The Right of the Living Dead? Italians can't kill zombie copyright, says ECJ

Arco, or a good Chinese copy ...

The principle of the protection of legitimate expectations is not one which often gets an airing on this weblog, or in any other intellectual property blog for that matter, but it was in the news today in Case C‑168/09 Flos SpA v Semeraro Casa e Famiglia SpA, a reference to the European Court of Justice for a preliminary ruling from the Tribunale di Milano (Italy).

Briefly stated, this reference is all about this: if a work is protected by a design right which has died, but the law subsequently clarifies that that work is now protected by copyright, what effect does its sojourn in the land of dead IP rights have upon liability for copyright infringement when it returns as a zombie, now protected as a copyright work? It originated from an action which Flos brought against Semeraro in the following circumstances.  Said Flos, Semeraro had imported from China and marketed in Italy a lamp called the ‘Fluida’ lamp which, it said, imitated all the stylistic and aesthetic features of Flos's own Arco lamp. In interim proceedings the court found that the Arco lamp, which was created in 1962 and entered the public domain before 19 April 2001, was nonetheless eligible for copyright protection as an industrial design under Italian Law No 633/1941, as amended by Legislative Decree No 95/2001, and that the lamp imported by Semeraro slavishly imitated all its stylistic and aesthetic features. The Fluida imported lamps were confiscated and Semeraro was ordered to stop marketing them.

Semeraro

After these proceedings commenced, Italy changed its law on copyright protection for industrial designs but there was some doubt as to whether the new law actually conforms with Directive 98/71 (the Designs Directive) and, more specifically, with the principle of cumulation of protection established by Ar:ticle 17 of that directive ("A design protected by a design right registered in or in respect of a Member State in accordance with this Directive shall also be eligible for protection under the law of copyright of that State as from the date on which the design was created or fixed in any form. The extent to which, and the conditions under which, such a protection is conferred, including the level of originality required, shall be determined by each Member State").  At the heart of the matter was a rather generous moratorium period of ten years in favour of otherwise-infringers in respect of their use of former public domain works. The referring court stopped the proceedings there and then, to ask the ECJ:

‘1. Must Articles 17 and 19 of Directive [98/71] be interpreted as meaning that, in implementing a … law of a Member State which has introduced copyright protection for designs into its legal order in accordance with that Directive, the discretion accorded to such a Member State to establish independently the extent to which, and the conditions under which, such protection is conferred may include discretion to preclude such protection in the case of designs which – albeit meeting the requirements for protection laid down in copyright law – fell to be regarded as having entered the public domain before the date on which the statutory provisions introducing copyright protection for designs into the domestic legal order entered into force, in so far as they had never been registered as designs or in so far as the relevant registration had already expired by that date?

2. If the answer to the first question is in the negative, must Articles 17 and 19 of Directive [98/71] be interpreted as meaning that, in implementing a national law of a Member State which has introduced copyright protection for designs into its legal order in accordance with that Directive, the discretion accorded to such a Member State to establish independently the extent to which, and the conditions under which, such protection is conferred may include discretion to preclude such protection in the case of designs which – albeit meeting the requirements for protection laid down in copyright law – fell to be regarded as having entered the public domain before the date on which the statutory provisions introducing copyright protection for designs into the domestic legal order entered into force and where a third party – without authorisation from the holder of the copyright on such designs – has already produced and marketed products based on such designs in that State?

3. If the answers to the first and second questions are in the negative, must Articles 17 and 19 of Directive [98/71] be interpreted as meaning that, in implementing a national law of a Member State which has introduced copyright protection for designs into its legal order in accordance with that Directive, the discretion accorded to such a Member State to establish independently the extent to which, and the conditions under which, such protection is conferred may include discretion to preclude such protection in the case of designs which – albeit meeting the requirements for protection laid down in copyright law – fell to be regarded as having entered the public domain before the date on which the statutory provisions introducing copyright protection for designs into the domestic legal order entered into force and where a third party – without authorisation from the holder of the copyright on such designs – has already produced and marketed products based on such designs in that State, where protection is precluded for a substantial period (a period of 10 years)?’

