UK: IP Update: Service Providers, Shampoo And Stormtroopers

Last Updated: 12 September 2011
Article by Andrew Horrocks, Benjamin Craven and Alexa Scoones

The last weeks of the court term saw a number of high profile and significant rulings from four different courts in relation to intellectual property matters. This briefing note draws together these judgments to identify the key issues and trends.

L'Oréal SA and others v eBay International AG and others

In this case, the ECJ determined questions referred to it by the English High Court concerning the unauthorised sale of L'Oréal products on eBay. Brand owners like L'Oréal will be exultant at the ruling, which sees strenuous obligations being imposed on online service providers that facilitate the sale of such goods. The two points of particular note from the judgment relate to (i) the liability of operators of online marketplaces and (ii) the injunctions that may be granted against such operators.

In relation to the first point, the ECJ has indicated that online service providers will lose the benefit of the exemption from liability for intermediaries under the ECommerce Directive (which protects service providers from liability in relation to information stored by them which has been provided by a recipient of their services) if they take an active role in relation to offers of infringing goods placed on their sites. Although it was accepted that eBay stored (ie, held in its server's memory) data supplied by its customers, it was held that eBay's service went further, in particular it provided "assistance" to sellers entailing optimising the presentation of or promoting the infringing goods in question. Further, the ECJ noted that even if the service provider has not played such an "active role" it will, nevertheless, be prevented from relying on the liability exemption under the ECommerce Directive if it was aware of facts or circumstances on the basis of which a diligent economic operator should have realised that the offers for sale in question were unlawful and failed to act expeditiously in removing the unlawful material.

In relation to the second point, the ECJ has ruled that injunctions can be granted against online service providers where they do not decide, on their own initiative, to put a stop to infringements of intellectual property rights and/or to prevent future infringements from taking place.

The ruling shifts the onus more squarely onto service providers to police the use of their online marketplaces and to take active measures in the event that they become aware of infringing goods being sold via websites which they are operating. It also narrows the remit of the exemptions in the E-Commerce Directive and ensures that those operating online marketplaces are no longer able to hide behind these exemptions in order to protect themselves from liability. The decision is a welcome one from the brand owners' perspective and a cautionary shot across the bows for service providers, who are now going to have to pay much closer attention to allegations of infringing goods passing through their sites.

Twentieth Century Fox Film Corporation and others v British Telecommunications Plc

Meanwhile, in a test case of considerable significance for rights holders and Internet Service Providers (ISPs), the High Court has granted an injunction against BT to block, or at least impede access to, an indexing website that enabled file sharing. The application, which appears to be the first of its kind under section 97A Copyright, Designs and Patents Act 1988 (CDPA) (under which the High Court can grant an injunction against an ISP where the ISP has actual knowledge that their service has been used to infringe copyright), was brought as a test case by six film studios in relation to the Newzbin2 website, which enabled its members to make infringing copies of the studios' films. The studios had previously brought a successful claim for copyright infringement against a previous incarnation of Newzbin2, but the website had since relocated offshore, effectively putting itself beyond the reach of the English court. The studios therefore asked that BT, the largest ISP in the UK, block access to the website. BT resisted the injunction.

The High Court held that both users and operators of the Newzbin2 website used BT's services to infringe the studio's copyrights, and that BT had actual knowledge of persons using its services to infringe copyright, even if it could not be shown that BT had actual knowledge of a particular infringement of a particular copyright work by a particular individual. BT knew that users and operators of Newzbin2 infringed copyright on a large scale (particularly the copyrights of the studios), it knew the users of Newzbin2 included BT subscribers, and it knew those users used its services to receive infringing copies of copyright works made available through Newzbin2. The court therefore had jurisdiction to grant an injunction and did so.

The studios had made clear that, if successful, injunctions would also be sought against other UK ISPs. What is less clear is whether the case will lead to injunctions against ISPs in relation to other file sharing websites without a claim being brought against the primary infringer first. The court thought this was less likely, and noted that in this case the studios had already brought a successful claim against the website, before acting against BT. Nevertheless, the way in which rights owners can obtain an injunction against an ISP is now much clearer.

Newspaper Licensing Agency v Meltwater

The Court of Appeal has upheld the decision of the High Court that a media monitoring company, Meltwater, which provided headlines, article extracts and links to online newspaper content, and the PR companies which received them, had infringed the publishers' copyright in the original content. The Court agreed with the High Court that newspaper headlines were capable of being original literary works, despite previous English case law suggesting otherwise, and that it was inevitable that some of the extracts would constitute a substantial part of the original. However, the issue was not whether any particular extract was a substantial part, but whether it was likely Meltwater's business of providing the headline with the extract was likely to infringe the publishers' copyright. The Court thought it was, as the probability of it occurring on a regular basis was substantial.

The PR companies sought to rely on the exception under section 28A CDPA, which protects temporary reproduction where it is an integral and essential part of a technological process, such as transmission in a network between third parties with no economic significance. However, in the Court's view, the voluntary act of opening an email and clicking on a link did not fall within those requirements.

The position therefore remains that even very short extracts of text may attract copyright protection.

Lucasfilm Limited and others v Ainsworth and another

Finally, the Supreme Court, in its first IP hearing, was invited to determine whether Imperial Stormtrooper helmets were works of sculpture and thus capable of copyright protection.

The helmets, which memorably featured in the Star Wars films, have been the cause of a long-running dispute between Lucasfilm, owner of copyrights in the artistic works created for the films, and Mr Andrew Ainsworth, who was involved in the original production of the helmets and subsequently made versions of the helmets for sale to the public. In the US, Lucasfilm obtained default judgment against Ainsworth for claims under US copyright law, but proceedings in the UK were less successful, with Lucasfilm failing to persuade both the High Court and the Court of Appeal that the helmets were works of sculpture pursuant to the CDPA 1988.

The Supreme Court has now unanimously upheld the lower courts' decisions. Lucasfilm had sought to argue that the helmets had no practical function at all, and therefore their purpose was wholly artistic. However, the justices considered that the helmet was utilitarian in the sense that it was an element in the process of production of the film. It was the film itself that was a work of art.

However, the decision should sound a note of caution for English IP defendants as the justices departed from the Court of Appeal findings in one respect, and held US copyright is enforceable by the courts of England and Wales. Following a review of the jurisprudence in relation to the justiciability of claims for infringement of foreign IP rights, the justices held that, in the case of a claim for copyright infringement, the English court would have jurisdiction where the defendant is English. The implications of the judgment will thus be felt a little closer to home than a galaxy far far away.

Conclusion

These judgments show that, as the technology that we use becomes increasingly complex, so too do the questions that the courts must consider in relation to protection of intellectual property rights.

They also demonstrate that the courts are increasingly unwilling to accept that third parties caught up in infringements should bear no responsibility. ISPs in particular should be particularly cautious about these new developments which place considerably more responsibility on their shoulders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.