Tuesday 30 August 2011

Maximum Protection Conferred by EU Directive on Copyright

While we are used to interpret EU directives in the sense that they define minimum requirements the national laws have to fulfil, an exception to this rule may be found in the ECJ case (Cassina ./. Peek & Cloppenburg ), which was initiated by the BGH in the case I ZR 247/03, known as “Le-Corbusier-Möbel II”.

The defendant, a well-known brand of fashion shops in Germany, had legally bought armchairs designed by Le Corbusier in Italy. At that time, the Italian Copyright excluded furniture from protection. The armchairs have been used in Germany in a lounge in front of the changing room and as a decoration in the window of the shop.

One of the questions conferred to the ECJ was whether or not this use was a “distribution to the public” in the sense of Article 4(1) of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society.

The ECJ answered in the negative by pointing out that since the directive is intended to implement at Community level the Community’s obligations under the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, the wording of the directive needs to be interpreted in the light thereof. Those Treaties link the concept of distribution exclusively to that of transfer of ownership.

The BGH argues that the german § 17 UrhG implementing the right to distribution to the public of Article 4(1) of Directive 2001/29/EC into german law has to be interpreted in conformity with the directive. This is not very surprising. More surprising is how this conformal interpretation is achieved. The BGH argues that the purpose of the directive is not only to ensure a minimum protection but rather to harmonize the application of copyright in the information society so as to prevent a refragmentation of the internal market due to significant differences in protection (cf. e.g. recital 6 of the directive). As a consequence, the interpretation has to respect this purpose.

The latter object, however, may only be achieved if the directive also defines a maximum protection conferred in the member states.

The interesting point for me is that the same argument can not only be applied to the right to distribution to the public but generally to any right conferred by the directive 2001/29/EC. It would be interesting to systematically check the consequences of this reasoning onto the national application of copyright law rather than waiting for the pertinent decisions of the BGH.

Friday 19 August 2011

New York, New York - a helluva town

The Blog IP finance has reported an interesting case about trade secrets hidden in New York subway brakes.

The trade secrets case being interesting enough, it is even more interesting to see how a New York judge lost his professinal aloofness when it came to the subway. This is what the judge had to say:
To the parties in this case, subway brakes are known as “Brake Friction Cylinder Tread Break Units” (“BFC TBU”). For the rest of us, BFC TBU are “that loud squeaking, sparking braking system that so reliably stops the New York City Transit subway system.” ... Twenty-four hours a day and 365 days a year, the City’s subway cars safely stop at 468 passenger stations—and, as any straphanger knows, many times in between—depositing riders of all classes and descriptions at homes, workplaces, ballparks, and every other destination imaginable. See generally MacWade v. Kelly, 460 F.3d 260, 264 (2d Cir. 2006) (“The New York City subway system … is an icon of the City’s culture and history, an engine of its colossal economy, a subterranean repository of its art and music, and, most often, the place where millions of diverse New Yorkers and visitors stand elbow to elbow as they traverse the metropolis.”). The subway is an indelible feature of the City’s culture. Its legend and lore fascinate locals and visitors alike. See, e.g., Carrie Melago, It’s the Rail Thing: Subway Ride Record is Official, N.Y. Daily News, Aug. 8, 2007, at 24 (reporting that six alumni of Regis High School set a new world record for stopping at all 468 stations on a single fare: 24 hours, 54 minutes, and 3 seconds). A point of personal pride for many New Yorkers, the City’s subterranean transit has appeared in song, on stage and screen. See, e.g., Leonard Bernstein, et al., “New York, New York,” from On the Town (“New York, New York—a helluva town, / The Bronx is up but the Battery’s down, / And the people ride in a hole in the ground; / New York, New York—It’s a helluva town[!]”), as quoted in The Oxford Dictionary of Humorous Quotations 329 (Ned Sherrin, ed., 1995) (attributed to Betty Comden and Adolph Green, lyricists). The subway’s rhythm and sound have also rumbled into the canon of American literature. See, e.g., Tom Wolfe, The Bonfire of the Vanities 36 (Farrar Straus Giroux 1998) (1987) (“On the subway, the D train, heading for the Bronx, Kramer stood in the aisle holding on to a stainless-steel pole while the car bucked and lurched and screamed.”). Moving forward, our next stop is the trade secret dispute concerning the distinctive brakes used by the New York City subway system.

