Competition Law
European Commission investigates allegations that Google acted 'anti-competitively' in ranking of rivals' sites on its natural search results...
The European Commission is investigating allegations that Google has acted anti-competitively over the way it has been ranking search results. Three businesses have complained to the Commission that their rankings have been demoted because they are commercial rivals of Google. They therefore claim that the search engine giant – which is responsible for about 90% of Internet searches across the world – has been abusing its dominant position in the market, contrary to European Union competition law. The complainants are UK search engine Foundem; French search engine ejustice.fr; and Ciao, the price comparison site which has been owned by Microsoft since 2008 and which prior to that had had a good relationship with Google. Google denies any wrong-doing and says that penalties to filter out unwanted traffic and rankings are reserved for spam or sites seeking to cheat Google's algorithms. For example, Google removed BMW's site from its search results four years ago because the search engine did not like the car manufacturer's search engine optimisation techniques.
Contracts
Liability cap in contract includes contractual interest but excludes statutory interest – Markerstudy v Endsleigh, High Court...
Endsleigh provided certain administration and claims handling services to Markerstudy. Markerstudy claimed for losses resulting from Endsleigh's alleged overpayment in relation to the claims. There was a liability cap in the contract. This preliminary hearing concerned how much was covered within the cap.
The High Court ruled that the total liability in contract included liability for contractual interest. However, any interest applied by statute was a discrete statutory liability arising from the exercise of the court's discretion and was therefore not covered by the contractual cap on liability.
The High Court also ruled on other matters that emphasised the need to draft exclusions or limits on liability absolutely clearly beyond doubt. Failure to do so could result in the liability clause being interpreted against the person looking to rely on it.
One clause said: 'Neither party shall be liable to the other for any indirect or consequential loss (including but not limited to loss of goodwill, loss business[...]) arising out of or in connection with this Agreement.' Endsleigh argued that the specific types of losses in brackets could apply to direct or indirect losses, but the court rightly disagreed. The phrase 'including but not limited to' gave a clear indication that those losses were a type of indirect or consequential loss.
More surprising, perhaps, was the court's interpretation of the following clause: 'Endsleigh will not be liable to Markerstudy for any indirect or consequential loss or loss of profit or loss of business arising out of...' The court ruled that only indirect loss of profit or business was covered by the exclusion. Endsleigh argued that the specified types of loss were free-standing from the phrase 'any indirect or consequential loss' and could therefore be direct or indirect loss of profit or loss of business, but the court rejected that argument too.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: 'Some of the court's findings here are surprising. However, what is not surprising is that if someone wants to exclude or limit its liability, the clause has to be drafted very clearly – more so, perhaps, than many people realise. Failure to do this could result in not having liability limited or excluded in the way intended. Since the liability clause nearly always crop up in the event of a dispute, it is arguably the most important clause in the contract, but the one drafted incorrectly most often.'
Economic duress to change the agreed contract price won't work – Kolmar v Traxpo, High Court...
You've secured an important deal to sell some products to a major customer. You've got an agreement with a supplier to buy the product. Everything's in place...that is until your supplier suddenly decides to put pressure on you to buy at a higher price than otherwise agreed. You're caught between a rock and a hard place. You don't want to pay any more money but you need to do so in order to fulfil that important customer deal. What should you do? Should you pay extra, supply the customer and then seek to claim later that your supplier broke an agree deal? Would that work?
That was the situation faced by Kolmar in this case. It did agree to pay the extra amount and then sought a recovery of the overpaid sums in restitution. The High Court awarded victory to Kolmar. It was important that Kolmar had clearly agreed to purchase at an agreed price and that it had only agreed to the revised price based on illegitimate pressure that left it with no practical choice. The Court decided that it had no real alternative but to agree to the supplier's demands and get its redress later.
European Commission proposes the 28th regime as alternative to national laws...
