End of “You have won!” advertising, Purely Creative Ltd, C-428/11

The UK Office of Fair Trading accused 5 companies and 3 persons of using the false impression that I' summarise as “You have won” for the promotion of their businesses (§ 2). Paragraph 31 of Annex I to the Unfair Commercial Practices Directive 2005/29/EC bans the following commercial strategy:

“Creating false impression that the consumer has already won […] a prize or other equivalent benefit, when in fact […] taking any action in relation to claiming the prize or other equivalent benefit is subject to the consumer paying money or incurring a cost.”

However the ECJ went even further. It declared that this prohibition is of “absolute nature” (§ 34), which means that even if the trader proposes several options how to get the prize (a car), one of which is completely free (go to the factory and take it yourself), the presence of paid options (we will send it) breaches the Directive (§§ 38, 39). The judges replied that in such situations the offer should be limited to the geographic area around the factory (§ 40). The spirit of “objective of ensuring a high level of consumer protection” also confirmed this interpretation (§ 48).

Avoiding competition formalities and accelerating purchase strategy, Editions Odile Jacob SAS, C-551/10 P

On 06/11/2012 the Grand Chamber of the European Court of Justice confirmed the wisdom of Lagardère SCA strategy for accelerating purchase of another company despite the presence of anti-concentration formalities. Vivendi Universal put on the table an urgent proposal to buy Vivendi Universal Publishing SA, a book publishing business in Europe and Latin America except Brazil. Lagardère didn’t have time to get clearance for this step from the competition authorities. So the decision was taken that the Vivendi Universal Publishing would be bought by Investima 10 wholly owned by Ecrinvest 4 SA wholly owned by Segex SARL wholly controlled by Natexis Banques Populaires SA (§ 2).

It was agreed that after getting clearance from the European Commission, Natexis Banques Populaires would sell the target assets back to Lagardère (Article 3(2)(i) of the NBP/ Lagardère sale contract, § 12).

Lagardère's competitor Editions Odle Jacob attacked this operation arguing that the transaction as a whole hiding the ultimate purchaser with a provisional one should be annulled (§ 26). The Natexis Banques Populaires subsidiaries created for the sole purpose of this transaction were not independent but bound vis-à-vis Lagardère by a contract (§ 27). The ECJ replied that the arrangement did not affect the very legality of the purchase (§ 34). It might lead to penalties but not to annulment of the transaction (§ 38).

European Commission may force national courts to enforce its decision while the legality of the decision is pending in Luxembourg, Europese Gemeenschap, C-199/11

This judgment dated 06/11/2012 is extremely interesting due to the legal strategy used by the European Commission. The Commission took a decision that certain manufacturers of elevators and escalators (Otis NV, Kone Belgium NV, Schindler NV, ThyssenKrup Liften Ascenseurs NV, General Technic-Otis Sàrl, Kone Luxembourg Sàrl, Schindler Sàrl, ThyssenKrup Ascenseurs Luxembourg Sàrl) who had worked with the EU buildings had a cartel agreement and infringed Article 101 TFEU (§ 2). The companies challenged the decision before the EU General Court, and then on appeal before the Court of Justice (§§ 21, 22, 57).

And then, instead of waiting for a judgment from the ECJ, the Commission acting as a representative of the EU brings a civil action against the companies before the Brussels Commercial Court, asking to order the payment of the provisional sum of € 7 061 688 (§ 23). The advantage of the Commission’s position before the Brussels Commercial Court is that, contrary to the EU General Court and the ECJ, it cannot depart from the line of the Commission (Article 16(1) of Regulation No 1/2003, §§ 26, 38).

The companies raised the fair trial principle under Article 47 of EU Charter of Fundamental Rights, Article 6(1) of the European Convention of Human Rights, and the principle nemo judex in sua causa (§§ 37, 39). The Grand Chamber of the ECJ gave 2 reasons for approving the role of the Commission. First, “any person can rely on a breach of Article 101 TFEU before a national court, including the European Commission (§§ 40, 44). Second, despite inability to declare the absence of the anticompetitive practice, the national court remains free to appreciate the existence of loss for the EU and a direct link between the loss and the anticompetitive agreement (§ 65). 

