Another survey by the UK’s data protection regulator showed that 1 in 10 people had admitted to not deleting data from mobile phones, computers or laptops. In addition, 65% hand on their old phones, computers and laptops to another user, with 44% giving it away to somebody else for free and around one in five (21%) selling it to somebody else.

The Information Commissioner, Christopher Graham, said: “We live in a world where personal and company information is a highly valuable commodity. It is important that people do everything they can to stop their details from falling into the wrong hands.”

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP, comments: “The results of the survey are surprising only in the sense that they are not worse. Many individuals and businesses either do not wipe data properly before dumping or selling them or fail to do so or use appropriate service providers who carry out this function properly. Businesses which fail to properly erase their data to a high enough standard could find that they are not only in breach of the Data Protection Act, but their valuable trade secrets are then used by competitors, possibly without their knowledge. For more information on what to do to comply with the law and protect your valuable assets, please contact me.”

For more on the ICO surveys, click here: http://www.ico.gov.uk/news/latest_news/2012/ico-report-finds-people-becoming-a-soft-touch-for-online-fraudsters-25042012.aspx.

There is still a fair bit to do to bring this to market. The next step is for the scientists to switch ingredients and replicate drugs already available in pharmacies. They also hope to work with engineers to increase the printer’s speed and resolution. And then there will be the regulatory side to worry about given that people will be able to download recipes and print out their own medicines. The scientists say this will revolutionise healthcare when it becomes a reality, and it is not hard to see why.

Print out your own drugs, anyone?!

The report can be found here: https://www.trustwave.com/global-security-report.

The Raspberry Pi is a credit-card sized, low-cost computer that is designed to help teach children (and adults) to program. The £22 computer is sold uncased and without a keyboard or monitor, and has been created by volunteers drawn mainly from academia and the UK technology industry.

The computer went on sale this week and its launch is timely given that the Department for Education has just announced that it is considering making changes to the way computing is taught in schools, with the aim of placing greater emphasis on skills such as programming.

In his recent speech outlining the aforementioned changes, the Secretary of State for Education praised the Raspberry Pi, saying “Initiatives like the Raspberry Pi scheme will give children the opportunity to learn the fundamentals of programming… This is a great example of the cutting edge of education technology happening right here in the UK.”

As well as the Government, the Raspberry Pi has naturally created a lot of interest amongst the general public and its launch has been covered by the BBC and the national press. The demand to purchase the new computer has been so overwhelming that The Guardian newspaper even reported that as soon as it went on sale it sold out, crashing the websites selling it in the process! Distributors Premier Farnell reported that its website received half a million hits in 15 minutes, and RS Components said that it was the greatest level of demand it had ever received for a product at any one time.

For those who have been unable to purchase one, don’t worry – more will become available soon, and an even cheaper £16 version will go on sale later in the year.

Ted Mercer, The Partner who did the work, comments, “It has been very exciting to work on the OEM, commercialisation and distribution contract to enable the Raspberry Pi to go on sale and we wish it every success in inspiring a new generation of schoolchildren to learn to program.”

Apple recently wrote to the European Telecommunications Standards Institute (ETSI), which is approved by the European Commission to impose the standards, stating that all firms involved in the technology industry should sign up to them. The letter was not sent as a public communication, but was later leaked to the Wall Street Journal. Microsoft has followed suit, stating that the Internet only works because of patents being licensed between competitors; and Cisco Systems, a networking equipment manufacturer, has also indicated its support.

The European Commission announced recently that it was investigating Samsung, which signed up to the essential standards imposed by ETSI in 1998, for pursuing an injunction against the use by competitors of standard patents that it owned and for not licensing the patents on fair, reasonable and non-discriminatory terms.

Ofcom’s research has shown that, on switching, one in five customers lose their broadband for a week and more than 130,000 customers have experienced issues with the wrong phoneline being taken over, either when switching or moving house. The research also shows that 500,000 households had their services slammed in the year-period in which the research was carried out.

Ofcom’s proposals include:

-          making sure switches are verified by an independent third party to protect from slamming;

-          simplifying the switching process to avoid confusion;

-          making the new service provider responsible for the switching process;  and

-          addressing the technical problems that can be experienced when switching.

Whilst telecoms service providers have, on the whole, expressed their support for the proposals, some have also expressed their concern that an independent service provider to verify switches could add to costs.

