Category: Russia

A Breakdown of Russia’s New Notice and Takedown Legislation

Last month, Russia formally adopted multiple online copyright enforcement reforms to its Anti-Piracy Laws (Federal Law No. 364-FZ; “Reforms”). Including in these Reforms were streamlined Internet Service Provider (ISP) injunction procedures, the establishment of a digital fingerprinting system to allow for the online identification of copyright protected works, and the establishment of Russia’s first statutory notice and takedown procedures—allowing qualifying persons or entities who have rights to copyright-protected work(s) (collectively, “Rights Holders”) the ability to extrajudicially petition Russian-based website owners, and eventually their ISPs, to remove infringing hosted content.

On its face, Russia’s new notice and takedown procedures provide qualifying Rights Holders a highly needed extrajudicial enforcement tool to fight online copyright infringement in one of the world’s most infringing online markets. In April 2015, Russia was listed on the Office of the U.S. Trade Representative’s (USTR) Priority Watch List in the USTR’s 2015 Special 301 Report, identifying countries who do not provide adequate protection for intellectual property. The 2015 301 Report cited Russia for having “persistent” online copyright piracy problems, as well as being the home of several piracy websites that “damage both the market for legitimate content in Russia as well as in other countries.”

While Russia’s new notice and takedown procedures in many ways mirror similar procedures in other jurisdictions, there are some important differences Rights Holders should be aware of concerning the new procedures. To understand these differences, it is important to first look at the actual notification procedures.

Procedures: Based on an unofficial translation of the Reforms, a Rights Holder must provide the operator of an infringing Russian-based website notification of an alleged infringement including:

  • Name of the legal owner or authorized agent of the copyright protected work(s), including their location, address, passport information, telephone number, fax number, and email address;
  • If an authorized agent, provide an attestation as to his or her representation of the owner(s) of the copyright-protected work(s);
  • Identification of the copyright protected work(s);
  • Identification of the domain name(s), network address(es), and other identifying information of the infringing website in question;
  • Consent to use personal information included in the notification; and
  • The Rights Holder’s claim that the copyright-protected work(s) and being used on the identified website(s) without the owner’s of the work(s) permission or any valid legal grounds.

Within 24 hours of receipt of a Rights Holder’s notification, the website’s operator will need to either:

  • Request additional information from the Rights Holder concerning their notification;
  • Remove the allegedly infringing content; or
  • Provide proof that the website operator is authorized to use the allegedly infringing content.

If the website operator does not restrict access to the allegedly infringing content within 24 hours after receiving the Rights Holder’s notice, the website’s ISP will have three days to block access to that website. If the ISP restricts access to the website in question, the ISP must notify Russia’s telecommunication agency (Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications (Roskomnadzor)) of the incident, and such data will be placed in a infringement registry.

Ok, now that we know the procedures, what are the main takeaway points?

Additional Steps May Be Needed: Unlike most national notice and takedown procedure systems, notices under Reforms are to be sent to website operators prior to sending to the website’s ISP. While a website operators and ISP can often be one and the same, e.g. Facebook or Google, Russia’s notice and takedown procedures may require submitting an additional notice to an ISP if a website operator fails to remove infringing content identified by a Rights Holder in a notice under the procedures.

Qualifying Content: Prior to passage of the Reforms, the Anti-Piracy Laws only covered “movies, including movies, TV films”, thereby excluding many other works normally qualifying for copyright protection in Russia and other countries. The Reforms expands qualifying works to “objects of copyright and (or) related rights (except photographic works and works obtained by processes similar to photography.” While these changes expand protection under the Anti-Piracy Laws beyond solely movies to songs, written works and other normally copyright-protected works, it expressly excludes “photographic works.” Excluding photographic works from protection under the new notice and takedown procedures means Rights Holders of such works would need to seek a judicial order to remove infringe content hosted by a Russian-based website, subjecting such Rights Holders to potentially substantial enforcement delays and costs.

Prosecution Requirements: Like the U.S., Russia does not require prosecution (registration) of copyright-protected works in order to utilize the Anti-Piracy Laws’ new notice and takedown procedures.

Country-Specific Restrictions: Although not identified in the Reforms, notifications sent through the Anti-Piracy Laws’ new notice and takedown procedures will likely need to be sent in Russian. Further, to ensure compliance, foreign Rights Holders will likely need to work with qualified Russian counsel to effectively utilize the new notice and takedown procedures. This can have additional costs and time delays for foreign Rights Holders.

What’s The Takeaway? Absent prior statutory provisions, the Reforms’ notice and takedown procedures do provide Rights Holders greater means to protect their works online in Russia. However, due to limitations on qualifying works, and additional and country-specific procedures beyond similar notice and takedown procedures in other countries, it remains to be seen whether Russia’s statutory notice and takedown procedures will become an effective extrajudicial enforcement tool against cross-border online copyright infringement.

