17 October 2014

Flos putting us all through the Mill

In 1962 Achille and Pier Giacomo Castiglioni designed a floor lamp with a marble base and a curved lead to a bowl shaped reflector.  Those lamps, known as the Arco lamp and you can see a picture of one of those lamps in Achille Castiglioni's studio in Quick History: The Arco Lamp in Apartment Therapy. Original Arco lamps retail for £1,373 but it is possible to buy a reproduction for a fraction of that price as the Prime Minister's wife did recently (see "Samantha Cameron counts the cost of her repro lamp" 3 Oct 2011 The Guardian).  

The reason why it is possible to buy a reproduction lamp is that s.52 (2) of the Copyright, Designs and Patents Act 1988 ("the CDPA"provides that after the end of the period of 25 years from the end of the calendar year in which articles made from an original artistic work in which copyright subsists with the licence of the copyright owner are first marketed, that work may be copied by making articles of any description, or doing anything for the purpose of making articles of any description, and anything may be done in relation to articles so made, without infringing copyright in the work.  Copyright usually subsists in an original artistic work for the life of the author plus 70 years (see s.12 (2) of the CDPA) but s.52 provides an exception to that term. The reason for the exception is that an author of such a work could and should register his or her design under the Registered Designs Act 1949 or the Community Designs Regulation  S.52 reflects the demarcation that has existed for many years between industrial designs which are covered by art 5quinquies of the Paris Convention for the Protection of Industrial Property of March 20, 1883 and artistic works which are protected by art 2 (1) of the Berne Convention for the Protection of Literary and Artistic Works of September 9, 1886.

This demarcation between art and design which had been respected by judges and legislators around the world for well over 130 years has been thrown into disarray by the decision of the Court of Justice of the European Union in Case C168/09 Flos SpA v Semeraro Casa e Famiglia SpA  [2011] ECDR 8, [2011] RPC 10, [2011] EUECJ C-168/09. This decision resulted from a reference under art 234 of the Treaty of Rome (now art 267 of the Treaty on the Functioning of the European Union) from the Tribunal of Milan in the course of an action for copyright infringement. Flos SpA ("Flos") which owned the copyright in the Arco lamp sued Semeraro Casa e Famiglia SpA ("Semeraro") for importing from China a lamp called the ‘Fluida’ lamp, which, in Flos's submission, imitated all the stylistic and aesthetic features of the Arco lamp.

In its defence, Semeraro relied on art 239 of the Italian Intellectual Property Code which provided:
"The protection conferred on industrial designs under point 10 of the first paragraph of Article 2 of Law [No 633/1941] shall not be enforceable as against products based on designs that were in, or had entered into, the public domain prior to the entry into force of Legislative Decree [No 95/2001]."
Flos argued that the exception provided by that article was incompatible with art 17 of Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs OJ L289 28.10.1998 p 28 ("the Designs Directive") which provides:
"A design protected by a design right registered in or in respect of a Member State in accordance with this Directive shall also be eligible for protection under the law of copyright of that State as from the date on which the design was created or fixed in any form. The extent to which, and the conditions under which, such a protection is conferred, including the level of originality required, shall be determined by each Member State."
Accordingly, the Tribunal referred the question of compatibility to the CJEU which to the surprise of many (including yours) truly replied:
"1. Article 17 of Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs must be interpreted as precluding legislation of a Member State which excludes from copyright protection in that Member State designs which were protected by a design right registered in or in respect of a Member State and which entered the public domain before the date of entry into force of that legislation, although they meet all the requirements to be eligible for copyright protection.
2. Article 17 of Directive 98/71 must be interpreted as precluding legislation of a Member State which – either for a substantial period of 10 years or completely – excludes from copyright protection designs which, although they meet all the requirements to be eligible for copyright protection, entered the public domain before the date of entry into force of that legislation, that being the case with regard to any third party who has manufactured or marketed products based on such designs in that State – irrespective of the date on which those acts were performed."
If anything could possibly drive me into the arms of UKIP it would be decisions like this one.

This judgment has been criticized widely and it may not be followed because the CJEU has no doctrine of stare decisis as such but it is for the time being the law. Possibly fearing claims against the UK for non-implementation of a directive following Joined cases C-6/90 and C-9/90 Francovich and others v Italian Republic Parliament enacted the Enterprise and Regulatory Reform Act 2013 s.74 of which omits s.52. s.74 (9) (g) and para 20 of Sched 1 to the CDPA. As this repeal will cause all sorts of problems HM government has not yet implemented it.  Instead it is holding a Consultation on transitional provisions for the repeal of Section 52 of the Copyright, Designs and Patents Act 1988 which closes on 27 Oct 2014.

As the repeal will revive long dead copyrights and outlaw purchases such as the one by Mrs Cameron mentioned above it will be wonderful for designers but appalling for consumers and many importers and retailers. Accordingly the government wishes to provide a transition period to implement s.74 of the Enterprise and Regulatory Reform Act 2013:
"The Government’s objective is to ensure that rights holders and designers are able to protect their copyright for the full duration of copyright protection. However, the Government wishes to ensure that the change in law is implemented in a way that provides for a fair and proportionate transition period. A proportionate transition period will fulfil the Government’s other objective of ensuring that businesses have sufficient time to adjust and minimise unnecessary harm to UK businesses that have lawfully relied on the permitted act contained in section 52 of the CDPA."
HMG has considered a number of suggestions for the duration of this transition period ranging from right now to 10 years or longer. As 10 years was considered too long by the CJEU the government is consulting on 3 years.

Another problem, as the consultation document acknowledges, is that "there is uncertainty as to which items would be protected" and "many businesses are unavoidably unsure of what items would be affected by the change in law, and assumptions have been made as to what constitutes an artistic work."  Already solicitors letters are flying about:
"The Government believes that a number of rights holders are likely to assert their intellectual property rights – the Government has seen correspondence from rights holders where they have contacted businesses that trade in unlicensed copies of their licensed products for potential infringement of their intellectual property rights. In some cases, rights holders have written to businesses trading in unlicensed copies of their products, citing copyright infringement of their works, despite section 52 of the CDPA currently remaining in force. The Government has received other anecdotal evidence that some businesses that sell lawfully manufactured or imported unlicensed copies online have been subject to take-down notices or action, and other businesses being accused of being “infringers” or “pirates” despite their business activities being lawful under section 52 of the CDPA."
This is imposing a significant cost on British business:
"The cost to identify which products could infringe copyright could be high, and in some cases it may require potentially expensive legal disputes. These legal disputes are likely to affect smaller businesses disproportionately as they may not have the resources to pursue or defend such actions. The legal uncertainty and fear of copyright infringements (or fear of potential criminal liability due to copyright infringement) could also have a “chilling effect” on planned investment in new products."
One of the questions on which HMG is consulting is whether it should issue non-statutory guidance on what items are likely to attract copyright in the form of a “Copyright Notice”, that is to say a document published by the IPO that provides basic copyright guidance the object of which would be to provide "an authoritative and impartial reference point on areas of copyright law."

This is a complex issue which affects just about everybody. Should there ever be a referendum on EU membership this could well be an issue. New technologies such as 3D printing will complicate the debate, especially since there is now a new exception under s.28B of the CDPA which permits personal copies of copyright works for personal use. If anyone wants to discuss Flos, the repeal of s.52 of the CDPA or any issue of copyright or design law he or she should call me on 020 7404 5252 during office hours or message me through my contact form. You can also tweet me, write on my wall or contact me through Linkedin or Xing.

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