Intellectual Property on the Internet: A Brief Comparison of the Current Situation in Europe and the United States (Guest Blog Post)

by Guest Blogger Pablo García Mexía, J.D., Ph.D

[Visiting Professor of Internet Law, The College of William & Mary. English translation by Morgan G. Fletcher, B.A. Cornell, William & Mary Law School, Class of 2014. The original Spanish version of this article was published in the weekly column La Ley en la Red, that the author writes for Spain´s newspaper I wish to thank Professor Eric Goldman for his kind invitation to write this guest post in his excellent blog.]

[Eric’s note: I thought this was an interesting response to my hot topics presentation from a European perspective, so I’m delighted to share it here.]

The situation in the United States regarding intellectual property on the Internet provides a magnificent perspective to evaluate the schools of thought currently evolving in both Europe and Spain.

Thanks to the generosity of Eric Goldman of Santa Clara University in California, I have had the opportunity to immerse myself in this action. Goldman is one of the foremost authorities on Internet law in the United States, and he typically delivers an annual lecture discussing the primary developments and occurrences in the area that have transpired in the preceding months. Its text is available on the Internet.

For our purposes, the main points of his work can be categorized into two overarching themes.

The first refers to what Goldman describes as “perennial questions,” which is in turn divided into three categories: the utilization of keywords in online publications (for example, the Adwords system on Google); the liability of intermediaries, such as Amazon, for the commercialization of products on its platform that infringe on intellectual property rights; and the liability of intermediaries that store content (e.g., YouTube).

In response to the matter of keywords, Goldman suggests a liberal approach that allows the use of keywords in trademarks and registered, commercial trade names, citing as support both recent doctrine and case law proffered in the May 2012 Trademark Trial and Appeal Board decision of STK v. BackRack. The main reasoning lies in the fact that, although the majority of Internet users search for a keyword that contains a registered trademark, or the registered product itself (i.e., “Kleenex,” without going any further), a lot of other users would like to be shown similar products on an equal basis. In spite of all of this, Goldman does highlight the reality that there are several unresolved important cases on this subject, four of which pertain to Google and another which is currently being reviewed by the Supreme Court of Wisconsin.

With regards to Amazon, Professor Goldman cited a 2012 ruling from the California Court of Appeals that absolved a company of liability for third party commercialization of counterfeit goods, even though they had received notification of this alleged infraction from the trademark holder. Rightly, Goldman draws the conclusion that simple notification on the part of the intellectual property rights owner is not sufficient to convey liability to sites such as Amazon; however, the ruling also introduces the possibility that companies such as Amazon may reject abusive claims from the holders of such rights.

Finally, with respect to content storage, Goldman highlights an August 2012 ruling from a federal court that excludes the viewing of videos embedded in hyperlinks from consideration as copyright infringement, effectively ruling out all liability for the owners of the site in question.

Eric Goldman refers to the aforementioned second section as “Post-SOPA Battlefields.” Three points stand out from this section: the criminal prosecution of the founders of MegaUpload by the U.S. Department of Justice; the seizure of domain names by the U.S. Immigration and Customs Enforcement (as was the case with Spain´s Rojadirecta); and international treaties such as ACTA. The first two fully address a critical issue in Internet law: the downloading of protected content, specifically through hyperlinks that make it possible to access such content without having to download or save them to your own server. The third, regarding ACTA, is a theme that has already been addressed in other installments of La Ley en la Red, to which I now refer.

From the presentation, I have distilled my own thoughts about three conclusions from–and for–Europe.

The first arises from the fact that the “perennial questions” to which Goldman alludes all commonly reference intermediaries in the information society, whether they are access providers or content providers; in other words, whether they are Movistar or Facebook. What confirms this is that, in the U.S., the issue of intermediaries plays a crucial role among legal questions relating to the Internet, particularly in all matters concerning potential liability for allegedly illegal acts committed by their users.

One of the main conclusions that after years studying these themes I have been able to extract is that this same thing happens in Europe, in the sense that intermediary liability is one of the undisputed “star themes” of European Internet law, especially if one takes into account its absolute uniqueness; regardless of the peer principles utilized in such dispute resolution–which have a more or less general anchor–the underlying conflicts here arise and develop only on the Internet.

The second big conclusion can be drawn from the liberal trend, expressed by Goldman, pertaining to the use of keywords for online advertising, the activities of e-commerce platforms such as Amazon, and the legality of streaming videos through embedded links. In the U.S., thanks to the liberal interpretation of applicable regulations, a growing openness with respect to online business activities is being achieved.

It is interesting to observe this increasingly open interpretation, which has also been picked up in Europe with respect to one of the same issues–that of keywords. Judgments of the European Court of Justice released in March 2010, specifically the Louis Vuitton and Viaticum et Luteciel cases, point in the direction of excluding strict liability for Google under circumstances similar to the aforementioned American cases, and instead subjecting that company to general guidelines of electronic commerce liability provided by European legislation.

This begs the question as to why such a propensity for openness in Europe does not extend to the commercial activities of Amazon or other similar websites. One already dated judgment from the District Court of Rotterdam, Netwise v. NTS (Dec., 2002), reaches the opposite result in similar facts regarding eBay, as the Court urged the copyright holder to act against the popular online auction site.

However, those more recent and authoritative cases adjudicated by the European Court of Justice could easily assert their influence over these assumptions because, as also argued by the said Court, it is not Amazon or Google who, as entities, to infringe on intellectual property, but instead those users who utilize protected names or trademarks without authorization.

More questionable is the assumption relating to embedded links. In Europe, the use of these by third linking websites has always been considered, especially by legal doctrine, as a breach of copyright, because, by definition, with this type of link it is not possible to dispel any confusion over the authorship of the content. In this sense, the jurisprudence cited by Goldman is certainly groundbreaking, even, I dare say, if it were to catch on in his own country.

The third and final conclusion pertains to the United States’ involvement in multiple, some international, judicial fronts to combat Internet piracy. One battle scene that Goldman opines to be of little use is SOPA, characterizing it as the failed Stop Online Piracy Act that tried to push through some members of the American legislature and that, in his own view, “will happen without any legislation”.

This criteria offered by the professor from Santa Clara seems more concordant with the European point of view. In this vein, it is enough to cite the ruling of the European Court of Justice in Promusicae v. Telefonica (Jan. 2008). Not to mention ACTA, whose ratification on the part of the European Union and its member states is now more than in doubt, for these same reasons.

After all, even though the European Union and its Member States have also become “entangled” on multiple judicial antipiracy fronts, it is certain that for the most part, the views that have been taken have always been more moderate in their defense of intellectual property, especially when it conflicts with fundamental rights such as privacy and freedom of expression.