Why should you protect your IP?

Protecting IP is becoming increasingly difficult, particularly with the proliferation of online sales. The Internet has created an ideal and, often, an almost anonymous selling place for sophisticated counterfeiters of products.

Why should you protect your IP? According to a 2013 report by PricewaterhouseCoopers, the value of the global impact of counterfeit goods and illicit trade is estimated to be US$650 billion per year. That is US$650 billion of lost revenue for brand owners, authorized manufacturers, distributors and retailers of genuine goods.

Ignoring the infringement of IP rights when it arises can dilute the strength of the right itself, undermining distinctiveness (in the case of a trade mark) and the ability to stop future infringement. This has a knock-on impact on the value of goodwill of a business.

The cure? Many businesses elect to protect their IP by registering trade marks, design rights, and patents with the relevant authority (whether that is a national authority, such as the Office for Harmonization of the Internal Market (“OHIM”) or the World Intellectual Property Organization (“WIPO”).

My suggestions of ways in which a brand can strengthen its position vis-à-vis counterfeiters include the following:

• Create a strong brand identity, using the same logos, designs, packaging etc., consistently across product lines.
• Use security features, such as stickers, serial numbers, holograms or mylar/security strips in products to help aid detection of counterfeit goods. These details will also assist in monitoring the security of your manufacturing, distribution and retail processes.
• Create an authorized manufacturing, distribution and retail network for products.
• Make each entity in your manufacturing, distribution and sales chain subject to contractual obligations to protect your IP and report to you any instances where it has become aware of possible infringement, either by itself or a third party.
•  Register your IP with relevant national customs authorities to enable them to detect and detain counterfeit goods that are imported and exported, allowing you to take action, where appropriate.
• Periodically collect and review information about any counterfeit goods that are discovered. You may choose to employ a ‘watching’ service to assist with this monitoring. This information will help you identify jurisdictions and territories where counterfeit goods are being produced as well as any weak links in your manufacturing, distribution and sales chain and the common distinguishing features of counterfeit goods.
• Clearly allocate responsibility within an organization for dealing with infringements and maintain a portfolio of relevant information so that documents such as registration certificates, precedent letters of complaint and text for witness statements are easily accessible.

For any questions on how to protect you IP, feel free to contact: Gianpaolo Todisco at gianpaolo.todisco@tsclex.com

Is SIAE’s Monopoly Over?

On July 15, the Court of Milan rendered a landmark decision, which probably establishes the end of SIAE’s legal monopoly in copyright collection in the Italian Territory.

The Court rejected the request of an injunctive relief requested by plaintiff Laura Piccinelli, a song writer member of SIAE, the Italian Copyright Collecting Society against Soundreef Ltd.  a British collecting Society  which collects copyright namely in the field of in store music broadcasting.

Soundreef licenses businesses to play on line its catalogue of over 170,000 songs licensed from artists, record labels and publishers throughout the world providing an alternative to traditional music copyright collection societies such as SACEM, BUMA/STEMRA, STIM, SIAE, SGAE and TONO.

 

Soundreef proposes to be an alternative to SIAE and withholds 50% of the royalties received by its clients and reserving the artist the other 50% and provides lower rates by 50% than SIAE.

Plaintiff argued the illegality of Soundreef’s collecting activities with respect to Italian copyright code and legislation (art. 180) which regulates copyright collecting services by granting  SIAE a legal monopoly over such activity.

Furthermore, Plaintiff also claimed potential damages for unfair competition acts in relation to the progressive acquisition by the resistant of many retail customers who have ceased to use the SIAE repertoire, which had an effect on Plaintiff’s loss of Profit.

Lastly Plaintiff requested that Soundreef was refrained from continuing any collecting activity in the Italian territory.

On the other hand, Defendant argued that it was not carrying out any collecting activity in the Italian territory as all activity was rendered in the UK and all contacts were subject to the UK Law and that the Legal Monopoly established under art 180 of the Copyright Act was in any case detrimental to Soundreef’s business activities.

In general, Soundreef argued that: (i) Ms Piccinelli does not carry out a commercial activity and therefore unfair competition rules do not apply to such case; (ii) SIAE’s monopoly would not prevent Soundreef Ltd and other European collecting societies to collect rights in Italy belonging to their members, referring the decision of the EC Commission's CISAC 16.7.2008 which involved SIAE as well; (iii) The principles laid down by the recent Directive 2014/26/UE are a major step towards the creation of the single digital market and aims in creating a single copyright and related rights in musical works accessible online, by putting in touch all of those platforms that offer a music services on the web.

In its decision, the Court of Milan rejected the request of an injunctive relief for the following reasons: (i) An artist is not an entrepreneur and therefore Plaintiff cannot claim unfair competition acts according to the Italian civil code; (ii) The CISAC decision in which SIAE was involved, acknowledged the principles of free competition in rendering services in the European Union States by companies established in the territory; (iii) The recent Directive  2014/26/UE provides for the creation of a multi territorial collecting license which shall in the future allow other collecting societies to start collecting copyright and neighboring rights across the EU and provides that artists should be able to choose the collecting society of their choice. In this sense an undeniable liberalization trend through out Europe has begun also with respect to online copyright collection.

This decision marks a new direction in copyright collection in Italy and SIAE’s exclusive right as a legal monopolist.

