Van Bael & Bellis on Belgian Business

VOLUME 2016, NO 7 July 2016 Van Bael & Bellis on Belgian Business Law

| HIGHLIGHTS

| COMMERCIAL LAW: Bill on Trust Services for Electronic Transactions Adopted by Chamber of Representatives | COMPETITION LAW: Belgian Competition Authority Rejects Request for Interim Measures by Football Club Royal White Star Bruxelles | DATA PROTECTION: | European Commission Adopts EU-US Privacy Shield | Facebook Wins Privacy Appeal before Belgian Court of Appeal | FINANCIAL LAW: Supreme Court Rules on Insider Trading Involving Former Fortis Employee | INTELLECTUAL PROPERTY: Repute of McDonald’s Sufficient to Prevent Registration of MAC-Food/Beverages Trade

Marks | LABOUR LAW: Bill on Workable and Flexible Work submitted to Stakeholders | MARKET PRACTICES: Publication of Law containing Miscellaneous Provisions in Economic Matters | PUBLIC PROCUREMENT: | Publication of Law on Public Procurement | Publication of Law on Concession Contracts | STATE AID: European Commission Opens In-Depth Investigation into Tax Exemptions for Belgian Ports

TOPICS COVERED IN THIS ISSUE

COMMERCIAL LAW...... 3 COMPETITION LAW...... 4 DATA PROTECTION...... 6 FINANCIAL LAW...... 9 INTELLECTUAL PROPERTY...... 11 LABOUR LAW...... 14 MARKET PRACTICES...... 16 PUBLIC PROCUREMENT...... 17 STATE AID...... 19

Van Bael & Bellis on Belgian Business Law should not be construed as legal advice on any specific facts or circumstances. The content is intended for general informational purposes only. Readers should consult attorneys at the firm concerning any specific legal questions or the relevance of the subjects discussed herein to particular factual circumstances.

Chaussée de La Hulpe 166 Phone : +32 (0)2 647 73 50 [email protected] Terhulpsesteenweg © 2016 Van Bael & Bellis Fax : +32 (0)2 640 64 99 www.vbb.com B-1170 Brussels – Belgium VOLUME 2016, NO 7 July 2016 Van Bael & Bellis on Belgian Business Law

Court of Justice Rules Payment of Royalties under | COMMERCIAL LAW 3 Licence Agreement where Patent Was Held Invalid May Bill on Trust Services for Electronic Transactions Be Compatible With Article 101 TFEU...... 12 Adopted by Chamber of Representatives...... 3 Advocate General Issues Opinion on French Out-of-Print Books Law...... 13 | COMPETITION LAW 4

Belgian Competition Authority Ends Investigation | LABOUR LAW 14 against Professional Institute for Real Estate Agents.....4 Bill on Workable and Flexible Work submitted to Belgian Competition Authority Rejects Request for Stakeholders...... 14 Interim Measures by Football Club Royal White Star Bruxelles...... 4 | MARKET PRACTICES 16

Publication of Law containing Miscellaneous Provisions | DATA PROTECTION 6 in Economic Matters...... 16 European Commission Adopts EU-US Privacy Shield...... 6 | PUBLIC PROCUREMENT 17 European Parliament Adopts New Cybersecurity Directive...... 7 Publication of Law on Public Procurement...... 17

Facebook Wins Privacy Appeal before Belgian Court of Publication of Law on Concession Contracts...... 18 Appeal...... 7 | STATE AID 19 | FINANCIAL LAW 9 European Commission Opens In-Depth Investigation into Supreme Court Rules on Insider Trading Involving Former Tax Exemptions for Belgian Ports...... 19 Fortis Employee...... 9

New Statutory Framework on Insider Trading and Market Abuse Entered into Force...... 10

| INTELLECTUAL PROPERTY 11

Operators of Physical Marketplaces Are Intermediaries...... 11

Repute of McDonald’s Sufficient to Prevent Registration of MAC-Food/Beverages Trade Marks...... 11

Chaussée de La Hulpe 166 Phone : +32 (0)2 647 73 50 [email protected] Terhulpsesteenweg © 2016 Van Bael & Bellis Fax : +32 (0)2 640 64 99 www.vbb.com B-1170 Brussels – Belgium VBB on Belgian Business Law | Volume 2016, NO 7

| COMMERCIAL LAW

Bill on Trust Services for Electronic Transactions Adopted by Chamber of Representatives

On 7 July 2016, the Chamber of Representatives adopted a Bill which (i) implements and complements Regulation (EU) 910/2014 of 23 July 2014 on electronic identification and trust services for electronic transactions in the inter- nal market and repealing Directive 1999/93/EC (the “eIDAS Regulation”); and (ii) supplements the eIDAS Regulation to create legal equivalence between electronic and non-electronic legal transactions (Wetsontwerp tot uitvoering en aanvulling van de Verordening (EU) nr. 910/2014 van het Europees Parlement en de Raad van 23 juli 2014 betreffende de elektronische identificatie en vertrouwensdiensten voor elektronische transacties in de interne markt en tot intrek- king van Richtlijn 1999/93/EG, houdende invoeging van titel 2 in boek XII “Recht van de elektronische economie” van het Wetboek van economisch recht, en houdende invoeging van de definities eigen aan titel 2 van boek XII en van de rechtshandhavingsbepalingen eigen aan titel 2 van boek XII, in de boeken I, XV en XVII van het Wetboek van economisch recht/Projet de loi mettant en œuvre et complétant le règle- ment (UE) n° 910/2014 du Parlement européen et du Conseil du 23 juillet 2014 sur l’identification électronique et les services de confiance pour les transactions électroniques au sein du marché intérieur et abrogeant la Directive 1999/93/ CE, portant insertion du titre 2 dans le livre XII “Droit de l’économie électronique” du Code de droit économique et portant insertion des définitions propres au titre 2 du livre XII et des dispositions d’application de la loi propres au titre 2 du livre XII, dans les livres I, XV et XVII du Code de droit économique; the “Bill”).