Ofcom is consulting on the proposals until 23 April and will report on the consultation in Autumn 2012.

When Mr Patel complained to Unite about the postings, Unite took the forum offline and released a statement that the allegations against Mr Patel were unfounded; but Unite failed to respond to Mr Patel’s request for the identification of those responsible.

The BASSA website was subject to terms of use, which warned users that their personal data might be disclosed subject to data protection and privacy law.

Mr Patel successfully applied to the High Court for a “Norwich Pharmacal” order, which required Unite to provide the identities, addresses and Internet Protocol addresses of the users responsible. Instead, Unite maintained that the information requested had in fact been deleted. Mr Patel and his solicitors pushed Unite to make further efforts to recover the information, without success. Mr Patel therefore sought a further Norwich Pharmacal order for an independent expert to be given access to Unite’s database on the grounds that the continued failure to provide the information must be, at best, as a result of incompetence or technical ignorance. Unite objected to a further order on data protection grounds.

The High Court ruled that Unite had not provided sufficient evidence that it had carried out the reasonable search required by the first Norwich Pharmacal order, and Unite had not shown that it had actually followed up the information provided by Mr Patel in order to carry out that search. The High Court noted that the additional order that Mr Patel was asking for was intrusive, but that it was proportionate and necessary to give the order so that Unite would comply with Mr Patel’s information request. The High Court considered the fact that the website terms of use warned users that Unite might disclose a user’s identity, subject to data protection and privacy law, and that, without the order, those responsible would not be identified. Whilst the order was given by the High Court, it was strictly limited to an expert appointed jointly by both parties and only to the disclosure of the information which would identify those responsible, or which explained why identification was not possible.

The look and feel of an App is created not just by the content, but also by the functionality and the functioning of the App in the hands of the public. 

Pop ups and words, direct connect to stream video links, cross-referencing and other mechanisms all add to the overall effect and impact of the App, which, so far as the public is concerned, is what really matters.

A recent case in which the Advocate General has given his opinion in the same vein as the English Courts will both make protection of functionality more difficult and in some ways the position easier for App designers.

Essentially the Advocate General in the case of SAS v WPL has said that the language and functionalities of a computer programmer are not eligible for copyright protection.  This follows on from previous English law cases such as Nova v Mazooma.

So how can you protect the look and feel of an App?  Clearly the content will be subject to copyright and possibly, if the design is very similar, there may be a degree of passing off.  The fact is, with functionality, if what you are doing is not patentable, there may be very little you can do to protect your wizzy idea. You can try and make sure that the person for who you design the App doesn’t get any rights to whatever it is you have done, but the App designers are still going to have to be quite careful to make sure that nothing they want to replicate in other Apps by way of functionality is accidentally handed over to a single client, as otherwise things are difficult. 

In fact this problem extends across into all kinds of spheres. The problem is that these days by contacting the right website somewhere in Asia, you can get a source code written for practically any functionality if you can identify exactly what is the functionality you want.  Very often identifying that functionality and the way in which things work must be analysed is the true value of a company.

Let’s give an example. Let us suppose that we have a company that has made a breakthrough in, say, a voiceover internet protocol using mobiles. It’s just spent 4 years and a lot of shareholders’ money developing a pass through to where it knows how everything works, has to work and works in the way in which the public wants. Some senior members of staff then rip it off by taking the analysis of functionality and asking somebody else to write a source code to replicate that. The answer in that case is not breach of the law of copyright nor infringement of patent,  but the good old fashioned law of confidence based on the employment relationships involved.

And that brings me to how App designers and producers and those dealing in discussing with them need to protect ideas. Although probably the best we can do to help you is to ensure that what you do talk about is subject to the law of confidence and the confidentiality provisions in your contacts and standard form agreements rely on the protection to the registered credentials.

In the meantime, with so many companies’ assets really held in the form of knowledge and know-how, the legal and business communities should really be looking at how existing structures or new structures can be adapted to give greater protection in the digital environment.

The Commission has for some time been looking at trying to encourage further uses for the concept of e-money, so as to improve the development of inter alia the internet based economy.  Its answers to questions, however, (there was another one back on the 25 November) have an arcane ring to them and the one that prompted this note is positively opaque. I wouldn’t say that the answers to these questions are actually making it any easier for people to get into the business.

