European union directive on the legal protection of databases

Software Protection Update 1997

In several domain name dispute cases that involved dilution claims, courts have ruled in favour of trademark owners. For example, in Hasbro Inc. v Internet Entertain- ment Group, the court ordered the domain name holder to cease using the domain name candyland.com for the name of an adult Web site. The court held that the use of the domain name in connection with such an activity diluted Hasbro’s trademark rights in CANDYLAND, which it used as the name of a well-known children’s product. Two later cases (Intermatic Inc. v Toeppen and Panavision Interna- tional LP v Toeppen) suggest that courts may stretch the concept of dilution when it comes to domain names, thus creating the potential for very broad liability. Each of these cases involved the same defendant, an individual who had registered as domain names numerous registered trademarks with the admitted intent of profiting from the sale of such domain names to the trademark owners. In each case, the trademark owner argued that its marks had been diluted by the defendant’s adoption of the domain name. In both cases, the court ruled that the defendant had tarnished or blurred the identity of the trademarks by lessening the trademark owner’s capacity to identify and distinguish its goods and services by means of the Internet. Significantly, in both cases, the courts found dilution based solely on the defendants having registered the domain name. Unlike traditional dilution cases, the defendant was not using the name ‘commercially’, that is, to sell goods and services, never- theless, the courts held the defendant’s intention to arbitrage the domain name constituted ‘commercial use’.

‘Given the dearth of case law deciding domain name disputes, it would be premature to extrapolate broad principles from the few decisions rentdered. Moreover, NSI and the United States legal system will soon be joined by a third method of domain name dispute resolution. IAHC has proposed a GO-day optional waiting period for registrants and a dispute resolution system incorporating online mediation, mandatory arbitration (if a domain name challenger chooses to initiate arbitration), and a fast-track online administrative domain name challenge procedure. Under the last method, an intellectual property right holder could petition a panel of international experts to determine if a second-level domain name violates the policy that a domain name which contains an internationally known trademark may only be held by the trademark owner.

Companies should register their names and key track marks as domain names

Given the Impending proliferation of domain names and the certain correspondent increase in domain name disputes, trademark owners and domain name holders must keep abreast of legal developments in cyberspace. Moreover, companies should register their names and key trademarks as domain names sooner rather than later, to minimize the obstacles to their cyberspace marketing plans.

For further information on domain name disputes, see “Trademark Issues in Cyberspace: The IBrave New Frontier,” by Sally M. Abel and Marilyn Tiki Dare of Fenwick & West LLP which may currently be found on the Internet at http:// www.fenwick.com/pub/sma-trade2.htnl.

European Union Directive on the Legal Protection of Databases

by Robert Bond*

The European Union (EU) Directive on the Legal Protection of Databases (Directive) was adopted on 11 March 1996 and published in the Official Journal of the EU on 27 March 1996. The Directive requires governments of its member states (Austria, Belgium, Denmark, Finland, France, Germany. Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal. Spain, Sweden and the United Kingdom) to pass legislation enacting the Directive no later than 1 January 1998. (See p. 419 of this issue for discussion of the UK response.)

OBJECTIVES OF THE DIRECTIVE Tbe Directive harmonizes co@rigbt protection for d&abases and creates a new sui generis r&bt applic able to databases

The two major objectives of the Directive are to harmonize copyright law applicable to the structure of databases and to create a new sui generzk right which protects the database maker against the unauthorized extraction and/or reutilization of the whole or a substantial part of the database.

DEFINITION OF DATABASE The Directive defines a database as “a collection of independent works, data or other materials arranged in a systematic or methodical way and individually accessible by electronic or other means”. Not only does the Directive contemplate the protection of electronic and digital databases, but also expressly states that protection should extend to non-electronic databases (e.g. paper <databases).

Computer Law & Security Report Vol. 13 no. 6 1997 10 1997, Elsevier Science Ltd. 401


COPYRIGHT PROTECTION OF DATABASES The copyright protection specified by the Directive will apply only to the structure of the database, whether or not the contents of the database are themselves protectable by copyright. Article 3.1 of the Directive provides that databases are eligible for copyright protection if, by reason of the selection or arrangement of their contents, the database constitutes the author’s own intellectual creation. The Directive also makes clear that no other criteria, such as aesthetic or qualitative criteria, should be applied to determine if a database is eligible for protection under the Directive.

The Directive defines the author of the database as the natural person or group of natural persons who created the database or, where the legislation of member states permits, the legal person designated as the right holder by such legislation. Because of the differences among the laws of the members states as to determining the authorship of copy- righted works created by employees, there may be incon- sistency among the member states as to the authorship of such databases.

Article 5 of the Directive provides the author of the database with the exclusive right to carry out or to authorize:

Temporary or permanent reproduction;

Transmission, adaptation, arrangement and any other alteration;

Distribution to the public;

Communication, display, or performance to the public; and

Reproduction, distribution, communication, display, or performance to the public of a translation, adaptation, arrangement, or other alteration.

The Directive expressly provides that the moral rights of the natural person who created the database belong to the author and remain outside the scope of the Directive.

Consistent with the EU’s directive that harmonized the term of copyright protection in the EU, the term of copyright protection for databases is the life of the author plus 70 years, or in the case of corporate ownership, a term of 70 years from the date of first publication.

SUI GENERIS PROTECTION OF DATABASES Tbe sui generis rigbt permits database makers to prevent unauthorized extractions and reutikations of databases

Article 7 of the Directive creates a new proprietary right for databases, namely, the sui generis right. Under this right, database makers who can show that they have made a qualitatively and/or quantitatively substantial investment in either the obtaining, verification, or presentation of the contents of the database will have the right to prevent acts of extractions and/or reutilization of the whole or a substantial part of the database. Whether a database user has extracted or reutilized the whole or substantial part of a database will be evaluated qualitatively and/or quantitatively. A database that satisfies the criteria for the sui gene& right will be accorded such protection, regardless of whether the

database itself or the database contents qualify fior copyright protection.

