Copyright

In a continuing trend, 2019 saw the CJEU issue a series of decisions following referrals from Member State national courts on various issues under the Copyright Directive and related Directives. This looks set to continue in 2020 with the CJEU due to hear more copyright referrals.  

Following one of the most intensive lobbying processes for a piece of legislation, the Digital Single Market Copyright Directive was approved in 2019, and Member States now have until 7 July 2021 in which to implement its provisions, with France taking the lead on the implementation process. The UK Government meanwhile had said it has “no plans” to implement the Directive into UK law. 

The UK Courts have also determined a number of interesting copyright points, ranging from the test for joint authorship through to communication to the public via Internet radio streams. In a decision where Mishcon acted for Nintendo, the Court has granted the first website blocking order relating to ‘Technological Protection Measures’, and websites selling devices seeking to circumvent such measures. The Court’s decision is significant as it confirms for the first time that website blocking orders are also available to non-IP rights. 

Copyright and the Digital Single Market: EU Parliament approves Directive

On 15 April 2019, the EU Council adopted the Copyright Directive. Member States will have two years, until 7 July 2021, to implement the provisions of the Directive into their national laws.  This date falls after the proposed transitional period under the Brexit Withdrawal Agreement and whilst the UK Government has “no plans” to implement it into UK law, businesses will need to comply with its provisions when operating. The Directive seeks to harmonise aspects of copyright law relating to the Digital Single Market but a number of its provisions have been highly controversial, and this shows no sign of abating during the implementation period of the Directive.  

The particularly controversial provisions are Articles 15 and 17. 

Rights in publications (Article 15, previously Article 11)

A new related right will be created for publishers of press publications (i.e., journalistic publications) established in a Member State relating to the online use of their publications by information society providers.  The right, which will last for two years from the date the press publication was published (calculated from 1 January in the following year), will not however apply to:

• Private or non-commercial uses by individual users
• Acts of hyperlinking
• Use of individual words or very short extracts

Authors (i.e., journalists) should receive an ‘appropriate share’ of any revenues the press publisher receives under this provision.

News aggregators, such as Google News have heavily criticised this proposal and so it remains to be seen to what extent a market for publishers to charge for use of their content will be created. In its press release, the European Parliament suggests:

“As sharing snippets of news articles is specifically excluded from the scope of the directive, it can continue exactly as before. However, the directive also contains provisions to avoid news aggregators abusing this. The ‘snippet’ can therefore continue to appear in a Google News newsfeeds, for example, or when an article is shared on Facebook, provided it is “very short””. 

It is likely that interpretation of the exception for ‘individual words or very short extracts’ will be the subject of considerable debate.

Use of copyright-protected content by online content-sharing service providers (OCSSPs) (Article 17, previously Article 13)

OCSSPs are sites that store, and give the public access to, large amounts of copyright-protected works uploaded by their users, such as YouTube, Twitter and Facebook. An OCSSP will be liable for copyright infringement if users upload copyright protected material, unless it has a licence from the copyright holder (which will cover the acts of its non-commercial users) or, where no authorisation is obtained, it complies with the regime set out in the Directive. This requires OCSSPs, subject to an assessment of proportionality and other factors, to:

• Make best efforts to obtain an authorisation
• Make best efforts to ensure the unavailability of specific works notified by right holders
• Act expeditiously, when receiving a notice from a right holder, to disable or remove access to copyright works (notice and takedown), and also make best efforts to prevent their future upload (‘notice and stay down’)

Start-up OCSSPs will not be subject to the full liability regime.  Instead, where an OCSSP service has been available in the EU for less than three years, with an annual turnover of less than EUR 10 million, it will only be required to make best efforts to obtain an authorisation and to adopt notice and take down mechanisms.  Once its average monthly visitors exceeds five million, it will also need to adopt notice and stay down mechanisms.

The Directive states that the mechanisms it sets out should not lead to non-infringing works not being made available.  Member States must ensure that there are exceptions for quotation, criticism and review, and parody use (under current EU copyright laws, such exceptions are optional for Member States to implement).   Further, there must be a mechanism for users to complain and obtain redress where they dispute material being disabled or blocked.