Today’s question and answer relate to NFC stickers. This is not, as some might imagine, some form of promotional advice to do with American football; it is to do with Near Field Communication and is basically RFID combined with authorisation procedures relating to e-money and its use.

The situation set up by the question is a very basic one – a payer with a device that has an NFC sticker on it goes into a shop and the shop reads the sticker, contacts the person with whom the shopper has made a deposit, accesses the necessary credit balance, authorises as if it were a payment to itself and hands over the goods. Payment comes from a central “fund” rather than a single payer’s designated account, but in a sense mimics the way in which electronic money issuances have been going on in Europe for some considerable time. That is to say, in the early days electronic money was issued usually by authorising a central fund owned by the issuer to make a payment following a payment in by the user. 

The answer as to whether or not this constitutes the issue of electronic money given by the Commission is simply to say: read the rules and come to your own conclusions. This is because the rules are designed to be flexible and not stifle technological development, whilst at the same time leaving a degree of latitude for interpretation of the rules at a country by country level. 

The second part of the question was when would this kind of transaction not be caught by the Electronic Money Issuance Rules. Here the Commission, in a roundabout way, gives a more straightforward answer. 

It basically quotes the well known exceptions to the need for e-money issuance in relation to, for example, communications operators to do what looks like e-money issuance for provision of services by themselves. Using powers of deduction, however, the answer to the second part of the question is you can deduce that the Commission thinks that it is probably more likely than not the exceptions have to apply to exempt the service and, therefore, the transaction is prima facie caught by the Rules.  A problem for those developing e-services, perhaps using newish technology, is the ease with which one can be caught by the e-money regime and then left struggling in the UK to use the small e-money issuer “get out of gaol card”. 

The fact is, however, that the European authorities are very nervous about the public being ripped off or scanned by what looks like e-money issuance schemes, and at the moment that fear drives them to be relatively conservative. 

What that should drive is the innovation in this area by those who don’t otherwise need further authorisation (such as the banks and those who are in charge and truly in charge of the technology, i.e. the mobile network operators.) Both these institutions probably have other things on their mind at the moment, but it does seem that they are being given a substantial opportunity, particularly in the case of banks who can continue to develop further services so they can remain the leading financial payment mechanism providers.

What I doubt will happen is that they will be left alone forever and they are frankly going to have to start demonstrating innovations in this area or risk the Commission making it easier for others to become e-money service operators in this area.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case shows the need for organisations to have clear IT and Internet usage policies. Organisations should also make sure that those policies have been updated since the increased use of business and personal social networking sites.”

The High Court had initially ruled that WPL had copied one of SAS’s programming manuals. However, in respect of the other allegations, the Court was of the view that there was no copyright infringement, based on previous English court cases of easyJet v Navitaire and Nova v Mazooma. However, it decided to make a reference to the European Court of Justice for a definitive ruling on the European Union’s position on the extent of copyright protection in software programming language, programming interfaces and the functionality within the software.

The European Court of Justice’s advisor has now given his opinion. Advocate General Bot has followed the High Court’s ruling. He said that the language and functionalities of a computer program were not eligible for copyright protection. They amounted to ideas without concrete expression. Functionality was the set of possibilities offered by a computer system. It is the service that the user expects from it. For example, in a program for airline tickets, this included finding the flight, checking availability, booking a seat, registering details, paying and editing. The list of possible functionalities was finite. However, the means of achieving the concrete expression of those functionalities is eligible for protection.

We will now await several months for the decision of the European Court of Justice. The Advocate General’s opinion is not binding, but is usually followed by the court.

The ruling is an important reminder that exit provisions in agreements are not something to worry about later; rather, they are just as important as those provisions of an agreement which are intended to have immediate effect. If exit provisions have not been agreed, the party receiving the services is at serious risk of being without those services for a period of time until another provider is found, with potentially catastrophic impacts on its business. Similarly, the service provider may suddenly be without a revenue stream without any form of transition period to balance the impact.

The ruling also shows the importance of not just having exit provisions within an agreement, but to make sure that those provisions set out the requirement for an exit plan which clearly defines what happens to the services on termination – in an IT contract, for example, this should include the specific hardware and software that is needed, the level of support and maintenance that will be provided, how long the transition services will be provided for and how much those transition services will cost.

