In 2011, Samsung pursued injunctions against competitors in the manufacture of mobile devices for infringement of its patents. This was despite Samsung having given a commitment to the European Telecommunications Standards Institute (ETSI) in 1998 to license standard essential patents relating to European mobile telephone standards to its competitors on fair, reasonable and non-discriminatory terms.  According to the EC, Samsung’s pursuit of an injunction may be an abuse of its dominant market position under Article 102 of the Treaty on the Functioning of the European Union. European standards are agreed specifications imposed by the EC in order to ensure interoperability of products, and standard patents should be licensed on fair, reasonable and non-discriminatory terms.

The EC has said that Samsung was obliged to license the use of 3G mobile and wireless technology patents to its competitors on fair, reasonable and non-discriminatory terms but that, in trying to enforce its rights over those patents against its competitors in court, it may have breached those obligations.

In a press release, the EC outlined the main changes that will be made to the data protection regime in the EU::

-          There will be one set of rules across the EU, rather than each EU Member State having its own rules.

-          The scope of the people caught by the data protection law will be increased. The rules will apply to data controllers who are not established within the EU if the data processing relates to offers of goods or services to data subjects within the EU or a monitoring of EU data subjects’ behaviour. Clearly, this is intended to cover large online players from the US such as Google.

-          In addition, what counts as personal data is being widened. Data will be personal data if it is not just data held by the data controller that can identify the individual but also data held by a third party which, in combination with the data held by the data controller, could identify. This could catch rights holders that hand over Internet Protocol addresses to Internet service providers for enforcement of copyright infringement under the Digital Economy Act 2010.

-          There will no longer be an obligation for organisations to notify (or register) all data protection activities to data protection regulators (such as the Information Commissioner’s Office (ICO) in the UK), but only data breaches will need to be notified; however, that will need to take place within 24 hours of becoming aware of the breach. Organisations will need to have continuous monitoring and reporting systems in place at all times. Security breaches must also be notified to data subjects “without undue delay”.

-          In place of general notification obligations, organisations will have to maintain documentation and records showing their processing activities, and be subject to strict audit requirements and produce that to the authorities on demand.

-          Data controllers will also have to comply with training requirements.

-          People will be able to access and transfer their own data more easily. They will have a right to be given their data in a convenient portable format such as a disk or MP3 file. They will also have a right to be told how long their data will be kept for.

-          Data subjects will have a right to be told where the data controller got their data from.

-          There will be a “right to be forgotten” where people will be able to delete their data if there are no grounds for it being retained. This will put a huge burden on Internet businesses in particular, which will have to do what they can to ensure links to the data is deleted by others even after they have deleted it.

-          Member State regulators, such as the ICO, will be strengthened to allow them to better enforce the rules, with possible fines of up to £1m or 2% of a company’s global turnover. The amount of the fine will depend on the nature, gravity and duration of the breach; whether the breach was deliberate or negligent; previous history of breaches; what security measures had been put in place; and the level of co-operation with the authorities.

-          All organisations will have to appoint data protection officers unless they have fewer than 250 employees, in which case they will be exempt from this requirement.

-          Clearer rules for the transfer of data across borders within multi-national organisations will be introduced. In addition, national data protection authorities will need to approve bespoke agreed clauses as an alternative to the standard contractual clauses for transfers between an organisation in one EU country and another organisation outside of the EU.

-          Any consent from a data subject will have to be explicit rather than implied. Any written consent such as a tick-box will need to be distinguishable from other consents. This would mark a change from current online acceptance practice.

-          Data access policies will have to be not only fair but also transparent.

-          The law will move from data being permitted if “not excessive” to effectively minimising the data as it will only be legitimate if the purpose cannot be fulfilled by processing non-personal data.

-          Data processors (people who process data on behalf of data controllers and do not take any decisions in respect of the data) are currently not subject to the data protection requirements. They are only caught under contract law when data controllers (as they are required to do) enter into a written agreement with the data processor to contain certain safeguards. That will change. Under the new regime, data processors will have specific direct obligations to maintain security of data under the law.

-          Data controllers will generally not be able to charge data subjects for data subject access requests.