Remuneration of authors and performers (Articles 18-23)

Where authors and performers license or transfer their rights in their copyright work, the Directive provides that they should receive appropriate and proportionate remuneration.  Further, they should be given, at least annually, information on the exploitation of their works/performances, to ensure greater transparency in terms of the revenues earned.  Where the revenues they receive under a contract turn out to be disproportionately low compared to those derived from the exploitation of the relevant work, a contract adjustment mechanism should allow them to claim additional, appropriate and fair remuneration.   

New exceptions to copyright infringement and measures intended to ensure wider access to content (Articles 3-14)

The Directive contains a number of provisions designed to improve research and preservation of cultural heritage.  This includes new mandatory exceptions relating to text and data mining, the digital use of works for teaching or illustration, and allowing cultural heritage institutions to make copies of works in their permanent collection for preservation. There are also provisions relating to the use of out-of-commerce works, audio-visual works on video-on-demand platforms, and works of visual art in the public domain.

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Copyright for designs? CJEU bolsters protection of product design

In a decision with potentially far-reaching consequences for design-led industries, the CJEU held that EU Member States’ laws cannot impose a requirement that designs (in this case of jeans and t-shirts) have an aesthetic effect in order to attract copyright protection. Instead, the same objective standard set out in the EU legislation and case law must be applied to all types of copyright works.

Currently, some EU countries make it harder for designs to attract copyright protection by imposing a requirement of aesthetic effect or artistic quality, perhaps reflecting concerns that granting lengthy protection to functional designs may hinder innovation. Now that the CJEU has ruled out this approach, there are likely to be a number of implications. In particular, copyright protection brings with it certain benefits over design rights: there is no requirement for the work to be novel, there is no requirement of registration (as there is for certain types of design rights), and the term of protection is significantly longer. If a particular design can benefit from copyright protection (in addition to design right protection), the owner of the rights in that item has a much greater ability to protect and enforce its rights. 

Clothing designer G-Star RAW CV alleged that another designer, Sociedade de Vestuário SA (Cofemel), had copied its designs for jeans and t-shirts and had therefore infringed G-Star’s copyright in those designs in Portugal. Cofemel argued that the designs were not eligible for copyright protection under Portuguese law, which requires designs to be of a certain aesthetic quality.

The CJEU concluded that Member States are not permitted to set a standard higher than that provided for by the relevant EU legislation. Article 2(a) of the InfoSoc Directive provides that “Member States must allow authors of “works” to prevent others from reproducing those works”. The Directive does not define “works” but the appropriate standard to apply has been set out by the CJEU in several earlier decisions.  These make it clear that the following criteria must be fulfilled:

1. A “work” must be original in the sense that it is an intellectual creation of its author. This means that it “reflects the personality of its author”, demonstrating his or her “free and creative choices”. However, where the expression of the work is determined by technical considerations, rules or other constraints, and there is no room for creative freedom, an item will not have the necessary originality.
2. Only something which is the expression of the author’s own intellectual creation may be classifed as a work.
3. The subject matter must be expressed in a manner which makes it identifiable with sufficient precision and objectivity (as determined by the CJEU in its Levola decision concerning the taste of cheese). There should be no element of subjectivity (such as aesthetic value).

In following its earlier case law, the CJEU’s decision is perhaps of no great surprise. However, the earlier cases did not comment explicitly on whether individual Member States can impose their own, different criteria for designs to qualify as copyright works. The CJEU has now put down a very clear marker that this is not permitted. 

This decision is likely to make it harder for designs to be denied copyright protection. This will impact on the UK’s law relating to “works of artistic craftsmanship”, and the approach the UK Courts have taken to ‘utilitarian objects’ and sculptures. However, the assessment of originality for copyright remains a rigorous one and it may be difficult, for example, in some cases to demonstrate that a particular design was not constrained by technical considerations (and left no room for creative freedom). There will need to be some further clarity from the Courts on both protection and infringement (and potentially, amended legislation). 

The decision may also lead to a revisiting of the traditional ‘closed list’ approach of UK copyright law where the legislation splits protectable works into categories including literary, dramatic, musical and artistic works, each with their own criteria. 

The UK court has already applied the CJEU’S decision in a case relating to jacquard fabric, in a decision suggesting that UK law will need to adapt to this new approach.

