Protection of IPRs, namely trade marks and designsmarks and designs

Are we going in the right direction? A global approach on possible future scenarios

Dr. Alan Ragueneau, LL.M (UCLA, USA)

Kraft Foods Europe GmbH

Senior Counsel – Global IP

TABLE OF CONTENTTABLE OF CONTENT

1. Our understanding of the title

2. Our focus: copyright ownership2. Our focus: copyright ownership

3. A set of facts

4. Pitfall No. 1 – Works created by third parties

5 Pi f ll N 2 N f bl i h5. Pitfall No. 2 – Non transferable right

6. Pitfall No. 3 – Digital Rights

7. To sum up: need for a global approach

1 O d t di f th titl1. Our understanding of the title

• IPRs protection ©• A Global Approach on Possible Future Scenarios• IPRs protection

– it refers to the rights (as opposed to the subject

©®

All types of IP rightsregistered

and

• A Global Approach on Possible Future Scenarios

– Global meanspp j

matter of the right) ®• Namely trademark and

andunregistered• Geographical: worldwide not only EU

• Legal: ydesign

– restricted to trademark l d i d t i l d i ? 2D Intersection between the

– substantive and conflict of law analysis not only substantive

– all types of protection applicable to 2 and 3 D intangible objectslaw and industrial design?

– in our view NO, it actually refers to the subject matter of the right

2D3D

Intersection between the subject matter of

trademark law and design law

g j

– Possible Future Scenarios

ill th ld f ll th h d t d i th EU?matter of the right• will the world follows the approach adopted in the EU?

2 O f C i ht O hi2. Our focus: Copyright Ownership

• Copyright is the spearhead of IPRs’ protection

– it is potentially the first right that chronologically protects p y g g y pthe intangible element

• launch of product before completion of registration process

• copyright may be the only available tool of protection

failing to secure copyright protection can potentially – failing to secure copyright protection can potentially jeopardize other IPRs’ protection

• Invalidation of industrial design law protection (Art. 25 (1)(f) g p ( ( )( )CDR)

• Invalidation of trademark law protection (Art. 53 (2)(c) CTMR)

3. A set of facts

WORK FOR HIRE

DesignAgency

3. A set of facts3. A set of facts

• The Free Lance develops a similar logo for an American US LAW

g y• Kraft Foods files trademark and industrial design applications for

the elephant logo and the entire packaging

confectionery company

ASSIGNMENTSWISS LAWSWISS LAW

FREELANCELANCE

• This American confectionery company starts distributing its product at the same time as Kraft Foods product at the same time as Kraft Foods

– in the USA and – in France

Agreement between free lance and UK advertising

agency refers to the El h t l l h d

3. A set of facts

agency refers to the work for hire doctrine

Elephant logo created in the USAby a free

Free lance was hired by the UK advertising agency commissioned by Kraft Foods

lance

Wh l l Wh l l

Assignment of copyright between Kraft Foods and the

y

Who is the copyright owner Who is the copyright owner i h l h l ?i h l h l ?

New packaging is first commercialized

in France

What law or laws What law or laws determine(s) whether Kraft determine(s) whether Kraft Foods the UK agency the Foods the UK agency the

Kraft Foods and the UK advertising

agency

in the elephant logo?in the elephant logo?Foods, the UK agency, the Foods, the UK agency, the competitor or the free lance competitor or the free lance

is the copyright owner?is the copyright owner?Kraft brings an action

for copyright infringement against

A US competitor starts commercializing a

chocolate product with

py gpy g

US competitor before French and US court

chocolate product with similar logo elephant but totally dissimilar TM name in the USA

and in FranceCompetitor claims that h i th i ht he is the copyright owner

in the elephant logo

4. Works created by third partiesy p4.1. Applicable law - answer

• Both French and US courts may follow THREE

First approach ONE LAW should apply (in any

• Both French and US courts may follow THREEdifferent approaches (unsettled case law in each country)

• Second approach – distributive application of • Third approach – characterization of the initial • First approach – ONE LAW should apply (in any country where an act of infringement occurs or whichever court is competent): law of the country

• Second approach – distributive application of ALL THE LAWS of the countries for which the protection is claimed (lex loci protectionis) i.e.

• Third approach – characterization of the initial copyright ownership issue as one of contract, lex contractus i.e. p ) yof origin

– Traditional definition:

p ( p )– French law for copyright infringement claim in France

– German law for copyright infringement claim in Germany– If there is a choice of law clause: both French and US courts

• the law designated by the parties

• place where the work is first published (Art. 5.4 Berne Convention)

– In our set of facts

– US law for copyright infringement claim in the USA

– etc.