The proposals will be sent to the European Parliament and the Council of Ministers for discussion, and will take effect two years after they have eventually been adopted.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP, comments: “This proposed law makes depressing reading. The Commission has trumpeted the ease of cost to business, but such a statement totally ignores all the other increases in regulation that this law would introduce. On balance, this will involve much more red tape for business to have to comply with. At a time when SMEs need a helping hand to grow and help to rescue the EU’s economy, this development is not going to be welcomed. Instead of considering SMEs’s legitimate interests, the Commission seems to have been too focused on protecting EU citizens against big US Internet businesses.

“The one plus side is that the new data protection law will be implemented in one consistent way across the whole EU; the major downside, though, is that it will involve much stricter obligations than businesses currently face, including tougher internal programmes and records and quick reports to the regulators and data subjects of data breaches. And there will now be much bigger fines for breaches. Let’s hope some of the provisions are softened before the law is passed.”

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.

The “Article 29 Working Party”, which is a committee of national regulators from each EU State (including the UK’s Information Commissioner’s Office), will provide the basis for the new board. The board will offer support to each country’s regulator and, it is hoped, will bring about more harmonisation between the data protection laws in each Member State.

In Apple’s business model, it calls itself an agent and gets a commission on the sale price. In genuine agency situations, the supplier is free to tell the agent what price to sell at. However, if it is not a genuine agency situation, this is forbidden. The EU rules as to what amounts to a genuine agency are complex. They include looking at who bears the financial risk or commercial risk in the sale of the books.

The Commission will now investigate. If found guilty, the parties to anti-competitive arrangements can be fined up to 10% of their turnover, the agreements are unenforceable and third parties can sue for damages.

In its recent second annual report on the competitiveness of the UK tax system, the Institute of Directors (IoD) has suggested that capital gains tax and inheritance tax should be merged in order to help simplify the UK tax system (much in the same way as the integration of income tax and national insurance would do.) The IoD suggests that capital gains tax should be charged on those assets held at death above a fixed and “reasonably generous” (but unspecified) threshold, and that inheritance tax could then be abolished. Its full proposals are here (see page 26.)

This is not the first time that the IoD has put forward suggestions to change the tax system – in 2007, an IoD discussion paper called for the abolition of capital gains tax and inheritance tax – and it is an idea that has been mooted by others for some time.

Following on from Spain’s possible prosecution at the hands of the European Commission for discriminating against non-residents, the Commission has now referred the Netherlands to the European Court of Justice (ECJ) for discriminatory rules on inheritance and gift duties, after it failed to amend its laws following a formal request in September 2010. Under Dutch legislation, country estates located in the Netherlands are fully or partially exempt from succession and gift duties if they are open to the public, while inheritance or gifts of country estates in other European Economic Area (EEA) States are taxed on 100 per cent of their market value. The Commission considers the difference in tax treatment to be contrary to the free movement of capital.

It is interesting, though, that UK inheritance tax laws in this area could themselves be potentially discriminatory. The UK offers a conditional exemption tax incentive (which is not limited to land in the UK) to historic houses that are open to the general public. Inheritance tax and/or capital gains tax is not paid when the qualifying property (or historic item, such as a painting or sculpture) passes to a new owner on death or is gifted. However, according to HM Revenue and Customs’ (HMRC) memorandum on ‘Capital Taxation and the National Heritage’, in order to obtain the exemption, the new owner must agree to look after the item/property, keep it in the UK if it is moveable, and allow “reasonable” public access to it. HMRC’s stipulation that public access to the property should be “reasonable” means that the relief cannot realistically be given to property or land outside the UK.

Not that the Government will be overly concerned about this.

With the EU currently threatening to sue the UK over its recently-signed tax agreement with Switzerland unless the Chancellor renegotiates it, the Government has more pressing things to worry about.

The ICO highlights that it believes the new framework must:

-          be clear and easy to understand and provide a cost-effective means of individuals exercising their rights;

-          set out a clear structure with overarching high-level principles based on risk, context and purpose with flexibility for enforcement bodies, rather than a prescriptive approach based on lists;

-          involve an obligation on organisations to carry out a private impact assessment where processing could have a significant or adverse effect on an individual, uses intrusive technology or creates a particular risk.

