The Court of Appeal has rejected an appeal against the decision of the High Court, on the grounds that the High Court’s findings were not based on any error of principle or perversity in factual findings, leaving no scope for a fresh evaluation by the Court of Appeal.

However, the Court of Appeal allowed a cross-appeal against the finding that the UK trade mark for the number 32 had not been infringed. The Court of Appeal ruled that the High Court had incorrectly assumed that, where a separate reputation had not been established by use of the trade mark, there could be no infringement under section 10(2) of the Trade Marks Act 1994; rather, the number 32 was a significant part of the trade marks that the High Court had ruled had been infringed, such that there was no basis for saying that the trade mark for the number 32 had not been infringed as well.

The Government’s actions are intended to take effect later this year, and will implement the Consumer Rights Directive, which was approved by the European Union in October last year.

Paul Gershlick, Head of Pharmaceuticals and Life Sciences at Partner at Matthew Arnold & Baldwin LLP and a data protection law specialist, comments: “We need to understand the facts as the ICO sees them and then make a judgement, but such a large fine seems harsh given that the hospital appear to have been the victim and no data actually got into the public domain through the hospital’s action with the police when the items appeared on eBay. This action signals the tough intentions of the UK’s data protection regulator in dealing with data security breaches involving people’s health data.”

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 report concludes that the current consumer protection system in the UK is ‘incoherent and fragmented’, and that many of the rogue traders fall between the gaps between local authority enforcement bodies. The recommendations include:

-      listing strict obligations and responsibilities for consumer protection bodies to ensure a clear framework of accountability;

-      ensure funding is spread appropriately between local authorities to avoid gaps in protection;

-      ensure that enforcement bodies have sufficient awareness of new forms of consumer harm; and

clear enforcement obligations and support for large scale investigations and court proceedings.

BT’s initial response has been that it would need to be ordered by a court before taking action, in the same way that a court order was needed before Newzbin2 was blocked. Those downloading copyright content illegally may not be paying for the service they receive, but it is certainly costing the ISPs and industry bodies huge amounts in legal fees to try to prevent it.

In July this year, the UK introduced the Bribery Act – the world’s toughest anti-bribery laws. Businesses can be held criminally liable for anything done on their behalf without their knowledge anywhere in the world, unless they can prove that they satisfy the defence of having had adequate procedures in place. The SFO is the prosecutor in charge of bringing cases under the Act.

BT estimated that the cost of implementing the court order was approximately £5,000, so it is unlikely that it would be worth the ISPs putting up a legal fight against any forthcoming court order. Indeed, the ISPs seem to have indicated that they would comply with any court order they receive. However, there is some doubt as to whether they have agreed to the width of the MPA’s requests for their consent to a court order. The move will only add fuel to the fire stoked up by critics of website blocking – the speed with which the pressure to block Newzbin2 has spread to other ISPs may also spread to other websites (such as The Pirate Bay) and lead to more argument, perhaps in court.

The report can be found here: http://www.publications.parliament.uk/pa/cm201012/cmselect/cmjust/1473/147302.htm.

The announcement follows a series of measures put in place by credit card companies to prevent the use of credit cards to pay for pirated music, meaning that premium rate payment services could soon be used as a quick and easy form of payment.

The City of London Police and The International Federation of the Phonographic Industry (which represents the recording industry worldwide) will supply PhonepayPlus with on-going information updates about copyright infringing websites, which the regulator will then pass on to service providers. If the regulator then discovers evidence of payment services being used by those websites, it will report back to The City of London Police and The International Federation of the Phonographic Industry and notify the provider that the service they offer is illegal. The overarching aim of the announcement is to ensure that pirated music is not used as a way of laundering money, or otherwise generating income, which is then used to fund organised crime or terrorist activity.

