Introduction
The creation and development of the legal regime applicable to copyright, related rights and sui generis rights was influenced by constant technological developments. The new and dynamic generative AI technology raises new opportunities and challenges for the current law and rightsholders.
There are rich ongoing research and debates that address the issue of the magnitude of the potential impact on the current legal frame, brought by an unprecedented scale of automation that increase productivity and access to creativity, that raises legal uncertainty and questions of how can and should EU law meet challenges brought by generative AI.
Throughout this Study, the terms”generative AI” and ”AI system” are understood as ”a machine-based system that is designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment, and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments”, according to the definition in Art. 3 of the Regulation (EU) 2024/1689 of June 13, 2024, laying down harmonised rules on artificial intelligence (Artificial Intelligence Act)[1].
The word ”copyright” will be used as a translation of the term ”author's rights”, this being the wording adopted by the European legislator in EU law. From a legal point of view, the two terms are not equivalents, on the contrary, there are many differences between the legal regime applicable to copyright in common law systems and to author's rights in continental, civil law systems. For example, sound recordings and broadcasts are protected under copyright in the United Kingdom, a common law country[2], while the same are protected under a related or neighbouring right in continental, civil law countries and EU legislation[3].
The Study is organised in three parts, followed by a short conclusion. The first part raises the question if works created with the use of generative AI might be protected under copyright, analysing the principles of human authorship and the basic requirement of originality, leading to the conclusion that only human authors may acquire copyright protection under current legislation. The second part addresses the issue if the existing related rights may protect AI-generated works, in view of the criteria for acquiring legal protection. The third part puts forward and analyses the policy option for protection of non-copyrightable AI-generated outputs by a newly enacted and carefully conceived related right, granted to legal persons that develop generative AI systems.
1.1. The principle of human authorship under copyright
Intellectual property law (comprising industrial property law, copyright and related rights) is conceived and build on the fundamental principle of human authorship. Only a human being, a natural person may create works that do not exist in nature as such and that are the expression of a ”self”, thus acquiring the quality of ”author” under copyright law.
In copyright law, the principle of human authorship is rooted in key legal provisions of public international law, European Union law and national legislations[4].
The Berne Convention for the Protection of Literary and Artistic Works of September 9, 1886[5] (”the Berne Convention”) is the cornerstone and the common ground for the protection of copyright, that sets the minimum level of legal protection in contracting states.
The main reasons for adopting the Berne Convention is to encourage and economically reward the creativity of human beings, the dissemination of works of human creativity and their legitimate use by third parties.
Article 1 of the Berne Convention states that protection is granted to ”rights of authors” in their ”literary and artistic works” - a term widely interpreted in art. 2 (1) of the Convention. Author's rights are granted by the mere fact of creation of the work. ”Authorship” of a work is a legal presumption, based on the mere publication a work under a personal name, with the ”consent” of the author [article 3 (3) of the Berne Convention]. ”Consent” for publication of a work may be given only by a human author.
Copyright comprises personality rights or moral rights[6] and economic rights [art. 6bis (1) of the Berne Convention]. Only human authors may be granted personality rights or moral rights, such as the right to claim authorship of a work.
The term of protection of a work under copyright is calculated based on the ”life of the author” and ”his death” [art. 7 (1) of the Berne Convention], which leads to the conclusion that copyright was created for human beings only.
The WIPO Copyright Treaty of December 20, 1996[7] (”the WCT”) reaffirms the existing obligations undertaken by Contracting Parties under the Berne Convention and, recognising ”the profound impact of the development and convergence of information and communication technologies on the creation and use of literary and artistic works”[8] provides for the protection of computer programs, as literary works, under the Berne Convention and of compilations of data (databases), as such.
The European Union is a party to the WIPO Copyright Treaty and is thus obliged to comply with the Berne Convention. European Union copyright law and national rights of EU Member States are constructed on the basis of the minimum protection granted under the Berne Convention and the WIPO Copyright Treaty to works of human authors.
The legal regime of author's economic rights in the EU is harmonised by the Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society[9] (”the Infosoc Directive”), which implements the WIPO Copyright Treaty in the EU[10].
Moral rights of the author remain under the legal regime established by international law (the Berne Convention and the WIPO Copyright Treaty) and by national law of each EU Member State.
One of the conditions for classifying a subject matter as a ”work”, protectable by copyright under the Infosoc Directive, is that the work is ”the author’s own intellectual creation”[11]. There is no work without an author and such author has to be always a human being, a natural person. There always has to be a direct link between the subject matter, or the creation, or the work and the intelligence of a natural person, a human being, in order to protect it under copyright[12].
The copyright term of protection of is harmonised at the EU level by the Directive 2006/116/EC of the European Parliament and of the Council of December 12, 2006 on the term of protection of copyright and certain related rights[13] (the ”Term Directive”) and it is established for ”the life of the author and for 70 years after his death” [art. 1 (1) of the Term Directive]. Copyright may be granted only to an initial human author, for the duration of the life of a human being, plus 70 years after the death of a human being.
In United Kigdom (a common law country, former member of the European Union), copyright protection is granted to computer-generated works, defined by law as works ”created in circumstances such that there is no human author of the work” [sec. 178 of the UK Copyright, Designs and Patents Act 1988[14]].
The author of a computer-generated work is taken to be ”the person by whom the arrangements necessary for the creation of the work are undertaken” [sec. 9 (3) of the UK Copyright, Designs and Patents Act 1988]. There is no further qualification of the term ”person” as natural or legal person.
The term of copyright protection of computer-generated works is 50 years ”from the end of the calendar year in which the work was made”, without reference to the life or the death of the author as a natural person [sec. 12 (7) of the UK Copyright, Designs and Patents Act 1988].
1.2. ”Originality” of a work, as a fundamental requirement for copyright protection under European Union law
”Originality” is one of the fundamental, sine qua non, requirement for the legal protection of a work under the continental author's right (not in all cases under copyright, in common law).
The legal term ”originality” is not defined by the Berne Convention, who makes reference to the ”original work”, in the sense of the initial work, originating from his author [art. 1 (3) and 14bis (1) of the Berne Convention].
This understanding of the legal term ”original” lead in common law legal systems to the interpretation of ”originality” in an objective way: a work is original if it is not a copy of another work. At the heart of copyright is the exclusive right of the rightowner to permit or prohibit third parties to copy his/her original (initial) work.
The United Kingdom copyright legislation was, up to a certain level, harmonised with the ”originality” standard established by the CJUE jurisprudence.The public consultation of United Kingdom Intellectual Property Office (”UKIPO”) on Artificial Intelligence and IP states that ”for a work to be original it must be the author's own intellectual creation. This means that the author has made free and creative choices and the work shows his personal touch”[15].
Under EU law and continental, civil law legal systems, ”originality” is assessed in relation to an object matter that must be an ”expression” of author's ”self”[16] or ”personality”. Only human beings are endowed with a ”self” and a ”personality” that may find an expression in works created by human intelligence.
According to article 2 of the WCT: ”Copyright protection extends to expressions and not to ideas, procedures, methods of operation or mathematical concepts as such”. Algorithms are thus excluded from copyright protection. So are mere instructions or prompts given by a natural person to an AI system.
In consistency with the WCT, the jurisprudence of the CJUE specifies that the concept of ”work” is understood as the ”expression” of ”the author’s own intellectual creation”[17], that is, an intellectual creation of a natural person[18].
In the most recent Mio judgment[19], the CJUE restated that ”for the concept of ‘originality’ and, consequently, for copyright protection under EU law”, ”the requirement that the author’s personality be reflected in the subject matter for which protection is claimed, through the expression of that author’s free and creative choices, is decisive”.
The making of a ”free and creative choice” requires the rational capacity to counsciusly decide with regard to the creative elements of the work, in a free manner. Such capacity of discernment is caracteristic of human intelligence only.
A work which is the result of ”free and creative choices”, or of a ”creative freedom” means that its realisation has not been dictated ”by technical considerations, rules or other constraints, which have left no room for creative freedom”[20].
Where the expression of a subject matter is dictated by its technical function, ”the different methods of implementing an idea are so limited that the idea and its expression become indissociable”[21], that leading to the exclusion of copyright protection.
1.3. The possibility of granting copyright in AI-generated works to natural persons
In view of the current EU copyright legal regime, copyright may not be denied to a work, merely because an AI system was used for its creation.
Copyright may not be granted to developers of AI systems, because legal persons may not be qualified as ”authors” of a work. Developers of an AI system may own copyright in the AI software, but that does not provide them copyright in the output of the AI software[22].
Only natural persons may have the quality of ”authors”, able to initially acquire copyrights in ”AI-generated works”[23], by the mere fact of the creation of a work, by using AI as a tool. Currently, such AI-generated works, potentially protectable under copyright are music[24], paintings[25], images, press articles[26], movies[27], novels etc.
The main question in deciding to recognise copyright in such AI-generated outputs is the same with regard to any type of human created works: does the work fulfil the criteria of ”originality”? Is the work ”original”, in the sense that it is the expression of free and creative choices that reflect the personality of a human author? Or are such expressions dictated by technical constraints imposed by the algorithms of the AI system?
In order to ”reflect the personality of a human author”, the choices, such as instructions or prompts given to the AI system, have to be ”creative” enough to be expressions of personality, not mere ideas, which are excluded from protection. As decided in the Mio case, ”the use of the words ‘reflects’ and ‘expression’ clearly indicates that such choices and the author’s personality must be visible in the subject matter for which protection is claimed (our emphasis)”[28], namely, in the AI-generated work or output itself. The work protected by copyright must be ”expressed in an objective manner”, ”clearly and precisely identified”, in order to ensure legal certainty[29].
In order to be ”free”, the creative choices must be conscious decisions of the human author, that are not determined by technical constraints of the AI system. Such technical constraints are the algorithms of the AI system and also the set of data used for the training of AI[30].
AI algorithms and training data sets do determine the limits of human choices, such as instructions or prompts given to the AI system. The algorithms of an AI system may not be controlled by human prompts. Random algorithmic choices may break the link between the human choice and the generated work[31]. Training data sets leave no room for human imagination able to surpass and transcend what already exists and is already ”known” by the AI system.
One of the main risks in granting copyright protection to AI-assisted works is false attribution or false representation that a work generated by AI with minimum human intervention that lacks any originality is the result of human free creative choices, in order to benefit from the term of copyright or author's rights protection (life of the author plus 70 years after his death). Another negative result is the subsequent restriction of use of such AI-assisted works by third parties, including other AI developers, which is certainly able to stifle further creativity because of scracity of new training data.
This risk is mitigated under the CJUE jurisprudence, according to which where the author has made choices that are not dictated by technical or other constraints, it cannot be presumed that those choices are creative, for the purpose of acquiring copyright protection. As decided in the Mio case, creative choices in a work must be identified: ”the court before which the question of the originality of a utilitarian object is brought must seek out and identify the creative choices in the shape of that subject matter in order to be able to declare it protected by copyright”[32].
In accordance with the CJUE jurisprudence, the Munich District Court stated, in its decision[33] of February 13, 2026: ”1. Whether products generated by artificial intelligence have the character of a work within the meaning of Section 2 Paragraph 2 of the German Copyright Act depends on the extent to which human creative influence is still exerted, despite the software-controlled process. 2. Copyright protection is therefore conceivable as a result of human intervention in AI results, which can also take place subsequently or successively during prompting and which leads to the personality of the prompter being reflected in the output. 3. However, human influence must shape the resulting output in a sufficiently objective and clearly identifiable way. This is the case, at least, when the creative elements incorporated into the prompting process so dominate the output that the object as a whole can be considered the author's own original creation”.
The person claiming copyright protection in AI-generated works bears the burden of proof of the existence of a creative intellectual creation, namely, of the fact that an ”independent creative expression of his personality is discernible” in the AI-generated work.
The effort to formulate and test a complex prompt of at least 1700 characters to create a work, characterized solely by time expenditure, is not a criterion for assessing originality.
It is essential that the AI model is ”closer to an aid than to an independent creative instrument". The AI's technical activity must not outweigh the user's creative and artistic influence on the output (para. 26 and 27).
In September 2025, Italy adopted the Law no. 132/2025 on the protection of AI[34], the first national law on AI. According to the Law, ”intellectual works” must be of ”human origin”. Art. 25 of the Law expressly reserves copyright for human-created works, including those made by using tools of AI, if they are the result of human authors' intellectual efforts[35]. The Law reaffirms copyright protection of works according to provisions of the Berne Convention.
The same approach was adopted by the Municipal Curt of Prague, in its Decision[36] of June 20, 2023, in the case S. Š. v TAUBEL LEGAL, advokátní kancelář s.r.o.. The Prague Court ruled that the person who claims authorship of AI-generated works and copyright in the work, based on his prompts or instructions given to the AI system, has the obligation to adduce specific evidence in support of such claims (para. 11). An AI-generated work is not a work created personally by the author (the user of the system) himself, but with the help of AI, according to specific prompts that do not constitute works of authorship, but mere ideas, excluded from copyright protection (para. 12).
The US Copyright Office adopted the same approach to the copyrightability of AI-generated outputs, in its ”Report on Copyright and Artificial Intelligence”, Part 2, of January 29, 2025[37].
The Office reaffirmed that copyright protection requires human authorship and that, according to an established jurisprudence: “copyright has never stretched so far [as] ... to protect works generated by new forms of technology operating absent any guiding human hand”[38].
”Prompts essentially function as instructions that convey unprotectible ideas. While highly detailed prompts could contain the user’s desired expressive elements, at present they do not control how the AI system processes them in generating the output”[39].
Copyright protection may be available to AI-generated works only if AI was used as a tool for human creativity, insofar as there is ”sufficient human control” over the expressive elements of the work.
The current functioning of AI systems shows gaps between prompts and the resulting outputs[40] and demonstrate that ”the user lacks control over the conversion of their ideas into fixed expression”, and that ”AI systems are largely responsible for determining the expressive elements in the output. In other words, prompts may reflect a user’s mental conception or idea, but they do not control the way that idea is expressed”[41]. Only expressions may be copyright protected, ideas being expressly excluded from protection.
Copyright may be granted to human authors, users of the AI system, if their works of authorship are ”perceptible in the AI-generated outputs, as well as the creative selection, coordination, or arrangement of material in the outputs, or creative modifications of the outputs”[42].