-          ensure that data processors are responsible and accountable, with the emphasis on the maintenance of standards rather than simply having a ‘process’ that complies with the law; and

-          allow the ICO more inspection and enforcement powers in both the private and public sectors with less emphasis on prior approval and authorisation of a data processor’s activities.

The ICO was critical of recent statements suggesting that consumers should have a “right to be forgotten” as it could mislead and create false expectations and be impossible to implement in practice.

The full text of the briefing can be found here.

1. the meaning of a “communication to the public” for the purposes of the Copyright Designs and Patents Act 1988 (the “Act”); and
2. the meaning of “reproduction in part” (whether individual frames amounted to a substantial part of the copyright work and whether the display of a broadcast on screen amounted to reproduction) for the purposes of the Act.

The High Court has now ruled that the first question should be amended for reference to the ECJ, as to whether the right to authorise or prohibit broadcasts extends to broadcasters of free-to-air programmes online to users who could lawfully receive those broadcasts on their televisions.

The High Court has also stated that the second question above has been answered by the ruling of the ECJ in the case of the FA Premier League v QC Leisure & Karen Murphy, which stated that copyright owners do have the “exclusive right to authorise or prohibit direct or indirect” reproduction of their content in the form of “transient fragments of the works within the memory of a satellite decoder and on a television screen, provided that those fragments contain elements which are the expression of the authors’ own intellectual creation, and the unit composed of the fragments reproduced simultaneously must be examined in order to determine whether it contains such elements”.

The EU has proposed several changes to the current data protection regime, including granting individuals a “right to be forgotten” by allowing them to force organisations to delete personal data they hold and making non-EU based organisations subject to EU data protection law if they store personal data of EU citizens in the “cloud” (i.e. storing the data on an Internet-based network rather than on local servers).

The Culture Minister responded that:

-          A “right to be forgotten” would give the public false expectations. His argument was based on the ease and speed with which data can be copied and circulated on the Internet, to the extent that the Government would be unlikely to pass a law into force that it was impossible to enforce.  After all, how could one organisation promise that someone’s photos had been permanently deleted when someone else may have copied them from that original site?

-          It was questionable how feasible it would be to enforce EU law against non-EU organisations and there was the possibility that the law would stifle innovation and economic growth in the sector.

The full text of the speech can be found here.

ENISA also expressed concern in relation to security and privacy risks from such practices. The report suggests that users are becoming increasingly dependent on websites storing their personal information to make their future visits quicker and easier; whilst this is a benefit to a user, it makes fraud and unauthorised access easier, with the potential for not only financial loss but also possible reputational harm, discrimination and even exclusion from websites altogether.

The report suggests that the other effect of the practice is that website operators are being put under increasing pressure to store and protect personal information in a legally compliant way, which they may not have the knowledge or financial means to undertake.

ENISA suggested that privacy-friendly mechanisms should be incorporated into new websites and software, with clear instructions for users explaining the risks involved in a personalised service.

In her statement, Reding said consumers should be more “empowered”. She also issued a warning that cloud computing service providers would face stricter provisions. Cloud computing refers to the making available of software and data on a network such as the Internet rather than on the user’s own servers.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This statement will send shockwaves through businesses. Currently, there are a number of grounds on which organisations can process data. They include if it is for their legitimate interests and it does not cause the data subject unwarranted harm. The statement is short so something may be lost in the translation, but at face value it suggests that the only grounds for processing data will be with explicit consent and that consent must be given in advance. That could prevent many businesses from functioning efficiently if they need to obtain explicit consent first every time.

“The new laws will also look to address the problem of social media site users saying something embarrassing and then never being able to remove it later, leaving them in an awkward position when a prospective interviewer checks them out on the web before a job interview. There has not yet been any clarity over users’ position when someone else posts a comment, photo or video clip about them on the web without their consent – if someone is featured in someone else’s posted content, will the subject be able to pull it?

“Further, the statement issues a warning for cloud computing service providers, but does not give any indication about how exactly their businesses may be affected.

