IP Phil

Here it is. The long awaited decision was published on Legalis.net. The reasoning however will provide little help for ISPs in general. While the TGI of Troyes refused to consider Ebay as an editor of content, as the platform is not the one to put items on sale, it also refused to consider Ebay as a hosting provider, and instead considered it as an “online communication broker” (frames its own website, gets commissions, etc., thus exceeding the status of a mere hosting provider). Submitting the company to a particular status enabled the Court to adapt the duty of diligence and - probably - go beyond the one that it could have requested from a hosting provider. As such, it ruled that EBay should have required series number that would have enabled the authentification of the products. In addition, Ebay should have disclosed information related to legal consequences in separate terms that its general Terms of Agreements, more easily visible for its users. Having failed to fulfill its duty of diligence, Ebay was held liable for TM infringement (and not under Art. 1382 of the French Civil Court as I had assumed it would). Will this ruling lead to the emergence of intermediate status between hosting and content editors with a scale of duties depending upon the position where the ISP stands on the scale? We’ll see.

On the whole, the decision can in any case be deemed satisfying for Ebay. The Court did not impose any extensive duty of diligence that would extend to an a priori control of online content. It only required the company to provide additional information, in a better way than it did before. Such requirements won’t be so hard and costly to implement, at least far less than then a priori control that lots of ISPs fear to have to put in place at some stage…Considering this mild ruling, I probably wouldn’t file an appeal if I were Ebay, but wait and see…

On May 20, 2008, the French Cour de cassation decided to submit the question of Google’s liability to the European Court of Justice and sought its answers on the following questions:

- does the offer by Google of a third party’s TM as keyword amount to a TM usage according to Art. 5 of the EC TM Directive ?

- If not, does Google function as a hosting provider with regards to Google Adwords as defined in Art. 14 of the Directive on E-Commerce?

These questions are good ones, and hope remains that the ECJ will clarify these questions in a well-thought way, all the more than its answers certainly will have a significant impact on the way IPS’s liability wil be shaped in the EU in the coming years.

On April 14, 2008, the TGI of Paris had to hear at a preliminary stage of an interesting case. A woman that had posted several posts on different Google groups had noticed that these posts were still accessible several years after. After having asked Google to delete any posts containing data about her in vain, she decided to file a claim, based upon data protection.

The Court however rejected her claim at this preliminary stage. It first considered that French legislation did not apply as all these posts had been archived on severs located in Mountain View by Google, Inc., while Google France had no real role to play (a strange reasoning since the effects of these posts could be felt where the concerned person was located, i.e. France…). It then ruled that any user had the possibility to delete its own posts, and recognized that for others posts containing information related to third persons (comments for instance to previous posts), there existed a difficulty as the only one to be entitled to delete the posts is the user itself, not the third party. At this stage, the Court however considered that the alleged damage suffered was not proved with sufficient certainty and did not pronounce itself on that issue.

One will have to see how the Court actually rules on the merits, but the question remains, all the more than the non-application of French law, in that particular case, can be criticized. Considering the significant amount of personal data held by Google, there is little doubt that serious concerns related to privacy and data information will be raised in the future.

In a post of June 2, I referred to a case that had been rendered by the Court of Appeals of Paris, in which the Court - rightfully in my opinion - held that the mere accessibility of one’s website does not lead to a competence ipso jure of the State Courts where that website can be accessed from, and that the design of the website has an important role to play. This ruling was merely confirming a previous one from April 26, 2006. Unfortunately, the TGI of Paris does not seem to feel itself bound by the ruling of the Court of Appeals, as it once again held twice on May 16, 2008 (L’Oréal v. Ebay and RueduCommerce v. Carrefour) that the mere accessibility was sufficient to give competence. Truth is that the most recent ruling of the French Cour de Cassation, issued on December 3, 2003 still goes in that direction. It is to be hoped that the Cour de cassation will soon have to pronounce itself again, and will follow the rulings of the Court of Appeals (for more comments see the post of June 2, 2008).

The first long awaited decision has finally arrived. In one of a long line of cases opposing Ebay to Hermès, the TGI of Troyes held Ebay liable for counterfeiting, and condemned the auction company to 20′000 euros. At this stage, I unfortunately cannot give any comment as to the reasoning of the Court, but already look forward to discovering its reasoning, in particular as to the interpretation of the duty of diligence that can required from ISPs.

This decision might create an annoying precedent for Ebay which will have to face a long line of rulings, in particular in a case where LVMH claims 20 millions euros of damages. From a more general perspective, the reasoning of the TGI will be of great interest as to the interpretation of the duty of diligence that one can expect from ISPs in the Web2.0 regarding infringing content distributed through them. One also may wonder whether the Court based its reasoning upon a TM claim (most likely secondary liability) or unfair competition case (i.e. tort liability under French Law); I would argue for a tort, i.e. Art. 1382 CCfr., but we’ll see.

At this stage, we all have to wait for the decision to be published.

The first long awaited decision has finally arrived. In one of a long line of cases opposing Ebay to Hermès, the TGI of Troyes held Ebay liable for counterfeiting, and condemned the auction company to 20′000 euros. At this stage, I unfortunately cannot give any comment as to the reasoning of the Court, but already look forward to discovering its reasoning, in particular as to the interpretation of the duty of diligence that can required from ISPs.

This decision might create an annoying precedent for Ebay which will have to face a long line of rulings, in particular in a case where LVMH claims 20 millions euros of damages. From a more general perspective, the reasoning of the TGI will be of great interest as to the interpretation of the duty of diligence that one can expect from ISPs in the Web2.0 regarding infringing content distribued through them.