USTR Releases Annual Out of Cycle Review of Notorious Markets

It is that time of year again when the Office of the U.S. Trade Representative (USTR) releases its annual report on Notorious Markets—The 2014 Out-of-Cycle Review of Notorious Markets. As we reported on last year, this annual review identifies foreign physical and online markets reported by U.S. businesses and industry organizations as being engaged in substantial IP piracy and counterfeiting.

This year’s review identified several foreign social media and file transferring websites, as well as a number of Internet service providers (ISPs), as being notorious markets including those hosted or located in Argentina, the British Virgin Islands, Canada, China, Czech Republic, France, Netherlands, Panama, Philippines, Poland, Russia, San Marino, Spain, Switzerland, Ukraine, the United Kingdom and Vietnam. Additionally, physical markets in Argentina, Brazil, China, Ecuador, India, Indonesia, Mexico, Nigeria, Paraguay, Thailand and Uruguay were also identified as being notorious markets.

The USTR also highlighted a number of recent developments including efforts by certain previously listed Chinese sites to curb piracy activities on their websites, as well as increased enforcement actions by rights holders and government officials to shut down physical and online markets in Brazil, the European Union and Ukraine among others.

What’s The Takeaway? As we have said before, every foreign market has its own IP protection challenges. U.S. businesses that operate abroad or are expanding into new markets should review the USTR’s 2014 Out of Cycle Review of Notorious Markets to help evaluate the IP protection risks associated with particular markets they wish to enter. Doing so can help to ensure that such businesses can better protect their IP assets abroad.

Brand Tough?: Ford Denied Well-Known Trademark Protection in Russia

Today, I posted on The IPKat about Ford Motor Company’s recent trademark troubles in Russia as the Federal Service for Intellectual Property (Rospatent) denied Ford well-known trademark protection for its company name and iconic blue oval logo. Particularly, I discussed how Ford’s denial of well-known trademark protection was not such a result of Russia’s precarious IP protection environment, or even Ford’s non-use of their name or logo in Russia, but that it likely failed to comply with Rospatent’s procedural registration requirements.

It is available here.

USTR Requesting Public Comments to Assist in Identifying Foreign IP Protection Barriers for U.S. Exports

The Office of the U.S. Trade Representative (USTR) announced yesterday that it is requesting public comments to assist the USTR in identifying significant barriers to U.S. exports of goods and services, including foreign IP protection deficiencies. The comments are being collected for inclusion in the USTR’s annual National Trade Estimate Report on Foreign Trade Barriers (NTE Report) that identifies barriers to U.S. exports including the “lack of intellectual property protection (e.g., inadequate patent, copyright, and trademark regimes).”

Last year’s NTE Report identified several U.S. export markets as possessing IP protection trade barriers, or at least IP protection concerns, including Angola, Argentina, Australia, Bahrain, Brazil, Cambodia, Canada, Chile, China, Colombia, Dominican Republic, Ecuador, Egypt, El Salvador, Ethiopia, European Union (member states), Ghana, Guatemala, Hong Kong, India, Indonesia, Iraq, Israel, Japan, Kazakhstan, Kenya, Kuwait, Laos, Malaysia, Mexico, Morocco, New Zealand, Nicaragua, Nigeria, Norway, Pakistan, Panama, Paraguay, Peru, Philippines, Russia, Saudi Arabia, South Africa, South Korea, Sri Lanka, Switzerland, Taiwan, Thailand, Turkey, Ukraine, United Arab Emirates, Uzbekistan and Venezuela.

Public comments for inclusion in this year’s NTE Report are due to the USTR by no later that October 29, 2014. Further instructions on the NTE public comment submission process are available here.

U.S. Congress Evaluates Copyright Reforms With Cross-Border and Trade-Related Implications

On Tuesday, the U.S. House of Representative’s Subcommittee on Courts, Intellectual Property and the Internet held a hearing on a number of proposed reforms to U.S. copyright laws that have a number of potential implications for internationally focused businesses. Reforms that were discussed at the Tuesday hearing included termination rights, resale royalties, moral rights and copyright terms. Among those who testified included representatives from the U.S. Copyright Office, the Songwriters Guild of America, Inc. (“SGA”), the Future of Music Coalition (“FMC”), the American Enterprise Institute (“AEI”),and the Creative Commons USA (“CC”).

Although a substantial amount of testimony given at the hearing was related to particular U.S. industries needs (e.g. music and visual arts), potential U.S. termination rights, resale royalties, moral rights, and copyright term reforms has implications on nearly all businesses both in the U.S. and abroad.

To better understand the potential implication of these reforms, it is best to evaluate them individually.

Termination Rights

One of the reforms discussed at the Tuesday hearing that arguably has the greatest likelihood of being implemented, as well as trade-related importance, is termination rights. Under 17 U.S.C. § 203 of the U.S. Copyright Act, a creator of a copyright-protected work (“author”) may cancel the transfer or license of rights to the work 35 years after its transfer or license to another party. However, the elimination of such rights has been recently proposed in U.S. free trade agreement (FTA) negotiations. In the Trans-Pacific Partnership Agreement (TPP) negotiations, the U.S. has proposed IP Chapter terms that would arguably eliminate termination rights in TPP member states (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam). This means an author from a TPP member state would be unable to terminate the transfer of rights or license of their work in the U.S. or other TPP member state(s) as currently provided under U.S. law.

