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By crossenetborowsky 0

In our last Newsletter, we introduced the new tax measures applicable to the production of theatrical and audiovisual works as of January 1<sup>st</sup>, 2016.

These measures concerned both the domestic tax credit, applicable to the French producers, and the international tax credit (aka TRIP), which benefits foreign producers.

The French 2016 Finance Act aims at strengthening the domestic tax credit, principally applicable to theatrical motion pictures, mainly due to the impulse of Luc Besson who threatened to produce his motion picture “Valerian” outside of France because of the current legal framework.

“Valerian” is an English-language theatrical motion picture produced by a French producer with the highest budget ever seen for a French film. As a French producer, the only tax credit available to EuropaCorp was the domestic one with the overall result being that EuropaCorp was in a less favorable position that a foreign producer. In the first instance, the English language simply disqualifies the film from being eligible for the domestic tax credit.

Further, assuming that the film was even eligible, the domestic tax credit is limited to 20 % for such works, while, as of January 1, 2016, 30% is available for the same works under the TRIP with funding caps being higher than those applicable for the domestic tax credit.

In light of the current structure, the various subsidies and tax schemes proposed by other European countries became more attractive than those proposed when filming in France.

The internationalization of French productions in terms of the use of English as a shooting language, as well as the level of the production budgets for these types of films, necessitated certain changes to the domestic tax credit system in order to keep the French market competitive and avoid delocalization.

The fact that “Valerian”’s budget approximates 170 Million Euros Illustrates the importance for the French film industry and economy to prevent the delocalization of these types of productions. The 2016 Finance Act therefore provides for two sets of modifications: the expansion of the eligibility criteria and the increase of the amounts of the tax credit available.

The following changes apply in respect of drama and animation works: – With respect to the eligibility criteria: <ul> <li>The language criterion no longer applies to theatrical animation pictures.</li> <li>Live action theatrical motion pictures shot in a foreign language are eligible when (i) at least 15% of the shots are processed digitally for certain specific purposes set by the Act (such theatrical works are assimilated to theatrical animation productions), or (ii) the use of a foreign language is justified by artistic reasons resulting from the screenplay.

</li> </ul> – With respect to the amount of tax credit available: <ul> <li>The tax credit percentages applicable to production companies are modified as follows:</li> </ul> <table> <tbody> <tr> <td></td> <td><strong>Animation</strong></td> <td><strong>Drama</strong></td> </tr> <tr> <td><strong>Audiovisual productions</strong></td> <td>    25%</td> <td>25%</td> </tr> <tr> <td><strong>Theatrical productions</strong></td> <td>    30%</td> <td>20%, or 30% when: (i) the picture is shot in French or in a French regional language; or (ii) at least 15% of the shots are processed digitally for certain specific purposes set by the Act</td> </tr> </tbody> </table> &nbsp; <ul> <li>The tax credit cap has been increased to 30 Millions Euros for theatrical productions.

</li> <li>Although the overall cap remains at 4 Million Euros, the per minute tax credit cap applicable to television drama programming has also been increased. The ceiling, originally set at 1,250 Euros per minute delivered, now fluctuates between 1,250 Euros and 10,000 Euros per minute delivered, based on the production costs per minute actually produced.

These new limits also apply to international television drama co-productions satisfying certain conditions regarding the budget and financing plan.</li> </ul> These new measures must be approved by the European Commission for the purpose of determining their compliance with the European Union legislation applicable to state aids. If so approved, such measures will apply to tax years beginning as of January 1, 2016.

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By crossenetborowsky 0

The decision of the European Court of Justice (CJEU) dated October 6, 2015[1] invalidated the “Safe Harbor” framework which authorized, since 2000[2], the transfer of personal data from within the European Union to companies with “Safe Harbor” certifications located in the United States.

For memory, the United States does not provide for an adequate level of protection and consequently the transfer of personal data to companies located in said country is generally prohibited[3]. However, by way of exception, prior to such decision, European companies could transfer personal data to American providers/data processors only if the latter i) self-certified that they will commit to implement processes ensuring an adequate level of protection or ii) entered into agreements with the European data controller, including “model contract clauses” issued by the European Commission[4].

In its decision dated October 6, 2015, the CJEU underlined that the “Safe Harbor” certification no longer provided a sufficient level of privacy protection, in view of the disclosures of mass surveillance programs of the NSA by Edward Snowden in 2013. The decision being effective immediately, any and all transfer of personal data made on the basis of said certification are consequently illegal and should in theory be terminated or otherwise modified to conform to the decision.

