HomeInsightsNeed to Know – 2013.04.08

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General

Intellectual Property Office announces research programme to help maintain UK’s position at forefront of research into economic impact of IP rights. Read more

Government announces £150,000 of funding to create copyright hub. Read more

European Commission proposes reforms to make trade mark registration systems across EU cheaper, quicker, and more reliable. Read more

Technology

European Commission proposes new rules to cut broadband installation costs. Read more

Government launches information sharing partnership on cyber security. Read more

PhonepayPlus Notice to Industry says no change to current administrative charges. Read more

Ofcom publishes Guidance for communications providers on administrative arrangements for pilot scheme to charge for geographic numbers. Read more

Litigation

High court refuses to take commercially inconsistent contractual wording at face value. Read more

Court of Appeal rules on enforceability of supply agreement that left matters open for negotiation. Read more

Supreme Court dismisses appeal by defendant that the harassment he undertook was for the purpose of preventing and detecting crime. Read more

Music

In the ReDigi case the United States District Court of New York rules that the sale of second hand legally downloaded digital music files is an infringement of copyright. Read more

Publishing

Department for Culture, Media and Sport publishes review of “e-lending” by public libraries. Read more

House of Lords Communications Committee publishes report on media regulation, saying “[it] is not just about Leveson”. Read more

House of Lords considers Commons’ amendments to Crime and Courts Bill in relation to press regulation. Read more

Press Complaints Commission upholds Vernon Kay accuracy complaint against magazine Reveal. Read more

Sport

Professional Football Strategy Council (PFSC) adopts plan to protect integrity of football and fight match-fixing. Read more

General

Intellectual Property Office announces research programme to help maintain UK’s position at forefront of research into economic impact of IP rights.

For the past two years the IPO has worked with academia and industry to help develop the economic evidence base and forge relationships in the intellectual property research community, nationally and internationally.  The programme proposed for 2013/14 builds on this work.  New research projects and areas of investigation will include:

  • the role of IP in facilitating business finance and economic growth;
  • a long-term series of projects to develop an economic approach to evaluating the impact of IP enforcement measures, including educational campaigns;
  • patent framework and competitiveness and whether this is supporting the competitiveness of UK business sectors;
  • the growth and demand of trade mark applications.  This will examine the reasons behind the 40% increase in UK trade mark applications since the downturn;
  • the impact of potential EU policy-wide influence on the copyright framework; and
  • an assessment of the costs and benefits of using mediation rather than the court service for IP disputes.

John Alty, Chief Executive of the IPO said: “It is vital that we have access to the best available evidence and data to truly understand the role that IP plays in the UK economy.  Over the last couple of years we have undertaken some groundbreaking research to help inform our policy making and ensure IP policy supports innovation.  I would urge those with an interest in IP and innovation to join the debate and to make sure that the evidence base we have is of the highest quality”.

The proposals for the new programme have been considered and supported by members of the research advisory groups made up of experts from academia, industry and policy-makers.  The programme will be reviewed quarterly.  Each research project will be tendered through a competitive tendering process.  To read the IPO press release in full and for more information on how to bid for a project, click here.

Government announces £150,000 of funding to create copyright hub.

The copyright hub is intended to be a one-stop-shop website designed to make it easier to obtain information about rights ownership and copyright licences.

In his Review of IP and Growth, Professor Hargreaves recommended that the UK should establish an industry-led solution to improve copyright licensing.  He estimated that it could add up to £2.2 billion a year to the UK economy by 2020, with a particular benefit to the creative industries.

The Hub, which will be designed and built by industry, will act as a source of information about rights ownership to support open and competitive markets for copyright licences.  The idea is that it will cut costs for businesses by creating a more efficient online marketplace where those looking to use copyright works in new creations or services, for example a company providing a multimedia service for a wedding, will have access to a greater range of licensing options, through the Hub, in a straightforward online transaction.

Richard Hooper, Director of Copyright Hub Ltd said: “The Copyright Hub, linking to a wide array of databases and digital copyright exchanges, has the clear aim of helping consumers, rights users and small businesses find their way through the complexity of copyright and thus allow them to license copyrighted works much more easily and at a lower transaction cost.  The Copyright Hub until today has been just an idea.  Today it begins to become an exciting reality.  We are especially grateful for the speed with which the Department of Business/IPO provided some start-up funding thus giving a real boost to this whole idea that emanated from the Hargreaves Review”.  To read the IPO press release in full, click here.