“Overall, the statement leaves more questions than answers and is not particularly helpful for businesses looking to plan ahead to the new regime. They will have to watch this space over the next few weeks to see what the impact will be.”

The statement can be found here: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/11/762&type=HTML.

Inheritance and gift tax in Spain are regulated at both state level and at the level of autonomous communities (i.e. local level.) Spain has 17 autonomous communities (or “Comunidades Autonomas”) and each has a territorial basis, their own government and Parliament, and broad legislative and executive powers. This legislation grants Spanish residents a number of tax benefits that, in practice, allow them to pay much lower taxes than non-residents. Consequently, Spain has been referred to the European Court of Justice on the grounds that this practice goes against the principle of free movement of people and capital within the EU, and breaches the Treaty on the Functioning of the European Union.

This is not the first time that Spain has been in trouble over this issue. In May 2010 and February 2011, the European Commission requested Spain to amend its legislation so that it complied with EU rules on inheritance and gift tax provisions. However, although Spain “tweaked” its laws, no satisfactory amendments have yet been made.

It remains to be seen how Spain will respond to the threat of legal action, and whether it will now satisfactorily change its inheritance and gift tax laws. According to the European Commission, approximately 95 per cent of infringement cases are resolved before they reach the European Court of Justice, so we shall wait and see…

The ECJ ruled that those individuals that were the subject of stories published online not only had the choice of suing the publisher either in the country where the publisher is based or in the country where the individual had their “centre of interests”, but they also had the choice of bringing the claim in a country where the story or content was accessible (although only for the damage suffered in that country). In such an instance, the ECJ ruled that the relevant national courts could not apply a stricter law to the case than that applied by the courts in the country where the publisher was actually based.

In an age where content spreads so easily on the Internet, the waters have suddenly become more muddied for a publisher – it is now much easier than previously thought for a person who is the subject of a story to take action.

The first report considered how 14 social networking websites had implemented the 2009 agreement. This second report considered nine social networking websites, which included a range of blogging, gaming, file-sharing and personal social-networking functionality, and found that only two of the websites had default settings which made a child’s information visible only to approved contacts; the other websites shared a large amount of that information beyond a child’s approved contacts.

The EC has said that it will take into account the two reports when it undertakes a comprehensive initiative to empower and protect children when using new technologies, which is set to take place later this year.

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 ECH 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 draft ACTA document that had been published by the European Commission can be found here: http://trade.ec.europa.eu/doclib/docs/2011/may/tradoc_147937.pdf.

Interflora, a flower delivery network, operated under CTM and UK-registered trade marks of “INTERFLORA”. Marks & Spencer sold products online, including flowers. Marks & Spencer bought a number of keywords containing the word “INTERFLORA”, and other variations, on Google AdWords – a service provided by the search engine operator Google, where specific adverts appear against certain search terms. When users searched for “INTERFLORA”, a link to Marks & Spencer’s online flower delivery network appeared. Interflora issued proceedings in the High Court against Marks & Spencer for infringement of the Trade Marks Directive.

The High Court adjourned proceedings and referred a number of questions to the European Court of Justice (ECJ). These questions covered what constituted “use” of a registered trade mark by a competitor, what goods and services were considered “identical” for the purposes of the Trade Marks Directive and the Community Trade Mark Regulation, whether such use might lead a consumer to believe the trade mark owner and competitor are part of the same commercial network, and whether Google’s lack of restriction on the use of the trade mark by the competitor affected the application of the Trade Marks Director and the Community Trade Mark Regulation.

The ECJ has now ruled that:

-      A trade mark owner can prevent competitors using the registered mark as a keyword for goods and services identical with those covered by the registration if that use might adversely affect one of the functions of the mark. The ECJ identified three functions. In terms of the original function, use of the registered mark will have an adverse affect on the trade mark’s function of indicating origin if the keyword does not enable a reasonably well-informed and observant Internet user to recognise the identity of the service provider as against the trade mark owner’s identity. As regards the advertising function, the ECJ said that use of the keyword by a third party would not be relevant, even if it caused the trade mark owner to have to spend more advertising money in enhancing its exposure in response to search requests for the trade mark term. The third function was the investment function, which allowed trade mark owners to acquire and preserve a reputation to attract consumers and retain their loyalty; the ECJ ruled that the mere fact that a keyword leads consumers to switch to a competitor does not mean that the investment function is adversely affected.

