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Technology Newsletter Issue 4/2014

10 December 2014

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Content of the newsletter:

CJEU Ruling in the BestWater Case – Is “Framing” a Form of “Communication to the Public”?

Finnish Courts Adopt Stricter View on Reputation Parasitism

Trademarks - New Common Practice Regarding the Likelihood of Confusion in the EU

CJEU Ruling on Grounds for Refusal of Registration in Relation to Shape Trademarks

Revision of the Finnish Trademarks Act in Progress

New Mass Media Ownership Restrictions in Russia

Data Protection Aspects of Big Data Considered by Data Authorities

Updates on Amendments to Russian Data Protection Law

WP29 Adopts New Opinion on the Internet of Things

WP29 Adopts Guidelines on Interpretation of CJEU’s “Right-to-Be-Forgotten” Case

Information Society Code Due to Enter into Force in Finland in 2015

CJEU Ruling in the BestWater Case – Is “Framing” a Form of “Communication to the Public”?

By Tom Jansson

The Court of Justice of the European Union (“CJEU”) issued a ruling in the BestWater International case (C-348/13) on 21 October 2014. The case concerned the embedding of copyright protected material on one’s website by means of “framing”. Framing is a way of linking content over the internet so that content from another website appears within a frame on the website containing the link.

The CJEU had discussed linking to copyright protected material earlier this year in the Svensson case (C-466/12) in which it decided that linking would only constitute a “communication to the public” within the meaning of Article 3(1) of the Copyright Directive 2001/29/EC if the content linked to had been communicated to a “new public”, in other words, if the link communicated the content to an audience that could not already access the content via the original website. Please find more information on the Svensson case and the BestWater case in our earlier newsletters (1/2014 and 3/2014).

The background of the BestWater case is that BestWater had made a promotional video which was later uploaded to YouTube, apparently without BestWater’s consent. The video then appeared on the website of BestWater’s competitor by means of framing. BestWater objected to the use of the video in this way and claimed that it constituted a “communication to the public” within the meaning of Article 3(1) of the Copyright Directive.

The case was referred to the CJEU by the German Federal Court of Justice (Bundesgerichtshof) which asked the CJEU to decide whether the embedding of another person’s work, which had been made available to the public on a third-party website, constituted a “communication to the public” even where the work was not communicated to a “new public” and the technical means used for the communication did not differ from the original communication.

Relying on its earlier decision in the Svensson case, the CJEU found that framing content that had been made publicly available on another website did not constitute a communication to the public since the content had not been communicated to a “new public”. The CJEU did not, however, address BestWater’s objection that the content had been uploaded to YouTube without its consent, and there still remains some uncertainty as to whether the material that is linked to must have been made available with the copyright holder’s consent. It is expected that the CJEU will have to address this issue in more detail in its future decisions.

Finnish Courts Adopt Stricter View on Reputation Parasitism

By Ilona Tulokas

Reputation parasitism (“maineen norkkiminen” in Finnish and “renommésnylting” in Swedish) is a term used to describe the exploitation of the goodwill of a competitor’s trademark, product, business concept, etc. Reputation parasitism may, for example, take place in the context of selling look-alike products or mimicking a well-known trademark as well as copying wider business concepts. Until a few years ago, reputation parasitism was not, as such, forbidden in Finland, provided that consumers were not misled as to the commercial origin of the product, trademark, or concept. Hence, one could imitate the looks of a competitor’s product packaging, as long as it did not infringe any intellectual property rights, provided that consumers did not mix up the products.

In 2012, the Finnish Market Court changed its views regarding reputation parasitism and confirmed that reputation parasitism can be forbidden in Finland also under the existing legislation. Hence, the Market Court took an old provision of law and expanded its interpretation. Section 1(1) of the Finnish Unfair Business Practices Act was interpreted in a new way and it was confirmed that reputation parasitism can basically be deemed to violate good business practice or to otherwise be unfair to other entrepreneurs.

In a judgment given a few weeks ago (MAO:809/14), the Finnish Market Court took stands on an alleged reputation parasitism regarding a trademark when Valio claimed that Bunge was exploiting the goodwill of its trademarks with reputation (VOIMARIINI and OIVARIINI) by registering and using the trademark KEIJURIINI. The Market Court stated, inter alia, that Bunge’s actions did not cause confusion among consumers regarding the commercial origin of Keijuriini, and the Market Court found, contrary to the opinion of the Finland Chamber of Commerce, Bunge not guilty of violating a good business practice and hence, not guilty of reputation parasitism.