The Bill introduces rules into the Code of Economic Law (Wetboek van Economisch Recht/Code de droit économique) governing electronic archiving, electronic registered mail, electronic seals (companies), electronic signatures (natural persons), website authentication, trust service providers and electronic identification schemes See,( this Newsletter, Volume 2015, No. 12, p. 4-5; and Volume 2016, No. 6, p. 5-6).

The Bill will now be published in the Belgian Official Journal. The date of entry into force of the Bill’s provisions will be determined by Royal Decree.

| COMPETITION LAW

Belgian Competition Authority Ends Investigation against is the fact that price is not a driving factor of competition Professional Institute for Real Estate Agents in the sector. Only 4% of the real estate agents considered price as their primary means of differentiation with their On 28 June 2016, the Belgian Competition Authority (Bel- competitors, and 84% did not even consider it to be among gische Mededingingsautoriteit/Autorité belge de la Concur- the three most important differentiating factors. Rather, rence; the “BCA”) ended its investigation against the Pro- correct estimation/appraisal, good reputation, and good fessional Institute for Real Estate Agents (Beroepsinstituut negotiation are key, according to the real estate agents. voor Vastgoedmakelaars/Institut Professionnel des Agents Immobiliers; the “PIR”). The BCA had initiated its investiga- The BCA pointed out that such parameters are hard to mon- tion because of the limited variation in tariffs applied by real itor for consumers, especially since these do not engage estate agents in Belgium, all of whom need to be registered frequently in real estate transactions. Therefore, the BCA with the PIR. However, the BCA has now reached the con- encourages more diversification with regard to tariff struc- clusion that real estate agents set their tariffs freely when tures. To that end, it has announced that it will continue providing real estate services in Belgium. to monitor the sector closely, and that it might open a new investigation in case new facts would suggest the exist- The information available to the BCA showed that a 3% ence of anti-competitive practices engaged in by the PIR tariff (on the sales price) is applied by a large majority of and/or its members. the real estate agents active in Belgium. This caused the Chief Competition Prosecutor (Auditeur-Generaal/Auditeur With regard to the disciplinary proceedings of the PIR, the Général) of the BCA to open an investigation into the PIR, BCA also found that it could not be concluded that the PIR which had already been sanctioned in 2010 by the then prevented innovation in the sale of real estate by means Competition Council for having established and circulated of its disciplinary decisional practice. This conclusion was recommended minimum scales (See, this Newsletter, Volume supported by the results of the survey. 2010, No. 8, p. 3). Belgian Competition Authority Rejects Request for Interim It was suspected that the PIR, in spite of the 2010 decision, Measures by Football Club Royal White Star Bruxelles had again incited its members to apply standardised tariffs. In addition, the PIR was believed to prevent innovative On 14 July 2016, the Competition College (Mededingingscol- services from emerging through the application of discipli- lege/Collège de la concurrence; the “Competition College”) nary procedures. of the Belgian Competition Authority (Belgische Mededing- ingsautoriteit/Autorité belge de la Concurrence; the “BCA”) The BCA had requested over 8,000 real estate agents, rejected a request by football club Royal White Star Brux- which amounts to almost all of the members of the PIR, to elles for interim measures against the Belgian Football Asso- complete a survey. The survey inquired about tariffs and ciation (the “BFA”) and the Belgian Arbitration Court for tariff structure of the real estate agent’s services, as well Sports. Royal White Star had requested these measures as about possible disciplinary proceedings by the PIR. With following the BFA’s refusal to grant the club a license to a participation rate of around 50%, the BCA considered play in the highest division of the Belgian football league that reliable conclusions could be drawn from the results during the coming 2016-2017 season. of the survey. Royal White Star had already brought an appeal against the With regard to the tariffs applied by real estate agents, the decision of the BFA, before the Belgian Arbitration Court BCA concluded that, despite the very limited variation, noth- for Sports. However, the Arbitration Court upheld the BFA’s ing suggested that the PIR had, again, suggested minimum decision that Royal White Star did not satisfy the general scales. Another related conclusion drawn from the survey requirements to obtain a license. One of the requirements

© 2016 Van Bael & Bellis 4 | July 2016 VBB on Belgian Business Law | Volume 2016, NO 7 considered not to be fulfilled was the guarantee of continuity of the club during the season for which the license was requested. Due to financial instability, such continuity was not thought to be guaranteed.

Following the Arbitration Court’s decision, Royal White Star filed a complaint with the BCA and a request for interim measures. After its initial examination of the case, the Competition College concluded that there were prima facie insufficient indications that the BFA’s refusal to grant a license might constitute an infringement of competition law. The Competition College therefore rejected Royal White Star’s request for interim measures.

| DATA PROTECTION

European Commission Adopts EU-US Privacy Shield more explicit obligations on companies as regards: (i) sec- ondary use of personal data (“purpose limitation” principle); On 12 July 2016, the European Commission adopted the (ii) onward transfers of personal data; and (iii) the duration EU-US Privacy Shield (the “Privacy Shield”), the new frame- of data retention and de-identification of personal data. work for transatlantic exchanges of personal data replacing the Safe Harbour agreement. The adoption follows a posi- Commission Adequacy Decision tive vote by the Member States’ representatives in the Arti- cle 31 Committee on 8 July 2016. US companies can sign In its decision, adopted on 12 July 2016 (the “Adequacy up to the Privacy Shield as from 1 August 2016. Once a US Decision”), the European Commission concludes that the company is certified under the new scheme, transfers to US ensures an adequate level of protection for personal this company from the EU will be permitted under Directive data transferred from the EU to organisations in the US 95/46/EC (the “Data Protection Directive”). that have self-certified under the Privacy Shield.

