Innovation Law Insights

Artificial Intelligence

EDPS guidelines on generative AI is also relevant to private entities

The European Data Protection Supervisor (EDPS) has published guidelines on Generative AI, focusing on the relationship between AI and data protection.

On 3 June 2024, the EDPS issued the guidelines on Generative AI (the Guidelines), to provide practical recommendations to European institutions on the responsible use of generative AI and how it intersects with data protection regulations. While the document is primarily directed at public bodies, it also offers clear guidance to private entities.

Below are the main points addressed by the EDPS in the Guidelines:

1. How can entities determine if generative AI systems involve processing personal data?

Processing of personal data in generative AI can occur at various stages, which may not be apparent at first contact with these systems (eg during the training phase). For this reason, the EDPS recommends systematic monitoring throughout all phases of implementing generative AI to verify whether personal data processing has occurred, necessitating compliance with GDPR.

2. What is the role of the DPO in the design and use of generative AI?

According to the EDPS, ensuring that these systems comply with GDPR should not be the effort of a single individual, such as the DPO. It requires coordination with the Legal Department, IT Department, and the Local Information Security Officer (LISO) from the early stages of development or implementation of generative AI systems to ensure compliance with current regulations. Creating an "AI Task Force" and preparing internal procedures and guides can significantly contribute to this goal.

3. When should a DPIA be conducted?

Data protection risks must be identified and addressed throughout the entire lifecycle of the generative AI system. Regular and systematic monitoring is necessary to identify new risks that generative AI may pose to data subjects as the system evolves.

4. What is the appropriate legal basis for using generative AI?

The EDPS notes that the processing of personal data via generative AI must consider the entire lifecycle of the system, affecting legal bases. If processing is based on a legal requirement or public interest, this must be explicitly provided for by European law. Regarding consent, the EDPS believes it can serve as a legal basis only in specific circumstances. For legitimate interest, particularly concerning data collection for training systems, the EDPS refers to the 4 July 2023 decision (C-252/21) regarding Meta, emphasizing the need for particular attention in this area.

5. How can the principle of data minimization be ensured when using generative AI systems?

Using a large amount of data does not necessarily result in better outcomes with generative AI systems. The EDPS emphasizes prioritizing the "quality" of data over "quantity" as the most efficient way to ensure the principle of minimization.

6. Is it necessary to inform data subjects when using generative AI systems?

Yes, if this involves the processing of personal data, it’s necessary to provide all the information required under Article 13 of the GDPR.

7. How can entities ensure fair processing and avoid bias when using generative AI systems?

Institutions must adopt procedures to identify and mitigate biases in AI systems, ensuring fair and non-discriminatory data processing. So adopting procedures and best practices aimed at mitigating potential biases should be a priority throughout the lifecycle of the generative AI system.

8. How can entities ensure data subjects can exercise their rights?

Data controllers are responsible for processing personal data through generative AI systems from their implementation: so it’s necessary to adopt technical and organisational measures that, from the outset, ensure data subjects can exercise their rights.

Author: Enila Elezi

 

Intellectual Property

UPC: Paris local division rules on jurisdiction in the event of multiple defendants

The allocation of jurisdiction between the divisions of the Unified Patent Court (UPC) is governed by Art. 33 of the Unified Patent Court Agreement (UPCA). The article also regulates the cases where the same action can be brought against more than one party, and cases where the defendant is domiciled in a country other than the members of the UPCA (including those, such as Ireland, which have signed but not ratified the Agreement).

Pursuant to Art. 33(1)(b) UPCA, an infringement action can be brought against several parties before the local division in which any of them has its domicile or main place of business. This is if there’s a “commercial relationship” between the defendants and that the action concerns the same conduct.

Art. 33(3) UPCA provides instead that where the action is brought against parties with their residence or main place of business in countries other than UPCA member countries, the action will be brought before the local division of the country where the act is (or may be) performed, or before the competent central division.

These provisions are not without ambiguity, and the Paris local division recently issued a decision that helped to clarify their scope.

The decision stems from a preliminary objection raised by defendant companies before the Paris Local Division in a dispute concerning the alleged infringement of a European patent owned by a US company.

Specifically, the proceedings had been brought against 12 defendants, only one of which was based in France. Most of the remaining defendants thought they couldn’t be subject to the jurisdiction of the Paris local division: some of them because they were based in non-EU countries or outside the UPCA (UK, Ireland and Poland), others because the plaintiff had, in theory, not demonstrated any “commercial relationship” with the other parties.

The exception concerned only the alleged lack of jurisdiction of the Paris local division, and not the jurisdiction of the UPC. So the judges focused their attention on the principles set out in Article 33 UPCA concerning the allocation of national jurisdiction.

