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November 21, 2013
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Government announces new Intellectual Property Bill in Queen’s Speech.
Design and Artists Copyright Society reacts to publication of Enterprise and Regulatory Reform Act 2013.
High Court considers inter-relationship between separate contractual terms requiring due diligence and use of reasonable endeavours to ensure performance.
Federation Against Software Theft says “Queens Speech missed opportunity for software industry”.
Ofcom upholds privacy complaint after BBC failed sufficiently to disguise identity of individual featured in documentary about gambling addiction.
Ofcom finds sex-themed Phones 4U sponsorship credit inappropriately scheduled on account of juxtaposition with rape scene in The Girl with the Dragon Tattoo.
Ofcom finds Cartoon Network sponsorship credits featuring call to action “Join the Kobots Federation” in breach of Broadcasting Code.
Government publishes results of consultation on proposed reform of Judicial Review proceedings.
Local publishers confirm support for independent Royal Charter.
Newspaper Society submits evidence to House of Lords Communications Select Committee’s Inquiry into Media Plurality.
Industry Implementation Group publishes statement on how appointments to Board of new Regulator should be made.
British Video Association releases figures showing that the market for video entertainment grew by 10.1% in the first quarter of 2013.
ASA finds LuckyAcePoker ad misleading because a significant condition of the “Get £10 Free to play with” offer was not clear.
Court of Appeal upholds High Court decision that business customers of betting exchanges are not required to pay horserace betting levy.
ASA finds TalkTalk ad misleading because it failed to make clear that its “best value” comparison claim was based on price alone.
Government announces new Intellectual Property Bill in Queen’s Speech.
The Government says that the Bill proposes changes that would help businesses better understand what is protected under the law, reduce the need for costly litigation, and provide greater certainty for investors in new designs and technologies. Key elements of the Bill include:
- new powers to enable the UK to implement the Unitary Patent Court Agreement. It is estimated that this would lead to direct benefits to business of £40 million per year. It is also anticipated that the London court, which will adjudicate on pharmaceutical and life sciences patent disputes, will benefit the economy an estimated £200 million per annum;
- the introduction of criminal penalties for copying UK registered designs and the strengthening of design protection;
- proposals for a designs opinion service and an expanded patents opinions service. This would allow design or patent rights holders (or anyone else) to ask the Intellectual Property Office to provide an expert opinion on whether a UK design or patent is valid or being infringed. The Government says that this will help businesses assess the strength of their case before embarking on more formal and costly legal proceedings, and may help avoid litigation altogether;
- allowing the sharing of information between international patent offices on unpublished patent applications to help clear existing backlogs and speed up clearance times;
- patent owners will have the option of marking their patented products with a web address which links to the details of the relevant patent number rather than having to put the patent numbers directly on the product in order to get maximum protection; and
- the introduction of a new exemption in the Freedom of Information Act for continuing programmes of research intended for future publication. The Government says that this will provide researchers with clarity and certainty and the opportunity to validate and analyse their results before putting them into the public domain or before any related patents have been granted.
To read the Government’s press release in full and for a link to the Bill, click here.
Design and Artists Copyright Society reacts to publication of Enterprise and Regulatory Reform Act 2013.
The final text of the Act has now been published and the various copyright provisions have attracted some attention. On the Extended Collective Licensing provisions, the Design and Artists Copyright Society said:
“DACS’ position on this issue has remained consistent – we firmly believe rights should not be licensed collectively if rightsholders wish to reserve the right to exercise their exclusive rights themselves. Rightsholders should be free to choose what is licensed collectively, and what is licensed directly. Rightsholders must also be able to opt out of any ECL scheme.
“83% of the rightsholders who responded to a survey by DACS in 2012 felt that with the appropriate safeguards in place, they could support extended collective licensing. However we are alive to the worries expressed by some visual artists about the possible negative impact on their ability to control the use of their works, and if collective licensing arrangements are likely to undermine or destroy their existing and developing primary markets.
“As the new Act is merely enabling legislation – additional regulation is required to flesh out the details of how extended collective licensing will work in the UK – DACS will be following the drafting of the Regulations carefully and will intervene to safeguard the interests of visual artists”.
On the Orphan Works provisions, DACS said:
“DACS shares the concern that the Act allows for the licensing of orphan works for commercial uses as this potentially undermines existing markets, particularly that of professional photographers. It is critical that the cost of licensing an orphan work must be comparable to market rates, in order to prevent this from happening.