Korea, Japan, China also apply the principles that only natural persons may be authors of a work and that copyright protection requires proof of a human creative contribution to the expressive form of the work[43].
Rights related to copyright were enacted due to technological developments, for the benefit of performers, producers of phonograms and broadcasting organisations, under the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations done in Rome, October 26, 1961[45] (the ”Rome Convention”), followed by the WIPO Performances and Phonograms Treaty of December 20, 1996 (the ”WPPT”).
Recently, the Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market (the ”DSM Directive”) enacted related rights to press editors (legal persons), for the online use of their press publications by information society service providers[46].
The grant of legal protection under related rights is not based on the principle of ”human authorship”. Consequently, related rights are not granted in view of the ”originality” of phonograms, broadcasts or press publications. The criterion for protection is a mere economic investment in the production of the subject-matter (except for performances).
That allows legal persons, such as phonograms and videograms producers, broadcasters and press publishers to acquire related rights in respect of their phonograms, videograms, broadcasts and press publications, including those created with the use of AI systems and even if there is no human creative contribution in the process[47].
An extensive study on AI music outputs[48] concludes that phonogram producers benefit from protection under a related right regardless of whether the underlying sound was created by a human or AI-generated. There is no threshold for protection other than the qualification of the subject matter as a phonogram[49]. The fixation requirement implies that AI-enabled continuous unfixed music generation and streaming projects are not phonograms and hence are not covered by rights awarded to phonogram producers.
The study gives examples of broadcasting events involving songs created with AI that already took place, such as the AI Song Contest, organised by the Dutch national public broadcaster, with a first edition in 2020 and of web radios broadcasting AI-generated music.[50]
The conclusion of the study is that the use of AI systems in music production does not impact on the legal qualification of protection of broadcasts by related rights. ”This type of related rights could be applicable to musical content that, due to the lack of fixation, is not protected by copyright and/or related rights of phonogram producers.”
The authors stress that when assessing the desirability of proposals for new modes of protection of AI outputs, the availability of related rights protection for non-copyright protected AI-generated outputs should be considered[51].
Under the current copyright legal regime, AI-generated works, such as music, films, novels, pictures, software etc., may receive copyright protection granted only to human authors, if they are created with a prevailing human original or creative contribution, that can be discernable or perceptible in the AI-generated output.
If the copyright criteria for protection are not met, AI-generated works fall into the public domain, with the risk to undermine investment and to raise competition concerns[52].
AI-generated works such as phonograms, broadcasts and press publications may be protected by related rights, granted to legal persons (producers, press publishers), based on the criteria of economic investments in the production process.
In view of the above legal analysis, we support the opinion that the current copyright (author's rights) and related rights legal regime may not be stretched to cover AI-generated outputs that does not meet the established criteria for protection[53].
We put forward the question if there is a need to protect investments in the development of AI systems and to incentivize further investment by enacting a new related right for the protection of non-copyrightable AI-generated outputs, based on the criteria of economic investments in the several stages of the creation of an AI system[54]? As pointed by reputed authors, ”training algorithms vary in originality from standard to uniquely developed. Many established training algorithms are standard, and available online in open-source libraries in the form of pre-written software. However, for some problems, new algorithms have to be developed, necessitating human and financial investments [...]”[55]. Prompt engineering, iterative curation, and fine-tuning of models may involve substantial expertise, as argued in the study on ”Generative AI and Copyright. Training, Creation, Regulation”[56].
Should these acts be treated as acts of creation of the AI-generated output (involving a much higher level of creativity that users' prompts) or as a technical manipulation? While some authors argue that the natural persons involved in the construction of the AI system, such as engineers, coders, data trainers, may be considered the co-authors and co-owners of copyright of the AI-generated outputs in cases where there is no creative contribution from the user of the AI system[57], other authors sustain, on the contrary, that in such cases the persons that created the AI system may not be considered authors of the output, as they have no influence or control on the final result, which is random[58].
Should fully AI-generated outputs, with no human creative intervention[59] able to attract copyright protection, remain in the public domain or should AI developers (legal persons) be granted a limited protection under a new related-right?
These are policy question that take into consideration not only the societal and economical value of AI systems, the investments in creating such value, that would justify the grant of exclusive rights in order to allow their recoupment and to prevent market failures[60], but also the economic and social risks for granting protection of AI-generated works under a related right.
The recent study on ”The economic of copyright and AI - Empirical evidence and optimal policy”[61], requested by the JURI Committee of the European Parliament shows that ”the amortised cost of training top foundation models exceeds tens of millions of dollars. These costs have been increasing at a rate of approximately 240% per year since 2016, and have grown so large that, with a few exceptions of recent government-backed investments, only commercial players can afford to produce frontier models. If this trend continues, the most expensive training runs could exceed $1B by 2027.”[62]
A newly enacted related right for the protection of AI-generated outputs[63] would allow the recoupment of economic investments and would prevent losses through acts of free use and free riding by third parties[64].The new related right would be granted to AI developers for AI-generated works that do not meet the threshold of copyright protection[65] and may not benefit from protection under the existing related rights, based on the criterion of economic investment[66].
Such normative intervention addresses legal uncertainties created by difficulties in establishing and proving the limits between AI and human creative contribution to output[67] and, in view of the legal presumption of authorship, discourages circumvention of copyright by false claims of human authorship[68].
For AI developers it is difficult to prove how the AI functions: as a mere tool controlled by human beings who make creative choices in the process of generating an output or as an automated process, capable to determine an expressive outcome with no human creative contribution[69]. ”Even though the output is in principle deterministic and traceable, it is often not human-explainable due to the complexity of the calculations, especially in the case of artificial neural networks (the ‘black box’ issue)”[70].
For AI-users it is difficult to prove that their contribution is, first, ”sufficient” to outweight the algorithms of the AI system and to control the output and, second, ”creative”, so that it confers ”originality” on the output as a whole. As explained in the US Copyright Office Report, Part 2[71]: ”Although AI technology continues to advance, uncertainty around how a particular prompt or other input will influence the output may be inherent in complex AI systems built on models with billions of parameters”. Issues related to technical solutions for the identification of AI-generated works were addressed by recent legislative proposals and several solutions were envisaged[72].
Another crucial argument for granting new related rights in AI-generated outputs is the liability for AI-generated works, given that the technological developments lead to more autonomous AI systems, capable ”not only of creating, but of initiating tasks, selecting data inputs, and refining outputs”[73].
A careful analysis of economic data is required in the eventual conception of a new related right[74]. The scope of protection under the new related right should be limited and its the term of protection should be shorter, to allow the recoupment of investments in the develpment of AI systems, while preventing obstacles in further obtaining AI-generated works based on newly created and publicly available data. When establishing the duration of the new right, one might have in view the 2 years term of protection of the press publishers related rights [Art. 15 (4) of the DSM Directive[75]].
However, as argued by reputed authors, one should observe the ”market dynamics in relation to the AI output per se” and bear in mind that if the market dynamic is such as to minimize the lifecycle of AI outputs, ”once the substitution of AI products or services happens with such speed that investments could not be recouped despite IP protection in place, any IP right would be detrimental to economic welfare and not justifiable.”[76]
Against the enactment of a new related right for AI-generated outputs is the expansion of monopoly rights over AI-generated outputs, to the detriment of the public domain and the scarcity of new data allowing further AI development[77].
Another risk is the encouragement of massive, rapid, low cost of AI production of outputs, that would substitute the demand for original works of authorship, to the detriment of authors. Recent studies show that generative AI can depress creative supply[78]. This would undermine the copyright system and would run against the very scope of author's rights to protect and encourage human creativity and the promotion of culture.
Other authors are of opinion that AI-generated works do not substitute the demand for human works and thus do not disrupt the market of such works, because the AI output only reproduces unprotected ideas, concepts and styles of the human authors[79].
Strong opinions are in the sense that the introduction of a new protection regime (a new related right) for AI-generated output is not justified according to the current state of knowledge and that algorithms and models of an AI system may be protected under extra IP regimes that address market failure, such as trade secrets, unfair competition, technological measures, contract law.[80]
The policy option to enact a new related right was under public consultation in the United Kingdom[81] (policy option 2). The UK legislator asked if the current copyright protection for computer-generated works, generated without any human contribution, should be replaced with a new right of reduced scope and duration. The UK Government response to consultations[82] is that, for the time being, legislative changes lack supporting economic evidence.
The same view was taken by the US Copyright Office[83], given that currently there are not enough empirical data in support of legislative changes.
The European Commission[84] 2020 report emphasizes that “fully autonomous AI-processed outputs currently fall outside the scope of copyright protection”. However, the report further notes that related rights or sui generis mechanisms might eventually be explored for such works, but for now the legal framework remains centered on the human creator.
The recently adopted European Parliament resolution of March 10, 2026 on copyright and generative artificial intelligence - opportunities and challenges[85] underlines that ”K. [...] the development, deployment and use of AI must be fully compliant with the current legal framework [...]”, that ”AE. [...] EU copyright law remains grounded in the principles of human authorship [...]” and that ”AG. [...] international convergence and the establishment of a global regulatory framework [...]” is needed.
In its resolution, the European Parliament insists that content fully generated by AI that does not meet the established criteria for copyright protection should remain ineligible for copyright protection, and that the public domain status of such outputs be clearly determined”.
Conclusion
For the moment, studies, debates, public consulations on a legislative intervention for the enactment of a new type of IP protection (a related right or a sui generis rights) to AI-generated works that may not be protected by copyright arrived at the conclusion that there are currently no sufficient empirical data for such an action[86].
However, they also stressed that the dynamic technological developments in the field should be further monitored[87] and that the enactment of a new type of IP protection of AI-generated output (reled right or sui generis protection) might be an option, if the economical and social evolutions justify such policy option.
[1] Regulation of the European Parliament and of the Council laying down harmonised rules on artificial intelligence and amending Regulations (EC) No 300/2008, (EU) No 167/2013, (EU) No 168/2013, (EU) 2018/858, (EU) 2018/1139 and (EU) 2019/2144 and Directives 2014/90/EU, (EU) 2016/797 and (EU) 2020/1828, OJ L, 2024/1689, 12.7.2024.
[2] Sec. 1 ((b) of the UK Copyright, Designs and Patent Act 1988, available at https://www.legislation.gov.uk/ukpga/1988/48/contents, last accesssed on March 17, 2026
[3] For example, under the Directive 2006/116/EC of the European Parliament and of the Council on the term of protection of copyright and certain related rights, available at https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:02006L0116-20111031, last accesssed on March 17, 2026). A comparison between the two legal systems exceeds the scope of this study.
[4] For an analysis of the current national copyright law in the context of AI, in Germany and Belgium, see France Vehar and Thomas Gils, ”I'm sorry AI, I'm afraid you can't be the author (for now)”, in the Journal of Intellectual Property Law and Practice, 2020, Vol. 15, No. 9, pp. 718-726.
[5] Available at https://www.wipo.int/wipolex/en/text/283698, last accessed last accesssed on March 17, 2026.
[6] For a comparative analysis of copyright laws, see Päivi Hutukka, Copyright Law in the European Union, the United States and China, in IIC (2023) 54:1044–1080, https://doi.org/10.1007/s40319-023-01357-0. According to the author, the requirement of the Berne Convention to recognize moral rights was assumed for a long time to be the main reason why the USA did not sign and ratify the Convention until 1989. The USA were reluctant to embrace the concept of moral right of the author.
[7] Available at https://www.wipo.int/wipolex/en/text/295166, last accessed March 16, 2026.
[8] Preamble of the WCT.
[9] Published in the Official Journal L 167 of 22/06/2001 P. 0010 - 0019.
[10] ECJ decision of 13 November 2018, Levola Hengelo BV/Smilde Foods BV, C-310/17, EU:C:2018:899, para. 38.
[11] ECJ decision of 13 November 2018, Levola Hengelo BV/Smilde Foods BV, C-310/17, EU:C:2018:899, para. 36, citing the ECJ judgment of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, para. 97.
[12] Peter Georg Picht, Florent Thouvenin, ”AI and IP: Theory to Policy and Back Again – Policy and Research Recommendations at the Intersection of Artificial Intelligence and Intellectual Property”, in IIC 54, 916–940 (2023). https://doi.org/10.1007/s40319-023-01344-5.
[13] Published in the Official Journal L 372 of 27.12.2006, p. 12.
[14] Available at https://www.legislation.gov.uk/ukpga/1988/48/part/I/chapter/I, last accessed on March 16, 2026.
[15] Available at https://www.gov.uk/government/consultations/artificial-intelligence-and-ip-copyright-and-patents/outcome/artificial-intelligence-and-intellectual-property-copyright-and-patents-government-response-to-consultation, last accessed March 17, 2026. The UKIPO help six roundtables of public consultations in November and December 2021.
[16] Iaia, Vincenzo, ”To Be, or Not to Be ... Original Under Copyright Law, That Is (One of) the Main Questions Concerning AI-Produced Works” (August 11, 2022). GRUR International, 71(9), 2022, 793-892, Available at SSRN: https://ssrn.com/abstract=4528143. The author shows that ”the exclusive protection of te human creative endeavour finds support form a philosophical perspective too, considering that the etymology of the term 'author' derives from the ancient Greek αὐτός, which means 'self'”.
[17] ECJ decision of 13 November 2018, Levola Hengelo BV/Smilde Foods BV, C-310/17, EU:C:2018:899, para. 36, citing the ECJ judgment of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, para. 97.
[18] ECJ judgment of 12 September 2019, Cofemel, C‑683/17, EU:C:2019:721, para. 29; ECJ decision of 13 November 2018, Levola Hengelo BV/Smilde Foods BV, C-310/17, EU:C:2018:899, para. 36, citing the ECJ judgment of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, para. 97.
[19] ECJ decision of 4 December 2025, Mio and konektra, C-580/23 and C-795/23, EU:C:2025:941, para. 50.
[20] ECJ judgment of 12 September 2019, Cofemel, C‑683/17, EU:C:2019:721, para. 30-31 and the cited case-law; ECJ decision of 4 December 2025, Mio and konektra, C-580/23 and C-795/23, EU:C:2025:941, para. 49 and 63.