The European Commission has proposed a new law spanning the European Union which would aim to increase cross-border trade. In 2008, only 7% of web site transaction were made cross-borders. Viviane Reding, the Justice, Fundamental Rights and Citizenship Commissioner, has blamed the lack of uniformity for that. Giving her assessment, she said, 'The EU must do better.' She would like business-to-consumer relationships to be made simpler by offering an alternative to the 27 different national regimes. Under the 28th regime, a business would simply need to comply with the new EU-wide set of rules. She compared the situation to the US and said Europe could have a uniform commercial code in order to become a truly globally competitive economy.
European Commission wants to push ahead with Consumer Rights Directive...
The European Commission has signalled its intent to push forward with its proposed Consumer Rights Directive. Viviane Reding, the Justice, Fundamental Rights and Citizenship Commissioner, would like to have a single set of rules that relate to consumer rights. This is all part of her plan to make the EU more harmonised and reduce barriers to trade. However, the position has been criticised by certain consumer rights groups, as the effect of the law would be to give a set of maximum standards, thus lowering the current protection offered to consumers. Based on statements so far, a standardised set of consumer laws across the EU would remove the rights that consumers currently have to reject faulty goods. The proposals are still a considerable way away from becoming law, but the developments are worth monitoring.
Copyright and Database Rights
Australian case says ISP not liable for peer-to-peer copying of users...
An Australian court has ruled that an Internet service provider was not liable for the unauthorised peer-to-peer file-sharing habits of users to whom the ISP merely provided access. Roadshow Films claimed that iiNet had authorised copyright infringement by its users, but the Australian Federal Court disagreed. The judge said that the fact that copyright infringement was occurring on a wide scale across the ISP's network did not mean that the ISP had authorised the wrong-doing as it was not compelled to stop the infringements. Mere knowledge that infringement was taking place was not enough.
As with English law, Australian copyright law forbids the doing or authorise of doing anything which infringes someone else's copyright. The two legal systems have common roots, and the decision may therefore be persuasive (although not binding) on similar English court cases.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.upload-it.com, comments: 'It's understandable that the music and entertainment industries want to take action against people who allow their people to lose royalty monies.
However, that's not fair on the ISPs. It would be the equivalent of taking action against the Post Office because they don't intercept pirated material sent in the post and stop it being delivered.'
Change of stance from Government on cutting off peer-to-peer file-sharers under Digital Economy Bill?...
There is some uncertainty whether the Government has shifted its position in the Digital Economy Bill and adopted a more lenient line in respect of illegal peer-to-peer file-sharers. If passed, the Digital Economy Bill would see file-sharers being identified, warned and ultimately stopped from having full Internet access. Instead of cutting off persistent file-sharers from the Internet, the Government now says that their accounts will be 'temporarily suspended'. Is this a change or not? According to Jim Killock, of the Open Rights Group – a body against the proposed legislation – nothing has really changed. He says that temporary account suspension still means that families will be stopped from using the Internet.
Nearly three-quarters confused by what they can copy...
73% of people surveyed by Consumer Focus admitted to being confused by what they were legally permitted to copy or record. These were the results of Consumer Focus's survey of about 2,000 people in the UK. Most of the consumers did not know that it was illegal to copy over something that they have legitimately paid for (such as a CD) onto another medium (such as a computer) for their own personal use. Consumer Focus accused the laws of being outdated and not reflecting what consumers reasonably believe to be the case when using music just for themselves to listen to. Many people who are not illegal peer-to-peer file-sharers are still clearly breaking the UK's copyright laws, despite not realising it.
Cybercrime/Security
Special police unit formed to crack down on terrorist material on Internet...
A special police unit has been formed to crack down on material posted on web sites that breach the Terrorism Act 2006. The Act gave police the power to require any material useful for terrorist activities to be removed from web sites within two working days. The police has set up a special purpose team to investigate reports of material from the public, proactively seek out illegal material on the web and work with the Internet industries to make it harder for terrorists to spread their dangerous messages online. The Government has created a dedicated page on its direct.gov site where people can report illegal terrorist material appearing on the web.
Data Protection/Privacy/Confidentiality
Coroners and Justice Act brought into force to allow Information Commissioner to inspect premises for data protection breaches...