“More significantly, any orphan works scheme should seek to prevent the creation of new orphans in the future. This issue has not been adequately addressed. DACS is concerned that the Government is not doing enough to make it clear that the stripping of rights management information/metadata is an infringement. Not enough is being done to ensure business users comply in this area. Again, Regulations are required to flesh out the details of this provision in the Act and DACS will be following this process closely”. To read DACS’ comments in full, click here.
High Court considers inter-relationship between separate contractual terms requiring due diligence and use of reasonable endeavours to ensure performance.
The claimant, Morris Homes, had purchased land from the defendants, Antony and Jeffrey Keay, upon which a medical centre was to be built. On completion the defendants were to lease back the land.
A dispute was referred to arbitration over whether Morris Homes was in breach of clause 3.1 and/or clause 4 of the agreement for lease when it decided to suspend construction work from around July 2008 to January 2010 after running into financial difficulties.
Clause 3.1 provided that Morris Homes “shall as soon as reasonably practicable commence and thereafter diligently carry out the Works…” Clause 4 provided that Morris Homes “shall use all reasonable endeavours to ensure the Works are completed as soon as reasonably practicable…”
Morris Homes’ case was that on a true construction, if it was using reasonable endeavours between mid-2008 to January 2010, it was automatically ensuring that the works were being carried out diligently. While it was arguable that by seeking to carry out the works for over a year Morris Homes was using reasonable endeavours to secure its financial future and thereby, “in a roundabout route”, to preserve the possibility of the works being completed at some future and undetermined date, in the arbitrator’s view Morris Homes was “quite clearly” in breach of its obligation to carry out the works diligently once they had been started.
Morris Homes sought leave to appeal the arbitrator’s decision. Of the requirements for leave to appeal under s 69 of the Arbitration Act 1996, one of the issues to be decided was whether the arbitrator’s decision was at least open to serious doubt.
HHJ David Grant noted that in Ampurius New Homes v Telford Homes [2012] EWHC 1820 (Ch) the court considered that “due diligence” was a familiar concept in construction contracts and one that usually connoted both due care and “due assiduity/expedition”. In the judge’s view different considerations arose in connection with a “reasonable endeavours” obligation to complete works, as compared with a separate obligation to carry out works with diligence. A party in Morris Homes’ position could well comply with a reasonable endeavours obligation to complete works, but yet be in breach of an obligation to carry out the works diligently, for instance because it failed to carry out the works by using appropriate materials. As such, the judge was not persuaded that Morris Homes’ construction opened the arbitrator’s decision to serious doubt. Leave to appeal was denied. (Morris Homes (West Midlands) Ltd v Antony Paul Keay [2013] EWHC 932 (TCC) (18 April 2013) – to read the judgment in full, click here).
Federation Against Software Theft says “Queens Speech missed opportunity for software industry”.
In FAST’s view, the new bill for intellectual property “could have brought in needed improvements in enforcement operations against intransigent IP infringers”.
Alex Hilton, CEO for FAST said: “While it is fair to say that the IP framework in the UK is one of the best in the world, enforcing the law is an area that needs improvement. We had hoped that this would have been reflected in Her Majesty’s most gracious speech yesterday”.
FAST has called for change in three areas:
- implementation Article 4 of the IP Enforcement Directive (2004/48/EC) to enable FAST to act on behalf of its members;
- making it more likely that infringers will face stiffer damages penalties that deter the use of pirated software; and
- making company directors more likely to be personally accountable for illegal software installations used by the business.
Julian Heathcote Hobbins, General Counsel at FAST said: “Implementing Article 4 of the EC Directive 2004/48 would enable FAST to act on behalf of its members in its own name in the shoes of the copyright owner. Properly mandated representative organisations need the power to protect members’ valuable IP which are the assets on which their future depends.
“Secondly, we need to move to a position where deterrent damages can be readily awarded by the courts for infringement. Purely compensatory redress has little deterrent effect on the business infringer who will argue that the licence fee is merely payable.
“Thirdly, individual company officers need to be held personally accountable for their failings if illicit copies are installed and being used for the business. Too often, they are able to evade personal responsibility and hide behind the corporate veil. We must challenge this ignorance-is-bliss mantra to software piracy”. To read FAST’s press release in full, click here.
Ofcom upholds privacy complaint after BBC failed sufficiently to disguise identity of individual featured in documentary about gambling addiction.
An edition of Panorama looked at the growth in problem gambling in the UK since the introduction of new legislation five years ago that enabled both greater promotion of gambling and a number of new ways in which to gamble. The programme featured a number of people, including the complainant Mr C, talking about their addictions to gambling. Mr C was not named in the programme and attempts were made to obscure his face in the footage shown. However, Mr C’s voice was not disguised and he complained that the broadcast rendered him identifiable without his consent.