– If there is no choice of law clause

• French Court: Rome I Regulation (Art. 4.1.b or 4.2.) – US law, creation took place

• place of first commercialization is France, so French lawThis means that the copyright owner can change each time the work crosses a border!!!

in the USA

• US Court: Restatement 2nd (§ 188) – “Most significant relationship” test, so open

– arguably US law because place of creation, nationality of the free lance,

4. Works created by third parties

• Both French and US courts may follow THREE

4.2. Substantive law - answer

ydifferent approaches (contradictory case law in each country)

• First approach law of the country of origin• Second approach – law of the country for which • Third approach – lex contractus• First approach – law of the country of origin

– French law (country where the work is first marketed):

Second approach law of the country for which the protection is claimed

– French law for copyright infringement claim in France

Third approach lex contractus

– In the agreement between the designer and the UK advertising agency• Choice of law clause selecting US law

• Kraft Foods would not be the copyright owner • The concept of work made for hire is unknown

py g g• In France the concept of work made for hire is not recognized• It is necessary to have an assignment provision with the 5 compulsory references

set forth in art. L. 131-3 CPI

• Reference to the work made for hire doctrine

– Under US law

SO this means that the choice of law / work made for hire provision in the agreement between the free lance and the UK advertising agency is useless!!!

– US law for copyright infringement claim in the USA• Kraft Foods would be the copyright owner

• Work made for hire provides that the commissioner is the author

• So, the UK agency is the author and can transfer the copyright in the elephant logo

to Kraft Foods

THINK GLOBALThis means that Kraft Foods is the copyright owner in some countries only

This means that Kraft Foods is the copyright owner in ALL the countries of the world

4. Works created by third partiesy p4.3. Key message and practical tips

• Thinking GLOBAL!

C f i i i i h • Substantive legal concept that, at first blush, would

appear facilitating the acquisition of copyright

• Always consider copyright ownership issue from

the perspective of not only ONE legal system but

• Crafting an assignment provision that

– refers to work made for hire doctrine pp g q py g

ownership may actually be “misleading” at a global

the perspective of not only ONE legal system but

– the substantive lawS of the most important markets

refers to work made for hire doctrine

– a parachute provision that enables you to obtain as many rights as possible under the potential applicable law of the most restrictive copyright contract lawlevel

here the US work made for hire doctrine may be useless

– i.e. where the work is being heavily used and where you may have to initiate

court action

the most restrictive copyright contract law

– verify the agreement between design agency and third parties to ensure that they also embrace a global – here the US work made for hire doctrine may be useless

– because the law applied by the court may not be US law

court actionparties to ensure that they also embrace a global approach

5. Non transferable rightsg5.1. A set of facts and questions

Going back to o h pothetical•Going back to our hypothetical

– Kraft Foods wants to (i) modify the design of its packaging and elephant logo and (ii) file new trademark and industrial design applicationsand (ii) file new trademark and industrial design applications

– The US free lance claims it infringes upon his moral right and threatens to invalidate registered rights if Kraft does not pay additional moneyinvalidate registered rights if Kraft does not pay additional money

• QuestionsQ

– Is it possible to assign or waive moral right?

– What is the applicable law to determine whether it is possible to assign or What is the applicable law to determine whether it is possible to assign or waive moral right?

– How have you or would you address(ed) this issue?

5. Non transferable rightsg5.2. Applicable law – uncertainty

• Applicable law – uncertainty: THREE

• First approach: ONE law applies in all the

• Applicable law – uncertainty: THREE possible approaches

• Second approach: Distributive application of the • Third approach: mandatory rule or international • First approach: ONE law applies in all the countries where an act of infringement occurs (contract characterization, lex contractus)

• Second approach: Distributive application of the law of each country for which protection is claimed (law of the country of protection)

• Third approach: mandatory rule or international public order– French court: moral right has been labeled as

– issue is characterized as one of contract and not as one of copyright

– law of the contract between the UK agency and the US free lance

( y p )

– French law applies in France,

G l i G

gmandatory rule

• will directly apply French law in France (Huston case);• in the other countries, it may still be possible to enforce assignment of – law of the contract between the UK agency and the US free lance– German law in Germany,

– UK law in the UK,

, y p gmoral right provision (e.g. the UK and the USA)

– US court: no case law on point– etc.

p• may (but unlikely) consider applying French moral right in France • will enforce assignment of moral right provision for any country where

moral right is not labeled as a mandatory provision

5. Non transferable rights5.3. Substantive laws – divergence

• Substantive law – three approaches

• First approach (lex contractus): “ALL GOOD” or “ALL BAD”

Substantive law three approaches

• Second approach: “IT DEPENDS”, world as a patchwork

• Third approach: “IT DEPENDS”, what court is competent

– ALL GOOD:

• if the law of the contract permits the hiring agency to be the author or

p

– French law: it is not possible to assign moral right

p

– If French court:

• Protection sought in France – US free lance designer can claim moral rightif the law of the contract permits the hiring agency to be the author or permits assignment /waiver of moral right

• Kraft Foods can reject the claim of the designer

p g g

– German law: it is not possible to assign moral right

UK l it i ibl t i l i ht

• Protection sought in France US free lance designer can claim moral right

• Protection in the US – depends on the choice of law analysis

If US t – ALL BAD:

• if the law of the contract does not enable assignment or waiver of moral

– UK law: it is possible to waive moral right

– US law: moral right in industrial design does not (really) exist

– If US court:

• may consider applying French international mandatory rule for the protection claimed in France only (no case law on point)

right

• No legal ground to reject the claim of the designer• Protection claim in the US – free lance designer cannot claim moral right

5. Non transferable rightsg5.4. Substantive Law Solution

• Substantive provisions in the agreement with the creator

– Including a provision whereby the creator assigns all his right including moral right or at least waive all claims relating to moral including moral right or at least waive all claims relating to moral right

• the only risk is to have this clause invalidated if French author’s right y gapplies

• the advantage is that at least Kraft Foods will avoid moral right issue in countries where moral rights can be transferred

5. Non transferable rightsg5.4. Conflict of laws solution

• Choice of law provision in the agreement with the creator

• Arbitration clause

•possibility to choose an arbitrator with real expertise

•Including a choice of law clause whereby the law of the country where transfer of moral right is possible

•possibility to choose an arbitrator with real expertise in choice of law for IP law

the country where transfer of moral right is possible

•and expressly stating that parties consider alienation

•maybe easier to convince the arbitrator to accept your characterization

of moral right issue (and more generally transferability of copyright issues) as one of contract and not as one of copyrightand not as one of copyright

6. Digital rightsg g6.1. A set of facts and questions

• Going back to our hypothetical• Going back to our hypothetical

– Kraft Foods wants to use • an old elephant logo

• on www.cotedor.com that targets specific countries (e.g. France and Spain)

• server hosting the website is located in Germany and controlled by KFD GmbH

– The assignment agreement executed with the physical person The assignment agreement executed with the physical person who created the elephant logo does not refer to online exploitation…

• Questions– Is Kraft Foods entitled to use the old elephant logo on its webpage?

– What is the applicable law to determine whether it is possible to exploit the work online?

6. Digital rightsg g6.2. Applicable law – double uncertainty

• Applicable law – uncertainties: THREE

• Three possible

• Applicable law – uncertainties: THREE possible approaches and application “online”

• Characterization as copyright issue: lex loci Three possible approaches:

– Characterization as a – No (or less) additional

complexity arising out of

py gprotectionis – how does it apply online?

– In Francecontract issue – lex contractus

Ch i i

p y gdigital networks context

In France

• Art. 8.1. Rome II Regulation (no response)

• Most recent case law – lex loci protectionis = lex loci delicti (possibly in – Characterization as a

copyright issue – lex loci originis or lex loci

– Additional complexityarising out of digital

p (p ythe context of complex tort)

– either the law of the country where the infringing act occurs– or the law of the country where the damage is felt– whichever law is the most closely connected to the litigation

protectionis

– Mandatory rule – (doubtful)

g gnetworks context

whichever law is the most closely connected to the litigation

– In our set of facts• either German law alone (place of control of the website) • or distributive application of French and Spanish law (no complex tort)

6. Digital rightsg g6.2. Applicable law – double uncertainty

S b t ti l t ibl l ti• Substantive law – two possible solutions

• Solution number 1 – law of the place of the • Solution number 2 – distributive application pcontrol of the website - Germany

ppof Spanish law and French law– Spanish law for the Spanish version of the website– German law alone

• Art. 31(4) UrhG prohibits the exploitation by means unknown at the time of the grant of the right

• Art. 43.5 Spanish IP Law – prohibition of transfer of exploitation for unknown means at the time of the transfer

• Kraft Foods does not have the right in the old elephant logog g

• Kraft Foods does not have the right in the old elephant logo– French law for the French version of the website• Art. L. 131-6 CPI – exploitation for unknown means possible but must

be expressly mention and correlative remuneration set forthbe expressly mention and correlative remuneration set forth

• Kraft Foods will have the right to exploit the logo online provided there was an express provision regarding unknown means of exploitation

7. To sum upp7.1. Are we going in the right direction?

• Adding an additional uniform layer of protection (Community design) is positive for brand owners

• However, this presentation shows the , pshortcomings of the approach adopted in the EU

copyright may jeopardize this additional layer of protection – copyright may jeopardize this additional layer of protection

– acquisition of copyright is an uncertain endeavor

7. To sum upp7.2. Possible Future scenarios

• Assuming that cumulative protection is the approach adopted at an international level, there is a timely need for

– harmonization of substantive rules relating to initial copyright ownership issue

• author’s right (right vests in the physical person) v. copyright approach (employer or commissioner is the author of the work)

• special regime for work of applied art as it was done for computer but encompassing employment work and commissioned work

– choice of law rule relating to copyright ownership issue • if work created within a contractual relationship: lex contractus• if work is created a outside contractual relationship: place of first if work is created a outside contractual relationship: place of first

exploitation

Thank you!

Q & A?Q & A?