Sections 173 to 175 of the Coroners and Justice Act has been brought into force as of 1 February. This gives the Information Commissioner – the data protection regulator in the UK – the right to inspect premises and require other co-operation (initially of public authorities, but the categories may be extended later) – to assess whether the data controller (usually the organisation being inspected) is complying with the Data Protection Act. The changes also make other changes of a framework nature initially, including requiring the Commissioner to create new codes of practice, such as to cover the sharing of personal data.
This is part of a trend to beef up data protection law and increase the teeth given to inspect and prosecute for data breaches.
It's a case of 'Do As We Tell You' not 'Do As We Do' as Labour is the latest political party caught out for flouting privacy laws when canvassing...
The Labour Party has embarrassingly been told off for breaching the privacy rights of 500,000 people in a canvassing campaign, when it sent the recipients a recorded message of actress Liz Dawn telling them to vote labour. Unsolicited automated telephone calls without consent breach the Privacy and Electronic Communications (EC Regulations) 2003. A member of the public complained in July 2007 that they were receiving those calls, but the Information Commissioner's Office – the UK data protection regulator – received further complains in 2009. The ICO has served an enforcement notice on Labour requiring the Party to ensure no further automated direct marketing calls are made without consent. If Labour breaches the enforcement notice, they could be fined. Labour is not the only Party at it – the Conservatives, Liberal Democrats and Scottish National Party have all received enforcement notices in the past for employing the same tactics. It seems to be a case of the politicians making the law for everyone else to comply with, but thinking they are above the law – sound familiar?
Information Commissioner's Office won't go soft on charities on data compliance...
The Information Commissioner's Office has hit a clear warning to charities that it won't go soft on them, after it required the Alzheimer's Society to sign a formal undertaking agreeing to comply with the Data Protection Act 1998 and improve its security and staff training. This follows the loss of several unencrypted laptops containing the names, addresses, national insurance numbers and salary details of 1,000 UK staff. The ICO – the regulator in charge of enforcing data protection laws in the UK – reiterated its message that it has given out frequently: all portable devices containing personal data must be encrypted and that staff are appropriately trained at all times.
European Commission updates data export laws to take account of sub-contracting in outsourced processing...
Under the EU's Data Protection Directive, personal data cannot be transferred out of the European Economic Area unless there is adequate protection of the data. One way of ensuring adequate protection is to conduct an individual assessment of the way the particular data will be protected in the destination country. Another possibility is if the destination country has been approved as having adequate data protection laws, but only a few have been approved so far – Argentina, Canada, Guernsey, Isle of Man, Jersey and Switzerland, plus entities in the US that comply with certain rules called the 'Safe Harbor' rules. A more common way of ensuring adequate protection is by entering into contracts with the organisations in the destination country on terms approved or designated by the European Commission.
The Commission has just updated the rules and data export contract terms that apply when a European data controller transfers data to a data processor that is not based in the EEA. A 'data controller' is someone who decides and controls what happens to personal data, and a 'data processor' is someone who processes personal data on behalf of a data controller but does not take decisions in relation to the personal data and is not ultimately responsible for that data. The new rules allow for the data processor to sub-contract the processing of the data to sub-processors under certain conditions, including by obtaining the prior written consent of the data controller that is exporting the data out of the EEA. The development is aimed at keeping pace with the way business is done, and in particular different levels of outsourcing in a chain.
Separate contract terms continue to exist in relation to transfers of data from data controllers within the EEA to data controllers outside of the EEA. They are unaffected by the updated contract terms in data controller to data processor situations.
(ISC)² warns new big fines are finally bringing data security to boards' attentions...
Imminent fines are bringing data security issues to boards' attentions. Those are the comments of John Colley, EMEA managing director of (ISC)². (ISC)² is a not-for-profit organisation that educates on information security issues. Colley claims that the forthcoming introduction in the UK of fines of £500,000 for serious data breaches is making businesses sit up and take their data protection obligations seriously. He advocates every information security person ensuring that they have compliant policies and documentation in place before the law becomes stricter.
