Technology Newsletter Issue 2/2015

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Content of the newsletter:

SKYPE Can Be Confused with SKY says General Court

The Market Court Ruled on the Obligation to Appoint a Representative in Relation to International Registrations

Parallel Import to be Legalised in Russia?

Protecting Live Broadcasts over the Internet – The CJEU’s Ruling in the C More Entertainment Case (C-279/13)

New Swedish Patent Law

The Ratification of the Agreement on a Unified Patent Court Proceeds – The CJEU Dismisses Spain’s Actions

Long-Awaited Digital Single Market Strategy for Europe Unveiled

“mtvUUTISET” and Various Other MTV Oy’s Figures Confusingly Similar to Certain “MTV” Community Trademarks

Pirate Bay Domain Names Seized by the State

Council of Europe Releases Recommendations for the Processing of Personal Data in Employment Contexts

EU Data Protection Reform: The WP29 Concerned about Proposed Provisions on Further Processing of Data

SKYPE Can Be Confused with SKY says General Court

By Kaisa Fahllund

The General Court confirmed on 5 May 2015 that the figurative and word sign SKYPE is confusingly similar to the word mark SKY. The ruling prevents Microsoft from registering a Community trademark for its voice, video, and text chat service Skype.

In 2004 and 2005, Skype applied to the Office for Harmonisation in the Internal Market (the “OHIM”) for registration of the figurative and word signs SKYPE as a Community trademark for audiovisual goods, telephony, and photography goods and computer services relating to software or to the creation or hosting of websites. The British Sky Broadcasting Group, now Sky plc and Sky IP International, filed a notice of opposition, pleading the likelihood of confusion with its earlier Community word mark SKY covering identical goods and services.

The OHIM upheld the opposition and considered that there existed a likelihood of confusion of the trademarks because of the visual, phonetic, and conceptual similarity. Skype sought annulment of this decision before the General Court, but the Court has now dismissed Skype’s actions, and by so doing, it has confirmed that a likelihood of confusion between the trademarks SKYPE and SKY exists.

The General Court argued that the word ‘sky’ remains clearly identifiable in the word ‘skype’. Phonetically, the figurative element in the shape of a border cannot produce any phonetic impression, and the phonetic impression is thus determined solely by the word element. Conceptually, the figurative element conveys no concept, except perhaps that of a cloud, which would further increase the likelihood of the element ‘sky’ being recognised within the word element ‘skype’, for clouds are to be associated with the word ‘sky’.

Concerning the argument that the ‘skype’ signs are highly distinctive because they are known by the public, the Court declared that even if the term ‘skype’ had acquired a meaning of its own for identifying the telecommunications services provided by the company Skype, it would be a generic, and consequently descriptive, term for that type of services. Lastly, the Court concluded that the peaceful co-existence of the signs in the UK concerning only a specific service did not lessen the likelihood of confusion in respect of other goods and services covered by the signs.

It should be noted that the case concerned trademark applications that, according to Sky, covered goods and services overlapping with Sky’s trademark registrations, not the use of the mark Skype.

The General Court’s entire judgement can be found on Case-law of the Court of Justice website.

The Market Court Ruled on the Obligation to Appoint a Representative in Relation to International Registrations

By Janne Joukas

The Finnish Market Court ruled in its four recent rulings (MAO:79/15–MAO:82/15) that the Finnish Patent and Registration Office’s (the “FPRO”) interpretation of the Finnish Trademarks Act has been erroneous in relation to an international trademark registration holder’s obligation to appoint a representative.

All of the four cases related to (separate) opposition proceedings, and the oppositions were based, inter alia, on the alleged confusing similarity of the international registrations recorded in the Finnish trademark register. However, the Market Court did not as such examine whether confusing similarity existed in the matters, but the cases were ruled based on the trademark holder’s obligation to appoint a representative.

According to the Finnish Trademarks Act, a trademark holder not domiciled in Finland must appoint a representative, resident in the European Economic Area, to represent the trademark holder in all matters concerning the trademark. If a representative is not appointed and the situation is not remedied, the trademark should be removed from the trademark register. As to international registrations, the FPRO’s interpretation of the legislation has been that a holder of an international trademark registration is required to appoint such representative only when the holder wishes to give a statement to the FPRO. The FPRO’s stance has been that if the holder does not wish to give a statement, e.g. in the opposition proceedings, such representative is not required to be appointed and the opposition is to be examined based on its merits.

