Ireland IP & Technology Law Blog : Dublin Lawyers & Attorneys for Intellectual Property, Communications & Information Technology Law in Ireland, U.S. & England

The German Government has presented a draft law governing workplace privacy.  The bill includes a proposal which restricts prospective employers from viewing Facebook profiles of potential candidates and would make it illegal for them to become a Facebook friend with an applicant in order to view their private postings.

Facebook has about 10 million users in Germany and there are currently no rules in place that regulate the use by companies of Facebook data.

Under the bill, employers would still be permitted to conduct a search for publicly accessible information about prospective employees on the internet. They would also be entitled to access information on job networking sites (as opposed to purely social networking sites) such as LinkedIn.

The German Interior Minister acknowledged that some of the new regulations might be complicated to enact and stated that if an employer turns down an application from a potential employee it might be difficult to prove that the reason for doing so was on foot of the content of Facebook postings.

The penalties proposed under the bill are substantial: A rejected job applicant who proves they have been rejected for a position based on violation of the new law could take a company to court claiming damages and fines of up to €300,000 could be imposed on employers that become friends with prospective employees in order to glean personal information from their postings.

Peter Schaar, the German Commissioner for Data Protection and Freedom of Information, endorsed the proposal stating it was “a substantial improvement on the status quo in dealing with employees’ data”. That may be the case, however it is difficult to see how this new law will be enforced.

The bill will go to the German Parliament to be debated when we will see how it develops. There are no similar proposals in Ireland but it is interesting to see how other EU countries are tackling this issue - if it succeeds there will no doubt be a political will for similar protections in Ireland.
 

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The recent UK High Court case of SAS Institute Inc. –v- World Programming Limited marks a significant legal development for software developers in relation to the scope of copyright protection for computer software and source codes in the European Software Directive. The UK High Court has ruled that copyright protects the source code of the software program as a literary work but that the replication of software functionality without access to source codes, at whatever level of detail, is not an infringement of copyright. The judgment has been referred to the European Court of Justice (ECJ) for confirmation of this interpretation of the Software Directive.

SAS Institute Inc. (SAS), one of the world’s largest developers of analytical software, lost it’s case in the UK High Court against World Programming Limited (WPL) for the misuse of the SAS Learning Edition, breach of licence terms, copyright infringement and other IP infringements in respect of it’s SAS System.

WPL developed it’s own language interpreter software product called World Programming System (WPS) to execute application programs written in the SAS Language and which emulated the functionality of the SAS Components in direct competition with SAS’s own products. The WPS software was created without access to SAS’s source codes.

Arnold J held that EU law protected WPL from breach of SAS's licence terms where WPL used the SAS Learning Edition to observe, study and test its programming functions when it developed it's WPS software product.

While the precise wording of the reference to be made to the ECJ is yet to be formulated, it will seek confirmation as to whether programming languages, interfaces and functional aspects of software are excluded from protection under Article 1(2) of the Software Directive and the extent of the exclusion from infringement for acts of observation, studying and testing of a program under Article 5(3).
 

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The first Interactive Advertising Bureau, Ireland (IAB) and PwC adspend study has revealed that:

• online advertising in Ireland approached the €100m threshold in 2009; and
• the online advertising sector achieved 10% of Irish adspend in 2009.

The study shows the importance of the Irish online advertising industry, and its resilience during recent economic conditions.  The growth in online advertising in Ireland also reflects the fact that more Irish people are now online. A report published this month by the Commission for Communications Regulation (ComReg) shows that PC and/or laptop ownership continues to grow in Ireland and that over three quarters of Irish adults use the internet for personal use.

With 75% of the participants in the IAB/PwC study predicting growth or strong growth in 2010, the outlook for the Irish online advertising industry is very positive.

For more information on the IAB/PwC adspend study, click here, and click here to be directed to the link to the ComReg study.

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The EC Commission has launched this month a public consultation on the future of electronic commerce in the internal market, and the implementation of the Directive on electronic commerce (2000/31/EC) (the Directive).

The Commission wishes to undertake the consultation for two reasons namely, it wishes to study the many reasons for the limited takeoff of e-commerce in the EU and to evaluate the implementation of the Directive.

All interested parties are required to submit their responses to the questionnaire by 15 October 2010. The Commission has specified target groups from whom comments would be particularly welcome, for example Ministries responsible for various aspects of e-commerce; economic operators of the information society; the regulated professions – pharmacists, lawyers and magistrates; consumers and consumer associations; and rightsholders and organisations representing them.

The Commission is seeking the views of interested parties on the following subjects:

• the level of development of information society services;
• issues concerning the application of Article 3(4) of the Directive by Member States – which concerns Member States’ ability to take measures to derogate from the general principle that Member States must not restrict the freedom to provide information society services from another Member State;
• contractual restrictions on cross-border online sales;
• cross-border online commercial communications, in particular by the regulated professions;
• the development of online press services;
• the interpretation of the provisions of the Directive concerning the liability of intermediary information society service providers;
• the development of on-line pharmacies; and
• the resolution of on-line disputes.

