Court of Justice of the EU clarifies when an action for infringement by SEP owner may amount to an abuse
By Gabriele Accardo
On 16 July, the Court of Justice of the European Union (“CJEU”) handed down its preliminary ruling following a reference by the Landgericht Düsseldorf (“Düsseldorf Regional Court”) in the context of the dispute between Huawei Technologies (“Huawei”) and ZTE Corp. (“ZTE”) on 4G/Long-Term-Evolution (“LTE”) technologies (see Newsletter 6/2014 p. 16 and Newsletter 2/2013, p. 9, for additional background).
Facts of the case
The issues at stake in the main case concerned the conditions of the “compulsory license defense” in standard-essential patents (“SEPs”) disputes, or, conversely, on the availability of remedies to the SEPs’ holder who has pledged to license them on Fair, Reasonable and Non-Discriminatory (“FRAND”) terms.
Huawei is the proprietor of, inter alia, a European patent concerning method and apparatus of establishing a synchronisation signal in a communication system, which Huawei notified to the European Telecommunications Standards Institute (“ETSI”), which ETSI granted the status of patent essential to the LTE standard.
Huawei and ZTE engaged in discussions concerning the alleged infringement of the SEP and the possibility of concluding a licence on FRAND terms in relation to the products that ZTE put on the market and that operate on the basis of the LTE standard, thus using the SEP held by Huawei.
In that context, Huawei indicated the amount which it considered to be a reasonable royalty, whereas ZTE sought a cross-licensing agreement, instead.
Ultimately, no offer relating to a licensing agreement was finalized, whilst ZTE continued to sell its products without paying a royalty to Huawei or rendering an account to Huawei in respect of past acts of use.
Huawei brought an action for infringement against ZTE before the referring court, seeking an injunction prohibiting the infringement, the rendering of accounts, the recall of products and an award of damages.
The Düsseldorf Regional Court considered that a preliminary ruling was needed in the circumstances because there are conflicting precedents on the issue at stake, notably the German Supreme Court decision in the Orange-Book-Standard case (see Newsletter 3/2009, p. 4 for more background) and the case brought by the European Commission against Samsung (The case was recently closed with a commitment decision. See Newsletter 2/2014, p. 14 and Newsletter 6/2012, p. 11 for more background).
In the Orange-Book-Standard case, the German Supreme Court held that a defendant in a patent infringement case may successfully raise an antitrust defense against the issue of an injunction provided that i) it has made an unconditional offer to conclude a licensing agreement under terms that cannot be rejected by the patent holder without abusing its dominant position, and ii) to the extent that the defendant uses the teaching of the patent before the applicant accepts the unconditional offer, it is compliant with the obligations that will be incumbent on it, for use of the patent, under the future licensing agreement, namely to account for acts of use and to pay the sums resulting therefrom.
Thus, in principle, under the Orange Book case law, the Düsseldorf Regional Court considered that it ought to uphold Huawei’s action for a prohibitory injunction insofar as ZTE’s offers to conclude an agreement could not be regarded as “unconditional” (the offer related only to the products giving rise to the infringement, whereas ZTE did not pay Huawei any royalty).
However, the CJEU noted that in the Samsung case the Commission basically held that, in principle, the abusive nature of a refusal to license a SEP may successfully be raised as a defense where the defendant is “willing to negotiate” a license on FRAND terms. In other words, the referring court wondered whether the bringing of an action for a prohibitory injunction may be deemed as unlawful under Art. 102 TFEU, where that action relates to an SEP, the proprietor of that SEP has indicated to a standardisation body that it is prepared to grant licenses on FRAND terms and the infringer is itself willing to negotiate such a licence, thus being apparently irrelevant that the parties in question cannot agree on the content of certain clauses in the licensing agreement or, in particular, on the amount of the royalty to be paid.
Answer by the CJEU
In essence, the CJEU had to clarify whether, and in what circumstances, a SEP holder abuses its dominant position by requesting injunctive relief against an alleged infringer of its SEP.