In the interview, Holden promoted certain information about the law firm group “QualitySolicitors”, and a presenter of the programme was considered to have endorsed the promotion. Ofcom ruled that “undue prominence” had been given to QualitySolciitors during the interview and ITV had not given sufficient information to viewers as to why the brand was being promoted in an interview with an actress.

The ruling noted that ITV was providing refresher training to its production team to prevent a repeat of the breach.

The initial ruling was given in favour of the film studios (whose copyright material had been copied) under section 97A of the Copyright, Designs and Patents Act 1988 (the Act), which provides that an injunction may be granted against an Internet service provider (ISP) that has “actual knowledge” of the use of its service to infringe copyright. The case will be of interest to ISPs and rights-holders, particularly since this is believed to be the first time that an order under section 97A has been made against an ISP.

BT has been ordered to use its Cleanfeed filtering system, which is currently used to block access to websites featuring images of child abuse, to block the website. Controversially, BT was also told to pay for the cost of implementing the court order. The judge said that since BT made money out of its users, it was right that it should foot the bill as part of the cost of doing business, and in any event the costs were proportionate. It left open the possibility of whether the costs would always be paid for by the ISP but in this case it would make sense.

BT and the film studios agreed that as software had been developed and was likely to be circulated by copyright infringers that could circumvent BT’s Cleanfeed system, BT’s blocking measures may have limited effect. However, the High Court judge said that the court order would still be justified if it meant that access to Newzbin 2 was prevented for only a minority of users.

This is the first time an order has been granted against an ISP under section 97A of the Act, but it is also interesting to note that the judge stated that he thought it unlikely that, following the implementation of the block, a BT user would be able to bring a claim against BT for breach of their Internet service contract with the ISP. However, that might be little consolation for BT, which merely thanked the High Court for providing ‘clarity’ on the issue.

No doubt, BT would have felt a bit aggrieved that the Court had refused to accept its argument that the order should be set aside or varied if the film studios did not apply within a reasonable time for the same injunction against other UK ISPs. The Court said that there was nothing in the law that made the injunction conditional on this action being taken. It was for the studios to decide on which remedies they would pursue and against whom.

BT would also no doubt have been unhappy at the refusal of the judge to give it permission to shut down Cleanfeed temporarily if it needed to. The judge said that it would only do that if the studios consented or BT obtained a court order.

So, all in all, a great result for the creative industries, but not a particularly good day in court for innocent ISPs.

The 65 requests received in that period covered more than 300 individual items, and came from the UK government and courts. Six of the requests related to videos that raised national security concerns on YouTube, and several other were court orders relating to defamation and privacy.

Details of the requests can be found here.

The Bribery Act, which came into force on 1 July 2011, increases the maximum penalty for bribery from seven to 10 years imprisonment. The Act has also introduced a corporate offence of failure to prevent bribery by persons working on behalf of a business. To avoid breaching the Act, employers must demonstrate that they have adequate procedures in place to prevent bribery. Further details of the Act are here.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “The Bribery Act is the biggest legal development of the year and given its very wide reach and political force behind it, it is no surprise to see a successful prosecution so soon after it came into force. What this prosecution shows is that the law is there not just to catch big businesses on complex international deals, but also small payments made on a local level too. Prosecutors will take action regardless of size. Every business should be aware of the Act and should take appropriate steps to stop its employees, agents and other representatives from breaking the law, particularly as their actions can in turn leave their business criminally liable too.”

The ISPs have now been granted permission to appeal by the Court of Appeal. It seemed that the Digital Economy Act was safe following the Court of Appeal’s initial decision to refuse permission to appeal, but this long-running saga now seems to have some more time left to run.

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.

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 guide also highlights that such actions can impact on the productivity and profitability of an employee to the business, whilst also risking legal action being taken against the business itself. Examples of infringing activity include an employee using work systems to sell goods both within the business and outside of the business, and even simply selling actual counterfeit goods from behind their desk.