ECtHR established the non-pecuniary damage rates for overcrowding in prisons

In case Lopata v Russia, the European Court of Human Rights continues applying the pilot judgment Ananyev et al. v Russia, 42525/07, as regards the overcrowding (personal average surface smaller than 4 or even 3 m²) in prisons, which breaches Article 3 of the European Convention on Human Rights concerning inhuman treatment. In combining the latter judgment with judgment Idalov v Russia, 5826/03, dated 22/05/2012, one gets the following rates for overcrowding:

2000 € for 2 months in such a prison,

6000 € for 1 year,

7150 € for 1 year and 2 months,

3500 € for each full year after the first one.

Plus 2500 € for costs. By the way, the EU directives 91/630/EEC and 98/58/EC establish the minimal personal surface of 3.7 m² for pigs.

Comparing with judgment Karalevicius v Lithuania, the rates have slightly increased.

I stand for election to the Parliament of Lithuania

Therefore this blog will be frozen until October 2012.

- After getting 41 % of votes, I am back to my legal practice, as well as to blogging on European case law :)

ECHR bans advertising of UFO contactors, MRS, 16354/06

On 13/07/2012 by a majority of 9 votes to 8 the European Court of Human Rights supported the decision of Swiss authorities to ban a poster campaign of the Swiss Raelian Movement (Mouvement raëlien suisse) promoting contacts with extra-terrestials. Mr. Claude Vorilhon (Raël) who allegedly entered into a direct contact with extra-terrestrials (Elohim) from an Unidentified Flying Object in 1973 founded the Movement in 1975. It unites UFO contactors, as well as people interested in inter-galactic relations.

The prohibited 97 cm by 69 cm poster was showing extra-terrestrials’ faces, a pyramid and a flying saucer, had slogans “The Message from the Extra-Terrestrials” and “Science at last replaces religion”, as well as a reference to the website http://www.rael.org (§ 14).

The Strasbourg judicial majority supported the ban on the UFO contactors’ poster in 2 steps:

1. The Court declared that the nature of the poster is not political but rather commercial, which means that the State’s margin of appreciation is broader (§ 62). The minority of 8 judges counter-argued that the Movement did not try to sell anything but rather to spread its world vision, which means that the poster is non-commercial or philosophical. The Movement position is that this interpretation allows the State to justify a systematic refusal and oppose expression of non-majority ideas in public on a permanent basis (§ 34).
2. The ECtRH declared that such reasons as support of human cloning, geniocracy (society governed by intellectual elite), and the fact that certain members of the Movement had been accused of paedophilia, "taken together" may “reasonably entitle” the national authorities to ban the poster. Although, he majority of judges admitted that “taken separately” these 3 facts “might not be capable of justifying” the ban (§ 72). The UFO contactors argued that they had not been participating in any human cloning but simply expressing their favourable opinion about it, and that geniocracy was not a real political project but a mere utopia (§ 36). The minority of 8 judges pointed that no cases of paedophilia had been proven, and that otherwise the Movement as such would already be banned.

The Movement expressed its intent to continue the litigation before the UN HRC.

Freedom to redistribute software, UsedSoft, C-128/11

 
On 03/07/2012 the Grand Chamber of the European Court of Justice interpreted in case UsedSoft GmbH, C-128/11, that a software copyrights holder (Oracle International Corp.) cannot oppose redistribution of the software by a buyer of the license (§ 80).
 

The copyrights holder Oracle supported by French, Irish and Italian Governments argued that the contractual terms prohibit further transfer of the software, requiring each new user to enter into a direct contractual relationship with the copyrights holder (§§ 77 and 82). The Grand Chamber found that this view would render ineffective the exhaustion of the copyrights holder’s distribution right (§ 83). This right becomes exhausted at the moment of selling the license to the very first user.

Oracle maintained that it sells only one license and not an unlimited number. The judges replied that the original acquirer of the license must delete her copy of the software when decides to redistribute it (§ 78). Oracle argued that it is impossible to verify whether she would delete her copy. The ECJ replied that the copyrights holder remains free to search for a technical solution (§ 79).

UN HRC registers case Paksas v. Lithuania, 2155/2012

On 06/06/2012 the United Nations Human Rights Committee registered the case of my client Rolandas Paksas, impeached President of Lithuania, versus Lithuania. The President was impeached on 06/04/2004. On 25/05/2004 the Lithuanian Constitutional Court prohibited him to stand for elections for life. This lifelong prohibition also covers the right to be nominated Prime Minister or minister (he is twice former Prime Minister).