European Commission proposes reforms to make trade mark registration systems across EU cheaper, quicker, and more reliable.

The Commission says that the proposed reforms would improve conditions for businesses to innovate and to benefit from more effective trade mark protection against counterfeits, including fake goods in transit through the EU.

The Commission is proposing a principle of “one-class-per-fee” that will apply to both Community and national trade mark applications.  This would, the Commission says, enable any business to apply for trade mark protection according to their actual business needs, at a cost that covers those individual needs only.  Under the current system, the fee for registering a trade mark allows for the registration of up to three product classes.  Under the revised system, a trade mark could be registered for only one product class. 

The proposed reforms would:

  • streamline and harmonise registration procedures across the EU using the Community trade mark system as a benchmark;
  • modernise the existing provisions and increase legal certainty by amending out-dated provisions, removing ambiguities, clarifying trade mark rights in terms of their scope and limitations and incorporating the case law of the Court of Justice of the European Union;
  • improve the means to fight against counterfeit goods in transit through the EU; and
  • facilitate cooperation between Member States’ offices and OHIM in order to promote a convergence of practices and the development of common tools.

The proposed package contains three initiatives:

  • recast of the Trade Mark Directive (2008/95/EC);
  • revision of the Trade Mark Regulation (207/2009/EC); and
  • revision of Regulation 2869/95/EC on the fees payable to OHIM.

The recast of the Directive and revision of the Community Trade Mark Regulation are legislative proposals to be adopted by the European Parliament and the Council.  The proposed revision of the Regulation on the fees payable to OHIM would follow a different procedure.  It would be adopted by the Commission as an implementing act and therefore require prior endorsement by the Committee on OHIM fees.  The first meeting of the Committee will take place before the summer with the aim of adopting the amended Regulation on the fees payable to OHIM before the end of the year.  To read the Commission’s press release in full, click here.

Technology

European Commission proposes new rules to cut broadband installation costs.

The Commission has proposed new rules to cut the cost of rolling out high-speed internet by 30%.  Civil engineering, such as the digging up of roads to lay down fibre, accounts for up to 80% of the cost of deploying high-speed networks.  According to the Commission, the new proposal may save companies €40 to 60 billion.

High-speed broadband is, the Commission says, “the backbone of the telecoms and wider Digital Single Market” that it is attempting to build.  Its rollout is currently slowed down by a patchwork of rules and administrative practices at national and sub-national levels.  “In most places, today’s rules hurt Europe’s competitiveness”, said European Commissioner Neelie Kroes.

The draft Regulation builds on best practices currently in place in Germany, Spain, France, Italy, Lithuania, The Netherlands, Poland, Portugal, Slovenia, Sweden and the UK, but leaves organisational issues to the discretion of Member States.

The new rules would become directly applicable across the EU after agreement by the European Parliament and Council.

Essentially, the Commission wants to tackle four main problem areas:

  • ensuring that new or renovated buildings are high-speed-broadband-ready;
  • opening access to infrastructure on fair and reasonable terms and conditions, including price, to existing ducts, conduits, manholes, cabinets, poles, masts, antennae installations, towers and other supporting constructions;
  • ending insufficient coordination of civil works by enabling any network operator to negotiate agreements with other infrastructure providers; and
  • simplifying complex and time-consuming permit granting, especially for masts and antennas, by granting or refusing permits within six months by default and allowing requests to be made through a single point of contact.

There is currently little transparency on existing physical infrastructure suitable for broadband rollout and no appropriate commonly used rules when deploying broadband across the EU.  At the moment, there is no market place for physical infrastructure and no potential to use infrastructure belonging to other utilities.  Regulations in certain Member States even discourage utility companies from cooperating with telecom operators, the Commission says.  To read the press release in full, click here.

Government launches information sharing partnership on cyber security.

