Force India fell behind in payments and, unbeknown to Force India, Aerolab, with its parent company Fondmetal Technologies (Fontech), began working for Lotus (operated by the two Malaysia Racing Team companies), a competitor of Force India in F1. In doing so, Aerolab put all the CAD files it had created for Force India onto a hard drive and kept it at its own premises with a model Force India F1 car, blocking Force India’s access to its servers. Aerolab and Fondtech then issued proceedings in Italy to recover the amounts owed by Force India, and began using Force India’s CAD files as a starting point for the work for Lotus.

Aerolab then took some photos of the Lotus F1 model it was working on, but, as the model was incomplete, used some of Force India’s wheel rims and tyres to make the model look complete. Whilst the photographs were intended for internal use only, they were actually made public, and Force India issued proceedings for:

1)    breach of the confidentiality and exclusivity clauses of its agreement with Aerolab and its parent company Fondtech;

2)    equitable breach of confidence against Lotus and Michael Gascoyne (who was previously Chief Technical Officer at Force India but then moved to Aerolab); and

3)    copyright infringement against Lotus.

Aerolab counterclaimed for the money owed to it by Force India.

The High Court ruled in favour of Force India as follows:

1)    Breach of agreement and confidence by Aerolab and Fondtech

Force India had committed a repudiatory breach of the agreement with Aerolab by not paying the fees due under that agreement. Aerolab had accepted that breach and had not breached the exclusivity provisions in the agreement by working for Lotus as it had only started work after the repudiatory breach. However, the confidentiality provisions were ruled to have survived termination.

The High Court pointed out that employees moving from Force India to Lotus could use information that was part of general skill, knowledge and experience in their new role, and that some of Force India’s pleadings were not as specific as to what amounted to confidential information as they could have been. It was agreed between the parties that some of the CAD files had been used as a starting point by Aerolab, misusing Force India’s confidential information, but the High Court ruled that this was not the same thing as using the confidential information to create the Lotus designs. Given the huge differences between the resultant F1 cars that had been produced by Force India and Lotus, the High Court decided that misuse could only be proved in relation to the use of the CAD files as starting points. However, the CAD files still had a high value within the F1 industry, and awarded Force India equitable compensation for that misuse by estimating what fee Force India would have received for giving consent to Lotus to use the CAD files as a starting point. The High Court awarded €25,000 in compensation to Force India, but Force India owed nearly €850,000 in unpaid fees to Aerolab and Fondtech, so that compensation was set off against the much larger amount owed.

2)    Claims against Mr Gascoyne and Lotus

Force India claimed that Mr Gascoyne, and therefore his new employer Lotus, had induced Aerolab’s breach of the agreement. The High Court ruled that, on the evidence, Mr Gascoyne, and therefore Lotus, had no liability. As such, this claim was dismissed.

3)    Claim for copyright infringement

The High Court decided that each CAD file was a literary and artistic work, and, when they were created for Lotus, they reproduced substantial parts of Force India’s works. This reproduction happened in Italy, outside of the jurisdiction of the English courts. However, Lotus then made further copies of the Lotus CAD files in the UK, which amounted to copyright infringement, but only in relation to a few of the F1 car parts about which infringement was pleaded by Force India. 

Force India therefore succeeded in the claims that it brought to the High Court, but was still left with a huge award against it for the fees it had left unpaid under the agreement with Aerolab.

The process of compiling the fixture list for a season involves many complicated steps. This involves some golden rules such as the number of home or away matches a club may have near other home or away matches or at certain times of the week. In addition to the golden rules, the leagues try to take account of the many requests from clubs as to avoiding home games when certain other teams are playing. There is human input into preparing a fixture list to comply with the golden rules and seek to accommodate the other requests, as well as discussing the position with the police. The process involves some random input but also some human effort.

Following a referral from the Court of Appeal, the European Court of Justice has confirmed that not only is there no database right in the fixture lists, there is also no copyright either. For copyright to apply to databases in the EU under the Directive which sought to harmonise the position across all EU countries, there must be the author’s intellectual creation in the selection or arrangement of the database contents. This intellectual creation in the structure of the database is not the same as the intellectual creation or effort that goes into the creation of the data itself (which is what the human effort done by Dataco involves).

Crucially, the ECJ said that significant skill and labour on building a database is irrelevant to database copyright under EU law now, unless it involves originality in the selection or arrangement of the data.

The ruling also means that databases assembled by automated means rather than creative originality will not qualify for copyright protection.