-      A trade mark owner that has a particular reputation can prevent competitors using the registered mark as a keyword if such use takes unfair advantage of the character or reputation of the mark (known as “free-riding”) or causes detriment to the character (“dilution”) or reputation (“tarnishment”) of the mark. Use of the registered mark as a keyword cannot be prevented by the owner where the advertising offers an alternative to the owner’s goods or services, provided that the alternative is not an imitation of the owner’s goods or services, does not cause dilution or tarnishment and does not adversely affect the functions of the trade mark.

The ECJ’s ruling has added little to the existing jurisprudence. However, one aspect of the ruling might offer new hope to those seeking to prove infringement – the ECJ ruled that a “substantial interference” with the “investment function” of a trade mark (which is seen as the purpose of acquiring and preserving a commercial reputation) is an infringement of that trade mark.

The proceedings will now move back to the High Court for judgment, and it will not be until that judgment is issued that the full effect of the ECJ’s ruling will be seen. The “investment function” aspect may give Interflora an additional argument when the proceedings come back before High Court. However, it seems that the national courts will have to consider the ECJ’s ruling on a case by case basis based on the facts. In addition, given how widespread the use of keywords has become, it may become harder for a trade mark owner to argue that infringement has taken place through use of keywords – most Internet users are aware of the process and know what product they are looking for when they perform a search.

We await the ruling of the High Court to pollenate our thoughts…

The UK has supported the increase in protection, despite saying in the Gowers Review and Hargreaves Report that the case for the extension had not been made out.  The increase will benefit musicians from the late 1950s and 1960s such as Sir Cliff Richard, who have lobbied for the increase for several years.

The Directive must be brought into law within two years.  More information is available in the European Commission’s statement on this issue here: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/11/595&format=HTML&aged=0&language=EN&guiLanguage=en.

ITV Broadcasting, together with Channel 4 Television and other broadcasters, issued proceedings against TVC for infringement of copyright. The case came to trial with the broadcasters arguing that the copyright in the broadcasts and films was infringed by (i) TVC communicating them to the public, and (ii) TVC making transient copies of the broadcasts and films in its own servers and on the screens of its users.

TVC based its defence on the following arguments:

(a)                 section 20 (1)(c) of the Copyright Designs and Patents Act 1988 (CDPA) states that communicating a copyright work to the public by broadcast constitutes infringement of copyright, but this section went beyond the powers of the Secretary of State granted to it under section 2(2) of the European Communities Act 1972 (which grants powers for the implementation of European law in the UK) and the scope of the Copyright Directive, making section 20 (1)(c) “ultra vires” and therefore invalid;

(b)                 even if section 20 (1)(c) was validly enacted, TVC was not communicating the broadcasts and films within the meaning of that section and thus not infringing copyright;

(c)                 any copies of the broadcasts and films made on TVC’s servers were not copies of substantial parts, and therefore copyright was not infringed;

(d)                 TVC had a defence under section 28A of the CDPA in that it was making temporary incidental copies as an integral part of a technological process to allow it to transmit the work between third parties, and that, in doing so, the transmission had no independent economic significance to TVC; and

(e)                 TVC had a defence under section 73 of the CDPA in that it was streaming regional channels only in the area for which those channels were made for reception and the re-transmission was re-transmitted through the Internet by cable from its servers.