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CJEU issues three copyright decisions on fundamental rights and copyright

In the summer, the CJEU issued three important copyright decisions looking at the interplay between the protection of copyright and fundamental rights (including freedom of expression) - all of which were referred by the German courts. In all three cases, the CJEU confirmed that Member States may not provide for additional defences to copyright infringement going beyond those provided for under the EU copyright regime. This sets out an exhaustive list of exceptions which already takes into account the interests and fundamental rights of both producers and users of protected subject matter, as well as the public interest. 

In the Pelham case, the CJEU considered music sampling and the use of a two-second rhythm sequence from the Kraftwerk song Metall auf Metall, in a continuous loop. The CJEU concluded that taking a sample, even where it was a ‘very short snatch’ of music, would amount to infringement of a copyright work (given that the InfoSoc Directive provides that infringement may occur where ‘part’ of a work is reproduced), provided that the sample remains ‘recognisable to the ear’. The CJEU suggested that this literal interpretation reflected the general objective of the InfoSoc Directive to establish a high level of protection of copyright, and of the exclusive right of a phonogram producer to protect its considerable investment.   

In relation to defences, the sampler sought to rely upon the German law that an independent work created in the free use of a copyright work may be published without consent, but the CJEU said this was incompatible with the EU copyright exceptions regime. Interestingly, however, it considered that the quotation defence under the InfoSoc Directive could apply to musical works and set out the essential characteristics of a quotation for the purposes of this defence as follows:

• Use by a user other than the copyright holder of a work, or more generally, an extract from a work,
• For the purposes of illustrating an assertion, of defending an opinion or of allowing an intellectual comparison between that work and the assertions of that user.
• User of a copyright work wishing to rely on the quotation defence must have the intention of entering into ‘dialogue’ with the work.

In principle, the use of a sample could qualify as a quotation where the sample is recognisable to the ear in the new work. But, there would be no ‘dialogue’ if it is not possible to identify the work concerned by the quotation at issue. Clearly, this case will raise a number of issues of interpretation in future cases, both in terms of the impact on the assessment of copyright infringement by a partial reproduction, and in relation to the proper application of the quotation defence. 

In the Funke Medien case, the CJEU considered copyright protection in German state military briefing reports relating to the operations of its forces overseas. A German newspaper had published the reports and the German state had brought an action against the publisher for copyright infringement.  These were purely informative documents and the content was essentially determined by the information in them. Whilst there would have been some degree of effort and skill involved in preparing the report, following the CJEU’s guidance, it seems likely that the national court will determine that the authors of the reports were not making free and creative choices and thereby expressing their own intellectual creation, in which case they will not be protected by copyright. In relation to potential defences if they are protected by copyright, particularly that of freedom of information and of the press, the CJEU made the same point as in Pelham re the exhaustive nature of the copyright exceptions regime in the EU. It did however note that, when assessing whether the defence of use of a work in connection with reporting applies, account could be taken of the nature of the speech or information, in particular, in relation to political discourse on matters of the public interest.  

Finally, in Spiegel Online, an online newspaper had published an article contending that a politician had made false claims in relation to a manuscript he had written. The journal linked from its website to the original manuscript and an article. The politician sued for copyright infringement and, again, the CJEU was asked to consider the interplay between protection of copyright and fundamental rights and the application of the quotation defence. The CJEU noted that to rely on the quotation exception, it was not necessary for the quoted work to be inextricably integrated into the alleged infringing work by way of an insertion or footnotes, and so quotation can take place by linking to the quoted work. The German court will need to assess whether the use of the manuscript and article by quotation extends beyond the confines of what is necessary to achieve its informatory purpose. Further, in the particular factual scenario before the Court, it will need to assess whether the work has already lawfully been made available to the public (i.e. with the copyright owner’s authorisation or in accordance with a non-contractual licence or statutory authorisation). 

CJEU confirms no exhaustion of copyright through the supply of e-book

In the Tom Kabinet case, the CJEU considered whether the provision of an online service comprising a virtual market for ‘second-hand’ e-books (allowing users to download copies), would amount to infringement of copyright or whether the copyright owners’ rights will have been exhausted, meaning that they could not prevent such sales. The claim was brought in The Netherlands by publishers associations against the Tom Kabinet service which makes e-books available to members of its ‘reading club’.  

