21 December 2024

Christmas Newsletter 2024

✨ARTIFICIAL INTELLIGENCE✨

➡️ First analysis of the Mission report on the implementation of the European regulation establishing harmonized rules on intelligence

In April 2024, the CSPLA entrusted Alexandra Bensamoun, Professor of Law at Université Paris Saclay and member of the Interministerial Commission on AI, with a mission relating to the implementation of the European Regulation establishing harmonized rules on artificial intelligence 2024/1689 (also known as the “RIA” or “IA Act”).

This mission focused on two points

assess the scope of the transparency obligation set out in article 53 of the RIA
determine mechanisms to guarantee rights holders the effectiveness of their rights when their works are used by AI system providers

As a reminder, Section 53(1)(d) of the RIA requires providers of general-purpose AI models to develop and make available to the public “a sufficiently detailed summary of the content used to train the general-purpose AI model, in accordance with a template provided by the Office of AI.

This summary must therefore conform to a template provided by the Office of Artificial Intelligence created by the RIA, which has not yet been made public.

On December 11, 2024, the Mission Report on the implementation of the European regulation establishing harmonized rules on artificial intelligence was published.

Several points caught our attention:

The transparency obligation extends beyond content protected by copyright and neighboring rights and also includes protected personal data within the meaning of the RGPD. Consequently, this implies that AI system learning training databases must comply with the requirements for fair and transparent data processing. This requirement is all the more interesting in view of the rise of software enabling the reproduction of artists’ voices and images (FIRSH is thinking in particular of deepfakes).

The Report recommends that the model summary should incorporate the compliance policy required by Article 53, 1, c, that of establishing a general policy for the respect of copyright and related rights to ensure transparency, particularly with regard to measures to respect the “opt out” clause, provided for by Article 4 of the European Directive of April 17, 2019 on copyright and related rights in the digital single market. The mission believes that these two obligations (provided for in paragraphs c and d of Article 53) should be treated together in that they pursue the same objective of transparency. This transparency is of paramount importance, particularly for copyright and related rights holders, to ensure that their works are used lawfully, that their rights are respected and that any exploitation is remunerated.
The template must be “simple and useful” to enable the AI provider to develop its summary.

The degree of detail expected in the summary depends on the type of content. In order to respect business secrecy, the Report recommends an “approach by type of content, with an increasing degree of detail” depending on whether the content is free or more sensitive.

➡️ European AI Office: publication of a draft code of practice for artificial intelligence

On November 14, 2024, the European AI Office published the first draft to frame AI practices.

Here are a few key measures:

Requirement for AI system suppliers to maintain up-to-date technical documentation on models
Obligation to set up an internal copyright compliance policy
Adoption of the robots.txt protocol, enabling rights holders to exclude their works from template training
Co-development of machine-readable standards to indicate prior rights

Presidents and stakeholders were able to discuss the project until November 28, 2024

Based on these comments, the chairmen adjusted the measures of the first draft while adding more details to the code.

✨NEW TECHNOLOGIES✨

➡️ Amendment to the law on influencers: Ordinance of November 6, 2024

On November 6, 2024, Ordinance no. 2024-978 was signed by the President of the Republic to amend and bring into line with European law Law no. 2023-451 of June 9, 2023, aimed at regulating commercial influence and combating the abuses of influencers on social networks.

In particular, this order provides for :

More flexible transparency and consumer information requirements for retouched and virtual images
Clarification of prohibitions on influencer advertising in the healthcare sector
Clarification of applicable penalties
Bringing the provisions on displaying commercial intent into line with European law (2005 directive on unfair commercial practices)

A ratification bill must be tabled within three months of publication of the Ordinance.

FIRSH expert voice: Firsh supports its clients, mainly major brands, in negotiating and concluding contracts with influencers. It’s possible to go beyond the law and lay down even more protective transparency obligations for users, if need be. The brand’s reputation may also be at stake.

Find out more👉 Ordinance of November 6, 2024 amending the Influencers Act 2023 | vie-publique.fr

➡️TJ of Paris November 13, 2024: application of article 6-3 of the LCEN (former “référé internet”)

A quick reminder of the accelerated procedure on the merits: Introduced by the Loi pour la Confiance dans l’Economie Numérique (LCEN) of June 21, 2004, and previously referred to in the literature as the “référé internet”, the remedy provided for in article 6-I-8 was originally designed to enable a litigant to summon a web host or ISP to stop the damage caused by online content, particularly when the publisher of the disputed content concealed his or her identity. Law n 2021-1109 of August 24, 2021 reinforcing respect for the principles of the Republic has, in the interests of better combating online hate, thoroughly amended article 6-I-8 LCEN, which now allows the President of the Judicial Court, ruling under the accelerated procedure on the merits, to: “prescribe to any person likely to contribute to it all measures likely to prevent damage or to stop damage caused by the content of an online public communication service”. The SREN Act very recently moved this remedy to article 6-3 of the same Act (LCEN).