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 Office of Fair Trading (OFT) claimed that Purely Creative, which promoted various prize-draw scratch-cards breached the Regulations because consumers ended up paying a significant contribution towards the value of the prize in premium-rate telephone charges and costs of delivery and insurance. The OFT failed to obtain Purely Creative’s agreement to various undertakings relating to the promotions and applied for an injunction under the Enterprise Act 2002 which would prevent Purely Creative from continuing with the promotions. The High Court initially ruled that the promotions breached the Regulations and injunctions should be granted in principle. However, the High Court accepted undertakings from Purely Creative in lieu of injunctions, by which Purely Creative undertook, amongst other things, not to have any future promotions which created the false impression that a consumer had won or might win a prize where any effort made by the consumer in claiming that prize is subject to the consumer incurring a cost which would then cover either the cost of the prize or Purely Creative’s delivery and insurance costs.

Purely Creative appealed the ruling of the High Court. The OFT cross appealed with amended suggested undertakings and argued that, if those suggested undertakings could not be approved by the Court of Appeal, the interpretation of paragraph 31 of schedule 1 of the Regulations should be referred to the European Court of Justice (ECJ) for clarity.

The Court of Appeal stayed both the appeal and cross-appeal and referred a number of questions to the ECJ:

-          do the Regulations prohibit consumers from incurring any cost when claiming a prize?

-          if Purely Creative offers a number of methods of claiming a prize but only one of them incurs any cost (even a small cost), is that a breach of the Regulations?

-          if Purely Creative was allowed to run promotions where consumers incurred only a small cost in claiming a prize, how should a court decide whether that cost is sufficiently small, and should the court also consider whether such costs, even though small, are necessary?

-          does the use of the words “false impression” in paragraph 31 of the Regulations impose an additional consideration on courts on top of the consideration of whether a consumer can pay to receive a prize, and, if so, what is a “false impression” and how is it created?

The reference will hopefully provide some clarity in the interpretation of the Regulations. In the meantime, the Court of Appeal ruled that the undertakings given to the High Court remain in full force and effect until the ECJ decision is passed down.

The Government commissioned Ofcom to produce a report on how effectively the website-blocking provisions of the DEA could be enforced. The report considered:

-          the technical means available of blocking websites, which it concluded could not be 100% effective and could be widely avoided; and

-          how effective the DEA could be when compared to section 97A of the Copyright Designs and Patents Act 1988 (CDPA), under which an ISP’s actual knowledge of copyright infringement using its network could be grounds for the granting of an injunction by the courts. The report concluded that the DEA method would be slow, expensive and uncertain when compared to the CDPA route.

The Ofcom report concludes that any DEA system would be ineffective, and that website blocking should be only one of a number of alternatives to reducing copyright infringement online. The Government’s announcement follows a recent case considered by the High Court in which BT was ordered to block a copyright infringing website known as Newzbin 2 under the provisions of section 97A of the CDPA. Following the ruling, some questioned whether the relevant sections of the DEA are actually necessary – the courts seem capable of dealing with the issue of blocking on a case-by-case basis under the CDPA.

Whilst the section 97A method can also be long and expensive, the Newzbin ruling shows that the method is a realistic option. When compared with the DEA, its requirements are also much easier to understand and invoke – the CDPA requires the demonstration of actual knowledge on the part of an ISP that its network is being used for copyright infringing activities. The DEA, on the other hand, has a number of requirements, including having evidence of the amount and type of material available, as well as the need to show that, before a website can be blocked, the operator of the website as well as the ISP has been warned of the possible consequences of the infringing activity.

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.

Andrew Ainsworth (AA) was hired in 1976 by Lucasfilm (L) to make ‘Stormtrooper’ helmets and armour for the film ‘Star Wars’ which was released in 1977 (later renamed ‘Star Wars: A New Hope’). In 2004, AA set up a website and sold helmets and armour produced using the same mould as had been used in 1976, some of which were sold and delivered to customers in the USA. L issued proceedings against AA in California for infringement of copyright and trade marks, and the US District Court in California ruled against AA to the tune of $10 million. However, since AA had no assets in the USA against which the judgement could be enforced and since the UK usually does not enforce US court judgements, the US proceedings were not taken any further.