Preliminarily, the CJEU considered that the particular circumstances of the SEP case in the main proceedings distinguished that case from all other cases where a company seeks to exercise its right to defend its intellectual property, as set out in previous EU case-law. Unlike that case law, the case at issue relates to the exercise of an exclusive right linked to a SEP established by a standardisation body that has granted such SEP status only in return for the proprietor’s irrevocable undertaking that it is prepared to grant licenses on FRAND terms.
Unlike all other patents, patents that have obtained SEP status allow their proprietors to actually control the market, by preventing products manufactured by competitors from appearing or remaining on the market, if an SEP holder should threat them by seeking an injunction.
Yet, the CJEU made it clear that under Article 102 TFEU, the proprietor of the SEP is obliged only to grant a licence on FRAND terms, and that the proprietor’s irrevocable undertaking to grant licences on FRAND terms does not, in principle, negate the substance of the rights guaranteed to that proprietor by Article 17(2) and Article 47 of the Charter of Fundamental Rights of the European Union, including the right of access to a tribunal.
However, according to the CJEU, such “irrevocable undertaking” does, none the less, justify the imposition on that proprietor of an obligation to comply with specific requirements before bringing an action against an alleged infringer for a prohibitory injunction or for the recall of products. Specifically, the SEP owner would not abuse its dominant position, as long as:
- first, before bringing such an action, the SEP holder alerts the infringer of the infringement complained about by designating that SEP and specifying the way in which it has been infringed;
- secondly, after the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms, the SEP holder has presented to the alleged infringer a specific, written offer for a license on FRAND terms, specifying, in particular, the amount of the royalty and the way in which that amount is calculated.
In turn, the alleged infringer must respond to that offer in a diligent and serious manner.
Accordingly, if the alleged infringer does not accept the SEP holder’s offer, it must promptly present the latter with a reasonable counter-offer that corresponds to FRAND terms, and has to provide a bank guarantee for the payment of royalties or deposit a provisional sum in respect of its past and future use of the patent, if that counter-offer is rejected. Where no agreement is reached on the details of the FRAND terms following the counter-offer by the alleged infringer, the parties may, by common agreement, request that the amount of the royalty be determined by an independent third party, by decision without delay.
Conversely, if the conduct of the infringer is purely tactical and/or dilatory and/or not serious, an application for corrective measures or for an injunction does not constitute an abuse of a dominant position.
The CJEU thus clarified that the alleged infringer may rely -as a defence- on the abusive nature of an action for a prohibitory injunction or for the recall of products, only if it has submitted a counter-offer.
Also, the alleged infringer cannot be criticized if, during negotiations, it reserves the right to challenge the validity and/or essential nature and/or use of that patent.
Finally, the CJEU held that the SEP holder does not abuse a dominant position in taking legal action to secure the rendering of accounts in order to determine what use the infringer has made of the teaching of an SEP with a view to obtaining a FRAND royalty under that patent, and in bringing a claim for damages in respect of past use of the patent, for the sole purpose of obtaining compensation for previous infringements of its patent.
By Gabriele Accardo
On 26 March 2015, Competition Commissioner Margrethe Vestager announced the launch of a competition inquiry in the e-commerce sector. In early May, the Commission published a Communication “A Digital Single Market Strategy for Europe” and an accompanying Staff Working Document with “analysis and evidence” setting out the action items the Commission intends to focus on in the next year and half.
Among others, the sector inquiry will address private – and in particular contractual – barriers to cross-border e-commerce in digital content and goods, since significant cross-border barriers to e-commerce still exist within the EU. Knowledge gained through the sector inquiry will also contribute to various legislative initiatives –including online platforms regulation- which the Commission plans to launch to boost the Digital Single Market.
But the work that EU officials intend to perform will be broader, as it will also include the establishment of a level playing field in the telecommunications sector, access to digital content, big data, interconnectivity, illegal content, and data protection.