Under the Data Protection Directive, personal data must The European Commission commits to monitor continuously not be transferred to a recipient outside the EEA unless the functioning of the Privacy Shield with a view to assess- such a recipient is located in a country which is regarded ing whether the Privacy Shield and the underlying US laws to provide an “adequate” level of protection. The decision of and regulations continue to ensure an adequate level of 12 July 2016 declares that US companies registered under protection of personal data. the Privacy Shield qualify for “adequate” protection status under the Data Protection Directive. The Adequacy Decision also provides for an annual revision of the scheme. This will allow the European Commission Improvements Provided by Privacy Shield to assess the compatibility of the Privacy Shield with the General Data Protection Regulation 2016/679 (the “GDPR”) The draft framework principles and additional documents which will enter into effect on 25 May 2018. It is expected composing the Privacy Shield were published on 29 Febru- that further updates to the Privacy Shield may be required ary 2016 (See, this Newsletter, Volume 2016, No. 2, p. 8). in order to comply with the strengthened rules of the GDPR. Since presenting the draft Privacy Shield in February, the European Commission and the US Department of Commerce The Adequacy Decision has been notified to the EU Mem- have updated the texts to include a number of additional ber States and thereby entered into force on 12 July 2016. clarifications and improvements. These improvements draw On the US side, the Privacy Shield was published in the US on the opinions of the EU’s Article 29 Working Party, an Federal Register and companies have been able to self-cer- independent European advisory body on data protection tify with the US Department of Commerce (“DoC”) since 1 and privacy comprised of representatives of the EU Member August 2016. The DoC will make both the Privacy Shield list States’ national data protection authorities, the European and certification submissions publicly available through a Data Protection Supervisor and the European Commission dedicated website. The DoC has also published a document (See, this Newsletter, Volume 2016, No. 4, p. 6). They also explaining how US companies can register for the Privacy reflect a resolution of the European Parliament. Shield (read it here).

The European Commission received additional clarifications Further reading: Press release of the European Commis- from the US National Intelligence Office on the question sion; US Department of Commerce Fact Sheet; US Depart- when bulk collection of data is permitted under US law. In ment of Commerce FAQ; Commission Adequacy Decision; addition, the updated texts of the Privacy Shield strengthen Annexes to the Adequacy Decision. the ombudsman mechanism which provides redress against access by US authorities. The latest changes also impose

European Parliament Adopts New Cybersecurity Directive Facebook Wins Privacy Appeal before Belgian Court of Appeal On 6 July 2016, the European Parliament adopted Directive (EU) 2016/1148 of the European Parliament and of the Coun- On 29 June 2016, the Court of Appeal of Brussels (the cil of 6 July 2016 concerning measures for a high common “Court”) overturned the decision of the President of the level of security of network and information systems across Court of First Instance of Brussels of 9 November 2015 the Union (the “NIS Directive”). The NIS Directive is designed (the “Decision”) which had ordered Facebook to cease the to increase cybersecurity in the EU, create a common level use of a cookie under sanction of a daily penalty (See, this of security for networks and information systems in the EU, Newsletter, Volume 2015, No 11, p. 11-12). enhance cooperation between Member States and enable the implementation of risk management strategies in key The Belgian Privacy Commission had initiated summary pro- sectors. The Council of the European Union had already ceedings against Facebook over the allegedly infringing use adopted the NIS Directive on 17 May 2016 (See, this News- of a specific cookie, called the “datr” cookie. During the pro- letter, Volume 2015, No. 5, p. 7). ceedings, Facebook rejected the territorial competence of Belgian courts on this matter and argued that the cookie The NIS Directive will come into force in August 2016. Mem- was necessary for the security and protection of its ser- ber States have 21 months to implement the NIS Directive vices. At first instance, the court sided with the Privacy into their national laws. Member States will have to under- Commission and issued a cease and desist order against take several steps, such as: Facebook Inc., Facebook Belgium SPRL and Facebook Ireland Limited (“Facebook”). The Court has now overturned the .›the introduction of a national strategy on the security of Decision in its entirety. network and information systems; First, the Court examined if the Belgian courts have inter- .›the establishment of a competent authority to monitor national jurisdiction over Facebook Ireland Limited and Face- the implementation of the NIS Directive; book Inc. The Court determined that Directive 95/46/EC of the European Parliament and of the Council of 24 October .›the establishment of a cooperation group, in order to sup- 1995 on the protection of individuals with regard to the port and facilitate strategic cooperation and the exchange processing of personal data and on the free movement of of information among Member States; and such data (the “Data Protection Directive”) does not have direct effect in Belgian legislation and that therefore the .›the designation of Computer Security Incident Response Belgian courts do not have jurisdiction over Facebook Inc. Teams (CSIRT). and Facebook Ireland Limited.

Obligations relating to risk management and incident report- The Court then turned to national legislation. It determined ing to national authorities will also be introduced for oper- that Article 32, §3 of the Law of 8 December 1992 on the ators of “essential services” such as energy, transport, protection of personal data (Wet tot bescherming van de water, banking, financial market infrastructures and health- persoonlijke levenssfeer ten opzichte van de verwerking care. Moreover, digital service providers such as online mar- van persoonsgegevens/Loi relative à la protection de la vie ketplaces, cloud computing services and search engines will privée à l’égard des traitements de données à caractère have to comply with risk management and incident report- personnel) does not govern international jurisdiction and ing obligations. therefore cannot be relied on to allow the Belgian courts to exercise jurisdiction over Facebook Inc. and Facebook Ireland Limited.

Furthermore, both Regulation 1215/2015/EU on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters and the Belgian International

Private Law (Wet van 16 juli 2004 houdende het Wetboek van internationaal privaatrecht/Loi du 16 juillet 2004 portant le Code de droit international privé) did not apply to the case at hand. This is because both laws only relate to civil or commercial cases. Conversely, disputes between an individual or commercial company and the government fall outside the scope of these laws when the government acts pursuant to its governmental power.

The Court also considered recent case law of the Court of Justice of the European Union (“ECJ”) interpreting the territorial scope of the Data Protection Directive. First, the Court held that the 2014 Google Spain judgment of the ECJ (See, this Newsletter, Volume 2014, No. 5, p. 6) does not apply, as this case concerned two companies which had both accepted the international jurisdiction of the Spanish courts voluntarily. Regarding the reference to the 2015 Wel- timmo ECJ case (See, this Newsletter, Volume 2015, No. 11, p. 10), the Court held that it does not elaborate on international jurisdiction, but only covers the power of the supervisory authority. Additionally, in this case, Weltimmo had brought the proceedings itself, therefore recognising the international jurisdiction of the court. Therefore, Weltimmo is not controlling either.