The High Court’s ruling is a direct application of the ruling of the European Court of Justice, ruling that:

-       national legislation that restricts the sale or use of foreign decoder cards is in breach of Article 56 of the Treaty on the Functioning of the European Union and it infringes the freedom to provide services; and

-       exclusive licence agreements that restrict the supply of decoder cards to TV viewers who want to watch those broadcasts outside of the Member State for which the licence is granted are in breach of Article 101 of the Treaty, which prohibits agreements that have as their object or effect the distortion of trade between Member States.

Together with the recent ruling of the High Court in the case of the FA Premier League v QC Leisure, which dealt specifically with copyright issues, it certainly gives the FA Premier League food for thought as to how it will license rights to show matches in future, rather than on the exclusive territorial basis that the High Court has ruled is incompatible with European Union law.

The ECJ had ruled that the transmission of PL copyrighted works by television in pubs was a communication to the public under article 3(1) of the Copyright Directive, and the High Court ruled that that article was effectively transposed into English law by section 20 of the Copyright, Designs and Patents Act 1988 (CDPA). The Copyright Directive requires member states to provide authors with the exclusive right to authorise or prohibit any communication of their works to the public by wire or wireless means, including the making available of their works to the public in such a way that members of the public may access them from a place and at a time individually chosen by them. Article 3(1) states that a communication to the public of a copyright work is an act restricted by the copyright in a literary, dramatic, musical or artistic work, a sound recording or film, and includes transmission by electronic means. Therefore, the publicans were technically breaching section 20 CPDA when they screened PL games through a decoder card.

However, the High Court ruled that section 72(1)(c) CPDA sets out a defence – that the showing or playing in public of a broadcast, to an audience who have not paid for it, does not infringe any copyright in the broadcast or any film included in it. The High Court ruled that it was clearly the intention of section 72 CPDA to allow films included in broadcasts to be seen and heard in pubs without the consent of the copyright owners, and that any infringement was limited to the PL anthem and graphics.

The High Court also ruled that obligations in exclusive licence agreements to prevent the supply of decoder cards outside the licensed territory breached article 101(1) of the Treaty of the Functioning of the European Union as they restricted competition, so were void to the extent that they restricted the Greek licensee in question from supplying the cards for use in the UK.

As with the decision of the ECJ, both sides can find reasons to be happy with the High Court’s ruling. The PL has some aspects of copyright that it can enforce, but the publicans have received the High Court’s support that the PL’s actions were anti-competitive. It remains to be seen how publicans can deal with the copyright infringement of the PL anthem and graphics – the anthem can simply be turned off and the publicans have made undertakings to do so; however, the graphics may prove to be more difficult to deal with.

The investigation follows the granting of an enforcement order by the High Court in August 2011 against Ashbourne Management Services Limited, a gym management company, following an application by the OFT. The order related to the use of unfair contract terms and debt collection practices that amounted to unfair commercial practices.

If the OFT finds that its concerns are justified, it can take enforcement action itself, make recommendations for action to the Government or refer the market to the Competition Commission.

Correct. It was HMRC’s Chris Martin (who was propelled into the spotlight when Harry Redknapp and Milan Mandaric were found not guilty of tax evasion) putting a good spin on a rather embarrasing defeat.

It would be rather pointless to recap the events of this rather well publicised trial.  But what might be more interesting is to think about what this means to other tax payers.

First if you are a sportsperson then it’s probably good news.  My understanding of the oft mentioned £8m campaign was that it related to the whole operating to look into fraud in sport (not just Redknapp’s trial).  I also understand that it has led precisely nowhere.  If anyone from the Met is reading this, feel free to set me straight.  So politically, and economically, it seems that this campaign might be over faster than you can say “transfer fee”.

If you are a tax evader, it probably makes no difference.  I’ve not yet read the full case report but if HMRC can’t prove tax evasion then they won’t get very far.  I don’t want to do their work for them, but HMRC’s powers to get information from offshore tax havens is always increasing and the UK has entered into a number of Tax Information Exchange agreements that greatly assist in tracking down fraudsters.  If you are one of those, then Chris Martin (not that Chris Martin – the one at the start of the blog), is probably right.  There are a number of disclosure facilities which may result in a reduction in any penalties and it is worth speaking to an expert before turning yourself in!

There is nothing wrong per se in having bank accounts in tax havens, provided that you make sure that any tax planning is done properly.

If you are expecting a bonus, I also wouldn’t take this as carte blanche to become friends with your boss and ask for some seed money for your investments.  The law hasn’t been changed by this judgement – a bonus is still taxable, and it will be a question of fact as to whether or not a payment is a bonus.  The assumption should generally be that it is taxable, and any derogation from this would require professional advice.

