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Global Media and Communications Watch

The International Legal Blog for the Tech, Media and Telecoms Industry

Posted in Policy & Regulation, Technology Michele FarquharEugene Kim

2019 Winnik International TMT Forum: Media and Technology Convergence Panel

The 2019 Winnik International TMT Forum hosted by Hogan Lovells featured a panel discussion on technology and media convergence. Logan Breed, antitrust partner at Hogan Lovells, moderated the discussion as six thought leaders in media, technology, and competition law grappled with business and legal issues related to industry convergence. Panelists included Jeffrey Eisenach from NERA Economic Consulting, Richard Greenfield from BTIG, Gabrielle Kohlmeier from Verizon, Joshua Wexler from Pure Imagination Studios, and Hogan Lovells partners Falk Schoening (Brussels) and Sheri Jeffrey (Los Angeles).

Recent Industry Trends and Developments

Technology, media, and telecommunications (“TMT”) industries have undergone seismic shifts in recent years as they respond to evolving market realities. Netflix, Amazon, and others have capitalized on the democratization of media distribution, bypassing traditional pathways and upending consumer expectations. Major mergers like AT&T-Time Warner and Disney-Fox highlight the consolidation underway for legacy media incumbents. Technology companies and media incumbents are increasingly at odds as the lines continue to blur between the two industries.

Meanwhile, the pace of technological development continues to create new markets for media consumption. Compared with radical new experiences that marry media and tech, over-the-top video services like Netflix and Amazon are beginning to look as staid and commonplace as their cable counterparts. Immersive virtual reality or augmented reality experiences promise to change the way we interact with our entertainment. The development of 5G networks will also unleash new potential as innovators leverage the speed, capacity, and latency of this next-generation network. As Joshua Wexler observed, we are witnessing the rise of a new form of entertainment as innovators leverage technological advances to blur the line between the physical and digital world. One thing is clear—the landscape for content creation, delivery, and consumption is vastly different today than even a few years ago.

Convergence and Competition

Panelists identified two major trends driving the evolution of media and technology industries in both the U.S. and across the globe. As Rich Greenfield highlighted, tech companies (e.g., Netflix, Amazon) are investing large sums in order to disrupt traditional media companies. Meanwhile, telecommunications and media companies are consolidating as part of what Mr. Greenfield described as a survival strategy (e.g., AT&T’s acquisition of Time Warner). Sheri Jeffrey also noted that when consolidation or convergence fail, traditional media and new technology companies can still find common ground through strategic relationships and investments.

How Should Regulators Respond

The panel agreed that U.S. regulatory regimes have been slow to adjust to changing market realities. Logan Breed noted that in some cases regulatory divergence adds another layer of complication. Traditionally regulated media companies are now competing with unregulated new tech entrants and certain regulatory agencies’ powers are too narrow to address these cross-industry concerns (e.g., the FCC). Breed queried how regulators should approach this imbalance and whether we should regulate companies in this space at all.

Jeffrey Eisenach believed that addressing this imbalance may require “regulating up” (i.e., imposing traditional regulations on new entrants) or “regulating down” (i.e., removing traditional regulations on incumbents). In his view, the United States has traditionally engaged in the latter, but the law (and especially antitrust policy) “need[s] to keep adjusting” to address the fact that all of these companies now compete against one another. Greenfield agreed, specifically referencing the FCC broadcast ownership rules as an example where traditional regulation has prevented media companies from consolidating in order to compete with companies like Netflix. In Gabrielle Kohlmeier’s view, rather than focusing narrowly on whether to regulate up or down, it may make more sense for regulators to take a step back to determine what the appropriate regulations are for the current landscape – which could mean replacing current regulations with entirely new ones.

Recent Regulatory Developments

Some panelists suggested that slow action, however, should not be confused with a lack of action. As Kohlmeier noted, the Federal Trade Commission recently created a Technology Task Force, which could signal an increased willingness on the part of federal regulators to pursue antitrust enforcement in the tech space. At the state level, various Attorneys General have expressed concern about Silicon Valley’s consolidation of market power. The Department of Justice (“DOJ”) also unsuccessfully sued AT&T in order to stop AT&T’s merger with Time Warner. (Assistant Attorney General Makan Delrahim offered his perspective on DOJ antitrust activity during the Winnik Forum Fireside Chat.) As these actions suggest, in the U.S., antitrust law may be the legal tool best-suited to address issues created by convergence.

Rethinking Market Definition?