Consequently, the Court declared the action against Face- book Inc. and Facebook Ireland Limited to be non-admis- sible. By contrast, the Court accepted competence over Facebook Belgium. However, the Privacy Commission had initiated summary proceedings, which require urgency. At first instance, the court had considered that urgency is assumed to be present in cases relating to the violation of a fundamental right. The Court now determined that with regard to Facebook Belgium, the urgency requirement had not been met, as the investigation regarding Facebook’s use of datr cookies had already been published in 2011, while the summary proceedings case had only been filed in 2015.

The Privacy Commission has announced that it is consider- ing filing an appeal to the Belgian Supreme Court (Hof van Cassatie/Cour de Cassation). It referred to the Yahoo case, in which the Belgian Supreme Court accepted the international jurisdiction of the Belgian courts (See, this Newslet- ter, Volume 2015, No. 12, p. 14 and Volume 2011, No. 1, p. 11).

The case on the merits between the Privacy Commission and Facebook is scheduled to be heard in the autumn of 2017.

| FINANCIAL LAW

Supreme Court Rules on Insider Trading Involving Former The defendant argued that, despite holding inside informa- Fortis Employee tion about the Emergency Liquidity Assistance plan, he had not used or relied upon that information when deciding to On 10 June 2016, the Supreme Court (Hof van Cassatie/ sell shares which he owned in Fortis. Cour de Cassation; the “Supreme Court”) rejected the appeal lodged by the FSMA (Autoriteit voor Financiële Dien- The Supreme Court sided with the defendant. According to sten en Markten/Autorité des Services et Marchés Financi- the Supreme Court, Fortis’ liquidity problems back in 2008 ers) against the judgment of the Brussels Court of Appeal had already been extensively discussed in the press and of 21 May 2015 in an insider trading case brought against were well known by the public. Therefore, the Supreme a former Fortis employee. Court considered that the granting by the BNB of an Emer- gency Liquidity Assistance to Fortis was merely a confir- The judgment of the Supreme Court offers a concrete exam- mation of such difficulties. ple on how the prohibition of insider trading laid down in the Law of 2 August 2002 on the supervision of the financial Moreover, the Supreme Court acknowledged that the sector and on financial services Wet( betreffende het toe- defendant had justified the sale of shares which he owned zicht op de financiële sector en de financiële diensten/Loi in Fortis by his intention (i) to distance from the manage- relative à la surveillance du secteur financier et aux ser- ment of Fortis; and (ii) to offset the proceeds from the sale vices financiers; the “Law”) should be applied in practice. with the amount of other incoming taxes. The defendant added that, in any case, the Emergency Liquidity Assis- The defendant, a former Fortis employee, had been accused tance together with the agreement of the Belgian, Dutch by the FSMA of insider trading after having sold shares and Luxembourg governments to recapitalise Fortis, could which he owned in Fortis Bank SA/NV (“Fortis”) in 2008 have been legitimately seen as reassuring news about the while the latter was in serious financial difficulties during future of Fortis. the financial crisis. According to the FMSA, this constituted insider trading in breach of Article 25, §1, 1° of the Law, as Consequently, the Supreme Court ruled that in light of the applicable at the time of the facts, which provided that: information which the defendant already possessed, and taking into account his personal situation, the familiarity “it is prohibited for any person possessing information that with inside information (i.e., the Emergency Liquidity Assis- he or she is aware, or ought to be aware, constitutes inside tance plan) had no influence on his decision to sell shares information […] a) to acquire or dispose of, or try to acquire which he owned in Fortis. Further, according to the Supreme or dispose of, for his/her own account or for the account Court, the defendant would have sold the shares even if he of a third party, either directly or indirectly, financial instru- had had no knowledge of the Emergency Liquidity Assis- ments to which that information refers […]”. tance plan.

In particular, the FSMA claimed that the defendant sold As a result, the Supreme Court rejected the appeal brought shares in Fortis, while possessing inside information about by the FSMA and confirmed the judgment of the Brussels the Emergency Liquidity Assistance plan that Fortis was Court of Appeal. about to obtain from the Belgian National Bank (the “BNB”). Pursuant to the judgment of the Court of Justice of the European Union in the Spector case (See, this Newsletter, Volume 2009, No. 12, p. 5), the defendant is presumed to have used this inside information while making his decision to sell the shares.

New Statutory Framework on Insider Trading and Market The Law also effects some changes in regard to the sanc- Abuse Entered into Force tions and measures which the FSMA may impose, in some cases doubling or even tripling the maximum fines. In case On 27 June 2016, Parliament enacted a new law amending of a violation of the prohibitions on market abuse and insider the statutory framework governing insider trading and mar- trading, the FSMA may impose administrative fines of up ket abuse (Wet van 27 juni 2016 tot wijziging, met het oog op to EUR 15,000,000 or 15 per cent of the total annual reve- de omzetting van Richtlijn 2013/50/EU en de tenuitvoerleg- nue of the perpetrator, whichever is the highest, on legal ging van Verordening 596/2014, van de wet van 2 augustus entities and EUR 5,000,000 or 15 per cent of the annual 2002 betreffende het toezicht op de financiële sector en de total revenue, on private individuals. In addition, the FSMA financiële diensten, van de wet van 16 juni 2006 op de open- may impose a fine amounting to three times the profits bare aanbieding van beleggingsinstrumenten en de toelat- gained (or loss avoided) resulting from the market abuse or ing van beleggingsinstrumenten tot de verhandeling op een insider trading. The Regulation contains a list of sanctions gereglementeerde markt en van de wet van 2 mei 2007 op and measures which the competent supervisory authority de openbaarmaking van belangrijke deelnemingen in emit- should in any case have at its disposal. It appears, however, tenten waarvan aandelen zijn toegelaten tot de verhande- that some of these sanctions have yet to be formally imple- ling op een gereglementeerde markt en houdende diverse mented into Belgian law. It is therefore likely that further bepalingen, en houdende diverse bepalingen/Loi du 27 juin amendments to the statutory framework will follow in the 2016 modifiant, en vue de transposer la directive 2013/50/ weeks and months to come. UE et de mettre en oeuvre le règlement 596/2014, la loi du 2 août 2002 relative à la surveillance du secteur financier Although a Royal Decree still has to determine the date of et aux services financiers, la loi du 16 juin 2006 relative aux entry into force of parts of the Law, some clauses relat- offres publiques d’instruments de placement et aux admis- ing to the implementation of the Regulation have already sions d’instruments de placement à la négociation sur des entered into force on 3 July 2016 to coincide with the date marchés réglementés, ainsi que la loi du 2 mai 2007 relative as of which the bulk of the Regulation applies. Other parts à la publicité des participations importantes dans des émet- of the Regulation entered into force on 7 July 2016. teurs dont les actions sont admises à la négociation sur un marché réglementé et portant des dispositions diverses, et . portant des dispositions diverses; the “Law”).

