The main telecommunications regulatory body in the United States has adopted new rules governing the administration of the country’s multi-billion dollar education technology fund. Schools and libraries in the U.S. will want to review the final rules closely to see how changes to this program will affect their future technology procurement plans and budgets, while telecommunications service providers doing business in the U.S. should be aware that the changes could open the door to a future increase in regulatory fees. The new rules also create a significant new revenue stream for providers of managed Wi-Fi services (and, indirectly, vendors of Wi-Fi equipment), and vendors of caching servers.
On February 27, 2014, the European Parliament (“EP”) adopted a resolution on private copying levies, finding that a copyright levy regime is relevant in the online environment but that licensing models for streaming services (where no copy can be stored on a device) should have preference. The EP calls on the European Commission to assess the impact of the use of cloud computing technology for private recording and storage of works to determine whether a levy regime should also apply to cloud computing services. This article looks at the EP’s approach to harmonising private copying levies in the digital age and looks at some of the recent key developments in the U.K., France, Germany and the Netherlands.
Peter Watts and Don McGown, corporate TMT partners at Hogan Lovells spoke to Reuters about trends for M&A in the sector. They discussed the drivers for the recent surge in dealmaking and some of the likely future opportunities in a convergent, consolidating and rapidly evolving space. You can watch the interview here.
On 10 July, the UK government announced cross-party backing for emergency legislation designed to ensure that the police and security services can continue to access communications data held by communications service providers for the purpose of investigating criminal activity and protecting national security. This is in response to the recent CJEU judgment of 8 April 2014 in joined cases (C-293/12 Digital Rights Ireland & C-594/12 Seitlinger) which declared the Data Retention Directive (2006/24/EC) invalid (as discussed here in a previous post).
The draft Data Retention and Investigatory Powers Bill (the “Bill“) provides powers to introduce secondary legislation to replace the Regulations which implemented the Data Retention Directive in the UK (the “2009 Regulations“), and seeks to clarify the scope of obligations that can be imposed on telecommunications service providers based outside the UK under the Regulation of Investigatory Powers Act 2000 (“RIPA”).
On 5 June, 2014, Hogan Lovells’ Paris office hosted a seminar on the Internet of Things, focusing on product liability, privacy, IP interoperability issues. The seminar featured presentations relating to the French post office’s plans to act as a central hub to facilitate “connected home” technologies.
Everyday products are now able to receive and store information regarding the product itself or the user. The interconnection between connected products allows the gathering, processing and permanent transfer of this information, thereby further blurring the boundaries between the real and virtual worlds. However, the “Internet of things” will likely bring many new and interesting challenges as well as concerns for lawyers and businesses: privacy issues, data protection, potential product liability…
This seminar was introduced by Christine Gateau, a Partner in the Paris Litigation practice of Hogan Lovells, who underlined the actual and prospective importance of smart products.
Stéphanie Dubreuil, Associate General Counsel of the French group La Poste, and Raphaël Basset, Director of strategic marketing and partnerships, DOCAPOST, then presented their views on connected services and products. La Poste is becoming a facilitator for numerous connected home technologies.
Stanislas Roux-Vaillard, a Partner in Hogan Lovells’ IPMT practice, analysed the potential frictions between standards and intellectual property rights in a world of interoperability.
Lionel de Souza, a Senior Associate in Hogan Lovells’ IPMT practice focused on privacy and personal data issues. Indeed, smart products are potentially intrusive given the amount of data collected.
Finally, Christine Gateau and Christelle Coslin, a Senior Associate in the Paris Litigation practice of Hogan Lovells, offered an overview of the liability incurred in relation to the use or dysfunction of smart products.
On 1 July the European Commission adopted an action plan to address infringements of intellectual property rights in the EU (COM(2014) 392/2). The action plan intends to shift the attention of enforcement policies and actions from individuals infringing IP rights towards commercial scale infringers as they are viewed as the most harmful according to the Commission.
