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

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

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

Paul Gershlick, a Partner and Head of Pharmaceuticals and Life Sciences at Matthew Arnold & Baldwin LLP, comments: “According to evidence from the BioIndustry Association, the UK share of clinical trials has fallen from 6% to 2% in the last decade. The UK also went from the fourth largest location for clinical trials in 2006 to twelfth just two years later. The UK has a long history of being a global leader in developing new pharmaceutical products. A lot of jobs and expertise have been based here as a result. Anything the Government can do to make drug discovery conditions better so as to reverse the declining trend and make the UK a more enticing place to discover new drugs has to be a good thing.”

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.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This result is interesting in light of recent court orders that the MPA has obtained against ISPs in the UK such as BT and Sky, under which the ISPs have had to block access to infringing content. The law needs to be clearer or at least applied in a more clear way across the European Union.”

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.

In this case, the Supreme Court ruled that it was sufficient to say that the protein was potentially useful for diagnosing, preventing or treating a large number of categories of disorders in the immune system, despite this assertion having been based on the protein’s membership of the TNF ligand superfamily of substances. This was because at the time of the patent application, the particular application of the individual protein was not known.

In following the EPO’s ruling, the Supreme Court said that it was important for UK patent law to be aligned as far as possible with EPO decisions. National courts could still come to its own rulings if it considers that the EPO has taken the law in an appropriate direction, misapplied a previous EPO ruling or not taken a particular argument into account. However, where the EPO had taken a consistent approach in several decisions, it would be unusual for the national court not to follow the EPO’s rulings.

On the type of patent application before the court in this case, the EPO had adopted a consistent approach, being:

• The patent had to disclose a practical application and profitable use which could be expected to lead to commercial benefit.
• The patent had to show a real possibility of exploitation.
• A skilled person had to be able to exploit the patent without undue burden.
• A concrete benefit had to be derived directly from the description and common general knowledge.
• Speculative use would not be sufficient, but plausible use could be.
• The plausible use could be assisted by later evidence.
• If all family or superfamily members of the protein had a role in controlling cells, it would be sufficient to assign a similar for the protein.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments, “This case should give businesses in the pharmaceutical industry certainty. It will also act as encouragement for innovating businesses that discover a protein where the protein is a member of a wider family or superfamily that has a clear role.”

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.

On appeal, the European Court of Justice has reversed that decision. Average consumers did not generally make assumptions about the origin of products based on the shape of the product or the packaging in the absence of a word mark on the packaging. It could be difficult to pass the threshold for establishing distinctive character. However, that did not mean that whether the threshold had been passed should not have been considered at all. It was not the case that since no bottle had been sold without a label, only the word mark would be a distinguishing feature for consumers. It was possible that the colour and matting of the glass of the bottle could have fulfilled the functions of a trade mark, but a proper test should have been done to assess that.

The draft guidelines require that certain information should be provided to end users by:

-      national regulatory authorities (Ofcom in the UK), which are required by law to ensure that the relevant information is provided;

-      Internet services providers (ISPs), which are required at law to provide the relevant information; and

-      other third parties such as price comparison websites.

The information provided by the above entities should be formed on the basis of a common terminology to avoid end user confusion. The information provided relates to download and upload speeds (that are both actual and advertised), service availability, service quality, usage limitation (including data caps, download limits and fair use policies) and any traffic-management techniques used by ISPs to avoid network congestion.

The guidance is draft only – BEREC has invited comments from interested parties by 2^nd November 2011 – but, once finalised, will be a foundation block for ISPs in relation to how they provide their services.

The complaint was that the website had been misleading as it had not set out that the surcharges were not optional in order to make a purchase from the website. It was also argued that the website was misleading in the way it set out VAT on purchases, as the price quoted was with the figure excluding of VAT, whereas in all cases VAT would apply.

The ASA upheld both parts of the complaint, ruling that there had been a breach of the CAP Code in terms of misleading advertising and pricing. The CAP Code is the code of practice aimed at ensuring adverts, including material written on businesses’ own websites and social networking websites, are fair and not misleading. The ASA is a regulator in charge of enforcing the CAP Code.

This issue is increasingly in the public eye. The Office of Fair Trading recently told travel companies to make credit and debit card surcharges clearer on their websites. In addition, the Consumer Rights Directive recently adopted by the European Union requires pricing to be more clearly set out.

Many people may be under the misapprehension that they have until the Consumer Rights Directive is brought into force under English law (likely to be about two years from now) before they have to make all charges clear up front in an online order process. In fact, as this ruling shows, failure to be up front and clear on pricing is already a breach of the CAP Code and the ASA enforces the CAP Code even for something said on an organisation’s own website. Although a breach of the Code does not have legal effect, it can result in bad publicity and an inability to obtain advertising space in the future.