The Ruling

The High Court ruled as follows:

(a)                 section 20 (1)(c) of the CDPA was not “ultra vires” – the powers of the Secretary of State under section 2(2) of the European Communities Act 1972 were not to be interpreted narrowly and allowed for legislation to be enacted by the UK Government which was not specifically required for the implementation of an EU Directive such as the Copyright Directive. Rather, section 20 (1)(c) was closely related to the Copyright Directive’s subject matter and was thus validly enacted;

(b)                 TVC was, in the view of the High Court, communicating films and broadcasts to the public, but this issue was referred to the European Court of Justice (ECJ) for a preliminary ruling. This was because case law reviewed by the High Court did not deal with the specific issue considered in this case – whether or not there was a communication to the public when an intermediary entity, acting for its own profit, intervened in full knowledge of the consequence of its actions and in order to expand its own audience to its transmissions and adverts, and communicated broadcast signals to the public who could access that signal using their own television or computer at home;

(c)                 TVC was not, in the view of the High Court, reproducing a substantial part of the films or broadcasts in its servers or on a user’s screen, but this issue was also referred to the ECJ. This was because the meaning of ‘reproduction in part’ (whether individual frames amounted to a substantial part of the copyright work and whether the display of a broadcast on screen amounted to reproduction) had already been referred to the ECJ in another case – Football Association Premier League v QC Leisure – and the ECJ’s decision in that case was outstanding;

(d)                 TVC did not need the protection of section 28A of the CDPA if the High Court’s view in (iii) above was correct, as no defence would be needed if there was no reproduction of broadcasts; however, the High Court noted that this issue depended on the ECJ’s decision in the Football Association Premier League v QC Leisure case; and

(e)                 the High Court ruled that the defence under section 73 of the CDPA did apply to the channels streamed by TVC but only where (a) there was actually a cable involved in the re-transmission at the user’s end i.e. the streaming to a computer was covered by the defence, but not streaming to a mobile phone, and (b) the re-transmission was within the intended regional area for service of that channel.

Comment

Copyright seems to be a major issue in the courts at the moment, and the decision of the ECJ in relation to those issues referred, both in this case and the Football Association Premier League v QC Leisure case will have a huge impact on the streaming of broadcasts on the Internet. The High Court’s view seemed to be that the streaming for commercial purposes was an infringement of broadcast copyright, but it remains to be seen whether the ECJ’s decision differs fro the High Court’s initial view.

• mandatory key nutritional information and where it needs to be placed on packaging;
• allergen information on particular products;
• mandatory font sizes;
• increased requirements for information relating to country of origin; and
• increased information requirements for distance selling, such as food sold online.

The regulation is expected to come into force in autumn 2011.

The ECJ ruled that Viking was not prevented from offering the refill service by Kosan’s trade marks on the bottles due to the fact that:

• it was industry standard to offer refills of such bottles, regardless of their shape; and
• the bottles were expensive (compared to the gas that would go inside them), had independent economic value and were designed for re-use.

As such, the ECJ ruled that it was unlikely that a consumer might assume a connection between Kosan and Viking, especially as Kosan’s bottle labelling remained intact and Viking had sticky labels to refer to its gas. The ECJ further ruled that a consumer would be unfairly restricted if, having bought the bottle, they could only have it refilled by one supplier, as the bottle had certain advantageous technical characteristics.

Simon Weinberg, solicitor in the Commercial/IP/IT team at Matthew Arnold & Baldwin LLP and assistant editor of Upload-IT, comments, “This case is interesting as it shows a situation where the industry standard was for the bottles to be refilled, avoiding any contention that a consumer may assume a connection between the supplier and the refiller. This contrasts with another recent case in the High Court in which cage containers for bottles could not be refilled with different bottles due to the confusion it might cause a consumer in thinking that both the bottles and the caged container came from the same source. Although the rulings come from different courts, the contrast clearly shows the importance of industry standards in trade mark rulings.”

The EC has now published the second monitoring report in this area. The report shows that there has been a reduction in those types of settlement agreements that are most likely to have anti-competitive effects, where there was a value transfer from an originator company to a generic company. The reports concludes that the reduction is likely to be because of the increased scrutiny from the EC following the first report and increased awareness by those entering patent settlements of the competition impacts. Patent settlements are still being entered into between companies, but they are increasingly of the harmless variety.

The EC intends to continue monitoring this area for anti-competitive aspects for at least another year.

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

The German proposal is alleged to be an attempt to strengthen the State-run monopoly over sports betting and lotteries, which would result in Betfair paying nearly 17% more tax and restrict the number of licences it could obtain as a private betting company, as only seven would be available across Germany. Betfair argues that the proposal is an attempt to keep private betting companies out of the German market.