Paul Gershlick, a Partner and Head of the Pharmaceutical and Life Sciences sector at Matthew Arnold & Baldwin LLP, says, “It is absolutely crucial to protect patient data. However, privacy groups again appear to be pursuing a single concern agenda – ie privacy. What about improving patient care and improving or saving lives? Instead of criticising the Government’s healthcare data strategy for being pursued too fast, people worried about privacy should instead be working with the Government to make sure the privacy safeguards are in place so that the health benefits can be achieved as soon as possible. The longer any delays take, the fewer number of people who will benefit from any reforms. When people’s lives are at stake, there should be no time to lose.”

One of CCWY’s officers had created a similar PM Absolute list with accompanying software, and received several PM Absolutes from a security operative who used FTS’s software. That officer then posted those PM Absolutes on an Internet forum for other officers to add to the list, and also used them to develop his own list and software.

FTS issued proceedings, claiming that its list was copyright protected (as it was a table or compilation that was not a database that was its own intellectual creation) and that CCWY and the officer in question had reproduced that list and infringed the copyright. FTS also claimed that the list was protected by database rights that had also been infringed and that its confidence had been breached by the publishing of the list on the Internet forum.

The High Court ruled that:

1. there was no copyright in the list under the Copyright, Designs and Patents Act 1988 as the list had been put together by trial and error and not by the type of intellectual creation of the author that was necessary to be protected by copyright. The list was not planned and had no set design, was not the author’s own intellectual creation due to the way it was arranged and selected, and had no structure that warranted copyright protection; rather, it was simply a list of data compiled over time;
2. the list was a database that FTS had made a substantial investment in obtaining and verifying that data contained in it, which did require skill and effort; it was therefore protected by database right. CCWY and the officer had extracted and reutilised a substantial part of the database, both in terms of the number of PM Absolutes and the detail contained in each, and had breached the database right; and
3. CCWY and the officer had breached FTS’s confidential information by posting the list on the website forum.

CCWY was held to be vicariously liable for the officer’s actions.

UK patent applications can be refused on various grounds, one of which is if the patent subject matter falls within an excluded type, such as pure business methods, a method for performing a mental act or computer programs that do not have a technical effect.

The High Court has allowed the appeal, and has referred the application back to the IPO for reconsideration.  The ruling was made on the basis that the application made a significant contribution with a relevant technical effect, such that the software should not be considered wholly within the computer program exclusion from patentability.

This ruling is further evidence of the alleged ‘over strict’ interpretation of the exclusions from patentability by the IPO.

A hearing officer at the Intellectual Property Office has allowed Hewlett-Packard’s appeal against the rejection. The appeal was allowed following the consideration of previous cases, in particular the High Court’s ruling in Halliburton, which concluded that mental acts could be patented where mathematical calculations with software and are technical enough to be patentable, and that the exclusion of patentability for mental acts should be interpreted narrowly. The application was sent for further examination by the IPO following the decision.

The paper states that the principles of cloud computing, where file and programs are stored effectively on the Internet, must comply with the strictest principles of data protection and privacy. It goes on to argue that a watchdog body should be formed to regulate cloud computing services, with an emphasis on transparency of cloud computing operations.

The consultation can be accessed here: http://ec.europa.eu/internal_market/consultations/docs/2011/audiovisual/green_paper_COM2011_427_en.pdf.

The EC has now announced proposed revisions for the Roaming Regulation, which would see it stay in place until 2022. The proposed revisions would include:

• the introduction of a roaming structure by which a consumer would be able to have a mobile roaming contract separate from their regular domestic mobile contract, and mobile network operators would be able to use other operators’ networks across the European Union at regulated prices;
• continued reduction of the cost of voice calls and text messages when roaming until structural measures within the market, to ensure the maintenance of low prices, become effective in 2016; and
• the introduction of a price cap on mobile data services.

Click here to view the article in full.

Last year, Apple filed proceedings against HTC for the infringement of 20 patents, but HTC counterclaimed, accusing Apple of patent infringement, and attempted to have the sale of iPhones, iPads and iPods banned in the USA.

Meanwhile, Apple and Samsung are in a spat, accusing each other of copying each other’s technology.

In 2009, the High Court ruled in Internet Broadcasting Corporation (t/a NetTV) v Mar LLC (t/a MARHedge) that there is a rebuttable presumption that an exclusion clause should not apply to a deliberate personal repudiatory breach of a contract. In that case, the High Court ruled that extremely clear drafting would be needed for a court to rule that the parties intended an exclusion clause to cover a deliberate personal repudiatory breach. The Court had said that there was a presumption that a party would not intend to limit their liability for really serious deliberate breaches (such as deliberately walking away from a binding contract).