In relation to physical copies of a book, EU law provides that the copyright in that book will be exhausted by the first sale or other transfer of ownership in the EU by the rights holder (or with their consent) of the original or a copy of the work. In the UsedSoft case, in interpreting the Software Directive, the CJEU had extended the exhaustion principle to distribution of copies of computer programs provided certain criteria were met, regardless of whether they were tangible or intangible (i.e., available for download). 

Tom Kabinet argued that its activities were covered by the distribution right and the copyright owners’ rights were therefore exhausted, i.e., that there was a concept of ‘digital exhaustion’ under the InfoSoc Directive. The CJEU disagreed and found that Tom Kabinet was communicating copyright works to the public by making them available to anyone registered with the reading club’s website, and so the distribution right did not apply. As the principle of exhaustion did not apply to a communication to the public, the right holders could prevent this. The CJEU concluded that the EU legislature had intended that the rule of exhaustion be reserved for distribution of tangible objects, such as books on a physical medium. Applying the rule of exhaustion to e-books would impact negatively on right holders (compared to physical books), as dematerialised digital copies of e-books do not deteriorate with use, and used digital copies are therefore perfect substitutes for new copies. Further, the exchange of such copies would be straightforward and require little effort or cost, compared to the market for second-hand tangible objects.

Nintendo obtains novel blocking injunction

On 10 September 2019, Arnold J issued judgment granting a ground-breaking blocking website blocking order to Nintendo Co., Ltd, the seller of the popular Nintendo Switch games console.  The  judgment expands the grounds upon which a blocking injunction may be granted, to include not only the blocking of websites which infringe intellectual property rights, but also those which offer for sale and distribute circumvention devices which aim to circumvent the technological protection measures (“TPMs”) within the Nintendo Switch console. The purpose of the TPMs is to prevent piracy and the playing of unauthorised and infringing games.

The order compels the UK’s major internet service providers to block public access to various websites advertising and selling Team Xecuter’s SX Pro and SX OS, which are the most prolific piracy-enabling products in respect of the Nintendo Switch.

As established in the Cartier case, website-blocking injunctions can be granted on the basis of trade mark infringement. In this case, the target websites made unauthorised use of Nintendo’s trade mark. However, in addition to trade mark infringement, Nintendo sought a blocking injunction on the basis of sections 296ZD and s296 of the Copyright Designs and Patents Act 1988 (“CDPA”), which provide statutory protection against the circumvention of copyright protection measures. The rights given by these sections of the CDPA are not themselves intellectual property rights but are an ancillary right, and their purpose is to support the protection of underlying copyright.

In assessing the merits of the claim for a website blocking order, Arnold J followed the same approach as adopted in the Cartier case, assessing whether or not the ‘threshold conditions’ were met. In Nintendo’s case, these conditions were satisfied by the fact that:

• the ISPs provide internet services to consumers and were not themselves responsible for the infringing websites or their contents and it is well established that they were intermediaries;
• the operators of the target websites were infringing Nintendo’s rights in the UK;
• the evidence provided by Nintendo established that the operators of the target websites were using the ISPs’ services to do so; and
• the target websites had knowledge of the claim because Nintendo had notified them of it.

Arnold J also concluded that granting the injunction was proportionate in all of the circumstances of the case including because of Nintendo’s sustained attempts to contact the operators of the infringing websites. 

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Court of Appeal guidance on works of joint authorship

In an unusual outcome, the Court of Appeal sent a case (Kogan v Martin) on joint authorship back for re-trial in the IPEC. The case concerns the 2016 film Florence Foster Jenkins, starring Meryl Streep as the eponymous wealthy American music-loving socialite who dreamed of becoming a great opera singer, but without any real talent.  The issue was whether there was a sole author and owner of the copyright in the screenplay (Mr Martin) or whether there were in fact joint authors/owners (Mr Martin and Ms Kogan). 

The Court of Appeal overturned the IPEC’s decision on a number of grounds, including the Judge’s erroneous approach to the witness evidence in the case (which led him to fail to make findings of fact on key issues) and for imposing too high a threshold for determining whether Ms Kogan had made a sufficient contribution.  The Court of Appeal usefully set out the appropriate factors to consider in a claim of joint authorship.  Whilst the parties will now face a retrial, the Court of Appeal appears to consider that Ms Kogan may have done enough to maintain her claim: “we consider that it is entirely realistic to suppose that a reconsideration of all the evidence would show that Ms Kogan’s contribution was indeed made as part of a collaboration and passed the quantitative threshold for joint authorship. It would be wrong for us to go any further in the light of the disposition of the appeal which we will propose”.