The Government says that the Cyber Security Information Sharing Partnership (CISP) delivers a key component of the UK’s cyber security strategy in facilitating the sharing of information on cyber threats in order to make UK businesses more secure in cyberspace.  This follows a successful pilot scheme, which included over 160 companies across a range of UK sectors.

The partnership includes the introduction of a secure virtual “collaboration environment” where government and industry partners can exchange information on threats and vulnerabilities in real time.  The CISP will be complemented by a “Fusion Cell”, which will be supported on the government side by the Security Service, GCHQ and the National Crime Agency, and by industry analysts from a variety of sectors.  They will work together to produce an enhanced picture of cyber threats facing the UK for the benefit of all partners.

As Cabinet Office Minister responsible for the Cyber Security Strategy, Francis Maude said: “We know that cyber attacks are happening on an industrial scale and businesses are by far the biggest victims of cyber crime in terms of industrial espionage and intellectual property theft with losses to the UK economy running into the billions of pounds annually.  This innovative partnership is breaking new ground through a truly collaborative partnership for sharing information on threats and to protect UK interests in cyberspace.  The initiative meets a key aim of our Cyber Security Strategy to make the UK one of the safest places to do business in cyberspace.  As part of our investment in a transformative National Cyber Security Programme, we are pleased to provide a trusted platform to facilitate this project”.  To read the Government’s press release in full, click here.

PhonepayPlus Notice to Industry says no change to current administrative charges.

PhonepayPlus, the UK premium rate phone number and service regulator, has announced that it will maintain its current administrative charges levels until a comprehensive review of methodology for setting the charges has been carried out in discussion with the Industry Liaison Panel. 

PhonepayPlus’ intention to undertake this work, as well as the current arrangements, were set out in its Administrative Charges from 1 April 2012 Notice.  Updates to the Notice have been published subsequently, in particular concerning PhonepayPlus’ VAT status.  Charges will apply to cases opened on, or after, 1 April 2013 until further notice.  To read PhonepayPlus’ press release, click here.

Ofcom publishes Guidance for communications providers on administrative arrangements for pilot scheme to charge for geographic numbers.

In July 2012 Ofcom published a statement entitled “Promoting efficient use of geographic telephone numbers” in which it set out, among other things, its decision to put in place a pilot scheme in which it will charge communications providers (CPs) for geographic numbers they have been allocated in 30 area codes.  The pilot scheme commenced on 1 April 2013.

The new Guidance provides information on the administrative arrangements for the pilot scheme.  Ofcom stresses that “It is important that all CPs which either have obtained, or intend to obtain, allocations of numbers from Ofcom in any of the area codes of the pilot scheme are aware of these arrangements”.  A list of the area codes included in the pilot scheme is provided at Annex 1 of the Guidance document.

The Guidance includes:

  • a summary of the key elements of the pilot scheme;
  • information on the administrative documents that Ofcom will issue to CPs with geographic number allocations in the area codes of the pilot scheme;
  • information on discounts to the number charge bill that CPs may apply for in respect of numbers allocated to them, but used by another CP for regulatory reasons;
  • a description of the payment process; and
  • the timetable for the administrative arrangements, including the charging and billing cycles.

For a link to the Guidance, click here.

Litigation

High court refuses to take commercially inconsistent contractual wording at face value.

The court dismissed a claim brought by a subcontractor builder who tried to rely on “mandates” issued to several insured householders to extract payment from them when the insurer’s nominated contractor went into administration after being paid by the insurer, but before paying the subcontractor.  While on their face the mandates made the defendant householders liable to the subcontractor, HHJ Keyser QC was satisfied that in their wider context the mandates could not mean that the householder would be personally liable to the builder beyond the policy excess and uninsured repairs. 

The judge said that if one must guard against the risk of permitting the factual context to override the clear meaning of the mandate, one must also be aware of paying insufficient attention in that context.  In the judge’s view, a different interpretation was perfectly possible having regard both to the text of the document and to the wider factual circumstances.  Moreover, if that were the case, the court was entitled to prefer the construction that best accorded with commercial common sense (see Rainy Sky v Kookmin Bank [2011] UKSC 50).