What happened in this case?

In this case, AstraZeneca (AZ) and Albemarle International (AI) entered into an agreement for AI to supply a product called DIP to AZ that AZ then distilled to produce propofol. AZ foresaw that it might, at some point in the future, be more beneficial to be supplied with propofol rather than DIP, and the agreement contained a provision that, if AZ did want to make such a change to its process, it would give AI first refusal on the supply of propofol.

AZ later told AI of its intention to enter into an agreement with a third party (“S”) for the supply of propofol. AI objected as it wanted to continue to supply and cited the first refusal provision in the agreement. Negotiations ensued, but, despite AI matching the third party offer of supply, no agreement was reached, and AI served notice to terminate for AZ’s breach of the first refusal provision which had not been remedied on demand. During the negotiations, AZ attempted to stockpile the goods, whilst AI refused to supply two additional orders made by AZ under the agreement, although this did not affect AZ’s operations. Things got rather messy as allegations were thrown around about who was breaching the agreement.

AZ issued proceedings against AI for breach of contract as AI had failed to supply the two additional orders. AZ argued this was a repudiatory breach entitling AZ to terminate the agreement and claim damages. AI denied the claim, and further argued that any liability it might have was, in any case, limited by an exclusion clause in the agreement. AZ argued that AI could not rely on the exclusion clause because (following the ruling in the NetTV case) the breach was deliberate and repudiatory. AI then counter-claimed for breach of contract due to the alleged failure to give it first refusal on the right to supply propofol, but AZ denied liability.

The ruling

The High Court ruled that AI was, on the facts, in breach to AZ for its failure to fulfil one of the two additional orders and was liable in damages for that breach. However, it went on to rule that failure in respect of one or two orders did not amount to a repudiatory breach of a minimum three year contract.

Meanwhile, AZ was also liable for failing to honour the first refusal provision and AI was entitled to terminate the contract as a result of that breach. However, despite that liability, the High Court had to decide whether the exclusion clause excluded or limited the liability of either party and in particular whether AI could claim for its loss of profits despite an apparent provision excluding liability for lost profits. Meanwhile, although AI’s failure to supply was not serious enough to be repudiatory and although the breach was not deliberate (as AI had had legal advice that suggested that it would not be breaching the agreement in the circumstances by failing to supply), the court went on to consider the issue of deliberate repudiatory breach anyway.

Right of first refusal

Where AZ had decided to move to buying propofol rather than DIP and it was considering an offer to supply from a third party, AZ was under an obligation to provide AI with full details so that AI could match the opportunity. Of course, issues may arise in the course of negotiating that could mean that AI would not supply on the terms offered by S, but if AI was willing to match the terms that AZ was minded to accept from a third party (as happened here) then AZ was obliged to accept AI’s offer. The right of first refusal clause had to mean something. AZ was obliged to provide full disclosure of the terms of the proposed deal with S and act in good faith to AI. The only sensible construction of a right of first opportunity was to give AI sufficient opportunity and right to match the offer and not just as AZ was about to award the contract to S. AZ was in breach of the right of first refusal clause, and AI had rightly given AZ 30 days to remedy the breach and then rightly terminated the contract when the breach was not remedied.

Waiver

The court added that AI’s willingness to continue negotiating after that 30 day period had expired did not amount to a waiver of its rights. It could still terminate despite not exercising that termination right immediately.

Deliberate Repudiatory Breach

The High Court ruled that, if there had been a repudiatory breach by AI, it had not been deliberate as AI had followed legal advice that it was acting within its contractual rights (albeit the legal advice had been incorrect). As such, there was no question that the exclusion clause applied and limited AI’s liability. However, the Court went on to consider what would have been the position had the breach been deliberate and repudiatory. It said that the decision in NetTV had in fact been misguided, and that deliberate repudiatory breaches should not be treated any differently from any other breach. The High Court said that, although it was not necessary to consider whether or not an exclusion clause applied to a deliberate personal repudiatory breach, it would be inclined not to follow the NetTV ruling if it did.

