HomeInsightsNeed to Know – 2012.10.22

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General

Attorney General says no withdrawal from European Convention on Human Rights.

Business Action to Stop Counterfeiting and Piracy publishes Guidelines to provide information to businesses on how to manage and protect IP rights.

Technology

European Commission consults on current list of relevant wholesale and retail telecoms markets that are subject to the Commission’s Article 7 procedure under EU telecoms rules.

Ofcom, Government and UK’s major mobile network operators publish joint statement on progress in delivering 4G.

European Commissioner, Neelie Kroes, says cyber security needs to be given attention “at the highest political level”.

European Commission proposes update to Radio Equipment Directive (1999/5/EC).

Data Protection

French data protection authority publishes findings on Google’s new privacy policy.

Prize Draws, Promotions and Competitions

Court of Justice of the European Union finds that giving false impression to a consumer that he/she has won a prize when in fact he has to incur costs to receive it is prohibited.

ASA finds Homebase national discount day promotions contradictory and misleading.

Music

Scottish court holds company director personally liable for copyright infringement.

International Federation of the Phonographic Industry says recent research into P2P file sharing “could lead to some misunderstandings”.

Publishing

Department for Culture, Media and Sport issues call for evidence on e-lending from libraries.

Sport

Court of Justice of European Union finds act of sending data from a database in one Member State to user’s computer in another Member State at user’s request can constitute “re-utilisation” at least in the place where user downloads the data.

General

Attorney General says no withdrawal from European Convention on Human Rights.

Speaking in the House of Commons on 16 October 2012, the Attorney General, Dominic Grieve, said of the Convention: “We helped to draft it and we support it strongly.  It has already contributed to widespread changes across Europe, including the decriminalisation of homosexuality, the recognition of the freedom of religion in the former Soviet countries, the prevention of ill treatment in police stations and elsewhere, and the removal of military judges from civilian courts.  Those are all very good reasons for it continuing its very good work”.  There was therefore “no question” of withdrawing from the Convention.

The Attorney General referred back to the April 2012 Brighton declaration which, he said, addressed the Government’s requirements for reform, including the European court of human rights showing greater responsiveness to the concerns of the UK’s national courts, parliament and public opinion.

Business Action to Stop Counterfeiting and Piracy publishes Guidelines to provide information to businesses on how to manage and protect IP rights.

The Guidelines address a number of components including internal IP use, supply chain practices, relations with intermediaries, and the handling of third party IP.  They also deal with IP management in all its forms within companies, from IP development to component sourcing, manufacturing, wholesaling, retailing and internal corporate use.

BASCAP says that the Guidelines are intended to help businesses:

  • understand and support the value of IP as the basis of innovative, creative and economic activity;
  • manage their own copyrights and trade marks more effectively;
  • comply with IP laws protecting other companies’ copyrights and trademarks;
  • manage the business risks associated with infringement;
  • prevent and deter counterfeiting and piracy; and
  • develop company policies and practices to effect such compliance.

For a link to the Guidelines, click here.

Technology

European Commission consults on current list of relevant wholesale and retail telecoms markets that are subject to the Commission’s Article 7 procedure under EU telecoms rules.

The Electronic Communications Framework Directive (2002/21/EC) is one of the main EU instruments that regulate the telecoms sector.  Article 7 is a consultation and notification mechanism that requires national telecoms regulators to inform the Commission and telecoms regulators in other EU countries about measures they plan to introduce to solve market problems.

There are seven telecoms “markets”, including retail access to the public telephone network and wholesale broadband access, which were identified for analysis by national regulators.  The Commission says that having a list of relevant markets helps National Regulatory Authorities regulate their markets in a coordinated manner.  Since 2002, under the procedures set out under Article 7, national telecoms regulators have analysed their national telecoms markets, in consultation with industry, and proposed appropriate regulatory measures to address market failures.  

The purpose of the consultation is to identify major relevant trends and to consult stakeholders on the revision of the current list of relevant markets and their scope, as well as on markets to be possibly added to the list, including markets regulated at national level and transnational markets.

The review will take into account major market and technological developments, such as internet-based applications and services, the convergence between different types of networks and services and the development of very fast internet networks and services.  Based on its results, the Commission will then revise the current Recommendation on Relevant Markets, which was last updated in 2007.  The Commission invites interested parties to respond to the consultation by 8th January 2013.  To read the Commission’s press release in full, click here.