The Directive uses the word ‘maker’ with respect to databases which qualify for the sui generis right but, as discussed previously, the word ‘author’ with respect to databases which qualify for copyright protection. The database ‘maker’ is defined as the person whlo takes the initiative and the risk of investing in the creation of the database. The Directive also expressly excludes subcontrac- tors from the definition of ‘maker’.

The term of the sui generis right runs from the day the database is completed and expires 15 years after the 1 January of the year following such completion. However, if the database is made publicly available (i.e. published) prior to the expiration of such 15-year period, then the s&gene& right expires 15 years after the 1 January of the year following such publication. In practice, therefore, the term of the sui gene& right is 15 years from the date of publication. However, the Directive also enables a database maker to qualify for an additional 15-year term of the sui gene& right if the database maker makes any qualitatively and/or quantitatively substantial changes to the contents of the database.

THE DIRECTIVE AND NON-EU MEMBER STATES l%e Directive provides for reciprocity ratber tban national treatment with respect to tbe sui generis r&W

With respect to copyright protection, a database will be treated in the EU like any other literary work. Thus, under the principle of national treatment, the author of a database who is a national of any Berne Convention country will be accorded the same copyright protection in any member state as that member state would accord its nationals.

With respect to the sui generis right, however, the Directive provides for reciprocity rather t:han national treatment. Thus, the maker of the database will be entitled to this right only if the maker is a national or a habitual resident of a member state. In the case of a company that is deemed to be the database maker, the company must be established in accordance with the laws of a member state and have its registered office, central administration or principal place of business in the EU. Even where the company has a registered office in a member state, it must possess an effective and continuous link with the economy of one of the member states.

The Directive has left open the opportunity for the European Commission to conclude agreements extending the sui gene& right to databases created outside the EU, if such non-EU jurisdictions provide an equivatlent form of protection for databases. Presently, there is a significant difference between the way that databases will be protected in the EU and, for example, in the US which provides only copyright protection for databases and does not protect the database maker’s ‘sweat of the brow’. Thus, until there is a movement towards a similar level of protection in the US, it is unlikely that there will be an extension of thle sui generis right to databases created in the US.

402 Computer Law & Security Report Vol. 13 no. 6 1997 01997, Elsevier Science Ltd.


CONCLUSION Until such time as the Directive is implemented by each member state there will continue to be disharmony in relation to the protection of databases. It will be interesting to see how each member state interprets the Directive into its own national law and it will be even more interesting to see what steps for further reciprocity are established between the EU and non-EU countries.

’ Robert Bond is a partner and bead of the IT and Media group in the London office of Hobson Audlq Hopkins i; Wood and is Rapporteurfor the International Chamber of Commerce Legal and Regulatory Working Group 011 electronic commerce.

1997 UPDATE: INTERNATIONAL LEGAL PROTECTION FOR SOFTWARE CHART January 1997

Local counsel should be consulted &fore distributing somare in aparticular market to conjpnn and update tbe information in tbi& chart and to advise on tbe practicality of enforcement, evidentiury considera- ti~ns, and otberprotection mecbantsms

How to use this chart This chart can be used to determine if subject matter protection is currently available in a particular country for either a US or foreign party’s software.

The entry under ‘Copyright’ indicates whether subject matter protection is available for software under the national copyright law of a particular country. If so, the second step is to determine if protection is available for a IJS work in that country. To do so, look at the entry under ‘Convention Memberships’ to see if there is an applicable mutual membership or a bilateral agreement between the US and it. If there is, subject matter protection is probably available. The same approach is used to determine if protection is available for a foreign party’s software in another foreign country (except that relevant bilateral agreements are not identified). For example, a Japanese author would look at the ‘Convention Memberships’ entries to determine if Japan and

a specific country have a common convention membership. The entry under ‘Patent’ indicates whether subject

matter protection is available for software in the specified country, under either national law or supranational law, such as the European Patent Convention. Patent treaties to which the country belongs are identified under ‘Convention Memberships’. While a common convention membership means that national treatment will be provided, a patent application may be Bled in some countries even when no common membership exists.

DEFINITIONS OF TERMS USED IN THIS CHART Yes”

“Probably”

“Maybe”

- subject matter protection for software is available pursuant to legislation, significant case law precedent (in the case of patent only), or presidential decree expressly protecting software. - significant case law precedent supports subject matter protection. - subject matter protection may exist based on, for example, a favourable lower court opinion, views of commentators, or the ability to register software in the country’s copyright office. - no substantial indication of subject matter protection for software.

“Unknown” - no information identified.

Convention Memberships: ‘B’ - Berne Convention

‘U’ - Universal Copyright Convention ‘ , P - Paris Convention

‘E’ - European Patent Convention ‘C’ - Patent Cooperation Treaty

This chart is also available on the World Wide Web at http:// www.softwareprotection.com and will be updated to reflect significant developments.