In this case, on August 15, 2024, the Chairman of the Autorité des Marchés Financiers (AMF) drew up a bailiff’s report stating that a website was offering investment services on French territory without having received the prior approval required under article L.531-1 of the French Monetary and Financial Code. A few days later, the Chairman of the AMF served formal notice on the site’s publisher to cease its illicit activity. The formal notice was then forwarded to the host, who was asked to take all appropriate measures to prevent access to the litigious content.

On September 23, 2024, the Chairman of the AMF also denounced the formal notices sent to operators.

As the operator had been duly served with formal notice and had not ceased its activity, and as the host and access provider had been duly notified, the AMF, following the accelerated procedure provided for in article 6-3 of the LCEN Act, summoned SFR, Orange, SRR, Free, Bouygues, Colt Technology and Outremer Télécom to appear before the Paris Court of Justice, with a view to ordering the cessation of access to this service.

In a decision handed down on November 13, 2024, the Paris Court of First Instance granted the AMF Chairman’s request and ordered the injunction to be enforced within fifteen days of service. However, the TJ reminds us that the measures ordered must be necessary, appropriate and proportionate to the aim pursued, and will also be limited in time to what is strictly necessary.

Read the decision👉 13 novembre 2024 – Tribunal judiciaire, Service des référés – 24/56513 | Dalloz

✨ DATA ✨

➡️Orange fined 50 million euros by the CNIL (French Data Protection Authority)

Following findings made online by CNIL agents, Orange has been fined 50 million euros for various breaches of personal data regulations. This is the highest penalty ever imposed by the CNIL on a French company.

The decision is based on two shortcomings:

Failure to comply with article L. 34-5 of the French Post and Electronic Communications Code (CPCE)

In this case, CNIL officers found that Orange was broadcasting advertising messages in the form of electronic e-mails without first obtaining the consent of recipients who were not already Orange customers for similar products and services.

The CNIL relied in particular on a ruling by the CJEU dated November 25, 2021 to consider that these actions constituted a breach of article L. 34-5 of the CPCE, which requires prior consent from recipients under certain conditions for the implementation of commercial canvassing

Failure to comply with article 82 of the French Data Protection Act

In addition, CNIL officials noted that several dozen cookies (information registration) continued to be sent (continued to be read) after consent had been withdrawn. The CNIL considers that these facts constitute a breach of article 82 of the French Data Protection Act, which stipulates that, as long as they do not fall within the scope of the exceptions mentioned in the last two paragraphs of article 82, operations to access or record information on a user’s terminal may only take place after the user has expressed his or her consent.

In addition to the 50 million euro fine, the CNIL also required Orange to implement measures to ensure the company’s compliance in terms of cookies, under a penalty of 100,000 euros per day of delay at the end of a 3-month period following notification of the ruling.

FIRSH expert opinion: When it comes to commercial prospecting by e-mail, it’s essential to put in place the right measures to enable recipients to give their consent when the conditions allowed by law for derogation are not met. In addition, it is essential to comply with the law on cookies. Firsh regularly assists its customers in achieving compliance and implementing best practices within their marketing and sales departments.

Link to the decision👉 Délibération SAN-2024-019 du 14 novembre 2024 – Légifrance

✨INTELLECTUAL PROPERTY✨

➡️ Design and Parasitism: Chanel sues Jonak over several shoe models

In 2020, Chanel took Jonak to court on the grounds of parasitism for reproducing seven of its shoe models.

In a ruling dated October 17, 2022 by the Paris Commercial Court, Jonak was found guilty of reproducing only one of the seven shoe models. Jonak was ordered to pay Chanel €17,500 in damages and to cease marketing one of the models in question.

Chanel appealed this judgment on November 18, 2022. On the grounds of parasitism, Chanel requested the cessation of marketing and withdrawal from sales channels of the other models reproduced, payment of 3.8 million euros in damages to compensate for the moral and economic prejudice suffered, and publication of the decision on the Jonak website for a period of three months. During the appeal, Chanel also invoked the reproduction of an eighth model.

On October 16, 2024, the Paris Court of Appeal ruled against Jonak on the grounds of parasitism for three shoe models

The Court’s reasoning was as follows:

Chanel provides numerous elements demonstrating public awareness of the “slingback” models (the DHAPOU and DHAPOP models) and IVANA. It therefore considers that three models enjoy a real reputation and constitute an individualized economic value. It considers that Jonak’s intention to follow in Chanel’s footsteps, in particular by taking advantage of the reputation of the slingback models (DHAPOU and DHAPOP) and IVANA, has been established.