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.

The European Commission is now consulting with communications service providers, consumer groups, Member States and others on practical guidelines that would harmonise the rules across the EU. It has asked the following questions:

• How would organisations comply with the new notification obligation?
• What types of breaches should trigger individuals being notified?
• What means of notification should take place and what procedure should be followed?
• What information should be in the notification to the regulator and the affected individuals?

The consultation is open until 9 September and can be found here: http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/887&format=HTML&aged=0&language=EN&guiLanguage=en..

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.

Betfair, the online gaming company, filed a complaint with the EC in June based on the fact that the proposed legislation limits the number of gaming licences available, bans betting exchanges, prohibits active gaming companies in Greece from locating servers and processing gaming transactions outside Greece, and contains an obligation for online gamers in Greece to obtain a special ID card before playing.

Other issues of concern for the EC are thought to be the requirement for each licensed gaming company to have a bank guarantee from a bank established in Greece and the opening of the tender process only to capital companies with a minimum paid up capital. The concern is that the proposed legislation will severely restrict entry into the Greek gaming market.

The Opinion means that Greece cannot implement the proposed legislation until 8 August 2011, in which time it must reply to the Opinion with amended proposals in line with the EC’s Opinion. If Greece fails to take the Opinion into account when revising the proposed legislation, it could be subject to infringement proceedings from the EC.

The Directive would give consumers across the EU the right to change their mind about a purchase made within two weeks of receiving the goods or entering into a contract for services. It would also mean that traders must give consumers precise information relating to an order, including the total price, the particulars of the goods ordered and clear contact details of the trader. The Directive contains other rules covering the passing of risk and timeframes for delivery or performance. Express consent would be needed for premium charges for fast delivery. The Directive specifies further rules for digital downloads.

The European Parliament’s press release can be found here and the text of the Directive here. It is expected that the Directive will be finally approved by the European Council of Ministers in the next few months, and Member States will have two years following that approval to bring it into force in their countries.

The ban might not make it through to the next round as other Member States of the EU have argued that the ban is in breach of EU competition law, and the law is set to be reviewed by the European Commission before it comes into force. Several trade bodies, including the European Gaming and Betting Association, have also criticised the law.

The new rules set up an EU-wide system for facilitating the recovery of maintenance payments when one parent lives abroad and refuses to provide financial help to the child(ren) and/or the former spouse. However, the definition of ‘maintenance’ is much wider than periodical child or spousal maintenance payments: ‘maintenance’ has been interpreted by the European Court of Justice as relating to the “needs” of the spouse or child(ren). This means maintenance could cover, for example, transfers of real property.

The vast majority of maintenance claims involve children and, in the past, it has proved difficult to recover unpaid child maintenance from a parent living in another EU country. However, the new rules will now enable the recovery of maintenance in cross-border situations, meaning parents will no longer be able to flee abroad to avoid making payments.

In most cases, a decision on maintenance obligations in one EU country will be enforceable in another one without any further procedure, such as registration. This should speed up procedures and save parents money. The rules will also set up laws on co-operation between central authorities, to provide assistance in relation to maintenance applications.

However, whilst the new rules simplify the enforcement of maintenance agreements and orders across the EU, there are potential problems. For example, what will happen in relation to decisions between an EU member state and a third state? Could English courts be prevented from making a maintenance order if couples have entered into a foreign prenuptial agreement or marital contract?

We will have to wait and see the true impact these new rules will have on the English courts.

• the necessity for data retention as provided in the Directive has not been sufficiently demonstrated;
• data retention could have been regulated in a less privacy-intrusive way;
• the Directive leaves too much scope for member states to decide on the purposes for which the data might be used, and also for establishing who can access the data and under which conditions.

The Directive provides that communications service providers must retain various communications data for a period of between six and 24 months for the purposes of investigation, detection and prosecution of serious crime. In April 2011, the European Commission reviewed the Directive, and criticised its effectiveness in a report due to the fact that it had been interpreted in different ways in different Member States, leading to inconsistency and confusion for telecoms operators.