Instead, proceedings were issued in England. AA admitted that he had used drawings provided to him in 1976 by L, and that he had used those drawings in producing the helmet and armour. Although AA admitted that L had had unregistered design rights in the helmets and armour which would have prohibited him from manufacturing identical objects (and such rights are totally different to copyright), he contended that these were the only rights L had had which AA could have otherwise infringed (as these unregistered design rights only last for 10-15 years from their creation and so had expired at the time he started recreating the helmets and armour). However, he said that to the extent the drawings and objects attracted protection under the Copyright, Designs and Patents Act 1988 (CDPA), they were not artistic works (and it should be noted that a sculpture is an Artistic work so he was arguing the objects were not sculptures, which would attract protection). He also argued that he was not infringing CDPA by making helmets and armour to the designs because, if for some reason the judges were to find that the original objects were sculptures (contrary to what he was arguing) then he was entitled to a defence under sections 51 and 52 of the CDPA which permits manufacture of an article to a design, without infringing copyright.

In the initial ruling, the High Court ruled that the defence under sections 51 and 52 of the CDPA did apply. Accordingly, there was no copyright infringement. The High Court also ruled that, whilst the US judgment could not be enforced in the English courts, the US copyright had been infringed and the claim was justicable in the English courts.

The Court of Appeal upheld the ruling of the High Court by saying that the helmet and armour were not artistic works under the CDPA. However, the Court of Appeal rejected the High Court’s reasoning in relation to the justicability of a claim in the English courts – a claim for infringement of US copyright should not be justicable in the English courts. As a result, L appealed to the Supreme Court on two issues:

1)       whether the helmets and amour were sculptures (which would attract copyright protection) and then whether the defences under sections 51 and 52 of the CDPA applied; and

2)       whether the English courts could consider a claim against a person domiciled in England for copyright infringement alleged to have happened, and was subject to a law, outside the EU.

Supreme Court Ruling

1) Copyright

The law relevant to the copyright infringement claim, as referred to above, is provided by the CDPA. Under section 1 of the CDPA, copyright exists in original artistic works. Under section 4 of the CDPA, artistic works can include graphic works or sculptures, which are defined as a cast or model made for the purposes of sculpture. Section 16 of the CDPA defines copyright infringement as being a person who copies all or part of a work, whether directly or indirectly, without the copyright owner’s permission.

The Supreme Court ruled that the helmet was not a sculpture. Rather, it was considered to be ‘a mixture of costume and prop’ for the effect of the film it was used in. The film itself was the work of art, rather than the helmet, which merely contributed to the success of the film. The Supreme Court referred to the helmet as ‘utilitarian’ in that it was merely an element of the production process of the film. Therefore the rulings of both the High Court and the Court of Appeal were upheld.

As such, the Supreme Court did not need to consider sections 51 and 52 of the CDPA and whether AA could rely on them as defences to the copyright infringement – the helmet was not an artistic work that was subject to copyright in the first place, and as such AA had not infringed any copyright under the CDPA for which he required a defence.

2) Justicability in England

The relevant law considered by the Supreme Court, in order to decide whether alleged copyright infringement abroad under the provisions of a foreign law was justicable in the English courts, was somewhat more complicated, in that the Supreme Court had to consider both the Brussels Regulation, an EU regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, and case law.

Under article 22(4) of the Brussels Regulation 2000, an exception is provided to the general rule that a defendant should be sued in the court where the defendant is domiciled. That exception is that, where proceedings relate to the registration or infringement of intellectual property rights, exclusive jurisdiction is given to the member state in which registration has taken place, been applied for or should have taken place. This exception takes effect irrespective of the domicile of the defendant.