Country WvWt Patent Convention Memberships

Argentina Yes2 Australia Yes Austria Yes

No Probably” Yesb

B,U,P B,U,P,C B,U,P,E,C

Belarus Belgium Bosnia and Herzegovina Brazil

Unknown3 Yes Yes4* Yes’

No YeSb* No No c

u,p,c* B,U,P,E,C B,U,P,C B,U,P,C

Brunei Bulgaria Canada

Unknown Yes Yes

Probablyd No Yes

None B,UJ’,C B,U,P,C

Chile China (PRC) Colombia

Yes Ye8 Yes

No Maybe’ Maybe

B,UJ’ B,U,P,C* B,U,P*

Costa Rica Croatia Czech Republic

Maybe’ Yes Yes’

No No No

B,UJ’ B,U,P B,U,P,C

Denmark Dominican Republic Ecuador

Yes Yes Maybe

Yesb Probably’ No

B,U,P,E,C

gfJ

Egypt Estonia Finland

Yes Yes Yes

Probably Maybeg Maybeg

EXk B:ti,P,E,C*

Yes Yes Yes

Yesb Yes Yesb

B,U,P,E,C B,U,P,W B,U,P,E,C

Guatemala Hong Kong Hungary

Unknown Yes Yes

No Probablyd Maybe

India Indonesia Ireland

Yes Yes Yes

No No Yesb

B,U P, Bilateral Copyright B,U,P,E,C*

Israel Italy Japan

Yes Yes Yes’

No Yesb Yes

B,U,P,C* hU,P,E,C B,U,P,C

Kuwait Latvia Lithuania

Unknown Yes Yes 9

No Unknown No

None W,C B,P,C

Luxembourg Macao Malaysia

Maybe Maybe” Yes

Yesb Probably No

B,U,P,E,C None BJ



country Copyright Patent Convention Memberships

Mexico Netherlands New Zealand

Yes Yes Yes

No Yes b Probably*

RU,P,C B,U,P,E,C B,U,P,C

Nigeria Yes Norway Yes Pakistan Yes

Probably Maybeg No

B,U,P B,U,P,C B,U

Panama Peru Philippines

Yes’ ’ Maybe Yes

No Maybe No

B*,U,P* B,U,P BJ’

Poland Portugal Romania

Yes Yes Yes12*

No Yesb No

B,U,P,C B,U,P,E,C W,C

Russia Saudi Arabia Singapore

Yes Yes Yes

No No Probablyd

RUJ’,C U P,C, Bilateral Copyright

Slovak Republic Slovenia South Africa

Yes7 Yes Yes

Unknown Maybe No

B,U,P,C B,U,P,C W

South Korea (ROK) Spain Sweden

Yes Yes Yes

Yes Yesb Yes

B*,U,P,C B,U,P,E,C B,UJ’,E,C

Switzerland Taiwan (ROC) Thailand

Yes Yes Yes

Yesb Maybeh No

B,U,P,E,C Flatera Copyright

Turkey Ukraine United Arab Emirates

May&!’ Yes, Yes

No No* No

W,C B*,U.P,C P*

United Kingdom United States Uruguay

Yes Yes Yes

Yesb Yes No

B,U,P,E,C B,U,P,C B,UJ’

Venezuela Yes Vietnam Yes14*

Maybe

Yugoslavia Maybe

Yes No

* Material added to or substantively revised from 1996 report.

RUJ’

Copyright Footnotes computer software is expressly protected under the

(1) Legislation or decree proposed. Argentinian Copyright Act of 1933.

(2) Argentina: On 8 February 1994, the Argentinian (3) Belams. Belarus has completed draft copyright

Official Journal published Presidential Decree No. legislation.

165/94, dated 3 February 1994. The Decree states that (4) l Bosnia and Herzegovina: Bosnia and Herzegovina have established their own Intellectual Property office

Computer Law & Security Report Vol. 13 no. 6 1997 0 1997, Elsevier lkience Ltd. 405


(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

(14)

and aII rights granted or applied for prior to 1 March 1992 in the former Yugoslavia may be extended to Bosnia and Herzegovina. Brazil: Brazil’s two-decade-long market reserve ended on 29 October 1992, pursuant to the provisions of Law No. 8,248. Legislation has been pending since June 1991, which would abolish both the access restrictions (similarity test) and marketing restrictions on foreign software distributed in Brazil that exist under Brazilian Law No. 7646 of 18 December 1987. China (PRC): In April 1996, the USTR designated China as a ‘Priority Foreign Country’ under the ‘Special 301’ provisions of the US Omnibus Trade and Competitiveness Act of 1988 as a result of China’s inadequate protection and enforcement of US intellectual property rights, including rights related to computer software. Czech Republic and Slovak Republic: In January 1993, Czechoslovakia became two independent republics. The office of the USTR has received assurances that both republics will adhere to pre- existing Czechoslovakian laws and treaty obligations governing the protection of intellectual property. Japan: No copyright protection exists in Japan for syntax, algorithms, or programming languages. In Microsoft v Shuuwa Trading KK, Tokyo District Court, 30 January 1987, the court held that the implementation of a programming language in a BASIC interpreter is protected by copyright law. Lithuania: Lithuania enacted a copyright law that came into force on 17 May 1994, which reportedly protects computer software. Macao: Recent cases in Macao have held that computer software is protected by copyright.. Panama: On 8 August 1994, Panamas president signed Panamas new copyright law, ‘Law Number 15’, which expressly protects computer software. Although the law came into force on 1 January 1995, the effect of this law has been suspended pending a determination of its constitutionality. Romania: On 14 March 1996, Romania’s president signed its new copyright law, which expressly protects computer software. The law became effective 24 June 1996. Ukraine: On 23 February 1994, Ukraine enacted a law relating to copyright and related rights that extends protection to databases and computer programs. Vietnam: On 1 July 1996, Vietnam’s new Civil Code granting express copyright protection for computer software came into force. It strengthens copyright protection by granting owners and authors of works the right to obtain copyright registration for their works. Despite this change, because Vietnam is not yet a member of Berne or the UCC, works of foreign authors wiII be protected in Vietnam onIy if such works are published in Vietnam within 30 days after the date of first publication in another country.