In reaching his decision, however, the judge rejected the argument that the normal rules of contractual construction would be usurped by Regulation 7(2) of the Unfair Terms in Consumer Contracts Regulations 1999, which provides that where there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer should prevail.  However, if the process of construction did not lead to a firm conclusion, but the court was left with two or more interpretations that it could not reject on other grounds, Regulation 7(2), in the judge’s words, “will operate as a tie-breaker”.  (A J Building and Plastering Ltd v Samantha Turner [2013] EWHC 484 (QB) (11 March 2013) – to read the judgment in full, click here).

Court of Appeal rules on enforceability of supply agreement that left matters open for negotiation.

A dispute arose between the parties to a contract dated 28 June 2005 for the sale of copper concentrates.  The matter was referred to arbitration and the parties entered into a Settlement Agreement that brought into effect three contracts for delivery of copper including a contract for delivery in 2010.  That contract left three matters for agreement “during the negotiation of terms for 2010”, i.e. at the annual round of negotiations which takes place each year following an annual meeting of metal traders in London.  Among the matters left open were the shipping schedule and how certain deductions by way of a treatment charge and refining charge would be calculated.  The contract did, however, contain detailed provisions with regard to the quality and description of the material to be supplied, how the concentrate would be delivered and how the purchase price would be calculated.

The claim (following on from no concentrates being shipped due to no agreement being reached on the shipping schedule) was that the matters left open for negotiation rendered the contract unenforceable as they amounted to no more than “an agreement to agree”.  The case went to arbitration where the tribunal stated that it should construe the contract without reference to the Settlement Agreement, overlooking the fact that the contract contained an express saving of the Settlement Agreement from the effect of the entire agreement provision.  The tribunal found that the failure to agree the shipping schedule was fatal to the enforceability of the contract.

The High Court overruled the tribunal and on further appeal the Court of Appeal was highly critical of the approach taken by the tribunal, particularly its decision to ignore the Settlement Agreement, thereby missing the point that the supplier had already benefited from some performance by the purchaser (namely the latter’s claim being compromised by the entry into three new contracts).  Further, the contract was part of a wider arrangement between the parties, which they had been acting upon for over one year.  The court was reluctant to find that a contract was unenforceable where it was an integral part of an overall deal, pursuant to which both parties had derived benefits and which both had worked perfectly well under for a year without any suggestion that the final part fell into a different and unenforceable category of obligation.

In the Court of Appeal’s judgment the language used by the parties in both the Settlement Agreement and the contract, for example “The Concentrate shall be delivered…”, showed beyond any doubt that they did not intend that they should remain free to agree or to disagree about the deductions and the shipping schedule as their own perceived interests should dictate, with the result that, should they not reach an agreement, there would be no obligation in respect of 2010 at all.  Instead, a term was to be implied that the deductions and shipping schedule were to be reasonable, and in the event of any dispute were to be determined by arbitration. 

In the court’s view, use of the mandatory “shall” was a strong indicator that the parties did not intend that a failure to agree should destroy their bargain.  Further, in circumstances where the parties had agreed every other aspect of the contract, including quality, specification and price, and where they had stipulated for the arbitration of disputes by a market tribunal, it would be almost perverse to attribute to them an intention not to conclude a binding agreement, particularly where the agreement was an integral part of a wider overall transaction compromising an earlier dispute.  (MRI Trading AG v Erdenet Mining LLC [2013] EWCA Civ 156 (8 March 2013) – to read the judgment in full, click here).

Supreme Court dismisses appeal by defendant that the harassment he undertook was for the purpose of preventing and detecting crime.

The appeal arose out of an action for damages for harassment and for an injunction to restrain its continuance.  The question at issue was in what circumstances could such an action be defended on the ground that the alleged harasser was engaged in the prevention or detection of crime.

Mr Willoughby was employed by one of Mr Hayes’s companies.  In 2002 the two men fell out and Mr Willoughby then embarked on a campaign against Mr Hayes centring on allegations of fraud, embezzlement and tax evasion in relation to Mr Hayes’s management of his companies.  This took the form of sending numerous letters to the Official Receiver, the police and the Department of Trade and Industry.  These bodies investigated and found no basis in the allegations, but Mr Willoughby persisted and made a series of intrusions into Mr Hayes’s private life.

