages them to invest in the research and development of new products and designs, which ultimately stimulates economic growth and job creation.

Registration of a model or design with the European Union Intellectual Property Office (EUIPO) gives the holder exclusive rights over the ornamental or aesthetic aspects of an object for up to 25 years. The European design regime also provides protection for up to three years for unregistered community designs. 

To benefit from this protection, the design or model must have an individual characteristic. This implies that the general impression that the design or model gives to the informed user must be different from the general impression that pre-existing designs or models give. When assessing this criterion, it is important to take into account the degree of freedom enjoyed by the creator at the time of the creation of the design or model, since this freedom will determine whether the latter achieved a real creative performance or not. Finally, the design or model must also be considered new.

This protection allows the holder to take action against the reproduction and sale of products with an identical appearance.

Furthermore, European design law provides broader and faster protection than national systems. Once registered, a design is protected throughout the EU, obviating the need for separate registration in each member state.

Considering its importance to European economic actors, it has become necessary to adapt this system to current and future trends arising from the digital era.

Context of the changes proposed by the Commission

In November 2022, the Commission presented a proposal that is currently under negotiation. This « EU designs framework » aims to revise the regulation and directive on community designs and models and is set to come into effect by the end of the year, or early 2024.

The objective of the designs framework is to modernise and improve current provisions by removing outdated rules, enhancing legal security, and clarifying design and model rights management. As technology advances and more businesses operate online, it becomes clear that current regulations are limited and must adapt to new forms of creation to protect designers and their digital creations. This directive aims to harmonise national laws and procedures to strengthen interoperability and complement the community design and model system.

Finally, the framework would help to complete the single market for replacement parts by including into the directive a repair clause, which is similar to the one already present in Regulation 6/2002.

Key changes proposed by the Commission

The « EU designs framework’s » primary aim is to provide clarity within protection regulations. This would result in terminological alterations that replace terms such as “Registered Community Designs” with “Registered EU Designs” (REUD) and “Unregistered Community Designs” with “Unregistered EU Designs“.

Another major change introduced by the directive is the removal of protection for unregistered community designs and models at a national level. In addition, it also stipulates that protection for community designs and models only starts when they are registered in the dedicated register.

It requires visibility by conditioning the protection of UDCs on the visible character of the appearance characteristics presented in the community design registration application. During the procedure of submitting a community design, the representations must clearly identify all the details of the design or model deposited.

The Commission also highlights the possibility of combining design protection with copyright protection, as established by European case law.

The proposed changes aim to broaden the definition of designs and models to include movement, transition, or any type of animation of product features as well as the definition of products by introducing a digital component and allowing for anything related to graphic interfaces, if necessary. Accordingly, the proposed framework defines “product” as “any object, including digital products, that can be manufactured or produced in limited quantities, or that can be sold, rented, or made available on the market.”

The Commission defines the boundaries of protection and grants an exception that allows for critical and parodic use of designs and models. Conversely, it deems 3D printing a form of use that requires authorization from the design or model rights holder. Importantly, this is a continually-advancing technology that facilitates the creation of 3D objects via digital files.

In addition, the proposal introduces new provisions. Firstly, it removes the unity-of-class principle, allowing for the submission of several REUD requests in the same application, even when designating multiple classes. Secondly, it makes the repair clause for spare parts permanent. This clause provides a transitional period of 10 years to safeguard the interests of existing design or model holders if the member state allows for design or model protection for spare parts at the time the new directive comes into force. However, it will only have an immediate legal effect on future registrations. The proposed framework also permits right holders to affix a specific symbol Ⓓ, informing the public that the product is registered.

Finally, on a procedural level, the Commission proposes to make optional provisions mandatory in order to increase predictability and coherence with the EU system. « The EU Designs Framework » also establishes a presumption of validity, which should be adopted by all EU Member States. This way, the validity conditions of the title would be presumed to be met in the event of an infringement. It also allows one to request a deferral period of 30 months from the date of filing the application. Ultimately, it stipulates that all member states must provide administrative actions for nullity with respect to registered designs and models in front of national intellectual property offices.