Firstly, the court held that the connecting factors set out in Article 33(1)(b) UPCA could also be applied in the presence of defendants domiciled in countries other than those party to the UPCA or in non-EU countries. So, for several parties to be sued before the local division of a country where even only one of them is domiciled, it’s sufficient that the following requirements are met: there’s a “commercial relationship” between them; and the action relates to the same alleged wrongful conduct.

As to the first of these two requirements, the question arises as to what is meant by “commercial relationship.”

In the court's view, although this requirement presupposes the establishment of a “certain quality and intensity” of the relationship, it should not be interpreted too strictly; this is also to avoid the risk of conflicting decisions concerning the same conduct and in view of the principle of efficiency which permeates the entire UPC system.

That being said, the court held that belonging to the same group and the existence of a common purpose for the activities carried out by the defendants (eg research and development, production, sale and distribution of the same products) could be sufficient to integrate the condition in question. Since the companies belonged to the same group and were involved in different ways in the activities relating to the products allegedly infringing the patent applied for, the court concluded that there was a “commercial relationship” between the defendants.

Regarding the second requirement, ie the uniqueness of the contested conduct, the court found that the website of the group which marketed the contested products listed, under “sales and support contacts,” all the addresses attributable to the defendant companies with the exception of one, which was mentioned as being responsible for the research and development of the products in the EU. This was enough to find that the second condition was also satisfied in respect of all the defendants.

In conclusion, pursuant to Article 33(1)(b) UPCA, the Paris Local Division confirmed its jurisdiction to decide the case in respect of all the defendants, despite the fact that some of them were established in countries outside the UPCA and/or the EU, because one of them was established in France, there was a “commercial relationship” between them and the action concerned the unlawful conduct.

Authors: Laura Gastaldi, Massimiliano Tiberio

Using visual disclaimers in design and model registration applications

Broken lines in design registrations indicate the parts that should not be protected. But that doesn’t mean they’re irrelevant. Recently, the General Court of the European Union ruled that the design created by broken lines is prior art that must be considered when comparing two designs or models.

The regulation on Community designs and models doesn’t provide rules for the applicant to include a statement waiving any exclusive right to one or more features disclosed in the representations of the design or model. Using a description under Article 36(3)(a) of the Community Designs Regulation is not appropriate in this context, as it "does not affect the scope of protection of the design or model as such"; only the indication that a description has been provided is published, but not the description itself. So any disclaimers must result from the representation of the design or model itself.

According to common practice, visual disclaimers indicate that protection is not sought, and consequently registration is not granted, for certain features of the design or model shown in the representation, indicating what isn’t intended to be protected. This can be achieved by:

• excluding the features of the design or model for which protection is not sought by using dashed lines, blurs, or colour shades; or
• including the features of the design or model for which protection is sought within a delimitation, clarifying that protection is not sought for what falls outside the delimitation. The important thing is that these disclaimers are always clear and evident, clearly differentiating the claimed features from those excluded.

The General Court of the European Union has recently examined the relevance of dashed lines in registered Community designs and models (RCDs) when invoked as prior art in invalidity proceedings. The opportunity was seized on two occasions, T-757/22 and T-758/22, in which a well-known footwear and sportswear brand filed applications for invalidity declarations for two registered Community designs. The brand based its applications on the lack of individual character (Art. 25, paragraph 1, letter b), referring to some previous designs. The Invalidity Division of the EUIPO rejected the applicant's requests, and subsequently, the EUIPO Board of Appeal confirmed the decision. The applicant then appealed the decision to the General Court of the European Union.

The court dismissed the appeals, confirming the conclusions of the BoA, according to which the contested designs were intended to be applied to shoes for which the informed user has a relatively high level of attention. Moreover, the designer’s degree of freedom was considered high. In this sector the designer is free to choose the shape, material, colour, patterns, and decorative elements. The judges also recalled how the overall impression produced by the models is decisive and is determined on the basis of the characteristics disclosed in the contested design or model, without taking into account any characteristics that are excluded from protection. The applicant argued that the soles of the contested designs should be taken into consideration in the comparison as an essential element of the shoe. But this argument was not shared by the judges because, although the overall impression of a design may be dominated by certain particular characteristics, there was still no justified reason to conclude that, in the case at hand, the sole should be considered, limiting the comparison to that element. According to the court, since the contested designs represent entire shoes from all angles, all their parts should be taken into consideration.

Regarding the use of broken lines, the applicant argued that in the contested designs, the broken lines constituting the upper part of the shoe could not be taken into consideration for the comparison as they were not part of the registered Community design; on the contrary, they only indicated how the sole was connected to the rest of the shoe. The judges, based on the EUIPO Guidelines, noted that the designs were registered with the product indication "soles for footwear" and depict soles with the upper part of the shoes in dashed lines, which means that no protection was claimed for the design of the upper parts. But the court ruled that even the upper parts of the shoes, being an integral part of the designs and models, should be compared with the contested ones.