The Market Court ruled that the Finnish Trademarks Act does not contain any provision stating that the obligation to appoint a representative would apply only to national registrations, as a similar obligation exists also in relation to international registrations designating Finland. Hence, the Market Court rejected the FPRO’s decisions and returned the matters back to the FPRO and specifically instructed that the FPRO should proceed in the matters by inquiring whether the holders of the international registrations will appoint a representative to represent themselves, and if such representative is not appointed, the international registrations shall be no longer valid in Finland.

Parallel Import to be Legalised in Russia?

By Pavel Falileev

In one of the latest meetings held by the Russian Government, the Ministers of Russia agreed that the parallel import of certain types of goods should be legalised in Russia, and a corresponding Bill was introduced by the Federal Antimonopoly Service of Russia. The exact list of goods in relation to which parallel imports will be permitted should be prepared by the competent Russian authorities by the end of May. Currently, it is proposed that the parallel import of pharmaceuticals, automotive parts, and medical devices and equipment be permitted. If the new Bill is adopted and signed, the new amendments will enter into legal force at the beginning of the year 2020.

Parallel imports are currently prohibited in Russia. This means that goods under a certain trademark may be legally imported into Russia only with the permission of the trademark owner or by the owner itself. Once the owner or the authorised person sells a product (to which its intellectual property rights are attached) in Russia, it must allow the resale of that product in Russia. This rule is referred to as the national principle of exhaustion of intellectual property rights.

It is proposed that the national principle of exhaustion of intellectual property rights be replaced for certain types of goods with international exhaustion, i.e. certain types of trademarked goods would be permitted to be resold in Russia without the permission of the trademark owner. The authors of the Bill suggest that the rights of the trademark owner should restrict parallel imports of trademarked goods only if they are produced in Russia.

What would be the possible consequences for businesses in Russia? Some experts believe that the price of the goods permitted for parallel import would become lower. However, at the same time, the increase of counterfeit goods could become a major problem for the Russian economy, and it could lead to serious problems for right holders conducting business in Russia using their authorised local distributors.

Protecting Live Broadcasts over the Internet – The CJEU’s Ruling in the C More Entertainment Case (C-279/13)

By Tom Jansson

The Court of Justice of the European Union (the “CJEU”) delivered its ruling in the third major case on hyperlinking and copyright law on 26 March 2015, following the CJEU’s earlier rulings in the same field in the Svensson case (C-466/12) and the BestWater International case (C-348/13). In the earlier judgments, the CJEU had interpreted Article 3(1) of the Copyright Directive 2001/29/EC, specifically with regard to the author’s right to decide over the “communication” of protected works to the public. Please find more information on the Svensson case and the BestWater case in our earlier newsletters (1/2014, 3/2014, and 4/2014).

This time, the CJEU was asked to interpret the right of broadcasting organisations to decide over making their broadcasts available to the public in accordance with Article 3(2)(d) of the Copyright Directive, in particular with regard to live broadcasts. This distinction is important, as the Copyright Directive does not grant the same rights to broadcasting organisations as to authors to decide on the communication of their work to the public. Broadcasting organisations only have the right to make their broadcasts available to the public, but this does not cover live broadcast. Instead, as the CJEU observed, the term “making available to the public” “is intended to refer to ‘interactive on-demand transmissions’ characterised by the fact that members of the public may access them from a place and at a time individually chosen by them”. Since the user cannot choose when to access live broadcasts, they are not covered by the term.

The background of the case is that C More Entertainment broadcasted live ice hockey matches on its website and allowed access to the broadcasts against a small fee. Following this, Mr Sandberg created links on his own website that enabled users to view the broadcasts free of charge; thereby circumventing the paywall that C More Entertainment had put in place to protect access to its live broadcasts. C More Entertainment brought charges against Mr Sandberg and the case ended up before the Högsta domstolen (the Supreme Court), which decided to refer the case to the CJEU for a preliminary ruling. The CJEU was asked to consider whether “Member States [may] give wider protection to the exclusive right of authors by enabling ‘communication to the public’ to cover a greater range of acts than provided for in Article 3(2)”.

In summary, the CJEU answered the question in the affirmative: Member States may extend the rights of broadcasting organisations and grant them the right to decide over acts of communication to the public, provided that this does not undermine the protection of copyright. In other words, the CJEU ruled that broadcasting organisations may be granted the right to prohibit others from communicating their broadcast to the public. The CJEU’s entire judgement can be found on Case-law of the Court of Justice website.

