Furniture and Copyright. Judgment by the CJEU of 13 May 2015 in the Dimensione Case (C-516/13)

Certain judgments of the Court of Justice of the European Union are less interesting for what they say than for what they stand for. The CJEU's judgment of 13 May (C-516/13) considers a request for a preliminary ruling in a dispute between two Italian companies in Germany. Complainants were Knoll International SpA, holders of exclusive distribution rights in certain pieces of designer furniture that have their own names, the Wassily chair; the Laccio table; the Barcelona chair, stool, couch, and table; the Brno and Prague chairs; and the Cantilever chair; defendants were Dimensione Direct Sales Srl, which was behind an advertising campaign selling reproductions that imitated those pieces of furniture, specifically targeting Germany.

 The pieces were offered for sale on the defendants' website, available in German, and through advertisements placed in German magazines and newspapers.

The starting point for the judgment is what some might think of as the core of the dispute. Under German law, the furniture in question are works of art protected by copyright. No jurisdictional issues were raised with the Court. Manufacture of the furniture in Italy did not preclude action from being taken in Germany, since the advertising was aimed at the German market and the pieces were protected in Germany.

However, there is another issue, whether offering or advertising an original or a copy of a work of art infringes the distribution right where the works are protected, even if it is not established that the advertising in question gave rise to purchase of the products.

The judgment is a reminder that the CJEU has to some degree come down on the side of a broad construction of the distribution right, understanding it to encompass other acts (contractual offers, non-binding offers and advertising) which also fall under the series of acts taken with the objective of making a sale of an object.

The CJEU has thus interpreted that Article 4(1) of Directive 2001/29 does not preclude the holder of an exclusive right to distribute a protected work from preventing an offer for sale or advertisement of the original or a copy of that work, even if it is not established that that advertisement gave rise to the purchase of the protected work by an EU buyer, "insofar as that advertisement invites consumers of the Member State in which the work is protected by copyright to purchase it".

Author: Antonio Castán

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Resale royalty right for works by visual artists – Who pays?

The resale royalty right benefiting the author of original artwork, traditionally known as the droit de suite, is, as its name implies, the right of visual artists to remuneration in the form of a royalty on subsequent resale of their works. The purpose of this right is quite clear: to enable artists to profit from the economic success of their works and thereby offset any disproportionate difference between the price at which works are sold by an artist and the price subsequently fetched at resale involving art market professionals.

This right has traditionally existed in the legal systems of most European Union countries, and a Directive to harmonize the right was issued in 2011 (Directive 2001/84/EC). The purpose of the Directive was two-fold: to ensure that visual artists effectively benefited from the right in all EU countries and to eliminate differences in the laws of the EU countries that resulted in different treatment of artists depending on where their works were sold, which ultimately was a factor contributing to distortion of the functioning of the internal market. Nevertheless, Community harmonization did not encompass all aspects of the operation of this right. Such issues as the beneficiaries of the right, the transactions and artworks subject to the right, the calculation basis, and the persons responsible for payment were addressed, but the Directive did not define, or did not clearly define, who was ultimately liable for bearing the cost of the royalty. Article 1.4 of the Directive provides that: "The royalty shall be payable by the seller. Member States may provide that one of the natural or legal persons referred to in paragraph 2 other than the seller shall alone be liable or shall share liability with the seller for payment of the royalty."

In this situation a clause in the general conditions of sale of the French art auction house Christie's France SNC for 2008 stipulated that the buyers were required to pay the house a sum equivalent to the royalty due on sales made through the said auction house that were subject to payment of the royalty  Christie's France SNC took the money on behalf of the seller and subsequently paid it to the collective management organization in charge of collecting the royalty. A competing association, the SNA, claimed that sales made by Christie's France under the aforesaid contested clause constituted unfair competition and were in breach of national law regulating the resale royalty right. The clause was voided by the Paris Cour d'Appel, and Christie’s appealed to the Cour de Cassation, which stayed the proceedings while it referred the question of whether Article 1.4 of Directive 2001/84 should be interpreted to mean that it is the seller who is definitively liable for bearing the cost of the royalty to the CJEU for a preliminary ruling.