On the other hand, it considers that for the other models, the individualized economic value has not been established

The Paris Court of Appeal ordered Jonak to pay Chanel €150,000 for economic loss, €30,000 for moral loss and €40,000 under article 700. It also enjoins Jonak from continuing its parasitic acts, subject to a fine of 1,000 euros per day for a period of one month from the date of service of the judgment, and orders the company to cease marketing the DHAPOU, DHAPOP (in their beige/black version) and IVANA shoes, and to withdraw them from distribution channels. The Court refused to publish the judgment, considering that CHANEL’s loss had been sufficiently compensated.

FIRSH expert opinion: Reading the Court’s reasoning on the calculation of the loss suffered by CHANEL, it sometimes seems more economically interesting to “parasitize” a luxury brand

Link to the judgment👉 October 16, 2024 – Court of Appeal, Pôle 5 – Chamber 1 – 22/19513 | Dalloz

➡️Copyright: Sony v Datel. A major decision for the video game industry

For more than ten years, Sony had been involved in a dispute with Datel, a company offering cheating software for video games, in particular for the PSP marketed by Sony.

In 2012, Sony brought an action against Datel before the Hamburg Regional Court (Germany) on the basis of Article 4 of Directive 2009/24/EC, claiming that these tools, which involved a transformation of the software, constituted an infringement of its software

In a ruling handed down on January 24, 2012, the Landgericht Hamburg (Hamburg Regional Court, Germany) partially upheld Sony’s claims.

However, this judgment was overturned on appeal by the Oberlandesgericht Hamburg (Higher Regional Court of Hamburg, Germany), which rejected Sony’s appeal in its entirety

The referring court, which was hearing an action for review of the judgment of the Oberlandesgericht Hamburg (Hamburg Higher Regional Court), noted that the outcome of this action depended on whether the use of Datel’s software infringed the exclusive right to transform a computer program, and therefore referred a question to the Court of Justice of the European Union (CJEU) for a preliminary ruling.

In other words, the question was whether providing the means to cheat within video games was therefore infringing.

More specifically, two questions were referred to the CJEU for a preliminary ruling:

Is there an infringement of the scope of protection of a computer program under Article 1 of Directive 2009/24/EC when the source code or object code has not been altered, but third-party software modifies the content of variables in the program?
Is there a software transformation under Article 4 of Directive 2009/24/EC?

The CJEU answered in the negative

In a ruling handed down on October 17, 2024, the CJEU ruled that the modification of variables inserted in the RAM of a program during its execution does not fall within the scope of protection granted by special software law

As a result, Sony could not demand a ban on Datel’s cheating software. The Oberlandesgericht Hamburg will therefore dismiss all Sony’s claims.

Link to the judgment👉 Sony Computer Entertainment Europe

✨ FIRSH NEWS ✨

Find out more about Firsh’s contributions to the advancement of law and innovation:

➡️ As part of its innovation laboratory, FIRSH has published its first White Paper! Ill marks the official launch of FIRSH LAB, which has published its first study on a high-stakes social issue: deepfakes (hypertrucages generated by artificial intelligence). This White Paper, after a documented study of the technical aspects and a legal reflection on the texts in presence of the doctrine and court decisions, gives legal and practical recommendations: to public authorities, to companies as well as to individuals. This White Paper represents more 6 months of work, more than 6 months of research, legal analysis, drafting, corrections, reflection and rich interviews with French and foreign experts in artificial intelligence, both technical and legal, to understand a major social issue with multiple stakes, and to provide concrete solutions for all players in society, from schools to public authorities

To receive your copy of the White Paper, please contact us at👉 contact@FIRSH.LAW

➡️ Claire Poirson, founder of FIRSH, had the pleasure of taking part in the 8^thedition of the RDV des Transformations du Droit, to debate the role of AI in the legal profession.

Find out more👉 RDV des Transformations du droit – The major event for the transformation of the legal profession in France: Legaltech, Legaldesign, Compliance, Regtech, Innovation, Careers…

➡️ Claire Poirson, founder of FIRSH, had the pleasure of taking part in a round table discussion at the 3rd edition of La Tech Pour Toutes, the largest public Tech event dedicated to women, on the subject of “Tech & Media, the digital revolution”. On this occasion, the contributions and dangers of AI in the media were discussed.

Watch a replay of the round table👉 Tech & Media: the digital revolution – La Tech pour Toutes

➡️ In November and December, Firsh assisted its customers with the following projects

Drafting of a letter of formal notice against an AI photography solution in the name and on behalf of a famous designer. Litigation on this subject is now coming to France…
Pre-litigation of trademark infringement, unfair competition and deceptive trade practices for a major electric car brand.
Pre-litigation patent infringement for a green transport company
Audit “Intellectual Property, Tech, data, AI” concerning a company that has developed a decarbonation platform
Negotiation of copyright assignment agreements in the perfume world
Negotiation of a hosting agreement for a data center
Negotiating the exit from a franchise agreement in the restaurant business

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