At this stage, we all have to wait for the decision to be published.

In this recent case, the Court of Appeals for the 8th Circuit had to rule on the following question submitted to it by CBS Distribution and Marketing, Inc.: did this company had a right to use, without license, the names of and information about major league baseball players in connection with its fantasy baseball products? Obviously, the Major League Baseball was considering such a usage as an infringement of its publicity rights, but CBS disagreed. And so did the Court of Appeals. While the Court admitted that the players’ names were used for commercial purposes, the Court nevertheless held that the First Amendment (freedom of expression) preempted the publicity rights.

The Court in particularly held that there was no reason to prohibit the usage of information available in public domain and already known to everyone. More than that, the Court recognized that “Economic interests that states seek to promote include the right of an individual to reap the rewards of his or her endeavors and an individual’s right to earn a living”. It nevertheless considered that “major league baseball players are rewarded and, handsomely, too, for their participation in games and can earn additional large sums from endorsements and sponsorships arrangements. Nor is there any danger here that consumers will be misled, because fantasy baseball games depend on the inclusion of all players and thus cannot create false impression that some particular player with “star power” is endorsing CBC’s products.”

The case certainly will raise comments in the US and lead licensees to renegotiate their contracts or at least wonder that their strategy should be when the renewal date will come, as it puts a significant limit to what had been an extension of publicity rights so far. To my knowledge, this is the first time - since that evolution started - that a commercial usage is not protected. In my opinion, the case can be welcome. True, stars should be entitled to monetize the goodwill associated with their name, as this reputation could - to some extent - only be gained thanks to their work. Is it however fair for a star to be able to monetize its name for any type of usage associated with said name? Where does the private usage stop and the public domain begin? Where should the limits and boundaries be put? After all, shouldn’t the stars only be entitled to a fair remuneration rather than a total remuneration for such uses? I do not claim to have the answers to these questions, which certainly would deserve a more thorough analysis. Limits should certainly exist, and one can welcome this case to finally have raised that issue.

On May 30, 2008, the Court of Appeals for the State of California (Sixth Appellate District) had to decide upon the following question: If someone steals a trade secrect and sells it to a third party, when does the statute of limitations begins to run on any misappropriation claim the trade secret owner might have against a third party? The trial court had concluded that the limitations period did not begin to run until the third party had actual notice of the trade secret owner’s claim to the information. The Court of Appeals however reversed, and held that with respect to the element of knowledge, the statute of limitations on a cause of action for misappropriation begins to run when the plaintiff has any reason to suspect that the third party knows or reasonably should know that the information is a trade secret. In the present case, the Claimant was already aware of the alleged facts since 1999-2000 and, consequently, was precluded from filing a trade secret claim.

The ruling makes sense. Imagine that someone could wait for the time it wants before filing a trade secret claim and ask for damages. Could it then ask for damages until the time it actually filed its claim into Court, even though it was aware of the facts a long time before? Such a ruling would obviously be unfair and inefficient. One can therefore welcome this ruling.

I happened to come across an interesting case today (RTD Com. 2008, p. 95). On November 9, 2007 (unfortunately unpublished online to my knowledge), the Court of Appeals of Paris had to rule on the following facts. A painter was basically arguing that E-Bay had no right to allow the online sale of paintings that were counterfeiting his own works. The Court however did finally not have to rule on the case for procedural reasons.

The website on which these counterfeiting paintings were located was ebay.ca, located in Canada. As a consequence, the Court held that the website was clearly targeted towards Canadian and Anglo-saxons citizens, all the more than the currency was in dollars, the language English and any measure was anglo-saxon. While foreigners could access the website, such a usage was only sporadic, and the mere possibility to access this website from anywhere was not sufficient to accept a general competence of any jurisdiction to rule on any issue related to ebay.ca. Consequently, the case was dismissed. In a comment of this case, Philippe Gaudrat criticizes the result of this case. I disagree. The move from the mere accessibility of the website (passive sales to some extent) to a more thorough analysis of the website design and its primary target (active steps and foreseeability requirement to some extent) seems to be a well-grounded move towards more consistent rulings. If a consumer (and the case does not have to deal with any contract, so that the issue of consumer protection did not have to be addressed) purposefully decides to buy an item on ebay.ca, shouldn’t he expect to be submitted to a jurisdiction that won’t be located in France? Should the mere purchase of an item that has no link whatsoever with France but for the accessibility of the website be sufficient to lead to the application of French Law and the competence of French jurisdictions? I would answer in the negative, and thus agree with the Court of Appeals of Paris.

In a second step, Philippe Gaudrat wonders whether the display of copyrighted works on eBay should amount to a copyright infringement before answering in the negative. I agree since this display is purely functionnal and would, if we refer to the US, amount to a fair use. The only possible infringement would consist of moral rights, in particular an infringement of the right of integrity depending upon the way works of arts, in particular paintings, are displayed on the Net (without mentioning the fact that the name of the author should obviously appear on these posts).

Dear friends,

It’s been quite a while that I haven’t posted any news. Truth is that these last months have been very busy for me, both on the professional as well as on the private sides. I’ve been writing a book related to contractual damages for the last year, and I am finally about to put an end to it.

More significant changes are about to come, but I’ll let you know in due course.

For now, I’ll try to more or less catch up with what has happened these last two months. Here is a first series of posts dealing with several issues: cases related to RSS feeds and liability for their usage as well as new cases dealing with ISPs liability in the Web2.0 which confirm a trend towards increasing liability are the most significant ones. Enjoy!

Philippe