Latest Developments in IP Law Matters

Finland

Rainer Oesch

12.07.2004

I. COPYRIGHT

Legislation

1.1.Government Proposal to implement Infosociety Directive

Government Proposal 28/2004 which is meant to implement the Information Society Directive (2001/29/EC) was introduced in the Finnish parliament on 19th March 2004. This is a developed version of the government proposal from year 2002 (Government Proposal 177/2002).

During the summer period the draft lies still on the table of the parliament. Finland is already been sued by the European Commission because of not having implemented the directive. It is to be mentioned that the proposal also contains elements that are not necessarily required by the directive.

In comparison to the earlier official version of the draft text there are some technical alterations. One of the most remarkable additions is that the proposal now includes a section, which explains the proposal from a constitutional point of view, that is, mainly from the freedom of expression and from the cultural basic rights point of view. This quite a lengthy section is to be welcomed, because it clarifies the tension between copyright and the basic rights.

Actually, it is one of the first times when the copyright legislator officially takes part in the constitutional discussion. On the statutory level there has always been constitutional implications for the benefit of the basic rights, as illustrated by the recognition of free adaptations in Art. 4(2) of the Finnish Copyright Act and Chapter two of the Act (Exemptions to Copyright). The relationship between the public good and copyright has never been unknown to the copyright legislator as such. It is however a time for redefinitions and slightly new thinking.

The government proposal concludes that there is no need for a specific constitutional legislative procedure, but nevertheless recommends that the opinion of the Constitutional Committee of the Finnish Parliament should be requested. This entails that the constitutional experts of the Committee will look through the proposed amendments. This discussion and analysis will be useful and will only benefit copyright in the longer run. The process can strengthen the system.

1.2. Details

As for some details in the proposal: new formulation of economic rights (on-line use specifically mentioned as a form of making available to the public; performance right related to the public being simultaneously present; public display without using any specific technical equipment). Public performance and transmission to the public cover also performances and transmissions to a fairly big ‘closed’ public (Art. 2 in the proposal).

Free works – some redefinitions – in the Art. 9.

Exemptions – quite many new amendments.

For example:

- a copy made for private use is still allowed – the copy can be further distributed but for the same (=private) purpose only

- intermediate copying without any specific economic purpose - allowed

- copying in education and scientific research

- exemptions for the benefit of official archives and libraries to copy and use protected material in their functions redefined

- free use in museums, archives etc.

- contractual licensing – some amendments.

- free public performance within religious services – abolished.

New object for protection (neighbouring right) – products of folklore

Compensation for private copying will concern “equipment used to a remarkable extent for the purposes of private copying”. For instance, CD-, DVD-discs but also MP3–equipment. Equipment meant for “professional use” is not covered by the compensation obligation. A question that slightly seems to remain open – at least would need some clarification in the motivations of the proposals – in the light of the very text of the proposal is the role of mobile phones. These too can be devices for effective copying and further transmissions. So they without doubt would fall into the category of equipments covered by the compensation as such. The Ministry of Culture will announce a decree which will list the covered equipment.

Also technological protection and electronic copyright management information is proposed to be strengthened in the copyright act itself. There is a prohibition against circumvention of technical protection as well as against distribution of the equipment aimed for circumvention purposes.

Some amendments and reformulation concerning criminal liability. Importation of illegally made copy or copies –whether for private purpose or not - will be punishable as copyright offence. Also importation with the aim to export to third countries is treated in the same way. It is proposed that that the intent to earn (with the infringement) should be abolished from the essential elements of the copyright crime.

As for enforcement measures the proposal contains some clarifications and references to other legislation than copyright law. E.g. “notice and take down” procedures are regulated in the specific act on services in the information society (Act 458/2002) (implementing the directive on electronic commerce).

1.3. Conclusions so far

As a whole the proposal covers many questions and is to be welcomed, because it improves the position of the right holders in the information society and clarifies many open question.Because the proposal covers many vital points in the function of copyrights it has raised emotions among the groups of interest and partly therefore the legislative process has been prolonged. But in the longer run the proposal has become sharper and better, which is only a good thing for the copyright market and industries.

It will take some time before the Parliament takes the needed measures, discusses and accepts the proposal. As for procedure, the proposal will be discussed at least in the Committee for Culture and the Constitutional Committee.

Court Practice

In the Supreme Court Decision 2003:88 concerning software licensing and distribution of discs the majority of the court gave a ruling according to which the distribution right is exhausted once the permanent ownership of a copy is transferred. There was also a dissenting opinion according to which the transaction as a whole could have been regarded to be licence agreement and therefore the right should not have been regarded exhausted by the distribution of discs to customers.

After the Supreme Court decision of 2003:88 (exhaustion of copyrights and software licensing agreement) there has been a case concerning importation of illegally produced CD discs (80 copies) and 20 computer game copies (Supreme Court 2003:16). The question was whether the discs were imported for private purpose only or in order to be distributed to the public. The accused was held liable and punished for copyright offence and the discs were ordered to be destroyed (Copyright Act Art. 56 a).