The case law considered by the Supreme Court was extensive, and below is a brief summary only of the issues from the cases considered:

-          the Moçambique rule, resulting from a case in 1893, relates to the trespass of property, and states that the English courts will not exercise jurisdiction in relation to matters which were ‘local’ in their nature, compared to proceedings which were ‘transitory or personal’. Therefore the English courts would not accept jurisdiction on a claim over property outside of English territory unless it could be proved that the matter was a ‘transitory or personal’ rather than a ‘local’ issue;

-          the rule in Philips v Eyre 1870, which states that an act done abroad can only be the subject of proceedings in England if the act, if done in England, would have been a tort;

-          Tyburn Productions v Conan Doyle 1991, in which an infringement of US copyright was struck out by applying the Moçambique rule and the rule in Philips v Eyre;

-          Coin Controls v Suzo International 1999, which applied the Moçambique rule and the rule in Philips v Eyre as well as article 22 of the Brussels Regulation; and

-          Red Sea Insurance v Bouygues 1995, a Privy Council ruling which was applied by the Court of Appeal in Pearce v Ove 2000 in relation to hearing a claim for infringement of Dutch copyright, which stated that the rule in Philips v Eyre should be displaced if a country had a specific relationship to a particular act and the parties.

The Supreme Court ruled that the claim for infringement of US copyright was a claim over which the English courts could accept jurisdiction if there was a basis for that jurisdiction in relation to the defendant. The Supreme Court ruled that the Moçambique rule and the rule in Philips v Eyre were no longer relevant, having been pushed to the side by Red Sea Insurance v Bouygues 1995 and actually being abolished by the Private International Law (Miscellaneous Provisions) Act 1995. As such, there was nothing to prevent the English courts accepting jurisdiction over infringement of intellectual property rights abroad – L’s claim against AA for copyright infringement in the USA under US law could be heard in the English courts.

The Supreme Court also considered intellectual property policies relating to this issue, and referred to the fact that article 22(4) of the Brussels Regulation, which assigned exclusive jurisdiction to courts of the country where intellectual property rights originated (which would have prevented the English courts from accepting jurisdiction in this case) would apply to copyright only in rare cases. The Supreme Court made clear that article 22(4) does not apply to intellectual property outside the EU, but emphasised that it shows that there is a distinction between claims which involve registration or validity of intellectual property rights and those which do not, reiterating that this claim was for copyright infringement and not validity or registration issues.

The Supreme Court also considered Rome (II), the EU regulation on non-contractual obligations, which, whilst not applicable in this case as it came into force in 2009, shows that European policy is not against the litigation of foreign intellectual property rights. Rather, the Supreme Court stated that Rome (II) “… plainly envisages that actions may be brought in [EU members states] for infringement of foreign intellectual property rights, including copyright”.

As such, The Supreme Court ruled that the decision in Tyburn Productions v Conan Doyle was mistaken, and that the English courts could accept jurisdiction for the claim by L for breach of copyright by AA in the USA.

Comment

The importance of this ruling should not be underestimated. Many view this as a victory for Mr Ainsworth because he cannot be sued for his sales in the UK (because the original helmets and armour are not sculptures) and because he will not be sued in the UK for his sales in the US – even though he now could be sued (and the only reason Lucasfilm will not sue him is because his sales in the US were so low, he’s not worth suing)! But that is the narrow view of this case.

The wider significant issue ruled on by the Supreme Court is jurisdiction, and this is what affects everyone else in the future. The fact that a claim for foreign copyright infringement against a person domiciled in England falls within the jurisdiction of the English courts has wide-ranging implications.

The Court of Appeal has upheld the ruling of the High Court, such that end-users of the Meltwater service require a specific web end-user licence from the NLA. The Court of Appeal also agreed that headlines themselves are capable of constituting a copyright work.