[21] ECJ judgment of 11 June 2020, Brompton Bicycle, C‑833/18, EU:C:2020:461, para. 27 and the case-law cited; ECJ decision of 4 December 2025, Mio and konektra, C-580/23 and C-795/23, EU:C:2025:941, para. 64.
[22] France Verhar and Thomas Gils, op. cit, p. 721.
[23] Iaia, Vincenzo, op. cit. supra.
[24] Spotify published AI composed music, see ViIaia, Vincenzo, op. cit., note 23.
[25] A Rembrand painting was produced by AI, see ViIaia, Vincenzo, op. cit., note 24.
[26] ”The Guardian” published a press article written by the AI system GPT-3, see ViIaia, Vincenzo, op. cit., note 22.
[27] Netflix released an AI produced horror movie, see ViIaia, Vincenzo, op. cit., note 24.
[28] ECJ decision of 4 December 2025, Mio and konektra, C-580/23 and C-795/23, EU:C:2025:941, para. 71.
[29] ECJ decision of 4 December 2025, Mio and konektra, C-580/23 and C-795/23, EU:C:2025:941, para. 72.
[30] AI developers are constantly suited for copyright infringement by use of protected works for the training of AI. One recent case is brought by Encyclopaedia Britannica against Open AI: https://www.g4media.ro/enciclopedia-britannica-da-in-judecata-openai-pentru-continutul-utilizat-in-antrenarea-chatgpt.html, last accessed on March 17, 2026.
[31] Iaia, Vincenzo, op. cit. supra.
[32] ECJ decision of 4 December 2025, Mio and konektra, C-580/23 and C-795/23, EU:C:2025:941, para. 65.
[33] Decision in the case 142 C 9786/25, available at https://www.gesetze-bayern.de/Content/Document/Y-300-Z-BECKRS-B-2026-N-1513?hl=true, last accessed March 18, 2026.
[34] Accessible at: https://www.normattiva.it/atto/caricaDettaglioAtto?atto.dataPubblicazioneGazzetta=2025-09-25&atto.codiceRedazionale=25G00143&atto.articolo.numero=0&atto.articolo.sottoArticolo=1&atto.articolo.sottoArticolo1=0&qId=345ab9c5-79ac-4964 a1b1197dd0bdc95f&tabID=0.5253345485394565&title=lbl.dettaglioAtto, last accessed March 20, 2026.
[35] ”Alla legge 22 aprile 1941, n. 633, sono apportate le seguenti modificazioni: a) all'articolo 1, primo comma, dopo le parole: «opere dell'ingegno» è inserita la seguente: «umano» e dopo le parole: «forma di espressione» sono aggiunte le seguenti: «, anche laddove create con l'ausilio di strumenti di intelligenza artificiale, purché costituenti risultato del lavoro intellettuale dell'autore»”.
[36] Decision in the case no. 10 C/2023-16, available at https://msp.gov.cz/documents/14569/1865919/10C_13_2023_10/108cad3e-d9e8-454f-bfac-d58e1253c83a, last accessed March 20, 2026.
[37] Available at https://www.copyright.gov/ai/, last accessed March 20, 2026.
[38] The decision of the the U.S. District Court for the District of Columbia, Thaler, cited in The US Copyright Office Report on Copyright and Artificial Intelligence, Part 2, page 8.
[39] The US Copyright Office Report on Copyright and Artificial Intelligence, Part 2, page 18.
[40] With regard to the condition of human intervention in the process of generating works with the use of AI, see also Benhamou, Yaniv; Andrijevic, Ana, ”Intelligence artificielle générative d’images et droit d’auteur”, in Richa, Alexandre; Canapa, Damiano (Ed.) ”Aspects juridiques de l’intelligence artificielle: projet de règlement européen, titularité des données, images et droits d’auteur, droit de la concurrence, responsabilité du fait des produits, prestations de services, Stämpfli Editions SA Berne, 2024, p. 41–85 (Collection lausannoise, CEDIDAC, vol. 98), available at https://serval.unil.ch > resource > REF.
[41] The US Copyright Office Report on Copyright and Artificial Intelligence, Part 2, page 19.
[42] See as example Rose Enigma, VAu001528922 (March 21, 2023), registered by the Office for copyright protection, in the US Copyright Office Report on Copyright and Artificial Intelligence, Part 2, page 23, page. See also: https://www.wipo.int/en/web/wipo-magazine/articles/us-copyright-office-on-ai-human-creativity-still-matters-legally-73696.
[43] See, also for examples of copyright policy decisions in other countries, the US Copyright Office Report on Copyright and Artificial Intelligence, Part 2, page 28-29.
[44] In common law systems, such as United Kingdom, sound recordings and broadcasts are protected under copyright, not under a related right [sec. 1 (1) (b) of the UK Copyright, Designs and Patents Act 1988]. ”Related rights” are designated by the term ”copyright” in common law countries, see explanations at note 1.
[45] Available at https://www.wipo.int/wipolex/en/text/289757, last accessed on March 17, 2026.
[46] Art. 15 of the Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC, OJ L 130, 17.5.2019, pp. 92–125 (the ”DSM Directive”).
[47] France Verhar and Thomas Gils, op. cit, p. 723.
[48] Oleksandr Bulayenko, João Pedro Quintais, Daniel Gervais and Joost Poort, “AI Music Outputs: Challenges to the Copyright Legal Framework”, reCreating Europe Report (February 2022), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4072806, last accessed March 21, 2026.
[49] idem, pages 96-98.
[50] idem, page 100.
[51] idem, page 113.
[52] Nicola Lucchi, Study on ”Generative AI and Copyright. Training, Creation, Regulation”, of July 9, 2025, PE 774.095, page 45, 95, available at https://www.europarl.europa.eu/thinktank/en/document/IUST_STU(2025)774095, last accessed on March 20, 2026.
[53] Péter Mezei, From Leonardo to the Next Rembrandt – The Need for AI-Pessimism in the Age of Algorithms (July 24, 2020). UFITA, 2020, 84(2), p. 390-429. (https://doi.org/10.5771/2568-9185-2020-2-390), available at SSRN: https://ssrn.com/abstract=3592187, last accessed on March 21, 2026.
[54] ”Technical Aspects of Artificial Intelligence: An Understanding from an Intellectual Property Law Perspective”, Drexl, Josef and Hilty, Reto and Beneke, Francisco and Desaunettes-Barbero, Luc and Finck, Michèle and Globocnik, Jure and Gonzalez Otero, Begoña and Hoffmann, Jörg and Hollander, Leonard and Kim, Daria and Richter, Heiko and Scheuerer, Stefan and Slowinski, Peter R. and Thonemann, Jannick (October 8, 2019). Max Planck Institute for Innovation & Competition Research Paper No. 19-13, Available at SSRN: https://ssrn.com/abstract=3465577. last accessed March 20, 2026.
[55] idem.
[56] Nicola Lucchi, op. cit, p. 97.
[57] Jane C. Ginsburg and Luke Ali Budiardjo, ”Authors and Machines”, Berkeley Tachnology Law Journal, Vol. 34:343, pp. 345-445, available at https://btlj.org > articles2019 > 01_Ginsburg_Web, last accessed March 20, 2026.
[58] Benhamou, Yaniv; Andrijevic, Ana, ”Intelligence artificielle générative d'images et droit d'auteur : utilisation des données d'entraînement et protégeabilité des résultats”, In: Arts-Loi// Kunst-Wet: plateforme du droit et de l’art contemporain. Sandrine Carneroli (Ed.). WIELS, Bruxelles. Bruxelles:
Larcier-Intersentia, 2024. p. 81–118. (Création Information Communication), available at https://archive-ouverte.unige.ch/home, last accessed March 20, 2026.
[59] ”As far as “AI-generated output” is concerned, it has to be stressed from the outset that according to the current state of knowledge, really “independently acting” computers do not exist”, see Hilty, Reto and Hoffmann, Jörg and Scheuerer, Stefan, ”Intellectual Property Justification for Artificial Intelligence” (February 11, 2020). Draft chapter. Forthcoming in: J.-A. Lee, K.-C. Liu, R. M. Hilty (eds.), Artificial Intelligence & Intellectual Property, Oxford, Oxford University Press, 2020, Forthcoming, Max Planck Institute for Innovation & Competition Research Paper No. 20-02, Available at SSRN: https://ssrn.com/abstract=3539406, last accessed on March 20, 2026.
[60] Hilty, Reto and Hoffmann, Jörg and Scheuerer, Stefan, ”Intellectual Property Justification for Artificial Intelligence” [...], op. cit.
[61] Christian Peukert, Study on ”The economic of copyright and AI - Empirical evidence and optimal policy”, of December 3, 2025, PE 778.859, available at https://www.europarl.europa.eu/thinktank/en/document/IUST_STU(2025)778859, last accessed at March 20, 2026.
[62] See page 16 of the Study.
[63] See the Jun Ito, on the outcome of the DABUS case in Japan, the Decision of the Tokyo District Court of May 16, 2024, Reiwa 5 (Gyo-U) 5001, in GRUR Patent. Patentrecht in der Praxis, no. 7/2024, pp. 307-308; Senftleben, Martin and Buijtelaar, Laurens, Robot Creativity: An Incentive-Based Neighboring Rights Approach (October 1, 2020). Available at SSRN: https://ssrn.com/abstract=3707741 or http://dx.doi.org/10.2139/ssrn.3707741, last accessed on March 16, 2026.
[64] Senftleben, Martin and Buijtelaar, Laurens, ”Robot Creativity: An Incentive-Based Neighboring Rights Approach” (October 1, 2020). Available at SSRN: https://ssrn.com/abstract=3707741 or http://dx.doi.org/10.2139/ssrn.3707741, last accessed March 21, 2026.
[65] France Vehar, Thomas Gils are of opinion that AI can create ”works” even completely without human intervention, op. cit. supra, p. 721.
[66] Nicola Lucchi, op. cit., page 8 and 11.
[67] Nicola Lucchi points that the current legal model ”highlights the growing difficulty in assessing the threshold of human involvement in AI-assisted creativity”, op. cit., pages 94-98. For doctrinal discussions in Germany, see France Vehar, Thomas Gils, op. cit, p. 721-722. See also Hilty, Reto and Hoffmann, Jörg and Scheuerer, Stefan, ”Intellectual Property Justification for Artificial Intelligence”, op. cit.
[68] Nicola Lucchi, op. cit, p. 23.
[69] Senftleben, Martin and Buijtelaar, Laurens, op. cit.
[70] Technical Aspects of Artificial Intelligence [...], op. cit.
[71] Available at https://www.copyright.gov/ai/, last accessed March 20, 2026, page 6.
[72] Alexis Léautier, Panorama et perspectives pour les solutions de détection de contenus artificiels, available at https://linc.cnil.fr/panorama-et-perspectives-pour-les-solutions-de-detection-de-contenus-artificiels-12, last accessed March 20, 2026, cited by Benhamou, Yaniv; Andrijevic, Ana, ”Intelligence artificielle générative d'images et droit d'auteur [...], op. cit.
[73] Nicola Lucchi, op. cit, p. 97.
[74] Péter Mezei, op. cit.
[75] Available at https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32019L0790, last accessed on March 17, 2026.
[76] Hilty, Reto and Hoffmann, Jörg and Scheuerer, Stefan, ”Intellectual Property Justification for Artificial Intelligence” [...], op. cit.
[77] Iaia, Vincenzo, op. cit.; Péter Mezei, op. cit. s
[78] Christian Peukert, The Study for the EP JURI Committee, op. cit., p. 17.
[79] Martin Senftleben, ”Text and Data Mining, Generative AI, and the Copyright Three-Step Test”, IIC (2026) 57:67–107, https://doi.org/10.1007/s40319-026-01680-2.
[80] Drexl, Josef and Hilty, Reto and Desaunettes-Barbero, Luc and Globocnik, Jure and Gonzalez Otero, Begoña and Hoffmann, Jörg and Kim, Daria and Kulhari, Shraddha and Richter, Heiko and Scheuerer, Stefan and Slowinski, Peter R. and Wiedemann, Klaus, ”Artificial Intelligence and Intellectual Property Law - Position Statement of the Max Planck Institute for Innovation and Competition of 9 April 2021 on the Current Debate” (April 9, 2021). Max Planck Institute for Innovation & Competition Research Paper No. 21-10, Available at SSRN: https://ssrn.com/abstract=3822924, last accessed March 21, 2026; Peter Georg Picht, Florent Thouvenin, op. cit.
[81] Available at https://www.gov.uk/government/consultations/artificial-intelligence-and-ip-copyright-and-patents/artificial-intelligence-and-intellectual-property-copyright-and-patents, last accessed on March 17, 2026.
[82] Of June 28, 2022, available at https://www.gov.uk/government/consultations/artificial-intelligence-and-ip-copyright-and-patents/outcome/artificial-intelligence-and-intellectual-property-copyright-and-patents-government-response-to-consultation, lat accessed March 17, 2026.
[83] The US Copyright Office Report on Copyright and Artificial Intelligence, Part 2, page 36.
[84] The European Commission Final report, “Trends and Developments in Artificial Intelligence – Challenges to the Intellectual Property Rights Framework”, of September 2020, available at https://op.europa.eu/en/publication-detail/-/publication/394345a1-2ecf-11eb-b27b-01aa75ed71a1/language-en, last accessed on March 20, 2026.
[85] 2025/2058 (INI) P10_TA (2026) 0066, available at https://www.europarl.europa.eu/doceo/document/TA-10-2026-0066_EN.html, last accessed March 20, 2026.
[86] Peter Georg Picht, Florent Thouvenin, op cit.
[87] The US Copyright Office Report on Copyright and Artificial Intelligence, Part 2, page 31; France Vehar and Thomas Gils, op. cit, p. 726.
Bad Faith Registration of Trademarks and Repetitive Filings[1]
Preamble:
TMs registered in ''bad faith'' are deemed to be valid, until cancelled.
In major part of EU Member States, issues of bad faith registration are not addressed at the stage of the examination of an application, so that the acquisition of a TM applied in bad faith is automatic, even in logically obvious cases of bad faith applications.
Obtaining a TM with bad faith is too much easy.
Bad faith registered TMs confer to the proprietor a strong exclusive right, used to distort competition by creating barriers to entry on a market, or to create a deliberate confusion/association with distinctive signs prior used on a given market, in order to mislead consumers over the origin of goods or services.