Conclusion

The Commission’s proposal for this directive is justified by a legal framework that has remained unchanged since the late 1990s and early 2000s, before the internet and the rapid growth of technology. As a result, it was necessary to address certain deficiencies and gaps in the protection regime to ensure its adaptation to the digital age and, more generally, its sustainability. This reform could encourage the protection of designs and models and, therefore, applications for registration within the European Union. It will also strengthen and limit protection, with the objective of striking a better balance between legitimate interests. Ultimately, it could potentially (and surely) improve the fight against counterfeiting.

About Dreyfus

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.

The French Public Investment Bank (BPI France) has set up a  program to help SMEs (small and medium-sized enterprises) and ETIs (Ethical Trading Initiatives and mid-sized companies) who are seeking or looking for help in developing and structuring their intangible assets.  These intangible assets include patents, designs, trademarks and software.

What are the terms of the “Intellectual Property Strategy Diagnosis”? How does Dreyfus & Associés intervene in this respect?

The BPI’s “Intellectual Property and Intangible Assets Strategy Diagnosis” is aimed at SMEs and ETIs registered in France with a workforce of less than 2 000 employees.  It is important to note that a  subsidiary of a group with more than 2 000 employees will  not be eligible for this program.

What is the purpose of this program?

The purpose of this offer of support is to finance an analysis and consulting service provided by an Intellectual property Expert for the protection, structuring and development of Intellectual Property. The cost of such an analysis is generally estimated to be between 3 000 and 10 000 euros (excluding VAT), for a duration of three  to ten  days, and it can extend for up to  3 months depending on requirements to be completed. The BPI finances up to 80% of the experts’ services. This program will benefit Startups, SMEs and ETIs due to the low cost that is being offered to allow them to engage with an Intellectual Property Expert who is registered with the BPI.

More specifically, the BPI provides support that includes an inventory of existing intangible assets, the implemented valuation actions, and an analysis of the company’s maturity in conjunction with understanding the challenges of building these intangible assets.

In retrospect, the “Intellectual Property Strategy Diagnosis” allows the company to obtain a comprehensive strategy of recommendations to be adopted for the management and valorization of assets.

What is the role of Dreyfus & associés, Intellectual property experts?

Dreyfus & associés is registered as an Expert Consultant with BPI France. This registration allows firstly Dreyfus & associés to  advise you on the relevance of such a diagnosis. If necessary, the firm establishes a commercial proposal that can position your  company in its context and explains the issues to be addressed during the diagnosis.

In order for you to submit the application to the BPI, your company will have to create an account on the BPI website and then constitute and submit a complete file.

The file needs to include the online application form, the Expert’s proposal (unsigned), the company’s latest tax return, tax and social security certificates dating back to less than three  months, the company’s up-to-date capitalization table and finally, the Declaration of Aid for the use of consulting and support services in the field of innovation.

When the  file is accepted, BPI France will send you an IP Strategy and Intangible Assets Valuation Diagnosis contract to be signed electronically by the company’s legal representative.

At the end of the diagnosis, the Expert will provide the company and BPI France with a final report including a summary of the context, the issues, the development paths and the recommendations. This final report will be made available within 15 working days.

The « IP Strategy Diagnosis » program set up by the BPI is a real opportunity for small and medium-sized companies seeking to develop their intangible assets. It allows them to obtain a complete expertise from qualified and accredited intellectual property experts at a significantly lower cost.

Do not hesitate to contact us for more information.

contact@dreyfus.fr

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

Webinar start up on July 9, 2020 :

  “Strategic advices to protect and defend yourself, both in the real and virtual world.”

When a company starts a business, why should it invest in protecting its trademarks, domain names, designs and software?

How does an IP strategy facilitate your international expansion, reassure your investors and customers, and protect your innovations? How does a protected right generate revenue?

When legislations become more  restrictive for companies, compliance requirements tend to be even more stringent. How can you make sure your company complies with the law? What are the risks of not integrating Internet into your compliance plan?

Webinar replay