Following this decision, the French Data Protection Authority (CNIL) and its European counterparts (Article 29 Working Party) met on October 15 to prepare a common action plan to permit the creation of a new legal framework. Accordingly, the Article 29 Working Party called on the European institutions and governments to implement a new legal framework enabling the transfer of data between Europe and the United States, before January 31, 2016. Such solutions could be sought during intergovernmental agreement negotiations and the implementation of a new “Safe Harbor” framework could be considered.

The Working Party continues its analysis of the consequences of the CJEU decision on the other means available to transfer data to the United States, particularly regarding the aforementioned “model contract clauses”. The Working Party indicated that, pending the implementation of the new regulations, European companies are still permitted to employ these “model contract clauses” for the transfer of personal data to the United States.

However, the personal data of European companies or individuals which have been transferred to American providers using these “model contract clauses” may still be subject to the intrusion of the NSA to the same extent as when the “Safe Harbor” framework was employed. A court decision or a CNIL recommendation could also invalidate the use of such clauses[5].

Pending the signature of a new intergovernmental agreement or the implementation of new transfer means, what strategy should the companies adopt today?

Given the current context, European companies wishing to transfer their data to the United States should act with caution and accordingly should implement legal and technical solutions to limit the potential risk taken when transferring their personal data. The foregoing essentially involves setting up restrictive contractual clauses with the providers receiving said data in the United States.

Such clauses should notably include:

  • at a minimum, all of the obligations provided in the “model contract clauses”;
  • the following additional obligations for American providers operating a Cloud Computing service:
  • information regarding data processing (compliance with the French Data Protection Act[6], definition of the processing methods in place, obtaining client’s consent should the data processing be entrusted to another data processor, limitation of the data retention period and ensuring that said obligations are included in subcontracting contracts);
  • the implementation of a complaints system and measures to avoid security flaws;
  • the possibility for the client to audit the provider;
  • the destruction of data and its restitution at the end of the services provided or in case of early termination of the contract, in a format chosen by the client;
  • the detailed specification of the provider’s obligations regarding data security (including physical and technical security measures, traceability, continuity of services, level of service, backup) and specification that the latter can only act on instructions from the client;
  • the cooperation of the service provider with the relevant data protection authorities and obligation to provide the client with any and all useful information in order to make the statement concerning data processing to said authorities;
  • the clear and exhaustive indication of the countries hosting the data and guarantee of an adequate protection in said countries.

iii) finally and most importantly, to prevent any potential changes of position by the CNIL, the following specific obligations to ensure the legality of the transfer under any circumstances:

  • the obligation to take all necessary technical and legal measures in order to comply with the developments of the French Data Protection Act and with the CNIL recommendations;
  • in the event of the inability or impossibility to comply with the developments of the French Data Protection Act, the inclusion of an automatic termination clause with the obligation to restitute such data in addition to the removal of such data without additional charge for the client.

Up until now, the recourse to “Safe Harbor” data processors was principally insured by signing standard terms and conditions or boilerplate agreements which European clients were unable to negotiate. The situation of the formerly “Safe Harbor” American providers is unclear and will necessarily force said providers to amend their contracts in order to adapt them to the requirements of their European clients. The decision of the CJEU may have the merit of rebalancing the forces in play between the European data controllers and the American service providers.

[1] CJEU decision dated October 6, 2015, Case C-362-14 Maximillian Schrems v. Data Protection Commissionner

[2] Commission decision dated July 26, 2000

[3] Indeed, under directive 95/46, the transfer of personal data to countries outside the European Union which do not provide an adequate level of protection should be prohibited.

[4] It should be noted that another contractual means to transfer data was provided for companies that are part of a same group (« Binding Corporate Rules »)

[5] In this respect, it should be specified that a German data protection authority expressed its wish to also invalidate the model contract clauses and to authorize data transfer to the United States only subject to changes in its legislations

[6] Act n°78-17 dated January 6, 1978[:]

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By crossenetborowsky 0

Considering the changes introduced by our digital environment and the constantly emerging new technologies, the European Commission has launched various studies, brainstorming, consultations and plans of action since 2011 in order to modernize and harmonize copyright protection in the European Union. This initiative forms part of the Commission’s strategy to establish “a single market for Intellectual Property rights”. The former Commission, however, did not succeed in presenting practical measures since the proposed reform was considered insufficient for certain European officials.