The fact that the Court of Appeal agreed with the High Court’s ruling that headlines can be protected by copyright seems to go against previous decisions taken by courts in the UK. Reiterating the ruling of the European Court of Justice in Infopaq v Danske – that extracts of stories as short as 11 words could constitute a copyright work – the Court of Appeal stated that a newspaper headline being a copyright work is ‘plainly correct’. However, the full background reasoning for this element of the ruling was not disclosed by the Court of Appeal, meaning that, if Meltwater appeals to the Supreme Court, this issue is likely to be at the forefront of its argument.

This ruling is also of importance for businesses that use media monitoring services such as that provided by Meltwater. Many businesses use media monitoring services to keep up-to-date with news relating to a specific client and/or industry developments. Such businesses, as end-users of such a service, must also obtain a licence to receive that service. Whilst it is unlikely the NLA will enforce this ruling until it is clear both whether Meltwater will appeal the decision and what the outcome of that appeal is, if it takes place, there is a risk that the NLA will attempt to enforce the recovery of licence fees retrospectively as well as prospectively. Businesses who use such services should prepare, if they do not do so already, to pay licence fees to use the service, and even to pay licence fees for previous use. Whilst there is a widespread belief that newspaper content online should be available for nothing when used for non-commercial purposes, the ruling of the Court of Appeal in relation to media monitoring services, together with increasing tendencies by newspapers to charge non-commercial users to access content directly, further erodes how justified that belief is.

Big Brother Watch’s statement can be found here: http://www.bigbrotherwatch.org.uk/Police_databases.pdf.

These figures are astonishing. Everyone would reasonably expect there to be the odd bad apple or two. But the scale of wrongdoing is incredible. The police need to carry out a root and branch review to ensure that their staff more effectively do what they should be doing – protecting the public. Anyone arguing that this demonstrates that we live in a police state, however, need to remember this – we only found out about these figures because of the Freedom of Information Act and the investigative work carried out by Big Brother Watch.

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.”

Newzbin has now threatened to break BT’s Cleanfeed filtering system if BT attempts to block the site. BT has hit back and said that it would be appalled if that happened as Cleanfeed helped protect innocent from highly offensive and illegal content such as child pornography.

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

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

Delta replaced Shütz’s bottles with new bottles produced by different manufacturers and sold the containers on. Delta included various disclaimers on the containers once the bottles had been replaced relating to the bottles themselves, but Shütz issued proceedings for infringement of trade marks and passing off.

The High Court ruled that passing off had been established, and that the replacement of bottles by the defendant infringed the claimant’s trade marks, both in relation to the bottles and the container as a whole, as an end user would see the Shütz name on the cage and presume that the bottles were also manufactured by Shütz. The High Court rejected Delta’s argument that the relevant consumers were the bottle fillers rather than the end users. The High Court considered that the disclaimers included on the containers by Delta were not sufficient to inform an end user that only the cage was from Shütz as they were not positioned prominently, were worded ambiguously and could come off as they were not well attached.

The High Court ruled in favour of the claimant under section 10(2) of the Trade Marks Act 1994, as the marks and services were similar and there was a likelihood that the average consumer would be confused or make a connection between the claimant’s website and the defendant’s business. The High Court rejected a claim for trade mark infringement under section 10(1) – which protects trade mark owners against identical marks for identical services. The telephone recordings did not show that Client Connection had no real prospect of success of showing that it was using a different name, but in any event the services were not identical. The High Court added that, if a claim under section 10(2) had failed, the ruling would have been in favour of the claimant under section 10(3) as the claimant’s business of cold-calling under its trading name might tarnish the claimant’s reputation whilst using the claimant’s reputation for its benefit.

The defendant had issued a counter-claim that the trade marks lacked distinctiveness and were too descriptive and were thus invalid, but the High Court rejected the counter-claim on the grounds that the trade mark was highly distinctive due to its use over a number of years.

• the service of the claim form was valid;
• its standard terms and conditions had been incorporated by the purchase order; and
• section 52 of the Sale of Goods Act 1979 applied, allowing SSL to apply for injunctive relief.