The questionnaire is available online here.

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The European Communities (Audiovisual Media Services) Regulations were adopted on 3 June 2010.  These Regulations transpose the remaining parts of the Audiovisual Media Services Directive, which was published in the Official Journal of the European Communities on 18 December 2007.  The Regulations include provisions in respect of on-demand audiovisual media services and subject providers of such services to regulation by the Broadcasting Authority of Ireland.

Click here to view the new Regulations.

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The European Commission has recently adopted the new Vertical Restraints Block Exemption Regulation and Guidelines (VRBE).  These rules came into force on 1 June 2010 but provide for a one year transitional period for existing agreements. They will remain in force for a period of 12 years. The new VRBE reflects developments in the past 10 years, most notably the growth of the internet as a tool for online sales.

The regulation exempts a wide range of vertical agreements from the prohibition on agreements that restrict competition. It does not apply to agreements containing ‘hardcore restrictions’ whose ‘object is to segment markets to the detriment of consumers’.

The new rules address the question of online sales. The guidelines provide examples of restrictions online that would be considered ‘hardcore’ restrictions. These include agreements requiring a distributor to:

(a)        prevent customers located in another territory from viewing its website or automatically rerouting its customers;

(b)        terminate a transaction over the internet once credit card data reveals an address that is not within the distributor’s territory;

(c)        limit the proportion of overall sales made over the  internet - this does not exclude a supplier requiring a buyer to sell at least a certain amount of products offline in order to ensure an efficient operation of its brick and mortar shop; and

(d)        pay a higher price for products intended to be resold by the distributor online, than for products intended to be resold offline.

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The ECJ has ruled that Anhueser-Busch InBev should be restricted from registering the word ‘BUDWEISER’ as a Community trade mark.  This decision puts this particular aspect of the long running legal battle between the two parties to an end.  The drama began on 1 April 1996 when Anheuser-Busch filed an application with OHIM for registration as a Community Trade Mark of the word sign ‘BUDWEISER’.

Anheuser Busch still holds the trade mark rights for the words ‘BUD’ and ‘BUDWEISER’ in 23 EU countries, and the decision to refuse registration of a Community trade mark has no bearing on the standing of these EU national rights.

It remains to be seen what the next chapter of this interesting legal battle will bring.
 

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The United States Copyright Office has granted an exemption to the Digital Millennium Copyright Act 1998 (DMCA) that purports to legalise what has become known as "jailbreaking".  According to reports, users can now legally modify their phones to switch networks and run applications not sanctioned by the device manufacturer. Under previous rules, users could be penalised on two grounds for this activity - both for violating the DMCA and breaching the contract in the form of the Licence Agreement between the user and device manufacturer.  However, as a result of the ruling on 27 July 2010, device manufacturers can only accuse users of breaching their Licence Agreement.

Users should be aware that any modification of a device's software may render the device manufacturer's warranty void - in this regard, the device manufacturer is under no obligation to enable jailbreaking on the device and jailbreaking can lead to an unusable or "bricked" device.

The ruling of the US Copyright Office can be found at: www.copyright.gov/1201/
 

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A decision in the US district court has declared that Google-owned website YouTube is not guilty of copyright infringement when users post videos to the site without permission. The Court ruled that liability for copyright infringement only arises once a copyright owner makes YouTube aware of any illegal videos on its site and it fails to act to remove them from its site.

Viacom issued proceedings in 2007; it claimed that YouTube's business was based on copyright infringement and that it profited from the unauthorised use of its copyrighted material.

The Digital Millennium Copyright Act (DMCA) in the US allows online service providers to avoid liability for hosting their users' illegal actions and absolves them of any duty to monitor their service for breaches of the law. Once companies are told of a breach in the law they must act quickly, to the extent they can, to remove the content or become accountable, according to the safe harbour provisions of the DMCA.

Viacom argued that safe harbour protection did not apply to Google because it knew that infringement was taking place on a massive scale. The Court held that it would be improper to hold Google and YouTube liable under federal copyright law merely for having a "general awareness" that videos might be posted illegally: "Mere knowledge of prevalence of such activity in general is not enough. That is consistent with an area of the law devoted to protection of distinctive individual works, not of libraries…The present case shows that the DMCA notification regime works efficiently…When Viacom over a period of months accumulated some 100,000 videos and then sent en masse takedown notice on February 2, 2007, by the next business day YouTube had removed virtually all of them".

The Court noted that previous cases had made it clear that the onus is on the owners of the copyright to find and identify infringing material, not the online service provider.

The Court rejected allegations by Viacom that YouTube was akin to file sharing entities such as Grokster or Lime Wire and that the same legal rules should apply in this case as did in earlier successful actions against those companies.