Patent Footnotes (a>

(b>

cc>

(4

(e>

0-J

(h)

Australia: Australian Patent Act, as amended, 30 April 1991; International Business Machines Corp. v Smith, Commissioner of Patents, AIPC 90-853 (Australian Federal Court 1992). The Commissioner of Patents has appealed the IBM case. If the EPO route rather than the national route is chosen, the ‘technical effects’ doctrine applies. Vicom Systems Applications, T208&4, 2 EPOR 74, EPO Appeal Board (1987). Brazil: Inventions involving the use of computer software may be patentable provided they are of ‘technical character’ (new and utilizable by industry). For example, if computer software is used to control a machine, a patent may be available for the machine. Provided that one registers an EPO patent designating the IJnited Kingdom. China (PRC): Inventions involving the use of computer software may be patentable in the PRC, even if the software concerned forms the major part of the invention, as a technical solution relating to a product, process, or improvement. Dominican Republic: Provided one confirms a non- Dominican Republic software patent (e.g. by re- registering a US patent).

Finland, Norway, and to a partial extent Estonia have reconciled their national patent laws with the European Patent Convention even thomugh they are not members. Taiwan: An invention relating to the utilization of software in a hardware apparatus may be granted a patent. However, if the invention is pure computer software and can be executed on aII computer devices, it cannot be granted a patent.

SOURCES OTHER THAN DIRECT AUTHORITY: Computer Law Association’s International Update; Michael Kepiinger, Esq., US Patent and Trademark Office; Richard Owens, Head of Copyright Law Section, CentraI and Eastern Europe Business Information Center of the US Dfepartment of Commerce; US Department of State; Business Information Service for the Newly Independent States of the US Department of Commerce; World Intellectual Property Organization, Geneva, Switzerland; RanaId Robertson, Esq. of Taylor Joyson Garrett of London, England; Mladen Vukmir, Esq. of Zagreb, Croatia.

0 1997 Fenwick & West LLP. AII Rights Reserved

COPYRIGHT PROTECTION Copyrlgbt protection for softulare continues to be estabiisbed around tbe world

The trend is strongly toward express statutory protection for software in copyright laws around the world. Statutory protection has become increasingly important because more software is mass-marketed without a signed license agreement. In many countries, courts have held s’oftware to be within the subject matter protection of existing copyright

406 Computer Law & Security Report Vol. 13 no. 6 1997 0 1997, Elsevier Science Ltd.


law. Generally, copyright laws protect the form of expression of an idea, but not the idea itself. With respect to software, this typically means that the computer program in both human-readable and machine-executable form and the related manuals are eligible for copyright protection, but the methods and algorithms within a program are not protected expression. Source code and object code are protected against literal copying. In addition, certain non- literal elements of expression (including the structure, sequence, and organization, and ‘look and feel’ of a program) have sometimes been afforded protection under US copyright law. This trend has not clearly surfaced in foreign courts. Therefore, the current scope of protection of software under US law is, at least in this respect, probably broader than under any foreign law.

A common requirement of copyright laws is that a work be original. Originality means that a work has been created independently and is the personal expression of the author. This factor must be distinguished from the concept of novelty, which usually is not required. Proof of originality is assisted in some jurisdictions by registration of a work with specified regulatory authorities.

Rights protected ‘Moral rights’ are recognized in tbe copyright systems

of many count&x

The exclusive rights of a copyright holder that are recognized and protected by most copyright laws are the rights to reproduce or copy, adapt (i.e. prepare derivative works), distribute, and publicly perform the work. The precise nature of these rights, however, often differs among countries. The exclusive right to display is not generally recognized outside the US, except to the extent that it ma) be covered by the moral right of disclosure (discussed below).

A number of countries, and the EU Software Directive as well, also recognize ‘moral rights’, which may include the right to be known as the author of the work (right of paternity), the right to prevent others from distorting the work (right of integrity), the right to control publication of the work (right of disclosure), and the right to withdraw. modify, or disavow a work after it has been published (right of withdrawal). Moral rights protection reflects the view that the individual, not only the work, is to be protected. The scope of these rights varies among the countries that protect moral rights of authors. The Beme Convention recognizes only the first two moral rights above.

In most such jurisdictions, agreements to waive or transfer moral rights are not enforceable. In those countries where moral rights are protected, such rights may restrict the transferee of the software (such as the party who commissioned the work) from making changes to the software without the express consent of the original author. At present, no reported case law appears to exist on this issue.

Formalities Member&p in Berne eiiminates tbe requirement of obseruing @-malities in order to obtain copyright

proten.

Benne Convention countries provide for copyright protection without stipulating the observance of any formalities. Some countries (such as the US prior to the effective date of its Berne membership on 1 March 1989 and some Latin American countries), however, require a copyright notice on published works. This notice is necessary on published works under the Universal Copyright Convention. Addition- ally, a deposit of all or portions of the work and/or registration is required by some jurisdictions in order to secure protection or prior to bringing a lawsuit for copyright tiingement. Even if registration is not stipulated to obtain or enforce protection, it may provide important evidentiary benefits.

In certain countries where formalities must be observed in order to obtain protection, they apply only upon publication. As indicated below, the country where first publication occurs is important in dletermining whether works of foreign authors will be granted copyright protection.

Copyright protection abroad Copyrigbt laws usually providk protection only for a country S nationals or fbr worksjZrst pub&bed in tbe country.

Copyright laws operate territorially. They usually provide protection only for a country’s nationals or for works first published in the country. Treaties and bilateral agreements address the availability of protection for foreign authors and grant the same protection to foreign authors as to nationals, usually under the condition of reciprocity. The most significant international treaties relating to copyright protection are the Berne Convention, the Universal Copyright Convention, and the Buenos Aires Convention. The US is a longstanding member of the Buenos Aires and Universal Copyright Conventions and became a member of Beme on 1 March 1989. The US also has bilaterdl arrangements with several nations that do not belong to any copyright convention.

ucc The US is a member of the Universal Clopyright Convention (UK). Under this treaty, each member :state grants the same protection to works (whether published or not) of nationals of, and to works first published in, any other member state as it grants to its nationals for works first published in its territory or to unpublished works created within its territory. This is called ‘national treatment’. Thus, software created by an American author or first published in the US is protected in a convention member country to the extent that the member’s current copyright statute protects software.