Nevertheless, the panel also agreed that antitrust law is struggling to address the complex issues raised by convergence. The problem is foundational: How does one define the relevant product market? Kohlmeier explained that, from an antitrust perspective, it is not enough to simply say that a company is engaging in anticompetitive conduct generally. Rather, the complaint must specifically identify the harm caused and in which market it is occurring. Breed added that this has become increasingly difficult as convergence has prompted a “totally different way of thinking about traditional markets in the sense that we’ve always talked about them in the media and tech space.” Citing the DOJ’s successful lawsuit against Microsoft for packaging its operating system and Internet browser, Breed mentioned that the problem of defining the relevant product market in these industries is not entirely new. Eisenach agreed, noting that antitrust policy has “a long way to go” to liberalize the way it defines TMT markets. Kohlmeier noted that antitrust issues related to TMT convergence and changing business models are not just showing up in the merger context. To better understand how market power is being exercised, she suggested that regulators also consider how convergence is affecting business incentives and how such incentives manifest (e.g., contract provisions).

Convergence and Globalization

Companies operating in the TMT space must also consider the international regulatory landscape. TMT markets are increasingly global, and antitrust regulators outside the U.S. are, in some cases, more active and have stricter enforcement regimes. Kohlmeier identified two issues for international regulators: (1) how will these regulations affect businesses in the U.S. that are outside the law’s extraterritorial reach, and (2) how will international regulations affect U.S. policy, such as how the EU’s General Data Protection Regulation (“GDPR”) prompted the California Consumer Privacy Act?

Falk Schoening suggested that there may be political dynamics at play for international regulation. He noted that although the TMT sector is increasingly global, some worry that convergence activity is dominated by the U.S. and China. EU politicians may thus have political incentives to support increased regulation in the TMT sector. He added that because other forms of regulation have thus far not been successful at constraining TMT companies in the way EU regulators would hope, the European Commission and many European member states are actively looking to deploy antitrust tools that are perceived to be better suited to confine the Silicon Valley tech giants. In this environment, Schoening cautioned that we should expect to see more antitrust enforcement in the EU and in other international jurisdictions as well.

Due to antitrust law’s case-by-case analysis, international regulations may also lead to conflicting decisions by different antitrust regulators in jurisdictions all over the world. Such inconsistency makes it difficult for businesses to define a global strategy. Schoening provided some practical advice to address this concern. Because European regulators are viewed as having the strictest enforcement approach, global firms should use European laws as a compliance marker. If a business’s activities pass muster in Europe, then there should be less risk of violating antitrust laws in more lax jurisdictions. In fact, in a multijurisdictional investigation, other jurisdictions may be likely to follow the European Commission’s lead.

Looking Forward

Media and technology convergence issues are coming to a head as government authorities across the globe adapt regulatory frameworks to respond to this evolving landscape. Formerly distinct products now compete and act as substitutes in many cases, throwing a wrench into traditional antitrust analysis. Consumer wariness also continues to grow as a small group of companies holds outsized control over media content. Regulators across the globe are actively exploring how to address this new reality using both existing regulatory tools and new regimes. Whatever the ultimate framework, the lessons drawn from the adaption of competition law will be crucial as convergence continues to transform global markets.

 

Posted in Copyright, Policy & Regulation Penny ThorntonAlastair ShawMorten PetersennWinston MaxwellBenedikt LüthgeAlberto BellanAnne Schmitt

DSM Watch: EU Copyright Directive clears the finish line

On 15th April the Council of the European Union adopted the EU Copyright Directive (the “Directive”), ending a negotiation process which first started with the Commission’s proposal for a new Directive in early 2016. After publication in the Official Journal of the EU, Member States will have two years to implement the Directive. In Council the UK voted to adopt the Directive, but it’s by no means certain that the UK will implement it. If the UK leaves the EU without a deal it will not be bound to do so, nor will it if any “deal” transition period expires before the Directive implementation period expires.

The Directive is the most substantial revision of EU copyright laws in years and will shape the digital market for years to come. It is aimed at modernising for the digital age and further harmonising EU copyright laws. Key changes include revising the exceptions to infringement; reinforcing the position of rightholders in relation to the use of user-uploaded content by online content sharing services; creating a new right for press publishers in relation to the use of their content online and giving increased protections to authors and performers. Our run down of the whole text is here, with deep dives on the provisions relating to online content sharing services (Article 15) and the new press publishers’ right (Article 17), here and here.

Posted in Advertising, Internet, Technology Dr. Ricarda BraunKerstin JonenDr. Martin Adrian Koch

Spring fever at the IP Lounge 3.0 on influencer marketing

On 11 April 2019 our Düsseldorf office hosted its third IP Lounge. The IP Lounge is an event planned and hosted by our younger associates and particularly addresses “Young Professionals” to provide a time and place to get to know each other and exchange ideas.