The current Commission, which took office in November 2014, made a priority of growth and employment matters and accelerated the reform process; and the president of the Commission considered the single digital market as a key element for economic growth. To achieve said priorities, it was clearly stated that it was necessary to “dismantle national barriers with respect to copyright regulations” in order to “unlock creativity”, with minimal regulations.

Julia Reda, Member of the European Parliament and member of the Pirate Party, was appointed at the end of 2014 to draft a report, which was presented to the European Parliament early 2015. Said draft report suggested in particular:

  • The removal of territorial restrictions to copyright and promotion of cross-border access to content;
  • The harmonization of conditions for protection, especially by introducing a single European title applicable in all Member States (which would also contribute to the removal of obstacles resulting from the territorial restrictions applicable to copyright as indicated above), and the duration of copyright;
  • The harmonization and strengthening of exceptions and limitations to copyright[1].

This text has been the subject of heated debates and substantial lobbying from intellectual property professionals and certain Member States, especially and most importantly France. The disputes were essentially centered around the following competing interests: on the one hand, liberalization of creativity and rights of consumers, and on the other hand, protection and security of authors and rights holders. The debates also focused on the balance of power between industries and authors and artists, as well as the particular interests of each Member State. Another important issue which was discussed was the level of copyright protection each Member State could provide in the event of general harmonization.

In the end, more than 500 amendments were submitted to the draft report: the European Parliament adopted a non-legislative resolution on July 9, 2015[2] which substantially modified certain proposals considered as too “drastic”.

By way of example:

  • Regarding exceptions and limitations to copyright:

(i) Whereas the draft report contemplated a total harmonization and a mandatory application of the exceptions and limitations to copyright, the Members of Parliament considered that each Member State should be free to legislate further on such exceptions according to its specific cultural and economic interests, however with the implementation of minimum standards to said exceptions and limitations;

(ii) Certain exceptions proposed in the draft report, and which could have considerably broaden the forms of exploitation of the works by consumers, have either been removed (including the acknowledgment of a ‘right of quotation’ in the audiovisual sector) or limited (the proposal implementing a compulsory exception enabling libraries to lend books to the public in digital format irrespective of the location of access was for instance regulated regarding the use contemplated, duration, goal, and possible introduction of a fair compensation to the authors).

  • Regarding territoriality and accessibility of content and services:

While territoriality was questioned in the draft report, the Parliament finally called “for a reaffirmation of the principle of territoriality” in order to enable each Member State “to safeguard the fair remuneration principle”. Indeed, certain Members of Parliament argued that territoriality enables an increase of the revenues generated in each territory, thereby contributing to the financing of the works, and consequently ensuring fair compensation to authors and rights holders.

The Members of Parliament, nonetheless, emphasized the importance of improving accessibility and portability of services and content in order for consumers not to be denied access to content services for geographic reasons, and urged the Commission to propose appropriate measures in this regard.

It therefore appears that the debate is still open.

However, the Parliament confirmed its willingness to potentially harmonize the duration of copyright or to invite the Commission to analyze the impact of a single European copyright title for Member States. It also expressed its wish to adapt and create new exceptions in the digital era[3].

Considering the growth of services such as Netflix, the issues at stake in this reform are essential for competitiveness and development of European services as well as for reinforcement of consumers’ rights. Such issues are, however, subject to objections and claims from certain intellectual property actors. Copyright harmonization at the European Union level seems therefore quite complicated and must necessarily take into consideration the various interests. The European Commission should present a proposal of legislative revision at the end of the year and we look forward to hearing the position taken by the Commission.

[1] The draft report contains numerous proposals that we have not presented nor developed for purpose of this article.

[2] European Parliament resolution of 9 July 2015 on the implementation of 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

[3] The non-legislative resolution includes various proposals and suggestions which are not presented nor developed for purpose of this article. You can find the resolution via the following link: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2015-0273+0+DOC+XML+V0//

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By crossenetborowsky 0

Software providers and IT consultants: Be careful to what you agree to, even in the absence of a written agreement.

In a recent ruling by the Court of Appeals of Grenoble (CA. Grenoble, June 4, 2015, n°2009J386), the company CIMM Franchise, which exploits a network of 120 real estate agencies, ordered from the consulting company E-Développement Conseil the creation of software to improve the management of its assets. E-Développement Conseil entrusted the conception of such software to a company called 3C Evolution.