The judges clarified that the function of a previous design or model is to reveal the prior art, ie all the previous designs or models related to the product in question that were disclosed on the date of filing of the contested design or model. A prior design or model belongs to the set of previous designs or models simply by being disclosed under Article 7 of the Community Designs Regulation. So what matters is not so much the specific object of protection of a prior design or model, but rather whether its elements have been disclosed.

The court agreed with the BoA’s assessment, according to which the overall impression created by the contested designs is sufficiently different from that of the previous designs invoked by the brand. And this is particularly evident when the comparison is not limited to the soles.

The court's decision on the relevance of dashed lines was not entirely surprising. In fact, a previous design or model doesn’t necessarily have to be registered or protected in any way to constitute prior art that could invalidate a subsequent design or model. What matters is disclosure. Consequently, it’s crucial that applicants for a design or model carefully consider the use of dashed lines in their registration application. The overall impression created by the design or model application, including the dashed lines, will be evaluated as prior art and could prevent the novelty or individual character of a subsequent design or model.

Author: Maria Vittoria Pessina

 

Technology Media and Telecommunication

ICA launches public consultation on the draft regulation on the forms of cooperation and coordination provided for implementing the Digital Markets Act

By decision of 3 June 2024, the Italian Competition Authority (ICA) launched a public consultation on the draft regulation on the forms of cooperation and coordination with the European Commission provided for the implementation of Regulation (EU) No. 2022/1925 (the Digital Markets Act or DMA).

The adoption of the draft regulation is in line with the provisions of Article 18 of Law No. 214/2023 (Annual Law for the Market and Competition 2022), pursuant to which the ICA “shall put in place all the forms of cooperation and coordination [with the Commission] provided for” by the DMA and, to this end, will exercise the powers of investigation provided for by Law No. 287/1990, “adopting its own regulations which shall be compatible with the procedures already provided for in competition matters.”

The draft regulation subject to public consultation concerns exercising investigative powers under Article 38(7) of the DMA. The provision provides that the national authorities responsible for implementing the DMA – in Italy, the ICA – can make requests for information to companies and entities and require the production of documents if they detect violations of the obligations provided by Articles 5, 6 and 7 of the DMA for gatekeepers. The provisions state:

• gatekeepers are prohibited from preventing business users offering the same products or services to end users through third-party online intermediation services or through their own direct online sales channel at prices or conditions that are different from those offered through the online intermediation services of the gatekeeper;
• gatekeepers are obligated to allow business users, free of charge, to communicate and promote offers, including under different conditions, to end users acquired via its core platform service or through other channels, and to conclude contracts with those end users, regardless of whether, for that purpose, they use the core platform services of the gatekeeper;
• gatekeepers are obligated to provide specific information to advertisers and publishers to which it supplies online advertising services;
• gatekeepers are obligated to allow end users to easily uninstall any software application in the gatekeeper's operating system, except in certain cases where this is not technically possible;
• gatekeepers are prohibited from treating more favourably, in ranking, services and products offered by the gatekeeper itself than similar services or products of a third party.

The gatekeepers are the undertakings designated by the European Commission, who meet the requirements set by Article 3 of DMA.

The requirements are:

• It has a significant impact on the internal market.
• It provides a core platform service which is an important gateway for business users to reach end users.
• It enjoys an entrenched and durable position, in its operations, or it is foreseeable that it will enjoy such a position in the near future.

The draft regulation subject to public consultation provides that if the ICA detects possible violations of the obligations under Articles 5, 6 and 7 of the DMA, it can initiate an investigation aimed at ascertaining the existence of any infringements. Pursuant to the draft regulation, following the notification of the measure initiating the investigation, the AGCM can exercise the powers under Article 14, co. 2 - 2d of Law No. 287/1990, namely:

• making requests for information and to produce documents to companies;
• summoning to hearings representatives of undertakings and any individual who may be in possession of information relevant to the investigation;
• ordering expert opinions and economic and statistical analyses and consulting experts regarding any element relevant to the investigation; and
• ordering inspections.

Finally, the draft regulation provides that the AGCM, when it deems the investigation sufficiently conducted, must notify the companies of the deadline for the closure of the evidentiary phase and submit the results of the investigation to the European Commission. As provided for in Art. 38, para. 7, of the DMA, the Authority “shall report to the Commission on the findings of such investigation in order to support the Commission in its role as sole enforcer of” the DMA.

As stated in the draft regulation, this is without prejudice to the ICA's power to initiate an investigation if indications of violations of competition law or the prohibition of abuse of economic dependence with relevance to the protection of competition and the market pursuant to Article 9 co. 3 bis of Law 192/1998 have emerged in the course of the investigation.

Subjects interested in participating in the public consultation must submit their contributions by 3 July 2024.

Author: Massimo D’Andrea, Flaminia Perna, Matilde Losa

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Innovation Law Insights is compiled by the professionals at the law firm DLA Piper under the coordination of 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 e Matilde Losa.

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