There are also a lot of rather more “vanilla” and rather more tax efficient ways of motivating employees such as share options, which should be considered before paying sums into bank accounts in Monaco in the name of your dog!

If you would like to discuss any of these points, please contact our wealth management or employment teams.

Viagogo – the website – had objected to the hand over, saying that to do so would be disproportionate and infringe its users’ data protection rights. The Court of Appeal disagreed. The rights had to be balanced and the RFU was entitled to know about who was infringing its contract terms. The Court of Appeal therefore ruled that it was right to grant the RFU a “Norwich Pharmacal Order” against Viagogo to reveal the data. Whether or not the England rugby body used that data to take action against the sellers or the people who had provided the tickets to the sellers was irrelevant to the ruling.

The Regulations will remain in force until September 2012, and similar regulations will come into force in Wales and Scotland.

The relationship broke down in 2008 and was terminated in December 2009 by R and Stoneygate. P issued proceedings for breach of contract, suing Stoneygate for arrears of commission due under the agreement, both before and after termination. R argued that post-termination commission was not payable, and that the agreement was not enforceable in any case as it was an unreasonable restraint of trade.

The High Court ruled in favour of R, ruling that the agreement was invalid and unenforceable – it was a restraint of trade on the grounds that it imposed substantial restraints on R over a significant period of time, on terms that were uncommon in the industry, and had been agreed by inequitable negotiation between P and R when R was 17 and had not received legal advice. The High Court also ruled that, even if the agreement was enforceable, post-termination commission was not payable under the terms of the agreement. P appealed to the Court of Appeal on a number of points.

The Court of Appeal ruled that:

1. on construction of the agreement, post-termination commission was payable in relation to arrangements procured by P and for which Stoneygate received payment after completion; and
2. the agreement was a restraint of trade, despite the fact that R’s primary occupation was as a footballer and his primary earning potential was not through the image rights that were the subject of the agreement – the exploitation of image rights was almost always going to be ancillary to another occupation, and was just as capable of protection under the restraint of trade doctrine as any other occupation.

Due to the fact that the agreement was a restraint of trade, P could not recover accrued entitlements as the agreement was unenforceable in the first place.

Simon Weinberg, a solicitor in the Commercial/IP/IT team at Matthew Arnold & Baldwin LLP and assistant editor of Upload-IT, commented, “In this case, it was extremely difficult for the courts to see past the fact that, when the agreement was negotiated and entered into, one of the parties was a 17-year-old without legal representation; the bargaining powers of the parties were unequal from the start, undermining the basis for the agreement. The fact that its terms restricted Rooney’s own exploitation of his image rights until he was 25 was always likely to lead to arguments of restraint of trade once he did receive appropriate legal advice. This case serves as a useful reminder that, when negotiating a contract, it is important to ensure that the other party has legal representation; if they do not have that legal representation and the agreement seems to be one-sided, there is a risk that the foundations of that agreement will be challenged in future. If you convince the other side to sign without legal advice, and the terms of the agreement seem too good to be true, they probably are.”

The Department’s response to the consultation responses can be found here: http://www.culture.gov.uk/images/publications/GovtResponse_advertising_trade_london2012.pdf. The revised draft regulations are here: http://www.legislation.gov.uk/ukdsi/2011/9780111515969.

The ECJ has ruled that:

-       national legislation that restricts the sale or use of foreign decoder cards is in breach of Article 56 of the Treaty on the Functioning of the European Union (“Treaty”) and it infringes the freedom to provide services; and

-       exclusive licence agreements that restrict the supply of decoder cards to TV viewers who want to watch those broadcasts outside of the Member State for which the licence is granted are in breach of Article 101 of the Treaty, which prohibits agreements that have as their object or effect the distortion of trade between Member States.

The ECJ ruled that a breach of Article 56 cannot be justified either by the intention to protect the intellectual property rights in the broadcasts or in an attempt to encourage more people to actually attend the football matches being broadcast.

The ECJ also considered Article 3(1) of the Copyright Directive, which allows copyright owners to restrict any “communication to the public” of their works. The ECJ ruled that the transmission in a pub of broadcasts containing copyright protected works – in this case the opening video sequence of Premier League matches that contains the Premier League anthem – is a “communication to the public” under the Copyright Directive, and the consent of the copyright owner is required for such a communication.

