On April 11, 2018, Hogan Lovells hosted another installment in its 2018 webinar series on emerging issues involving the Internet of Things (IoT). This webinar focused on product liability in Europe.
New connected products are hitting the market at an unprecedented rate, so staying aligned with the evolving regulatory and legal issues is more important than ever. With the opportunity to hear from those with direct and versatile industry experience, this session promises an insightful and comprehensive look at the most important legal issues, questions, and solutions surrounding product liability.
Valerie Kenyon started the webinar by highlighting the product liability rules applicable to IoT in the EU. She started with an overview of the Product Liability Directive, and then moved to a consideration of how the directive is being reviewed to see whether it is “fit for purpose” in the future. Hogan Lovells is very actively involved in the Product Liability Directive consultation and is doing a great deal of work in the context of liability for emerging technologies.
Tobias Faber then went through some practical real-life examples coming from the energy and infrastructure sector. Tobias discussed two cased studies covering a predictive maintenance contract model for gas-fired power plants and a smart factory example from the manufacturing industry which leveraged Artificial Intelligence (AI) to deliver Batch-size 1 productions. One conclusion drawn by these examples is that many traditional business models will be disrupted and are transforming to a more serviced based model which is already common within the IT-industry (Infrastructure as a Service, IaaS). Tobias also touched on the legal challenges of contract conclusion by AI and the liability regime within the new business models.
We were delighted and honoured to speak at last week’s lunch event of U.S. Copyright Society (CS USA). The Los Angeles Chapter of the CS USA kindly invited Salomé Cisnal de Ugarte (Brussels), Alberto Bellan (Milan) and myself to sit on a panel together with Susan Cleary, Vice President and General Counsel of the Independent Film & Television Alliance (IFTA). The panel discussed the new copyright law in Europe brought about by the Digital Single Market strategy that is currently implemented with the EU, and assessed the antitrust and competition issues arising in this context. Corey Field, former President of the U.S. Copyright Society eloquently moderated the panel with more than seventy participants being welcomed at Fox Rothschild’s fine Century City premises in Los Angeles or attending via remote web access. A lively debate emerged circulating around the underlying question “Are the new EU copyright regulations a weird kind of trade war?”
The discussion touched upon various aspects of the Digital Single Market and how it affects U.S. based corporations particularly in the media & entertainment sector. The panel also considered the new Portability Regulation (EU) 2017/1128, the current debate on the draft DSM Copyright Directive COM (2016) 593 and the draft Regulation on Transmissions & Retransmissions of TV and Radio Programs COM (2016) 594. The overall take-away was that the distribution, licensing and use of copyrighted works in Europe will undergo significant changes.
We thank all who joined us for the engaged participation and challenging queries. Special thanks go to Corey Field for his warm words and fine moderation, Jeremy S. Goldman of the L.A. Chapter of the Copyright Society of the USA for his invitation to speak at this lunch event and Fox Rothschild for a brilliantly organized venue.
From wristbands that count your steps, to skin patches that measure your sun exposure, a wide range of products are entering the wearable-technology market and raising new questions about intellectual property (IP) claims and protection. In this hoganlovells.com interview, Katie McConnell, counsel in the Hogan Lovells London office, provides an overview of the unique challenges market players face in the highly competitive field of wearable-technology. Among many other topics, she discusses the benefits of licensing other peoples’ patents; why it can be worthwhile applying for a patent, even if you don’t get it; and the importance of fashion trends.
What is wearable-technology, and how large is the market for it?
McConnell: With wearable-technology, we’re talking about computing technology or access to computing technology in something that you wear. Normally, these technologies have some sort of portable data monitoring ability that can record things like your activities, sleep patterns, or blood pressure. They provide real-time feedback and have some communication functionality, which is important when we’re looking at what sort of IP protection there might be for these devices.
Wearable devices are predicted to grow and grow as an industry over the next five years. In 2017, the International Data Corporation anticipated that 121.7 million devices would be shipped in 2017, which is a 16.6 percent increase over 2016. In the next five years, they expect that pace of growth to continue, with shipments reaching 229.5 million units by 2021.
And there’s a trend that more smart devices will be sold. There’s something interesting going on with the price, too: in the next few years, as the devices become smarter and include more technology, it’s expected that the average selling price will go up, but then as that becomes more the norm, it’s expected to drop off again. So perhaps something similar to what we’ve seen in the mobile device market.
What does this mean in terms of IP protection for wearables?