Under changes to UK data protection law expected to take place in April this year, the Information Commissioner's Office – the regulator in charge of enforcing data protection law in the UK - will be able to fine organisations up to £500,000 if they discover a serious breach of the Data Protection Act. The breach must be of a kind likely to cause substantial damage or distress, and either the organisation must have deliberately breached the Act or it should have known of the risk and the likely substantial damage or distress but still failed to take reasonable steps to prevent it. The ICO has issued guidance as to how high it would make the penalties. The ICO would consider a number of factors, including:
- How serious the breach was.
- How likely damage was.
- Whether the breach was deliberate or negligent.
- What steps the organisation had taken to safeguard the
data.
- The organisation's resources and size.
European data protection supervisor concerned over data protection issues with international anti-counterfeiting trade agreement...
Peter Hustinx – the European data protection supervisor – has expressed concern that the anti-counterfeiting trade agreement currently being negotiated may not be protecting people's data protection and privacy interests. He expressed regret over the fact that the European Commission had excluded him from the negotiations over Acta. Trade representatives of leading developed countries have been negotiating Acta for two years and the agreement is expected to be concluded this year.
The purpose of Acta is to protect intellectual property rights in software, music, video and pharmaceutical products against unlawful copying. Hustinx would like to ensure that the negotiating parties consider the balance between protecting intellectual property rights and data protection and privacy rights, rather than data protection and privacy issues being considered at the end. Hustinx particularly wants safeguards to apply to all data transferred out of Europe to countries that do not provide strong enough protection on data protection issues. Hustinx would like to see a public and transparent dialogue on Acta.
Parliamentary group advocates journalists informing subjects of their stories before going to print...
The House of Commons Culture, Media and Sport Committee has issued a report calling for the Press Complaints Commission to recommend journalists to pre-notify people who are the subject of stories before publishing. However, it has said that the Government should not pass laws to develop the laws of privacy: it said it was better off left to the courts to develop privacy laws under the Human Rights Act as they had done until now. Max Mosley, who won a controversial court case giving him damages for invasion of his privacy in 2008, told the Committee that he thought there should be a law requiring journalists to contact anyone featuring in their stories before they could publish them, but the Committee heard other evidence saying that a legal requirement to pre-notify would be going too far. That's why they thought it was best to leave it to the Press Commission to decide.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.upload-it.com, comments: 'This is a cop-out by the Parliamentary Committee. A few years ago, they recommended that the Government should pass a new privacy law so that people knew where they stood. In the last couple of years, there has become even greater uncertainty as to what the press could say and in what circumstances without infringing people's privacy rights. Now, more than ever, is a need to clarify the law in this area. Yet, the Committee has failed to come up with a decisive recommendation.'
Defamation
Budget airlines hit new low with libel action between two big players...
Sir Stelios Haji-Ioannou has said that Ryanair and its chief executive Michael O'Leary have crossed a line and he has been left with no alternative but to issue legal proceedings for defamation. Stelios – whose easyJet company is fierce rivals with Ryanair in the budget airline market - objects to having been depicted with a long-nose to suggest he was a liar. Stelios also objects to Ryanair's comments about whether easyJet is in fact a high fares rather than budget airline and whether customers are forced to pay for added extras. The Office of Fair Trading and Government are currently considering whether budget airlines are transparent enough over their pricing and what action to take against them. Mr O'Leary has belittled Stelios's complaints, by suggesting that they settle the issue with a run around Trafalgar Square or a sumo wrestling contest. Actually, come to think of it, that sounds like a good idea! Maybe more disputes could be settled that way – it might work out cheaper!
E-Commerce Laws
Italian prison sentences for Google executives for user-generated material sends shockwaves across the Internet...