The ECJ’s ruling is largely in line with the opinion of Juliane Kokott, one of the eight Advocates General to the ECJ whose opinions, whilst not binding, are usually followed in the ECJ’s ruling. It remains to be seen how the High Court applies the ECJ’s ruling to the facts of the case of Karen Murphy and other similar cases before it. It would seem that pubs cannot be prevented from obtaining foreign decoders to show Premier League matches shown by foreign broadcasters.

However, the part of the ruling relating to the Premier League’s anthem and opening video sequence may take the edge off the ruling for rights holders. It would seem that, if the Premier League can continue to include certain copyrighted content in the broadcasts, such as its anthem and opening sequence, commercial institutions such as pubs will not be able to show broadcasts from foreign broadcasters without the consent of the Premier League. However, this seems unlikely to impact on an individual’s rights under the ruling, who may be able to show such copyrighted material in their own homes as it would not then be a “communication to the public”.

Others have argued that the Premier League will find it hard to protect this copyright and enforce its rights against commercial venues if the High court agrees with this interpretation. Still, we may yet see increased amounts of copyrighted content in each Premier League broadcast which would further prevent commercial venues showing the broadcasts, and attempts by commercial venues to split the copyrighted content from the match itself, which the ECJ confirmed is not the copyright of the Premier League as it cannot be considered the Premier League’s own “intellectual creation”.

The ECJ’s ruling seems to have implications on how the Premier League, and possibly other rights holders in relation to films and music, sell their rights within the European Union. The ruling may result in a single EU-wide market for rights as the Premier League tries to mitigate the effect of the ruling; this would avoid the domestic price being undercut from overseas. This may impact on domestic broadcasters, such as Sky, who would then need to buy the rights on an EU-wide basis rather than domestically. But at least it would protect the value of their investment.

The High Court has ruled that the information contained in the article published was, in principle, protected by article 8. However, the High Court also ruled that there was a public interest in the publication of the article, based on:

1. an objective consideration of the public interest and what was significant to modern society, in particular that Ferdinand had occupied a high-profile position and the article published called into question his suitability for that position;
2. previous case law which suggested that the position of captain of the England football team was a role from which a higher standard of behaviour from the occupant was needed. This was particularly true at a time when the previous captain of the England football team, John Terry, had lost the position to Ferdinand for an extra-marital affair with the partner of a teammate; and
3. the fact that Ferdinand had, for some years, professed to be faithful to his wife – the article published had additional public interest if it proved that public claim to be false.

The High Court ruled that the article had not excessively infringed Ferdinand’s private life, and that the publisher’s right to freedom of expression outweighed Ferdinand’s right to privacy, with the justification based on public interest. The High Court has previously ruled in favour of people who have had their private lives exposed in many previous cases, so it is interesting to see a successful use of the public interest argument in practice.

It seems that Ferdinand’s own goal in seeking to project a particular public image may have cost him victory this time.

The High Court agreed with Playup’s claim. Givemefootball’s failure to deliver to the number of opted-in recipients amounted to a repudiatory (or fundamental) breach of contract. Playup was entitled to walk away from the contract. Buying in data did not satisfy the requirement to supply “opted-in” recipients. Although the agreement did not specify what a user should have opted-in to, it must have meant that they would have opted-in via the PFA website. The whole point of the agreement was to give Playup football access to the avid fans who were involved with the PFA Fans Awards rather than anyone who liked sport and could have come from another source, in order to maximise the chances of getting a positive response. Otherwise, Playup could have used its marketing budget for a cheaper and less targeted advertising campaign, such as through Google. “Targeted” had to mean just that and the other wording used in the contract reflected that purpose. The inclusion of the words “owned or controlled” by Givemefootball in relation to the databases was the result of careful drafting and did not infer bought in data.

The High Court added that the contractual requirement for data subjects to have provided prior consent to Givemefootball to receive direct marketing from Playup meant that the consent would have had to be made to Givemefootball rather than a third party data seller and the individual would have consented to receive the direct marketing from Playup or a class of which Playup was a member.

A lot of business is done in relation to marketing and promotional campaigns. Where one party agrees with another to run a targeted campaign, this decision makes clear that the campaign must be just that: targeted. That does not allow for buying in data from third parties to supplement the numbers, unless this still makes the campaign just as targeted.

The ECJ ruled that the legislation creating the monopoly was justified if it met the French government’s objectives relating to crime and society. The ECJ noted that there was no distinct market for online horseracing betting, and that the Internet was only one of many means of offering a game of chance, such that a perceived monopoly of the online market could not be considered a monopoly of betting on horseracing as a whole in France. The ECJ reminded national courts that, in considering claims such as this, they must consider all routes for a particular type of betting, and not just the Internet.