The High Court ruled that service on the director in England was valid, as the director was senior enough in TTK’s company to be served with proceedings. However, SSL’s terms and conditions had not been incorporated into the joint venture agreement by the purchase order as TTK had never seen the terms and conditions, and therefore could not be bound by them. As a result, section 52 of the Sale of Goods Act 1979 could not apply as the applicable law was Indian law, and the High Court could not grant interim relief. TTK’s business and property were all based in India, and it had no English presence, such that any order of the English court would have to be enforced only in India. The High Court saw no reason why its jurisdiction could extend to this case. It stated that the action should have been brought in India.

Particularly when dealing with foreign-based companies, businesses should make every effort to ensure that the governing law and jurisdiction of any agreement is English law, if that is your preferred route. It must be remembered that terms and conditions can only apply if they are properly incorporated, which means that all parties must have actually seen them and had a chance to read them. In this case, the claimant seemed to forget these two points and spent time and money trying to obtain a judgment when an English court had no jurisdiction over the case at all. It proved a costly mistake. It is one thing to pay for a law firm to draw up decent terms and conditions, but that is only half the battle. The other thing to make sure that the terms and conditions actually apply.

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

The MPA said BT was being targeted as it is the largest ISP in the UK. It may also be because BT uses the website-blocking software Cleanfeed to stop access to child sex abuse images, so it clearly has filtering technology available. The MPA hopes the injunction will force BT to block access to Newzbin in the same way it blocks access to websites hosting child porn , and this should then have a knock-on effect on other ISPs and website blocking.

This is a really interesting development and tactic by the entertainment industry in its long-standing cat-and-mouse battle against online copyright infringers. The MPA took action against Newzbin in 2010 in the UK, where Newzbin had been based, and the High Court ordered that Newzbin removed copyright-infringing material from the website. However, the company behind the website folder and a new version of the website set up by a phoenix company has since appeared operated out of the Seychelles. Due to the difficulties in taking action against that site there, the MPA is trying this new tactic. It will be interesting to see the outcome.

This case comes against the backdrop of the Digital Economy Act, which, when its provisions are fully implemented, would require ISPs to pass details of users who infringe copyright material to copyright holders so that they can take action against the infringers. ISPs would also have to suspend Internet access of the infringers.

In this case, the parties had entered into a contract under which Blackpool Airport Ltd (BAL) had to use all reasonable endeavours to provide a low cost base for Jet2, and under which both parties had agreed to use best endeavours to promote Jet2’s low cost services from BAL. The parties agreed before the case that the court should consider, for this case, the best endeavours and all reasonable endeavours clauses used in the agreement to have the same meaning i.e. that they should both be considered all reasonable endeavours clauses. Neither party obtained significant legal advice on the provisions of the agreement before entering into it.

The agreement did not specify the operating hours of the airport. Initially, the airport opened or stayed open outside of its published operating hours for early or late flights respectively, as it seemed common ground between the parties that Jet2 needed flexibility to operate. However, BAL made an operating loss over that period and, after four years, refused to accept flights that were scheduled for arrival or departure outside of its published operating hours, giving Jet2 just one week to comply.

Jet2 issued proceedings against BAL for breach of contract. BAL argued that its ‘all reasonable endeavours’ obligation did not oblige it to act against its own commercial interests – i.e. to allow the flights to continue to run outside of its operating hours despite the airport making a loss as a result.

The High Court ruled that BAL had breached the agreement, rejecting BAL’s justification of protection of its commercial interests. The High Court ruled that the initial intention of the parties in the agreement could not have been for BAL to change what it did on an ongoing basis based on what profit it was making as a whole – this profit was affected not just by Jet2’s flights, but also by a number of other problems it faced. The High Court stated that those other problems should have been considered in a risk assessment by BAL before entering the agreement, and did not justify BAL restricting or stopping performance of its obligations under the agreement if it became unprofitable.

