Upcoming Legislation

• Legislative proposals are expected from the European Commission in the second quarter of 2022 for the revision of both the Directive 98/71/EC (the “Design Directive”) and Council Regulation (EC) No 6/2002 (the “Community Design Regulation”).
• The European Commission has published proposals for a “Data Act” which will aim to facilitate the access to and use of data, including in a business-to-business context. As part of the development of this initiative, a review of Directive 96/9/EC on the legal protection of databases (the “Database Directive”) will be conducted. The current proposals clarify that databases containing data from Internet-of-Things devices and objects should not be subject to separate legal protection. Further developments on the Data Act initiative are expected this year.
• The UK Intellectual Property Office (IPO) launched a consultation in October 2021 in relation to AI and the protection of works created by AI. This consultation closed in January 2022 and while specific to the UK, any developments in this area will be interesting to note as potential areas for regulation at both an EU and national level.
• A full draft of the Online Safety and Media Regulation Bill has been published by the Irish Government. This Bill will transpose the revised Audiovisual Media Services Directive into Irish law and will establish a new regulator, the Media Commission to replace the Broadcasting Association of Ireland and to include a new Online Safety Commissioner. While the Bill does not include changes to IP law, this development will have a significant impact on content creators and audio visual services suppliers. The Bill is now passing to debate stage and is likely to be enacted before the end of the year. Also in the content regulation sector, Regulation (EU) 2021/784 on Terrorism Content will apply from 7 June 2022. This Regulation introduces strict new requirements for online ‘hosting service providers’ to remove flagged terrorist content within one hour, provide reasons for the removal of content on request and monitor their own compliance by submitting annual reports. It also includes provisions for Member States’ authorities to take action for the removal of terrorist content and for mechanisms of better cooperation between Member States.
• The EU’s Digital Services package, the Digital Services Act (“DSA”) and Digital Markets Act (DMA), aims to create a safer digital space where the fundamental rights of users are protected and to establish a level playing field for businesses. On 20 January 2022, the European Parliament finalised its position on the draft Digital Services Act, which was adopted with a broad majority during the plenary session. This follows the approval by the European Parliament of the DMA in December 2021. Negotiations between the European Parliament and the Council of the EU to agree the text of both pieces of legislation are expected in the coming year.

Progress towards the Unitary Patent and Unified Patent Court

The Unitary Patent system and the Unified Patent Court (“UPC”) are a step closer to coming into force, following the ratification by Austria of the Protocol on Provisional Application of the UPC Agreement and the subsequent deposit of these ratification instruments on 19 January 2022.  The Unitary Patent system will provide uniform protection across all the participating countries, providing financial and administrative benefits.

The provisional application period will involve preparatory work including the recruitment of judges. This phase is likely to continue for eight months and will conclude with Germany depositing its instruments of ratification of the UPC Agreement.  The UPC Agreement will come into force three months after that date, possibly in early 2023.

However, Ireland has not yet held the required referendum to ratify the UPC Agreement.  IBEC called on the Irish government on 2 December 2021 to publish a timetable for the ratification of the UPC Agreement and stressed that Ireland would benefit from a local division of the UPC as this “would be attractive to indigenous and multinational patent intensive companies”.   There is also the possibility that a Central Division of the UPC could be located in Ireland, following Brexit and the UK’s withdrawal from the UPC Agreement.

It remains to be seen whether the Irish government will make an application to host the Central Division. In any event, a timeline for the ratification of the UPC Agreement will hopefully be published in 2022.

Decisions to watch out for in the year ahead

Merck Sharp & Dohme Corp v Clonmel Healthcare Limited [2021] IECA 54

The case related to Merck’s SPC in Ireland for its cholesterol lowering drug Inegy, made from a combination of two previously patented active ingredients with market authorisation. Under Article 3(d) of the SPC Regulation an SPC for a particular product must be based on “the first marketing authorisation” for the product and a question therefore arises as to the availability of an SPC for a combination product whose components have each already received marketing authorisation.

Potentially at odds with the recent position of the CJEU in Santen (C-673/18), the Irish Court of Appeal found that Article 3(d) did not necessarily exclude SPCs based on a marketing authorisation for a combination product, even when both of the individual active ingredients in the combination product were covered by previous authorisations. While the Court of Appeal found the Inegy SPC to be invalid under Article 3(a) of the SPC Regulation, it also found that authorisation for the co-administration of two separate products could not be equated to a marketing authorisation for the combination product, and as such a “first marketing authorisation” had not already been granted.

This finding has been appealed and the Supreme Court in its recent judgment in Merck Sharp & Dohme Corp v Clonmel Healthcare Limited [2022] IESC 11 confirmed that it is proceeding with an ECJ reference on the interpretation and application of Articles 3(a) and 3(c) the SPC Regulation.