Under s 1(3) of the Protection from Harassment Act 1997 it is a defence for a person to show (a) that harassment was pursued for the purpose of preventing or detecting a crime; (b) that it was pursued under any enactment or rule of law; or (c) that in the particular circumstances, the pursuit of the course of conduct was reasonable.

The trial judge found that Mr Willougby’s conduct constituted harassment under s 1(1) of the Act but that he had a defence under s 1(3)(a) because he genuinely believed in the allegations involving Mr Hayes and wished to persist in investigating them.  The Court of Appeal allowed Mr Hayes’s appeal on two main grounds: (i) only the purpose of the conduct, not the purpose of the alleged harasser, was relevant and in this case it was not reasonably or rationally connected to the prevention of crime; and (ii) the prevention of crime had to be the sole purpose of the alleged harasser and the intrusions on Mr Hayes’s privacy were not related to that purpose.

The Supreme Court dismissed the appeal by Mr Willoughby by a majority of four to one.  The court found that there was no distinction between the purpose of the conduct and the purpose of the alleged harasser as such acts have no purpose other than that of their perpetrator.  The issue was by what standard that person’s purpose was to be assessed. 

A wholly objective test was not consistent with the wording or purpose of the Act, since a test of reasonableness was not included in s 1(3)(a).  It would also render the general defence of reasonableness in s 1(3)(c) ineffectual.  A wholly subjective test was equally problematic, the court said, since those who claim to be acting for the purpose of preventing or detecting crime may, at a purely subjective level, entertain views about what acts are crimes and what steps are calculated to prevent or detect them that have no relation to reality.  Mere existence of belief, however absurd, in the mind of the harasser that he is detecting or preventing a crime cannot justify him persisting in a course of conduct, which the law recognises as oppressive.  Some control mechanism was therefore required, the court said, even if it fell short of what was objectively reasonable, and that mechanism was in the concept of rationality, familiar in public law but also increasingly significant in other areas, such as contractual discretions. 

Rationality was different to reasonableness, the court said, as reasonableness was an external, objective standard applied to the outcome of a person’s thoughts or intentions and a test of rationality only applied a minimum objective standard to the relevant person’s mental processes.  It imported a notion of good faith in requiring some rational connection between the evidence and the ostensible reasons for the decision, and an absence of arbitrariness, capriciousness or reasoning so outrageous in its defiance of the logical as to be perverse.  If the alleged harasser has rationally applied his mind to the material suggesting criminality and formed the view that the conduct said to constitute harassment was appropriate for its detection or prevention, the court would not test his conclusions by reference to what view a hypothetical reasonable man in his position would have formed.  If he has not done so, but proceeds anyway, he acts irrationally.  

Applied to the facts, the test meant that, after June 2007, Mr Willoughby’s conduct against Mr Hayes was more than objectively unreasonable.  It was irrational.  He was no longer guided by any assessment of evidence, nor was there a rational connection between his supposed purpose and acts.  By persisting in pressing his allegations on the Official Receiver and other investigatory bodies long after they refused to deal with him, he was acting in way that was incapable of furthering the alleged purpose.  (Hayes v Willoughby [2013] UKSC 17 (20 March 2013) – to read the judgment in full, click here).

Music

In the ReDigi case the United States District Court of New York rules that the sale of second hand legally downloaded digital music files is an infringement of copyright.

The record label Capitol Records LLC sued ReDigi Inc for copyright infringement in respect of recordings (in which Capitol owned the copyright) that ReDigi was reselling on its website. 

ReDigi marketed itself as “the world’s first and only online marketplace for digital used music”.  ReDigi invited users to sell their legally acquired digital music files and buy used digital music from others at a fraction of the price currently available on iTunes.  ReDigi claimed that its service was like any used record store, except that it took place in the digital domain.

ReDigi used software that analysed the user’s computer to check that the files the users wished to resell had been purchased legally in the first place.  Music downloaded from a CD or other file-sharing website was ineligible for sale.  The software also checked that the user had not retained the music that he wished to resell.

Capitol claimed that ReDigi’s upload process of a user’s music file necessarily involved copying the file, which amounted to infringement of its copyright, regardless of the fact that the music was no longer on the user’s computer and located instead on ReDigi’s “Cloud Locker”.