A decision of an Italian criminal court has sent shockwaves around the Internet. Four Google executives, including its global privacy legal counsel, have been given suspended prison sentences for user-generated material uploaded onto Google's popular video-sharing service, YouTube. The video showed an autistic child being bullied. The European Union introduced the E-Commerce Directive – which has been brought into English law through the law commonly known as the E-Commerce Regulations – in order to protect intermediaries (such as Google who facilitate and oil the wheels of the Internet against liability) they have not monitored that content but had a process of quick take-down upon becoming aware. Google has promised to appeal this decision and said that the ruling threatens to undermine the legal basis of essential Internet services.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: 'Although this ruling is not binding on English courts, it is of great concern that any court anywhere in the European Union could have come to this decision. If not successfully appealed, it could change the Web 2.0 as we know it and make anyone more cautious if they are involved with acting as a mere host or intermediary of content supplied by other people. The fact that there is criminal liability is even more concerning – it's one thing risking being sued; it's another if people at a responsible business risk jail terms.'
Freedom of Information
Conservatives promise to publish details of Government contracts...
The Conservatives will publish all Government contracts with a value of over £25,000 with just a few exceptions (such as threats to national security), if the Party wins this year's General Election. David Cameron, the Conservative leader, has accused the Government of secrecy and inefficiency. In a statement that will send shivers through businesses that supply the Government, he believes that transparency of contracts will enable competitors to compete better, which will lead to greater efficiencies. The policy would come into effect from 1 January 2011. The Party also wants to ensure that no ICT project would be commissioned unless it is properly investigated whether it can be done well for free or at low cost.
Gambling
Does ECJ ruling on broad extent of Unfair Commercial Practices Directive? – Zentrale zur Bekaempfung unlauteren Wettbewerbs eV v Plus Warenhandelsgesellschaft mbH, European Court of Justice...
The European Union introduced the Unfair Commercial Practices Directive, which the UK brought into law through the Consumer Protection from Unfair Trading Regulations. The Directive aims to stop misleading, unfair or aggressive selling practices. However, a recent case has suggested that the law goes much wider than that, and there could now be major question marks over the legitimacy over the UK's Gambling Act.
In the case in question, a German law prohibited promotions where prizes were won by chance and where purchasing an item was a condition of entry. The European Court of Justice decided that those sorts of promotions were commercial practices within the scope of the Directive. It said that the Directive was a total harmonisation Directive, meaning that it was exhaustive of all illegal commercial practices. Building on an earlier case of VTB-VAB v Total and Galatea v Sanoma Magazines, the ECJ ruled that the 31 practices described in the annex to the Directive was an exhaustive list of all commercial practices which could be considered to be unfair. Since the particular German sales promotion law was not on that list and did not otherwise offend against the provisions of the Directive, it could not be illegal, so the particular law was invalid.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: 'This case seems to dramatically expand the scope and effect of the Directive. The Directive had been considered as a useful tool to guard against unfair and aggressive selling practices. However, it seems to go further and say that if a particular commercial practice is not a problem under the Directive, then any Member State's laws which go further than the Directive are no longer valid. The UK has a relaxed set of laws dealing with sales promotions, compared to many of our continental neighbours. However, if the validity of laws surrounding sales promotions are now questionable, then this begs the question of whether the Gambling Act – which prohibits illegal lotteries, whereby people pay something for the chance to win a prize – is also invalid. Anyone charged with operating an illegal lottery contrary to the Gambling Act should consider running the argument that UK gambling laws are no longer valid.'
IT and Internet Use
Consumers' online awareness of laws rises while so does e-tailers' compliance...
Between 2006 and 2009, consumers' awareness of their rights while shopping online has risen, whilst the e-tailers selling to them have increased their legal compliance. That is according to research conducted by the Office of Fair Trading. Amongst the findings were:
- Consumers' awareness of their rights when shopping online
had risen from 49% to 62%.
- There was a fall in the numbers of consumers not knowing where
to seek advice for their rights (16% from 28%).
- 26% of web sites had restrictions on cancellations, down from
38% in 2006.
- More sites complied with all aspects for which they were
assessed – 21% compared to 17%.
However, Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: 'This last figure is not encouraging. With consumers having more knowledge about their online rights and knowing where to turn to find out more, it's important that more online businesses keep up and comply with their legal obligations.'