The BBC said that Mr C had approved the material and that it had taken actions to safeguard his identity such as altering the appearance of Mr C’s room, instructing him to wear a cap to disguise the back of his head and using extreme close-ups and blurring. However, the BBC admitted that further steps could have been taken.
Ofcom recognised that Mr C’s recollection of certain exchanges regarding whether he was content with the footage to be broadcast differed from that of the programme makers. However, because it considered that the material was sensitive and private in nature and because Mr C’s contribution to the programme was contingent upon his identity being protected, Ofcom took the view that Mr C had a legitimate expectation of privacy. Ofcom concluded that because Mr C was identified from the programme, he had not consented to the broadcast and his privacy had been infringed.
Finally, Ofcom found that the intrusion into Mr C’s privacy was unwarranted because the broadcaster’s right to freedom of expression did not outweigh Mr C’s expectation of privacy in relation to the broadcast of the footage of him that rendered him identifiable without his consent. To read Complaint by Mr C (Panorama: Gambling Nation) published in Issue 229 of Ofcom’s Broadcast Bulletin (7 May 2013), click here.
Ofcom finds sex-themed Phones 4U sponsorship credit inappropriately scheduled on account of juxtaposition with rape scene in The Girl with the Dragon Tattoo.
One credit at 11.32 pm, showed a woman apparently having sex. She paused and leaned towards the camera and said, “I’m faking it, can I upgrade?” Immediately before the credit the film showed a prolonged attack and disturbing rape on a young woman. This included a close-up of her face while she was screaming. The effect was to cut from the face of the screaming woman in the film’s rape scene to the face of the woman in bed in the sponsorship credit. The next credit continued the sexual theme with the man looking at the camera and saying, “I’ve still got my pants on, can I upgrade?”
Seventeen complainants felt that the scheduling of the sponsorship credit was inappropriate and belittled the serious issues being dealt with in the film’s content.
Channel 4 explained that there were 37 different Phones 4U sponsorship credits and those with a more adult nature were scheduled for post-9 pm broadcast. It said that the sponsorship credits complained about were played in random rotation across all sponsored films on Channel 4 and Film 4 and had a post-9 pm restriction. Channel 4 said it regretted what had occurred and acknowledged that “Unfortunately, the juxtaposition between the credits and this particular film inadvertently caused offence to viewers”.
Ofcom considered that the juxtaposition of a light-hearted sponsorship credit featuring a woman during sex with a disturbing and distressing rape scene in a film was clearly unsuitable and had the potential to be offensive to viewers. Ofcom noted that Channel 4 had insufficient processes in place to prevent the unsuitable juxtaposition of advertising and programming material, as required by Rule 32.1 of the BCAP Code. Accordingly, the sponsorship credits breached Rule 9.17 of the Broadcast Code which requires that sponsorship must comply with both the content and scheduling rules that apply to television advertising. To read Ofcom’s adjudication on Phones 4U’s sponsorship of network films on Channel 4, published in Issue 229 of the Broadcast Bulletin, (7 May 2013), click here.
Ofcom finds Cartoon Network sponsorship credits featuring call to action “Join the Kobots Federation” in breach of Broadcasting Code.
During routine monitoring, Ofcom came across a sponsorship credit on Turner Broadcasting’s Cartoon Network, Cartoon Network Too and Boomerang for Kobots Federation: Kobots Dual Action Game1 which comprised: the Kobots logo which stated “Kobots Federation Kobots Dual Action Game”; the website address “www.kobotsfederation.com”; footage of children playing with the Kobots figures; and the voiceover “Join the Kobots Federation. Join the Funtastic. Cartoon Network sponsored by Kobots.”
Turner considered that because viewers could not purchase the sponsor’s products on the Kobots Federation website, the voiceover “Join the Kobots Federation” was not a call to action for viewers to contact the sponsor to purchase the sponsor’s products. It also submitted that the line “Join the Funtastic” was an attempt to create a thematic link between the sponsored programmes and the sponsor.
Ofcom considered that the purpose of encouraging viewers to “Join the Kobots Federation” (which was sometimes accompanied in the voiceover by the line “Join the heavyweight heroes”) was to encourage them to use the sponsor’s service to interact with friends, put details of their Kobot toy collection online and play online Kobot games. Further, as the toys are called Kobots Federation: Kobots Dual Action Game, Ofcom considered that the call to action could not only have been understood to be an encouragement to visit the website, but also an encouragement to purchase the toys from a retailer.