In the past, the Commission has conducted competition inquiries in various sectors, including energy, financial services and pharmaceuticals. As a result of such inquiries, the Commission has carried out a number of individual investigations in the various sectors.
Barriers to intra-EU e-commerce
One of the issues the Commission will seek to address concerns territorial restrictions relating to online sales, specifically conducts that result in the denial of access to websites based in other Member States, or that, while allowing access to websites, still prevent completion of a purchase, or lead to the re-routing of consumers to a local website of the same company with different prices or a different product or service. Other geo-localizing practices that will be under scrutiny are those which result in different prices automatically applied on the basis of geographic location.
In 2010, the Commission updated the Block Exemption Regulation and the Guidelines on Vertical Restraints (see Newsletter 3/2010, for additional background), specifically focusing on non-price online restraints, notably territorial restrictions and selective distribution in the online space.
The Commission has now resolved to tackle the persisting problem in order to bring increased price transparency, more competition in cross-border e-commerce and greater availability and choice of products for consumers. In order to carry out its inquiry, the Commission will issue requests for information to suppliers and distributors of goods, and will likely rely on the assistance of National Competition Authorities.
Another issue that the Commission will investigate concerns pricing restrictions between suppliers and distributors.
Price restraints in the online context were not included in the Commission’s 2010 review of the Guidelines on Vertical Restraints.
In fact, recent cases –concerning for instance so-called Most Favored Nation clauses- have resulted in the need for more clarity and legal certainty on this hot topic. In fact, following the stream of cases in the hotel online booking sector, the Commission noted that “some platforms simply forbid companies from selling more cheaply elsewhere (including the seller’s own website, other platforms and all offline distribution channels)”. However, the inquiry will encompass not only online platforms but all the players whose goods are distributed online.
Online platforms regulation?
A specific focus of the inquiry will be on online platforms, that is “…software-based facilities offering two- or even multi-sided markets where providers and users of content, goods and services can meet”, according to the definition provided by the EC.
The Commission stated that “Given the dynamics of the markets created and served by platforms, and the relatively short time that they have been in existence, more work is needed to gather comprehensive and reliable evidence on how different types of platform work and their effects on their customers and the economy as a whole.”
While a better understanding of the new dynamics online platform bring in certain sectors is indeed welcome, the Commission has hinted at some forms of regulatory actions allegedly needed to fill, amongst others, the gap between EU and US internet platforms. This appears to be necessary due to the market power of some online platforms.
The Commission will thus carry out a comprehensive investigation and consultation on the role of platforms, including the growth of the sharing economy. The Commission’s analysis will cover, among others, issues like those arising from the lack of transparency in the search results (involving paid for links and/or advertisement) and the way platforms use the information they acquire, possible issues relating to fair remuneration of rights-holders and limits on the ability of individuals and business to move from one platform to another.
By Gabriele Accardo
On 12 May 2015, Germany’s Federal Cartel Office (“FCO”) imposed a fine of 300,000 euros on United Navigation GmbH, Ostfildern, for enforcing resale price maintenance on retailers selling its portable navigation devices between 2009 and 2014. The investigation was launched upon an exchange of information with the Austrian Competition Authority.
During the relevant period, United Navigation monitored the prices of online retailers specifically, and requested them to raise prices up to the indicated level, so-called “street price”, as soon as prices dropped below the price level considered acceptable by United Navigation.
The FCO found that most of the retailers raised their prices after being contacted by United Navigation.
In other instances, United Navigation threatened stop supplying the retailers or bringing legal claims allegedly for unauthorized use of copyright material. Otherwise, in order to induce retailers to raise prices, United Navigation granted retailers certain advantages, such as bonuses.
EU Court of Justice’s Advocate General issues opinion on circumstances where the use of an online booking system by travel agents may amount to a concerted practice
By Gabriele Accardo
On 16 July 2015 Advocate General Szupnar handed down his opinion following a request for a preliminary ruling by the Court of Justice of the European Union in a case concerning the implementation of a maximum discount level via technical means by the administrator of the Eturas computer reservation system used by several travel agencies in Lithuania.