The EDPS has called on the European Commission to consider repealing the Directive in order to harmonise data retention laws across Europe, which was the primary intention of the Directive. Data retention periods currently differ across Europe, benefitting some communications service providers but not being a disadvantage to others. Privacy lobbyists are also likely to respond well to the EDPS’s opinion as they have long argued that the blanket data retention requirement infringes a data subject’s right to privacy.

• 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.

An invitation to purchase is a commercial communication and must contain details of the product and price in a way that enables the consumer to make a purchase. The ECJ ruled that an invitation to purchase can exist even where the means to actually purchase the product or service, such as an order form, have not been provided. The implication for businesses is that the ruling seems to suggest that even an advertisement referring to a product or service and its price may be considered an invitation to purchase.

English law and guidance offered by the Office of Fair Trading previously presumed that an invitation to purchase existed only where the means of purchase was provided. The ECJ’s ruling means that the definition is much wider than this, and an invitation to purchase arises wherever the information and price on a product are sufficient for a consumer to make a transactional decision. The ECJ’s ruling is wide enough for a verbal or visual reference to a product or service merely identifying it to be considered an invitation to purchase. However, the ECJ stated that it would be up to a Member State’s national court to decide, in the particular circumstances, whether an invitation to purchase had been made or not based on the information given.

This ruling is a potential massive headache for any businesses supplying consumers as they would need to provide lots of information at a very early stage or they would fall foul of the law. However, the ECJ did limit the effects of its ruling by interpreting Article 7(4) of the Directive as allowing a trader to refer a consumer to its website for the ‘mandatory material information’ rather than actually having to set out that information in the invitation to purchase, although certain information still must be provided in the invitation to purchase and the website must actually contain the mandatory material information required by the Directive.

• 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.

• The rights and procedures regarding seizing infringing material would extend from the current position which catches goods infringing patents, trade marks, copyright or design rights. It would also cover trade names and semiconductor topographies.
• Parallel imported goods contrary to European Union law would also be seized.
• A new quicker procedure would be established to enable customs authorities to deal with goods abandoned by their owner for destruction without having to go through formal legal proceedings if the owner does not object within a short period of time.
• Have a new procedure whereby rights owners do not need to be involved with the destruction of small consignments.

The Commission’s approach is that libraries, museums, educational establishments, archives, film heritage institutions and public service broadcasters should be able to provide orphan works without having to obtain the copyright owner’s consent, provided that those institutions have first carried out a diligent search to find the copyright owner. Once the orphan status has been established by a relevant institution in one Member State, that status will apply in other Member States. The Commission said that the EU needed to catch up with the US in treatment of orphan works, and this would help create new digital libraries. The new law would help researchers and academics benefit from wider works. The Commission said the proposed Directive formed a key element of its Digital Agenda plans, and expected the new Directive to be adopted in 2012 with the new Directive coming into force in each Member State in around 2014.

The proposed Directive can be found here: http://ec.europa.eu/internal_market/copyright/orphan_works_en.htm.

Viviane Reding was speaking in response to several recent high profile data breaches, such as that by Sony in relation to its PlayStation Network, which affected 100 millions users. She criticised the delay of seven days before users were told of the Sony breach and she said notification of data loss should be immediate.

She added that all companies, even those outside the European Union, should comply with EU data protection laws if they target users based in the EU.

The Act has been controversial ever since it was passed in early 2010, when it was rushed through Parliament so that it would become law before the General Election. BT and TalkTalk initially took action as they believed the Act did not comply with European Union Directives on e-commerce and privacy, and that it lacked proportionality. They have argued that the law would require them to restrict or suspend a customer’s Internet access even if someone else from outside that customer’s household, for whom the customer was not responsible, was using that customer’s Internet connection for file-sharing.

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 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.

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

As part of the reforms, the ICO will also be given greater investigatory powers, under which the ICO will be able to demand information from Internet service provides (ISPs) and telecommunications companies to assist with investigations into possible breaches of the Regulations. The ICO will also be able to audit ISPs and telecommunications companies to ensure that they assist the ICO in these investigations.