In contrast to Berne, tbe ohs-ante offormalities may be required by UCC member states in orah- to en&rce copyrfgbtprotection

The UCC provides that any me:mber country that requires, as a condition of copyright protection, compliance with formalities (such as registration, deposit, or notice) must treat such formalities as satisfied if all published copies of a work bear the symbol ‘KZJ’, the name of the copyright



proprietor, and the year of first publication. This provision applies, however, only to works that (i) were first published outside the country requiring the observance of the formalities, and (ii) were not authored by one of that countrys nationals. In contrast to Beme, formalities such as registration are permitted under the UCC in order to bring an infringement suit.

As of 1 January 1997, UCC member countries not listed on the chart were: Algeria, Andorra, Bahamas, Bangladesh, Barbados, Belize, Bolivia, Cambodia, Cameroon, Cuba, Cyprus, El Salvador, Fiji, Ghana, Guinea, Haiti, Holy See, Iceland, Kazakstan, Kenya, Laos, Lebanon, Liberia, Liechtenstein, Malawi, Malta, Mauritius, Monaco, Morocco, Nicaragua, Niger, Paraguay, Rwanda, Saint Vincent and the Grenadines, Senegal, Sri Lanka, Tadjikistan, Trinidad and Tobago, Tunisia and Zambia.

Buenos Aires Convention The Buenos Aires Convention has been adopted by the US and most Latin American countries. It provides for national treatment and requires the use of ‘All Rights Reserved’, or its equivalent, in the copyright notice. This treaty has become less important since most member states have also adopted the UCC, which supersedes the Buenos Aires Convention to the extent they contlict.

Berne Convention The Beme Convention contains a more far-reaching regula- tion of copyright than does the UCC. Beme members constitute a union that is open to all countries of the world, provided that certain minimum protective requirements are satisfied. These requirements include (i) national treatment (whether or not a work is published), (ii) the granting of certain moral rights to authors with regard to the exploita- tion of their works, (iii) the granting of certain ‘economic rights’ (such as exclusive rights of translation, reproduction, performance, or adaptation with respect to protected works), and (iv) the adoption of certain minimum terms of protection (generally the life of the author plus 50 years) for various works. In addition, Beme provides copyright protection without requiring that any formalities, e.g. prerequisites to bringing infringement suits, be observed. Beme does not prevent a country from providing evidentiary benefits as an incentive to registration such as in the United States. Some commentators interpret Beme as prohibiting the waiver or assignment of the ‘moral rights’ of the author. As a practical matter, however, national law appears to govern whether ‘moral rights’ may be totally waived, transferred, or are applicable to a particular type of work such as software.

In Mar& 1989, tbe Us became a me?n?moftheBe?m Convention, tbe world’s most lvfrlezy observed copyright treaty.

The US became a member of Beme on 1 March 1989. Until then, US authors could indirectly obtain protection under this treaty if first publication took place in a member country or simultaneously in a member and a non-member country. ‘Fit publication’ has different meanings, both strict and l&e.ral, among countries. While the US ratified the most recent version of Beme, some other countries have ratified earlier versions only.


With respect to retroactivity, unless otherwise agreed by special convention, a work whose ‘country of origin’ is the US will receive Berne protection from other member countries if that work had not fallen into the public domain under US domestic copyright law as of 1 -March 1989. Similarly, unless otherwise agreed by special convention, the US is required to extend Beme-level protection to any work whose ‘country of origin’ is a Beme member if t’hat work had not fallen into the public domain in that member country as of 1 March 1989.

As of 1 January 1997, other Berne countries not listed on the chart were: Albania, Aruba, Bahamas, Barbados, Benin, Bolivia, Burkina Faso, Cameroon, Central African Republic, Chad, Congo, Cyprus, El Salvador, Fiji, Gabon, Gambia, Georgia, Ghana, Guinea, Guinea-Bissau, Guyania, Haiti, Holy See, Honduras, Iceland, Ivory Coast, Jamaica, Kenya, Lebanon, Lesotho, Liberia, Libya, Liechtenstein, Macedonia, Madagas- car, Malawi, Mali, Malta, Mauritania, Mauritius, Moldova, Monaco, Morocco, Namibia, Netherlands Antilles, Niger, Paraguay, Rwanda, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Santa Lucia, Senegal, Sri Lanka, Suriname, Tanzania, Togo, Trinidad and Tobago, Tunisia, Zaire, Zambia and Zimbabwe.

Practical variations Among the countries where subject matter protection exists for software, there are substantial differences in the laws and regulations governing protection. For example, the author of a ‘US origin’ work who desires to file suit for copyright infringement in the US must l%rst register the work with the US Copyright Office. Most other countries do not require that their nationals take such action prior to filiig copyright infringement actions. In some countries, registration provides certain evidentiary benefits. In Japan, for example, the legal effect of one type of optional registration is to create a rebuttable presumption that the program was created on the date declared in the application, but a program must be registered wiithin six months of its creation. In Venezuela, unless a US author has already registered its software in the US Copyright Office, when the author seeks to register its copyright in Venezuela (which one might do to prove originality for purposes of possible litigation in Venezuela), the author must also file assignments from each person who worked on the software.

TRADEMARK PROTECTION Companies may jibe trademark applications in tbe US based on an ‘intent to use’ tbe mark

The protection of trademarks via registration It-m long been accepted internationally. In most countries, rights are initially secured by registration and maintained by lat.er use in the country. Generally speaking, use without registration does not provide trademark protection. Only the .US and a few other nations require use of the mark before registration (e.g. Canada and the Philippines) or give some prilority of rights based solely on use (e.g. in addition to the US! common law countries such as Australia, Canada and the UK).

Since 16 November 1989, applicants have been able to file for trademark registrations in the US on the basis of ‘intent to use’, but actual use of the mark must occur before


the registration is issued. The sole exception to this actual use requirement is that a foreign applicant relying on Paris Convention rights may obtain a registration without actual use of the mark.