It should be noted that no agreement or technical specifications were formalized in order to detail the missions of both providers or the conditions of the software’s creation.

However, meeting minutes helped establishing that the parties decided the software to be delivered on January 2008.

The ordered software was finally delivered in June 2008, and showed many malfunctions, making it unfit for use. CIMM Franchise consequently decided to sue both providers in order to have the agreements terminated, to be reimbursed for all sums already paid, and to be granted damages.

The Court of Appeals of Grenoble, considering that:

  • the developer had breached its obligations by not respecting the delivery date, such an obligation being an obligation of results, even in the absence of an agreement or of technical specifications;
  • the developer had also breached its obligations by not providing software conforming to the client’s needs, such an obligation being an obligation of results as well, even in the absence of an agreement or of technical specifications;
  • the consulting company had breached its obligation of counseling because, on the one hand, they did not organize a call for bids before selecting the developer and therefore did not assess its competency and, on the other hand, had not detailed the technical specifications expressing the needs of the client,

decided to terminate the agreements to the exclusive fault of both service providers and to order the reimbursement of the down payments. However the court refused to grant damages.

Clearly, the lack of written agreements proved to be detrimental to the two service providers.[:]

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By crossenetborowsky 0

In an objective to render the French territory more attractive for the production of theatrical and audiovisual programs, Law n°2014-1655 dated December 29, 2014 modifies the tax credits available for such programs. Applicable as of January 1, 2016, the law incentivizes both producers (with respect to the national tax credit) and line producers (with respect to the tax rebate for international productions, also known as “TRIP”) to spend production costs in France.

 

With respect to the national tax credit:

 

The changes made by this law are mainly oriented toward animation programs in order to reduce the delocalization of the production of such programs abroad, notably to Canada or the US. Accordingly, the percentage of French eligible expenditures used to calculate the amount of tax credit available to French companies is increased to 25% for both theatrical and audiovisual animation programs. Additionally, the overall cap to the tax credits that can be received for one single program is increased from 1,300€ to 3,000€ per minute produced and delivered.

 

These changes also address low budget theatrical motion pictures. Indeed, the increased percentage of 30% of French eligible expenditures, which has been available solely for programs with budgets below or equal to 4 Million Euros until now, has been extended to motion pictures with a budget comprised between 4 Million Euros and 7 Million Euros. This measure will enable additional financing solutions for “middle-range” pictures which are the most prejudiced by the financing decrease, according to Frederique Bredin, President of the Centre National de la Cinematographie et de l’Image Animee (CNC).

 

With respect to the TRIP:

 

The modifications provided by the law increase the percentage of French eligible expenditures used to calculate the amounts available for the tax credit (from 20% to 30%) as well as the overall cap to tax credits received on one program (from 20,000,000€ to 30,000,000€). The objective of these measures is to improve how France is perceived by the entire world as a cultural, touristic and economic destination (we note that the television series “Merlin”, which benefited from the TRIP, has generated a significant increase in visits of the Castle of Pierrefond).

 

These new measures are welcome at times when the financing of theatrical and audiovisual programs is suffering (reduction of approximately 20% in the financing of the French theatrical productions, and of approximately 13% with respect to international theatrical co-productions for 2014). The parliamentarian deputies which initiated such changes are convinced that they will generate a significant economic return. Let’s hope that the future will prove them right.

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By crossenetborowsky 0

Is a trademark coexistence agreement sufficient to protect your trademark?

 

The question is legitimate, as reveals the decision of the French Supreme Court (Cour de Cassation) from February 10, 2015 (Cass. Com., n°13-24979).

 

In this case, the company Laboratoires Lehning, which manufactures pharmaceutical preparations, is the owner of the French and European trademarks “Lehning” in connection with, notably pharmaceutical veterinary and disinfectants products registered in class 5. Having realized that the company Ecophar had registered the French trademark “Lehring Naturellement efficace” (“Lehring naturally efficient”) before the French trademark office (INPI), to designate products that overlapped with some of the products bearing Lehning’s trademarks (also in class 5), Lehning opposed this trademark application. The dispute was settled when the two companies signed a coexistence agreement in June 2008. However, during the year 2012, considering that Ecophar had not respected its undertakings under the coexistence agreement, in particular because they reproduced the word “Lehring” alone and in big lettering on its website, Lehning filed a lawsuit against Ecophar on the basis of trademark infringement and unfair competition.