The registration of a TM in bad faith on the territory of a EU Member State may allow counterfeiting activities on the EU territory. Such counterfeited goods bearing a registered TM, may not be stopped from entering the European market, because they are put in commerce under the registered trademark of the owner of such goods.
Comparing to the easy steps for registering a TM in bad faith, and in view of the often huge economic damages caused by the exercise of the exclusive rights granted by such TMs, the process of cancelling a TM registered in bad faith is extremely difficult.
The present Study seeks to reveal the main difficulties faced in cancellation actions in various scenarios indicating a possible bad faith registration and to make proposals for improving and balancing the current TM system with regard to absolute/relative grounds for refusal, the relevant indicia of bad faith, the standard of proof and the onus of proof of bad faith.
I Different case scenarios
In the majority of Member States registration is mandatory for protection under TM law. In such countries, protection under TM law by action for cancellation for bad faith registration is restricted to well-known or reputed TMs.
Proof of a high degree of knowledge or of reputation of a distinctive sign used as a TM satisfies the relevant factors related to prior knowledge of the use of the sign for certain goods/services and related to the high degree of legal protection enjoyed by the third party’s sign in comparison with the sign for which registration is sought.
However, this approach is inconsistent with the existing law provisions and disregards that bad faith is a different, absolute ground of cancellation, which should not be equivalent with the relative ground for cancellation based on conflicts with prior rights in well-known or reputed TMs.
This case amounts to bad faith in most EU Member States.
In major part of EU Member States, only in this case the assignment of the registered TM is possible.
In major part of Member States, it would not constitute a bad faith TM registration if two associates of a company split, the company ceases to exist, but both former associates continue to carry the same business separately and, without the consent of the former associate, one of them registers as a trademark, in his own name, the former's company distinctive signs (such as trade name, domain name, emblems etc.).
It is questionable if this approach is consistent with the ECJ jurisprudence in cases C-371/18, SkyKick (par. 75) and C- 104/18, Koton (par. 45, 46, 63) regarding the registration of the TM with the aim of engaging fairly in competition and of allowing consumers to distinguish the commercial origin of goods/services without facing a risk of confusion.
This case amounts to bad faith in most EU Member States.
4.1. Registration of a sign similar/identical to a TM registered abroad for similar/identical goods/services, folowed by no use of the TM after registration and notifications and legal actions to stop third parties from using the sign on the market
4.2. Registration of a sign similar/identical to a TM registered abroad for similar/identical goods/services, followed by use of the TM that creates a risk of confusion on the market as to the commercial origin of goods/services
In the majority of Member States, that would not amount to bad faith registration. The principle of territoriality and the principle of priority apply.
Further relevant factors indicating bad faith vary between Member States and may be, in most cases: proof of prior use of the TM registered abroad in national jurisdiction; proof of a certain degree of knowledge by the general public in national jurisdiction; proof of a dishonest intention at the date of application.
In most Member States, effective use of the TM after registration does not indicate that the application was made in good faith.
There are jurisdictions where Courts decide differently (DK, GE, PL, RO, SK).
4.3. Registration of a sign with a low degree of similarity with a TM registered abroad (word mark) for non-similar goods/services, followed by use of a similar/identical sign for identical goods and notifications and legal actions to stop third parties from using the sign on the market
In the majority of Member States, Courts consider the TM as registered, in view of the fact that bad faith should exist at the date of the application, so confusion on the market as to the commercial origin of goods is excluded.
Issuing notifications and starting legal actions for counterfeiting is considered an exercise of exclusive rights in the registered TM.
This approach allows registration of TMs in a way that deliberately circumvents the double similarity between signs and goods/services in order to create a risk of confusion on the market by the effective use of the sign.
The two choices made at the stage of registration and at the stage of effective use are motivated by bad faith and are able to show an abusive filing strategy.
In other jurisdictions, Courts always take into account the actual use of the TM on the market, after registration (BNLX; BG, EE, DK, FR, LV, LT, SI, SK).
The second approach is consistent with the ECJ jurisprudence in cases C-371/18, SkyKick (par. 74) and C- 104/18, Koton (par. 45).
The kind of signs that would be protected by prior rights (in trade names, emblems) or other legal or commercial interests in distinctive signs, as well as the requirements for their protection (use as a trade mark; use in national jurisdiction; degree of market recognition; right to prohibit the use of the subsequent TM) vary widely between Member States.
In the majority of EU Member States registration is mandatory for protection under TM law. In such countries, protection under TM law by action for cancellation for bad faith registration is restricted to well-known or reputed TMs.
The approach is inconsistent with the existing law provisions and the ECJ jurisprudence and disregards that bad faith is a different, absolute ground of cancellation, which should not be equivalent with the relative ground for cancellation based on conflicts with prior rights in well-known or reputed TMs.
In GE, SE, FI, protection for trade names is granted on the basis of prior use, according to art. 8 of the Paris Convention.
According to Benelux practice, the non-registered sign can be any sign (including a trade name) being used as a trademark.
The Swedish trademark law provides protection for signs that have been put into use before the mark applied for and which have in principle continued to be used, in Sweden or abroad, even if the mark has not been registered.
Trademarks with extensive lists of goods or general terms can generally neither be cancelled for bad faith nor for being contrary to public interest (ECJ, C-371/18, SkyKick).
II Procedural aspects
Bad faith may be invoked in cancellation proceedings in major part of the EU Member States.
In some Member States, bad faith may be raised in opposition proceedings (BG, CY, EE, DK, GR, LV, LT, PL, PT, RO, SE, SK, TR, UK), in case the the trade mark is ''liable to be confused with an earlier trade mark protected abroad, provided that, at the date of the application, the applicant was acting in bad faith'' [Art. 5 (4) c) TMD].
In a few numer of EU Member States, bad faith may be brought up in observation proceedings (CZ, EE, DK, GE, PL, UK).
III Problems
In case the defendant effectively uses the TM after registration, cancellation for bad faith is almost impossible, because of the strong principle of territoriality and priority of registration.
The defendant has no obligation to justify any legal interests in the registered sign, acquired prior registration, neither at the stage of registration, nor in cancellation proceedings.
- if the registered TM is able to fulfil its essential function of indicating origin or if, on the contrary, the TM was registered in order to create a risk of confusion/association with goods/services already put on the market by another undertaking;
- if the defendant is able to justify any legal interests in the sign, acquired through use of the sign for certain goods/services prior registration as a TM;
- assessing bad faith based on the commercial realities of the use made of the TM after registration, not of the TM as registered.
IV Proposals
- if the TM is not used after registration in commercial activities, but legal actions are taken to prevent third parties from entering the market or from continuing to use the sign on the market;
- if the TM, as used in commerce after registration, does not fulfil its essential function to indicate the origin of goods/services, without confusion.
[1] Studiul a fost prezentat în cadrul proiectului desfășurat de European Community Trademark Association (ECTA), Comisia de armonizare a dreptului european.
The Romanian implementation of the New Press Publishers Rights Related to Copyright[1]
SCPA Florea Gheorghe și Asociații
The Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC[2] [the ''DSM Directive''] introduces in its Title IV, as part of the ''measures to achieve a well-functioning marketplace for copyright'' and related to ''rights in publications'', legal provisions for the ''protection of press publications concerning online uses'', in Article 15.
On the 1st of April 2022, the Law no. 69/2022[3] implemented the DSM Directive by amending the Law no. 8/1996 on copyright and related rights.
Article 15 of the DSM Directive was implemented in the Romanian Law no. 8/1996 in Articles 94 and 941 of the Law no. 8/1996.
This paper concentrates on some essential issues related to the Romanian implementation of the new press publishers' related rights and it is organised in three parts.
The first part presents briefly the context of the adoption of the press publishers related rights, the main aspects in establishing the boundaries of press publishers' rights, with a focus on issues related the determining the object of protection.
The second part questions if the Romanian legal provisions guarantee the effectiveness of press publishers' related rights, given that it does not provide for criteria that allow the calculation of the remuneration due by online service providers to press publishers.
The third part raises concerns regarding the compliace with the provisions of the DSM Directive and its aim of the Romanian implementation of the right of authors of journalistic works included in press publications to an appropriate share of the revenues received by press publishers from online service providers.
I The context of the adoption of the press publishers related rights and the main aspects in establishing the boundaries of press publishers' related rights
Press publishers' related rights were adopted in the context of an extensive use of press publications by online services such as news aggregators and media monitoring services that made huge amounts of profits by using journalistic works [extracts of articles (snippets), photographs (thumbnails), videos], without the prior consent of press publishers or of authors of the works included in a press publications, without the payment of a remuneration for the uses and in breach of copyright and database rights of the rightholders.
Prior the adoption of the press publishers' related rights, the repeated attempts of press publishers and authors of journalistic works to license their works or to enforce copyrights or database rights vis a vis online services, such as, for example, Google News, failed.
The enactment of the press publishers' related rights aims to give press publishers bargaining power vis a vis online service providers[4], to enable the conclusion of lincensing agreements for the online use of press publications and journalistic works included in press publications.
The implementation of press publishers' related rights was mandatory for Member States, as it results from the preamble of the DSM Directive, paragraph (55).
The scope of the new press publishers' related rights is the same as that of the right of reproduction and of the right to make available to the public, stipulated in Article 2 and Article 3 (2) of Directive 2001/29/EC - the Infosoc Directive [Article 15 (1) and (4) DSM Directive].
The rights are granted for press publications first published after 6 June 2019.
The duration of the press publishers' related rights is of 2 years, calculated from 1 January of the year following the date on which that press publication is published.
Holders of the rights are ''publishers of press publications'', such as news publishers and news agencies, when they publish ''press publications'' for which they assume the initiative, editorial responsibility and control [par. (55), preamble DSM Directive].
The concept ''press publication'' is defined by Article 2 (4) DSM Directive, implemented in articles Art. 21 (1) h) and 2 (3) of the Romanian law.
''Press publications'' include ''journalistic publications published in any media, such as ''daily newspapers, magazines, news websites'' [preamble of the Directive, par. (56)].
Online publications that provide updated information ''as part of an activity that is not carried under the editorial responsibility and control of a service provider'', such as blogs and ''periodicals that are published for scientific or academic purposes, such as scientific journals'' do not fall under the definition of ''press publications''.
Addressees of the related rights are online service providers ''for which the reuse of press publications constitutes an important part of their business models and a source of revenue'' [par. (54), Preamble DSMD], such as ''news aggregators, media monitoring services'' and social platforms, such as Facebook, inso far as they offer such services.
The object of protection consists of ''literary works of a journalistic nature'', ''other types of works'' - photographs, videos, ''other subject matter'', included in ''journalistic publications''.
Issues in determining the object of protection of press publishers' related rights may be raised by the legal concept ''other subject matter''.
Does the concept cover only original works of human authorship, or does it include also AI generated content, without the requirement of originality?
One possible interpretation is based on Article 15 (1) of the DSM Directive, read in conjunction with Article 2 of the Infosoc Directive, as interpreted by the ECJ in the Infopaq[5] decision, which stated, essentially, that copyright protection is grated only to original works. Originality must reflect the “author’s own intellectual creation” or the author’s personality, which clearly means that a human author is necessary for a copyright work to exist.
Another possible interpretation has in view that the legal protection is not granted under copyright, but under a related right with a special legal regime, which does not impose the requirements of investment and originality. This interpretation allows the legal protection of content generated by the so called ''artificial intelligence journalism''[6]. AI journalism is used by press agencies such as Associated Press at least since 2016.
''Hyperlinks'', ''mere facts'', ''individual words'' and ''very short extracts'' of a press publication are excluded from protection.
The concept ''very short extracts'' of a press publication raises difficulties of interpretation. According to the preamble of the Directive, the legal notion is to ''be interpreted in such a way as not to affect the effectiveness of the rights provided for'' [par. (58), preamble, DSM Directive]. A ''very short extract'' has little or no economic significance for the press publisher [par. (54) and (58), preamble DSM Directive].
Article 941 (2) c) of the Romanian Law introduces a quantitative criteria and adds 3 alternative conditions. A very short extract has a maximum lenght of 120 characters (not words) and it ''does not affect the effectiveness of the rights or it does not lead to the replacement of the press publication or it does not determine the public not to access the press publication''.
Several questions arise in relation to the interpretation of this important article, which allows a press publisher to prohibit the reproduction of an extract that has 120 characters, when, in the opinion of the press publisher, the extract affects the effectiveness of its rights.
In case an extract has 122 characters, is the damage to the press publisher presumed? How may the presumption be reversed, in view that no means of proof are available?
In case an extract has maximum 120 characters and all the alternative conditions are respected, so that there's no infringement of the press publishers' related rights, the question arises if copyright in the same extract might be infringed?
The answer to the question has to be given in view of the ECJ ruling in Infopaq, according to which ''11 consecutive words'' of a protected work may infringe copyright, ''if the elements thus reproduced are the expression of the intellectual creation of their author''[7].
The interpretation of the legal concept ''very short extract'' of a press publication has to be in relation with the legal provisions of Article 5 of the Infosoc Directive, in particular these regarding the exception for the use of ''works or other subject-matter in connection with the reporting of current events'', ''to the extent justified by the informatory purpose'' [Article 5 (3) (c) of Directive 2001/29/EC] and the exception for quotation ''for purposes such as criticism or review'' [Article 5 (3) (d) of Directive 2001/29/EC].
The problems that may arise at the EU level is due to the lack of harmonization of national implementations of Article 5 of the Infosoc Directive, that determines a lack of harmonization of press publishers' rights.
For example, under German law search results produced by search engines do not qualify as quotations, whereas under Dutch case law they do. In Spain, changes to the quotation exception were introduced, so that search engine operators would have to pay compensation for displaying short extracts of press publications[8].
In order to rely on the exception for quotation, the lenght of the extract has to be justified by the legal purpose. There are no quantitative limits imposed by the law.
Consequenty, if an extract has more than 120 characters and does substitute the press publication, but its lenght is justified by the purpose of quotation, as interpreted in the ECJ jurisprudence, the exceptions to the press publishers' related rights apply.
The same is applicable for the exception for the reporting of current events. The length of the extract is irrelevant, as long as it is justified by the informatory purpose.
