In a recent case involving Calminia, a company specializing in limestone and marble cutting, and its service provider Sodileve, responsible for machine maintenance, the intricacies of unilateral contract termination were brought to light. In 2016, Calminia expressed dissatisfaction with Sodileve’s repair services. This led to a sharp decline in their relationship, culminating in Sodileve’s decision in March 2017 to cease services due to the conduct of Calminia’s manager. Sodileve subsequently sued for unpaid invoices.
According to Article 1224 of the French Civil Code, contract termination can result from a resolutory clause, creditor notification in cases of serious non-performance, or a court decision. Article 1226 allows for unilateral resolution by the creditor through notification, typically following a formal warning, except in emergencies.
Calminia contested the termination’s validity, arguing the lack of formal notice. However, the Cour de cassation, in its October 18, 2023 ruling, upheld the termination. It found that the manager’s behavior created an untenable working environment, evidenced by tensions, confrontations, and direct orders bypassing hierarchical protocols.
The French Commercial Chamber clarified that formal notice is redundant when circumstances indicate its futility. The Court of Appeal was not required to investigate the presence of a prior formal notice.
This case sets a precedent under Article 1226, highlighting the importance of maintaining professional conduct to avoid risk of unilateral contract termination.
Our IT Contracts, Data & Compliance department is ready to assist in contract drafting, business relationship management, and dispute resolution.
For further inquiries, please engage with us directly.
In the first installment of a three-part series, the IP/IT division of Cloix Mendès-Gil law firm will dissect the Digital Services Act (DSA), delineating its objectives, stakeholders, and the ensuing responsibilities.
1 – Addressing key concerns with the DSA
The Council of Europe has set forth a clear edict for the digital realm: “What is illegal offline should also be illegal online.” This dictum serves as the cornerstone for the novel regulation.
Despite existing regulations for internet entities, most notably the European Directive on electronic commerce (Directive 2000/31/EC of June 8, 2000), the digital landscape has undergone significant transformations, necessitating an update to reflect contemporary practices.
The DSA’s goals include:
- Enhancing protection of European digital users’ fundamental rights by regulating unlawful content and misinformation, safeguarding consumers, and ensuring freedom of expression and non-discrimination.
- Bolstering the growth of EU digital enterprises.
- Intensifying oversight of major platforms to mitigate democratic risks and information manipulation.
2 – Framework for Implementation
As a European regulation, the DSA is immediately enforceable across the EU, negating the need for transposition into national legislation. This ensures immediate and consistent application in all member states.
The enactment is phased: Major platforms serving over 45 million monthly users must comply by April 25, 2023, as stipulated by the European Commission.
The majority of other relevant entities have a compliance deadline of February 17, 2024.
Notably, businesses with fewer than 50 employees and less than 10 million in annual turnover will enjoy certain dispensations.
3 – The Scope of Influence
The DSA encompasses online intermediaries providing content, goods, and services within the EU. It applies irrespective of establishment within the EU, thus extending its reach to international firms.
The affected sectors include:
- Internet Service Providers (ISPs)
- Cloud computing service vendors offering data hosting or SaaS solutions.
- Operators of online platforms such as marketplaces, app stores, social networks, and content-sharing services.
4 – Sanction Mechanisms
The DSA introduces a regulatory and punitive framework reminiscent of the 2016 GDPR protocols for personal data protection.
Each EU member state will designate an independent digital services coordinator. In France, this role is assigned to ARCOM under the legislation passed on October 17.
Per Articles 51 et seq. of the Regulation, ARCOM holds the authority to process user complaints, conduct audits for non-compliance, and levy penalties up to 6% of the annual global turnover.
Subsequent articles will delve into the specific duties and obligations of intermediary service providers and the distinct responsibilities of web hosts, marketplaces, and online platforms.
The IT Contracts, Data & Compliance department remains at your disposal to facilitate adherence to digital legislation.
For further inquiries, we invite you to engage with our experts.
The rapid expansion of artificial intelligence (AI) presents an urgent economic, cultural, and legal quandary that warrants immediate attention.
Such is the premise of a draft bill introduced to the French National Assembly on September 12, 2023, by a group of eight legislators. The bill, with its four key articles, seeks to align the nuances of creations generated by AI platforms, like ChatGPT or Midjourney, with the existing statutes of the intellectual property framework.
The proliferation of these innovative tools prompts critical inquiries: Should the individual instructing the algorithm be deemed the creator? Do works derived from extensive databases of preexisting works constitute infringement? And does an output deliberately emulating a particular artist’s style violate that artist’s intellectual property rights?
The bill’s four articles aim to address these conundrums. However, it’s becoming evident that practical application could prove challenging.
The inaugural article proposes an amendment to Article L.131-3 of the French Intellectual Property Code, stipulating that the incorporation of protected works into AI training databases is contingent upon compliance with copyright regulations. This implies that the utilization of preceding works would require “consent from the creators or their legal beneficiaries.”
Article 2 confronts a similar predicament, asserting that “In instances where an AI independently creates a work without direct human intervention, the exclusive rights belong to the creators or their successors of the utilized works that facilitated the conception of said AI-generated creation.”
Additionally, this article dictates that the creators are to be compensated via the traditional collective rights management system. Yet, it fails to delineate the process by which rights organizations would ascertain the original work’s contributors behind the AI-produced piece.