Will new societies soon begin collecting copyright in Italy?

First dismissal of a URS complaint for a .sexy domain name.

On May 25, 2014, the American National Arbitration Forum (NAF) delivered its 44th URS (Uniform Rapid Suspension) decision, the first in respect of a domain name bearing the .sexy TLD.

The domain name concerned, <finn.sexy> is reserved by North Sound Names. Spearheaded by Frank Schilling, also the founder of Uniregistry, which, to date, is a registry comprising of 50 new gTLDs, North Sound Names is used to store domain names in the TLDs managed by Uniregistry before they are made available to the public. It is in this context that the disputed domain name was reserved on April 15, 2014.

The domain name resolves to a parking page offering the name for sale and containing links called “First Names”, “Selfies”, “Diet”, “Fitness”, “Social Networks”, “Dating” and “Modeling.” It is to be noted that these terms are clearly detached from the business activities of the complainant, Finn.no, the largest online market in Finland.

In support of its complaint, the complainant mentions its extensive use of the Norwegian trademark FINN. This allows the expert to find that the first condition of the URS procedure has been satisfied as the domain name is identical to the trademark. With regard to the legitimate interests or the rights of the registrant, the expert notes that the latter employs the term “finn” in its common usage, i.e. referring to Finnish people. According to the expert, the registrant in fact has a legitimate interest to use this name. On the issue of bad faith, neither the fact of the domain name in dispute being offered for sale nor the notification received by the registrant from the Trademark Clearinghouse (TMCH) convinced the expert. Logically thus, the complaint was dismissed.

The URS procedure is still at an early stage and it is difficult to foresee how the case law of the centres will develop. Yet, there have been many dismissals since most proceedings are primarily concerned with clear cases of trademark abuse. A more appropriate option therefore would have been to proceed on the grounds of the UDRP (Uniform Dispute Resolution Policy). Indeed, while the rules are similar, UDRP experts espouse a more flexible approach and it is usually easier to lend credence to one’s complaint. Without entertaining any preconceived opinions about the experts’ views, it seems that a transfer unto the applicant would have been warranted.

Fair Compensation, Unfair Distribution.

On 20 June, the Italian Government signed a ministerial decree updating for the next three years the fair compensation provided for private copying of sound recordings and video recordings as provided by the Italian copyright law.

Following the controversy that continued in the past months, the minister made it clear that:

The decree does not introduce any new tax, but merely reformulate and update rates of technological devices that manufacturers will have to pay on all new products to authors and artists for granting the reproduction for personal use of musical and audiovisual works downloaded from the web. A mechanism exists since 2009 which had to be updated to the law.

The fair compensation tariffs were waiting for an update since 2012 but as the decree was passed, Altroconsumo a major guild which protects interests of private consumers immediately declared to challenge the decree in front of the administrative courts for unfair distribution of the sums collected by SIAE.

Wordpress Claims $10,000 For Dmca Takedown Censorship

Automattic, the company behind the popular WordPress blogging platform, has seen a rapid increase in DMCA takedown notices in recent years.

Most requests are legitimate, aimed at disabling access to copyright-infringing material. However, there are also many overbroad and abusive takedown notices which take up a lot of the company’s time and resources.

Last November, WordPress decided to take a stand against these fraudulent practices. The company teamed up with student journalist Oliver Hotham who had one of his articles censored by a false takedown notice. Hotham wrote an article about “Straight Pride UK” which included a comment he received from the organization’s press officer Nick Steiner. The latter didn’t like the article Hotham wrote, and after publication Steiner sent WordPress a takedown notice claiming it was infringing on his copyrights.

Through a lawsuit filed in a California federal court, WordPress and Hotham now hope to be compensated for the damage this abuse caused them.

“The information in the press release that Hotham published on his blog did not infringe any copyright because Hotham had permission to publish it. It was a press release, which by its very nature conveys the intent to ‘release’ information to the ‘press’,” WordPress’ attorney explains to the court.

The company says that as an online service provider it faces overwhelming and crippling copyright liability if it fails to take down content. People such as Steiner abuse this weakness to censor critics or competitors, and they have to be stopped.

“Steiner’s fraudulent takedown notice forced WordPress to take down Hotham’s post under threat of losing the protection of the DMCA safe harbor,” WordPress argues.

“Steiner did not do this to protect any legitimate intellectual property interest, but in an attempt to censor Hotham’s lawful expression critical of Straight Pride UK. He forced WordPress to delete perfectly lawful content from its website. As a result, WordPress has suffered damage to its reputation,” the company adds.

Since Steiner failed to respond in court WordPress and Hotham have requested a default judgment. In a recent filing they demand a total of $10,000 in damages as well as $14,520 in attorneys’ fees.

If the court agrees with the request it will be mostly a symbolic win, and hopefully a signal to other copyright holders that false DMCA takedown requests are not without consequence.

During a House Judiciary Subcommittee hearing on the DMCA takedown system earlier this year, Automattic General Counsel Paul Sieminski also stressed the importance of this issue to lawmakers,

“The system works so long as copyright owners use this power in good faith. But too often they don’t, and there should be clear legal consequences for those who choose to abuse the system,” Sieminski said. In a few weeks we’ll know if the court agrees.