This time, the hot-topic “Influencer-Marketing” was discussed. Dr. Ricarda Braun, Kerstin Jonen and Dr. Martin Adrian Koch provided a very interesting insight into the backgrounds of influencer-marketing, the legal provisions discussed in this regard and the German, currently quite inconsistent case law. Furthermore, Kevin Tewe from the Artist Management Agency TEWE MEDIA GmbH and Helena Wöscher from Springlane gave interesting insights into their everyday work for and with influencers. Last but not least, Nico Kuhlmann, Lea Prehn, Anja Pecher and Lisa Harz presented their Influencer App which they developed in the course of the Hogan Lovells Legal Tech Hackathon (watch the highlights from the 2018 Hackathon here).

The evening ended with a flying buffet and interesting conversations while enjoying the great view from the Hogan Lovells Sky Office over Düsseldorf.


Last month, we launched a guide outlining a list of best practices on how to achieve compliance while working with social media influencers to promote your products and services online.

You can download the guide here.

Posted in Copyright, designs, patents, Policy & Regulation Katharina BerghoferDr. Teresa ChristofDaniel KanekoCorey LeggettPhilipp SimonSteffen Steininger

Hogan Lovells’ U.S. + Germany Patent Update

Hogan Lovells’ U.S. + German Patent Update reports on recent patent news and cases from Germany and the United States. The most recent update is available in English here. This update covers the following developments across the U.S. and Germany:

United States

  • PTAB Has Discretion to Join Parties and New Issues in “Limited Circumstances” – Proppant Express Investments, LLC v. Oren Technologies, LLC (13 March 2019)
  • PTAB Establishes New Precedent and Pilot Program for Motions to Amend – Lectrosonics, Inc. v. Zaxcom, Inc. (25 February 2019, Designated Precedential 7 March 2019)
  • PTAB May Evaluate Validity of Proposed Substitute Claims on All Statutory Grounds – Amazon.com, Inc. v. Uniloc Luxembourg (18 January 2019, Designated Precedential 18 March 2019)
  • Live Testimony Permissible at PTAB Oral Hearings in Limited Circumstances – K-40 Electronics, LLC v. Escort, Inc. (21 May 2014, Designated Precedential 18 March 2019) and DePuy Synthes Products, Inc. v. Medidea, LLC (23 January 2019, Designated Precedential 18 March 2019)

Germany

  • Recall of Infringing Products Is Disproportionate Remedy If Future Patent Infringement Can Be Avoided by Design-Around, 15 U 43/15 (Higher Regional Court Düsseldorf) – “Heated Floor” (“Beheizbarer Boden”)
  • German Federal Supreme Court on Validity of Transfer of Priority Rights, X ZR 14/17 (Federal Supreme Court) – Wireless Communication Network
  • Higher Regional Court Düsseldorf on Entitlement of Co-Inventor to License Out Patent, I-15 U 2/17 (Higher Regional Court Düsseldorf)  – Flammpunktprüfung
  • Antibiotic Substance Not Patentable If Inevitably Obtained Through Process Suggested by Prior Art X ZR 110/16 (German Federal Supreme Court) – “Rifaximin α”

For more information, please click on the link with the detailed update, or contact partners Joe Raffetto or Steffen Steininger.

Posted in Consumer Privacy, Technology

Consumer Horizons 2019

The Consumer industry is evolving at lightning speed, and the way consumer companies operate is shifting. From issues in supply chain to the digitalization of the consumer experience, companies are rapidly changing to keep up with consumer demands. Last year businesses in the consumer industry saw a wave of unprecedented disruption and transformation, and 2019 promises challenges of similar or greater magnitude.

In this year’s edition of Consumer Horizons, the Hogan Lovells global Consumer team identifies trends that will impact food and beverages companies, fashion and luxury goods producers, retailers, consumer electronics manufacturers, and other consumer companies throughout 2019.

Our team breaks down disruptive technology, sustainability and corporate responsibility practices, privacy and consumer data issues, shifting sales models, supply and sourcing matters, M&A and capital markets, and more – all with a look at global perspectives.

Tech topics include:

  • Technology trends that will reshape e-commerce in 2019
  • Harmonization of e-commerce in the EU
  • Blockchain: Recent developments and predictions for 2019
  • Virtual social influencers
  • 3D printing and IP rights
  • The impact of intellectual property on artificial intelligence
  • Drones in retail
  • The FTC sinks its teeth into subscription sales- ROSCA
  • The sharing economy
  • Supply chain – Issues and opportunities in outsourcing in Asia
  • Personalized shopping in Asia

Download Consumer Horizons 2019 by registering here.