To conclude, it can be stated that even if it has been confirmed by the Market Court that reputation parasitism can be found to be contrary to Finnish law, trademark owners have yet had a hard time convincing the court that their hard-earned goodwill has in fact been unlawfully exploited. At least in the most recent Finnish case regarding reputation parasitism referred to above, the Market Court’s message seem to be somewhat in contradiction with earlier reputation parasitism cases as the court states that whether consumers are actually mislead as to the origin of the product can still be of relevance today when it comes to reputation parasitism. It is interesting to see what the future holds as regards reputation parasitism case law as the court’s interpretation of the law still seems to be in development.

Trademarks - New Common Practice Regarding the Likelihood of Confusion in the EU

By Petra Lennhede

On 2 October 2014, the trademark offices of the European Union published a Common Communication on a new common practice regarding the impact of non-distinctive/weak components of marks in the examination of the likelihood of confusion (relative grounds of refusal). The Common Practice aims to increase transparency, certainty, and predictability for examiners and users alike. According to the Common Practice, when marks covering identical goods and/or services coincide in a component which has no or low distinctiveness, it will not lead to the likelihood of confusion unless the overall impression of the marks is highly similar or identical.

The Common Practice, which is the fifth project in the context of the Convergence Programme through the European Trade Mark and Design Network, will be implemented within 3 months of the date of publication of the communication by all trademark offices in the European Union (except Italy and Finland) as well as in Iceland, Norway and Turkey. The Office for Harmonization in the Internal Market (OHIM) will incorporate the Common Practice in its Guidelines.

CJEU Ruling on Grounds for Refusal of Registration in Relation to Shape Trademarks

By Petra Lennhede

The Court of Justice of the European Union (the “CJEU”) recently issued a ruling in the Tripp Trapp children’s chair case (C-205/13) regarding the grounds for the refusal or invalidity of the registration of a trademark consisting of the shape of a product. Pursuant to the EU law, a trademark consisting exclusively of a shape which results from the nature of the goods themselves or which gives substantial value to the goods cannot be registered.

The current dispute started when Stokke A/S and others (“Stokke”) brought action against Hauck GmbH & Co.KG (“Hauck”) claiming that the company’s sale of the children’s chairs “Alfa” and “Beta” was infringing, inter alia, its trademark of shape, i.e. the Tripp Trapp chair. Hauck made a counterclaim for the invalidity of said trademark. The Supreme Court of the Netherlands referred the questions to the CJEU for a preliminary ruling.

The CJEU ruled that the concept of a shape which results from the nature of the goods themselves means that shapes containing essential characteristics inherent to the generic function or functions of such goods shall be denied registration. Furthermore, the CJEU stated that the concept of a shape giving substantial value to the goods should not be limited purely to the shape of products having only artistic or ornamental value.

Finally, the CJEU concluded that the grounds for the refusal of registration in the Trademark Directive operate independently of one another wherefore, if any of the criteria is satisfied, a trademark consisting exclusively of the shape of the product or of a graphic representation of that shape cannot be registered.

Revision of the Finnish Trademarks Act in Progress

By Janne Joukas

The Finnish Ministry of Employment and the Economy has published a draft Government Bill proposing changes to the Finnish Trademarks Act (7/1964, as amended). The draft Government Bill has been circulated to relevant stakeholders for comments.

The draft Government Bill proposes a partial reform of the Trademarks Act – namely renewing Chapter 1 of the Act – and the main goal is to revise the content and the wordings to be more in line with the Trademarks Directive and the trademark case law of the Court of Justice of the European Union. As such, the proposed amendments would not lead to any major changes to the current legal state.

The revision would include, inter alia, changes to the wordings regarding the scope of protection, limitations, and the protection of well-known marks, as well as some changes to the administrative practices relating to the registration process. A more thorough reform of the Trademarks Act may still be ahead in the near future, subject to the progression and implementation of the ongoing EU trademark legislation reform.

The full draft Government Bill can be found in Finnish at the Ministry of Employment and Economy’s website here.

New Mass Media Ownership Restrictions in Russia

By Pavel Falileev

Amendments to Federal Law No. 2124-1 on Mass Media of 27 December 1991 were introduced into law by the Russian President on 14 October 2014. These amendments will prohibit foreign states, international organizations, organizations under their control, foreign legal entities, and Russian legal entities with 20% of their share capital under foreign ownership, foreign citizens, stateless persons, citizens of the Russian Federation with dual citizenship, jointly or individually, from owning or in any other manner controlling over 20% of a mass media outlet as of 1 January 2016. To some legal entities the new law will be applied as of 1 January 2017.

Any failure to comply with the law may result in the loss of corporate ownership rights, invalidation of any transactions resulting in a violation of the information above, and/or suspension of the activities of the media outlet.