With few exceptions, three most notable of which are the European Community Trademark, the Madrid Agreement, and the Madrid Protocol, discussed below, trademarks may be protected on a country-by-country basis only. The lead time from application to registration varies by jurisdiction from a few months to several years. While some countries examine the existing registry for potentially conflicting prior registrations (e.g. the US), others do not (e.g. Germany, France and Switzerland), leaving it to the registrants to identify and resolve such conflicts.

Paris Convention Under the Paris Convention, which has been signed by more than 80 countries, a trademark owner may have trademark rights backdated’ in a foreign country to the date of initial filing in its home country if application is made in another treaty country within six months of filing in the home country. Since the US is a signatory to this agreement, timely Paris Convention filings may help protect new US trademarks from pirates who register trademarks abroad and then attempt to sell them back to the true owners.

As of 1 January 1997, Paris Convention member countries not listed on the chart were: Albania, Algeria, Armenia, Aruba, Azerbaijan, Bahamas, Bangladesh, Barbados, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Cuba, Cyprus, El Salvador, Gabon, Gambia, Georgia, Ghana, Guinea, Guinea-Bissau, Guyana, Haiti, Holy See, Honduras, Iceland, Iran, Iraq, Ivory Coast, Jordan, Kazakstan, Kenya, Kyrgyzstan, Lebanon, Lesotho, Liberia, Libya, Liechtenstein, Macedonia, Madagascar, Malawi, Mali, Malta, Mauritania, Mauritius, Moldova, Monaco, Mongolia, Morocco, Netherlands Antilles, Niger, North Korea, Paraguay, Rwanda, Saint Kitts and Nevis, Saint Vincent and the Grenadines, San Marino, Santa Lucia, Senegal, Sri Lanka, Sudan, Suriname, Swaziland, Syria, Tadjikistan, Tanzania, Togo, Trinidad and Tobago, Tunisia, Turkmenistan, Uganda, Uzbekistan, Zaire, Zambia and Zimbabwe.

European Community Trademark (CTM) Beginning 1 April 1996, it became possible for anyone to obtain protection in all member countries of the ELJ (currently 15) with a single application filed with the CTM office in Alicante, Spain It is anticipated that the costs of obtaining a CTM will be significantly less than half the cost of otherwise seeking registration in each individual member country. However, should the application encounter difE- culties during examination or be opposed by a successful challenger and the applicant choose the option of converting the CTM application to individual country applications, the costs likely would be significantly higher than they otherwise would have been had the applicant directly applied in the individual countries initially.

Madrid Agreement The Madrid Agreement is the second major exception to the

need for registration on a country-by-country basis. Under this increasingly popular convention, to which the US is not a party, once a national of a member country has registered a trademark in its home country, the trademark may be registered in all member countries by depositing its certificate of registration with the Central Registration Bureau in Berne, Switzerland. Nationals of countries that are not members of this convention may not obtain such ‘international registrations’ unless they have a ‘real and effective industrial or commercial’ presence in a member country through which they can obtain the necessary home country registration.

Member countries of the Madrid Agreement, as of 1 January 1997, were: Albania, Algeri.a, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia, Bulgaria, China, Croatia, Cuba, Czech Republic, Denmark, Egypt, Finland, France, Germany, Herzegovina, Hungary, Italy, Kazakstan, Kyrgyzstan, Latvia, Liberia, Liechtenstein, Luxembourg, Macedonia, Mol- dova, Monaco, Mongolia, Morocco, Netherlands, North Korea, Norway, Poland, Portugal, Romania, Russia, San Marina, Slovak Republic, Sloven&t, Spain, Sudan, Sweden, Switzerland, Tadjikistan, Ukraine, Unitled Kingdom, Uzbeki- stan, Vietnam and Yugoslavia.

Madrid Protocol The Madrid Protocol, which ultimately will replace the Madrid Agreement and is expected to provide a truly international centralized trademark application system, became effective 1 April 1996. Members of the Madrid Protocol, as of 1 January 1997, were China, Cuba, the Czech Republic, Denmark, Finland, Germany, Monaco, North Korea, Norway, Spain, Sweden and the United Kingdom. Iceland, Poland and Portugal are expected to join later in 1997. However, the US, Japan, Canada, and other key jurisdictions have indicated that they will not join until a disagreement over procedure - voting rights for intergovernmental organizations, such as the EC - is resolved. Because of this dispute, nationals of the US and other non-member countries essentially are excluded from taking advantage of the Madrid Protocols centralized filing option.

Practical variations The worldwidk trend b to treat sojbare like any other

product for purposes of trademark protection

While the basic laws offering trademark protection have been in effect for many years, many countries are only now arriving in the computer age. Until recently, even a developed country such as Switzerland would not register a trademark for a software product as such, but only for the media on which the software was storeld (i.e. ‘data carriers’). Today, Taiwan will not register a mark for ‘computer software’. Electronic delivery of software via the Internet raises a host of conceptual issues for trademark authorities who are used to thinking of trademarks only in connection with the transfer of tangible goods.

Even though registration is available for trademarks (product names), registration of service marks is not yet available in all countries. That imbalance is changing: the worldwide trend is to remove these restrictions in favour of complete protection. Notably, Singapore began protecting



service marks in 1991. Japan, Hong Kong and Thailand enacted service mark protection laws effective in 1992, and Switzerland, Greece and Venezuela enacted service mark protection laws effective in 1993. Following adoption of the EU Trademark Harmonization Directive, each member state is required to protect service marks.