For further information, please visit our Consumer Industry page on HoganLovells.com.

Posted in Consumer Privacy, Policy & Regulation Mark BrennanJulian Flamant

Efforts to Expand CCPA’s Private Right of Action Remain in Question

The California legislature is considering significant amendments to the California Consumer Privacy Act (CCPA) ahead of the law’s January 1, 2020 implementation date. Of particular note has been the potential for CCPA amendments to expand the private right of action beyond violations of businesses’ duty to implement and maintain reasonable security procedures to instead cover violations of any CCPA right.

Recent developments in the California Assembly and Senate may preview whether California businesses and consumers should expect an expanded private right of action:

On April 10, The CCPA amendments bill (SB 561) introduced by California Senator Hannah-Beth Jackson and sponsored by California Attorney General Xavier Becerra was approved by the California Senate’s Judiciary Committee in a 6-2 vote following a Committee hearing in which the private right of action was debated. The bill is moving forward and will now be considered by the California Senate’s Appropriations Committee. We previously have described SB 561 on our blog.

On April 12, the CCPA amendments bill (AB 1760) introduced by California Assemblymember Buffy Wicks was revised by the California Assembly’s Committee on Privacy and Consumer Protection to remove a provision that would have expanded the CCPA’s private right of action to apply to any CCPA violation. Removing the private right of action was the Committee’s only significant revision to AB 1760, which otherwise envisions significant changes to the CCPA such as requiring opt-in consent for businesses’ sharing of consumer data and significantly expanding consumers’ right to delete data held by businesses.

The removal of the expanded private right of action is significant, and the bill will remain with the Assembly’s Committee for Privacy and Consumer Protection for further consideration.

For additional analyses of the California Consumer Privacy Act and the challenges ahead for companies, read Hogan Lovells’ CCPA blog series.

Posted in Copyright, Digital Single Market (EU) Penny ThorntonAlastair ShawMorten PetersennWinston MaxwellBenedikt LüthgeAlberto BellanAnne Schmitt

DSM Watch: EU Copyright Directive clears the finish line

Today the Council of the European Union adopted the EU Copyright Directive (the “Directive”), ending a negotiation process which first started with the Commission’s proposal for a new Directive in early 2016. After publication in the Official Journal of the EU, Member States will have two years to implement the Directive. In Council the UK voted to adopt the Directive, but it’s by no means certain that the UK will implement it.  If the UK leaves the EU without a deal it will not be bound to do so, nor will it if any “deal” transition period expires before the Directive implementation period expires.

The Directive is the most substantial revision of EU copyright laws in years and will shape the digital market for years to come. It is aimed at modernising for the digital age and further harmonising EU copyright laws. Key changes include revising the exceptions to infringement; reinforcing the position of rightholders in relation to the use of user-uploaded content by online content sharing services; creating a new right for press publishers in relation to the use of their content online and giving increased protections to authors and performers.  Our run down of the whole text is here, with deep dives on the provisions relating to online content sharing services (Article 15) and the new press publishers’ right (Article 17), here and here.

Posted in International/EU privacy

Eduardo Ustaran Discusses Brexit and ePrivacy on IAPP Podcast

Eduardo Ustaran was featured on the IAPP’s Privacy Advisor Podcast to discuss latest developments of Brexit—including various potential outcomes—and how companies doing business in the United Kingdom are looking ahead to prepare post-Brexit privacy and data protection compliance practices. Eduardo also outlined the state-of-legislation of the European Union’s ePrivacy update and discussed how the anticipated regulation may develop during Romania’s term in the Presidency of the Council of the European Union.

To access The Privacy Advisor Podcast: Dispatch from London on Brexit and the ePrivacy Regulation, click here.

Posted in Copyright, designs, Policy & Regulation Sahira KhwajaClare Matheson

Real Estate Horizons: The Power of the Brand

Real Estate Horizons is a snapshot of key legal topics and market trends across the globe. This post higlights the importance of IP rights in this sector. With property developments increasingly focusing on experience and becoming “destinations” or lifestyle brands in their own right, branding has become an essential element of the development process. Therefore, protecting your IP rights is important, helping to protect and even increase the value of your development.

There are four main reasons to protect your real estate brand:

  • To prevent copying;
  • To create a branded, experiential destination for customers, tenants, and other users;
  • To increase revenue through licensing (for example through merchandise); and
  • To increase recognition of your brand and marketability of your development.