Representatives from the FMC and CC testified on this issue, both calling for upholding existing termination rights under U.S. law. The FMC went even further and explicitly called on Congress to ensure that such termination rights continue to be made available in international agreements the U.S. enters such as the TPP.

Whether the U.S. decides to uphold or eliminate termination rights will have global implications for international businesses. If the U.S. decides to uphold termination rights in the U.S. Copyright Act and FTAs, it would provide content-producing businesses greater rights and flexibility in protections in their works, both in the U.S. and abroad. In contrast, eliminating termination rights would provide businesses who purchase rights to protected works greater assurance that their ownership or rights to such works will be protected.

Regardless of the benefits or drawbacks of eliminating termination rights, it remains unclear from the Tuesday hearing how Congress will decide to proceed.

Resale Royalties

Tuesday’s hearing also included testimony on whether the U.S. should adopt resale royalty requirements. Some of the U.S.’ major trading partners, such as Australia, the EU, and Russia among others, require that authors (in most cases, visual artists) be entitled to royalties for the resale of their works. However, the U.S. has yet to adopt such measures despite their voluntary recognition in Article 14ter of the Berne Convention for the Protection of Literary and Artistic Works (“Berne Convention”), and several U.S. federal and state legislative attempts to do so. The main argument against such royalties is that oppose the first sale doctrine, which generally allows for the unrestricted domestic secondary sale of copyright protected works.

During Tuesday’s testimony, the sole testifying entity, the U.S. Copyright Office, stopped short of calling for the U.S. adoption of resale royalty laws. The Copyright Office recognized the disadvantages visual artists have compared to other authors in recouping the true value of their works, and that over 30 countries have now adopted resale royalty requirements. However, their testimony stated that mandated resale royalties were not the only means to remedy such disadvantages as voluntary initiatives and best practices could also be utilized, and that the true benefits of a resale royalty regime is difficult to quantify.

Based on such timid testimony, it appears unlikely that the U.S. will seriously consider adopting mandated resale royalties as currently provided in EU and other countries in the near future. The lack of a current and potentially future mandated U.S. resale royalty regime emphasizes that visual artists and other authors will need to find alternative means in order to obtain effective compensation for their works.

Moral Rights

The Tuesday hearing also evaluated to what degree the U.S. should adopt stronger moral rights protections. Moral rights, as detailed under Article 6bis of the Berne Convention, gives an author non-economic rights in a work even after the transfer or sale of their work including the right of attribution that allows them to object to the distortion, mutilation or modification of their work. Currently, the U.S. only extends such rights to visual artists under 17 U.S.C. § 106(A) and in an arguably less encompassing manner. In contrast, many major U.S. export markets such as Australia, Canada, China, and EU have more robust moral rights protections.

None of those who testified on moral rights argued for an explicit extension in the U.S. despite acknowledgements of its benefits. The SGA and FMC stressed that freedom of speech and fair use considerations should be balanced with any moral rights considerations, and the CC highlighted the difficulties and costs of establishing exclusive attribution rights. Based on these testimonies, it appears unlikely that the U.S. will adopt moral right reforms in the near future.

Copyright Term

Lastly, but arguably the most contentious issue of this hearing was copyright term reforms, namely the period of time in which a qualifying work is entitled to copyright protection. Under 17 U.S.C. § 302, a copyright protected work is entitled to protection for the life of the author and 70 years after their death for a natural person author, and 95 years for works created by legal entities. Such copyright terms are well beyond international norms as Article 7 of the Berne Convention establishes copyright protection for the life of the author and 50 years after their death for a natural person, and 50 years for legal entities. The U.S.’ extended copyright term is controversial as it is argued to harm the public through unnecessary taxation and limits on creative freedom, especially as the U.S. has proposed that other countries adopt similar terms in FTAs such as the TPP and the U.S.-Australia FTA, just to name a few. Despite these criticisms, such extended terms give U.S. and other FTA member state authors and copyright owners longer copyright protections in their works.

The testimony provided in the Tuesday hearing varied widely as to whether the U.S. should amend its copyright terms, both in the U.S. Copyright Act and FTAs. The CC called for a reduction in copyright terms, while the FMC and AEI took a less argumentative stance by disagreeing with any term extensions. Contrastingly, the SGA rejected any term reductions. The CC was only group to identify copyright term issues in FTAs by highlighting widespread criticism towards the U.S.’ attempt to propose U.S. copyright terms in the TPP and the CC’s efforts against the same. However, the lack of a comprehensive rejection of the U.S.’ current copyright terms or more robust efforts to prevent their inclusion in U.S. FTAs means that any reforms to the U.S. copyright terms are unlikely.