The Law implements into Belgian Law Regulation 596/2014 of 16 April 2014 on market abuse (“market abuse Regula- tion”) which repeals Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (the “Regula- tion”). The Regulation introduced a uniform framework on insider trading and market abuse. As a result, the Law abol- ishes most of the current provisions on market abuse and insider trading as they are replaced by the rules set out in the Regulation.

The Law further designates the FSMA as the competent authority to supervise compliance with the Regulation. To that end, it delegates specific additional investigating pow- ers to the FSMA. Among others, the FSMA now can order the production of pre-recorded telephone conversations, e-mail exchanges and overviews of data traffic.

| INTELLECTUAL PROPERTY

Operators of Physical Marketplaces Are Intermediaries of cumulative conditions must be satisfied. First, the earlier trade mark must have been lodged before that for which On 7 July 2016, the Court of Justice of the European Union cancellation is sought and must be registered. Second, the (the “ECJ”) tackled the preliminary question which had been earlier trade mark and that for which cancellation is sought referred to it by the Czech Supreme Court as to whether must be identical or similar so that the relevant public could the reasoning espoused by the ECJ in L’Oréal v. eBay when establish a link between the trade marks. The establish- defining the role of intermediaries in an online marketplace ment of such a link must be assessed globally, taking into (See, this Newsletter, Volume 2011, No.7, p. 10) also applies account all factors relevant to the circumstances of the to physical marketplaces. case, including the degree of the earlier trade mark’s distinctive character, the degree of similarity between the goods This question arose after trade mark holders had sought an and services covered by the trade marks at issue and the injunction before the Czech Courts against Delta Center, relevant public. Third, the earlier trade mark must have a an operator subletting various sales points situated in a reputation in the EU. Fourth, the use without due cause of physical marketplace in Prague where counterfeits were the trade mark for which cancellation is sought must lead sold. The trade mark holders argued that Delta Center was to the risk that unfair advantage might be taken of the dis- to be considered an intermediary within the meaning of tinctive character or the repute of the earlier trade mark Article 11 of Directive 2004/48/EC of 9 April 2004 on the or that it might be detrimental to the distinctive character enforcement of intellectual property rights (the “Enforce- or the repute of that trade mark. ment Directive”), which meant that Delta Center could be the subject of an injunction. Given that the first and third requirements had not been challenged, the Court focused on the second and fourth The ECJ agreed with the trade mark holders. It held that, requirements. since it is irrelevant for the application of Article 11 of the Enforcement Directive whether a marketplace is online As regards the second requirement, the Court first con- or offline, Delta Center must be regarded as an interme- firmed that the trade marks at issue had a certain degree diary to which injunctions may be addressed. Continuing of phonetic and conceptual similarity due to their respective along these lines, the ECJ added that the conditions for an initial part, namely the “mac” and “mc” elements. Although injunction laid down in L’Oréal v. eBay also apply to physi- the trade marks at issue lacked visual similarity, the Court cal intermediaries. concluded that they were overall similar.

Repute of McDonald’s Sufficient to Prevent Registration of The Court went on to state that the relevant public was MAC-Food/Beverages Trade Marks likely to establish a link between the trade marks at issue since the trade mark “MACCOFFEE” could be seen as belong- On 5 July 2016, the EU General Court (the “Court”) upheld ing to the “Mc” family of trade marks of McDonald’s. To the decision of the EUIPO (European Union Intellectual Prop- establish the existence of a “Mc” family of trade marks, the erty Office, formerly OHIM) finding the EU trade mark “MAC- Court referred to the numerous “Mc” trade marks owned by COFFEE” invalid after McDonald’s had brought an applica- McDonald’s (McMUFFIN, McRIBB, McFLURRY, McNUGGETS, tion for a declaration of invalidity of that trade mark (Case McCHICKEN and EGG MCMUFFIN). The Court found that T-518/13). the combination of the prefix “Mc” with another word had acquired its own distinctive character. For an earlier trade mark to invalidate successfully a similar but not identical trade mark pursuant to Article 8(5) of The Court then rejected the appellants’ argument that Regulation No 207/2009 of 26 February 2009 on the Com- there was no similarity between the goods and services munity trade mark (the “Trade Mark Regulation”), a number at issue given that the trade mark “MACCOFFEE” was reg-