Limited “Contra Proferentem” interpretation of exclusion clause in relation to breach of right of first refusal provision

The exclusion clause said “No claims by AZ of any kind whether as to the products delivered or for non-delivery of the products, or otherwise, shall be greater in amount than the purchase price of the product…; and failure to give written notice of claim within 60 days from the date of delivery, or in the case of non-delivery, from the date fixed for delivery, shall constitute a waiver by AZ of all claims with respect thereto. In no case shall AZ or Albermarle be liable for loss of profits or incidental or consequential damages.”

AZ argued that it was not liable for AI’s lost profits arising out of its breach of the right of first refusal provision. However, the Court ruled that, in line with English law rules of interpretation on liability clauses, the exclusion clause had to be construed against the party seeking to rely on it if there was the slightest bit of doubt in the meaning (a rule known as “contra proferentem”). AZ’s interpretation would have meant that the first refusal provision would have been no more than a statement of intent, leaving AZ with no incentive to comply with it, which a court would always seek to do everything to avoid if there is no alternative construction.

In this case, the alternative construction was that the second sentence in the exclusion clause (ie the exclusion of lost profits) had to be read in the same light as the first sentence within the same paragraph – ie applying to late or non-delivery of DIP products. On that interpretation, it was not intended to deal with loss of profits arising out of not giving AI the opportunity to supply propofol.

Comment

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments, “This ruling is important because it deals with four important issues relating to commercial contracts – deliberate repudiatory breach, the meaning of rights of first refusal, waiver during contract negotiations and contra proferentem.

 ”The ruling in NetTV stated that deliberate repudiatory breaches can, in some circumstances, be covered by an exclusion clause but only if express words are used. This ruling suggests the opposite, in that liability would be restricted or excluded for deliberate repudiatory breach just as much as with other forms of liability. Those comments are not strictly binding on future cases, as the High Court did not need to make a ruling on that issue, as it had already ruled that the breach was not deliberate or repudiatory anyway. This uncertainty is not particularly helpful for businesses that need to know how to draft contracts going forward, but the best advice would be to draft appropriate wording to reflect the level of risk the parties are willing to take and not leave it to the courts to decide.

“The part of the ruling dealing with the narrow interpretation of an exclusion clause against the party seeking to rely on it – the ‘contra-proferentem rule’ – which meant that breach of the right of first refusal provision in the agreement was not covered by the exclusion clause is actually just a very useful reminder of existing rules. Exclusion clauses should be professionally drafted by specialist lawyers. A party to a contract should play devil’s advocate when drafting an exclusion clause and try to understand what a court might see from the outside looking in, rather than just looking on what might be beneficial for the business itself.

“The interpretation of the phrase “right of first refusal” was also extremely useful. That phrase is sometimes used in a contract but this ruling gives real insight into what that actually means.

“Finally, the decision that one party had not waived its rights of termination when it continued to negotiate for a few weeks in good faith was also helpful.

“All in all, this is a major judgment that affects all commercial dealings. We will have to see, though, whether the ruling will be appealed.”

The parties have each interpreted the ruling differently. IPCom hopes to have 3G Nokia phones banned from the UK unless Nokia agrees to enter a licensing agreement and pay licensing fees relating to the patent. However, whilst the High Court did not specify which Nokia phones infringed the patent, the ruling did refer to phones using alternative software to the patent. Nokia argues that its current 3G phone offerings all use this alternative software, and that any infringement occurred only in older versions –as such, Nokia believes that no ban or injunction preventing the sale of those products in the UK can take place.

The technology automatically recognises users in photographs where a person in the photograph has been ‘tagged’ and then applies the technology to other photographs to automatically suggest a name to tag the person in the photograph, but without the subject’s consent. The technology has been switched on but as far as the user’s privacy settings are concerned, this has been done on an ‘opt-out’ rather than ‘opt-in’ basis.

The concern stems from the fact that Facebook has not told users how the information collected by the technology will be used nor obtained prior consent, and the fact that privacy settings are not as clear as they might be. The use has been criticised by the European Union’s Article 29 Working Party, which represents the ICO and its counterparts across the EU. The ICO has suggested that users should be given more information about the technology and the ability to refuse consent to its use in relation to their profile.