What’s The Takeaway? The Tuesday hearing highlighted that the U.S. is at least evaluating copyright reforms that may harmonize U.S. copyright laws with other countries. Although it appears unlikely that the U.S. will adopt moral rights, copyright term or resale royalty reforms, the potential invalidation of termination rights does seem to be a potential possibility in the near future, especially in light of the U.S.’ TTP IP Chapter Proposal. Businesses and authors with substantial copyright portfolios should be aware of these reform efforts and adjust their copyright protection policies as needed in order to best protect rights in their works, both in the U.S and abroad.

Local Case Highlights Important Cross-Border Trade Secret Protection Issues Businesses Should Consider

On March 17th, the U.S. Attorney’s Office filed charges in U.S. Federal Court (Western District Washington) against Russian national Alex A. Kibkalo for stealing trade secrets from software giant Microsoft under The 1996 Economic Espionage Act (18 U.S.C. § 1832).  Although U.S. v. Kibkalo (14-mj-00114) has yet to be ruled on, and despite involving a large multi-national business like Microsoft, this case highlights several cross-border trade secret protection issues all internationally-focused businesses should consider.

Facts. To understand these trade secret protection issues, it is important to first understand the alleged facts of this case. According to the U.S. Attorney’s Complaint, Kibkalo was a Microsoft employee, working as software architect in Microsoft’s Lebanon office. He allegedly signed a non-disclosure agreement (“NDA”) at the beginning of his employment.

Between July and August 2012, Mr. Kibkalo allegedly established a virtual machine on a computer server at Microsoft’s Redmond, Washington headquarters to upload unreleased versions of Microsoft’s software updates and a software development kit (collectively, “Content”) to his personal cloud storage account. The Content was secured on Microsoft’s internal system by Microsoft’s internal security program that included limited facility and electronic system access points, facility monitoring, and unique identifying signature technology to track downloaded proprietary information from the internal system. Those who accessed content on Microsoft’s internal electronic system were also required to accept Microsoft’s terms of service that included warnings concerning the proprietary nature of content on the internal system as well as reminders to Microsoft employees and others of their non-disclosure obligations pertaining to proprietary information on the system.

Once Mr. Kibkalo allegedly downloaded the Content, he allegedly transmitted links to the Content to a French technology blogger whose actual geographic location was unknown. Microsoft became aware of alleged transmission through an outside source who was contacted by the blogger about the Content. Microsoft subsequently monitored the blogger’s communication through the blogger’s Microsoft Windows Live Messenger account. An examination of the blogger’s Messenger communications and emails allegedly verified the transmission and unique identifiers in the Content.

Lessons To Be Learned. Although this fact pattern is by no means novel, it does reveal cross-border trade secret protection issues all companies should consider in order to ensure their trade secrets are protected under U.S. and foreign trade secret laws.

So what protection issues need to be considered?

Worker Protection Measures. Kibkalo emphasizes that establishing trade secret protections through contractual provisions with contractors and employees is essential for businesses to protect their proprietary information, both at home and abroad. Under U.S. law (18 U.S.C. § 1839(3)) and international legal standards (Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) – Art. 39.2(c)), businesses who wish for their proprietary information to qualify for trade secret protection must take “reasonable” measures to protect such information from public disclosure. Often, this requires that a business have their employees, contractors or any other person to whom they disclose the business’ proprietary information sign a NDA (or similar agreement) prohibiting such persons from disclosing the proprietary information to others. See MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 521 (9th Cir. 1993).

Assuming Microsoft had an effective NDA executed with Mr. Kibkalo under U.S. law, Microsoft would likely be in a position to enforce trade secret protections in the Content under U.S. law.

Any business, regardless of its geographical location or the location of its employees or contractors, can also take similar protective measures.

Internal Security Measures. This case also highlights that international businesses need to establish internal security measures in order to effectively protect their proprietary information. Electronic and facility security measures, such as access restrictions, surveillance mechanisms have been found to be reasonable protection measures to help businesses qualify for trade secret protection. See U.S. v. Chung, 659 F.3d 815, 825 (9th Cir. 2011). As Microsoft attests to maintaining similar security measures, such measures would likely help Microsoft to obtain trade secret protection for its Content.

It goes without saying that not all businesses can afford the same level of security protections as multinational businesses like Microsoft. Yet, simple and relatively inexpensive security measures such as password protections, locking of files and computer equipment, as well as posting confidential notices on proprietary information can effectively help any business to better qualify for trade secret protection, both in the U.S. and abroad.

Online Monitoring Measures. Lastly, this case highlights the importance of online surveillance and tracking measures that businesses should consider acquiring to protect their proprietary information throughout the globe. Although generally not required to obtain trade secret protection under U.S. and/or foreign laws, the monitoring of suspected persons or entities who may be misappropriating trade secrets (*provided they are done so in compliance with applicable laws and regulations), as well as tracking software, are both effective tools to identify and prevent trade secret misappropriation. Microsoft would not have been able to determine that Mr. Kibalko had allegedly stolen the Content in the U.S. and allegedly transmitted it to the blogger outside of the U.S. without its unique identifier technology.