The Charter specifically bans political demonstrations and propaganda, and the IOC has said that use of social media such as Facebook and Twitter by athletes should be limited to non-commercial purposes, such as a first-person diary format to record their experiences. In addition, athletes are not allowed to release video or audio footage recorded inside an Olympic Venue, in order to protect the IOC’s licensing agreements selling the rights to broadcast footage with television and online entities. Any athlete who makes a false start could have their Olympic accreditation taken away from them – effectively preventing them from participating.

The different strands had co-existed for many years and even entered into a trade mark co-existence agreement in 1985 to apportion their various rights. Things became more heated when the two different strands entered into the same field of Formula One racing.

Group Lotus, the car manufacturer, brought a claim for breach of contract, passing off and trade mark infringement against a number of entities involved with the ‘Team Lotus’ Formula One racing team. The parties made various claims and counterclaims against each other relating to the trade marks, including infringement, invalidity and passing off, and there were accusations of repudiatory breaches of a merchandising licence. The facts of the case were very complex based on their developed relationships over time and previous acquiescence to what had gone on before.

In what was effectively a maintenance of the status quo, the High Court dismissed all claims and counterclaims relating to the passing off and infringement of trade marks, except for a revocation claim affecting the defendant’s trade marks as they had not been put to genuine use in the UK for a period of at least five years, when Team Lotus had stopped fielding a Formula One team.

The High Court ruled that the claimant was entitled to terminate a 2009 merchandising licence agreement for a breach by the defendant, and as a result could claim damages for breaches relating to the production of unlicensed products. The High Court also rejected a claim for post-termination misuse of the Lotus name, on the grounds that the defendant still had goodwill in the name and was entitled to continue to use it.

Of most interest in this multi-faceted battle was that the High Court decided that both parties had acquired goodwill in the same name and that goodwill had been retained by the defendant even during the period in which it stopped using the name; and, due to the fact that some entities enter several teams in Formula One under the same branding, the public would be unlikely to confuse the two Formula One teams using the Lotus name.

Therefore, both teams were free to start the race.

In the Max Mosley case against News Group Newspapers in 2008, Mr Justice Eady refused to grant an injunction to protect Mosley’s privacy as the video involving his sexual exploits had already been viewed about one million times on the Internet. He warned at the time that the court should “guard against slipping into playing the role of King Canute” and there could come a point at which privacy orders would not serve a useful purpose. In this latest case, it seems that the same judge is now playing King Canute out of his own defiance towards the civil defiance. He has justified the distinction on the basis that the Mosley video had already been viewed by so many people at the time of the application for the order. The differentiation seems tenuous, as he has now described the benefits of providing some protection from intrusion even if the information had been discussed openly by many.

We have come a long way since the courts filled an essential hole by developing the law of privacy out of the birth of the Human Rights Act to protect genuine cases of innocent people whose privacy was clearly violated – for example, when Gorden Kaye, the ‘Allo ‘Allo star, was subjected to gross invasions of his privacy by the press invading his hospital ward as he was recovering from a nasty accident during the Great Storm of 1987.  Genuine privacy needs to be protected, but politicians now feel things have gone too far as judges are routinely using the law to stop the press from being able to report about so much.  Where does it end?

Well Parliament could take a stand by changing the law if they are not happy with the balance currently being struck.  The Human Rights Act derives from the European Convention on Human Rights, but that legislation is not a condition of our membership of the European Union.  So if Parliament feels that the judges’ development of the Human Rights Act has gone in the wrong direction, they could pass a law clarifying how they expect the Act to be interpreted.  Or alternatively, they could repeal and replace the Act with another Act.  But very few people believe that the role of politicians should be to use Parliamentary privilege – which is a rule that allows Parliamentarians freedom to say what they want within Parliament without fear of being hauled before the courts – in total disregard for the court order as the way to name the Premier League footballer worshipped by many who has been at the centre of one of the super-injunctions.

Nevertheless, the position has become ridiculous when the newspapers are unable to report a story that is being repeated and discussed openly by many on Internet message boards and on social networking sites such as Twitter. The position took an interesting turn when the footballer obtained a High Court order against Twitter to reveal the name of the person tweeting his details.  The trouble with that was enforcement – Twitter is based in California and it is questionable whether the order would be enforced.

So when the Internet seems to be a bit of a lawless wild west over what is said there, it all seems a bit pointless stopping the traditional press from reporting on things that other people are freely talking about.  And the row over the super-injunctions and interest over who may be at the centre of them has led to far more publicity than the stars had been intending to suppress.