Ofcom, Government and UK’s major mobile network operators publish joint statement on progress in delivering 4G.

The statement says that EE, Telefónica O2, Three and Vodafone have announced that they have made further progress in speeding up the deployment of 4G mobile phone services in the 800 MHz frequency band vacated by the Digital Switchover.  These four mobile phone companies have now formally created a jointly controlled company called Digital Mobile Spectrum Limited, originally called MitCo, which will be responsible for ensuring that consumers continue to receive clear Freeview TV signals following the rollout of 4G mobile services in the 800 MHz spectrum band from the spring of next year. 

According to the statement, creating the company will “further accelerate the rollout of competitive 4G services next year”.  It will be funded by the successful bidders for 800MHz spectrum in the forthcoming auction and provisions exist to make sure that if any other party acquires some of this spectrum in the auction they can immediately become a shareholder in the company.  To read the statement in full, click here.

European Commissioner, Neelie Kroes, says cyber security needs to be given attention “at the highest political level”.

Speaking at the Conference on Cyber Security of Industrial Control Systems and Smart Grids in Amsterdam on 16 October 2012, Commissioner Kroes stressed the need to take action to increase cyber security.  “… in today’s new environment, we need to raise our game.  We need to act strategically; we need to work together; and we need to give this attention at the highest political level.  And that is exactly what we will do with our forthcoming European Cyber-security Strategy”, she said.

With the Commission’s consultation on its proposed cyber security strategy having closed on 15 October 2012, and over one hundred organisations and individuals having responded, Ms Kroes announced some early outcomes from that exercise, and some early indications of the Commission’s thinking.

Two in three responses to the consultation agreed on the need for regulatory requirements to manage security risks.  Further, the majority believed it should be at EU level, Ms Kroes said.  In Ms Kroes’ view, the strategy therefore needs to contain provisions for cooperation between the countries of the EU as “the internet knows no borders; we are only as strong as the weakest link in the chain”.  However, this should not be through centralised EU control, she said.  What is needed is “an approach based on dialogue, partnership and empowerment”.  The strategy will therefore set out how to raise protection levels across Member States; to ensure countries are more prepared; and to establish mechanisms for cross-border cooperation. 

Further, Ms Kroes said, different sectors, public and private, need to be involved and responsible.  She noted that for the telecoms sector there is already a legal obligation to manage security risks and report significant security breaches.  However, as more and more sectors interact with, and critically depend on, ICT networks, there is an urgent case for extending those obligations, and creating a level playing field, she said.  Further, it is often the private sector that produces the technical solutions to defend against cyber-attacks.  Therefore the strategy “will help them to do just that, and stimulate a rich and competitive EU industry”.

In addition, Ms Kroes said, “the responsibility for cyber-security lies with everyone, down to each and every ordinary internet user” and there are many simple steps people can take to improve their security online, such as choosing a sound password, and storing information safely.  The Commission needs to raise awareness of those steps, Ms Kroes said.

Ms Kroes concluded by saying: “Cyber-security is a top priority, and needs top political attention.  On the other side of the Atlantic, President Obama has long recognised this as a national security priority.  He’s right: it is.  It’s time we took that attitude here in Europe too.  It’s time to give cyber-security the attention it deserves.  Let’s be strategic, let’s work together, and let’s ensure we protect our infrastructure, and our citizens, in the digital age”.  To read the speech in full, click here.

European Commission proposes update to Radio Equipment Directive (1999/5/EC).

The Commission says that the proposal “aims to make sure all market players comply with the rules regarding the avoidance of interference, so that consumers do not have problems when opening car doors, monitoring their babies or listening to radio”.  The Commission also proposes to clarify and simplify the Directive to facilitate its application and to “eliminate unnecessary burden ultimately increasing all stakeholders’ confidence in the regulatory framework”.

The Commission proposes to:

  • strengthen the level of compliance with the Directive, ensuring that citizens have access to radio products which operate without interference;
  • clarify the Directive, in particular clearly spelling out the obligations for every market player, be it manufacturer or importer, and also by limited adaptations of scope; and
  • simplify the Directive, including through suppression of notification of certain products and other administrative obligations.

The proposal would also introduce some specific requirements, such as:

  • ensuring that software can only be used with radio equipment after the compliance of that particular combination of software and the radio equipment has been demonstrated; and
  • interoperability with accessories such as chargers, and/or work via networks with other radio equipment.