US law provides for what is known as the “first sale” doctrine, which states that “the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord”.  The question in this case was, therefore, whether a digital music file, lawfully made and purchased, could be resold by its owner through ReDigi under the first sale doctrine.

The court found that it was settled law that the unauthorised duplication of digital music files over the internet amounted to infringement of a copyright owner’s exclusive right to reproduce.  However, the courts had not previously addressed the question whether the unauthorised transfer of a digital music file over the internet, where only one file existed before and after the transfer, constituted reproduction within the meaning of the Copyright Act.

The court found that the text of the Copyright Act made it clear that reproduction of a work occurred when a copyright work was fixed in a new “material object”.  Case law on the application of the reproduction right in the digital domain, specifically with regards to the “material object” question, showed that a digital music file was separate from the phonorecord, or “hard disk” that the file would be embodied in following transfer.  Case law concluded that when a user downloaded a digital music file on to his hard disk, the file was “reproduced” on a new “phonorecord” within the meaning of the Copyright Act and fixed in to a new “material object”.  Accordingly, the court concluded that ReDigi’s service infringed Capitol’s reproduction rights. 

ReDigi argued that the file simply migrated from a user’s computer to its “Cloud Locker” and that no copying occurred.  The court said that, even if that were the case, the fact that a file has moved from one material object to another meant that reproduction had occurred.  Further, when a user downloaded a file from RiDigi’s service, yet another reproduction was created.  “It is beside the point that the original phonorecord no longer exists.  It matters only that a new phonorecord has been created”, the court said.

The court also found that ReDigi’s service infringed Capitol’s distribution rights.  Further, ReDigi’s activities fell “well outside the fair use defense” and the first sale defence did not apply either.  Accordingly, sales on ReDigi’s website infringed Capitol’s copyright.  (Capitol Records LLC v ReDigi Inc No 12 Civ 95 (RJS) (30 March 2013) – to read the judgment in full, click here.

Publishing

Department for Culture, Media and Sport publishes review of “e-lending” by public libraries.

The Government says that the lending of e-books by public libraries enhances library services for users, but the interests of booksellers and publishers must be protected too.

A report by William Sieghart entitled “An Independent Review of E-Lending in Public Libraries in England”, which was commissioned by the Government, sets out the following principles:

  • public libraries should be able to offer a remote e-lending service to their readers, free at the point of use;
  • the interests of publishers and booksellers must be protected through “frictions” that limit the supply of e-books in the same way that physical book loans are controlled;
  • pilot projects later in the year should test business models and help gather evidence of best practice; and
  • the Public Lending Right should be extended to on-site e-loans, with consideration further ahead to include remote e-loans.

A series of pilot projects between publishers and libraries will go ahead this year using established literary events.  As recommended by the report, it will test business models and user behaviours to help provide a solid evidence base for going forward.

Author of the report, William Sieghart, said: “The UK publishing industry is undergoing a digital revolution, the full impact of which will transform the structure of publishing, bookselling and book borrowing, whether we like it or not.  What this means for each participant, whether they are a writer, agent, publisher, wholesaler, retailer, librarian or reader, is as yet unclear.  What is certain is that the industry is changing very quickly and each one of these stakeholders has a right to feel anxious.  It is easy to focus on the challenges posed by digital developments, rather than of the opportunities offered.  This review… does not try to predict the future for the industry as a whole.  It is more narrowly focussed on the issue of the lending of digital versions of books by public libraries, offering practical and realistic suggestions for how to manage this ‘revolution’ in a way that makes sense for all”.  To read the DCMS press release in full and for a link to the Report, click here.

House of Lords Communications Committee publishes report on media regulation, saying “[it] is not just about Leveson”.

The House of Lords Communications Committee has said that the discussions on media regulation have “tended to miss the bigger picture and vital issues have largely been left out of the debate”.

Whilst discussions on the Leveson report have been going on, the Committee has been investigating the issues presented by media convergence, for example:

  • newspapers are no longer just printed on paper, but also have websites with up-to-the-minute information, including videos which look like TV;
  • broadcasters do not only beam signals to TV aerials or satellite dishes but also have websites carrying articles which can look more like a printed page; and
  • families can still sit down together at a specified time to watch a TV programme, but they can also be watched at a later date on the internet, whenever is most convenient for the viewer.