The EU Commissioner for Internal Market and Services, Michel Barnier commented on the new plan stating: “Rather than penalising the individual for infringing intellectual property rights, often unknowingly, the actions set out here pave the way towards a ‘follow the money’ approach, with the aim of depriving commercial-scale infringers of their revenue flows”.
An action plan is deemed necessary by the Commission due to the high importance of IP-rights for the European market. According to the communication IPR-intensive sectors account for around 39% of EU GDP. The number of new European patent, Community trade marks and Community designs registrations more than doubled between 2003 and 2012. At the same time IP infringements also rose to an all-time high; from less than 27,000 cases of goods suspected of infringing intellectual property rights registered by EU border control in 2005, to 90,000 cases in 2012.
The US Supreme Court has delivered its much anticipated ruling in American Broadcasting Cos., Inc., et al. v Aereo, Inc, a case about whether Aereo’s live streaming service infringes US broadcasters’ public performance right. The Supreme Court found that it does, overturning the ruling of the Court of Appeals for the Second Circuit.
In 2012 the owners of various copyrights in television content sued Aereo in relation to its live streaming service, which allows subscribers to watch free, over-the-air television stations on its website at virtually the same time as the content is being broadcast. The system is comprised of thousands of tiny antennas housed in a warehouse, each one dedicated to an individual subscriber for the duration of the show they have selected to watch. Once that subscriber has selected a programme, the system creates a personal copy of the broadcast from the signals received by that subscriber’s dedicated antenna and streams it to the subscriber. After the District Court and the Court of Appeals for the Second Circuit both found that Aereo’s service did not infringe the broadcasters’ public performance right, the broadcasters sought review by the Supreme Court.
Copyright owners, including the owners of broadcast television programmes, have the exclusive right to “perform the copyrighted work publicly” in the US. The US Copyright Act of 1976 defines that right as including the right to “transmit or otherwise communicate a performance…of the…work…to the public, by means of any device or process…” This language was part of a series of amendments to the Copyright Act intended to cover the retransmission of broadcasts by traditional cable systems.
Aereo argued that it was merely a supplier of equipment that allows the subscriber (rather than Aereo) to perform the copyrighted works. It sought to distinguish itself from traditional cable companies by arguing that it is the subscriber who performs a work by initiating a request for the work to be received and transmitted. The Supreme Court was not persuaded by this argument. The “overwhelming” similarities between Aereo and traditional cable systems led the Court to conclude that Aereo was not simply an equipment supplier, but that it “performs” the works.
On the question of whether the works are performed publicly, Aereo argued that its one-to-one system, which streams each transmission to each subscriber from an antenna ascribed to that subscriber personally, does not transmit a performance “to the public”. The Court found, however, that where Aereo is transmitting the same programme to multiple subscribers, it is transmitting a performance to all of them and this transmission amounted to a performance “to the public”.
The US Supreme Court’s approach to live streaming services is consistent with the approach taken in Europe. In ITV Broadcasting Ltd v. TV Catch Up Ltd, which also related to a live streaming service that was retransmitting free-to-air broadcasts in the UK over the internet, the Court of Justice of the European Union held that any retransmission which uses a different technical means must be authorised by the copyright owner and, therefore, the retransmission of broadcast content over the internet required the consent of the broadcasters. It did not matter that there was a “one-to-one connection” with each subscriber. The Court felt that a one-to-one connection did not prevent a large number of people having access to the work at the same time.
The United States Supreme Court in Aereo was careful, however, to state that its decision is limited to live streaming services (i.e., cable companies and their “equivalents”) and that the Court was not opining on whether other technologies, such as cloud computing services and remote storage digital video recorders, might infringe the public performance right.
Japan, Hong Kong and Singapore permit net neutrality traffic control measures as long as they are fair and open. In contrast, South Korea permits network operators to block traffic or charge extra fees to the users of certain applications. The different policy approach in South Korea may be due to the country’s desire to be the world leader in 5G services, network equipment and technology.