New Swedish Patent Law

By Jens Forzelius

The Patent Commission has recently delivered its final report, “New Patent Law”, to the Swedish Government. The Commission had earlier delivered its Part Report “The Patent Law and the Uniform European Patent System” in which the Commission proposed changes that were considered necessary because of the establishment of the unified patent system in the EU and the unified European Patent Court. The final report contains the Commissions’ proposals on the remaining parts of the mission, which foremost concern proposals of a modernised patent law replacing the current patent law.

According to the proposal, the current paragraphs would undergo a linguistic modernisation. Also, the new patent law and the patent regulation would be divided into different chapters with subheadings providing information on the content of the following paragraphs.

Furthermore, some of the paragraphs would be adapted to the corresponding articles of the European Patent Convention, one of which is the paragraph setting forth the conditions for the grant of a patent. The incorporation of the Convention into domestic law would, according to the Commission, simplify the application of the law in Sweden and would have the benefit of making the law more easily accessible for its users, who often work in an international field.

The Ratification of the Agreement on a Unified Patent Court Proceeds – The CJEU Dismisses Spain’s Actions

By Panu Siitonen

The Court of Justice of the European Union (the “CJEU”) has dismissed Spain’s actions in cases C‑146/13 and C‑147/13 concerning the creation of a system for the European Patent with unitary effect (the “Unified Patent”). Both judgments were delivered on 22 March 2015. This article is intended to review some statements of the CJEU concerning the main issues raised in the actions.

The CJEU clarifies that the regulation at issue is in no way intended to delimit, even partially, the conditions for granting European patents and that it does not incorporate the procedure for granting European patents laid down by the European Patent Convention (the “EPC”) into EU law. The CJEU notes that regulation merely establishes the conditions under which a European patent previously granted by the European Patent Office (the “EPO”) may benefit from unitary effect, and provides a definition of that unitary effect.

With respect to the adequate level of uniform protection of intellectual property rights throughout the EU, the CJEU points out that unitary patent protection is apt to prevent divergences in terms of patent protection in the participating Member States and, accordingly, provides such uniform protection in the territory of those States.

The CJEU specifically remarks that the EU legislature has not delegated any implementing powers which are exclusively its own under EU law to the participating Member States or the EPO. It points out that the EU per se is not a party to the EPC, and according to the Treaty on the Functioning of the European Union, it is for the Member States to adopt all measures of national law necessary to implement legally binding Union legislation. Hence it inevitably falls to the participating Member States, and not to the Commission or the Council, to adopt all the measures necessary for the implementing the contested regulation.

When it comes to the allegation of an infringement of the principle of non-discrimination as regards the language arrangement of the Unified Patent towards individuals whose language is not one of the official languages of the EPO (English, French or German), the CJEU acknowledges that the regulation differentiates between the official languages of the EU. Nevertheless, the CJEU notes that the current European patent system is complex and high in costs and hence constitutes an obstacle to patent protection within the EU adversely affecting the capacity of European businesses, especially small and medium-sized enterprises, to innovate and compete. The regulation particularly aims to create a uniform and simple translation regime for the Unified Patent so as to facilitate access to patent protection. The CJEU emphasises that the patent system as a whole is to become easier, less costly, and legally more secure. The regulation is also proportionate, as it maintains the necessary balance between the interests of applicants for Unified Patents and the interests of other economic operators in regard to access to translations of texts which confer rights, or proceedings involving more than one economic operator.

Upon dismissal of Spain’s actions, the other Member States may continue to prepare the ratification of the Agreement on a Unified Patent Court (the “Agreement”). Since our previous update (Technology Newsletter 3/2014), six Member States have ratified the Agreement, including Austria, Belgium, Denmark, France, Malta, and Sweden. Luxembourg is likely to be Member State number seven as soon as it deposits its instrument of ratification.

As reported earlier, in order to become effective, the Agreement must be ratified by at least 13 Member States including France, Germany, and the United Kingdom. Finland is currently preparing the ratification and a Government Bill concerning the subject matter is currently in process. Finland is targeting to ratify the Agreement in early 2016.

Long-Awaited Digital Single Market Strategy for Europe Unveiled

By Anssi Suominen

The rapid growth of the Internet and digital technologies has posed challenges to the EU Member States, who are under pressure in finding the balance between providing businesses with a flexible and efficient market to operate in and, on the other hand, safeguarding the fundamental rights of individuals in the ever evolving digital society. The European Commission (“Comission”) has long demanded for an integrated approach among the Member States that would help to unlock the potential of the digital economy in the EU as well as to break down unnecessary barriers and end the fragmentation between the Member States.