• Continued push for a single European Union patent system.
• Modernisation of the European Community Trade Mark system. This would include speeding up the registration procedure and increasing certainty over what constitutes a registrable trade mark.
• Creating a comprehensive framework for copyright in the digital single market. That would include multi-territorial collective management of copyright so that there would be online copyright licensing. There would also be a consultation on user-generated content to see if there should be more freedom for amateur producers of non-commercial film to be exempt when incorporating other copyright works. In addition, the Commission said it would propose a Directive on permitted uses of orphan works, and it actually proposed the Directive this at the same time as the strategy document.
• Replacement of the Customs Regulation to strengthen enforcement of intellectual property rights. As with the orphan works proposal, this was also introduced at the same time as the publication of the strategy.

For more on the strategy, click here: http://ec.europa.eu/commission_2010-2014/barnier/headlines/news/2011/05/20110524_en.htm.

• Creation of a Digital Copyright Exchange. This would be a centralised digital copyright works marketplace where licences to copyright content could be readily bought and sold, akin to a copyright shop. This would extend what currently happens with through music collections agencies such as PRS. The aim is to have this implemented by the end of 2012. In addition, the UK should support the European Commission’s proposals to establish a framework for cross-border licensing.
• Introduction of legislation to permit use of orphan works – copyright works where the rights owner has not been ascertained. The European Commission has also come up with similar plans recently.
• Allowing wider exceptions for lawful copying, such as to include format shifting between a laptop and mp3 player, which is still unlawful. This may also include copyright exceptions for non-commercial research, such as digital copying of medical journals for computerised analysis in research. Parody and library archiving would also be exceptions to copyright. The exceptions would be enshrined in law and non-excludable by contracting out by agreement between the parties. There is no place in the report for anything as extensive as the “fair use” exception along the lines that US law has, as that would not be compatible with European Union law.
• Increasing the Intellectual Property Office’s ability to give legally binding opinions on changes to intellectual property law in response to economic or technological changes.
• A careful look at the enforcement of intellectual property rights. The Government should look not just to enforcement but also education, growing legitimate markets and modernising copyright law. Other countries’ experiences should be considered when the Digital Economy Act starts to become operational in 2012.
• Try to remove patent thickets that stifle innovation. Thickets arise where there are overlapping patent claims by multiple applicants, resulting in delays and extra costs in innovation. This should involve cutting backlogs in patent applications. There should also be a disincentive – perhaps through cost of additional fees for patent renewals – to discourage patents that do not add much value. Computer-related patent rules also need to be clearer and stricter to avoid patents being granted for non-technical inventions or business methods.
• Investigate whether the system of protection for designs should be made clearer. The Intellectual Property Office should conduct an assessment based on evidence within the next 12 months to consider the relationship between design rights and innovation.

It now remains to be seen what the Government will do in terms of implementation of the recommendations within the report. There have been other intellectual property reviews previously – most notably the Gowers Review – which were not then followed-up significantly.

It gets worse. Margaret Hodge, Chairwoman of the Public Accounts Committee, has now become so concerned about the lack of confidence that she said it should be questioned whether the project should be stopped altogether, even at this late stage. The total spending for the entire project so far is £6.4bn, with an expectation of it rising to at least £11.4bn by completion.

The NAO said that the Department of Health needs to admit that it is now in damage limitation mode. 

The prognosis for the chances of a successful conclusion to this operation do not look good!

The change reflects EU legislative changes, but after considering the issue over the last couple of years, the Government has suddenly given website operators the news that they had been dreading just before the 26 May deadline: it will not be enough to obtain consent automatically on a general basis through their users’ browsers; other steps will be needed.

This has led to concerns as to how it will affect the user-friendliness of sites. But the law is clear – consent is needed. How to show consent is not clearly set out in the new law. The Information Commissioner’s Office has provided some guidance with suggestions. The type of consent the user must give will vary according to what the cookie contains, at what point in the process it is placed and also according to what the user may already have agreed to.  See here. However, the guidance does not give totally definitive answers.

We have already been advising clients on how to comply with this new law and have come up with some practical suggestions of our own. If you would like to obtain our advice, please contact us on mark.weston@mablaw.com or paul.gershlick@mablaw.com.

UPDATED 26 May: The Information Commissioner stated on 25 May, the day before the law comes into force, that although the law will still come into force on 26 May, his office will not take enforcement action for the first year following implementation against a site not obtaining consent to its use of cookies, provided that the site still provides clear information on the cookies used and it uses a brower-led solution by 25 May 2012.  In the meantime, the Commissioner will be working with Internet browser providers to find a technical solution so that browser-led consent can be provided within that timeframe. 