Viacom said it would appeal the ruling.

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The ‘Innovation Fund – Ireland,’ was launched last week by Taoiseach Brian Cowen. The €500 million fund has been set up to support enterprise development and position Ireland as the “innovation hub” of Europe.

Speaking in the New York Stock Exchange last Monday, Mr Cowen announced the fund as a key part of the Irish government’s Smart Economy strategy, designed to assert Ireland as “the best place in Europe to turn research and knowledge into products and services”. The Taoiseach pointed to the enterprise-friendly environment and the availability of high quality employees as aspects of the Irish economy that will complement the new fund.

A large portion of the fund will go towards fostering research.  The government has pledged €250 million towards the Innovation fund, half of which will come from the exchequer and another €125 million will be provided by the National Pension Reserve Fund. The remainder will come from venture capital companies.

The fund will seek expressions of interest in early September 2010.

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NTP, the patent-holding company best known for securing $612.5 million from the manufacturer of the Blackberry after accusing it of infringing patents, has now filed suit against six other smartphone companies- Apple, Google, Microsoft, HTC, Motorola and LG Electronics.
 

The suits, which were filed last week, allege that the mobile phone email systems of these companies incorporate NTP’s technology.

The patents in issue are identical to those that were at issue in the litigation taken against Blackberry maker Research In Motion (RIM), a case that settled in 2006. The settlement included a perpetual licence for RIM to NTP’s technology. Nokia and Good Technology have also licensed NTP’s mobile email patents. The NTP patents expire in 2012.

Patent holding companies often launch patent battles against established industry players even though they have no intention to market their own patented product - hence they have attracted the name "patent trolls".

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The Irish Minister for Health, Mary Harney, has announced plans to bring forward legislation that would introduce reference pricing and permit generic substitution by pharmacists in Ireland.

Currently, when a specific brand of medicine is prescribed for a patient, a pharmacist can only supply that particular brand. The new measures would oblige pharmacists to advise patients if an alternative generic drug is available. In a country where less than one in five prescribed drugs are generic (compared to four in five in the UK), it is estimated that the new legislation would result in savings for the Irish taxpayer of at least €78m.

It is expected that 100 branded products will be covered in the legislation, which is expected to be introduced later this year.

We will update readers on the progress of this legislation. 

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The Article 29 Data Protection Working Party recently published an Opinion clarifying new EU rules concerning the use of cookies and similar devices.

The Working Party considers that prior opt-in mechanisms requiring an affirmative action by website users to indicate their willingness to receive cookies or similar devices would be "more in line" with the requirement to obtain informed consent as required under Article 5(3) of the ePrivacy Directive.  Up until now, website users have typically been notified about cookies by means of privacy statements and online terms and conditions. Due to the “affirmative action” referred to in the Opinion, it would appear that these mechanisms may no longer be sufficient.

The legislation in question (which is the revised ePrivacy Directive) must be transposed by 25 May 2011 and the precise means of notifying website users will depend on the implementation measures adopted by each individual Member State.

Based on the Opinion however it would appear that enhanced notification mechanisms may have to be adopted in the future. 

We will post further updates as they arise.
 

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An alleged publicity stunt by the Dutch brewer Bavaria resulted in the arrest in South Africa recently of two Dutch women on charges of organising "unlawful commercial activities".

The two women along with 34 others appeared in a prominent pitch side position at the recent Netherlands v Denmark World Cup game in Soccer City Stadium in Johannesburg wearing orange mini-dresses apparently associated with Bavaria.

As soon as the stadium television cameras captured pictures of the group, they were ejected from the stadium with two being arrested. They were subsequently released.

FIFA, the owner of the rights to the 2010 World Cup in South Africa, has stated that it is looking into "all available legal remedies" against Bavaria. The right to associate ones brand with the World Cup is licensed by FIFA to official sponsors wishing to promote their brands in conjunction with the event. Companies not willing to pay the substantial fees (often millions of dollars) involved to secure rights of association but which are still determined to promote their products at these world wide events tend to adopt the type of ambush marketing stunt alleged here. It appears that Bavaria sold the mini-dresses in question in the Netherlands prior to the World Cup as part of a gift pack with the only distinguishing feature of the garments being a tiny outer label carrying the brand's name. In an effort to raise the Dutch public's awareness of their promotion Bavaria arranged for one of the mini-dresses to be modelled by the high profile wife of a Dutch player prior to the tournament.

Because FIFA depends on sponsorship fees to run events like the World Cup its sponsors in turn enjoy exclusivity of the exploitation of the brands associated with the World Cup. This exclusivity is enforced in conjunction with the host nation by imposing fines for infringements and in this instance the possibility of criminal sanctions which are not often associated with the infringement of such rights. As with all successful ambush marketing stunts the publicity gained is substantial and highly beneficial to the company.

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