To read the Commission’s press release in full, click here.

Data Protection

French data protection authority publishes findings on Google’s new privacy policy.

On 24 January 2012 Google announced that it would be updating its privacy policy and terms of service for almost all of its services on 1 March.  Given the numerous questions raised by these changes, the Article 29 Data Protecting Working Party mandated the French data protection authority, the CNIL, to lead the investigation into the new policy.  Two successive questionnaires were sent to Google.  The company replied on both occasions but, the CNIL says, “several answers were incomplete or approximate”.  In particular it says, Google did not provide satisfactory answers on key issues such as its personal data processing operations or the precise list of the 60 or so product-specific privacy policies that had been merged into the new policy.

The CNIL says that it has not been able to ascertain from its analysis that Google respects the key data protection principles of purpose limitation, data quality, data minimisation, proportionality and the right to object.  In fact, it says, the privacy policy “suggests the absence of any limit concerning the scope of the collection and the potential uses of the personal data.  The EU Data protection authorities challenge Google to commit publicly to these principles”.

As the policy stands, the CNIL says that Google provides “insufficient information to its users on its personal data processing operations”.  For example, users are unable to determine which categories of personal data are being processed for which service and the exact purposes for which the data is processed.  Moreover, passive users (i.e. those that interact with some of Google’s services such as advertising) have no information at all.  The CNIL reminds Google, and internet companies in general, that “shorter privacy notices do not justify a reduction of information delivered to the data subjects”.  Accordingly, it asks Google to provide “clearer and more comprehensive information about the collected data and purposes of each of its personal data processing operations”.

Further, the CNIL says, Google does not provide user control over how data is combined across its numerous services.  Instead, the policy generalises this information.  Therefore, the CNIL says, in practice, any online activity relating to Google (use of its services, of its Android system or of third party websites via Google’s services) can be gathered and combined.  The investigation also showed that “the combination of data is extremely broad in terms of scope and age of the data”.  The CNIL reminds Google that it “must have a legal basis to perform the combination of data of each of these purposes and data collection must also remain proportionate to the purposes pursued”.

Google also does not provide retention periods, the CNIL found, and it refused to provide such retention periods for the personal data it processes.

The CNIL has also made recommendations to Google to ensure that the policy complies with data protection legislation.  The CNIL says that it, all the authorities in the Working Party and data protection authorities from other regions of the world, “expect Google to take effective and public measures to comply quickly and commit itself to the implementation of these recommendations”.  To read the CNIL’s press release in full, click here.

Prize Draws, Promotions and Competitions

Court of Justice of the European Union finds that giving false impression to a consumer that he/she has won a prize when in fact he has to incur costs to receive it is prohibited.

The Office of Fair Trading originally sought injunctions against five promoters of prize draw competitions for alleged breaches of the Consumer Protection from Unfair Trading Regulations 2008 in relation to promotions offering one of a number of specific prizes.  The promoters had been placing individually addressed letters, scratch-cards and other advertising inserts into newspapers and magazines which informed consumers that they had won a prize or equivalent benefit the value of which could be either considerable or nominal.  Consumers were given a number of options in order to obtain a claim number and receive the prize: they could call a premium rate telephone number, use an SMS service or obtain the information by ordinary post (the latter method being given less prominence).  Consumers were informed of the cost per minute and the maximum duration of making the telephone call, but were not made aware that the company responsible for the promotion would receive a percentage of the cost of the call.

The case went to the Court of Appeal in the UK, which referred questions to the CJEU.  In particular, the CJEU was asked to rule on the compatibility with EU law of such promotion practices and on the question of whether traders may impose a cost, even a minimal cost, on a consumer who has been told that he has won a prize.

The court found that, under the Unfair Commercial Practices Directive (2005/29/EC), aggressive practices that give the consumer the impression that he has already won a prize, when in fact he is obliged to pay money or incur a certain cost in order to find out the nature of the prize and/or acquire it, are prohibited.  This is the case, the court said, even if the cost imposed on the consumer is minimal (such as the cost of a stamp) compared with the value of the prize, and even where the trader receives no benefit.

Further, such practices are prohibited, the court said, even if a number of methods are offered to the consumer in order to obtain the prize and even if one of those methods is free of charge.  (Case C-428/11 Purely Creative and Others v Office of Fair Trading – to read the judgment in full, go to the curia search form, type in the case number and follow the link).

