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Artificial Intelligence

Artificial intelligence and intellectual property: Challenges in the fast fashion industry

A recent legal case in the US has once again brought attention to a well-known Chinese fast fashion brand, accused of systematic violation of intellectual property rights. The lawsuit was filed against various companies affiliated with the main holding, highlighting a growing problem in the sector.

A renowned multimedia artist has reported the unauthorised reproduction of his works, published since 1990, on numerous products sold on the Chinese brand's platform. This case is just the latest in a series of legal disputes involving the fast fashion giant, which has previously been accused by major international brands. The peculiarity of this case lies in the use of AI algorithms to identify works by independent artists and reproduce them without authorisation or compensation. The case was brought before the Southern District Court of New York, with the artist aiming to turn the lawsuit into a class action, demonstrating that he isn’t the only one to suffer such violations.

An analysis of the fast fashion company's modus operandi reveals a production method based on four main phases: trend analysis, prototyping, sales monitoring, and mass production. First, market trends and products with high commercial potential are studied through online user preferences. The analysis results are used to create prototypes of the selected products. These prototypes are then put up for sale on the platform, and consumer response is monitored. Finally, if the market responds positively, large-scale production is initiated.

The characteristics of this production method have also been analysed in other lawsuits. The most notable of these is undoubtedly the case brought by the well-known Japanese company Uniqlo before the Tokyo court, which confirmed the counterfeiting of the iconic “Round Mini Shoulder Bag” model using AI.

The EU, through the new AI Act, is addressing the issue of intellectual property violations facilitated by AI. Italy is among the first countries to adopt the regulation, with a bill that extends and updates copyright protection. Articles 23-25 of the Italian bill aim to ensure that works generated using AI comply with copyright laws and foresee criminal liability for anyone who reproduces or extracts texts or data from works available online without authorization. The implementation of these new regulations is a crucial step towards protecting the rights of artists and creatives against new forms of appropriation made possible by AI technology.

Author: Maria Vittoria Pessina

Data Protection and Cybersecurity  

Garante updates guidelines in relation to retention of employees’ email metadata

The Italian Data Protection Authority (Garante) has updated the guidelines on the email management computer programs and services in the work context and metadata processing (we discussed this in a previous version here), following a public consultation that began on 16 March 2024. Below we outline the main changes:

First of all, the Garante stresses that the updated guidelines clarify existing regulations rather than imposing new obligations on employers. They focuses on the intersection of data protection laws and workplace technology use, providing employers with guidelines on handling metadata to ensure proper email system functionality and security without triggering specific labour law procedures.

Clarifying the concept of metadata

This update narrows the scope of the initial decision by clarifying that the sole metadata referred to in the guidelines corresponds to information recorded in logs generated by the server systems that manage and route email (known as Mail Transport Agent) and the workstations in interactions between the various servers and between these servers and the terminals sending messages (known as Mail User Agents).

This means that the guidelines don’t refer to the information contained within or integrated with the "body-part" of emails which constitutes the set of structured technical headers documenting the message routing, origin, and other technical parameters. This information is inseparable from the relevant message and remains available to the employee in their assigned email inbox.

Updated data retention period

The updated guidelines confirm that the retention of metadata necessary for the functioning of the email system's infrastructure is permissible for a limited period of a few days, not exceeding 21 days. This extends the previously identified retention period of 7 days, but the Garante doesn’t clarify why it specifically indicates a 21-day term, merely stating that it’s a guideline term.

So the generalized retention of metadata for a longer period of time can only take place with the prior agreement with the trade union representatives or the prior authorization of the Territorial Labor Office, without prejudice to the need to ensure compliance with the storage limitation principle.

The Garante further emphasizes the importance of informing employees about the collection and use of their email metadata, including retention periods and potential monitoring.

Additionally, service providers must implement adequate measures to ensure that data controllers can meet their obligations under the guidelines.

Final considerations

While the Garante highlights that the updated guidelines serve to clarify existing regulations rather than introduce new obligations, adhering to these guidelines necessitates that employers implement the following measures:

• Verify that the email management programs in use enables them to comply with the requirements of the guidelines.
• If they intend to retain metadata for more than 21 days, sign an agreement with union representatives or, failing that, obtain authorization from the Territorial Labor Office.
• Update the privacy information notice for staff and the record of the processing activities, specifically indicating the retention period applicable to email metadata.
• Conduct a data protection impact assessment (DPIA) and legitimate interest assessment (LIA).
• Update the data retention policy and the record of data processing.