PATENT PROTECTION Tbere is a woridwidk trend ita fatrour of adoptingpatent

protechkm Jbr somare reiated Inventions

More than 55 of the 176 countries in the world that grant patents permit the patenting of software inventions, at least to some degree. There is a worldwide trend in favour of adopting patent protection for software-related inventions. This trend has accelerated following the adoption of the Trade-Related Aspects of Intellectual Property (TRIPS) portion of the GATT, which mandates member countries to provide patent protection for inventions in all fields of technology. Developing countries have been given up to 11 years to modify their laws, if necessary, to meet this requirement

The most widely followed doctrine governing the scope of patent protection for software-related inventions is the ‘technical effects’ doctrine that has been promulgated by the European Patent Office (EPO). This doctrine generally holds that software is patentable if the application of the software has a ‘technical effect’. Thus, for example, software that controls the timing of an electronic engine is patentable under this doctrine, whereas software that detects and corrects contextual homonym errors (e.g. ‘there’ to ‘their’) is not.

The EPO law regarding patentability of software is generally more liberal than the individual laws of the EPO member countries. Thus, one desiring to patent a software- related invention in Europe should generally file an EPO application designating the European countries in which protection is sought, rather than filing separate patent applications in France, Germany, the UK, etc.

For each country, the exact nature of software patentability is a complicated question. Even in countries that are liberal in granting patents on computer software, certain limitations apply. For example, in the US, software that affects a physical process may be patentable. If the software preempts a mathematical algorithm, however, it is not patentable.

The situation in Japan is similar to that in Europe and the US. In Japan, a computer program that simply performs a mathematical calculation is not patentable. However, if the software is used as a means for materializing a law of nature and is linked to appropriate hardware elements, it may be patentable. For example, software claimed as part of a microcomputer embedded in a fishing rod to control the operation of the reel can be patented.

WbUe copyright law protects only tbe qpresskm of an idea, patent law protects tbe undkrlytng id&A

Obtaining patent protection for any invention, including software, is relatively expensive. For each country in which protection is sought, the cost is typically several thousands of dollars in attorney fees, patent draftsman charges and

Computer Law & Security Report Vol. 13 no. 6 1997 410 01997, Elsevier Science Ltd.

governmental fees. Why then would one pat:ent software rather than rely on copyright protection? First, a patent is valid against everyone in that country who makes, uses, or sells the patented invention, even if the infringer invented it independently. Second, while copyright law protects only the expression of an idea, patent law protects the underlying idea. This is true as long as the idea is not so fundamental that it constitutes a law of nature. Thus, for example, under US patent law a mathematical algorithm is not patentable if the patent claim preempts the entire algorithm, but may be patentable if it applies the algorithm to accomplish a specific technical purpose. Finally, because more software is mass- marketed without a signed license agreement, the strong protection provided by patent laws is increasingly important.

Paris Convention Most of the industrialized nations of the world a.dhere to the Paris Convention for the Protection of Industrial Property. Notable exceptions are India and Taiwan. This treaty provides that one who files a patent application in any of the member countries has up to one year to file subsequent applications in other member countries and be able to backdate the effective filing dates of the subsequent applications to that of the first-filed patent application. For example, one could file a patent application in the US. on 1 June 1997, then file corresponding application:5 in the UK, Japan, and Canada up until 1 June 1998, and. be able to backdate the filing dates in the UK, Japan, and Canada to 1 June 1997. Isackdating is important because public disclosures of an invention (whether by the inventor or by somebody else) that occur between 1 June 199’7 and 1 June 1998 will not have an adverse effect upon the LK, Japanese, and Canadian applications. Such public disclosures would bar applications .in these countries if the provisions of the Paris Convention could not be invoked. In addition., backdating provides an earlier filing date for priority purposes when the first to file is the critical timing factor, as it is in most countries, in determining which of two or more competing applicants will be awarded the patent. Nationals of countries that are not members of the Paris Convention might not be allowed to file patent applications in certain countries.

European Patent Convention The European Patent Convention is the treaty that established the EPO. Approximately 20 countries can be designated via the EPO. In each of these countries, one can apply for a patent via either the national route or the EF’O. The EPO grants patents that are valid in those European countries designated in the EPO application and subsequently per- fected in those countries. Enforcement of the EPO patent is obtained through the national courts of the various countries.

Patent Cooperation Treaty The Patent Cooperation Treaty provides a means for filing patent applications simultaneously in over 87 countries. The major value of the PCT is to enable one to defer normal filing and translation deadlines and costs in PCT countries beyond the country in which the first patent application is filed for up to an additional 18 months beyond the 12 months

Software Protection lJpdate 1997

provided by the Paris Convention. This extra time can be critical, because it may be what is needed to evaluate the results of the patent prosecution in a first-filed country. If the prosecution does not go well or the product in which the invention is embodied is not commercially viable, the subsequent foreign patent applications can be stopped, thereby avoiding additional expenses.

CONTRACTUAL PROTECTION Contractual protection is available&r somare in most countries if required approvals, registrations and otber adims are completed

Contractual protection (in contrast to statutory protection) is available in most countries if any required governmental registrations, approvals, and other actions are taken to assure enforceability. Even then, the scope of available remedies may be restricted and their application will generally be limited to the other party to the agreement. Confidentiality requirements are implemented by specitic agreement both with licensees and in employer-employee relationships. Unless expressly provided for in the agreement, injunctive relief is usually not available for breach of contract in most nations other than the US.

US BORDER ENFORCEMENT Customs fs authorized to detain imported somare tbat is merely believed to infi-mge tbe tight of a US copyright owner.

US Customs is authorized to make its own independent infringement determinations in the areas of copyrights, trademarks and trade names. With respect to copyrights, Customs is authorized to detain imports that are merely believed to infringe the rights of a US copyright owner. Customs ordinarily makes such detentions based on allega- tions by US copyright owners of possible infringement. Imports may be detained at the port until after Customs makes a decision concerning the validity of the infringement claim. Significantly, such imports are detained before Customs makes a decision concerning infringement and may remain in Customs’ custody for many months pending a final infringement decision. Customs’ .copyright regulations have been used extensively to prevent allegedly infringing imports of BIOS software from entering the United States.