The Committee believes that these changes are profound and that the regulatory framework across the media is creaking.  Ahead of the Government’s imminent White Paper on communications, the Committee recommends that:

  • the dynamism of the media sector today means that the existing pattern of updating the Communications Bill every ten years or so no longer provides an adequate basis for regulating the media industry.  The Government must therefore ensure that forthcoming legislation is drafted in such a way as to enable flexibility to adapt to an ever-changing media environment;
  • new technologies and behaviours are evolving more quickly than regulatory protections.  Therefore, action is required to ensure a safer environment for content accessed via the internet and to continue to meet public expectations of content standards;
  • the Government should charge Ofcom with conducting research into what UK audiences expect in terms of the standards of internet content available through digital intermediaries such as ISPs and search engines;
  • the Government and Ofcom need to get ahead of the curve on shaping profoundly different regulatory arrangements by joining up regulation across the media as a whole;
  • the Government should conduct a comprehensive review of public service broadcasting (PSB) in the round, to include not just the BBC but all other providers, so as to secure its future in the converged world;
  • consideration must be given to the BBC’s economic impact, how this might best promote the public good and what action should be taken to ensure that the prominence of PSB is maintained.  At the same time, the market, above all the newspaper industry, must be reassured that it too has a secure foothold in the converged world; and
  • Ofcom’s competition powers should be clarified, but the hurdle for intervention should be high.

Committee Chairman, Lord Inglewood, said: “… The converged world is a marvellous place, breathing new life into creativity, competition, innovation and choice.  People access different content in different ways and on different platforms, all of which operate and are regulated in slightly different ways.  The Committee believes that consumers in the UK have a right to bring accurate expectations to content, no matter what it is or how they access it; the challenge now is for the Government to act quickly enough to ensure that this happens”.  To read the Committee’s press release in full and for a link to the report, click here.

House of Lords considers Commons’ amendments to Crime and Courts Bill in relation to press regulation.

The amendments made in the Commons to the Crime and Courts Bill effectively mean that if a “relevant publisher” is not a member of the new regulator, it is more likely to have exemplary damages and/or costs awarded against it in litigation.  These provisions have been described by the Government as “incentives” for publishers to sign up to the new regulatory system.

Of the amendments, Lord McNally said: “This group of amendments, together with a new clause which your Lordships’ House has already added to the Enterprise and Regulatory Reform Bill, implement legislative parts of the Leveson cross-party agreement…  As part of that agreement, the three parties also agreed proposals and exemplary damages and costs that are designed to incentivise publishers to join the new regulatory framework.  We are, I believe, striking the right balance through these amendments, which enable the implementation of this system but which, equally, do not compromise freedom of expression.  They form a crucial part of the new regime for press regulation as Lord Justice Leveson set out and which, as politicians, we have a collective duty to implement”.

Lord Soley (Labour) followed, saying: “What we need to remember when we discuss these issues is that there is a world of difference between an individual who might say something factually incorrect and even insulting as an individual and a very large-scale international organisation such as News International doing the same thing.  That is really where this problem has come from.  People reacted to Leveson from the press side by saying that it was an attack on 300 years of press freedom, but that is nonsense.  Press freedom was about small individuals and small groups fighting for the right to publish their views, and that remained the case until quite late in the 19th century, when the press barons emerged and these large-scale and powerful organisations developed”.

A number of Lords proposed further amendments, but these were withdrawn after Lord McNally said: “We have a set of provisions that implements Lord Justice Leveson’s recommendations, that strikes the right balance between a tough system of incentive-based self-regulation and protecting this country’s cherished freedom of expression, and that draws the right line between publishers that are in the scheme and those that are out of it.  I commend the Commons amendments to the House together with the three government amendments and invite the noble Lords, Lord Lucas, Lord Skidelsky and Lord Stevenson, not to press their amendments.  I believe that this will be the best way forward”.

The Bill has been returned to the Commons for consideration of the Lords’ changes.  The next stage of “ping pong” has yet to be scheduled.  To read the Committee’s press release in full, click here.

Press Complaints Commission (PCC) upholds Vernon Kay accuracy complaint against magazine Reveal.