Granted, not all businesses have the same circumstances that allowed Microsoft to find out about the blogger and Mr. Kibalko’s alleged activities (e.g., outside sources, access to Messenger and email accounts, etc.), nor the available funds to conduct Microsoft’s extensive online surveillance activities. Yet, there are many (legal) monitoring services, investigating agencies, and identifying software products on the market that can help businesses better monitor misappropriating conduct both at home and abroad.

What’s The Takeaway? It remains to be seen how U.S. v. Kibkalo will be decided. However, this ongoing case shows that all internationally-focused businesses can develop sound practices and procedures to ensure their proprietary information is protected throughout the world. By establishing effective worker protection measures, internal security measures, as well as online monitoring measures, businesses can better protect their trade secrets from being misappropriated both at home and abroad.

Current Lawsuit Exposes Limitations in Russia’s New Online Copyright Laws

Check out my guest posting for the UK IP blog The IPKat on the Russian publishing house Eksmo’s copyright infringement lawsuit against leading Russian social media website VKontakte, and general online copyright enforcement in the Russian Federation. It is available at: http://ipkitten.blogspot.co.uk/2014/02/fifty-shades-of-grin-and-bear-it-as.html.

New USTR and IIPA Reports Describe the Current State of IP Protections for U.S. Businesses Abroad

Over the last week, the Office of the U.S. Trade Representative (USTR) and the International Intellectual Property Alliance (IIPA) released reports on the current state of intellectual property (IP) protections for U.S. businesses abroad. These reports provide updated insights on foreign countries and foreign retail markets (both physical and online) that have recently caused U.S. businesses the most IP protection difficulties.

Here is a summary of the reports:

IIPA 2014 Special 301 Report Submission

On February 8th, the IIPA submitted their 2014 Special 301 Report Submission to the USTR. As one of the largest U.S. lobbying groups for the copyright-based industries, the IIPA’s submission identifies the foreign countries the IIPA believes provides the most ineffective IP legal protections for U.S. businesses. The USTR’s final Special 301 Report (released annually April-May) provides reporting to the U.S. government and the general public on the countries that, according to the Omnibus Trade and Competitiveness Act (19 U.S.C. § 2242(a)), deny “adequate and effective protection of [IP] rights” or “fair and equitable market access to United States persons that rely upon [IP] protection.”

Although the U.S. government rarely imposes trade sanctions based on the Special 301 Report, a country’s listing in the final report often impacts the U.S.’ trade relations with that country and the degree to which the U.S. government initiates trade promotional activities with the same. From both a private sector and practical standpoint, the Report also represents a review of the markets that U.S. businesses have had the most IP protection challenges.

What countries did the IIPA recommend for inclusion in the 2014 Special 301 Report?

Priority Foreign Countries. For a second year in a row, the IIPA has identified Ukraine as being a “Priority Foreign Country.” This is the least favorable designation available under the Special 301 reporting system. Specifically, it identifies that country as one with the “most onerous or egregious acts, policies, or practices” that “have the greatest adverse impact (actual or potential) on the relevant [U.S.] products” without making efforts to ameliorate their status. 19 U.S.C. § 2242(b)(1)). Ukraine’s designation as a Priority Foreign Country was based on a number of factors, most notably the absence of effective online copyright enforcement, and unfair and non-transparent royalty society collections. Shockingly, the classification was also based on reports of widespread software pirating by Ukrainian government agencies.

Priority Watch List and Watch List Countries. The IIPA’s Special 301 Report Submission lists Argentina, Chile, China, Costa Rica, India, Indonesia, Russia, Thailand and Vietnam on the “Priority Watch List,” and Belarus, Brazil, Bulgaria, Canada, Ecuador, Greece, Israel, Kazakhstan, Kuwait, Mexico, Romania, Saudi Arabia, Switzerland, Taiwan, Tajikistan, Turkey, Turkmenistan, United Arab Emirates and Uzbekistan as “Watch List” countries. Although not as a severe rating as a Priority Foreign Country, being listed as a country on the Priority Watch List or simply Watch List means that a country has potential IP protection deficiencies that require varying levels of USTR monitoring.

Newly Non-Listed Countries. It is also important to note that the IIPA has recommended removing a number of countries from the final 2014 Special 301 Report due to their improvements in IP protection. These countries include Barbados, Bolivia, Colombia, Dominican Republic, Egypt, Finland, Guatemala, Jamaica, Lebanon, Pakistan, Paraguay, Peru, Trinidad and Tobago, and Venezuela.

Out-of-Cycle Review of Notorious Markets

Also, on Wednesday, the USTR released an Out-of-Cycle Review of Notorious Markets that identified physical and online markets reported by U.S. businesses and industry organizations as being engaged in substantial IP piracy and counterfeiting. The Review includes particular social media and file transferring sites hosted abroad, including sites hosted in Antigua and Barbuda, Bulgaria, Canada, China, Czech Republic, Finland (possibly), Netherlands, Poland, Russian Federation, Spain, Sweden, Ukraine, United Kingdom and Vietnam. Specific physical markets in Argentina, China, Colombia, Ecuador, India, Indonesia, Mexico, Paraguay, Spain, Thailand and Ukraine were also deemed notorious.