If websites can obtain consent through other means in the meantime, that would still be preferable, particularly as some people may not access a website through a browser and they would still need to give consent to cookies.

The survey can be found here: http://www2.lse.ac.uk/media@lse/research/EUKidsOnline/ShortSNS.pdf.

The CAP Code is a code of practice governing the content of adverts and marketing communications, administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.

The High Court dismissed Southwark’s claim. The framework agreement and the order had to be read together, so the reference to the Orchard software being of satisfactory quality had to be read in conjunction with the warranty in the order. The software conformed to the standard set out in the order. The judge said that satisfactory quality should be interpreted in that light rather than given the meaning under the Sale of Goods Act. It was clear from the wording in the contract that no statutory terms (including fitness for purpose or satisfactory quality) would be implied. The judge added that, in any event, the Sale of Goods Act would not apply in this case because there was no sale of any goods, as the contract made clear that there was no transfer of property in the software as the software was licensed rather than sold and on termination of the agreement all copies had to be returned or destroyed.

The Employment Tribunal disagreed and said that the decision was fair. The action had damaged his employer’s reputation and their decision was within the range of reasonable responses. Gosden’s argument that he should not be held responsible for his colleague’s decision to forward the email was dismissed because the subject was clearly something that was intended to be passed on and not remain private.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This ruling shows that employees cannot assume that offensive material accessed or posted in their spare time has no impact on their employment. People who use technology such as email and social networking sites need to be careful all the time. Meanwhile, employers should ensure that their rights are preserved and dealt with properly in an IT and Internet use policy.”

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “It is clear from the fines that the regulator has issued since the introduction of their new powers to fine £500,000 for serious breaches of the Data Protection Act, that they are looking to clamp down on unencrypted laptops, even if they are password-protected. This happens a lot. What should concern anyone that processes data about people is the way in which the regulator also seems happy to dish out fines to organisations that use other service providers to help with the processing of their data. This may apply to anyone who has a website hosted, outsources payroll, or any other outsourced service.”

Atos failed to fully understand the complexity of De Beers’ requirements, resulting in significant delays to the project, but this was due, in part, to De Beers’ inability to finalise the scope of the project. There was misunderstanding on both sides and the project did not progress as well as had been hoped. As a result of the delays, De Beers decided to withhold payment of an interim invoice.

In response, Atos Origin refused to continue work on the project unless the contract was renegotiated, as it believed that the project had altered substantially in cost, specification and deadline. Atos Origin demanded that the contract be renegotiated to reflect the change in scope. Although negotiations took place, a variation to the original agreement could not be agreed and no further work took place.

Both parties claimed that the other had repudiated the agreement, breaching its terms by indicating that they no longer wished to be bound by it.

The High Court ruled that both parties had contributed to the failure of the contract. De Beers had not had a right to withhold payment of the interim invoice, but that non-payment did not amount to a repudiatory breach. However, in stopping its performance of its obligations under the contract, Atos Origin had committed a deliberate and wrongful breach of contract, which amounted to a wrongful repudiation of the agreement.

The High Court noted that Atos Origin did actually have a right under the contract to suspend work whilst waiting for De Beers’ payment, but the way in which Atos Origin communicated the threat to suspend services was an indication that Atos Origin was not willing to continue on the terms of the existing agreement, and would only proceed on their own terms.

The High Court ruled that De Beers was entitled to recover £4.4 million to cover the cost of modifying its old software system and purchasing a replacement system, less costs it would have incurred had Atos Origin not terminated the contract, totalling nearly £3 million. As such, Atos Origin was liable to pay De Beers some £1.4 million in damages, not including any claims for interest.

Simon Weinberg, a solicitor at Matthew Arnold & Baldwin LLP and assistant editor of Upload-IT, comments: “This case shows how important it is to be realistic and to have clear intentions in negotiations over an IT contract, together with commercial sensitivity in any subsequent renegotiation or variation. Suppliers must understand their customers’ requirements and ensure that they have the necessary expertise to fulfill their obligations under any agreement they enter into. At the same time, customers must limit the risk they expose themselves to, making sure that they participate in their project and that they are doing as much as possible to prevent the failure of the project.

“Here the High Court ascribed blame to both parties, and could so easily have ruled that no damages were payable. Business-critical IT contracts are essential to any business and can be expensive. It makes sense to negotiate them properly and to ensure the parties’ expectations are properly reflected in a clear written contract.”