It is clear that the rules of the game need changing before this particular law looks any more out of touch.

The UK currently has the events on a ‘protected list’ under the Broadcasting Act 1996, an enactment of a European Union (EU) Directive, which allows EU Member States to designate certain cultural and sporting event for free-to-air television as being in the national interest. FIFA and UEFA have argued that, as a result, they cannot sell their respective events fairly, that it distorts competition and infringes their intellectual property rights. In February, the European General Court rejected the football governing bodies’ challenge, but they have now decided to take their challenge to the ECJ in a final attempt to get their way, although the appeal may take more than a year to even be heard by the ECJ. A similar appeal has been launched by FIFA against Belgium showing the World Cup on free-to-air television.

Whatever the outcome of the appeal, matches at the events involving England, Scotland, Wales or Northern Ireland (the ‘Home Nations’) will remain free-to-air. The appeal relates to matches shown in the UK not involving the Home Nations. UEFA and FIFA argue that these matches should not be shown on free-to-air television, but in their appeal they can only make arguments on points of law – for example, an argument that the European General Court breached procedure or law in their initial ruling, or that the European General Court lacked sufficient competence in making their initial ruling.

The rights for the European Championships in 2012 and World Cup in 2014 have already been sold. However, the rights for the European Championships in 2016 and World Cup 2018 will be sold by UEFA after the Football Association (FA), the governing body for English Football, agreed to let UEFA sell the rights collectively for both events, and the outcome of the appeal will directly affect UEFA’s intentions.

You get the impression that they are not just playing for pride, but this particular fixture will have big financial ramifications in an industry where money has become ever more important.

There is the thorny issue of facilitation payments – payments made to officials to speed up processes, for example to get an export licence through quicker.  Lots of business are asked to pay these, but what should you do, as the Bribery Act makes it clear that you should not pay them?

Corporate hopitality – can you take clients to Lords or out to lunch?  Can you send them a client to say “thank you”?  One interesting question that came up yesterday was whether you can take away the personal partners or families of the people you want to impress?

But a big thank you must go to Lord Triesman and the Sunday Times.  Thank you for providing a very live case study about alleged corruption by certain members of football’s international governing body, FIFA.   Can the Bribery Act catch them if they have done anything wrong?  Would accepting a gift that is for a charity or a “good local cause that helps the community” rather than the member of the committee’s back pocket amount to a bribe?  And what is the story with Qatar’s bid, because according to Transparency International Qatar is deemed to be a less corrupt place than the UK, as can be seen here: http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results?  Should England have played ball to have won the right to host the 2018 World Cup?  Or should England be keen to be the winner of the more humble fair play award?

In your own business, can you afford not to play keepy uppy with what your competitors are doing?  Or can you afford not to play ball with the requirements of the new Bribery Act?  Do you play a gung ho formation and just go for it, or play it with a solid defence?

These are the dilemmas facing businesses.  But there are very serious issues at stake and businesses can’t afford to bury their heads in the sand.  To continue the sporting analogy, you might want to make your own luck, and speak to us to find out more what tactics to pursue.

Now, Tottenham Hotspur and Leyton Orient are seeking a judicial review of the decision by Newham Council to give a £40 million loan to West Ham so that the football club can covert the stadium into a football stadium. The rival clubs argue that the loan breaches EU and UK law which prohibit state aid i.e. public money, from being used to fund private companies.

Leyton Orient is also challenging the Premier League’s decision to sanction West Ham’s move from its current home, Upton Park. Premier League rules state that, in order for a club to move to a new ground, the impact on other clubs should be properly considered. Leyton Orient argues that this has not happened.

A large number of other grounds for complaint are also being raised by the two clubs against West Ham’s proposed move. If any of the complaints are upheld, it seems the proposed move will be cancelled and the bidding process restarted.

So, in summary, the grounds need to fail for the ground to go ahead. 

Seems like the Olympics isn’t all fun and games…

The High Court has seen a similar case appear before it recently, where the landlord of a pub, Mr Turner, was showing Premier League matches that were received from ART, a broadcaster in the Middle East and Africa. The Magistrates’ Court had convicted him and fined him £500 under the Copyright, Designs and Patents Act 1988, and the Crown Court upheld this conviction after he had appealed it.

However, Mr Turner appealed the conviction to the High Court, arguing that the Crown Court should have considered European Union law and had not done so. The High Court agreed with Mr Turner, ruling that the Crown Court had misunderstood the ruling in the case of Karen Murphy, the landlady referred to above currently in front of the ECJ.