The Court of Appeal drew together the following principles for assessing a claim of joint authorship:

Collaboration

1. A work of joint authorship is a work produced by the collaboration of all the people who created it.
2. There will be a collaboration where those people undertake jointly to create the work with a common design as to its general outline, and where they share the labour of working it out.
3. Derivative works do not qualify.  If one of the putative authors provides only editorial corrections/critique, or ad hoc suggestions of phrases or idea, without wider collaboration, this will also not qualify.  
4. It is never enough to ask ‘who did the writing?’.  Authors can collaborate in many different ways.

Authorship

1. Joint authors must be ‘authors’ in the sense that they must have contributed a significant amount of the skill which went into the creation of the work.  Again, this means looking beyond who ‘held the pen’. 

Contribution
Only ‘authorial’ contributions in this sense will count, and this will be acutely sensitive to the nature of the copyright work. 
Whether a contribution is sufficient will be assessed by reference to the standard set out in the Infopaq test for originality, namely whether the putative joint author has contributed elements which express their own intellectual creation, exercising free and creative choices.

Non-distinctness of contribution

1. The contribution must not be distinct (if it were, the authors would be separate authors of their individual contributions).
2. There is no further requirement that the authors subjectively intended to create a work of joint authorship.
3. It may be relevant that one of the authors has the final say on what goes into the work (as occurred in this case), but this will not be conclusive.
4. The respective shares of joint authors do not need to be equal and can reflect the relative amounts of their contributions.

The Court of Appeal also rejected the IPEC Judge’s “novel theory” that the significance of a contribution depended upon the type of skill employed in making that contribution.  The IPEC Judge distinguished between primary skills required to create a copyright work (in relation to a literary work, this would be the selection and arrangement of words in the course of setting them down) and other secondary skills (e.g., inventing plot and character).  

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Breaking the Internet? TuneIn radio aggregator service infringes copyright

Many cases in recent years have tested the extent to which copyright law can meet the challenge of new technologies and new uses of technology. In the latest case, the Defendant (TuneIn Radio) suggested that a win for the Claimant record companies would “break the Internet”, whereas the Claimants argued that allowing the Defendant to continue its activities would “fatally undermine copyright”. In fact, the court found, in relation to three categories of radio station, there would be a copyright infringement by TuneIn when the relevant radio station was targeted to the UK as a result of TuneIn’s activities, including in relation to geographically tailored adverts. The findings of infringement covered:

• Radio stations not licensed in the UK or elsewhere
• Radio stations licensed in a territory other than the UK
• Internet radio stations created for and operated by TuneIn (without licence from record companies). This service was disconnected in 2017

Crucially, the Court found that there would also be infringement in these scenarios by the radio stations themselves (i.e. even though it was only through the acts of TuneIn that certain radio streams would become infringing in the UK).

However, there would be no infringement by TuneIn or the radio stations in relation to those stations that were licensed in the UK (via PPL) - a significant part of TuneIn’s operation. 

TuneIn Radio is available via its website and apps, providing links to over 100,000 radio stations that are freely available on the global Internet. Importantly, TuneIn does not transmit third party content, it connects users to third party radio stations’ streams without taking the listener to those stations’ websites. Instead, users remain on the TuneIn page and are shown TuneIn ads whilst streaming. The case hinged on the interpretation of provisions in the InfoSoc Directive relating to communication to the public, and whether TuneIn was simply a directory or search engine linking users to websites containing relevant content i.e., radio streams (instead of websites generally, as in the previous case law). TuneIn argued that it did not transmit or store any music, and was merely providing users with hyperlinks to works which had already been made freely available on the internet without any geographic or other restriction. 

The Court’s decision is particularly useful for the Judge’s explanation of the series of CJEU case law relating to communication to the public, including in relation to linking and the relevant criteria. The Court concluded that TuneIn was not a conventional search engine, but was an aggregator of links at scale. In relation to the non-UK radio stations (but not the UK ones which had already been licensed via PPL), there was a communication to the public.  