The Digital Single Market, as pushed forward with increasing speed by the European institutions, does not end with the click of a “purchase” icon. Goods ordered and bought online need to find their way to the purchaser, be it a consumer or a corporation. This is why the Commission, as part of its overall DSM strategy published a draft regulation on cross-border parcel delivery on 25 May 2016 (COM (2016) 285). The Commission’s main objectives were to
- Improve the market’s efficiency through effective regulatory oversight and increased competition, and
- Improve the price transparency to reduce unjustified tariff differences as well as the prices overall.
On 15 March 2018, we reported that the European Parliament had adopted a final version of the new regulation.
Meanwhile, the Council has also concluded its considerations. It approved the Parliament’s amendments and thereby the final text of the regulation on 18 April 2018. The respective press release, includes the following statement from Ivaylo Moskovski, Bulgarian Minister for Transport, Information Technology and Communications:
“These rules will make information about different parcel delivery options more readily available – including track and trace services, which are important for e-commerce. The adoption of these rules means that another key element of the EU’s digital single market is in place.“
The Regulation will be published in the Official Journal by the end of this month and will come into force twenty days thereafter. According to Article 13 of the new regulation, the Member States will have to adopt “effective, proportionate and dissuasive” penalties, which they should notify to the Commission within eighteen months.
For further information on the Digital Single Market and its practical impact, please visit our website www.dsmwatch.com.
Germany’s highest civil court signs off on the business model behind AdBlock Plus
The popular adblocking software AdBlock Plus, and the underlying business model of Eyeo GmbH, do not fall foul of German unfair competition rules. On 19 April, the German Federal Supreme Court (BGH) handed down its landmark ruling on the legality of adblocking (BGH, file number I ZR 154/16). Given that AdBlock Plus is highly popular throughout the world, the decision will have repercussions for online advertising and for publishers of online content far beyond the borders of Germany.
If you missed our previous blog posts on the adblocking battles raging in Germany since 2015, you can catch up here.
Online advertising vs adblocking
Both digital advertising and its counterpart, adblocking, have been on the rise for years. Revenue from digital advertising has been forecast to grow by some 12 percent annually, to nearly 240 billion USD in 2019, according to PWC. And the flip side of the equation: According to the 2017 PageFair Report, 11% of the global internet population is blocking ads, and those numbers are increasing. Researchers expect that even if content publishers took all available countermeasures, adblocking would still cost them 16 billion USD globally by 2020. Should they take no action, these losses could increase to as much as 78 billion USD, says Ovum, the research arm of Informa Group.
In our digitally driven economy, the business stakes are clearly high. Just as publishers and advertisers vye for the attention of internet users, adblockers meet conflicting demands to be spared from overly intrusive and annoying ad content. Today, adblocking features are available for all major browsers – either inbuilt or available as add-ons, such as Adblock Plus. By and large, users are increasingly unhappy about the ways that advertising can affect their online experience; and by activating adblocking, they take action to change that.
The U.S. Consumer Product Safety Commission (CPSC) will host a hearing on May 16, 2018 on potential safety hazards associated with internet-connected consumer products. With primary jurisdiction over consumer product safety, the CPSC’s evaluation of risk affects everything from design evaluation to mandatory recalls. The CPSC will use the information the public provides at the hearing and in written comments to the agency to inform its ongoing risk management work. The hearing therefore is an opportunity for the public to help shape best practices and possible regulation for mitigating potential new hazards resulting from the introduction of internet connectivity to consumer products.
The hearing will be webcast. Members of the public interested in speaking at the hearing must submit their requests to make oral presentations, along with the written text of those presentations, by 5 p.m. on May 2, 2018. The Commission will accept written comments through June 15, 2018, at Docket No. CPSC-2018-0007. Hogan Lovells will cover the full-day meeting and provide interested clients with an in-depth summary of the meeting. If there are particular subjects of interest, please let us know.
The CPSC is an independent federal agency created in 1972 by the Consumer Product Safety Act (CPSA). The agency is responsible for protecting the public from unreasonable risks of injury or death associated with the use of consumer products. The CPSC conducts research into product-related illness and injury and oversees recalls of consumer products due to safety hazards. It also has authority to issue regulations governing the manufacture and sale of consumer products, including establishing safety or design standards for particular product categories (e.g., toys, lawn mowers) or to ban certain hazardous products (e.g., lead-based paint, lawn darts). CPSC also mandated that firms report potentially unsafe products to the Commission. The failure to report in a timely fashion can subject a firm to up to approximately $16 million in civil penalties.
Hogan Lovells assists PayPal in securing an important victory for German retail
Decision of the German Patent and Trademark Office of 27 March 2018 (ref. no. 30 2013 057 574 – S 33/17/Lösch)
The German PTO has seen the light in the dark of the “Black Friday” battles: The term has been declared free for all to use in commerce, signaling the end of a trademark monopoly that has been aggressively exercised against German retail during the past 18 months. Hogan Lovells, represented by Anthonia Ghalamkarizadeh and Dr. Thomas Richter, assisted PayPal in securing this important victory for the entire German retail market.