Advocate General Szupnar opined that where several travel agencies participate in a common booking system and that system’s administrator posts a notice informing its users that the discounts applicable to clients will be restricted to a uniform maximum rate, this notice being followed by a technical restriction on the choice of a discount rate, then such a situation may fall within the scope of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”), notably in the form of a concerted practice among those travel agencies.
The Advocate General further clarified under what circumstances the travel agencies who become aware of the illicit initiative of the system’s administrator and who continue to use the booking system, without publicly distancing themselves from that initiative or reporting it to the administrative authorities, may be held liable for the infringement of Article 101(1) TFEU.
The Advocate General first noted that the questions referred by the national court do not concern the liability of Eturas itself as a cartel facilitator (i.e. a third party which is not active on the relevant market or a related market, but serves merely as cartel secretariat), since Eturas is a contractual partner of all travel agencies concerned, with which it has concluded licensing agreements, and it is also an undertaking active on the market of licensing of online booking systems, which is related to the market of travel agents.
In order to establish the existence of concertation in circumstances which involve both an indirect communication via a third party and the absence of explicit response, the context of the interaction must be such that the addressee may be deemed to appreciate that the illicit initiative comes from a competitor or at least is also communicated to a competitor or competitors, who will rely on mutual action, even in the absence of response
While undertakings using the same computerized system are not partners in a commercial dialogue, and therefore the sending of a message via the information notices field of a computerized system may not be fully treated as equivalent to other methods of communication in the business world, such as the participation in a meeting or an exchange of emails, the form of the communication may be relevant in assessing the context of the interaction.
In this respect, the Advocate General observed that the unusual nature of the method of communication in the main proceedings was counterbalanced by other circumstances:
- The system notice implemented by the system’s administrator conveyed a clear message which could not be understood otherwise than as an initiative to engage in an illicit anti‑competitive practice.
- The terms of that notice and the mode of communication were such that undertakings who became aware of the system notice, should have appreciated that – absent their expeditious reaction – the initiative would be automatically and immediately implemented with respect to all users of the system.
- The restriction of competition in question, i.e. the application of a uniform maximum discount rate by competitors, was clearly of a horizontal nature insofar as it required their mutual reliance, and an undertaking would comply with such an initiative only on the condition that the same restriction applies horizontally to its competitors.
Interestingly, the Advocate General rejected the contention of the applicants that the case at hand falls within the orbit of the so-called hub and spoke collusion, which involves exchange of information between competitors via a common trading partner in vertical relations, such as exchanges between distributors via a common supplier.
In such indirect exchanges, disclosure of sensitive market information between a distributor and its supplier may be considered as a legitimate commercial practice, whereas the present case concerns a message which was conveyed simultaneously to all undertakings concerned by their common trading partner and which, given its content, could under no circumstances be considered as forming a part of legitimate commercial dialogue.
Finally, the Advocate General considered under what circumstance the undertaking who became aware of the system notice and who continued to use the system, could escape antitrust liability.
Undertaking using an online booking system which is exploited as a platform for an anti-competitive practice, may have effective recourse to the two possibilities resulting from the Court’s case-law in order to dissociate itself from that practice: it may publicly distance itself from the content of the illicit initiative or, otherwise, report it to the administrative authorities.
While it would be unreasonable to require an undertaking to express its opposition to all participants in the concerted practice (the identities of the competitors concerned may not be discerned immediately), the undertaking should have, at least, informed the system’s administrator who announced the restriction and those other companies the identities of which might be known.
On the contrary, it would not be sufficient to ignore the communication or to instruct employees not to conform to the practice. Similarly, it would also be insufficient to oppose the practice by mere conduct on the market, for instance by giving individual discounts in order to counterbalance the general restriction, since, without public opposition such conduct could not be easily distinguished from mere cheating on other cartel members.