 

On appeal, the Court of Appeals of Paris judged that because Ecophar had generally performed the coexistence agreement, there could not be a finding of trademark infringement, nor of unfair competition. The Court of Appeals had simply drawn a simplistic parallel between coexistence agreement and counterfeiting or unfair competition. The general performance of the former implying automatically the lack of materialization of the other.

 

Nevertheless, the Supreme Court overturned the decision from the Court of Appeals, explaining that the Court should have analyzed “as it was invited to, whether, due to the similarities of the trademarks and the products designed to be registered, the failure to perform the agreement could generate a risk of confusion in the eye of the public…”

 

The Supreme Court then used the same reasoning for the unfair competition claim.

 

The consequence is that a finding of infringement and/or unfair competition is in no way automatic. The breach of an agreement constitutes infringement and/or unfair competition only in so far as it impacts the monopoly of the trademark owner, in accordance with the applicable law. It thus falls upon the injured party to prove the infringement and the unfair competition, regardless of the breach of the coexistence agreement.

 

Consequently, the signing a coexistence agreement only offers a relative protection of the trademark subject to this agreement[1].

 

Therefore it is important to be particularly careful when drafting such agreements and potentially to tie the breach of these agreements to a constraining indemnification clause which will deter the co-contracting party from breaching the agreement.

 

[1] Even more so since, as decided by the European Court of Justice (ECJ, 3rd ch., Sept. 19, 2013, case C-661/11), no one is bound to remain in a state of coexsitence.

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By crossenetborowsky 0

It’s a fact: data hacking and computer fraud are in a permanent evolution.  The increased number of attacks linked to cyber terrorism has been making headlines these past few years. In some instances, such attacks have had disastrous consequences for the targeted companies, from both a financial and reputation perspective.

For example, in May 2014 eBay had personal data from over 233 million clients stolen. More recently, over two million of personal data information belonging to the subscribers of the national broadcaster, TF1’s were hacked.

Cyber-threats are capable of silently and efficiently infecting on an extremely large scale without distinction as to the branch of activity, the size of the company or location.

However, the French data protection act (the “Act”) requires that companies which process personal data “ensure the security of the data and in particular prevent them from being distorted, damaged or accessed by unauthorized third parties” (cf. article 34) or they could face sanctions up to 5 years in prison and a 300.000 euros fine (1.500.000 euros for companies). This sanction can be further increased by damages payable to the victims of such leaked and thus may be the subject of class action suits which are now authorized in France. These attacks are all the more problematic given that insurance companies are increasingly refusing cover cyber-attack risks in their civil liability coverage.

Faced with the ingenuity of the hackers and the fact that security measures become obsolete even before they are implemented, how can companies respect the obligations relating to data protection and avoid the sanctions?

The Act requires data controllers to take all “necessary measures” and accordingly must implement all adapted technical and organizational measures in order to guarantee the security, the integrity, and the confidentiality of the data. Data controllers will be exonerated from any liability to the extent that they have properly implemented such measures.

Unfortunately, there are no lists of which technical measures should be put in place in general or in respect of any particular data. In any event, in light of the rapidity with which the technology is evolving, such a list would soon be irrelevant.

As a result, in order to avoid sanctions, the data controller will have to:

  • Always keep up to date with the new technology and the technical measures that can counter cyber attacks;
  • Implement these technical measures if they are adapted to the processing in question;
  • Follow the CNIL recommendations regarding security;
  • Raise awareness at all levels throughout the company with respect to issues linked to the protection of personal data (56% of French companies that suffered attacks revealed that they were perpetrated by someone in-house); and
  • manage employees while still respecting their right to privacy.

It is also important to underline the fact that the data controller could still be held liable for the pirating of data managed by a subcontractor (data processor), such as a hosting service provider. Accordingly, it is of the utmost importance to contractually require that every subcontractor implement strict security measures (but in any event, no less stringent than those internally implemented by data controller).

A vast majority of subcontractors being based abroad or using adhesion contracts; such process can prove to be difficult but remains absolutely necessary.

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By crossenetborowsky 0

Questions relating to the applicable law and identifying the correct defendant are particularly complex when the dispute concerns the Internet, and in particular when dealing with data protection issues.

Consider the following hypothesis: a data controller (website publisher, ISP, search engine, etc.) is located on foreign soil, but has a subsidiary in France that is potentially liable for the failure to respect data privacy rights of a French Internet user.