Today the ECJ ruled as follows:

"1. Article 17 ... must be interpreted as precluding legislation of a Member State which excludes from copyright protection in that Member State designs which were protected by a design right registered in or in respect of a Member State and which entered the public domain before the date of entry into force of that legislation, although they meet all the requirements to be eligible for copyright protection.[i.e. Article 17 won't let Italy refuse copyright protection to ex-design-protected works that still fit the conditions for copyright protection]

2. Article 17 of Directive 98/71 must be interpreted as precluding legislation of a Member State which – either for a substantial period of 10 years or completely – excludes from copyright protection designs which, although they meet all the requirements to be eligible for copyright protection, entered the public domain before the date of entry into force of that legislation, that being the case with regard to any third party who has manufactured or marketed products based on such designs in that State – irrespective of the date on which those acts were performed". [i.e. Article 17 won't let Italy ban or suspend copyright protection for the benefit of anyone who relied on the fact that the work was once in the public domain]

On the principle of the protection of legitimate expectations the Court had this to say:

"51 ... in accordance with the principle that amending legislation applies, except where otherwise provided, to the future consequences of situations which arose under the law as it stood before amendment ..., acts performed before the date of entry into force of new legislation continue to be governed by the previous law. Thus, the revival of copyright protection has no effect on acts of exploitation definitively performed by a third party before the date on which such rights became applicable.

52 Conversely, by virtue of that principle, the fact that copyright protection applies with regard to the future consequences of situations which are not definitively settled means that it has an effect on a third party’s rights to continue the exploitation of subject-matter which is protected afresh by an intellectual property right (see, to that effect, Butterfly Music, paragraph 24).

53 It should also be recalled that it is settled case-law that the principle of the protection of legitimate expectations cannot be extended to the point of generally preventing new rules from applying to the future consequences of situations which arose under the earlier rules ...

55 As regards ... the legislative measure providing for a transitional period in relation to a specific category of third parties with a view to protecting their legitimate interests, it follows from the principle that acquired rights must be respected and from the principle of the protection of legitimate expectations that Article 17 of Directive 98/71 does not preclude such a measure, provided that the measure does not have the effect of deferring for a substantial period the application of the new rules on copyright protection for designs so as to prevent them from applying on the date laid down by that directive ...

56 In that regard, the assessment of the compatibility of the length of that transitional period and of the category of third parties covered by the legislative measure must be carried out in the light of the principle of proportionality.

57 Accordingly, the legislative measure adopted by the Member State concerned must be appropriate for attaining the objective pursued by the national law and necessary for that purpose – namely ensuring that a balance is struck between, on the one hand, the acquired rights and legitimate expectations of the third parties concerned and, on the other, the interests of the rightholders. Care must also be taken to make sure that the measure does not go beyond what is needed to ensure that that balance is struck.

58 For that purpose, the measure may be regarded as appropriate only if it is directed at a category of third parties entitled to rely on the principle of protection of legitimate expectations – that is to say, persons who have already performed acts of exploitation in relation to designs within the public domain at the date of entry into force of the legislation transposing Article 17 of Directive 98/71 into the domestic law of the Member State concerned.

59 Furthermore, the legislative measure should ensure that the period of use of the designs by those third parties is limited to what is necessary for them to phase out the part of their business that is based on earlier use of those designs or to clear their stock.

60 The measure does not go beyond what is necessary to ensure that a balance is struck between the competing rights if it does not defer entitlement to copyright protection for a substantial period.

61 In this instance, as regards the definition of the category of third parties as against whom it is provided that copyright protection is for a temporary period to be unenforceable, Legislative Decree No 95/2001 and Article 239 of the IPC may be regarded as appropriate since they are directed solely at persons who acquired their rights before the entry into force of the national measures transposing Directive 98/71.

62 Conversely, unenforceability for a transitional period of 10 years does not appear to be justified by the need to safeguard the economic interests of third parties acting in good faith, since it is apparent that a shorter period would also allow the part of their business that is based on earlier use of those designs to be phased out and, even more so, their stock to be cleared.

63 Furthermore, a 10-year moratorium in respect of copyright protection appears to go beyond what is necessary, since, by taking 10 years off the period during which a work is protected (as a rule 70 years after the death of the author), the application of copyright protection is deferred for a substantial period.

64 As regards, in the second place, Article 4(4) of Decree Law No 10 of 15 February 2007, abolishing the moratorium and rendering copyright protection unenforceable for an indefinite period in the case of products manufactured on the basis of designs which were in the public domain before 19 April 2001, it follows from the foregoing that such a measure negates Article 17 of Directive 98/71, since it has the effect of preventing, generally, the application of the new protection, that is to say, protection relating to copyright. Nor does that measure seek to restrict the category of third parties who may rely on the principle of the protection of legitimate expectations. On the contrary, the measure renders copyright more generally unenforceable, since, under the provision, it is not necessary for a third party to have begun exploiting the designs before 19 April 2001".

Quite right, says tytoc collie -- though he is still trying to get his furry little brain around the interrelationship of the principle of the protection of legitimate expectations with the doctrine of proportionality.  Merpel adds, it might be fun to measure some earlier ECJ intellectual property rulings against the protection of legitimate expectations ...

Resurrection of copyright here
Revival of copyright here