We partially won this case before the European Court of Human Rights on 06/01/2011, but the Strasbourg judges interpreted that the European Convention of Human Rights covers only the right to stand for parliamentary elections. Moreover, they did not find a violation of presumption of innocence and of the principle of impartiality during the national proceedings. Therefore, the former President took a decision to continue before the UN HRC.

ECtHR: fixing structutal problems annuls previous violations of human rights, Altunay, 42936/07

Mr Mehmet Altunay acquired land of 603 m2 for agricultural purposes in Turkey in 1999 (§ 3). However in 2007 the Turkish Court of Cassation annulled the title to property: the administration made a mistake in recognising him this property, since it was a State forest. He didn’t receive any compensation and filed an application to the European Court of Human Rights. In 2009 the Turkish Court of Cassation amended its case law in recognising the right to compensation.

Mr Altunay argued that the fact of violation shall be determined at the time the respective facts took place, i.e. as it was in 2007. The Strasbourg judges dismissed the action in explaining that fixing a structural problem annuls all previous violations of human rights (§ 33), and proposed him to apply for compensation at home. The ECtHR reasoning is very practical: too many applications.

Ombudsman: European Commission may change the interpretation of financial rules applicable to its grant receivers during the execution of contract, 286/2011/RT

A small Romanian enterprise that had received 2 grants for projects under the 7^th Framework Programme for Research and Technological Development filed a complaint against the European Commission to the European Ombudsman. The enterprise argued that the Commission had replaced the 2007 Financial Guidelines with the 2010 Financial Guidelines during the execution of the projects. The new version of the Guidelines required fulfillment of cumulative criteria for eligibility of staff costs, which led, after audit, to the necessity to recover a part of the grants (§ 25).

The Ombudsman replied that the 2010 version “simply clarified the conditions” that existed at the moment of signing the contracts (§ 34). It was stated in the 2007 version that “this Guide has been conceived as an evolving document which, it is intended, will be updated regularly (in principle every 6 months) […]” (§ 36). Thus, no maladministration was found.

ECtHR refuses to apply ECJ judgment because it was unforeseeable, Ioviţoni, 57583/10

Romania introduced a pollution tax for the first registration of a car. In this manner, if you buy a second hand car in Romania (i.e. the car has already been registered in Romania), you do not pay any pollution tax. However when you bring a second hand car from another EU State (like Germany), you must pay the pollution tax. On 07/04/2011 the European Court of Justice found in case Tatu, C-402/09, that this was indirect trade discrimination against sellers from other EU States contrary to Article 110 TFEU (§ 33).

In 2010, previously to the ECJ judgment, commercial company Holtzver SRL and others tried to get the pollution tax back, but the Romanian Appellate Courts dismissed their actions (§§ 9, 13). The victims of trade discrimination could not file a claim directly to the ECJ. Therefore, the company wished to prove the breach of property rights before the European Court of Human Rights.

The ECtHR declared the applications inadmissible, since the ECJ judgment “had not been evident” (§ 49).

ECJ liberates software functionality and programming language from copyrights, SAS Institute, C-406/10

The SAS Institute Inc. sued the World Programming Ltd. in the UK for infringing its copyright in analytical software. World Programming copied the manuals for the SAS System when creating the “World Programming System” (§ 27). However the Grand Chamber of the European Court of Justice found yesterday that software functionality and programming language are not literary or artistic works, and therefore not covered with copyrights.

The judges made a policy argument in writing that functionality copyrights would make it possible to monopolise ideas to the detriment of technological progress and industrial development (§ 40). The Grand Chamber referred to point 3.7 of the explanatory memorandum to the Proposal for Directive 91/250 stating that only the individual expression of the work should be protected, and leaving other authors the latitude to create even identical programs provided that they refrain from copying (§ 41).

The SAS Institute tried to use the proportionality remedy in arguing that the copyright should be protected at least to some degree having regard to the nature or extent of the copied functionality, to the skills, judgment and labour which had been expended, and to the level of detail reproduced (§ 28). However this attack was dismissed as such.