The French Internet user who intends to bring an action against the data controller must ask himself the following questions:

  • Is French law applicable to rule on the liability of the data controller?
  • Which entity must the French Internet user sue? Can he hold the French subsidiary liable for the violation the data privacy rights he suffered?

These questions were answered very recently by the courts of Paris, in two summary judgments rendered on September 16th, and December 19th of 2014, relating to the search engine giant Google. In both cases, individuals, invoking their right to be forgotten, asked Google to remove certain hyperlinks.

1/ Regarding the Applicable Law

It should first be noted that article 5 of the French Data Protection Act (dated January 6th, 1978) provides:

« The processing of personal data is subject to this act when:

1° The data controller is deemed to be established on French territory. The data controller who carries out his activity on French territory within an establishment, whatever its legal form, is considered established on French territory ».

Accordingly, pursuant to this Article, the establishment on French soil by a data controller renders French law applicable.

What of Google?

It is first important to note that the processing of personal data via Google’s search engine is directed and controlled by Google, Inc., based in the United States. The American giant only uses its subsidiaries (including its French subsidiary) to promote, facilitate, and carry out the sales of its online advertising products and services in the country in which the subsidiary is established. Such a subsidiary does not perform any processing of personal data.

However, the Paris civil court of first instance, held that notwithstanding that Google France does not perform any data processing, it qualifies as an establishment under article 5-1 of the French Data Protection Act because its activities relate to the sale of advertising space are inextricably linked to those of Google Inc. that operates the search engine.

French law is consequently applicable in respect of the data processing performed by Google.

2/ Which entity to sue?

Now that we have resolved the question of applicable law, it remains to be determined against which company legal action should be taken. In this respect, the above-mentioned summary judgments of the Paris civil court of first instance are in complete opposition.

In its summary judgment dated September 16th, 2014, the Court held that the plaintiff’s claims against Google France were admissible and ordered the company to remove several links to content deemed defamatory.

The Court advanced arguments previously formulated by the ECJ in its notworthy decision dated May 13th, 2014, that established the right to be forgotten, and in particular noted that:

  1. If Google Inc. is in fact the operator of the search engine, the activity of Google France, its wholly-owned subsidiary, which sells advertising space connected the U.S. search engine, finances Google Inc. through such activities.
  2. The “activities of the operator of the search engine and those of its establishment located in the Member State are inextricably linked”.

On the other hand, surprisingly, in its most recent summary judgment, dated December 19th, 2014, the Paris court held that the right to be forgotten could only be exercised against Google, Inc. given that Google France does not exploit, whether directly or indirectly, the search engine, and does not qualify as the data controller.

As a result, the question of which entity to sue, that seemed to have been resolved by the ECJ, remains unclear. Until such time as there is established case law on the matter, any plaintiff who wishes to invoke the right to be forgotten by removing links to defamatory content, would be prudent to sue both Google France and Google, Inc.

The current legal uncertainty is problematic for any potential plaintiff who will be compelled to sue Google, Inc. and will thus be faced with long and expensive court proceedings. Further, in the event of legal action, the plaintiff will have to endure the damaging articles published online for a longer period of time.

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By crossenetborowsky 0

Press agencies, publishers, and photographers’ unions signed on July 15th, 2014 a code of good professional practices aiming at setting a framework for the compensation of photographers when their images are published in the news, and at regulation the exploitation of photographs. In the event that these rules are not respected, the code provides for damages to the benefit of photographers, coupled with a decrease or a cut in financial aid for the press.

The goal of this code of good practices is to attempt to reset the economic balance in the relations between publishers and photographers (and/or their agencies), since the situation of the latter has been consistently deteriorating.

The key points of the code are the following:

  • Photographic credits. It will be possible to ask the publisher, in the event of a total lack of credit, for damages at least equal to the license fee for the photograph in question. That amount is reduced to 50% of such license fee in the event of an incomplete or erroneous credit.Furthermore, use of the credit “all rights reserved” must be limited to the sole situation in which the photographer or the agency does not wish for their name to be public, or when the author of the photograph cannot be identified, despite real research efforts on the part of the publisher. If the photograph comes from a third party but does not bear the name of its author, the publisher shall at least mention its source. If the “all rights reserved” credit remains even after having identified the photographer, it will be possible to ask the publisher for damages.
  • Compensation of photographers and agencies.
  • Assignment of rights.
  • The rules regarding the shared responsibility between publishers on the one hand, and agencies and photographers on the other hand, in the event of claims arising from the publication of the photograph.In this respect, the code provides that the people involved in the creation, distribution, or publication of the photograph, can only be found liable in the limited cases provided for by the law. For instance, publishers can be held liable when they write the caption of a photograph themselves, or disregard the meaning of the one that is given to them when they use the photograph in an article that has no relation with what it represents, or when using the photograph would lead the viewer to believe that the person photographed is the one the article it is attached to is about.On the other hand, agencies and photographers can be held liable when they do not have certain authorizations (from the photographer for the agencies, from persons or owners of objects for photographers), when they do not provide captions, or provide an erroneous one.
  • The implementation of a common standard for the definition and the transmission of metadata, or the affixing of digital protection measures on the photographs in order to prevent or limit their download and re-exploitation without authorization. This common standard shall be the subject of a specific agreement between the parties, to be entered into within twelve months of the signature of the code.

However, despite the apparent goodwill of the code, it has been widely criticized and numerous journalists’ unions like the SNJ (National Union of Journalists), the SNJ-CGT, the CDFT Journalistes, the SNJ-FO, and certain photographers’ organizations like the UPP (Union of Professional Photographers) have refused to sign it.

According to them, the code “does not provide any solution to the catastrophic social situation of an agonizing profession and will, on the contrary, ensure the durability of practices that cut the input of editorial photography to the news”.

The future of these negotiations should thus be followed closely.

 

You can find this code here.

 

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By crossenetborowsky 0

Last October 21st, the ECJ expanded its case law regarding the online sharing of content previously released on the Internet by extending it to embedding, effectively rendering such case law consistent with previous decisions regarding hyperlinks.

In the Svensson decision dated February 13th, 2014 (C-466/12), the ECJ ruled that the practice of broadcasting a hyperlink without the author’s authorization does not constitute an infringement of author’s rights when such initial content had been previously published without restrictions. According to the Court, the new publication made via hyperlink does not constitute either a communication via different technical means, or a communication to a new public. The premise of the Court’s ruling was that, in each instance, the entirety of Internet users were freely able to access such content and accordingly there was no basis for an infringement claim.

In Bestwater, the Court applied the same reasoning to embedding, a technique that consists of inserting in the frame of a web page, an element originating from another website. This technique is widely used and enables Internet users to access content from another website without having to leave the original website they came to visit.

BestWater, a German company noticed that videos which it originally published on the video platform YouTube, were copied via embedding onto the websites of its competitors, and therefore asked the German courts to order that these videos be taken down.

After opposite decisions rendered by the trial court and court of appeals, the German Supreme Court, the Bundesgerichtshof, decided to refer the case to the ECJ for its determination as to whether, according to article 3 of the 2001/29 Directive, embedding content without the rights holders’ permission qualified as a “communication to the public” and therefore an infringement of the author’s rights.

The judges of the ECJ unequivocally answered no to that question, explaining that in order for there to be a “communication to the public” according to the directive, the content needs to be:

  •  communicated via a “specific technical mode, different from those previously employed, or
  • communicated to a “new public i.e. a public that has not already been targeted by the rights holders when they authorized the initial communication to the public of their work”.

However in “BestWater”, the embedding technique used to communicate the work was not a different technique and the targeted public was not new given that the same content was already available to the Internet users on another website with the authorization of the rights holders”.

The Court added that, in authorizing the publication of the relevant content via the video platform YouTube, the rights holders had already targeted the entire Internet community of users. Given the rights holders’ decision not to avail themselves of a wide array of means to privatize content on the Internet, the public must accordingly be deemed as all Internet users, and not only the visitors of the website.

The Court concluded that embedding content does not constitute a “communication to the public” and therefore an infringement upon the author’s rights if such content was originally published on the Internet with no restrictions.

It is worth noting that if embedding does not constitute public performance, the ECJ acknowledges that it allows for the bypass of provisions relating to reproduction rights.

The ECJ’s ruling is consistent with the decision rendered in 2012 by the 7th Circuit, Flava Works Inc. v. Gunter wherein Judge Posner held that embedding does not constitute copyright infringement as the embedding by the website myVidster was solely a connector between the server that hosts the video, and the computer of the website user. Accordingly, such embedding does not constitute copyright infringement given the absence of any form of copying or distribution of, copies of protected works.

 

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