What’s The Takeaway? Every foreign market has its own IP protection challenges. U.S. businesses that are exploring expansion into new markets should consider the IIPA’s Special 301 Report Submission (as well as the USTR’s Final Special 301 Report due out later this year), and the USTR’s Out-of-Cycle Review of Notorious Markets to help evaluate the IP risks associated with such markets. Doing so can help to ensure that such businesses can better protect their IP assets as they expand.

Don’t Be Scared of Havarti! Geographical Indication Issues Exporting Businesses Should Consider

Late last month, the European Commission approved for publication (pre-registration) a geographical indication (GI) application for the Danish cheese HAVARTI. This raised concern amongst interested industry groups, and should cause concern amongst all export-focused businesses. Similar to trademarks, and particularly certification marks, GIs are legal protection granting producers of a particular type of product from a specific geographical region the exclusive right to use the geographical region’s name (or a regionally-known name) on their products and in related promotions. Being an exclusive right, GIs exclude producers from other regions from labeling and marketing similar or identical products under the same GI name. This means, for example, that a U.S. sparkling wine can never be sold as CHAMPAGNE in the EU, or a Kenyan tea as DARJEELING in India. If registered, the EU HAVARTI GI would exclude non-Danish cheese producers from labeling and promoting their Havarti cheeses in the EU as HAVARTI.

So what’s concerning about the potential EU HAVARTI GI registration for non-dairy businesses? Well, industry groups such as the Consortium for Common Food Names (CCFN) argue that allowing the EU HAVARTI GI application to be registered would contravene international standards by prohibiting non-Danish cheese producers from labeling and promoting their own Havarti cheeses in the EU as HAVARTI, even if they meet recognized international Havarti cheese production standards. From an intellectual property perspective, the registration would arguably expand EU GI protections to common (generic) named products. Commonly named GIs such as DIJON for mustard and CHEDDAR for cheese have traditionally been restricted from GI protection due to their common vernacular usage. HAVARTI is a widely known cheese variety this is arguably as generic as these other excluded food names. By allowing HARVARTI’s potential GI registration, the European Commission could possibly allow other generic named products to be registered as GIs, thereby hindering the promotional efforts, and ultimately success of many foreign goods in the EU.

Although the potential HAVARTI EU GI registration only directly impacts the global dairy industry and the EU market, it does underscore general issues all export-focused businesses should be aware of concerning GIs. Many businesses are unfamiliar with GIs, much less the extent to which GIs can impact their expansion and success in new foreign markets. GIs are granted legal protections in multiple countries for a wide array of goods, and can significantly impact a business’ foreign operations.

Below are some GI issues businesses should consider when entering new foreign markets:

Know the Practical Differences Between GIs and Trademarks. Before understanding what GIs restrictions a business may face in a foreign market, a business needs to recognize how GIs and trademarks differ. Unlike trademarks, GIs do not indicate or represent a individual business or their goods and services. They instead represent protections for the local conditions—natural or human-made (depending on the country)—that give products from a region their qualities and reputation. Based on these localized and natural characteristics, GIs cannot be extended, shared, or transferred to producers outside the region, and cannot be cancelled once registered. Further, in many countries that grant GIs legal protection such as the EU, member state governments, not individual producers or businesses, prosecute GI infringement claims. This means a foreign business can be assured that their unauthorized use of a registered GI in a foreign market will more likely subject them to a greater risk of legal action in that country compared to the threat of a lawsuit from a individual trademark owner.

The bottom line is that GIs prohibit exporting businesses from promoting and selling their goods in a particular country under a registered GI without much recourse.

Determine if an Export Market Recognize GIs—and to What Degree. After understanding the important differences between GIs and trademarks, businesses need to then evaluate whether the markets they wish to export to have GI protections and the extent of such protections. Nearly all countries recognize GIs for wines and alcoholic beverages through their World Trade Organization (WTO) commitments. Under Articles 22 and 23 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), WTO member states are required to extend specific GI protections for wines and alcoholic beverages, and to a reduced degree other agricultural and natural products. Most common law jurisdictions (U.S., Australia, and Japan, etc.) generally only extend GI protections to wines and alcohol beverages based on their WTO commitments. Yet, many countries, including several substantial markets, have gone beyond TRIPS’ minimum standards by providing enhanced GI protections to non-wine and alcohol agricultural products, and even non-agricultural products. The EU, China, India, and Russia, among others, extend the same level of legal protection to all agricultural and natural product GIs. Brazil, China, India, Russia, and Switzerland even extend GI protections to human made goods such as handcrafts and textiles.

Determine if There are Existing GI Registrations for Your Goods. Once a business determines whether the market(s) they wish to export their goods possess GI protections, they must evaluate whether the names of the goods they wish to use on their goods and related promotions are registered GIs. To do so, businesses must examine national GI registers in such export market(s).