The High Court distinguished this case from other cases concerning endeavours clauses as the relevant clause here related to matters all within BAL’s control i.e. whether or not to schedule flights outside its published operating hours. Other cases in this area tend to be where the clause relates to matters outside of the relevant party’s control, and in such instances a party would be justified in not risking its commercial interests in an attempt to achieve a result outside its control. In this case, BAL was not justified as the result was entirely within its control.

This case is another instance where obtaining legal advice and ensuring stricter drafting of the agreement could have saved both parties significant amounts of time and money. It is always better to have an express obligation in an agreement rather than an obligation qualified by an endeavours clause, as it allows much less scope for arguments on interpretation. If the operating hours of the airport had been specified in the agreement from the outset, a dispute of this magnitude could have been avoided.

The BSA recently received an anonymous tip-off that a York-based company was using unlicensed software and, after reaching an agreement with the company, handed them a £29,000 bill to cover licences and costs. The BSA has previously targeted Birmingham and now plans to audit 1,500 companies in Yorkshire. The BSA estimates that it received fines and fees of £2.2 million in the UK in 2010.

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

The 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.

CCTV images can be considered as personal data, and the ICO’s action came after CCTV footage of a shopper from the website was posted on YouTube. The ICO has made it clear that such disclosure of personal data should take place only where ‘necessary’ i.e. for the purposes of crime detection, rather than just for entertainment, as it was here.

The ICO criticised Internet Eyes for not encrypting CCTV images it shared with its members, and it was also not tracking member activity meaning that it could not trace who had posted the video on YouTube. The ICO has made sure that the website has signed an undertaking to ensure encryption and sufficient tracking, and has also requested that the website not allow a member to access CCTV footage taken within a 30 mile radius of the member’s registered location, in an attempt to decrease the likelihood that those people visible in the footage are identifiable to a particular member.

In this case, the High Court had to consider a scheme of arrangement involving financial assistance as part of a restructuring to resolve financial difficulties suffered within a group of companies, and ruled that, whilst some aspects of the scheme of arrangement could be defined as financial assistance under section 678(1) of the CA, they also fell within the principle purpose exception under section 678(2) of the CA. The principle purpose was considered by the High Court to be the attempt to release a subsidiary’s pension scheme liability, with any payments and loans made in good faith and in the interests of the companies involved. The High Court also ruled that the payment of costs and giving of indemnities as part of the scheme of arrangement, which would otherwise be construed as financial assistance, should be approved by the exercise of the High Court’s power under section 681(2)(e) of the CA, as such payments and indemnities were commercially necessary for the restructuring and in the interests of the companies’ creditors and members.

The High Court also ruled that an error in a figure contained in a special resolution, which was being voted on by the company’s members to approve changes in share capital under the scheme of arrangement, could be construed so as to correct that error. Under the CA, a resolution to be passed at a general meeting cannot be considered a special resolution unless the text of the resolution was contained in the notice of general meeting. The courts have previously held that a general meeting cannot amend a special resolution except to correct grammar or spelling, or where all members eligible to vote on the resolution waive their rights to notice. However, in this instance, it was clear that the special resolution, when read with accompanying documentation, contained an error, and the High Court ruled that common sense should prevail – that the special resolution could be read as a matter of construction as if the error had not been made. In addition, the meeting had been informed of the error prior to the vote, and the minutes of the meeting noted the error.

This ruling is important as it is a further insight into how the revamped financial assistance doctrine under the CA is interpreted by the courts. It is also a good to see that the courts are willing to be flexible when considering a special resolution containing an error, allowing that error to be considered corrected – however, it would be interesting to see the court’s ruling if an error contained in a special resolution was a mistaken word rather than a mistaken figure. In this case it was obvious to all that the figure was incorrect, but if mistaken wording was included in the special resolution the mistake might not be so clear-cut and the court not so generous in their ruling.