Customs also has authority to detain imports that are merely alleged to infringe US trademarks or trade names before there has been any formal infringement finding. Under existing regulations, however, Customs does not make its own independent infringement determinations with respect to patents or semiconductor mask works. Because of the complexity of infringement issues relating to patents and mask works, Customs historically has deferred to the institutional expertise of the US International Trade Commis- sion (ITC) and the courts to make patent and mask work infringement findings. In the case of both patents and mask works, Customs simply enforces exclusion remedies that have been issued by a court or the ITC at the conclusion of a formal infringement case.

Customs has developed an online database that links each US port with the intellectual property records that are

maintained at Customs’ headquarters in Washington. Because each local Customs district director has authority to take action against imports that may infringe protected intellectual property rights, this development will provide a greater degree of national uniformity with respect to overall US border enforcement efforts. Such a policy is required to avoid a situation where a work would be ‘cleared’ at one port, but “believed to be an insringing copy’ at another. Also, because intellectual property rights become eligible for Customs’ protection only after they are registered with Customs headquarters in Washington (or an ITC or court order is issued at the close of an infringement case), there is a need for uniform notification of the ports concerning the status of works eligible for Customs protection.

CONCLUSION T&e trend is toward multilateral agreements for

strengtbeningprotecthns for som)are.

Although the availability of legal protection for software is increasing rapidly around the world, t.he scope and enforceability of that protection varies significantly by country. The use of the Special 301 provisions of tlhe 1988 US Trade Act have resulted in greater protection for software, as well as other intellectual property, in several countries. The Business Software Alliance and Software Publishers Association have been effective forces for monitoring software piracy around the world, promoting legislative and at:titudinal changes, and taking legal actions to enforce copyright protection. The accession of the US to the Beme Convention, the NAFTA provisions, and the signing of GATT indicate that the trend is toward multilateral agreements for dealing with protection for software. These multilateral efforts are intended to promote adequate and effective protection of intellectual property rights while ensuring that national laws enforcing such rights do not themselves become barriers to trade.

FENWICK & WEST LLP CONTACTS I. Joel RIff is a partner specializing in intellectual property transactions, including network technology, multimedia, licensing, distribution, development, and joint venture technology agreements.

Michael R. Egger specializes in domestic and international technology licensing, distribution, and transfer transactions, and intellectual property counselling.

Sally M. Abel is a partner specializing in international trademark and tradename counselling, prosecution, and litigation, and is co-fomidsr.of the South Bay-Trademark Association.

Lisa D. Noble is a member of the intellectual property group, where she represents high technology clients in the protection of patent rights, copyrights, and trade secrets and in technology transactions including licensing, acquisition, and distribution agreements.

Computer Law & Security Report Vol. 13 no. 6 1997 0 1997, Elsevier lkience Ltd. 411


Fred M. Greguras heads the international practice group and specializes in representing high technology clients in international and domestic transactions.

Edward J. Badlo is a partner specializing in the worldwide protection of high technology inventions. Mr Radlo was formerly the Chief Patent Counsel of Ford Aerospace Corporation.

Phyllis E. Andes ls an associate in the Washington, DC office of Fenwick & West LLP representing high technology clients in the areas of corporate and international trade including customs matters and export control issues.

David L. Hayes heads the intellectual property practice group and specializes in protection of intellectual property rights, technology licensing, acquisition and distribution agreements, and intellectual property litigation. He is admitted to practice before the US Patent and Trademark Office.

n FENWICK&WESTLLP TWO PALO ALTO SQUARE 1920 N STREET, NW, #650 100 THE EMBARCADERO, SUITE 300

PALO ALTO, CA 94306 WASHINGTON, DC 20036 SAN FRANCISCO, CA 94105 TEL: (4 15) 494-0600 TEL: (202) 463-6300 TEL: (415) 281-1330 FAX: (415) 494-1417 FAX: (202) 463-6520 FAX: (415) 281-1350

Book Review IT Law Croner’s Purchasing and Supply Guide to IT, first published in 1994 with updates, Croner Publicatious Ltd, ISBN 1 85524 2710

Croner have been publishing management information for more than 50 years and claim to be Britain’s biggest loose- leaf publisher.

Croner’s Guide to IT was first published in 1994 to reflect the increasingly central role, in the management of companies, of information technology. The preface notes that systems support every aspect of the running of a company and cannot, therefore, be planned and managed in isolation: “Introducing new IT systems is now generally recognized to be a high risk activity with high potential benefit. Most companies that use IT become completely dependent on computers and change their whole way of conducting business as a result. However, the information systems and services requirements of different departments and functions can be so diverse that it is hard for IT or purchasing managers to construct a comprehensive and integrated picture of their requirements.”

This Guide aims to assist in this process. Its aim has been to gather all the essential facts on issues such as finance, health and safety, quality, standards and security. The main products and services are also addressed. In addition, copyright and various other intellectual Property rights that a company may unwittingly ln.fringe are all covered at some length. Finally, procurement and contracts are addressed, with check lists of what to include, together with tactical advice on what to look for in specific IT contracts.

Contributors come from a wide range of backgrounds and are all well known in their field. The work is updated four times a year via the amendment service.

In addition to the loose-leaf guide, an electronic version is supplied for use on the subscriber’s PC. This service comes with the subscription package. It is also updated regularly via the amendment service. Available from Croner Publications Ltd, Croner House, London Road, Kingston Upon Thames, Surrey, KT2 6SR, VK; tel: + 44 181 547 3333 or fax: + 44 181 547 2637.

Computer Law & Security Report Vol. 13 no. 6 1997 412 01997, Elsevier Science Ltd.

European union directive on the legal protection of databases

Documents

Transcript of European union directive on the legal protection of databases