In order to achieve the above-mentioned goal, the Commission has on 6 May 2015 unveiled its long-awaited strategy for a Digital Single Market (the “DSM”) for Europe. The DSM, which is one of the Commission’s top priorities for the upcoming years, aims to enhance and open up digital opportunities for people and businesses in Europe by setting out a total of 16 initiatives under the three main pillars: (1) Access; (2) Environment; and (3) Economy & Society. Under these pillars, the issues range from data privacy and security, cloud services and copyright to telecommunication and consumer rights in e-commerce, to mention a few. Below, we have gathered some of the main action points and initiatives presented by the Commission.

1. Better access to digital goods and services across Europe 

• EU rules on online consumer business need to be harmonised in order to provide consumers with better consumer protection and data protection, as well as to bring more transparency in online shopping in general.
• Unjustified geo-blocking and other discriminatory practices used for commercial reasons must be prohibited so that consumers have more choice and greater access to content, goods, and services from other EU countries.
• New EU copyright rules need to be created as the current copyright laws across the EU are too fragmented and, to certain extent, old-fashioned and out of date.

2. Right conditions and a level playing field for digital networks

• An overhaul of EU telecommunication rules will be presented in order to, inter alia, offer incentives to businesses to invest in high-speed broadband and to provide equal playing field for both traditional and new market players.

• Audiovisual media rules are planned to be updated to match the needs of the developing market, meaning, for example, that the Audiovisual Media Services Directive needs to better take into account the emergence of new audiovisual market players and modern business models for content distribution.

• The roles and rules of search engines, social media, app stores, and other online platforms in the market must be comprehensively analysed in order to tackle the drawbacks of the ever growing Internet market, such as privacy violations, non-transparency, illegal contents, and misleading pricing policies.

3. Maximising the growth potential of the digital economy by reducing administrative burdens and recognising the importance of big data

• Unnecessary national restrictions on the cross-border movement of data must be removed in order to allow a free flow of data and the development of cloud services, the Internet of Things, and data mining.

• A new e-government action plan aims to reduce burdens when dealing with public administration so that business registers across Europe become better connected, different national systems can better work with each other, and businesses and citizens only have to communicate their data once to public administrations.

• Overall, the DSM aims at creating a fair environment where all companies offering their goods or services in the EU are subject to the same data protection and consumer rules.

To summarise, the DSM is an ambitious project that aims to fix numerous issues at one colossal and simultaneous stroke. Accordingly, it has already been criticised for its vague language on the concrete measures, and doubts have been raised over the feasibility of such a large-scale project. However, Andrus Ansip, the Vice-President for the DSM, was quick to announce that the strategy is just a start, not the detailed target, whilst urging Europeans to expedite the pace by stating that the 16 initiatives must be rapidly implemented to promote the creation of jobs and growth in Europe more strongly.

The Commission has established a specific DSM project team to focus and deliver on these actions. With the backing of the European Parliament and the Council, the Commission strives for a good kick-off and implementation of the project as soon as reasonably possible. The next step will be taken on 25 and 26 June when the DSM will be on the agenda for the meeting of the European Council.

More information on the DSM can be found on the Commission’s website.

“mtvUUTISET” and Various Other MTV Oy’s Figures Confusingly Similar to Certain “MTV” Community Trademarks

By Janne Joukas

In its rulings MAO:278/15 - 288/15, the Finnish Market Court found that figures “mtvUUTISET”, “mtv FAKTAXL”, ”mtv juniori”, “mtv KOMeDIA”, ”mtvTOTAL”, ”mtv LEFFA”, ”mtvKATSOMO”, ” mtv FAKTA”, ” mtv SARJA”, ”mtv MAX”, and ”mtvSPORT” were confusingly similar to Viacom International Inc.’s “MTV” community trademark registrations (No. 180943, No. 3572518, and No. 8696701). Hence, MTV Oy’s applications to register aforesaid figures as trademarks were rejected.

According to the Market Court, MTV Oy’s figure marks contained the letter combination “mtv” followed by a descriptive word, such as “UUTISET” (= news). The letter combination “mtv” was seen as the distinctive and dominant part of the marks, and such letter combination was the same as the one used in the “MTV” community trademarks. As the figures subject to the application and the “MTV” community trademarks - as well as the goods and services - were similar, MTV Oy’s figures were considered to be confusingly similar to the “MTV” community trademarks and, therefore, did not fulfil the conditions of registration.