II Is the Romanian law able to guarantee the effective exercise of press publishers' related rights, given that it does not provide for criteria that allow the calculation of the remuneration due by online service providers to press publishers'
In contrast, the Italian Copyright Law[9] establishes relevant criteria such: the number of online accesses of the article, the years of activity and the relevance on the market of the press publisher, the number of the journalists employed, as well as the costs incurred on both sides for investments in technology and infrastructure, the economic benefits deriving, to both parties, from the publication of the article as to visibility and advertising revenues, which have to be taken into account at negociations of the fair compensation.
Also, the French IP Code provides for relevant criteria, different from the Italian ones: ''the human, material and financial investments made by publishers and press agencies, the contribution of press publications to political and general information and the importance of the use of press publications made by the internet service providers'' [Article L 218-4 (2)].
Moreover, the Romanian law does not impose on online services the obligation to provide relevant data which would allow a transparent and fair calculation of the remuneration due to press publishers.
In comparison, under the Italian Copyright Law, online service providers are bound to provide all data necessary to calculate the fair compensation, at the request of the Authority for Guarantees in the Communications or of any interested party, including through collective management organizations or independent management entities. A breach of the duty to provide the data within thirty days from the request may result in an administrative sanction [Article 43 bis (12)].
The French IP Code obliges online services to '' provide press publishers and press agencies with all information relating to the use of press publications by their users as well as all other information necessary for a transparent evaluation of the remuneration [...]'' [Article L 218-4 (2)].
III Concerns regarding the compliace with the provisions of the DSM Directive and its aim of the Romanian implementation of the right of authors of journalistic works included in press publications to an appropriate share of the revenues received by press publishers from online service providers.
According to Art. 15 (5) DSM Directive: ''Member States shall provide that authors whose works are incorporated in a press publication should be entitled to an appropriate share of the revenues that press publishers receive'' for the use of their press publications by online service providers.
According to par. 59 of the preamble of the Directive, the ''appropriate'' share of revenues is due to authors of the works ''without prejudice to national laws of ownership'' and to the ''exercise of rights in the context of employment contracts'', meaning that the revenue is added to the salary.
According to Art. 941 (6) and (7) of the Romanian law: ''Authors of works incorporated in a press publication shall be entitled to an appropriate share of the revenue received by the publishers of press publications from online uses by information society service providers, subject to the principle of freedom of contract and that of a fair balance between the rights and interests of the parties.
Payment of a lump sum may constitute appropriate remuneration.''
''The provisions of par. (6) do not apply in the case of publishers of press publications for the rights acquired in the context of labor relations [...].''
Under the Romanian law, if an author of a journalistic work included in a press publication is the employee of the press publishers and receives a salary, he/she shall not be entitled to a share of the revenues obtained by the press publishers from online services.
Moreover, even outside the context of a labor contract, authors may not receive an appropriate ''share of the revenues'' for online uses of the press publications, but only a lump sum.
The Romanian law allows the conclusion of the so called ''right-grabbing contracts'', against which the International Federation of Journalists has launched a worldwide campaign to demand fair payments to journalists[10].
In contrast with the Romanian legal provisions, under the French law, authors of journalistic works are entitled to an appropriate and equitable share of the press publishers’ remuneration. The share of remuneration has a ''complementary'' nature and may not be considered a ''salary'' [Article L 218-5-I].
Under German law[11], press publishers due to authors a minimum share of one third of the revenues received from online services.
The Italian Law establishes that authors of journalistic works two to five per cent of the revenues received by press publishers from online service providers.
The Polish Law states that authors have the right to a fifty percent of the revenues obtained by press publishers from online service providers[12].
In view of the above, the Romanian legal solution does not comply with the provisions of the DSM Directive, on the contrary, it frustrates one of the purposes of the enactment of the press publishers' related rights: to remunerate authors of journalistic works.
Short conclusions
The variety of national legal provisions in the implementation of Article 15 of the DSM Directive reveal that the goal of harmonization of the copyright regime in the digital single market was not achieved.
However, the aims of the DSM Directive were achieved in France. Based on the newly implemented related rights, after years of tough legal battles under competition law on abuse of a dominant position, the association of press publishers l'Alliance de la presse d'information générale was able to conclude licensing agreements with the internet giant Google News and with Facebook, for the online service Facebook news. Press publishers and journalists received remunerations for the use of their works.
[2] Published in OJ L 130, 17.5.2019, p. 92–125.
[3] M.Of. no. 321 of 01.04.2022.
[4] S. Scalzini, The new related right for press publishers: what way forward?, (July 31, 2020), in E. Rosati (ed.), Handbook of European Copyright Law (Routledge, 2021), available at https://ssrn.com/abstract=3664847 (accessed 15 May 2022).
[5] C-5/08 Infopaq, par. 33 and 34.
[6] A. Trapova, P. Mezei, Robojournalism – A Copyright Study on the Use of Artificial Intelligence in the European News Industry, GRUR International, 2022;, ikac038, https://doi.org/10.1093/grurint/ikac038 (accessed 14 May 2022). The authors conclude that ''the extent to which European journalism relies on assistive and generative technologies to produce written output does not justify, from a copyright perspective, the changing of the current anthropocentric copyright system''.
[7] C-5/08, Infopaq, par. 48 - 51.
[8] Mireille M.M. van Eechoud, A publishers' intellectual property right. Implications for freedom of expression, authors and open content policies, available at https://www.ivir.nl/publishers-intellectual-property-right/.
[9] Accesible at www.normattiva.it.
[10] IFJ/EFJ is the world's largest organisation of journalists, representing 600.000 media professionals from 187 trade unions and associations in more than 140 countries. According to IFJ, a ''right-grabbing contract'' is ''a contract where a media employer asks you to sign away all your authors' rights/copyright for an unlimited time, in any media, or on any platform, for a single payment - usually just the fee you are paid for writing the original story. This means that you will not get any extra remuneration if your article, photograph or broadcast is reproduced or sold elsewhere (e.g. to a database, other media in the same media group or externally). In addition, your contract may also insist that you waive your moral rights and thus prevent you from the right to be named as the author or to oppose any modification that threatens the integrity of your work. This can also imply that you are allowing your employer to sell your story to another media which you may not approve of''. See https://www.ifj.org/actions/ifj-campaigns/fair-contracts-for-journalists.html (accessed 15 May 2022).
[11] Urheberrechtsgesetz – UrhG, Copyright Act of 9 September 1965 (Federal Law Gazette I, p. 1273), as last amended by Article 25 of the Act of 23 June 2021 (Federal Law Gazette I, p. 1858), accessible at http://www.gesetze-im-internet.de/englisch_urhg/englisch_urhg.html#p0761.
[12] M. Peguera, Spanish transposition of Arts. 15 and 17 of the DSM Directive: overview of selected issues, Journal of Intellectual Property Law & Practice, Volume 17, Issue 5, May 2022, Pages 450–456, https://doi.org/10.1093/jiplp/jpac034.
The Impact of the European Trade Mark Law Reform on the Romanian Legislation[1]
* Versiunea în limba română a articolului este disponibilă aici
Abstract: The Study analyses the necessary changes of the Romanian legislation as a result of the recently adopted and published Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks (hereinafter called the Directive 2015/2436) and of the Regulation No 2015/2424 of the European Parliament and of the Council of 16 December 2015 amending Council Regulation (EC) No 207/2009 on the Community trade mark and Commission Regulation (EC) No 2868/95 implementing Council Regulation (EC) No 40/94 on the Community trade mark, and repealing Commission Regulation (EC) No 2869/95 on the fees payable to the Office for Harmonization in the Internal Market (Trade Marks and Designs) (hereinafter called the Regulation No 2015/2424).
Keywords: trade mark law reform, Directive (EU) 2015/2436, approximation of national trade mark laws, Regulation No 2015/2424, the European Union trade mark
Introduction
The new Directive No 2015/2436 to approximate the laws of the Member States relating to trade marks was adopted and published very recently in the Official Journal of the European Union No L 336 of 23rd of December 2015 and entered into force on the 13th of January 2016.
This Directive was adopted as part of a legal package, toghether with the Regulation No 2015/2424 introducing the European Union trade mark, published in the Official Journal of the European Union No L 341 of 24rd of December 2015 and entered in force on the 23rd of March 2016.
The new Directive No 2015/2436 and the new Regulation No 2015/2424 are drafted together and they comprise many identical legal provisions, with the aim to ‘‘reduce the areas of divergence within the trade mark system in Europe as a whole, while maintaining national trade mark protection as an attractive option for applicants”[1] and to ensure the ‘‘coexistence and balance of trade mark systems at national and Union level”[2].
The Study analyses in detail the content of these legal provisions insofar as they constitute a reform of the European trade mark law and entail changes of the Romanian trade mark legislation, contained in the Romanian Law No 84/1998 regarding trade marks and geographical indications, republished in the Official Journal No 337 of 8 May 2014 (hereinafter called ‚‚the Law No 84/1998”) and in the Rules for the application of the Law No 84/1998 published in the Official Journal No 809 of 3 December 2010 (hereinafter called ‚‚the Implementing Rules”).
According to the provisions of Article 54 of the Directive, by the 14th of January 2019, Romania has the legal obligation to make all the necessary changes of its national laws, regulations and administrative provisions covered by this Directive in order to comply with most of the provisions of the Directive[3]. As an exception to this term, legal provisions of Article 45 of the Directive, which refer to procedural rules, shall be transposed into the national legislation by the 14th of January 2023.
The Study identifies the area of divergencies and the necessary steps to be taken by the Romanian legislator in order to attain the objective stated in paragraph (12) of the Directive’s Preamble, namely that the conditions for obtaining and continuing to hold a Romanian registered trade mark are consistent with the conditions set up for the European Union trade mark and are, in general, identical in all Member States.
Some of the divergencies identified in the Study refer to the necessary transposition of new procedural rules, aligned with these stipulated in the new European Union trade mark Regulation, which would be applicable only in the field of trade mark law.
In the filed of intellectual property rights, the tendency to create European Union procedural law, via the adoption of Regulations or Directives is more evident[4]. What constitutes a novelty for the legislative process is the adoption by a Directive of procedural rules which have an impact on national laws of civil procedure, in order to harmonise these national rules with the rules of procedure contained in the Regulation on the European Union trade mark.
We shall further identify and examine in detail the necessary changes of the Romanian substantive trade mark law, followed by the necessary reform of the Romanian trade mark procedural law. Next, the main new legal provisions of the European Union Regulation which may have an important impact on the Romanian legislation and on the previously registered Community trade marks are identified.
To our knowledge, up to date, in the Romanian doctrine there is no published study related to the impact on the Romanian legislation of the legal substantive and procedural provisions of the trade mark legislative package, as adopted and published in the Official Journal of the European Union.
Content
Signs capable of constituting a trade mark are, according to Article 3 of the Directive, any signs, including sounds, provided that they are capable of distinguishing the goods or services of one undertaking from those of other undertakings and of being represented on the register in a manner which enables the competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor.
The requirement of graphic representation is no longer stipulated by the law. According to paragraph 13 of the Preamble a sign should be permitted to be represented ‘‘in any appropriate form using generally available technology, and thus not necessarily by graphic means”, as long as the representation satisfies the criteria established by the Sieckmann Judgment of the Court of Justice of the European Union (C-273/00): that is the sign is ‘‘capable of being represented in a manner which is clear, precise, self-contained, easily accessible, intelligible, durable and objective”, even if the sign is not graphically represented.
The legal provision requires the change of Article 2 of the Law No 84/1998 and of Article 3 of the Implementing Rules.
As a new compulsory absolute grounds for refusal of registration or for invalidity, Article 4 paragraph 1 (k) of the Directive No 2015/2436 adds signs ‘‘which are excluded from registration pursuant to Union legislation or international agreements to which the Union is party, providing for protection of traditional specialties guaranteed”.
The ground is compulsory for Member States. There is no option whether to introduce or not such absolute ground in the national legislation.
Paragraph (15) of the Preamble gives no further clarification on what is understood by ‘‘protected traditional specialties”. Art. 4 paragraph 1 (i) and (j) allows us to understand that protected designations of origin, geographical indications and traditional terms for wine differ from ‘‘protected traditional specialties”.
Another new compulsory absolute ground for refusal of registration or for invalidity is provided in Article 4 paragraph 1 (l): ‘‘trade marks which consist of, or reproduce in their essential elements, an earlier plant variety denomination registered in accordance with Union legislation or the national law of the Member State concerned, or international agreements to which the Union or the Member State concerned is party, providing protection for plant variety rights, and which are in respect of plant varieties of the same or closely related species”.
According to Article 4 paragraph 2 of the Directive 2015/2436, bad faith remains a ground for invalidity of the registered trade mark and is an optional absolute ground for refusal of registration.
Bad faith remains regulated as an optional ground for refusal of registration in Article 5 paragraph 4 (c) of the Directive 2015/2436 and so is also in Article 6 paragraph (4) g) the Romanian Law No 84/1998.
The Romanian legislator may decide to provide for the absolute ground of refusal of bad faith applications of trade marks in obvious cases (for example, one applies, with no justification, for registration of a trade mark which is an insignificant alteration of a well-known or reputed trade mark, or of the personal name of a famous person).
The Directive changes legal provisions on the effect on registration and invalidity of the required distinctiveness following use. A trade mark shall not be declared invalid, according to Article 4 of the Directive, if it is devoid of any distinctive character [Article 4 paragraph 1 (b)], or if it consists exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, or the time of production of the goods or of rendering of the service, or other characteristics of the goods or services [Article 4 paragraph 1 (c)], or if it consists exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of trade [Article 4 paragraph 1 (d)], in case it has acquired distinctiveness following use before the date of application for a declaration of invalidity. The rule is applicable even if before the date of application for registration the trade mark did not aquire distinctiveness following use.
The rule is mandatory for Member States. The rule is in compliance with the general principles of nullity of a legal act, such as the registration of a trade mark, according to which the sanction shall be waived when the cause of cancellation no longer exists at the time the sanction may be pronounced.
Mamber States have the option to transpose the legal provisions of Article 4 paragraph 5, according to which a trade mark shall not be refused registration if it acquired distinctive character after the date of application for registration, but before the date of registration.