© 2016 Van Bael & Bellis 11 | July 2016 VBB on Belgian Business Law | Volume 2016, NO 7 istered mainly for foodstuffs and beverages while the trade In 2008, Hoechst commenced ICC arbitration proceedings mark “McDonald” related to fast food restaurant services. for the payment of royalties, subsequent to which Genen- The Court found that there is complementarity between tech was ordered to pay over EUR 108 million plus inter- those goods and services since the goods covered by the est dating from 1998. Genentech then requested the Paris trade mark “MACCOFFEE” are identical to goods offered on Court of Appeal to set aside the arbitration award arguing the menu of McDonald’s establishments and they are both that ordering the payment of running royalties is contrary intended for the same consumers. to Article 101 TFEU and the principle of free competition, as the licensee must bear unjustifiable costs for a tech- With reference to the fourth criterion, the Court held that nology which is no longer patented and is thus accessible it was highly plausible that the trade mark “MACCOFFEE” without restriction. rode on the coat-tails of the trade mark “McDonald’s” in order to benefit from its power of attraction, its reputation On 9 December 2014, the Paris Court of Appeal made a and its prestige, and exploited, without paying any financial request for a preliminary ruling to the ECJ for clarifica- compensation, the marketing effort made by McDonald’s in tion. In March 2016, Advocate General Wathelet delivered order to create and maintain its image. his opinion in which he opined that Article 101 TFEU is not breached if the commercial purpose of the licence agree- Finally, the Court found that the owner of the trade mark ment is to avoid patent litigation, provided the licensee is “MACCOFFEE” did not have a due cause to use the con- able to terminate the licence by giving reasonable notice tested trade mark. and retains freedom of action after termination (by, for example, challenging the validity or the infringement of the This decision is still open to appeal to the Court of Justice patent). of the European Union. In its judgment, the ECJ established that the beneficiary of Court of Justice Rules Payment of Royalties under Licence a patent licence must pay the agreed royalty for the use Agreement where Patent Was Held Invalid May Be Compat- of technology, even where such use does not give rise to ible With Article 101 TFEU an infringement, or where the technology is deemed never to have been protected following the annulment with ret- On 7 July 2016, the Court of Justice of the European Union roactive effect of the patent. (the “ECJ”) issued its judgment on a request for a preliminary ruling from the Paris Court of Appeal, which had First, the ECJ clarified that the question from the Paris enquired whether Article 101 TFEU precludes a licensee Court of Appeal not only refers to the case of a revocation from paying royalties pursuant to a licensing agreement of patents, but also to the case of non-infringement of the when the patent which is the subject of that licensing licensed patents, since Genentech had argued in the main agreement has been held invalid (Case C-567/14, Genen- proceedings that it was required to pay the running royalty tech v Hoechst). in the absence of any infringement, contrary to the terms of its licence agreement. The case concerns a long-standing patent dispute relating to a licence agreement signed in 1992 between Behringw- Second, the ECJ recalled the existence of old case-law on erke, the licensor (of which Sanofi-Aventis Deutschland, a the issue of exclusive licence agreements (namely, case subsidiary of Hoechst, is a successor), and Genentech (a 320/87 Kai Ottung v Klee & Weilbach), which determines subsidiary of Roche). The licence agreement provided for that the obligation to pay a royalty, even after the expiry running royalties in the amount of 0.5% based on the man- of the period of validity of the licensed patent, may reflect ufacture of a medicine incorporating a patented substance a commercial assessment of the value to be attributed to even if, in the country of manufacture, the patent was sub- the possibilities of exploitation granted by the licence agree- sequently found to be invalid. ment, especially when the obligation to pay is embodied in a licence agreement entered into before the patent was granted. In other words, royalty is the price to be paid for

© 2016 Van Bael & Bellis 12 | July 2016 VBB on Belgian Business Law | Volume 2016, NO 7 commercially exploiting patented technology whilst ensur- months, an author may only object to the exercise by SOFIA ing that the licensor will not bring legal proceedings for an of the right to reproduce or perform his work if he considers infringement against the licensee. The ECJ crucially added that the reproduction or performance of that work is liable that if the licensee may freely terminate the agreement to affect his good name or reputation adversely. by giving reasonable notice, an obligation to pay a royalty throughout the validity of the agreement cannot fall under In the AG’s opinion, Articles 2(a) and 3(1) of the Copyright the prohibition set out in Article 101 TFEU. Directive are incompatible with national legislations, such as the French Law, which replace the author’s express and The ECJ therefore concluded that EU competition rules do prior consent for the reproduction or communication to the not prohibit the imposition of a contractual requirement public of his work with tacit consent or a presumption of providing for payment of a royalty for the exclusive use of consent. This is because the prior express consent consti- technology that is no longer covered by a patent, as long tutes an essential prerogative of authors. According to the as the licensee is free to terminate the contract. Accord- AG, this conclusion applies even if a copyright management ing to the ECJ, if the licence agreement is still valid and society such as SOFIA has a mechanism allowing authors, can be freely terminated by the licensee, the royalty pay- and their successors, to oppose the communication of the ment is due, even where industrial-property rights derived work. from patents which are granted exclusively cannot be used against the licensee due to the fact that the period of their The AG recommends that the Court of Justice of the Euro- validity has expired. pean Union should hold that the rights provided by Articles 2(a) and 3(1) of the Copyright Directive preclude national Advocate General Issues Opinion on French Out-of-Print legislations, such as the French Law, which give designated Books Law copyright management societies the right to authorise the reproduction and the performance in the digital form of On 7 July 2016, Advocate General Melchior Wathelet (the ‘out-of-print books’. “AG”) delivered his opinion in Case C-301/15, Marc Soulier, Sara Doke v. Ministre de la Culture et de la Communica- tion, Premier Ministre. The case involves a challenge of the legality of Decree No 2013-182 of 27 February 2013, imple- menting Articles L. 134-1 to L. 134-9 of the French Intellec- tual Property Code (Code de la Propriété Intellectuelle; the “French Law”). The case specifically addresses the compatibility of the French law with the limitations set out in Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (the “Copyright Directive”). The AG concludes that the French Law is incompatible with the Copyright Directive.

The French Law relates to the digital exploitation of out- of-print 20th century books and authorises the creation of a public database indexing out-of-print books without the need of the authors’ prior express consent. If a book has been registered on this database for 6 months, then the right to authorise the reproduction and performance of the book in a digital format is exercised by the Société française des Intérêts des Auteurs de l’Écrit (SOFIA). After these six