One particular area of concern for some businesses is the requirement on businesses to seek the express consent of the consumer to any extra payment in addition to the main payment obligation. If there has not been express consent but it is inferred by using default options which the consumer is required to reject in order to avoid the extra payment obligations, the consumer may be refunded for the extra payment.

The UK Government will have two years to implement the Directive, but it may well do so before that, as it has already signalled its desire to amalgamate consumer laws into a single Consumer Bill of Rights, which the Government hopes will be less confusing for consumers and businesses than the plethora of laws that exist today.

The full text of the Directive can be found here: http://register.consilium.europa.eu/pdf/en/11/pe00/pe00026.en11.pdf.

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 European Court of Justice has backed up the French Competition Board’s decision. The ECJ looked specifically at the question of selective distribution networks. It said that establishing those networks are not prohibited by Article 101 if resellers are chosen based on objective criteria, where those criteria are applied uniformly and non-discriminately, where the characteristics of the products need to preserve the quality and ensure proper use, and the criteria only go as far as is necessary. However, provisions within those networks may still end up offending against competition law. The ECJ has not accepted arguments relating to the need to provide individual advice to customers and to ensure their protection against incorrect use of products in the context of non-prescription based products to justify an Internet sales ban. Contract provisions that effectively prohibited Internet sales meant that the benefit of the block exemption did not apply. That said, it would still be for the national court to ascertain whether the contract had an individual exemption, as the failure of an agreement to fall within block exemption parameters does not automatically mean that it will not be found to be individually exempt on other criteria.

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.

On a trial of preliminary issues, the High Court ruled that S and then Rossetti had been commercial agents and had the protection of the Commercial Agents Regulations. Those Regulations implement the European Union’s Commercial Agents Directive, which provides for the agent to be entitled to additional compensation beyond the ordinary common law position on termination of the relationship. The Court also decided that the transfer from S had amounted to an assignment and the agency contract had effectively lasted for four years, regardless of the change of agency. The agreement was therefore terminable on at least three months’ notice, as that was what the Regulations provided.

In addition, the High Court decided that the agents could act for more than one competing principal and that was not forbidden by the Regulations and the agreement between the parties had not prohibited the agent from representing a competing supplier. A requirement under the Regulations to act dutifully and in good faith did not stop the agent from representing more than one competing principal, but the agent must act openly, not take advantage and act loyally.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “People often enter into agreements with agents informally. This case shows that if they want to stop their agents from representing competing suppliers, they need to set this out in a written agreement.” 

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.

With effect from 1st August 2011, companies will be able to raise up to 5 million euros (up from 2,500,000 euros) before the requirement to produce a Prospectus is triggered.

In addition, they will be able to raise finance from 150 person, not including certain qualified investors (up from 100 persons), before the requirement to produce a Prospectus is triggered – regardless of the amount of money being raised.

Preparing a Prospectus is a time-consuming and costly process and these measures have been brought in to provide a much needed fillip to SMEs looking to raise finance. Many of those small companies see credit as the primary source of finance but equity finance can be attractive too.

Time will tell whether these measures actually have any effect. They will make it easier for the SME to seek to raise finance but will not necessarily make an investment opportunity any more attractive to the investor community.

The Article 29 Working Party’s opinions are not legally binding and they only represent the body’s own interpretation of data protection laws. However, they can be very persuasive and should not be ignored. It will be interesting to see what changes are made by the UK’s regulator, the Information Commissioner’s Office, to its stance on consent following this opinion. This can potentially affect a lot of businesses, particularly Internet ones.

The Article 29 Working Party opinion can be found here: http://ec.europa.eu/justice/policies/privacy/docs/wpdocs/2011/wp187_en.pdf.