ASA finds Homebase national discount day promotions contradictory and misleading.

A Homebase discount day campaign promoting “15% off everything” and which stated that the offer was “on top of our other great offers” was found in breach of advertising rules because promotional vouchers, which the ASA considered were offers in themselves, could not be used in conjunction with the current offer.

The ASA considered that consumers would be likely to understand that the national discount day offer could be used in conjunction with all other Homebase promotions.  It considered consumers would understand the use of Homebase promotional vouchers, such as the “£5 OFF when you spend £30” voucher, as an “offer‘“ as referenced in the ads, because they could be used to get money off purchases. 

The ASA noted that a radio promotion stated “Exclusions apply” but considered that, because the overall impression of the ad was that the national discount day offer could be used in conjunction with all Homebase’s other offers, including their promotional vouchers, the statement contradicted, rather than clarified, the main claim. 

Because the overall impression of each of the ads was that the national discount day offer could be used in conjunction with all other Homebase offers, when that was not in fact the case, and because the statement “Exclusions apply” in the radio ad contradicted rather than clarified that impression, the ASA concluded the ads were misleading and breached BCAP Code rules 3.1 and 3.2 (Misleading advertising) and 3.10 (Qualification) and their equivalents in the CAP Code.  To read the ASA Adjudication on Homebase Ltd (10 October 2012), click here.

Music

Scottish court holds company director personally liable for copyright infringement.

A recent Scottish case involving the classical music label Naxos and the people behind the website www.royalty-free-classical-music.org raised two important issues.  The first was whether company director Keith Salmon was liable either primarily or jointly on the basis of procurement and acting in concert with his company for infringement of copyright in recordings of two works owned by Naxos, namely The Four Seasons and the song Joy of the World.  In Lord Glennie’s view, he was both, since on the evidence it was clear that he was acting not only as a director of the company but also as an individual setting up a website and licensing or selling infringing material through it.  The website, for example, was registered in his name as an individual and Lord Glennie was satisfied that it was in fact operated together by the company and by Mr Salmon.  The site even included a statement purporting to come from Mr Salmon that “I own the copyright to all of my recordings”.  This was consistent with his evidence that he owned the copyright and entered into agreements with the company for it to exploit it in return for some remuneration.  Additionally, sales receipts in evidence recorded the distributor sometimes as the company and sometimes as Mr Salmon.

The second issue arose from the “infelicitous” use of the future tense in a 1989 asset transfer agreement which the defenders said broke the chain of title to Naxos in respect of one of the works on the basis that the statutory requirement that an assignment of copyright must be in writing was not satisfied.  Despite the fact that the agreement provided that Naxos’s predecessor in title “shall” buy the relevant rights and there was no deed of assignment accompanying it, Lord Glennie was satisfied that “in the particular circumstances of this case” it was the intention of the parties, judged objectively, that the rights would be assigned immediately and not at some future date.  Accordingly, the 1989 asset transfer agreement was effective to achieve that transfer “without the need for a further agreement or deed of assignment”.  (Naxos Rights International Ltd v Project Management (Borders) Ltd [2012] CSOH 158 (9 October 2012) to read the full judgment click here). 

International Federation of the Phonographic Industry says recent research into P2P file sharing “could lead to some misunderstandings”.

The research in question is the American Assembly’s Copy Culture Survey, undertaken with “support from a research award by Google”.  The report’s author, Joe Karaganis, writes that: “US P2P users have larger collections than non-P2P users (roughly 37% more).  And predictably, most of the difference comes from higher levels of ‘downloading for free’ and ‘copying from friends/family’.  But some of it also comes from significantly higher legal purchases of digital music than their non-P2P using peers – around 30% higher among US P2P users”.

 IFPI says that the majority of research undertaken shows that “overall unlicensed P2P file-sharing has a negative impact on recorded music sales” and that unlicensed P2P file sharing is a “major obstacle to a thriving digital music market”. 

IFPI points out that previous studies have shown that some unlicensed P2P network users do also pay for music, and a few are serious fans who pay a lot, but they are far outnumbered by the bulk of unlicensed P2P network users who pay little or nothing for music.  Research by The NPD Group during 2010 in the US found that just 35 % of P2P users also paid for music downloads.  P2P users spent US$42 per year on music on average, compared with US$76 among those who paid to download and US$126 among those that paid to subscribe to a music service.  The overall impact of P2P use on music purchasing was therefore negative, despite a small proportion of P2P users spending a lot on music.  According to IFPI, that finding was corroborated by a study in Europe by Jupiter Research in 2009.  To read IFPI’s press release in full, click here.