| LABOUR LAW

Bill on Workable and Flexible Work submitted to Stakeholders .›Occasional telework: A regulatory framework would determine the conditions under which an employee is entitled Deputy Prime Minister and Minister for Work Kris Peeters to occasional telework. submitted a draft Bill on Workable and Flexible Work (Wet- sontwerp Werkbaar en Wendbaar Werk/Projet de loi con- If the industrial sectors do not conclude a collective bargain- cernant le Travail Faisable et Maniable; the “Bill”) to the ing agreement (“CBA”) on all or part of these basic meas- so-called “Group of 10”, a group of stakeholders including ures before 31 December 2016, these measures (or the part employer organisations and unions. thereof that has not been made the subject of a CBA) will become mandatory. The Bill consists of two parts: 2. A series of measures that can only be activated by the 1. A general section with measures that apply immediately industrial sectors. to companies. .›Overall reform of working time: The social stakeholders .›Annualisation of working hours: There is no question of would be able to deviate from the normal working time abolishing the 38-hour work week. It would be possible, limits by CBA. The absolute thresholds of 11 hours per day however, to determine the 38-hour work week on aver- and 50 hours per week would remain (if the average of 38 age over a period of 1 year. During specific periods, work hours per week is respected). It would be possible to shift can be performed up to 9 hours per day and 45 hours per the starting hour for night work from 8:00 PM to 10:00 PM. week, provided that these hours are compensated with free time during periods of less work. This flexibility is not .›Modification of work schedules: All full-time work sched- unlimited. At no time the employee is allowed to perform ules would have to be included in the work rules. If multiple more than 143 hours above the average working time. If work schedules apply, the rules for the transition between this threshold is reached, the employer must grant com- these work schedules would also have to be included in pensatory rest to his employee. The existing overtime reg- the work rules. ulation will remain unchanged. The employee will thus be compensated financially if he works in excess of normal .›Plus Minus Conto: Internationally competitive sectors working hours during specific periods. would be able to provide by CBA that the calculation of the average 38-hour work week will be spread over sev- .›100 voluntary paid hours of overtime: The employee would eral years. This is already provided for today in the auto- be able to choose to perform 100 hours of overtime. In motive industry. such a case, the employer would pay these hours with overtime allowance. .›Temporary agency work of indefinite duration: Tempo- rary agency workers with a contract of indefinite duration .›Training : The current target to spend 1.9% of the total would also receive a salary from the agency between two wage bill on training would be replaced by a new inter-pro- assignments. fessional target of 5 training days on average per full-time equivalent (“FTE”) and per year. This measure will entail no .›Reform of system of employers’ group: Small businesses additional costs for employers. The new system provides would be able to hire an employee together. This is an for the possibility to organise the right to training either opportunity for companies that do not have the resources at sectoral level or at company level, through the crea- to hire an employee individually. tion of an individual training account. If none of these two instruments are available, the employee is entitled to an .›Simplification part-time work: The obligation to include individual right for 2 days of training per year and per FTE. all individual work schedules in the work rules would be

..deleted. This is a significant administrative simplification. For employees who work with a variable work schedule, the notification period would remain 5 days. This could be increased or decreased (to a minimum of 1 day), but only if this is agreed in a binding CBA between the social stakeholders. Certain documents which currently have to be kept on paper could also be stored electronically.

.›Career saving (loopbaansparen/épargne-carrière): Employ- ees would be able to save up additional holidays. Each sector could decide to implement this option at company or sectoral level. In case of a job change (even to another sector), the employee would be able to opt for a compensation payment for the accrued additional holidays from which he has not yet benefited wherever it is impossible to transfer the accumulated additional holidays to the new employer. It is unclear at this stage whether the compensation payment would have to be paid by the former or the new employer.

.›Adaptation of leave systems: Leave for palliative care could be extended to a maximum of 3 months. Time credit for care purposes could also be extended by 3 months.

.›Flexible working hours: A regulatory framework for flexible working hours during which the employee can determine the beginning and the end of his performance, would be subject to certain limits.

.›Granting of leave: The employee who has a seriously ill child and has exhausted all leave systems, would be able to ask his employer to open up this system by accepting other employees to donate additional holidays (holidays beyond the statutory leave of 20 days) for the benefit of the employee with the seriously ill child.

After discussion of the Bill within the Group of 10, the Min- ister of Work will submit it to the government. Following the advice of the Council of State, the Bill will be submitted for approval to the Chamber of Representatives.

| MARKET PRACTICES

Publication of Law containing Miscellaneous Provisions in Economic Matters

On 6 July 2016, the Law of 29 June 2016 containing miscellaneous provisions in economic matters (Wet van 29 juni 2016 houdende diverse bepalingen inzake Economie/ Loi du 29 juin 2016 portant dispositions diverses en mat- ière d’Economie; the “Law”) was published in the Belgian Official Journal.

The Law strengthens the enforcement of the market practice rules and amends the rules on itinerant trading (See, this Newsletter, Volume 2016, No. 6, p. 24). Subject to some exceptions, the Law entered into force on 16 July 2016.

| PUBLIC PROCUREMENT

Publication of Law on Public Procurement dure and to further the use of procedures that contain an element of negotiation, the Law concerning Public Procure- On 14 July 2016, the Belgian Official Journal published the ment relaxes the conditions for the use of the so-called Law of 17 June 2016 concerning public procurement (Wet “competitive procedure with negotiation” (the successor of van 17 juni 2016 inzake overheidsopdrachten/Loi du 17 juin the procedure previously known as the negotiated proce- 2016 relative aux marches publics; the “Law concerning dure with prior publication) (mededingingsprocedure met Public Procurement”). The Law concerning Public Procure- onderhandeling/procédure concurrentielle avec négociation) ment, which was adopted by the Chamber of Representa- and the competitive dialogue (concurrentiegerichte dialoog/ tives on 12 May 2016 (See, this Newsletter, Volume 2016, No. dialogue competitive). The Law concerning Public Procure- 5, p. 16), implements into Belgian law Directives 2014/24/ ment further introduces a new, flexible tender procedure, EU and 2014/25/EU. the so-called “innovation partnership” (innovatiepartner- schap/partenariat d’innovation). Containing 193 Articles, the Law concerning Public Pro- curement is significantly more elaborate than its prede- The innovation partnership is a procedure specifically cessor, the Law of 15 June 2006 (Wet van 15 juni 2006 designed for situations where a need for the development inzake overheidsopdrachten en bepaalde opdrachten voor of an innovative product or service or innovative works and werken, leveringen en diensten/Loi du 15 juin 2006 relative the subsequent purchase of the resulting supplies, services aux marchés publics et à certains marchés de travaux, de or works cannot be met by solutions already available on fournitures et de service), which consists of 80 Articles. the market. In such situations, the new procedure allows Although the Law concerning Public Procurement maintains contracting authorities to establish a long-term innovation a number of provisions stemming from the Law of 15 June partnership for the development and subsequent purchase 2006, it introduces important innovations, some of which of a new, innovative product, service or works provided are discussed below. that these can be delivered to agreed performance levels and costs, without the need for a separate procurement Greater Flexibility in Choice of Tender Procedures procedure for the purchase. According to the parliamen- tary report for the Law concerning Public Procurement, the First, while the Law concerning Public Procurement no introduction of this procedure is intended to give a positive longer uses the distinction between “adjudication” (aan- signal to innovative sectors. besteding/adjudication) and “call for tender” (offerteaan- vraag/appel d’offres), it continues to put forward the Award Criteria so-called “open procedure” (consisting of one phase in which any interested party can submit an offer) openbare( proce- A second innovation is the new approach in applying the dure/procedure ouverte) and the so-called “restricted pro- award criteria. The Law concerning Public Procurement procedure” (in which interested parties first have to submit a vides that contracting authorities should award their con- request for participation) (niet-openbare procedure/proce- tracts to the most economically advantageous tender. While dure restreinte) as the standard procedures to be used by under the current regulatory framework the term “most eco- contracting authorities. However, compared to the situation nomically advantageous tender” refers to the offer with the under the Law of 15 June 2006, the open and restricted best price-quality ratio, the meaning of this term is signifi- procedures are no longer given absolute priority. cantly broadened under the Law concerning Public Procure- ment. Accordingly, a contracting authority can determine The Law concerning Public Procurement thus marks an the most economically advantageous tender on the basis important shift in the choice of tender procedures by pro- of criteria of its choice. These can include price, cost, and/ moting the use of more flexible procedures, other than the or price-quality ratio. open and closed procedures. In line with the intention of the European legislator to provide greater flexibility for contracting authorities in their choice of procurement proce-