Other cases: Supreme Court 2002:101: Music performance in a taxi cab to the customers present both through radio and cassette- CD-players was regarded to be a public performance.

Supreme Court 2002:20: to transmit TV-broadcasts in an apartment hotel was regarded to be a public performance.

Copyright council is an out-of-court –body that is used by the parties in a specific copyright dispute to clarify the preconditions of protection and the contents of protection. The council is used as a kind of alternative dispute settlement system. The practice has been fairly lively concerning mainly the originality criteria and contents of protection. Questions on how to interpret copyright contracts do not belong to this body.

As examples from this year 2004 there is to mentioned following cases:

- jewelry (design of a j.)

- written works and the use of them in webpages

-instructions for use – are they protectable (for a camera)?

-is a painting regarded to be a copy of a photograph (portrait)?

The statistics shows that for the market and especially for the parties these expert opinions in conrete cases are important.

As stated above originality criteria has been one of the primary issues, but questions concerning the scope of rights has also been important. Because of the powers of the council the interpretation of contracts in a copyright dispute is not solved in the council but in a normal court system from local courts to Supreme Court. In some cases alternative dispute settlement (such as arbitration is possible and even favoured in certain copyright matters) (e.g. fees for contractual licensing).

II. INDUSTRIAL PROPERTY

Legislation

Amendments to the Design right Act has been made in 2002 already because of the Directive (98/71/EU) concerning Designs. In this amendment alterations to some central concepts, preconditions for registration, contents and scope of protection and the term of registration were made.

As for coming legislation in patent law there is a proposal on university innovations under way. A more fair balance between the rightholders/university innovators and universities and the industry is sought.

Some amendments concerning PCT and EPC are under way as well as a technical amendment after the European Community entered Madrid Protocol.

There is a new act (act nr. 228 from 13th March 2003) enacted in 2003 concerning domain names with Fi. – endings. The prior trade mark rights and trade name rights are taken into consideration in the law text by giving a possibility to ask the authroties to freeze the use of a conflicting name.

Court Practice

2.1.Trademarks

The Sign RENICHEW for specific natural products was regarded to be confusing with the trademark RENNIE for medical products (Supreme Court 2004:49).

The trademark application concerning the figure mark TOFU ICE was dismissed by the patent office for certain food stuffs, because of lacking distinctiveness. TOFU ICE was neither regarded to be established in use. (Supreme Court of Administration 1852/2003).

Interestingly in a case the Patent Office had dismissed an application for the trademark O.P. ANDERSON for strong liquors because it contained a persons name. The applicant could however rely on the fact that the person involved was a Swedish person Olof Peter Andersson died already in 1876, and could therefore be registered, because it was not a confusion with a (living) person’s but with person died long ago. His name is not known in Finland at all.

No confusion between the trademarks TEFLI and TEFLON, the former for textiles in classes 24 and

25, the latter also covering certain textiles in the class 22 and 23. No unfair use of well known marks was found out. (Supreme Court of Administration 2002:31).

1.2.Patents

A city was held responsible when having an equipment for oil damages at its possession in order to use it and without having the permission of the patent holder. Supreme Court 2003:127.

OBSERVATIONS

During the last time the legislator of IP matters has approached problems of intellectual property in a scattered way t.i. made changes pressed by the new techniques and other factors in outmost situations, t.i. when the problems of reality has forced to make amendments. Of course this a some kind defending position and this kind of approach easily lacks systematic touch. After all a need to discuss some general problems is accepted in some fields of IP law, e.g. legal principles concerning contracting of IPR’s have been left untouched so far. The norms in this area are quite few, and there is a clear need to renew the laws concerning licensing and other transfer provisions, e.g. especially in copyright where also electronic contracting and needs of third parties seem to play quite an important part nowadays. E.g. competition authorities have been looking through their mirrors the activities of some copyright organizations (Gramex). In this case there was regarded to be unfair pricing and this was held to have bad impact on the competition in general. The Finnish Bankruptcy Code has been under revision. There are no specific norms concerning e.g. IPR’s, but there are specific norms on how the bankruptcy estate is able to continue the contractual relationships that have been entered by the debtor (right of subrogation).

The practice in IP matters that has come out can be divided into two parts: general courts (including administrative courts) and specific courts (market court – which has power in questions of unfair competition and consumer protection and in questions concerning competition restrictions). In addition to that comes the practice from Copyright Council the Council for Employee Inventions.

In a small country to give matters that need specialization to specific bodies is to my mind well founded, because otherwise the general local courts seldom have the knowledge of IP matters required for these cases. In addition to that it is to be mentioned that the Ministry of Justice has set up a working group revising the national law concerning the rules on jurisdiction on national level.

The working group has not yet given any statement about the progress of its work.