The key issue underlying the CJEU's ruling (Case C-41/14) is doubtless the difference between the person liable for payment and the person who must definitively bear the cost. According to the CJEU, the Directive merely makes provision specifying the first issue, whereas it is silent about the second. In this regard the CJEU has held that a clause like the one in Christie's France's general conditions of sale stipulating that the cost of the royalty is to be borne by the buyer is not contrary to Community law. Basically what the CJEU has held in this judgment is that the essential objective of harmonizing the droit de suite in the Community is to ensure that artists effectively receive remuneration, and the issue of who may or should in actuality definitively bear the cost is left to the discretion of the Member States.

Author: Patricia Mariscal

Visit our website: http://www.elzaburu.es/

CJEU rules legal the technological measures preventing the use of homebrews on Nintendo consoles

The CJEU yesterday handed down a judgment (case C-355/12) resolving a request for preliminary guidance in a dispute that has arisen in Italy between the companies Nintendo and PC Box. The roots of the conflict were PC Box’s manufacture and sale of devices which, once installed in a Nintendo video game console, allow users to circumvent the piracy protection system and use counterfeit games. PC Box created the so-called homebrews expressly for use with Nintendo game consoles, and their aim is to deactivate technological protection measures so that consumers can play games by other manufacturers, listen to MP3s, and watch movies and videos.

The Italian court referred two questions to the CJEU. Firstly, whether the technological protection measures installed by Nintendo into its consoles to prevent the use of third-party programs, games and other content is in conformity with Community legislation, and, specifically, whether the concept of an effective technological measure set out in article 6 of EC Directive 2001/29 is applicable thereto. And, secondly, which criteria should be applied to evaluate the scope of legal protection against circumvention of effective technological protection measures.

(i) The first question is not without relevance, since the technological measures adopted by the complainant consist of an encryption system installed in the consoles and video games that prevents the use of video games lacking the encrypted code as well as the use of any other type of software, such as that aimed at reading MP3 files, videos or movies. According to PC Box, such technological measures go beyond the scope of the Directive, which excludes any type of interoperability between the console and equipment other than that of the company which produces the system. Recital 48 of the Directive states in this regard that the legal protection provided in respect of technological measures “should respect proportionality and should not prohibit those devices or activities which have a commercially significant purpose or use other than to circumvent the technical protection.”

Nintendo 3DS AquaOpenConsole

By Evan-Amos

Via Wikimedia Commons

However, according to the CJEU, there is nothing in EC Directive 2001/29 applicable to video games to suggest that Article 6.3 thereof does not refer to technological measures such as those used by Nintendo in its consoles. The concept of an effective technological measure is defined in a broad manner and also includes application of protection systems including encryption of the physical housing of video games such as the consoles themselves, which serves to prevent interoperability with equipment or devices lacking the encrypted code.

(ii) Secondly, the Italian court raises a question relating to the criteria or parameters in respect of which the scope of legal protection against the circumvention of technological protection measures should be assessed, and, specifically, whether account should be taken of the intended use attributed by the right holder to the product in which the protected content is inserted.

In this regard the Court holds that further to the said recital 48 of EC Directive 2001/29, the national court should take into account criteria such as the existence of other effective technological measures comparable to those adopted by the complainant, which would have caused less interference with the activities of third parties not requiring authorisation by the right holder, the costs of different types of measures, as well as other purposes of the devices used by the defendant aside from the circumvention of the technological measures and the frequency with which they are effectively used by third parties.

The fact is that a definite conclusion cannot be drawn from the CJEU’s judgment as to whether or not the homebrews manufactured and sold by PC Box are legal, since the assessment thereof is left in the hands of the national court depending on the proof of effective use provided by third parties. What has been clarified is that the concept of the effective technological measure set out in EC Directive 2001/29 also encompasses measures that serve to prevent the interoperability of a console with equipment, devices and software other than that of the company which produces the console.

By Maico Amorim

Via Wikimedia

Also of interest is the CJEU’s declaration relating to the legal definition of video games. In the Court’s opinion, video games constitute “complex matter”, comprising not only a computer program but also graphic and sound elements with a unique creative value, and should thus be protected by copyright together with the entire work, in the context of the system established by EC Directive 2001/29.

Author: Patricia Mariscal

Visit our website: http://www.elzaburu.es/

Private copying exception: not applicable to copies made from illegal sources

Yesterday, 9 January, Advocate General Pedro Cruz Villalón released his opinion in a case that once again requested further clarification on how to apply the exception laid down in Article 5.2.b) of Directive 2001/29, that is, the so-called private copying limitation (Case C-435/12) [in French].