• 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 ECJ has now delivered a dramatic ruling as follows:

• Where goods are advertised from outside of the European Economic Area and they have not been put on the market within the EEA with the brand owner’s consent, there is trade mark infringement even where the goods are just targeted as being offered or advertised for sale within the EEA without having to show further that they were actually put on the market in the EEA.
• It would be for a national court to rule on what was meant by “targeted”, but the mere fact that a website was accessible from a particular country would not be enough to satisfy that. The national court would need to consider the context of the offer, such as whether the territory was included in a list of countries to which the seller was willing to send the goods.
• Consumers do not “use” the brand in a trade mark sense when they use the eBay service. However, in this particular case, the people using eBay were deemed to be businesses as they were selling goods in the course of a trade, so they were “using” in a trade mark sense.
• The operator of an online marketplace like eBay does not generally “use” a third party’s trade marks (like L’Oréal’s) when its users advertise goods under those marks.
• However, its exemption from liability for its users’ actions under the E-Commerce Directive is removed when, as in eBay’s case, the operator of an online marketplace buys advertising keywords that are identical to the trade marks in order to optimise the presentation of the online offers. In that case, it is playing an “active role”.
• For the “active role” to apply and the operator to have liability, the trade marks have to be used on the site itself rather than in a sponsored link.
• Where an Internet service provider does not play an “active role”, such that it does not have knowledge or control of the unlawful advert, it is exempt from liability under the E-Commerce Directive, assuming it acts expeditiously in taking down the offending material as soon as it discovers the offending material.
• An online marketplace is not deprived of the exemption from liability merely because it stores offers for sale on its servers, sets terms of service, is paid for the service or provides general information to its users. However, the line is crossed if the online operator helps its customers in other ways such as by promoting or optimising its customers’ adverts. It was then no longer taking a neutral position and had taken an active role.
• Member States must ensure that trade mark owners can obtain an effective, proportionate, dissuasive injunction to stop infringers. This means ensuring effective protection for intellectual property rights. To do this, national courts should have the power to require online service providers to take steps not only to prevent a current infringement but also further infringement. It could be too much to expect ISPs to actively monitor all the data of its customers, but if it is aware of a particular problematic customer, it should not be able to wait until it is told again but there may, for example, be the need for an injunction ordering the ISP to suspend the account of the infringer so as to prevent further infringements by that user.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case creates two interesting developments. Firstly, taking an active role by optimising the material on its site could leave an ISP open to liability. Online intermediaries should therefore reduce their active involvement where they may be at risk of having liability for that content. Previously, they had assumed that they were not liable for their users’ activity unless they were informed otherwise.

“The second major impact is the wider-ranging injunctions mentioned by the ECJ. This could lead to actions by rights holders to try to get an injunction against ISPs to require them to shut down serial infringers’ accounts.”

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

The European Court of Justice has ruled that Fiorucci could object to Edwin’s registration, despite the fact that the rights in the mark had been sold. A well-known person can take advantage of these rights and stop a Community Trade Mark being registered if national law allows that person to object, so said the EU’s top court.

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.

The new Act would consider the perception of the average consumer and aggressive practices would be defined by reference to coercion, abuse of power or harassment. The consumer would have to prove aggressive or misleading practice had occurred, it was likely to cause an average consumer to decide to enter a contract or make a payment that they would not otherwise have done and the practice was a significant factor in that particular consumer’s decision.

The remedies involved would include a right to unravel the contract, get a refund, have a reduction in price and obtain damages for provable losses. A trader could avoid damages if he could prove that he took all reasonable precautions to avoid committing the offence.

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 ECJ ruled that the supplier had to not remove and replace but also install the replaced goods despite not having been responsible for the original installation as the goods had been faulty on delivery and consumers needed to have an absolute right for them to be put right without suffering loss. Alternatively, the supplier would have to bear the cost of someone else doing so. The ECJ further said that if only one remedy is possible then the seller cannot refuse to provide that remedy even if the cost of removing and reinstalling would be disproportionate to the value. In this case, the tiles cost €1,382 and the cost of removing and replacing was €5,830. The seller would not have been liable for the replacement if the reason for the defect was the poor installation (that the supplier was not responsible for), although proving who was at fault may not be easy.

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.

However, other countries in the European Union (EU) have implemented the Directives with different interpretations. The UK only exempts those acts specifically required to obtain marketing authorisation of a generic drug. Germany provides an exemption in relation to any medicinal product (not just a generic drug) in any country (not just within the EU). Spain, meanwhile, has a tighter restriction on the exemption in a similar way that the UK does. The variation has come about largely due to the EU Directives being interpreted differently by different national courts in view of national case law.

The IPO has therefore started a consultation with stakeholders to obtain evidence of how the law should evolve in the UK, as there are concerns that stakeholders are avoiding holding clinical and field trials in the UK due to the tighter regulatory framework compared to some other EU countries. Further information in relation to the consultation, including the list of questions for stakeholders to respond to as part of the consultation, can be found at http://www.ipo.gov.uk/pro-policy/consult/consult-live/consult-2011-bolar.htm .

The responses to the consultation must be received by the IPO by 31 July 2011, and results of the consultation are expected in autumn 2011.

• 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.

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

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

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.