Regarding the relative grounds for refusal or invalidity Article 5 paragraph 3 (a) of the Directive is redrafted in order to comply with the Decision of the Court of Justice of the European Union in the Davidoff & Cie SA, Zino Davidoff SA v. Gofkid Ltd case (C-292/00). A conflict with an earlier registered trade mark with a reputation is established irrespective of whether the goods or services for which a later trade mark is applied or registered are identical with, similar to or not similar to those for which the earlier trade mark with a reputation is registered.
The legal provision requires a rewriting of Article 6 paragraph (4) a) of the Law No 84/1998, which was already interpreted and applied by Romanian Courts in compliance with the above-mentioned jurisprudence.
A new mandatory relative ground for refusal or invalidity is stipulated in Article 5 paragraph 3 (c) of the Directive in relation to conflicts with earlier rights granted by an application for a designation of origin or a geographical indication already submitted in accordance with Union or national legislation prior to the date of application for registration of the trade mark, if that designation of origin or geographical indication confers the right to prohibit the use of a subsequent trade mark.
The new rule ensures that ‘‘the levels of protection afforded to geographical indications by Union legislation and national law are applied in a uniform and exhaustive manner”[5].
The new rule implies for the Romanian legislator a clarification of the issue if and under what circumstances the right to a registered or to a submitted designation of origin or geographical indication gives the right to prohibit the use of a subsequent trade mark.
Article 5 paragraph 4 contains optional relative grounds for refusal of registration or for invalidity of a trade mark. They are already stipulated in the Romanian legislation, but the Romanian legislator has to clarify if prior rights to a non-registered trade mark, or to a name confer on its proprietor the right to prohibit the use of a subsequent trade mark.
Contrary to the corresponding provisions of Article 8 paragraph 4 (a) of the Regulation No 207/2009 (which were not ammended by the Regulation 2015/2424 on the European Union trade mark), Article 5 paragraph 4 (a) the Directive does not condition the right to prohibit the use of a subsequent trade mark to the use in the course of trade of a non-registered trade mark or a sign of „more than mere local significance”.
As regards the right to a name, Article 5 paragraph 4 (b) (i) of the Directive makes no limitation as to the right to a company name or to a personal name.
In our opinion, having in view paragraph (27) of the Preamble, the conflict with such prior rights needs to be solved by the Romanian legislator on the basis of the priority principle. That leads to the necessary provision of the legal solution according to which signs such as prior rights to a non-registered trade mark, or to a name (personal name or company name) give the owner the right to prohibit the use of a subsequent trade mark. That means that an earlier right to a personal or to a company name used in commerce may be invoked in order to preclude the registration of a trade mark or as an invalidity ground. Also, an earlier right to a registered trade mark may be invoked against the use of a subsequent company name. As a result of limitations of the effects of a trade mark, an earlier right to a registered trade mark can not be used against the use of a personal name in the course of trade, where such use is in accordance with honest practices in industrial or commercial matters, as provides Article 14 paragraph 1 (a) and paragraph 2 of the Directive.
The absolute grounds for refusal or invalidity may be invoked in an observation by any interested party, according to legal solutions adopted both by Article 40 of the Directive 2015/2436 and by Article 18 of the Law No 84/1998.
According to the provisions of Article 37 of the Romanian Code of Civil Procedure, the Romanian Law No 84/1998 must expressly recognise the legal standing to submit observations for any group or body representing manufacturers, producers, suppliers of services, traders or consumers.
Relative grounds for refusal or invalidity may be invoked by opposition, by any interested party, on the ground of existing earlier rights, as already stipulated in the Romanian Law No 84/1998.
The redrafting of Article 18 paragraph (1) of the Implementation Rules is necessary in order to clarify, as stated in Article 43 paragraph 2 of the Directive 2015/2436, that ‘‘a notice of opposition may be filed on the basis of one or more earlier rights, provided that they all belong to the same proprietor”.
As to the legal option regarding ex-officio examination of only absolute grounds or of absolute and relative grounds, the Study on the Overall Functioning of the European Trade Mark System, presented by Max Planck Institute for Intellectual Property and Competition Law (hereinafter reffered to as ‘‘the Study”[6]), reveals that 12 Member States do not perform any ex officio examination of relative grounds, leaving them only for opposition and invalidity proceedings, while other 12 Member States provide for the ex officio examination of relative grounds.
Arguments in favour of such ex officio examination of relative grounds are stated in paragraph 2.49, page 232 of the Study, which emphasizes that a great number of trade mark owners support such examinations and see them as helpful and important for a well-functioning system, even if user associations and trade mark agents endorse the view that the system should leave such monitorisation to the trade mark owners themselves.
The new Regulation No 2015/2424 on the European Union trade mark stipulates, in its Article 38, that, at the request of the applicant for the EU trade mark when filing the application, the Office shall draw up a European Union search report citing earlier EU trade marks or EU trade mark applications which may be invoked against the registration of the EU trade mark. The applicant may request, at the time of filing an EU trade mark application, that a search report be prepared by the central industrial property offices of each of the Member States. Upon publication of the EU trade mark application, the Office shall inform the proprietors of any earlier EU trade marks, or EU trade mark applications cited in the EU search report of the publication of the EU trade mark application.
In our opinion, the procedure insures a balanced and fair functioning of the registration system, for all interested parties that act in good faith. There are strong arguments in favour of the adoption of such rules in the Romanian legislation, because the procedure of is carried only at the request of the applicant and not ex officio and because the proprietors of any earlier rights cited in the search report receive information of the application’s publication.
Articles 10 – 14 of the Directive 2015/2436 clarify and reform legal provisions concerning the exclusive rights conferred by a registered trade mark and the limitation os such rights.
The transposition of these legal provisions imply an adequate modification of the Romanian Law 84/1998, as explained below.
The proprietor has exclusive rights in relation to the sign registered as a trade mark for certain goods and services, which enable him to prevent third parties from using any sign in the course of trade, in relation to goods or services, under certain limited circumstances.
An important clarification is brought by paragraph 6 of Article 10 of the Directive, namely that trade mark protection is mandatory for Member States only in case of use of a sign by a third party for the purposes of distinguishing goods or services. That means that legal provisions stipulated in paragraphs 1, 2, 3 and 5 of Article 10 of the Directive give the proprietor the right to prohibit uses of sign which jeopardize the essential function of the trade mark to guarantee the consumers the origin of the goods or services is protected. No other trade mark functions are protected.
In this regard, paragraph 18 of the Preamble expressly states that „It is appropriate to provide that an infringement of a trade mark can only be established if there is a finding that the infringing mark or sign is used in the course of trade for the purposes of distinguishing goods or services. Use of the sign for purposes other than for distinguishing goods or services should be subject to the provisions of national law”.
Article 10, paragraph 6 of the Directive 2015/2436 gives Member States the option to protect trade marks against other types of uses, which are not made for the purpose of distinguishing goods and services, where the use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.
Without prejudice to the rights of proprietors acquired before the filing date or the priority date of the registered trade mark, paragraph 3 of Article 10 (d) adds the right of the trade mark owner to prohibit the use of a later sign as a trade or company name or part of a trade or company name, in line with the Decision of the Court of Justice of the European Union in case C-17/06, Celine[7].
The rationale of the rule results from paragraph (13) of the Regulation 2015/2424: because „confusion as to the commercial source from which the goods or services emanate may occur when a company uses the same or a similar sign as a trade name in a way such that a link is established between the company bearing the name and the goods or services coming from that company”, „the concept of infringement of a trade mark should also comprise the use of the sign as a trade name or similar designation, as long as such use is made for the purposes of distinguishing goods or services” (paragraph 19 of the Directive’s Preamble).
According to the Directive 2015/2436 and contrary to the previous legislation reflected in the Celine case, article 14 paragraph 1 (a) on limitation of the effects of a trade mark, third parties have the right to use only personal names: „1. A trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade: (a) the name or address of the third party, where that third party is a natural person”. Consequently, the trade mark owner may prevent the use of a subsequent trade name or company name, even if such use is in accordance with honest practices in industrial or commercial matters. Paragraph (27) of the Preamble clarifies that ‘‘the exclusive rights conferred by a trade mark should not entitle the proprietor to prohibit the use of signs or indications by third parties which are used fairly and thus in accordance with honest practices in industrial and commercial matters […] such use should only be considered to include the use of the personal name of the third party.”
Article 10 paragraph 3 (f) provides for the right of the trade mark owner to prevent the use of a subsequent sign in comparative advertising if that use is made in a manner contrary to Directive 2006/114/EC. The Directive implies a shift from the Decision of the Court of Justice of the European Union in case C-533/06 O2[8].
A new right of the trade mark owner is stipulated in Article 10 paragraph 4 of the Directive, namely the right ‘‘to prevent all third parties from bringing goods, in the course of trade, into the Member State where the trade mark is registered, without being released for free circulation there, where such goods, including the packaging thereof, come from third countries and bear without authorisation a trade mark which is identical with the trade mark registered in respect of such goods, or which cannot be distinguished in its essential aspects from that trade mark”.
This right should lapse if, during subsequent proceedings initiated before the judicial or other authority competent to take a substantive decision on whether the registered trade mark has been infringed, evidence is provided by the declarant or the holder of the goods that the proprietor of the registered trade mark is not entitled to prohibit the placing of the goods on the market in the country of final destination.
According to paragraph (22) of the Preamble, this right may be exercised ‘‘to prevent the entry of infringing goods and their placement in all customs situations, including, in particular transit, transhipment, warehousing, free zones, temporary storage, inward processing or temporary admission, also when such goods are not intended to be placed on the market of the Member State concerned.”
An analytical approach reveals six cumulative requirements for the exercise of this right: 1. the goods are in the course of trade; 2. the goods are brought into a Member State where an identical/similar trade mark is registered for such goods; 3. the goods are not being released for free circulation in that Member State; 4. the goods, including the packaging thereof, come from third countries; 5. the goods, including the packaging thereof, bear without authorisation a trade mark which is identical with or similar to the trade mark registered in the Member State in respect of such goods; 6. the proprietor of the registered trade mark is entitled to prohibit the placing of the goods on the market in the country of final destination.
In case during the judicial proceedings it is found that the registered trade mark has been infringed or that „the goods in question are found not to infringe an intellectual property right” [in the wording of paragraph (24) of the Preamble], according to article 28 of Regulation (EU) No 608/2013, the trade mark proprietor is to be liable for damages towards the holder of the goods.
The legislative solution reverses the controversial decision in Philips and Nokia (C-446/09 and C-495/09), pronounced in the application of former Regulations (EC) No 3295/94 and No 1383/2003[9], according to which goods could only infringe trade mark rights if they were released into free circulation in the European Union, were intended for the European Union market or were the subject of a commercial act directed to European Union consumers.
In line with the „Declaration on the TRIPS Agreement and Public Health”[10] and in order to insure the smooth transit of generic medicines, paragraph (25) of the preamble stipulates that the proprietor of a trade mark should not have the right to prevent a third party from bringing goods into a Member State where the trade mark is registered without being released for free circulation there based upon similarities between his registered trade mark and an international non-proprietary names (INN)[11] as globally recognised generic names for active substances in pharmaceutical preparations for the active ingredient in medicines.
Article 11 of the Directive No 2015/2436 stipulates a new right of the trade mark proprietor to prohibit preparatory acts, carried out in the course of trade, where the risk exists that the packaging, labels, tags, security or authenticity features or devices, or any other means to which the trade mark is affixed, could be used in relation to goods or services and that use would constitute an infringement of the rights of the proprietor of a trade mark under Article 10 paragraphs (2) and (3).
Such acts may consist of: (a) affixing a sign identical with, or similar to, the trade mark on packaging, labels, tags, security or authenticity features or devices, or any other means to which the mark may be affixed; (b) offering or placing on the market, or stocking for those purposes, or importing or exporting, packaging, labels, tags, security or authenticity features or devices, or any other means to which the mark is affixed.
An analytical approach reveals the cumulative requirements for the exercise of this right: 1. a third party commits, in the course of trade, preparatory acts in relation with a sign identical with, or similar to, a trade mark; 2. the preparatory acts relate to any means to which the trade mark is affixed on goods or services, such as: the packaging, labels, tags, security, authenticity features or devices; 3. the use of the means to which the identical/similar trade mark is affixed on the goods/services would constitute an infringement of the rights of the proprietor of a trade mark under Article 10 paragraphs (2) and (3).
This provision protects the trade mark proprietor against the use of a sign for the purpose of distinguishing goods or services and, if provided by the national law, against other uses of the sign, where it would without due cause take unfair advantage of, or would be detrimental to the distinctive character or the repute of the trade mark.
The right to prohibit preparatory acts in relation to the use of packaging or other means may not be exercised in cases where such use would constitute an infringement of the rights of the proprietor of a trade mark under Article 10 paragraph 4, that is in transit situations.
Article 12 of the Directive No 2015/2436 gives the trade mark proprietor the right to request the publisher of a dictionary, encyclopaedia or similar reference work, in print or electronic form in which the trade mark is reproduced, to ensure that the reproduction of the trade mark is accompanied by an indication that it is a registered trade mark. This was under the previous legal regime a regular measure taken by the proprietor in order to avoid that a registered trade mark becomes a generic term of the usual language, which further attracts the revocation of the trade mark [Article 20 (a) of the Directive].
New rights of trade mark proprietor are stipulated in Article 13 of the Directive No 2015/2436, applicable in cases where, without the proprietor’s consent, his agent or representative registers a trade mark in his own name, without a justification. The trade mark proprietor ‘‘shall be entitled to do either or both of the following: (a) oppose the use of the trade mark by his agent or representative; (b) demand the assignment of the trade mark in his favour.
The transposition of these legal provisions implies changes of the Romanian legislation.
In such cases, the trade mark proprietor may also exercise the right to oppose the registration of the trade mark, or to file an action for invalidation of the trade mark registration, as stipulated by Article 5 paragraph 3 (b) of the Directive and by the actual Romanian legislation.
Limitations of the effects of a trade mark stipulated in Article 14 paragraph 3 are novel: „A trade mark shall not entitle the proprietor to prohibit a third party from using, in the course of trade, an earlier right which only applies in a particular locality, if that right is recognised by the law of the Member State in question and the use of that right is within the limits of the territory in which it is recognised”.
Such an earlier right may be also an earlier trade name or company name, or to an emblem or to any sign used in the course of trade in a particular locality.