The defendants in the main proceedings are Stichting de Thuiskopie, a Dutch entity in charge of collecting and distributing fair compensation for private copying as provided by the said Directive. The complainants are several companies that manufacture and import storage media and hence are obliged to pay compensation.

The main issue in the proceedings, which has been referred to the Court of Justice for a preliminary ruling, is whether Article 5.2.b) of the Directive is also applicable to copies of works obtained from illegal sources, and in that case whether such copies are to be included when calculating the compensation to be paid to rightholders. Unlike the legislation in other countries, like Spain, Dutch copyright law does not specify that the exception is applicable only to copies of works obtained legally. The text of the Directive does not make this distinction either.

The Dutch collecting society basically considers that since there are no effective technical means to prevent works from being copied, fair compensation payable to rightholders for private copying should also take into account copies made from illegal sources, particularly via the Internet. So doing would achieve effective compensation for the actual damage sustained by rightholders pursuant to the public availability of works on the web.

However, the Advocate General's opinion appears to take the opposite tack. Pedro Cruz Villalón maintains that, undeniably, while legislation along the lines proposed by the defendant collecting society could provide a lawful and suitable framework for addressing copyright infringement on the Internet, providing compensation for harm sustained by rightholders from this type of piracy is not the rationale for the private copying exception.

As an exception to copyright, private copying should be interpreted in accordance with the three-step test set forth in Article 5.5 of the Directive and hence should be strictly interpreted. Accordingly, this route, notwithstanding that it would allow rightholders to receive compensation, cannot be used to expand the scope of application of the exception to illegal copying, because so doing would entail making legal a practice that can only be regarded as wholly unlawful. It therefore inevitably follows that compensation for private copying should take into account only copies made from works accessed legally.

As concerns Spain, this opinion has interest because it once again calls into question the new system put into practice by Royal Decree no. 1657/2012 (in Spanish) of 7 December 2012 establishing a system of fair compensation charged against the federal budget. According to the Advocate General in Recital 43 of his opinion, compensation is to be funded by those responsible for causing harm, that is, by the physical persons making copies for private use. It seems clear that a system like Spain's is not in consonance with this interpretation.

Author: Patricia Mariscal

Visit our website: http://www.elzaburu.es/

The Berne Convention in the modern age, with Spanish legal principles as a point of reference

In the tumultuous times currently faced by copyright, the best thing to do is to go back and look for handholds at the source from which considerable rivers, tributaries and springs flowed for authors.  At a time when scientific knowledge seems to be limited to the microscopic boundaries of a 140-character “tweet” or confined to a post in a topical blog, it will be good to take our hats off to genuine scientific contributions.                  

A group of Spanish professors and experts in the field of copyright, led by the master Rodrigo Bercovitz, has just published a commentary of almost 1700 pages on the Berne Convention entitled Comentarios al Convenio de Berna which analyses, provision by provision, the intricacies of this key document in the history of copyright protection.        

The extreme importance of this Convention was consolidated by the tribute paid to it by the World Trade Organization’s TRIPS Agreement, among the tributes paid by many other international and Community initiatives. The WTO decided to adopt Berne as a legal reference framework for all countries.         

International legal doctrine did not, however, rise to the occasion.  Notwithstanding a number of isolated contributions, there did not seem to be any specific work that did justice to the magnitude of Berne’s contribution.  This void has now been filled as a result of this book with Spanish roots.                                                                                                          

Comentarios, published by Tecnos, contains the work of up to 15 university scholars, such as  Pilar Cámara, Ignacio Garrote, José Carlos Erdozaín, Nazareth Pérez de Castro and Rafael Sánchez Aristi, all of whom have proven experience in the field of copyright. It is cause for satisfaction that one of the contributing authors is the Doctor of Laws Patricia Mariscal Garrido Falla, a lawyer at ELZABURU, who provided commentaries on two of the articles of the Convention.                                       

In times of tribulations and uncertainty, it cannot hurt to utter a “long live the Berne Convention"  and delve into this transcendental study in order to find out where we came from and also to figure out where we want to go under expert guidance.

Author: Antonio Castán

Visit our website: http://www.elzaburu.es/