Below are GI registers for some of the world’s major GI jurisdictions.

Country

Governing Agency

National GI Register

Brazil

National Institute of Industrial Property (Instituto Nacional da Propriedade Industrial -INPI)

INPI GI Registry

China

General Administration of Quality Supervision, Inspection and Quarantine

GI Product List

European Union

European Commission

Database of Origin and Registration (DOOR) Database

India

The Controller General of Patents, Designs, and Trade Marks

GI Registry

Russia

Federal Institute of Industrial Property

Register of Appellation of Origin of Goods

What’s the Takeaway? As the nature of GI protections are evolving in many of the world’s major markets such as the EU, businesses need to be even more aware of GIs and how they impact their operations in foreign markets. Due to the significant implications GIs have on the labeling and marketing of exported goods, businesses should work with qualified counsel to ensure that they comply with existing GI registrations to ultimately take advantage of foreign markets opportunities.

Understanding Foreign IP Customs Notification Registration Procedures

In recent years, many national customs offices have established notification procedures to allow IP rights holders the ability to alert customs officials of their IP rights in order to assist them in their import inspection activities. Like Internet Service Provider takedown requests on the Internet (more information about these procedures), IP customs office notifications is a tool for IP rights holders to protect their IP rights abroad by reducing the global spread of infringing goods and content by preventing its cross-border transit—and in many cases, assisting in its destruction. However, to utilize such protection measures, an IP rights holder must ask themselves:

  1. Can you submit such a notification in a particular country?
  2. Does the country you wish to enforce your IP rights have an IP customs notification system?
  3. Does such a country’s national IP customs notification system include the type of IP you wish to protect?
  4. What are the particular foreign customs agency’s IP notification requirements?

Can you submit a IP customs notification? Generally, an IP rights holder can only submit an IP customs notification to a foreign customs office if their IP qualifies for protection in that foreign country. Determining if particular IP qualifies for protection in a country depends on the type of IP the rights holder wishes to protect and to what extent the rights holder has secured foreign legal protections. Here is how it breaks down:

Trademarks. If an IP rights holder wants to submit a foreign customs notification to protect a trademark or service mark in another country, they usually need to have registered that mark in the IP office of that specific country or through a centralized international registration mechanism like the Madrid Protocol (more information about the Madrid Protocol). This is because trademark protection is territorial, meaning that a trademark or service mark registration only grants its owner rights in the mark in the territory of the registering country. So for example, if a U.S. company registers its trademark in the U.S. for particular goods or services and wishes to protect that trademark against infringing imports into New Zealand, it must also register that mark through the Intellectual Property Office of New Zealand or the Madrid Protocol in order to submit a trademark notification to the New Zealand Customs Service.

Of course there are some important exceptions to this territoriality requirement to keep in mind. The European Union maintains a community-wide trademark system (Community Trade Mark) allowing one community registration to qualify for customs notification registration in all EU member states (a list of EU member states is available here). The African Intellectual Property Organization (OAPI) also maintains a community trademark system where a single OAPI community mark registration is recognized in 16 African nations (a list of EU member states is available here).

Patents. Like trademarks, a patent rights holder must generally have a registered patent in the country to which they wish to register an IP customs notification. Unlike trademarks, however, there are no current community registration exceptions. As a result, patent rights holders must register their patents in the country to which they wish to register their IP customs notifications.

Trade Secrets: Generally, as trade secrets require that their owners keep the content of their secrets confidential in order to maintain its legal protections, any disclosure of such secrets to customs officials likely eliminates such secrets’ protections. Therefore, there does not appear to be any national customs IP notification systems that permit trade secret notification.

Copyright. Unlike trademarks and patents, a work qualifying for copyright protection in one country may qualify for copyright protection in other countries in order to allow foreign customs notification registration. However, depending on the country, foreign copyright authors may need to file a copyright registration in order to submit an IP customs notification. A work qualifies for international copyright protection under the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention) when it becomes attached. Attachment requires that the author of the work be a national of a Berne Convention country (Berne Convention countries), the author is a habitual resident of a Berne Convention country, that the work is first published in a Berne Convention country, or that the work is published in a Berne Convention country within 30 days after an initial publishing in a non-Berne Convention country. If a work is attached through any of these means, it is treated as if the work originated in each Berne Convention country, and is then subject to each Berne Convention country’s copyright protection requirements in order to qualify for copyright protection in that specific country.

If a work qualifies as an attached work under the Berne Convention and the IP rights holder wishes to register their protected work in a foreign Berne Convention country customs office, they will be able to file a customs registration without having authored the work in the foreign Berne Convention country. Yet, as mentioned above, countries differ on national copyright registration requirements for IP customs notifications. Australia, for example, does not require Australian copyright registration prior to submitting a customs notification application to the Australian Customs Service. However, several major markets, such as the U.S., China and India, require that copyrighted works be registered in their country prior to registering an IP customs notification.