The High Court has ruled that the strong public interest in the Court having before it all the relevant evidence outweighs individual rights to confidentiality.
The recent ruling comes as part of the so-called “Plebgate” incident involving an altercation between Conservative MP Andrew Mitchell, the Government Chief Whip at the time, and police officers on duty at Downing Street. Police logs initially suggested that Andrew Mitchell had insulted the officers by calling them “plebs”. The minister subsequently apologized for the remark but ultimately resigned from his office one month later amid public outrage. Subsequent revelations called into question the officer’s account of the events, throwing doubt on whether the minister actually used the word “plebs”.
In two defamation claims relating to the incident, the police officer who had made the original allegation against Andrew Mitchell and the newspaper publisher that had reported on the “Plebgate” incident both sought third party disclosure by the Metropolitan Police of various witness statements created as part of an investigation of the events.
Some of the police officers who had given statements objected to their disclosure, invoking their equitable right to confidentiality and their right to respect for private and family life under Article 8. Tugendhat J had previously refused to order disclosure holding that he was not in a position to undertake the “genuine balancing exercise” required by the Human Rights Act 1998 as the objections had not been properly put in evidence and their authors were not represented at the hearing.
Following a fresh application for disclosure, all the officers who had objected were given an opportunity to make representations. This time, Tugendhat J was satisfied, based on the material before him, that the requirements of the test for orders of disclosure against third parties (set out in CPR 31.17) were met and that the balancing exercise weighed in favour of disclosure. Accordingly, on 19 May, Tugendhat J made an order for third party disclosure. On 11 June, he handed down his reasons, which included the following.
This is a libel action between private parties. But the issues that it raises are ones that concern the public to a greater extent than most libel actions. There is a strong public interest in the court having before it all the relevant evidence and documents. The third parties have legitimate concerns about becoming involved in an action which attracts the interest that this action attracts. But they were all police officers and the events in question arise out of their official duties. The public interest in disclosure clearly outweighs the interests of the individual third parties.
Tugendhat J also noted that the concerns raised by third parties could be adequately addressed by imposing certain conditions in the order for disclosure (such as strict limitations on the persons to whom copies of the disclosed documents may be provided), as had been done in Frankson v Home Office  EWCA Civ 655.
In a June 18, 2014 decision, the Commercial Court of Nanterre found that French pay-tv challenger beIN Sport had not committed unfair business practices by pricing its pay TV subscription at only 11€ per month. France’s principal pay TV provider Canal + argued that beIN Sport had abused market rules by charging a price so low that it could never make profit. Financed by the government of Qatar, beIN Sport had successfully bid for premium sports rights, and set a retail price for its specialized sports channel at an aggressively low price. Canal + argued that by accumulating massive losses, beIN Sport is “pursuing objectives that are totally foreign to those of a private economic operator,” and had therefore committed unfair business practices. Canal + asked for €262 million in damages.
The Nanterre Commercial Court disagreed. The court began by noting that beIN Sport does not occupy a dominant position, and that the provisions on abuse of dominance are therefore inapplicable. The court noted that Canal+ must prove that beIN Sport had committed a “fault” under France’s general text on negligent or unfair practices. Noting that some of Canal+’s own retail subscription offers were priced around 10€ per month, the court found that beIN Sport’s 11€ retail price was not “abnormally low compared to the market.” Moreover, the court found that Canal + cannot presume to know how beIN Sport’s offer might evolve in the future, particularly given the fast evolution in the broadcasting sector and the increasing global demand for premium sports events. The court concluded that Canal + had not proven any “fault” committed by beIN Sport, and dismissed Canal +’s claims.
The commercial court is only a first level jurisdiction. Canal + may appeal the decision before the Versailles Court of Appeals, who will hear the decide the case anew.