Article 3 mandates the inclusion of the generative method and the originators’ names of the employed works in every AI-generated work, as an extension to Article L.121-2 of the Intellectual Property Code.
Conversely, Article 4 introduces a provision for AI-produced works to be subject to levies for the benefit of the designated rights management collective.
In essence, the bill advocates for enhanced traceability of AI-generated works and fortified protection of the original creators’ rights within this novel paradigm—eschewing the safeguarding of the generated work or its direct creator.
This noble intention seeks to uphold the moral rights of authors, as enshrined in Article L121-1 of the Code: every creator is entitled to the “recognition of their name, status, and oeuvre.”
Yet, this ideal clashes with the logistical behemoth of processing the vast data sets needed to train and operate generative AI systems. As the founder of Midjourney disclosed to Forbes, deploying a hundred million images was instrumental, and securing consent from every implicated artist is likened to a Herculean endeavor:
“It would be ideal if the images included metadata denoting the copyright proprietor. Alas, they do not; no such registry exists. There is no mechanism to trace an image found online back to its proprietor and validate its authenticity.”
Consequently, work traceability emerges as a pivotal concern, particularly for intricate algorithms such as neural networks.
For instance, can a piece crafted by an AI, under the directive of an author and based on antecedent works, be classified as an original work bearing the author’s personal imprint?
Moreover, how should a collective management organization equitably distribute rights remuneration among the myriad of contributors to the AI’s creative process? This ambiguity, coupled with the AI’s inherent opaqueness, portends potential for complex legal disputes.
These pivotal issues are slated for committee review and may evolve with the legislative process.
Our IT Contracts, Data & Compliance team is poised to assist with the governance of personal data amassed through your commercial activities.
For further inquiries, please engage with us directly.
A recent ruling on July 20, 2023, by the President of the Paris Judicial Court emphasized a key principle in copyright law: maintenance works on software are not inherently original and thus may not qualify for copyright protection.
The case involved a dispute between a company specializing in computer systems and a maintenance service provider over the ownership of improvements made to a software named Zephyr, as well as the software itself, designed for managing large quarries and industries.
The court’s reasoning unfolded in two phases:
- Presumption of non-originality1: The President initially asserted that maintenance works on software are generally non-original, hence not automatically eligible for copyright protection.
- Burden of proving originality: The President further clarified that if a maintainer claims copyright over maintained software due to their contributions, they must demonstrate that these contributions constitute a work of the mind and impress upon the pre-existing software the personality of its developers through free and creative choices.
Non-title presumption in copyright Law
Judges are required to determine if works meet the originality criterion, reflecting the creator’s2 personality. Thus, copyright does not apply to standard technical services3 or simple operational work4.
In this case, the judge affirmed that only truly original works merit protection. Contributions heavily constrained by technical aspects do not qualify.
For the matter at hand, the focus was on application maintenance, primarily dictated by the software being maintained. The President highlighted that maintenance is meant to adapt software within its existing features.
Additionally, the President introduced another criterion for maintenance operations: they are guided by client requests. When a client seeks to evolve their software, this evolution is based on specific needs. Thus, improvements made by the provider, as tools to help the client adjust their software, are not necessarily considered original.
However, the President noted that this doesn’t mean maintenance contributions are always devoid of originality.
Proving ownership
Claimants seeking copyright protection must precisely delineate the form they claim protection for5.
Following this logic, the President didn’t outright dismiss the idea that maintainer contributions could be protected. However, they demanded proof of the originality of these contributions.
The maintainer in this case failed to distinguish between original and non-original contributions, raising questions about whether these contributions were documented.
The court went further, asking the maintainer to prove that their contributions not only imprinted on the software but also transformed the existing software to confer new distinct originality.
Contributions must “imprint on the pre-existing Zephyr software the personality of its developers expressed through free and creative choices.”
In summary, a maintainer claiming rights over software due to their interventions must demonstrate that their contributions significantly altered the original nature of the software.
Otherwise, any maintainer could claim rights over software simply for updates or corrections.
Furthermore, if every third-party maintainer could claim rights on the work they maintain, the question arises whether the transformed software is a collaborative or collective work. In both cases, obtaining rights over the entire software is complex without the original rights holder’s agreement.
In this instance, although the claimant argued that the software was a collaborative effort, this posed a challenge due to the absence of an agreement with the initial creator, evident from the ongoing dispute.
In conclusion, the July 20 ruling clarifies that third-party application maintenance does not automatically confer rights to the original software on the provider.
For clarity, we recommend:
- explicitly clarifying rights in contracts to prevent disputes.
- carefully documenting all original contributions during the project or maintenance.
- if the maintainer believes their contributions are original, they must discuss this with their client.
Our IT Contracts, Data & Compliance department assists creators and maintainers in all necessary acts for their activities, including maintenance contracts, copyright assignment, and dispute resolution. For any inquiries, please contact us.
- Contrary to audiovisual copyright, for which article L. 113-7 of the French Intellectual Property Code designates five types of persons presumed to be authors of an audiovisual work ↩︎
- Cass. Ass. Plén., 7 mars 1986, n° 83-10477 ↩︎
- Civ. 1re, 29 mars 1989. V. §18. ↩︎
- Civ. 1re, 1er mars 1988: ↩︎
- Civ. 1re, 15 janv. 2015, n°13-22.798. ↩︎