Publishing

Department for Culture, Media and Sport issues call for evidence on e-lending from libraries.

The DCMS has appointed an independent panel to examine how libraries should respond to the challenges and opportunities that the new technology of e-books presents.

The panel are considering the following areas, and welcome submissions from any interested parties:

  • the benefits of e-lending;
  • the current level and nature of demand for e-lending in English libraries, along with a projection of future demand.  For example, will e-lending be in addition to traditional borrowing of print books, or is it likely to transform the way in which library users access services?  What is the demand for downloading e-books remotely, i.e. away from library premises?  To what extent do owners of e-readers value public e-lending above what is freely or commercially available elsewhere?
  • current supply models, barriers to the supply of e-books to libraries, and likely future trends;
  • systems for remunerating authors and publishers for e-lending;
  • the impact of e-lending on publishers and their business models; and
  • any unforeseen consequences of e-lending.  For example, the impact on those who cannot keep up with technology, the likely long-term impact on the model of highly localised physical library premises, skills requirements for librarians, etc. 

To read the DCMS call for evidence in full, click here.

Sport

Court of Justice of European Union finds act of sending data from a database in one Member State to user’s computer in another Member State at user’s request can constitute “re-utilisation” at least in the place where user downloads the data.

Football Dataco, owned equally by the Premier League and the Football League, marketed data from matches organised by its shareholders and by the Scottish Football League and the Scottish Premier League.  The data was entered into a database by PA Sport UK, which was engaged as a sub-contractor by Football Dataco, through a special graphical user interface called “Football Live”. 

The defendant, Sportradar, provided data relating to sports events to customers all over the world.  The service was called “Sport Live Data”.  In particular, Sportradar’s customers include bet365 and Stan James who provide betting services for and aimed at the UK market.  The database in which Sportradar collected and maintained the data was uploaded onto servers in Austria. 

The claimants claimed that Sportradar had copied data relating to some of the matches from the Football Dataco database and had included them in Sport Live Data by using sources already under licence by the claimants, such as the Sky Sports News live TV broadcast, Soccer Saturday.

The Court of Appeal essentially referred two questions to the Court of Justice of the European Union.  First, where a party uploads data from a database protected by the sui generis database right under the Database Directive (96/9/EC) onto a server in Member State A and on the request of a user in Member State B sends such data to the user’s computer so that the data is stored in the memory of that computer and displayed on its screen, does the act of sending the information constitute “extraction” or “re-utilisation” under the Directive?  Secondly, if so, where does that act occur: in Member State A, B or both?

The court agreed with the Advocate General who said in his Opinion that re-utilisation by means of a web server was characterised by a series of successive operations, ranging from the placing online of the data concerned for it to be accessed by the public, to the transmission of that data to interested members of the public, which may take place in different Member States.

However, the court said, account must also be taken of the fact that making available to the public should be distinguished from other modes of distribution since a website can be accessed instantly by an unlimited number of internet users throughout the world, irrespective of any intention on the part of the operator of the website.

Consequently, the mere fact that the website containing the data in question is accessible in a particular territory is not a sufficient basis for concluding that the operator of the website is performing an act of re-utilisation.  Accordingly, the fact that in the present case, at the request of an internet user in the UK, data on Sportradar’s web server was sent to that internet user’s computer for technical purposes was not in itself a sufficient basis for concluding that the act of re-utilisation performed by Sportradar took place in the UK.

Identifying the territory in which re-utilisation takes place depended, the court said, on whether there was evidence that there was an intention on the part of the person sending the data to target people in that territory.  Here, the fact that the data on Sportradar’s server included data relating to English football league matches might be evidence of an intention on the part of Sportradar to attract the interest of the public in the UK.  The fact that Sportradar granted, by contract, a right of access to its server to companies offering betting services to the UK public might also be evidence of its intention to target them if, and it was for the national court to decide, Sportradar was aware, or must have been aware, of that specific destination.  (Case C-173/11 Football Dataco Ltd v Sportradar GmbH – to read the judgment in full, go to the curia search form, type in the case number and follow the link).

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