Aviareto Limited v Global Closing Room Limited [2021] IEHC 377

The High Court granted an interlocutory injunction to Aviareto, the registrar of the International Registry of Mobile Assets in Aircraft Equipment, restraining the use by the defendant of the name or sign “Global Closing Room” in breach of the plaintiff’s EU trademark in the mark “Closing Room”. As part of its submissions, the plaintiff argued that if the defendant wished to launch a business using a trademark which was similar to the plaintiff’s trademark, it should have cleared the path, a patent law practice, by challenging the validity of the plaintiff’s mark in advance of doing so. As part of its findings, the High Court held there was no positive obligation on the defendant to have cleared the path to avoid the plaintiff being granted injunctive relief until the trademark dispute was resolved but the extent to which the potential damage relied on to resist the grant of an injunction could have been avoided through the application of commercial common sense is a factor to which the court can and should have regard in considering whether the balance of convenience favours injunctive relief. The case is expected to progress to full hearing this year

C-401/ 19 Republic of Poland v Council and Parliament

The Opinion of Advocate General Saugmandsgaard Øe (“AG”) has been published, which advises the ECJ to dismiss Poland’s action for the annulment of Article 17(4)(b) and 17(4)(c) of the DSM Directive on the basis that the application of the filtering obligations for online content-sharing service providers (“OCSSPs”) contained in these provisions will lead to censorship and will limit the freedom of expression and the freedom to receive and impart information guaranteed in Article 13 of the EU Charter of Fundamental Rights. The AG agreed with Poland that these provisions interfered with freedom of expression and freedom to receive information of the users of OCSSPs. However, the AG states that limitations on the exercise of the Article 11 right to freedom of expression are permissible provided that the three conditions set out in Article 52(1) are met: that the limitations are provided for by law; that they respect the essence of that freedom; and that they respect the principle of proportionality. It was the opinion of the AG that in most cases Articles 17(4)(b) and 17(4)(c) are a permissible limitation. In such case where appropriate and effective tools are available on the market and are not unreasonably expensive, OCSSPs are required to put them into place to comply with the contested provisions.

The Opinion was drafted and finalised before the European Commission issued guidance on how Article 17 should be implemented, which the ECJ will no doubt take into account when it delivers its ruling.

Case C-433/20 Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte Gesellschaft mbH v Strato AG

This reference from an Austrian court concerns the reproduction right in the Directive 2001/29/EC (the “Copyright Directive”) and the application of the exemption for reproductions made for private use and for ends that are non-commercial, provided the rights holders receive fair compensation.  The defendant in this case provided a cloud storage application and the concern arose from the potential storage by individuals for private use of lawfully acquired copyright material in the cloud storage application – thereby, resulting in a copy of this work being made on the service.

Advocate General Hogan’s Opinion concluded that the reproduction by cloud computing services provided by a third party should constitute “reproductions”. However, he also found that a separate levy should not be payable “by a natural person for their own personal purposes based on cloud computing services provided by a third party” provided that any levies paid in respect of the device or media reflects the harm caused to the rights holder by such reproduction.

Case C-184/21 Louboutin

This preliminary reference raises questions about the liability of a website operator for the use of a trade mark infringing sign in an advertisement displayed on that website, and whether the use of such an advertisement on an online store is attributable to the website operator if, in the eyes of the internet user, the operator has “played an active role in the preparation of the advertisement or if that advertisement is perceived as forming part of that operator’s own commercial communication”.  The case also raises a question about whether a shipper of such goods can be held liable for infringement.

No opinion has been released by an Advocate General to date.

Case C-531/20 – NovaText GmbH v Ruprecht-Karls-Universität Heidelberg

This reference from a German court raised the question about whether Articles 3 and 14 of Directive 2004/48/EC (the “IP Enforcement Directive”) should be interpreted to preclude any national legislation, which imposes an obligation on the unsuccessful party in a claim to reimburse the costs of the other party incurred in utilising a patent attorney, regardless of whether the patent attorney was necessary for the resolution of the case.

Advocate General Campos Sánchez-Bordona’s November 2021 Opinion found that the IP Enforcement Directive does prevent such legislation, as such automatic reimbursement would bypass the necessary judicial assessment of reasonableness and proportionality and could breach the principle that national procedures must not be unnecessarily costly.

Case C-716/20 RTL Television

This case will examine whether “cable retransmission” under Article 1(3) of Council Directive 93/83/EEC (the “Satellite and Cable Directive”) covers the distribution to the public, on a simultaneous basis and entirely by cable, of a primary broadcast of television or radio programmes intended for the public (even if the distributor is not a broadcasting organisation) and whether the simultaneous distribution of the broadcasts of a television channel, through hotel television sets, constitutes a retransmission within the meaning of the Satellite and Cable Directive.

Case C-559/20 Koch Media

This case will examine Article 14 of the IP Enforcement Directive and whether the IP Enforcement Directive covers necessary lawyers’ fees as “legal costs” or as “other expenses” where the rights holder “asserts, out of court, a right to apply for a prohibitory injunction against an infringer of those rights by way of a warning notice”.  Another question raised concerns the entitlement of a rights holder to the full reimbursement of said costs, or at least a reasonable and substantial proportion, even if the infringer is a natural person acting outside their trade or profession. This case is expected to progress this year.

For an overview of some developments in IP law from the past year, please see our Look Back article, here.