Interestingly, under the contracts between TuneIn and the various Internet radio stations, the stations were said to be responsible for the permissions necessary for the streams to be published in their own locality. However, there was nothing in the terms setting out whether the non-UK radio stations were responsible for ensuring a consent was in place where streams were targeted at users in the UK. 
 
Both parties were given permission to appeal to the Court of Appeal given the ground-breaking nature of the issues.

IPEC rejects copyright claim in celebrity bedding

In November 2019, the IPEC dismissed a claim for copyright infringement in a celebrity endorsed duvet prototype. The similarities between the “Kylie Minogue At Home” prototype were not close, numerous or extensive enough to the “By Caprice” duvet to suggest copying. Whilst the respective duvets had similarities (each bore repeating scallop-style pleats in horizontal rows), the differences between them were extensive enough to indicate that they had been produced by an independent source. 
 
The Court declined to place any weight on the evidence of the Claimant’s expert witness. The expert, specialising in textile design, had initially been engaged by the Claimant to produce evidence in support of its case, focusing on the similarities between the duvets and not the differences. However, when the expert was later required to submit evidence as a court-appointed independent expert, he was criticised for his lack of impartiality and objectivity as he maintained an approach that identified too closely with the aims of the Claimant. Above all else, this case acts as a useful reminder of the duties and obligations of an expert under the Civil Procedure Rules and the consequences of non-compliance.  

Copyright in Charlotte Tilbury make-up infringed by Aldi

In an interesting decision, the High Court ruled that copyright can subsist in the designs of pressed powder in a palette, and that Aldi had infringed Charlotte Tilbury’s copyright in two such designs. This case is notable for three reasons: it confirms that copyright can subsist in a work that is ephemeral in nature, the Court was sufficiently persuaded by the Claimant’s arguments to award summary judgment, and it illustrates how copyright is a useful tool for rights holders dealing with copycat products where otherwise they might only consider passing off.  

The Claimant, Islestarr Holdings Ltd, launched the Charlotte Tilbury brand in 2013 with a “Filmstar Palette”, which included two designs in the “Starburst Design” embossed onto the metal lid of the palette and the “Powder Design” embossed into the pressed powder within the palette. Aldi produced two copycat products, each featuring a design similar to one of the Claimant’s designs. Aldi relied upon the Harpbond decision (where the Court decided that the facial make-up of pop star Adam Ant was not protected by copyright because it was not fixed on a tangible medium) in support of its argument that copyright could not subsist in the Powder Design due to its ephemeral nature. Deputy Master Linwood however rejected this argument, and found that, despite the fact that the design could disappear over time through ordinary usage of the palette, the design did attract copyright protection. 

Aldi had prior access to the designs, and so given the objective similarities, the burden of proof shifted to Aldi to disprove that the similarities in the products resulted from copying. Aldi was unable to do so and the Court concluded that the similarities between the designs amounted to reproduction of a substantial part. As Aldi had no realistic prospect of defending the infringement claim, the Court awarded summary judgment.

Haas Formula 1 and the Rich Energy logo

The Summer of 2019 proved a testing time for the relationship between the Rich Energy Haas Formula One team and its title sponsor, Rich Energy.  In May 2019, the IPEC found that Rich Energy had deliberately copied its logo from ATB Sales Limited (trading as Whyte Bikes), and so infringed the copyright in Whyte Bikes’ logo (ATB Sales Limited v Rich Energy Limited).

Rich Energy denied that its logo infringed the copyright in Whyte Bikes logo. It claimed that it independently designed its logo in 2015 without reference to, or knowledge of, the Whyte Bikes logo. Rich Energy purported to produce evidence of independent design – in the form of a “Brand Guidelines” document showing how its logo had been created independently of Whyte Bikes’s logo.  However, under cross-examination at trial, it transpired that key parts of this document had been created after the proceedings were issued, for the purposes of defending the claim.

The court found not only Rich Energy liable for copyright infringement, but also its director and sole shareholder, and its design agency. Given the high degree of similarity between the logos, Rich Energy was always facing an uphill struggle to prove that it had created its logo independently. When Rich Energy’s evidence of an independent design process for its logo fell apart, a finding of copyright infringement became inevitable.