New web site called PleaseRobMe posts details of when people are not at home...
A web site called PleaseRobMe has been set up to post details of when people are away from home. The founders claim that they use data that people post on the Internet and put it in one place to show how dangerous and careless they act with their data. The site founders say that they do not want to encourage crime, but make people more aware of how they are exposing themselves to the risk of crime. They say that people post their current whereabouts on tools like Twitter, while elsewhere revealing where they live. Crimestoppers, the independent crime-stopping charity, has urged users of social networking sites to take care. It says that people would not hang a sign on their doors saying that they are out, so it questions why they effectively do the same thing when they use the Internet.
Jurisdiction
Material hosted on US server broke English criminal law – R v Sheppard and Whittle, Court of Appeal...
People could be convicted of criminal offences under English laws despite their material being published in a US server, the Court of Appeal has ruled. The defendants had been involved with writing or publishing racially inflammatory material, contrary to the Public Order Act. They appealed against their convictions on the basis that the material was hosted on US servers and were therefore not criminal offences caught by the English jurisdiction.
The Court of Appeal disagreed. It said that the crucial factor was that a substantial measure of the activities had taken place in England. The material had been prepared in England, uploaded onto a web site from England and this had been done in the knowledge and expectation and intent that the material should be available to the English public. In particular, there had been references for how people in England could obtain the materials by post.
The Court also dismissed the defence's argument that there had not been actual publication in England until it could be proved that people had read the materials. The Court said that any analogy with defamation laws – which had applied a similar test – was flawed. Defamation was a civil wrong which considered the damage done to someone's reputation. This case involved criminal law, where the mere posting was enough to break the law.
Miscellaneous Laws
Conservatives to come down tough on irresponsible marketing to children...
The Conservatives would introduce a new law that would severely hamper any business that markets irresponsibly to children, if they win the General Election to be held this year. Conservative leader, David Cameron, wants to 'mend Britain's broken society' and make businesses more responsible in how they market to children. He wants to see children protected from 'premature sexualisation and excessive commercialisation'. Ultimately, any business flouting this could end up being banned from obtaining Government contracts for up to three years.
Misleading Advertising
Wheels fall off bike chain business's ad campaign for wrongly suggesting endorsement of Olympic winner...
A bike chain manufacturer has been rebuked by the Advertising Standards Authority for misleading people into thinking that an Olympic medal winning cyclist had endorsed their products when she had not. KMC had an advert with a picture of Emma Johansson, which said that she had chosen their products. However, she had never consented to her image being used in this way and the ASA upheld a complaint that the advert was misleading for suggesting that she was endorsing their products. KMC said that the picture was genuine and Johansson's cycling team was sponsored by KMC. Johansson herself, though, had not personally endorsed the products. She had not agreed for her image to be used. The ad therefore breached the CAP Code.
The CAP Code is a code of practice governing the content of adverts and marketing communications, and it is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space. The ASA here ruled that KMC must not use the advert again and should ensure it had people's approval for products allegedly endorsed by them.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: 'This seems the correct result. It follows on from the Eddie Irvine case a few years ago which established image rights, when the racing driver was awarded £25,000 by the Court of Appeal after talkSPORT had featured his photo superimposed with a radio containing talkSPORT's logo without his permission. This latest ruling shows that the ASA will also take action to stop the practice. In addition, it may now be possible for traders conducting misleading practices to be prosecuted under the Consumer Protection from Unfair Trading Regulations.'
Misleading Hovis ad not quite the best thing since sliced bread...
The Advertising Standard Agency has ruled that Premier Foods should stop using a misleading advert which stated that its Hovis brand had been voted Britain's softest white bread. The claim was based on an independent survey of 200 people in November and December 2008. However, rival bakers complained that the advert was misleading. The ASA agreed. Even though Premier Foods had continued to carry out its own surveys following the independent 2008 survey, they did not hold the same weight as the independent one. Since the 2008 surveys had been conducted, the recipe in at least one of the breads had changed, and all the breads were using 2009 rather than 2008 flour, which may have affected the results if a further independent survey was carried out. The ASA said it could not be certain how people would have voted if there had been a subsequent survey.