Thus, even though the Law on Public Procurement no longer uses the concept of “adjudication”, contracting authorities still remain free to award a contract based on price as the sole award criterion. The preparatory works of the Law concerning Public Procurement explicitly state that, in the case of highly standardised products such as needles for hospital use, it seems likely that contracting authorities will prefer to use price as the sole tender criterion, as it suffices to refer to the relevant standards in the techni- cal specifications in order to ensure the desired quality. By contrast, contracting authorities using the competitive dialogue or innovation partnership procedures are obliged to award contracts on the basis of the price-quality ratio and are not authorised to award the contract on the basis of price alone.

The Law concerning Public Procurement generalises the use of tender criteria, which become applicable regardless of the tender procedure used. However, for tenders of limited value and in specific circumstances in which the negotiated procedure without prior publication is applied, contracting authorities are not bound by the rules on award criteria.

Entry into Force

Most of the provisions of the Law concerning Public Pro- curement will enter into force only on a date determined by a Royal Decree yet to be adopted. However, three Arti- cles already entered into force on 27 July 2016. Pursu- ant to these provisions, contracting authorities will only be allowed, as far as a number of products, services and buildings listed in a Royal Decree are concerned, to purchase these with a demonstrated high energy efficiency performance. However, even the Articles that have already entered into force still have to wait for the publication of a Royal Decree in order to become operational.

Publication of Law on Concession Contracts

On 14 July 2016, the Law of 17 June 2016 on concession agreements (Wet van 17 juni 2016 betreffende de concessie- overeenkomsten/Loi du 17 juin 2016 relative aux contrats de concession; the “Law on Concession Agreements”) was published in the Belgian Official Journal. The Law on Con- cession Agreements, which was adopted by the Chamber of Representatives on 12 May 2016 (See, this Newsletter, Volume 2016, No. 3, p. 11), implements into Belgian law Direc- tive 2014/23/EU on the award of concession contracts.

| STATE AID

European Commission Opens In-Depth Investigation into Belgium and interested third parties, such as beneficiaries Tax Exemptions for Belgian Ports or competitors of beneficiaries, are invited to comment on the state aid assessment of the tax exemptions, in par- On 8 July 2016, the European Commission (the “Commis- ticular the economic nature of the ports’ activities and the sion”) opened an in-depth investigation into corporate tax effect on competition and trade. exemptions granted to Belgian ports. If the Commission were to conclude that the taxation of In Belgium, a number of sea and inland waterway ports ports in Belgium is not compatible with the EU state aid (notably the ports of Antwerp, Bruges, Brussels, Charleroi, rules, it may require Belgium to put an end to the regime. Ghent, Liège, Namur and Ostend, as well as ports along the However, as the aid is regarded as existing aid, the Com- canals in Hainaut Province and Flanders) are exempt from mission cannot ask Belgium to recover aid granted in the the general corporate income tax regime. These ports are past, nor any aid granted up until the moment that a final subject to a different tax regime, with a different base and decision is adopted by the Commission. tax rates. On 8 July 2016, the Commission also opened an in-depth However, the main activities of ports are commercial activ- investigation into tax exemptions granted under French law ities, including the transfer of persons and cargo and the to the main French ports. In January 2016, the Commis- provision of infrastructure to shipping companies, shipbuild- sion had already taken a negative final decision regarding ers and other companies. In the Commission’s view, the corporate tax exemptions granted to the Dutch public sea- commercial operation of port infrastructure constitutes an ports. The Commission is also investigating the function- economic activity for which the ports should pay corporate ing and taxation of ports in other Member States, including tax like any other company. Still, the tax regime applicable Germany. to ports results in an overall lower level of taxation for Bel- gian ports on their commercial activities as compared to other companies in Belgium. Therefore, the Commission has opened an in-depth investigation into this regime. The Com- mission’s investigation does not cover the ports’ activities that are linked to the exercise of essential state responsibil- ities, such as safety, surveillance and traffic control. These activities fall outside the scope of EU state aid control.

As the tax exemptions for ports already existed before the establishment of the European Union in 1958, the aid is regarded as “existing aid”. Therefore, the Commission followed the specific three-step cooperation procedure between Belgium and the Commission applicable to such aid. First, on 9 July 2014, the Commission sent a letter to Belgium outlining its concerns and giving Belgium an opportunity to respond. Second, on 21 January 2016, the Com- mission adopted a decision in which it proposed appropriate measures to bring the taxation of ports into line with EU state aid rules. Third, with the decision of 8 July 2016, the Commission opened an in-depth investigation to verify the compatibility of the aid.

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