Pirate Bay Domain Names Seized by the State

By Jens Forzelius

The Stockholm District Court recently ordered that The Pirate Bay’s two primary domain names, thepiratebay.se and piratebay.se, be seized by the Swedish Government. The decision is unique in Sweden and it is the first time that a Swedish prosecutor has requested that a domain name be permanently removed from the Internet.

Originally, the Swedish prosecutor wanted to hold Sweden’s Internet Infrastructure Foundation (.SE), the organization that handles Sweden’s top level domain names, liable for the information hosted by The Pirate Bay. However, the court ruled that the organization had not done anything illegal and therefore the court could not force it to block certain domain names.

Instead, the court ruled that the owner of a domain name could be held liable for any infringements against rightholders and that a domain name is property that can be seized from its owner in such a case. By awarding the addresses to the State of Sweden, the court effectively made sure that they will not be sold on to another owner. The decision is a result of a nearly two-year-long court battle.

Council of Europe Releases Recommendations for the Processing of Personal Data in Employment Contexts

By Erkko Korhonen

On 1 April 2015, the Committee of Ministers of the Council of Europe (the “Committee”) adopted a Recommendation on the processing of data in the context of employment. The idea of the Recommendation is to provide guidance to Member States (comprising 47 member states, 28 of which are members of the European Union) on ensuring harmonised legislation across Europe regarding data protection in employment situations and in the workplace. According to the Recommendation, employers should minimise the processing of personal data to only the data that is necessary to the aim pursued in the individual cases concerned. Thus, only the personal data that is necessary for employment purposes should be processed. Employers should also develop appropriate measures to ensure that the principles and obligations relating to data processing for employment purposes are respected in practice, and the measures should consider the possible implications for the fundamental rights and freedoms of employees, in particular their right to privacy.

The Committee is aware of the increasing use of new technologies and means of electronic communication in the relations between employers and employees. The Committee is also aware of the changes that have occurred internationally in the employment sector and related activities, notably due to the increased use of information and communication technology and the globalisation of employment and services. The recommendations are made in light of these changes.

The Committee recommends that transparency in the processing of employee data be increased and that employees be given rights to have access to their personal data and to object to the use of it. In addition, the recommendations cover many other interesting topics, such as i) limiting the collection and processing of sensitive employee data only to cases where it is absolutely necessary to process such data (and always in accordance with local law), ii) a requirement that the processing of genetic data may only be permitted in exceptional circumstances and that biometric data should be processed with appropriate technical and organisational safeguards, and iii) a requirement that employers should not require employees to give access to employees’ social media information. Furthermore, employers should also refrain from using technology designed to monitor employees, for instance video surveillance.

The Committee recommends that the governments of the Member States:

• ensure that the principles contained in the appendix to the Recommendation are reflected in the application of domestic legislation on data protection in the employment sector;

• ensure that the Recommendation and its appendix are brought to the attention of the authorities established under domestic data protection legislation which are competent to supervise the implementation of such legislation;

• promote the acceptance and implementation of the principles in the appendix to the Recommendation to ensure that the principles are well known, understood, and applied by all employment sector participants, and are taken into account in the design and use of ICT in the employment sector.

The Recommendation is available on the Council’s website.

EU Data Protection Reform: The WP29 Concerned about Proposed Provisions on Further Processing of Data

By Erkko Korhonen

The Justice and Home Affairs Council has recently discussed the reform of the EU data protection legal framework, and it has adopted a partial general approach, in particular on Chapter II of the draft General Data Protection Regulation which contains the basic principles relating to data processing. According to the Council, it will be possible for a data controller to further process data even if the purpose is incompatible with the original one as long as the controller has an overriding interest in this processing. This new possibility offered to the data controller has opened serious concerns in the data protection community and the Article 29 Working Party (the “WP29”), a body composed of representatives from the national data protection authorities of the EU Member States, is very much concerned about the proposed provisions, especially in the context of big data.

The WP29 considers that this situation would render one of the fundamental principles of the data protection framework, the purpose limitation principle, meaningless and void. Such an approach, which conflates the notions of legal basis and further processing for a compatible purpose, contradicts the EU data protection acquis and would be illegal under the current legal framework. Furthermore, it could have no other consequence than to undermine the whole new data protection framework and to dilute the level of protection for EU citizens in comparison to Directive 95/46/EC in force.