The PCC has ruled that Reveal breached Clause 1 (Accuracy) of the Editors’ Code of Practice following the publication of an article headlined “Vernon’s still walking on eggshells”, about the television presenter Vernon Kay.

Mr Kay complained that the article had reported inaccurate claims about his marriage.  It quoted an unnamed source (described in the article as a “close friend”) who alleged that Mr Kay felt he was “walking on eggshells” following his public admission in 2010 that he had sent flirtatious text messages to several women.  He said that the claims contained in the article (including that he was “worried [his wife] will never fully forgive him”, and that they were “living increasingly separate lives”), had not been put to him for comment before publication.

The magazine stood by the claims, which it said had been obtained from a reliable source.  It argued that the comments did not contribute any substantive new information about the texting incident relative to the details that had been previously reported and which were not in dispute.  It denied having suggested that the couple were living strictly separate lives in the marital sense.  Whilst it did not accept that it had breached the terms of the Editors’ Code, it nonetheless offered to publish a statement setting out the complainant’s denial that he and his wife were “living separate lives”.

The PCC ruled that despite the provision in Clause 14 (Confidential sources) of the Editors’ Code to protect confidential sources of information, publications cannot simply rely on referring to confidential sources as a defence against complaints about the accuracy of material.  Publications should generally be able to produce on-the-record material to corroborate significant claims or demonstrate that the individual concerned had a suitable opportunity to respond before publication.  In this case, the magazine apparently accepted that it had not taken these steps, but sought to defend the piece to the PCC on the basis that the claims were not new.

The PCC disagreed with the magazine’s argument, saying that “the article had contained specific, and significant, assertions about the current state of the couple’s relationship, two years after the texting incidents”.  The magazine had not demonstrated that it had taken care over the accuracy of the story.  The PCC therefore found a breach of Clause 1(i) of the Editors’ Code.  Since the statement offered by the magazine omitted Mr Kay’s denial of the claims regarding his feelings about his marriage, it was insufficient to remedy the issues which had been raised under Clause 1(ii) of the Code, which makes clear that “A significant inaccuracy, misleading statement or distortion once recognised must be corrected, promptly and with due prominence”.  The PCC said it had “no option” but to uphold the complaint.  To read PCC Adjudication on Vernon Kay v Reveal (28 March 2013), click here.

Sport

Professional Football Strategy Council (PFSC) adopts plan to protect integrity of football and fight match-fixing.

The PFSC, which is composed of representatives of Europe’s national associations (UEFA), clubs (ECA), leagues (EPFL) and players (FIFPro Division Europe), has unanimously adopted a joint position paper that includes a concrete action plan to protect the integrity of football and fight match-fixing.  The action plan includes a number of initiatives focusing on education, prevention, monitoring and disciplinary sanctions.  Together, the ECA, the EPFL, FIFPro Division Europe and UEFA also aim to establish a code of conduct for the integrity of the game for all participants in European football, including players, referees, officials and administrators.

All four organisations agree that sports bodies do not have the means or the legal jurisdictions to tackle by themselves a problem that often involves criminal organisations.  They say that sports fraud should be recognised as a specific criminal offence in national legislations throughout Europe, “as this would help to ensure a consistent, effective and coordinated means to deter match-fixing”.  At the same time, European countries should consider dedicated prosecution services with a primary responsibility of dealing with sports fraud cases.

The organisations call for close cooperation, including information exchange, between police services, investigating and prosecuting authorities, sports bodies and betting companies.  “This would help sports bodies in the prosecution of disciplinary cases while at the same time allowing state authorities to benefit from their expertise in order to investigate and prosecute crimes”, they say.

Recognition of a sports organiser’s right in the context of betting is also paramount in helping to develop the economic and social role of sport.  This can be achieved, the organisations say, by: a) tackling threats relating to the integrity of sport; b) securing a fair financial return to sports bodies and their members; and c) supplying funding to further protect the integrity of the game and finance other areas such as youth, amateur and female sport.

Finally, efforts towards the adoption of an international convention on match-fixing under the auspices of the Council of Europe should be encouraged, with full involvement by football stakeholders.  To read the UEFA press release in full, click here.

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