The High Court ruled that the appeal should be allowed outright, rather than just postponing the decision until the decision in Karen Murphy’s case has been given by the ECJ; however, the High Court made clear that they were allowing the appeal outright due to the fact that Mr Turner had now acquired an undoubtedly legitimate licence to show Premier League football in his pub, and the fact that the initial prosecution had taken place four years ago. It is unclear what the High Court’s ruling would have been if Mr Turner had been continuing his alleged illegal activity at the time of the hearing.

We eagerly await the final score from the ECJ in the Murphy case.

A European Union (EU) Directive allows each EU Member State to designate certain sporting and cultural events for free-to-air broadcast on television for the purposes of national interest. In the UK, this Directive was enacted by the Broadcasting Act 1996.

FIFA and UEFA challenged that law on the basis that it restricted their ability to sell rights to show the tournaments at the most favourable prices, and that it was an infringement of their intellectual property rights and a distortion of competition in the sports broadcast market. They accepted that, in the UK, the matches involving England, Scotland, Wales and Northern Ireland, along with the finals and semi-finals, should continue to be shown on free-to-air television, but they argued that they should have the ability to sell the rights to show other matches to subscription-only television.

The EGC rejected the challenge, and ruled that all of the matches that take place at such tournaments are ‘events of national importance’, making the free-to-air nature of the entire tournament compatible with EU law.

The EGC is the European court where first instance rulings are made, and appeals are made to the European Court of Justice. FIFA and UEFA have two months to appeal.

A ruling in favour of FIFA and UEFA could also affect the broadcast of events such as the Olympic Games and Wimbledon on free-to-air television.

I don’t act for any sports leagues.  That’s not to say I wouldn’t be interested, if someone from the FA, for example, reads this.

However, I know that stories about sports are always of interest (hence the fact that the slightly esoteric question of proper taxation of image rights is now familiar territory to a large part of the general public), so here we go.  Here we go.  Here we go.  Sorry.

HMRC have issued a notice clarifying their view of the VAT treatment of commercially operated sports leagues in response to enquiries from a number of organisations that run football leagues.

Background

Typically, a sports league provider will do most or all of the following:

• organise a league
• allocate fixtures to teams in the league 
• provide pitches for teams to play on (some league providers own pitches, others rent them from other parties) 
• provide referees
• determine results
• keep and publish scores and league tables
• award trophies to winning teams 

Payments for such supplies are collected in a variety of ways. For example, the sports league provider may charge a one off ‘admin fee’ to teams plus a ‘match fee’ for each game that is played.

Taxation

Some leagues have put it to HMRC that the essential nature of their supplies is one of pitch hire.  This relies on a series of VAT cases which rule that when you have provide one main service and there are added services ancillary to this, the VAT treatment is that of the main supply.  Following this, the leagues would not have to charge VAT.

Unsurprisingly, HMRC disagree with this and I suspect that most fans would too.  The supplies made by sports league providers consist of a bundle of elements, which are integral to each other.  HMRC consider that it cannot be said that there is one principal element to which all others are ancillary.

So what is that main supply?  In HMRC’s view, the overarching supply is of participation in a sports league, not a supply of land, and therefore subject to VAT at 20%.

Conclusion

It seems that by raising this as a question, the leagues have forced HMRC to go public with their views.  Rather an own goal, I’d say.  Sorry, again.

The High Court agreed that Etihad’s delay of about 10 weeks from finding out all the facts on which it relied for termination to the date of termination was too long. This was despite there being a ‘no waiver’ clause in the contract which had said that neither party waives the right to exercise rights under a contract by delay, as no waiver clauses only help and do not work indefinitely.

The Court of Appeal has now reversed the High Court’s decision. How long would amount to affirming the continuation of the contract is a question of fact based on the facts of the case. However, the Court of Appeal gave some very useful guidance. It said that the position would depend on:

• How clear the breach is to the innocent party.
• Whether the timing of the transaction was of the essence. Someone selling perishable goods would need to know the position very quickly.
• Whether silence and doing nothing would be misleading and make the other party assume the contract was continuing.