Data Protection Aspects of Big Data Considered by Data Authorities

By Erkko Korhonen

Recently, big data has been noted as one of the key economic assets in the market. While presenting great opportunities, the massive amount of data entails new kinds of challenges both for processing and privacy. Big data is a catch-phrase used to describe a massive volume of structured and unstructured data which is too diverse, fast-changing, or massive to be handled by using today’s widely available mainstream solutions, techniques, and technologies. Big data covers a large number of data processing operations, some of which are already well-identified while others are still unclear and many more are expected to be developed in the near future.

The size and complexity of the data require new ideas, tools, and infrastructure, not to mention the right legal framework, system, and technical solutions to ensure privacy and data security. From a legal perspective, big data is also expected to present numerous challenges with respect to ownership of the data and liability issues. In consequence of the growing interest and the acknowledged risks of big data, the Berlin Group (a working group consisting of data protection authorities and telecom organizations) recently released an international guideline for securing citizens’ privacy when handling big data. The Working Paper includes key principles which are to be taken into account when processing and exploiting personal data as part of big data. The entire Working Paper from the Berlin Group can be viewed in English here.

In addition, the data protection authorities of the European Union, represented in the Article 29 Working Party (WP29), have briefly touched the topic of big data in the statement adopted in September 2014. In its statement, the WP29 provides, inter alia, the following key messages:

  • The benefits to be derived from big data analysis can be reached only under the condition that the corresponding privacy expectations of users are appropriately met and their data protection rights are respected.

  • The EU legal framework for data protection is applicable to the processing of personal data in big data operations. Directive 95/46/EC and other relevant EU legal instruments are part of this framework.

  • The WP29 acknowledges that the challenges of big data might require innovative thinking on how some of these and other key data protection principles are applied in practice. However, at this stage, the WP29 has no reason to believe that the EU data protection principles are no longer valid and appropriate for the development of big data.

  • On the basis of these shared experiences, the WP29 recently released a number of policy documents which are relevant to the analysis of privacy concerns raised with regard to big data – e.g. Opinion 3/2013 on purpose limitation, Opinion 5/2014 on anonymisation techniques, Opinion 6/2014 on legitimate interests, or Opinion 1/2014 on the application of necessity and proportionality concepts and data protection within the law enforcement sector.

  • The WP29 believes that increased cooperation is needed between data protection authorities and other competent authorities around the world in order to provide unified guidance and operational answers on the implementation of data protection rules to global players and to implement joint enforcement of these rules.

Updates on Amendments to Russian Data Protection Law

By Pavel Falileev

The debate continues in Russia among specialists and government officials regarding the amendments to be introduced to the personal data laws in Russia requiring personal data processing to be conducted in Russia as of 1 September 2016.

As a result of the public outcry and active participation of the business community in Moscow, the law whereby these amendments would become effective on 1 January 2015 has not been enacted. As a result, the amendments discussed in our previous article will, at this point, only enter into force on 1 September 2016.

Hannes Snellman’s lawyers in Russia are actively working with other business representatives on all open issues related to these amendments and they have been active in seeking official explanations together with business associations from government officials.

We will keep you updated in the upcoming issues of HS Technology Newsletter on the enforcement practices and possible changes to the recent amendments of personal data and mass media legislation.

WP29 Adopts New Opinion on the Internet of Things

By Erkko Korhonen

The Article 29 Working Party (WP 29), composed of representatives of data protection authorities from every European country, has recently published an Opinion on data privacy issues surrounding the development of the “Internet of Things” (IoT). In the Opinion, the WP 29 addresses the data protection and privacy challenges that arise from the phenomenon of 30 billion devices being connected to the internet by 2020 as well as the recommendations to parry these.

In its Opinion, the WP 29 focuses on three types of devices currently included in the concept of IoT. These devices are:

  • Wearable Computing: everyday objects and clothes, such as watches and glasses, in which sensors are included to extend their functionalities. The availability of an API (application programming interface) for wearable devices also supports the creation of applications by third parties who can thus get access to the data collected by those devices

  • Quantified Self Things: devices that are designed to be regularly carried to record information about the habits and lifestyle of the carrier (e.g. sleep patterns). These devices record information that may be considered health data, which EU law classifies as sensitive data

  • Home Automation (“Domotics”): connected home or office devices, such as light bulbs, alarms, washing machines, or thermostats. Most home automation devices are continuously connected and may transmit data back to the manufacturer. Data protection and privacy challenges arise as an analysis of the usage patterns is likely to reveal the inhabitants’ lifestyle details, habits, or choices.

The WP 29 identified a number of data protection challenges arising from the IoT and the huge increase in the amount of data being processed. Such challenges include excessive self-exposure due to the user’s lack of control over the data, unauthorised data usage for secondary purposes (repurposing), and the limitations to the possibilities to stay anonymous if the wearable devices collect and transmit the user’s exact physical location. As a solution to these challenges, the WP 29 instructs data collectors and processors to consider data protection and privacy laws and lists the cornerstone principles to follow. Given the significant change in the collection of data and the issues the WP 29 addresses, EU regulatory measures are expected to follow.