The case at hand ventures in somewhat unchartered territory of antitrust enforcement in the online commerce, to the extent that the Advocate General intends to apply case law on collusion arising in the context of meetings or other direct/indirect contacts among competitors to participation in a computerized system and failure to distance from an illicit “unilateral” measure implemented by the administrator of that system.
It may be recalled that last 6 April 2015, the US Department of Justice’s Antitrust Division announced the first criminal prosecution against an online conspiracy, whereby certain companies selling posters on the Amazon Marketplace adopted specific pricing algorithms with the goal of coordinating changes to their respective prices and wrote a computer code that instructed algorithm-based software to set prices in line with the agreement (see Newsletter 2/2015 for additional background). Unlike in the case referred to the Court of Justice, the US investigation showed that conspirators entered into direct contacts and exchanged information.
By Nikolaos Theodorakis
On June 11 the European Commission announced the launch of an antitrust investigation pertaining to Amazon’s business policies in the distribution of electronic books (“e-books”). Amazon relies greatly on the success of its e-book enterprise, yet the Commission questions whether Amazon does so to the detriment of its consumers. The investigation adds to the pressure on the online retailer in Europe, since it is already being investigated for low tax rates it pays in Luxembourg.
The e-books sector has sparked investigations on antitrust concerns in the past. In 2011, the European Commission launched proceedings due to concerns that certain international publishing houses (Penguin Random House, Hachette Livres, Simon & Schuster, HarperCollins and Georg von Holtzbrinck Verlagsgruppe), in collaboration with Apple, could have colluded to limit retail price competition for e-books in the EEA, in violation of applicable antitrust rules. Amazon prodded the US Justice Department to file an antitrust suit for conspiracy to fix e-book prices.
Following this investigation, the companies offered a number of commitments in December 2012 and July 2013 to address the concerns. The European Commission has recently pursued tax, antitrust and similar investigations into the businesses of Apple, Google and Facebook. The Commission is also pursuing an antitrust investigation on whether large tech companies have impeded competition in Europe’s online shopping industry. President Obama has, however, warned on the danger of Europe turning to protectionism to the detriment of the U.S. technological sector.
Scope of the investigation
Amazon is the largest distributor of e-books in Europe, taking advantage of the vast growth of the industry in the past years. Commission’s investigation will focus on e-books in English and German.
Specifically, the Commission has targeted provisions that are included in Amazon’s contracts with publishers. The disputed clauses allegedly require publishers to inform Amazon about: (i) more favourable or alternative terms offered to Amazon’s competitors, or (ii) offer Amazon similar terms and conditions than to its competitors, or (iii) through other means ensure that Amazon receives terms at least as good as the ones of its competitors. Since Amazon is the most powerful e-book retailer, these clauses might prevent an innovator from breaking through.
The Commission fears that such clauses hamper healthy competition since they make it more difficult for other e-book distributors to compete with Amazon through the development of comparatively advantageous strategies. Consequently, restrictive measures of this nature reduce the choice that consumers have. Such behaviour could also count as abuse of a dominant market position, and restrictive business practices. Ultimately, these provisions hinder the level playing field and potentially decrease competition between different e-book distributors.
As is the case in relevant investigations, the legal basis of potential antitrust is based on Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibit anticompetitive agreements and the abuse of dominant market positions. These provisions are implemented in the EU’s Antitrust Regulation (Council Regulation No 1/2003), which is also applied by national competition authorities.
Article 11(6) of the Antitrust Regulation supports that the initiation of proceedings by the Commission, and relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices in question. Article 16(1) of the said Regulation provides that national courts must avoid handing down decisions that could conflict with a decision contemplated by the Commission in already launched proceedings.
The investigation will focus on Amazon’s contracts with publishers and in particular the use of the “Most Favored Nation” clauses (“MFN”). According to these clauses, the seller must provide to the buyer the lowest price offered to any rival purchaser. Since Amazon maintains the right to be informed about the terms given by other retailers, it is only natural that it will always be able to provide the lowest price in the market. This might constitute anti-competitive behaviour, and abuse of its dominant position in the market.