In this particular case, Etihad had held discussions and meetings with Force India to try to resolve things between mid-November and mid-January. Etihad terminated a couple of weeks after it was not satisfied with the proposals being offered in the discussions. It had been fair for Etihad to consider its position. Force India would have known that Etihad was considering its position. In addition, the delay had occurred during a break between Formula One seasons, so there had been no urgent need for a quick decision. In this case, a delay of about three months had not been a problem.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin and editor of Upload-IT, comments: ‘Each case turns on its own facts, but this decision is very useful. When an innocent party finds out that the other party has seriously breached the contract, it is left in a difficult position. It might want to terminate the contract, but if it wrongfully terminates because the other party’s breach is not serious enough then the supposedly innocent party could be the one acting wrongfully. The stakes are therefore high. The innocent party may want to consider its position and also see if it can still work things out with the other party. However, delay can prove fatal to exercising those rights.

‘This case sets out useful guidance as to whether a delay would be too long. There are also useful things that parties can do in practice to enhance their position. In general, having a well-drafted ‘no waiver’ clause in the contract should help. In addition, when a breach happens, the innocent party can take steps to show that it is considering its position so that the other party cannot assume that there has been a waiver based on silence, and that there is no urgent need for a decision (which the breaching party’s failure to disagree with may confirm). There are other steps that the party in breach can do too to protect its position. For more advice on a particular situation, please contact us.’

The OFT has the power to fine organisations up to 10% of their turnover for having an anti-competitive agreement contrary to the Chapter I Prohibition of the Competition Act. Third parties who suffer loss arising out of anti-competitive conduct can also sue for damages. In addition, individuals involved with cartel activity can be personally fined and jailed under the Enterprise Act.

If you miss the deadline it could be costly, as paper returns filed after this date could mean a £100 penalty.

An alternative to paper-filing is to file your return online, which benefits from a January deadline.

If you would like assistance in preparing and filing your tax returns, please contact James Odds on 01923 202020 or james.odds@mablaw.com.

The High Court did not see the merit in Force India’s position.  There was an obligation to provide a minimum of 6,000km to drive the car. That was not conditional on driving on Friday morning Grand Prix sessions or obtaining a licence – that involved additional rights. The terms of the agreement were that Force India would decide on the dates and the driver would participate in driving on those dates to the best of his ability. In fact, the driver had refused to drive at just one particular test date and that would have accounted for 266km of his entitlement. The minimum number of kilometres was therefore reduced by 266km, but otherwise the driver was entitled to damages for the rest of the difference (ie about 3,700km), amounting to compensation of US$1,865,000 at US$500 per km. That’s enough of a refund to drive the formula one company round the bend.

The High Court ruled that Umbro had breached the licence by allowing Dick’s to dip into the off-field market. However, it also agreed that Hudson Bay had breached the licence by doing likewise the other way. The Court of Appeal has now agreed with the High Court’s ruling. The reasoning turned on pockets. FIFA (the regulatory body) had regulations which said that on-field clothing could not have pockets; in contrast, off-field clothes generally did have pockets. There were other differences such as the size of logos, but that was the main distinguishing design difference. Hudson Bay argued that it had asked for authorisation to stock a design without pockets, which had been agreed to by the head of Umbro’s US subsidiary. However, that person did not have actual or ostensible authority to bind Umbro UK, which was the party to the licensing agreement. That lack of authority was borne out by other surrounding facts in the case, such as the delay in executing the original agreement which had been negotiated by Umbro US so that Umbro UK people could sign it.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘This case is interesting because of the sporting subject matter. But it raises another more serious point. When someone wants to get something approved or agreed by the other party in a contract, they should ensure that the individual they are dealing with has authority to bind that other party. Where in doubt, this should be checked with a board director.’

The High Court agreed that the contract was in restraint of trade and it was therefore void. It had been entered into when the footballer was just 17 years old. He had no commercial experience and was unsophisticated in financial and contractual matters. The terms of the agreement had been dictated by P and there had been no negotiation as to the terms. The contract was for a long period of time and did not provide for different commission rates according to revenue levels. Rooney and S had not taken independent legal advice as to the terms of the agreement. In those circumstances, the contract was unreasonable and unenforceable. However, P was entitled to receive payment on a restitutionary basis for services provided for which it had not yet received commission.

The High Court, however, ruled that Etihad was too late to object and its behaviour following the name change suggested that it had accepted the change. Accordingly, it was deemed to have acquiesced in the change and so lost a right to terminate. Therefore, its attempt to terminate amounted to a wrongful repudiation of the contract and meant that it had acted in breach of contract, rather than the other way round. The court awarded the team US$4.6 million in damages for the breach.

Paul Gershlick, editor of www.Upload-IT.com and a Partner at Matthew Arnold & Baldwin LLP, comments: ‘This case shows the importance of not delaying when exercising rights under a contract. Otherwise, you could end up in breach rather than the other party who committed the initial transgression.’