The Romanian legislation does not have any provision related to rights used in the course of trade on a limited territory and, in particular related to the issue if such earlier rights give the owners the right to oppose to the registration of a subsequent trade mark, valid across the entire Romanian territory or to the use of such a subsequent national trade mark on that particular territory.
Innovative are also the provisions contained in paragraph (27) of the Preamble, relating to other uses of a trade mark by third parties that the trade mark proprietor may not prohibit and the application of the Directive in a way that ensures the full respect for fundamental rights and freedoms. Reference is made to the use of the trade mark by third parties for the purpose of artistic expression and in the ambit of the freedom of expression. The „fair use” defence[12], provided for in the copyright legislation may constitute a defence in infringement proceedings under trade mark legislation only in cases where the use made is one ‘‘in accordance with honest practices in industrial and commercial matters”.
The European Union legislation states the fundamental rights and freedoms such as the freedom of expression and information, freedom of the arts and sciences, the right to education etc. in the The Charter of Fundamental Rights of the European Union[13], amended and proclaimed a second time in December 2007, which has a binding legal effect equal to the Treaties. Article 17 of the Charter of Fundamental Rights provides for the right to property[14], in the ambit of which ‘‘Intellectual property shall be protected”.
In our opinion, the transposition process has to be made in such a way that the Romanian legislation clearly states that the interpretation and application of the trade mark law, especially in cases of alleged trade mark infringements, should ensure the full respect of other equally fundamental rights and freedoms.
Trade marks are registered and rights are granted in so far as they are actually used on the market in the course of trade, in relation to goods and services for which they are registered and so fulfil their function of distinguishing goods or services of an undertaking from those of another undertaking.
If the requirement of use is not fulfilled within five years of the date of the completion of the registration procedure, trade marks are liable to be revoked, unless there are proper reasons for non-use.
According to the existing Romanian legislation, which provides for an opposition pocedure prior registration, the date of completion of the registration procedure is the day the term for lodging an opposition lapsed or the opposition was rejected [Article 21 of the Implementing Rules].
Lack of genuine use of a registered trade mark on the Romanian territory may be invoked as a defence in opposition and invalidity proceedings [Article 47 paragraph (4) of Law No 84/1998].
As a novelty, Article 17 of the Directive No 2015/2436 stipulates that lack of genuine use of the registered trade mark within a period of five years following the date of the completion of the registration procedure may constitute a defence in infringement proceedings. The Romanian legislation needs to be modified accordingly.
Regarding the right of the proprietor of an earlier registered trade mark to file an action for infringement in order to prohibit the use of a later registered trade mark, Article 18 of the Directive states that the action for infringement shall be rejected and the use of the later registered trade mark may not be prevented where that later trade mark would not be declared invalid because: (i) the earlier trade mark lacks distinctive character or reputation; (ii) there is acquiescence; or (iii) the proprietor of the earlier trade mark did not furnish proof of its genuine use.
In all other cases not expressly mentioned in Article 18, the action for infringement may be brought by the proprietor of an earlier registered trade mark against the proprietor of a subsequent registered trade mark, without the need for that latter mark to have been declared invalid beforehand.
This new rule adopted by the Directive is consistent with the Decision of the European Court of Justice in the case Fédération Cynologique Internationale C-561/11, given in the interpretation of Article 9 (1) of Council Regulation (EC) No 207/2009.
The transposition of Article 18 of the Directive in accordance with the jurisprudence of the Court of Justice in the Romanian legislation will ensure a common approach under the national and EU system, to what was a controvesial issue, namely if under the Romanian legislation, the action for infringement may also be brought against a later registered trade mark or if the later registered trade mark needs to be first invalidated[15].
Section 5 of the Directive is entitled „Trade marks as objects of property”. As explained in paragraph (34), the rules of this Section are adopted „for reasons of coherence and in order to facilitate the commercial exploitation of trade marks in the Union, the rules applicable to trade marks as objects of property should be aligned to the extent appropriate with those already in place for EU trade marks”.
In our opinion, the use of the term „property” in the Directive also provide legal certainty and full consistency with specific Union legislation, in particular with the provisions of Article 17 of the Charter of Fundamental Rights of the European Union, which protects intellectual property rights in the ambit of the right to property.
As objects of property, trade marks and applications for trade marks, may be transferred, licensed, levied in execution. The Romanian legislation already stipulates these rights.
A novelty for the existing Romanian law is that a trade mark may „be given as security or be the subject of rights in rem„, as stated in Article 23 of the Directive. Because in the Romanian legislative system the rights in rem are only those expressly designated as such by the law, a trade mark subject to rights in rem has to be subject to one of the rights specified in Article 551 of the Civil Code. Intellectual property rights are not mentioned by Article 551 of the Civil Code, however, paragraph 11 leaves the possibility of adding other rights to the list. The right to property is, of course, specified in Article 551 of the Civil Code, but the issue of qualifying intellectual property rights as property rights, that give the right holder ‘‘the right to own, use, dispose of and bequeath his or her lawfully acquired possessions”, is controversial in the Romanian doctrine[16], despite of the jurisprudence of the Romanian Constitutional Court stating that Article 44 of the Romanian Constitution regarding the private property right applies to intellectual property rights[17] and of the jurisprudence of the European Court of Human Rights, according to which Article 1 of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, regarding the protection of property, is applicable to intellectual property rights[18].
It remains to be seen how the Romanian legislator will decide to transpose the provisions of Article 23 of the Directive, according to which a trade mark „may be the subject of rights in rem.”
The provisions of Article 39 paragraph 5 on the ‘‘designation and classification of goods and services” are already interpreted by the Romanian Office for Inventions and Trade Marks in consistence with the Decision of the Court of Justice of the European Union in the IP Translator case C-307/10[19]. Before the ruling in the IP Translator case, a class heading was interpreted as covering all possible goods and services in that class. The new provisions require trade mark owners to ensure sufficient clarity and precision in relation to the goods and services for which protection is sought. General indications in class headings may be used, provided they comply with the requisite standards of clarity and precision, and will include all goods or services clearly covered by the literal meaning of the indication or term.
Innovative for the current Romanian Law are the provisions of Article 45 of the Directive, providing a mandatory efficient and expeditious administrative procedure before their offices for revocation or declaration of invalidity of a trade mark. The transposition of this article which is due by 14 January 2023 entails changes of competences of the Romanian State Office for Inventions and Trade Marks.
Novel for the Romanian legislation are the provisions of Article 45 paragraph 6 of the Directive, which state that ‘‘an application for a declaration of invalidity may be filed on the basis of one or more earlier rights, provided they all belong to the same proprietor” and the provisions of Article 47 paragraph 1, according to which: ‘‘an earlier date, on which one of the grounds for revocation occurred, may be fixed in the decision on the application for revocation, at the request of one of the parties”.
The Regulation 2015/2424 is part of the adopted legislative package. The Regulation entered into force on the 23rd of March 2016.
The terminology of Regulation (EC) No 207/2009 is updated, as a consequence of the entry into force of the Lisbon Treaty. The Community trade mark is called the European Union trade mark (EUTM) and the Office for Harmonization in the Internal Market (OHIM) is called the European Union Intellectual Property Office (EUIPO).
Some of the changes that impact on the national legislation are indicated next.
According to provisions of Article 25 of the Regulation, there is no longer possible to file for an European Union trade mark through national offices. The application must be made directly to the European Union Intellectual Property Office. As explained in paragraph (24) of the Preamble, the measure was adopted ‘‘in view of the gradual decline and insignificant number of EU trade mark applications filed at the central industrial property offices of the Member States and the Benelux Office for Intellectual Property”.
As regards the classification of goods and services, Article 28 of the European Union trade mark Regulation mirrors the Directive in stating that the goods and services for which trade mark protection is sought should be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on the basis of the application alone, to determine the extent of the protection applied for. The use of general terms, including the general indications of the class headings of the Nice Classification, shall be interpreted as including all the goods or services clearly covered by the literal meaning of the indication or term.
In order to ensure that the content of the Register meets the requisite standard of clarity and precision in accordance with the case law of the Court of Justice of the European Union, paragraph 8 of Article 28 gives the proprietors of European Union trade marks, applied for before 22 June 2012 which are registered in respect of the entire heading of a Nice class, the possibility to declare that their intention on the date of filing had been to seek protection in respect of goods or services beyond those covered by the literal meaning of the heading of that class, provided that the goods or services so designated are included in the alphabetical list for that class in the edition of the Nice Classification in force at the date of filing. Such a declaration should be filed between 23 March 2016 and 24 September 2016 inclusive. The trade marks for which no declaration is filed within that period shall be deemed to extend only to those goods or services clearly covered by the literal meaning of the indications.
Paragraph 9 provides protection to existing trade mark owners who might be prejudiced by the expansion of trade mark rights resulting from such declarations. Where the register is amended, the European Union trade marks cannot be used to prevent third parties from continuing to use a trade mark where that use commenced before the register was amended and the use did not infringe on the literal meaning of the goods and services at that time. Any amendment to the classification does not give the owner the right to oppose or apply for invalidity of a later trade mark where that later mark was in use or an application for registration had been made before the amendment and the use would not have infringed on the literal meaning of the goods and services on the register at the time.
An impact on the national legislation have the provisions of Article 123 c) on the ‘‘Cooperation to promote convergence of practices and tools”, which puts in place a mechanism of continuous cooperation between the European Union Intellectual Property Office and the national Intellectual Property Offices of the Member States in order to promote convergence of practices and tools in the field of trade marks and designs, in particular in the following areas of activity:
„(a) the development of common examination standards;
(b) the creation of common or connected databases and portals for Union-wide consultation, search and classification purposes;
(c) the continuous provision and exchange of data and information, including for the purposes of feeding of the databases and portals referred to in point (b);
(d) the establishment of common standards and practices, with a view to ensuring interoperability between procedures and systems throughout the Union and enhancing their consistency, efficiency and effectiveness;
(e) the sharing of information on industrial property rights and procedures, including mutual support to helpdesks and information centres;
(f) the exchange of technical expertise and assistance in relation to the areas referred.”
Conclusions
The transposition of the Directive in the Romanian legislation would not entail radical changes, but a fine tuning that allows the coherent functioning of the Internal Market, simplifies and clarifies the ground rules applicable in the field of trade mark rights in all European Member States.
The procedural rules relating to mandatory administrative procedure for revocation or declaration of invalidity of a national registered trade mark, in line with the the legal provisions of the European Union trade mark Regulation, to be implemented until 14 January 2013, ensure a better functioning of cross-border business activities and make easier the registration, administration and protection of trade marks in more than one European jurisdiction.
References
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[1] Preamble of the Directive, par. (5).
[2] Preamble of the Directive, par. (3).
[3] Articles 3 to 6, Articles 8 to 14, Articles 16, 17 and 18, Articles 22 to 39, Article 41, Articles 43 to 50.
[4] The Regulation (EU) No 608/2013 of the European Parliament and of the Council of 12 June 2013 concerning customs enforcement of intellectual property rights which provides procedural rules for customs authorities to enforce intellectual property rights with regard to goods liable to customs supervision or customs control and the Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights entailed adequate changes of national rules of civil procedure
[5] Preamble of the Directive, par. (15).
[6] Paragraph 2.43 and 2.44, page 231 of the Study on the Overall Functioning of the European Trade Mark System, presented by Max Planck Institute for Intellectual Property and Competition Law, available at http://www.ip.mpg.de/fileadmin/ipmpg/content/forschung_aktuell/03_studie_und_synopsen/mpi_final_report.pdf and Roland Knaak, Annette Kur, Alexander von Mühlendahl, ‘‘The Study on the Functioning of the European Trade Mark System”, Max Planck Institute for Intellectual Property and Competition Law Research Paper, No 12-13, available at: www.ssrn.com.
[7] The unauthorised use by a third party of a company name, trade name or shop name which is identical to an earlier mark in connection with the marketing of goods which are identical to those in relation to which that mark was registered constitutes use which the proprietor of that mark is entitled to prevent in accordance with Article 5(1)(a) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks, where the use is in relation to goods in such a way as to affect or to be liable to affect the functions of the mark.
[8] Where is was judged that ‘‘Article 5(1)(b) of (the former – n.ns.) Directive 89/104 is to be interpreted as meaning that the proprietor of a registered trade mark is not entitled to prevent the use by a third party, in a comparative advertisement, of a sign similar to that mark in relation to goods or services identical with, or similar to, those for which that mark was registered where such use does not give rise to a likelihood of confusion on the part of the public, and that is so irrespective of whether or not the comparative advertisement satisfies all the conditions laid down in Article 3a of (the former – n.ns.) Directive 84/450, as amended by Directive 97/55, under which comparative advertising is permitted”.
[9] Concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights.
[10]Adopted by the Doha WTO Ministerial Conference on 14 November 2001, available at www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm.
[11] For more information, see http://www.who.int/medicines/services/inn/en/, according to which ‘‘International Nonproprietary Names (INN) facilitate the identification of pharmaceutical substances or active pharmaceutical ingredients. Each INN is a unique name that is globally recognized and is public property. A nonproprietary name is also known as a generic name”. ‘‘Trade-marks should neither be derived from INNs nor contain common stems used in INNs.”
[12] See Martin Senftleben, „Overprotection and Protection Overlaps in Intellectual Property Law – the Need for Horizontal Fair Use Defences”, The Structure of Intellectual Property Law: Can One Size Fit All?, A. Kur/V. Mizaras, eds., Cheltenham: Edward Elgar Publishing 2011, available at www.ssrn.com.
[13] Published in the Official Journal of the European Union of 26.10.2012.
[14] Article 17 „Right to property (1) Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest. (2) Intellectual property shall be protected.”
[15] Romanian readers may read the written arguments on the site www.juridice.ro: Andreea Micu, Dragoș Bogdan, „Contrafacerea unei mărci printr-o marcă înregistrată ulterior. Soluție CJUE contrară jurisprudenței din România” and Octavia Spineanu-Matei, Andreia Constanda, ‘‘Despre inadmisibilitatea acțiunii în contrafacere împotriva unei mărci înregistrate. Este necesară reconsiderarea practicii judiciare?”. Article 18 of the Directive No 2015/2436 clarifies that an action for infringement may be brought, under the stated circumstances, also against a later registered trade mark.