The Commission has informed Amazon about the open proceedings in the case. There is no legal deadline to complete inquiries for this anti-competitive claim, and the duration of an antitrust investigation varies depending on the laboriousness of a case, the willingness of the firms to cooperate, and the exhaustiveness of defence tools that they might wish to use. For instance, the Google antitrust case lasted four years before the official charges were even levied.
Amazon has declared its willingness to cooperate fully during the process. The European Commission’s e-books investigation is at an early stage and could be dropped or end in a settlement without a formal finding of wrongdoing. If formal charges are eventually brought against Amazon, and Amazon does not successfully refute them, the company could face a fine as much as 10 percent of its more recent annual global sales.
By Marie-Andrée Weiss
On May 18, 2015, the Ninth Circuit held en banc that actress Cindy Lee Garcia does not have a copyright interest in her performance in the Innocence of Muslims movie and that Google can thus not be asked to remove it from all its platforms. The case is Garcia v. Google, No. 12-57302. Many amici curiae filed briefs, which can all be found here.
Garcia had signed up to appear in a low-budget movie, Desert Warrior, and was led to believe the film was about ancient Egyptians. This movie was never completed, but Garcia’s five-second performance was later incorporated by its writer and producer in his anti-Islamic The Innocence of Muslims movie. Garcia’s original lines had been dubbed so that she appeared to ask: “Is your Mohammed a child molester?” The movie was uploaded on YouTube and led to violent protests in the Middle East. It may even have been at the origin of the 2012 attack on the United States Consulate in Benghazi. A fatwa was issued against all people having participated in the movie, and Garcia received death threats.
Garcia filed eight Digital Millennium Copyright Act (DMCA) takedown notices, but Google refused to take the movie down. Garcia then claimed that she had a copyright interest in her performance and sought a preliminary injunction to have Google remove the movie from YouTube. The United States District Court for the Central District of California refused to grant the temporary injunction in November 2012, as Garcia’s copyright claim was not likely to succeed. A three-judge panel of the Ninth Circuit reversed, and issued an injunction to Google to take down all copies of The Innocence of Muslims from YouTube and its other platforms. This decision was later amended to state that the injunction did not encompass movies which did not include Garcia’s performance. The panel’s decision was vacated by the Night Circuit which granted a rehearing en banc. The en banc court affirmed the district court’s decision.
No copyright in a movie performance
Article 7(1)(c) of the 1961 Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations gives performers, including actors, the right to prevent the unauthorized reproduction of a fixation of their performance, if the original fixation had been made without their consent or if the reproduction was made “for purposes different from those for which the performers gave their consent.“ However, the United States did not accede to the Convention and does not recognize otherwise that performers have an individual right in their performance.
Indeed, the Copyright Office refused in March 2014 to register Garcia’s performance because its “longstanding practices do not allow a copyright claim by an individual actor or actress in his or her performance contained within a motion picture. The rationale behind this position is clear: an actor or actress in a motion picture is either a joint author in the entire work, or, as most often is the case, is not an author at all by virtue of a work for hire agreement.”
The three judge panel had found that “[a]n actor’s performance, when fixed, is copyrightable if it evinces “some minimal degree of creativity… `no matter how crude, humble or obvious’ it might be” (at 1263). The panel had further noted that pantomimes and choreographic works may be protected under Section 102 of the Copyright Act and had concluded that “[i]t’s clear that Garcia’s performance meets these minimum requirements.”
But the Ninth Circuit en banc did not agree with this statement, because the Copyright Act only protects original works of authorship fixed in any tangible medium, a fixation which must be done, under 17 U.S.C. §101, by or under the authority of the author. Garcia had not fixed her performance, which was instead fixed by the director and his crew. The en banc court also warned that granting a copyright in a movie performance would “turn cast of thousands into a new mantra: copyright of thousands” (p. 20). It quoted the Community For Creative Non Violence v. Reid case, where the Supreme Court explained that “the author is the party who actually creates the work, that is, the person who translates an idea into a fixed, tangible expression entitled to copyright protection” (p. 22, quoting Reid at 737).