The opinion of the Article 29 Working Party can be viewed here.

WP29 Adopts Guidelines on Interpretation of CJEU’s “Right-to-Be-Forgotten” Case

By Erkko Korhonen

Following the judgment of the Court of Justice of the European Union (CJEU) of 13 May 2014 in Google Spain case regarding the “right to be forgotten” (C-131/12, for more detailed analysis on the decision, please see HS Technology Newsletter 2/2014 and 3/2014), the European data protection authorities, assembled in the Article 29 Working Party (WP29), have on 25 November 2014 adopted the guidelines on the implementation of the CJEU’s judgment containing the common interpretation of the ruling as well as the common criteria to be used by the data protection authorities when addressing complaints.

The WP29 guidelines recall that the CJEU ruling confirmed the applicability of Directive 95/46/EC to a search engine insofar as the processing of personal data is carried out in the context of the activities of a subsidiary on the territory of a Member State.

The WP29 also emphasises the fact that according to the CJEU’s judgement the “right to be forgotten” only applies to search results made by using person’s name and would not require removal of links to search results altogether, meaning that the original site may still continue to be accessible e.g. by using other search terms.

According to the WP29, de-listing decisions must be implemented in such a way that they guarantee the effective and complete protection of data subjects’ rights and that EU law cannot be circumvented. Thus, in order to avoid the circumvention of the CJEU’s judgement, the removal of links cannot be limited to the 28 EU country domains but should also be effective on all relevant .com domains (e.g. global google.com).

The forthcoming WP29 guidelines on implementing the search de-listing ruling will include a list of the 13 main “common criteria” which data protection authorities can use to handle appeals where a search de-listing request has been refused. Each of the criteria has to be read in light of the principles established by the CJEU and in particular in light of the “the interest of the general public in having access to the information”.

Information Society Code Due to Enter into Force in Finland in 2015

By Anssi Suominen

The Finnish Government approved the new legislation on electronic communications (the “Information Society Code” or the “Code”) on 6 November 2014, and the Code will, for the most part, enter into force on 1 January 2015. The Information Society Code gathers several former acts under the same umbrella, inter alia, in the fields of e-privacy, telecommunications market, data security, television and radio activities, and domain name services.

While majority of the changes are technical by nature, some of the main updates to the current legislation will be made in relation to issues concerning data and information security, such as the following:

  • Cross-border effect broadened: In case the provider of a service is located outside the EU, certain provisions regarding the protection of confidential communications and privacy will nevertheless apply, if such providers maintain or use devices for the transmission of communications in Finland or if the user of a service is in Finland and it is evident that the services are otherwise targeted to Finland or Finns.

  • Definition of a “communications provider” is introduced. Obligations relating to the protection of privacy in electronic communications and data security would be extended to concern all providers and conveyors of communications (excluding private use). Hence, it appears that the legislator aims to extend the scope of the Code in this respect to the Internet-based services as extensively as possible. In addition, for example the following amendments will be made in relation to consumer protection and access to universal services:

  • Joint liability of the operator and the seller in mobile payments: The Code introduces joint responsibility of the telecommunications operator and the company selling the product or service in situations where a consumer orders and pays for the product or service via mobile. According to the Code, a consumer who has the right (i) to refrain from paying or (ii) to receive a refund from the seller due to the seller’s breach of contract will have the same right in relation to the telecommunications operator that has charged the consumer for a product or service.

  • Access to the Internet’s universal service connection is improved: In the future, telecommunication operators are obligated to inform their customers of and offer them universal service products more actively than thus far.

However, like the current legislation, the Code does not seem to take Internet-based services into great or particular consideration. For example, based on the justifications presented in the Government Bill, the interpretations of, inter alia, the “communications service” and “telecommunications operator” continue to be interpreted, to a large extent, in accordance with the old principles and, despite the attempt, no new and more concrete law-level interpretation instructions are presented for said definitions. As a result, there will still be grey areas in this respect, and the Finnish Communications Regulatory Authority seems to have been given wide powers of interpretation with regard to the applicability of the Code to the businesses operating in communications market.

As reported in our Technology Newsletter 1/2014, the Code aims to flexibly ensure that electronic communications services are available throughout Finland. However, it remains to be seen how flexibly (i) such an extensive and fragmental legislative package can adapt to the ever-changing circumstances and developments in the field of technology business and (ii) any prospective EU-level regulatory changes can be incorporated into the national legislation.

 

Disclaimer: Hannes Snellman Technology Newsletter is intended for information purposes only. It should not be relied upon as legal advice nor should it be used as a basis for any action or final decision without specifically verifying the applicability and relevant issues on their merits in each individual case.