[16] See the various possible interpretations in Sonia Florea, ‘‘Proceduri civile în materia drepturilor de proprietate intelectuală”, Universul Juridic, Bucharest, 2013, pages 112 – 132.
[17] See the Decisions of the Romanian Constitutional Court No. 541 of the 7th of December 2004, Official Journal No. 81/the 25th of January 2005 and No. 688 of the 31st of May 2011, Official Journal No. 537/the 29th of July 2011.
[18] See the Decision of the Grand Chamber of the European Court of Human Rights in Anheuser-Busch v. Portugal case (No 73049/2001);
[19] See also the ‘‘Common Communication on the Interpretation of the ‘IP Translator’„ and the ‘‘Common Communication on the Common Practice on the General Indications of the Nice Class Headings”, made in the ambit of the European Trademark and Design Network, available at https://www.tmdn.org/network/converging-practices.
[1] Studiul a fost prezentat în cadrul conferinței internaționale ”Challenges of the Knowledge Society’’, 20 - 21 mai 2016, ediția a 10-a, București, organizată de Universitatea „Nicolae Titulescu”, Fundația „Nicolae Titulescu” pentru Drept și Relații Internaționale, Universitaea Complutense din Madrid și Universitatea Deusto din Bilbao.
Parallel/Grey imports v. Exhaustion[1]
I What are grey goods or parallel imported goods?
The term „parallel imports” or „grey goods” is not defined by law.
In practice, parallel imports are regarded as genuine, original goods, placed on a market in one country by the owner of the intellectual property right or with his consent, which are imported for sale in another country, without the owner’s consent.
It is important to bear in mind that grey goods/parallel imports are not counterfeit or pirated goods.
It is also important to keep in mind that the genuine goods have already been put on the market, by the right holder or with his consent.
The problem relating to the infringement of intellectual property rights by parallel imports arises at the moment they are imported from one market, where rights have been exercised, in order to be sold to a different market, where the right owner has not used its intellectual property rights.
Usually, goods marketed in different markets differ in terms of quality controls, ingredients, packaging, marketing methods, which reflect in a different price level.
The parallel importer is deriving a benefit by purchasing the genuine product at a cheaper price in country A and subsequently selling it at a higher price in country B.
From the consumer’s point of view, parallel imports appear to be desirable because they are genuine products, affordable at lower prices.
Parallel imports also benefit free market competition, by preventing partition, control of the market and abuses through exclusive and territorial intellectual property rights.
From the intellectual property right owners, the licensees and authorized distributors perspective, parallel imports are undesirable.
They consider that parallel imports unfairly escape the necessary costs for market entry, such as local marketing, advertising, regulation compliance, product liability, research, costs which are normally passed to local consumers and reflect in local prices.
Other legitimate reasons to oppose parallel trading relate to issues of consumer protection, because, often, parallel imports are not provided together with the warranties and service guarantees which come with the authorized sales.
Also, parallel imports may comply with different product safety standards. If destined for marketing in one country, parallel imports may come with instructions written in a foreign language, which could lead to misuse of products and cause injuries.
Such repetitive negative consumer experiences with grey goods or parallel imports damage the intellectual property owner’s and its authorized distributors reputation and goodwill.
Ultimately, fair, free and undistorted competition on the market is discouraged.
II Is it possible to stop parallel imports by relying on intellectual property rights?
Intellectual property rights are, by nature, exclusive and territorial.
That means that the right holder has the exclusive right to use its property right and to stop others from using it, in a given territory.
The risk is that the right holder may use its rights to partition markets and to control further commercialization of goods bearing the intellectual property right.
In order to limit the scope of the exclusivity of the intellectual property rights, the legislation provides the principle of „exhaustion” of rights, upon first sale.
According to the principle of exhaustion of intellectual property rights, once a product bearing an intellectual property right, has been put on the market with the owner’s consent, he can not rely on the exclusive right to prohibit further sales of that product.
Exhaustion of intellectual property rights is in connection with the territory on which the intellectual property right can not be exercised after the first sale.
At present, different law systems use one of the three standards of intellectual property rights exhaustion:
There is no international agreement on the standard of exhaustion of intellectual property rights.
According the art. 6 of the TRIPS Agreement, subject to compliance with the non-discrimination rules of most favorite nation and with the principle of national treatment, „nothing in this Agreement shall be used to address the issue of exhaustion of intellectual property rights”.
Because the three different approaches coexist, different legal systems are inconsistent on the issues of whether parallel imports violate intellectual property rights and under what conditions.
III The principle of Community exhaustion
The principle of community exhaustion applies to all types of intellectual property rights.
Most of the cases in which right holders try to stop parallel imports are related to trade mark rights and, in order to simplify the issue this paper will limit its analysis to trade mark rights.
Article 295 of the EC Treaty [Treaty establishing the European Community] states clearly that „the Treaty shall in no way prejudice the rules of Member States governing the system of property ownership”.
This article coexists with the provisions on free movement of goods stating that „the existence of trade mark rights should not constitute a means of arbitrary discrimination or disguised restriction on trade between Member States” and on free and undistorted competition.
In order to reconcile the conflicting provisions and to ensure the achievement of the common market, the European Court of Justice defined the core of each intellectual property right and developed the doctrine of the „essential function” / specific subject matter”.
According to the European Court of Justice case-law, the specific subject-matter of a trade mark is, in particular, to guarantee to the owner that he has the exclusive right to use that mark for the purpose of putting a product on the market for the first time and thus to protect him against competitors wishing to take unfair advantage of the status and reputation of the trade mark by selling products illegally bearing it.
The scope of exclusivity given to the right holder shall reflect the essential function of the trade mark.
The Directive codified the principle of community exhaustion of trade mark rights in its article 7 (1): „The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in the Community under that trade mark by the proprietor or with his consent”.
The two cumulative conditions for exhaustion of trade mark rights are related to 1. the market on which the goods were first put in commerce – only the European Community market and to 2. the consent of the trade mark owner to release of goods on the market.
4.1. Member states were not left with the right to adopt the international exhaustion principle, as stated in the Silhouette case [Case C-355/96 Silhouette International v. Hartlauer].
The trade mark owner Silhouette International Schmied GmbH produced and marketed sunglasses through a selective distribution network on the Community market and most countries of the world. Silhouette refused to supply Hartlauer Handelsgesellschaft mbH with its sun glasses for trade on Austrian markets. Harlauer succeeded to buy genuine sunglasses outside the European Community and to put them on the community market.
The ECJ held that Silhouette had not exhausted its trade mark rights within the European Community and had the right to stop the importation and selling of the genuine goods on the EC market.
4.2. The consent of the trade mark owner is required in respect of each individual item of the marketed products, as stated in the Sebago case [Case C-173/98].
The US company Sebago distributed in Belgium goods manufactured in El Salvador through its exclusive distributor. The claim of infringement of trade mark rights was brought against GB Unic SA, which acquired Sebago shoes manufactured in El Salvador and sold them in Belgium.
The ECJ ruled that the requirement of consent is not satisfied if identical or similar goods bearing the same trade mark have already been put on the EC market with the owner’s consent.
Consent is required in respect of each individual item of the product put on the EC market.
4.3. The trade mark owner’s consent can be either express or tacit, as stated in the joined cases Davidoff and Levi Strauss [Cases C-414/99 and C-416/99].
Davidoff sold cosmetic products in Singapore through an exclusive distributor. By agreement, the distributor was limited only to markets outside the EC and had the obligation to impose the same restriction on its sub-retailers and sub-distributors. A&G bought the products on the Asian market and sold them in the UK.
Levi Strauss sold jeans on the UK market thorough its authorized distributor. The contracts Levi Strauss entered with its distributors contained no restrictive territorial clauses. Levi Strauss refused to enter a distribution agreement with big supermarket chains Tesco and Costco, who managed to obtain genuine Levi Strauss jeans from authorized distributors on markets outside the EC.
The European Court of Justice set the requirements for inferring tacit consent of the trade mark owner.
The burden of proving tacit consent rests on the parallel importer.
Tacit consent can be inferred from circumstances which unequivocally demonstrate that the trade mark owner had given up any of his exclusive trade mark rights.
Mere silence does not imply consent of the trade mark owner.
The fact that the trade mark owner did not communicate to all subsequent purchasers of the goods placed on the market outside the EC its opposition to goods being marketed in the EC does not imply consent.
The fact that the goods do not carry a notice of prohibition of sales on the EC market does not imply consent.
The fact that the trade mark owner has transferred the ownership of the goods bearing the trade mark without imposing any contractual restrictions does not imply consent.
5.1. Council Regulation 1383/2003 [Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights] entered in force on 1st of July 2004 and repealed the Regulation 3295/1994.
It enables the right holder who suspects that certain goods infringe his intellectual property rights to lodge a written application for action with the relevant customs authorities, giving an accurate and detailed description of the goods in question, information concerning the nature of the fraud and the name and address of the contact person appointed by the right-holder.
Customs authorities may take action against such goods when goods are entered for release for free circulation or export within the Community or when they are found during checks on goods entering or leaving the Community customs territory, placed under a suspensive procedure, in the process of being re-exported, or placed in a free zone or free warehouse.
The measures consist mainly of detention by the customs authorities of suspected goods, for a certain period of time, subject to the right holder undertaking legal action against the infringer.
Member States may set up a simplified procedure to enable the customs authorities to have the goods destroyed.
5.2. The Directive 2004/48 [of 29 April 2004 on the enforcement of intellectual property rights] provides for harmonized measures and procedures needed to ensure the enforcement of intellectual property rights and appropriate action against those responsible for counterfeiting and piracy.
The Directive provides for provisional and precautionary measures, such as interlocutory injunctions, the seizure of the fixed and non-fixed assets of the alleged infringer, including the blocking of his/her bank accounts and other assets.
If a decision is given on the merits of the case, at the request of the applicant, the judicial authorities may order the recall of the goods which have been found to infringe an intellectual property right and the destruction of counterfeit or pirated goods.
If the decision found an infringement of an intellectual property right, judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement, which may be subject to a recurring penalty payment. The competent judicial authorities may also order pecuniary compensation to be paid to the injured party instead of applying the removal or destruction measures, if that person acted unintentionally and if execution of these measures would cause him/her disproportionate harm.
It does not matter whether the holder of the right or those entitled under him have their registered office in a Member State or outside the Community.
Even if the external transit of non-Community goods is not subject to import duties, nor to other measures of commercial policy, it is not devoid of effect on the internal market.
The risk is that counterfeit goods may be placed under the external transit procedure and may be fraudulently brought on to the Community market.
The case concerned the attachment of the Aquafresh trade mark on original goods imported from South Africa, stored by Class International, owner of those goods, in a warehouse in Rotterdam.
The ECJ ruled that placing non-Community goods bearing a mark under a suspensive customs procedure such as that of external transit is not, per se, interference with the right of the proprietor of the mark to control the initial marketing in the Community.
The trade mark proprietor can oppose the offering for sale or sale of original goods bearing a trade mark and having the customs status of non-Community goods, when the offering is done and/or the sale is effected while the goods are placed under the external transit procedure or the customs warehousing procedure and this necessarily entails their being put on the market in the Community.
The case involved the detention in France, on suspicion of infringement of trade mark, of original spare parts for cars manufactured in Spain and being transported to Poland (before its accession to the EU).
The ECJ considered that the transit does not involve any marketing of the goods in question, therefore it is not liable to infringe the specific subject-matter of the trade mark and cannot be justified on the ground of protection of industrial and commercial property (art. 28 and 30 EC Treaty).
Montex manufactured jeans by exporting the different pieces to Poland, including distinctive signs, under the customs seal procedure, having the pieces sewn together on Polish territory and bringing the completed trousers back to Ireland. Diesel has no protection for the sign in the territory of Ireland.
The dispute concerned an application for an order prohibiting the transit through German territory of goods belonging to Montex bearing the sign Diesel, identical to the registered German trade mark.
IV The principle of international exhaustion – the US example
US laws consider that once a genuine trademarked product is placed on the global marketplace anywhere in the world, by or with the consent of the trademark owner, the trademark owner may not control the further distribution of that product under a theory of trademark infringement.
US Courts constantly permit the unauthorized importation and sale of genuine products, on the principle that once a trademarked product is placed on the market, trade mark rights may not be used to control the product’s further destination.
V Exceptions to the principle of international exhaustion
There are numerous exceptions to the general principle of exhaustion of trade mark rights, related to the „legitimate reasons”, „especially where the condition of the goods is changed or impaired after they have been put on the market” by the proprietor or with his consent (as stated by art. 7, paragraph 2 of the Directive 89/104/EEC and art. 13 paragraph 2 of the Regulation No. 40/94 and ECJ Cases) or to the standard of „material change” (US Courts Decisions, such as Perugina Case [Lever Brothers Co. v. U.S.; Ferrero U.S.A., Inc. v. Ozak Trading, Inc.]), but this paper will not treat the problem in extenso.
With regard to ECJ cases, exceptions to the principle of Community exhaustion were frequent in relation to pharmaceutical products in cases such as Bristol-Myers Squibb and Others v. Paranova, Eurim-Pharm v. Beiersdorf and Others, MPA Pharma v. Rhone Poulenc.
The ECJ ruled that pharmaceutical trademark owners could restrain the further marketing of their products which have been repackaged, unless:
(1) in doing so, the trademark owner would contribute to the artificial partitioning of the market;
(2) the repackaging did not directly or indirectly affect the original condition of the product (by merely replacing external packaging or adding labels or instructions);
(3) the packaging does not clearly identify the repackager;
(4) the repackaged product is not such as to be liable to damage the reputation of the trademark or its owner;
(5) the importer notifies, and provides requested samples of repackaged products to, the trademark owner before placing them on sale.
The above principles are not confined to the field of pharmaceutical products.
In the Loendersloot v. Ballantine & Son Limited case, concerning bottles of whiskey, the ECJ held that the trademark owner could prohibit the reaffixing of his trademark to genuine goods, with the same exceptions, but it not required the submission of samples to the trade mark owner and the mentioning on the goods of the identity of the party that relabels or repackages them.
[1] Studiul a fost prezentat în cadrul conferinței internaționale a International Bar Association (IBA), organizată la București, 2007.