The words “Black Friday” resonate with bargain hunters across the globe. Black Friday, the day after Thanksgiving, has a long tradition of special deals and promotions. It is by far the most profitable day of the year for retailers in the US, where the tradition originated. And in the age of global e-commerce, Black Friday as a day for special sales promotions has also become entrenched in many other markets, including Germany. So the commercial attraction of the phrase “Black Friday” is obvious – and holding a monopoly over its use in advertising and retail would be highly profitable. Hong Kong based Super Union Holding Ltd. went down this road when it obtained a German trademark registration for “Black Friday” that covers nearly every retail service under the sun. Following the acquisition of the mark in 2016, the trademark owner and its licensee Black Friday GmbH started to aggressively monopolize and capitalize on the word mark. Numerous retailers in Germany received propositions for expensive licensing deals or were slapped with cease and desist letters warning them off a use of “Black Friday” in their sales promotions. The aggressive enforcement culminated in a lawsuit with significant damages claims against a leading global online shopping platform.
Everything from healthtech to self-driving vehicles, to education and smart homes, drones and space, social media, and beyond is being affected. These new technologies present a variety of commercial opportunities and the potential to change our daily lives. At the same time, new AI innovations bring many legal, policy, commercial, and strategic challenges that need to be considered thoughtfully across jurisdictions. In some instances, existing frameworks can be applied or adapted. For others, new paradigms and robust safeguards may be needed. And as machine-learning technologies continue to evolve, organizations will need dynamic, sophisticated compliance approaches.
In this guide, we highlight several of the key challenges and commercial opportunities for AI and advanced machine-learning.
Click here to download the PDF.
We are pleased to invite you to the next webinar in our Internet of Things series, focusing on connected medical devices.
Yarmela Pavlovic, Paul Otto, Elisabethann Wright and Fabien Roy will explore the regulatory framework and challenges facing developers of connected medical devices and digital health solutions. With the market for these devices booming, this session promises an insightful and comprehensive look at the key legal and regulatory issues that these present. We will address a number of evolving issues, including:
- Regulatory changes and implications for digital health tools, including FDA and EU Medical Device Regulation
- Use and testing of wireless connectivity tools in medical devices
- Regulation of cloud computing
- How the upcoming EU General Data Protection Regulation (GDPR) will change data privacy obligations
- Cybersecurity expectations by various regulators, including FDA, FTC, HHS OCR, and law enforcement
- The approach of various regulatory authorities in this area
Wednesday, 25 April 2018
Click here to register for this webinar.
The European Parliament’s Rapporteur on the draft Copyright Directive (COM (2016) 593), Axel Voss, released proposed amendments to Article 11 and its corresponding recitals at the end of March. Mr Voss’s draft, for the shadow Rapporteurs on the Parliament’s Committee on Legal Affairs (JURI), introduces a number of remarkable suggested changes, which diverge significantly from the Bulgarian Presidency’s compromise proposal debated by the Council’s Working Party on Intellectual Property the same day.
The idea itself of an ancillary right for press publishers is being widely questioned following the setbacks experienced by press publishers in Spain and Germany after those countries introduced similar legislation. Those laws are generally regarded as having failed, and the economic basis for the new right has been called into question by the Commission’s own research centre (read our earlier blog on this here). However, and despite the divergent views about the path to follow (we previously wrote about a recent discussion paper of the Council Presidency considering possible solutions), Mr Voss seems committed to proceed with the creation of such a right, despite the fact that he has been quoted (by Julia Reda, also an MEP on the JURI committee) as saying in a February 2018 interview that the extra copyright for news sites was “maybe not the best idea – but I think it’s the only one before us that makes at least some progress.”
A new beneficiary on the horizon
The Rapporteur’s latest proposal would see news agencies added as beneficiaries of the ancillary right, along with press publishers (amended Article 1). Recital 31 seeks to justify this addition by stating that news agencies are a stakeholder worth supporting in the light of the threat represented by misinformation (fake news) – not at all the start point for the original proposal of the Commission, in 2016 (see Comment below). His draft also suggests that the ancillary right would reinforce the news agencies’ negotiating position vis-à-vis “the powerful platforms” active in the digital environment.
In addition to the reproduction right and the right of making available to the public (Article 2 and 3(2) of the 2001 InfoSoc (Copyright) Directive), Mr Voss’s draft would amend the Commission’s proposal to include the exclusive rental and lending right (Articles 3 and 9 of Directive 2006/115), as well as the distribution right, within the press publishers’ and news agencies’ new rights.