In a rather emotional dissent, Judge Kozinski stated that “Garcia’s dramatic performance met all of the requirements for copyright protection: It was copyrightable subject matter, it was original and it was fixed at the moment it was recorded” (p. 33). He argued that if one considers that “Garcia’s scene is not a work, then every take of every scene of say, Lord of the Rings is not a work, and thus not protected by copyright unless and until the clips become part of the final movie” (p.35). For Judge Kozinski, “a performer need not operate the recording equipment to be an author of his own performance” (p.37).
Could Garcia have been successful by filing different claims?
Garcia’s goal was less to have her performance protected by copyright than to have The Innocence of Muslims taken down from the Web, as its wide dissemination and the ensuing fatwa had caused her “severe emotional distress, the destruction of her career and reputation and credible death threats” (p24). However, the en banc court stated that “[t]his relief is not easily achieved under copyright law… [and] the protection of privacy is not a function of the copyright law… Likewise, authors cannot seek emotional distress damages under the Copyright Act, because such damages are unrelated to the value and marketability of their works” (p.25).
While the en banc court was “sympathetic to her plight … the claim against Google is grounded in copyright law, not privacy, emotional distress, or tort law” (p.8). The court further noted that the “difficulty with Garcia’s claim is that there is a mismatch between her substantive copyright claim and the dangers she hopes to remedy through an injunction. Garcia seeks a preliminary injunction under copyright law, not privacy, fraud, false light or any other tort-based cause of action. Hence, Garcia’s harm must stem from copyright- namely, harm to her legal interest as an author “ (p. 24).
Garcia had originally filed a claim in Los Angeles Superior Court claiming invasion of privacy, false light, violation of her right to publicity, slander and intentional infliction of emotional distress. She voluntarily dismissed her state court suit to file instead a copyright infringement suit in the federal court, but she has since revived her state claims against Youssef. Indeed, she may be able to prove that the director’s conduct has caused her damages.
Copyright and First Amendment
The en banc Court noted that, “[u]nfortunately for Garcia … a “right to be forgotten” although recently affirmed by the Court of Justice for the European Union, is not recognized in the United States” (p. 26). This case, Google Spain SL v. Agencia Española de Protección de Datos, requires search engines to remove links to personal data upon demand of the individual whose personal information is thus displayed. The allusion to the right to be forgotten is interesting as the U.S. is generally viewing it as a threat to freedom of expression.
In this case, Garcia asked an Internet intermediary to take down speech. Justice Kozinski wrote in 2014 as part of the three-judge panel that the words which Garcia seems to utter in the dubbed version of her performance were “fighting words to many faithful Muslims” (Garcia v. Google, at 1262), a choice of words which may have been an attempt to present her dubbed performance as unprotected speech as it is so blasphemous that it triggers violence.
But for the en banc court, this “appeal teaches a simple lesson – a weak copyright claim cannot justify censorship in the guise of authorship” (p. 7) and “Garcia seeks to impose speech restrictions under copyright laws meant to foster rather than repress free expression”(p.8). The en banc court found that the panel’s injunction “censored and suppressed a politically significant film- based upon a dubious and unprecedented theory of copyright” and found it to be “a classic prior restraint of speech” (p. 29).
This case could have had a different outcome in Europe, which recognizes ‘neighboring rights.’ However, these rights cannot trump the rights of the author, and, in this case, Basile is the author of the offensive movie and chose to publish it on YouTube. France recognizes that interpreting artists have a moral right over their performances which may give them the right to prevent publication: the Versailles Court of Appeals held in 2004 that interpreters have moral rights, which are “non-negotiable and stem from each contract, and are outside the contractual scope” and that they “may hinder the unacceptable commercial policy” set by the other contracting party. Also, the Innocence of Muslims movie could be considered unprotected hate speech in Europe, and thus the injunction to take it down could have been successful, which would have made the whole discussion about Garcia’s neighboring rights unnecessary.