Author: Cristina Criscuoli and Roxana Smeria

Intellectual Property

EU General Court declares revocation of "Big Mac" trademark for chicken goods

In its recent judgment of 5 June 2024 (Case T-58/23), the General Court of the European Union partially annulled the decision adopted by the European Union Intellectual Property Office (EUIPO), excluding the protection of the “Big Mac” trademark for chicken goods, on the basis of the submission of insufficient evidence to prove current use for those goods.

The facts

On 11 April 2017, the Applicant, an Irish fast-food chain in business since 1978, filed an application for revocation with the EUIPO for the European Union trademark “Big Mac” (den.), registered in 1996 by a well-known American fast-food chain.

Based on the provisions of Article 51(1)(a) of Regulation (EC) No 207/2009 (now Article 58(1)(a) of Regulation (EU) 2017/1001 (RMUE), the application for revocationwas filed in respect of the goods and services contained in classes 29, 30 and 42 of the Nice Classification, listed below.

• Class 29: Meat foods, pork, fish and poultry, meat sandwiches, fish sandwiches, pork sandwiches, chicken sandwiches, preserved and cooked fruit and vegetables, eggs, cheese, milk, milk products, pickles, desserts.
• Class 30: Edible sandwiches, meat sandwiches, pork sandwiches, fish sandwiches, chicken sandwiches, biscuits, bread, cakes, biscuits, chocolate, coffee, coffee substitutes, tea, mustard, oatmeal, pastries, sauces, condiments, sugar.
• Class 42: Services provided by or in connection with the operation and franchising of restaurants and other eating establishments and drive-in infrastructures; preparation of take-away meals; contract design of restaurants, establishments and other infrastructures; design and consultancy for the construction of restaurants, on behalf of third parties.

In January 2019, the application was then granted by the Cancellation Division of the EUIPO (the Division). The trademark of the well-known US chain was then declared revoked for all theaforementioned goods and services, as of the date of filing of the application for revocation. According to the Division, the evidence produced by the US chain was not sufficient to prove the current use of the mark for the marked goods and services.

On 8 March 2019, the US chain challenged the Division's decision by lodging an appeal before the EUIPO, downstream of which the decision of the Fourth Board of Appeal of the EUIPO (the Board) then intervened, annulling the contested decision limited to the declaration of the revocation of the mark for the following goods and services: Class 29, for “meat and poultry foodstuffs, meat sandwiches, chicken sandwiches”; Class 30, for “edible sandwiches, meat sandwiches, chicken sandwiches”; and, finally, Class 42, for “services provided by or in connection with the operation of restaurants and other eating establishments or consumption facilities and drive-ins; preparation of take-away meals.” The forfeiture of registration was confirmed for the remaining items of goods and services.

It then came to the seat of the most recent development, namely the General Court of the European Union, before which the Applicant challenged the Commission's decision and requested its annulment, with the sole exception of the goods in Class 30 meat sandwiches. The basis of the request was the alleged infringement of Article 51(1)(a) of Regulation No. 207/2009 and the provisions of the current Article 18(1), first subparagraph, RMUE, which states: "If, within a period of five years following registration, the proprietor has not put the EU trade mark to genuine use in the Union in connection with the goods and services in respect of which it is registered, or if such use has been suspended for an uninterrupted period of five years, the EU trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use."

The EU General Court ruling

Let’s briefly review the following principles underlying the evaluations:

• the proprietor is declared to have revoked only those rights in respect of the goods or services in question if the ground for revocation exists in respect of only part of the goods or services for which the trademark is registered (Art. 51, pa. 2. of Regulation No 207/2009, now Art. 58, pa. 2, RMUE);
• according to case law, genuine use occurs when the sign is used in the function of a trademark, namely when it’s used as an indicator of the commercial origin of the marked goods and services, excluding cases of use of a symbolic nature having the sole purpose of preserving the rights conferred by the trademark;
• the assessment of the extent of the use of the trademark must be based on all the facts and circumstances capable of demonstrating the actual commercial exploitation of the trademark in the course of trade, taking into account, in particular, the commercial volume of all the acts of use and the extent of the period during which the acts of use were carried out, the frequency of those acts and, finally, the interdependence between those factors (Judgment of 19 December 2012, Leno Merken, C-149/11, paragraphs 29 and 31);
• the genuine use of a trademark in relation to the relevant market can be deduced only from an examination of concrete and objective elements, as probabilities or presumptions are not sufficient to prove genuine use (Judgment of 6 October 2004, Vitakraft-Werke Wührmann v OHIM - Krafft (VITAKRAFT), T-356/02, paragraph 28).

We finally arrive at the judgment of the European Union General Court, which upheld the petitions of the Irish fast food chain recognising that the American fast food chain had not produced sufficient evidence to prove the actual use of the trademark "Big Mac" to mark the goods designated chicken sandwiches, chicken foodstuffs and the services provided by or related to the operation of restaurants and other eating and drive-in establishments or catering facilities, preparation of take-away meals. So the court also declared the partial annulment and reform of the Commission's decision. Decisive in this case was the absence of evidentiary material relating to the extent of current use of the mark and, more specifically, to the volume of sales, duration, frequency and actual commercial initiatives implemented.

Author: Tamara D’Angeli

Applying the UPCA to national infringement proceedings: A recent decision from Germany

Since the UPC system came into operation, one of the most controversial issues has been the applicability of the substantive provisions of the UPCA to national litigation concerning the infringement of European patents.

Before the creation of the UPC, infringement of the national portions of European patents was assessed in the light of the law of the state in which the case was pending. But this hasn’t been the case since last year, at least for countries that have signed and ratified the UPCA. 

According to Article 3(c) UPCA, the latter "shall apply to any European patent [...] without prejudice to the provisions set out by Article 83 UPCA"; so it could be argued that the substantive provisions of the UPCA also apply in national infringement litigation.

But this interpretation is not peaceful, at least according to the Higher Regional Court of Karlsruhe (decision of 14 February 2024, No. 6 U 232/22).

The German Court have in fact ruled that the UPCA doesn’t apply to national proceedings concerning the infringement of a European patent, which must be governed exclusively by national law. According to the court, this is supported by Article 24 of the UPCA, which states that the sources of law listed in it, including the UPCA, apply "to disputes brought before it (editor's note: the UPC) under this Agreement." In other words, not domestic disputes.

It will be interesting to see whether other national courts will follow or reject the direction set by the Higher Regional Court of Karlsruhe.

Author: Camila Francesca Crisci

Innovation Law Insights is compiled by DLA Piper lawyers coordinated by Arianna Angilletta, Matteo Antonelli, Edoardo Bardelli, Carolina Battistella, Carlotta Busani, Giorgia Carneri, Maria Rita Cormaci, Camila Crisci, Cristina Criscuoli, Tamara D’Angeli, Chiara D’Onofrio, Federico Maria Di Vizio, Enila Elezi, Alessandra Faranda, Nadia Feola, Laura Gastaldi, Vincenzo Giuffré, Nicola Landolfi, Giacomo Lusardi, Valentina Mazza, Lara Mastrangelo, Maria Chiara Meneghetti, Deborah Paracchini, Maria Vittoria Pessina, Tommaso Ricci, Miriam Romeo, Rebecca Rossi, Roxana Smeria, Massimiliano Tiberio, Giulia Zappaterra.

Articles concerning Telecommunications are curated by Massimo D’Andrea, Flaminia Perna and Matilde Losa.

For further information on the topics covered, please contact the partners Giulio Coraggio, Marco de Morpurgo, Gualtiero Dragotti, Alessandro Ferrari, Roberto Valenti, Elena Varese, Alessandro Boso Caretta, Ginevra Righini.

Learn about Prisca AI Compliance, the legal tech tool developed by DLA Piper to assess the maturity of AI systems against key regulations and technical standards here.

You can learn more about “Transfer,” the legal tech tool developed by DLA Piper to support companies in evaluating data transfers out of the EEA (TIA) here. And check out a DLA Piper publication outlining Gambling regulation here, a report analyzing key legal issues arising from the metaverse qui, and a comparative guide to regulations on lootboxes here.

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