Conversely, if you are an investor/purchaser you should be looking to ensure that all the necessary IP rights are owned by the developer and transferred as part of the transaction. Here are some key things to consider in protecting these rights.

Trade Mark Rights

This covers, amongst other things, names, nicknames, and logos.

The name of the development, as well as any nicknames, can and should be protected by registration as well as any designs or logos used.

Registering trade marks will help to protect against damaging infringement and copycats.

There are many trade marks registered in retail and real estate services. It is a crowded market and that can make it difficult to register a trade mark which is sufficiently different to those already registered. Register the trade mark early. If the name of the development becomes synonymous with the area it’s in it may be difficult to register the name as geographical locations are not generally registrable and must be kept free for all to use.

Copyright

Copyright arises automatically in certain original works and is ordinarily owned by the creator of the work. Copyright may arise in building plans, websites, photographs, virtual tours, and in software code, for example AR/VR used in apps.

Summary: Get ahead and stay ahead of your IP rights. IP rights are an important part of the development process and as the influence of tech and lifestyle branding continues to increase, the importance of IP rights and protecting your development brand continues to grow.


Click here to read the full Real Estate Horizons report. Our strategy is to anticipate and monitor how clients can adapt to change and be ready for the year ahead. Not only does our international network mean that we are adept at dealing with a wide range of cross-border issues, but our offices throughout the world have the knowledge to offer both global and local solutions, ranging from effective deal structuring to PropTech and investment in student accommodation.

Posted in Consumer Privacy Bret CohenJulian FlamantGreg FerenbachRay LiFilippo Raso

Beyond FERPA: The California Consumer Privacy Act’s New Rules for Privacy in the Education Sector

In June of 2018, California passed the California Consumer Privacy Act (CCPA), which seeks to give consumers additional safeguards regarding their personal information. The CCPA will become effective January of 2020 and may impact companies in the education sector, including the larger education technology companies.

While the CCPA does not apply to nonprofit educational institutions, it may apply to certain for-profit educational institutions, third-party service providers, and others in the education space. If an educational entity meets the threshold requirements below or it processes information on behalf of such an entity, it should prepare for CCPA implementation by January 2020.

The CCPA applies to for-profit businesses that collect the personal information of California consumers, and meets at least one of the following criteria: 1) annual gross revenue over US$25 million; 2) buys, receives, sells, or shares the data of over 50,000 California residents annually for commercial purposes; or 3) derives over 50 percent of its annual revenue from selling consumer information. The CCPA also applies to service providers that process consumer information on behalf of qualifying business entities.

The CCPA covers several different activities related to consumer information. First, the CCPA regulates the disclosures businesses must provide consumers before their personal information is collected and what businesses can do with the personal information. Second, the CCPA governs the sale of personal information, with “sale” defined very broadly to include data transfers in exchange for any valuable consideration. Finally, the CCPA oversees disclosure of personal information for business purposes.

Regulated educational entities should be wary of the following key requirements of the CCPA:

  • Maintain public disclosures that outline the rights listed in the CCPA and the categories of personal information that are collected, sold, or disclosed for business purposes (e.g., a for-profit university would post a disclaimer on its website that it purchases phone numbers of prospective students).
  • Allow consumers to receive information detailing what personal information has been collected, sold, or disclosed by the business in question (e.g., if requested by a student, an online program management (OPM) provider would disclose to students that it has distributed student email addresses to partner institutions).
  • Delete consumers’ personal information upon request, subject to a number of exceptions (e.g., a for-profit computer programming “boot camp” would delete a student’s mailing address from its database after a request is sent).
  • Allow consumers to opt out of the sale of personal information (e.g., a for-profit university would place a “do not sell my personal information” link on its homepage).
    Business entities are not allowed to discriminate against consumers who exercise their rights under the CCPA. However, businesses are permitted to offer financial incentives for consumers to provide consent for the collection, sale, or deletion of their personal information.

Once in effect, the California attorney general’s office will have jurisdiction over enforcement. Businesses have 30 days to cure alleged violations, if these are not cured, then the attorney general’s office can levy civil penalties of up to US$7,500 per intentional violation. Unlike the Family Educational Rights and Privacy Act (FERPA), the CCPA authorizes a limited private right of action for consumers whose personal information is subject to unauthorized disclosure. But this private right of action only applies to disclosure of sensitive personal information that includes social security numbers, passwords, and medical information.

The CCPA provides consumers broad privacy rights. Though it is not applicable to all educational entities, many businesses in the education sector, including large education technology companies, should be aware of its requirements.