I wonder if the cultural importance of "that loud squeaking, sparking braking system" is of any advantage for the right owner.

Attorneys do not lie - at least not systematically

The decision discussed in my previous post has provoked a sharp reaction from the German association of attorneys at law (Deutscher Anwaltverein).

Says its president:"it is surprising that the talk is about 'systematic manipulation' whilst the 'empiric findings of the judges' are derived from specific statements of attorneys". One might wonder if finding systematic deviations from a number specific probes is not what empiricism is all about... Still, I feel that the word "systematic" has some kind of an "organized crime"-flavor whcih is maybe ideed somewhat inappropriate.

However, the rumor goes that the criminal case against the attorneys has been dropped.

Tuesday 2 August 2011

Thou shalt not lie! - The truth about the amout in dispute

Despite of the uncontestable reputation of us german patent attorneys as advocates of honesty and truthfulness, the Düsseldorf Upper District Court (OLG Düsseldorf) appears to have some doubts in this regard.

Mr. Kühnen, the chief judge of the court’s chamber specialized in IP is not the only german judge who is currently concerned about this, in particular when it comes to money.

The first thing the judges decide on in a trial in Germany is the amount in dispute, i.e. the economical value of the right under dispute. This is an important issue because not only the amount of litigation costs refunded by the underlying party but also the court fees depend on this value. In former times, the attorney’s fees to be paid by the client used to be calculated from the amount in dispute as well. This means that not only the court but also the attorneys had a financial interest in not to chose an inappropriately small value for this. Since direct information on the economical importance of the litigation is not available for the judges in most cases, they have to rely on the estimates and information obtained from the parties.

The Düsseldorf OLG and the Xth senate (responsible for patents) in the Federal Supreme Court (BGH) have both identified a recent tendency that the law firms charge their clients on an hourly basis (which is permissible if the result is higher than the one calculated on the basis of the amount in dispute). The consequence is that the parties (and their attorneys) might not have an interest in providing a reasonable estimate anymore but rather to reduce the risk of litigation by providing unreasonably low estimates for the amount in dispute.

One might think that the courts would helplessly come to terms with their fate and simply take over the flimsy numbers provided by the parties. Not so the OLG Düsseldorf!

The Düsseldorf OLG has addressed this problem in two decisions: OLG Düsseldorf, April 15. April 2010 — I-2 W 10/10 “Du sollst nicht Lügen” (you shall not lie) and OLG Düsseldorf, May 10. April 2011 — I-2 W 10/10 “Du sollst nicht Lügen II” (you shall not lie II - not yet available online, published in Mitt. 7-8/2011, 383).

In the first decision, the prevailing plaintiff had originally given an estimate of EUR 200.000 for the amount in dispute and has asked to correct this value to 30.000.000 EUR after the decision was made (in a procedure for fixing and distributing the legal costs which takes place after the decision on the main issue).

The underlying defendant did not find this very sporty and argued that his confidence in the plaintiff’s original estimate should be protected and that the plaintiff should not be rewarded for obvious lies. After all, this is just as if you were entitled to double the stakes in a poker game after not only having seen the cards of your buddy but even after the croupier has decided who has won!

Finally the amount in dispute for this case was fixed by the court to EUR 2.050.000 based on the evidence provided by the plaintiff.

The Düsseldorf OLG argued that the confidence in a lie may not be protected to the detriment of the state treasury and that the true amount in dispute is to be fixed according to the true, factual circumstances.

In the second decision, the tone is even sharper: If the parties do not suitably contribute to an adequate assessment of the value under dispute, the court may estimate a value which is sufficiently high to reliably motivate the parties to fulfil their duty to contribute in a request to correct the value under dispute. To use the picture of the poker game, the croupier is entitled to raise the stakes to a really painful amount if he is bored by the players toying with pennies only.

This is not all: if the party refuses cooperation to an adequate setting of the value under dispute, this will generally lead to the suspicion of an attempted financial fraud to the detriment of the state treasury, which may result in a criminal liability.

As an aside: an attorney who has made himself liable to prosecution will inevitably lose his accreditation. In sincerely think that this will change the way of thinking on the amount in disputeSo better keep up with the truth!
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