In addition, the ASA objected to the fact that the survey had asked people to give the products a mark out of 10 and although Hovis's average was higher it was not necessarily chosen preferred by more people.
Consequently, the ad breached the CAP Code. The CAP Code is a code of practice governing the content of adverts and marketing communications, and it is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.
Dabs comes unstuck as ASA tells retailers not to publish prices in printed brochures if they change regularly...
The Advertising Standard Agency has rebuked Dabs, the online retailer, for advertising prices in its printed brochures that were not accurate. Dabs argued that its prices changed regularly and its printed brochure warned readers to 'check www.dabs.com for latest prices'. However, the ASA said that that did not go far enough. It had not indicated that the prices in the advert regularly changed. The advert was therefore misleading, contrary to the CAP Code. The ASA went further and said that the printed brochure was unsuitable to advertise prices because it was likely to be in circulation after prices had changed.
The CAP Code is a code of practice governing the content of adverts and marketing communications, and it is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.
Trade Marks and Passing Off
Failure to act quickly enough proved fatal to injunction application to stop trade mark infringement and passing off – Blinxx v Blinkbox, High Court...
Since 2004, A had been operating the blinkx.com web site, which was an Internet service providing access to film, television and video content. In 2008, B started up its own site at blinkbox.com, which enabled users to choose, customise and share video and television content. When A discovered that B was attempting to register trade marks, it complained to B and said it was infringing A's trade marks and passing off. A applied for an injunction to stop B.
The High Court refused to grant A's injunction application. A had been aware since 2008 of B's potentially conflicting similar service but had done nothing to stop it for a while. It was totally unjustified and unreasonable to delay in issuing legal proceedings. The Court dismissed A's argument that it was appropriate to wait to issue proceedings until the extent of the confusion became clear. The Court said an injunction would severely affect B's business as it would have to immediately change its name and lose advertising revenue, which may prove unnecessary if B won at the main court action. If A had acted more quickly, the Court may have granted the application but the delay was fatal to its request for an injunction.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: 'People often delay in taking legal action because they don't want to incur the expense. However, as this case shows, if you delay in exercising your rights, you may lose out on stopping someone. It's always best to speak to a lawyer at the earliest opportunity so you can at least weigh up the options and don't lose your rights for failure to act.'
Own name defence to registered trade mark infringement applies to trading as well as corporate names, but use must be honest – Hotel Cipriani v Cipriani (Grosvenor Street) Ltd, Court of Appeal...
HC – which owned hotels under the name 'Cipriani' in Italy, Portugal and Madeira - has won in its trade mark infringement action against the owners of a restaurant that called itself 'Cipriani London'. The High Court initially, and now the Court of Appeal, have said that the defendant's operation of a restaurant in London since 2004 infringed HC's EU and UK trade marks, which had been registered since 1996. The London restaurant was ordered to change its name.
In the High Court action, the Court threw out the defendant's argument that it was simply using its 'own name'. Although there was an 'own name' defence that could apply to companies as well as to individuals, the defendant did not use its full company name (apart from the 'Ltd' bit) as it was required to do to take advantage of this defence but it instead used a much shorter version of its name. In any event, the Court said that its use had not been 'in accordance with honest practices in industrial and commercial matters' as it should have known of the existing registered trade mark when starting up.
On appeal, the Court of Appeal has agreed with the High Court ruling, but not with all of its findings. The Court of Appeal said that a company could claim that its trading name benefited from the 'own name' defence. Whether it was the company name or trading name, though, the position had to be that the use was in accordance with honest practices. The right to use one's own name was not an absolute right. Much depended on the trading name adopted and in what circumstances it had been adopted. In this particular case, the use of the same name as the already established brand did not amount to honest practices as the infringer did not already have concurrent rights in the name, so the 'own name' defence was thrown out.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.