Does the country you wish to enforce your IP rights have an IP customs notification system? Not all countries maintain IP customs notification processes. Some substantial and growing markets, such as Brazil, Canada and Chile, do not currently maintain IP custom notification systems. However, many major markets and transshipment countries maintain various types of IP customs notification systems including Argentina, Australia, China, European Union (EU), Hong Kong, India, Japan, Malaysia, Mexico, New Zealand, Russia, Singapore, South Korea, Taiwan, Thailand, Turkey, Ukraine, United States and Vietnam, among others.

Does such a country’s national IP customs notification system include the type of IP you wish to protect? Several countries only maintain IP notification systems for particular types of IP. For example, The U.S. Customs and Border Protection (CBP) only accepts copyright and trademark notifications, not patent notifications (the CBP only examines imports for patent infringement based on a Section 337 exclusion order from the U.S. International Trade Commission (more information available here)). In contrast, several other countries monitor and detain imports for possible patent and geographical indication infringement. India’s Central Board of Excise and Customs (CBEC) in particular monitors imports for copyright, geographical indication, patent and trademark infringement.

What are the particular foreign customs agency’s IP notification requirements? Once an IP rights holder verifies that their IP qualifies for legal protections in the foreign country they wish to submit an IP customs notification, and that the type of IP they wish to notify customs about can be registered, the IP rights holder’s customs notification must comply with the foreign customs office’s own notification requirements.

Below are the IP customs notification submission requirements for some of the worlds’ major markets.

Governing Law

Types of IP Covered

Notes

Forms/Links

United States 19 C.F.R. 133.1 et seq.
Copyright and Trademark Instructions: Copyright and trademark notification (known as e-Recordation) requires:

-Registering a trademark with the U.S. Patent and Trademark Office or a copyright with the U.S. Copyright Office

-The trademark or copyright’s U.S. registration number

-The name, address and citizenship of the IP rights owner

-The place(s) of manufacture of goods bearing the trademark or copyright

-The name and address of individuals authorized to use the trademark or copyright

-The identity of a parent company or subsidiary authorized to use the trademark or copyright (if any)

Fees: US $190.00 per copyright and trademark (per class of goods and services).

Effective Duration of Notification: 20 years.

e-Recordation Notification Portal
Australia
Copyright Act 1968, Subsection 135(2)

Trade Marks Act 1995, Section 132

Copyright and   Trademark General Notes: Australian IP customs notifications are known as Notices of Objection.To register a copyright or trademark notice with Australian Customs Service, an IP rights holder must submit: (1) a notice of objection form; and (2) a deed of undertaking. Both types of forms as well as further instructions are located in the right column.

Duration of Notification: Four years.

Copyright

Copyright Notice Instructions

Copyright Notice Form

Copyright Deed of Undertaking

Trademarks

Trademark Notice Instructions

Trademark Notice Form

Trademark Deed of Undertaking

China Decree of the General Administration of Customs, No. 183 Copyright, Patent and Trademark Requirements: To file a IP customs notification with the General Administration of Customs (GAC), an application must include:

-a copy of the IP rights holder’s business registration certificate and a Chinese translation

-a copy of the Chinese registration certificate for the copyright, patent or trademark

-Proof of Power of Attorney (if registered by an agent)

-Registration fee (see below)

-Licensing agreements (if any)

-Pictures of the relevant goods and their packaging

Submission: Forms can be filled online or by mail.

Fees:Approximately US $130.00 (800 RMB).

GAC Online Notification Form (In Chinese)
European Union Council Regulation (EC) No 1383/2003, Article 5.5 Copyright, Geographical Indication, Patent and Trademark The EU refers to IP customs notifications as Applications For Action. Applications require: (1) a completed application form; and (2) a completed Article 6 Declaration. Both forms are located to the right.

Note: Individual EU member states may maintain their own IP customs notification systems (a link to individual EU member state customs agencies is available here).

Community Application For Action

Community Article 6 Declaration

India  Notification no. 47/2007 – Customs (n.t.) Copyright, Geographical Indication, Patent and Trademark Registration: The CBEC requires that copyrighted works be registered with Indian Copyright Office, and geographical indications, patents and trademarks with the Office of the Controller General of Patents, Designs & Trade Marks prior to submitting a CBEC customs notification.

Ports of Entry: The CBEC also requires that notifications be submitted to particular ports of entry.

Duration of Notification: Minimum period of one (1) year.

Online Notification Submission Portal

**Note**: The above requirements are meant for comparative educational purposes only. IP rights holders should consult with national customs agencies or qualified attorneys in the jurisdictions they wish to enforce their rights to confirm these and other IP customs notification requirements.

Further Steps. Once an IP rights holder’s IP is registered with a foreign customs office, the foreign customs office will generally notify the rights holder or their representative of any infringing inbound shipments and may detain and potentially destroy infringing imports. However, such detentions may include legal proceedings, as well as additional country-specific enforcement procedures. IP rights holders should obtain qualified local counsel to assist with these enforcement activities.