Ofcom also judged that “Join the Funtastic” did not serve to create a clear link with the programming being sponsored, and instead simply appeared to be a call to action for the viewer to contact the sponsor, particularly as it followed the line “Join the Kobots Federation”. Because Ofcom judged that the credits contained direct invitations to viewers to contact the sponsor and as such encouraged the purchase of the sponsor’s products, the credits were in breach of Broadcasting Code rule 9.22(a) – sponsorship credits must be distinct from advertising. To read Ofcom’s adjudication on Kobots Federation: Kobots Dual Action Game sponsorship credits, featured in Issue 229 of the Broadcast Bulletin (7 May 2013), click here.
Government publishes results of consultation on proposed reform of Judicial Review proceedings.
In December 2012 the Government published a consultation on its proposals to reform Judicial Review proceedings.
Over 250 responses were received from a range of stakeholders, including lawyers, representative bodies, businesses, public authorities and interested individuals.
The reforms the Government will be taking forward include:
- reducing time limits for bringing a claim from three months to six weeks in planning cases and 30 days in procurement cases;
- introducing a new fee for an oral renewal hearing, where the claimant does not accept a refusal of permission on the papers, and asks for the decision to be reconsidered at a hearing; and
- removing the right to an oral renewal where the case is assessed as totally without merit on the papers.
The Government says that the changes aim to tackle delays and reduce the burden of Judicial Review by filtering out weak, frivolous and unmeritorious cases at an early stage, while ensuring that arguable claims can proceed to a conclusion without delay. For a link to the consultation results, click here.
Local publishers confirm support for independent Royal Charter.
A press release published by the Newspaper Society (NS) says that its Board, which met on 1 May 2013, “wholeheartedly endorsed the newspaper and magazine industry’s application to the Privy Council for the grant of a Royal Charter for the Independent Self-Regulation of the Press”.
NS president Adrian Jeakings said: “Any system of voluntary self-regulation by definition requires the support of the industry coming together to be regulated. We in the regional and local press believe this is vital if we are to maintain a free press in this country with the ability to hold authority to account – the message of Local Newspaper Week coming up next week. Local newspaper publishers have been fully involved in drawing up the Independent Royal Charter proposal and fully support it”. To read the NS press release in full, click here.
Newspaper Society (NS) submits evidence to House of Lords Communications Select Committee’s Inquiry into Media Plurality.
NS evidence to the Media Plurality Inquiry reminded the Committee that Government action on regional press sustainability, not plurality, had been advocated by Ofcom and the Leveson Report.
Ofcom’s advice to the Culture Secretary back in October last year had recommended regional press exemption from both current and future plurality controls, including the media mergers public interest tests. It had added that the “existing regime to deal with the competition issues raised by local media mergers is widely perceived as being too onerous… we do believe it is important that it is not exacerbated by the plurality framework”.
In a speech published on 24 April 2013, Alex Chisholm, CEO-designate of the Competition and Markets Authority, which will combine the responsibilities of the OFT and Competition Commission from 1 October 2013, spoke of the need to secure “a step-up overall in the pace and efficiency of our investigations”. On merger control, with reference to his regulatory involvement with the communications sector, he emphasised “the extent to which competition can bring about rapid changes in markets experiencing a lot of innovation or changes in the terms of trade… So when assessing mergers we must be alive not only to historic market data but also to the potential for the relevant market to evolve so as to alleviate or resolve the competition issues identified”.
The Leveson Report had suggested that the Government should “look urgently at what action it might be able take to help safeguard the ongoing viability of [the regional press] this much valued and important part of the British press”.
The NS submission also refers the Committee to the application for the Royal Charter for the Independent Self- Regulation of the Press, which addresses the deep concern of the regional and local press about the draft 18 March Royal Charter.
The NS submission also rejects European Commission claims to legislative competence on media concentration or instigation of pan-European press controls, under the guise of media plurality or otherwise. For a link to the NS submission, click here.
Industry Implementation Group publishes statement on how appointments to Board of new Regulator should be made.
In a statement published on 9 May, Paul Vickers, Chairman of the Industry Implementation Group said: “The newspaper and magazine Industry Implementation Group met today and agreed to recommend to the industry that the requirement for qualified majority voting on appointments to the Board of the new Regulator for the press be dropped. The Implementation Group will recommend instead that the Appointments Panel should make its decisions by consensus of its members”. To read the statement as published on the Newspaper Society’s website, click here.
British Video Association releases figures showing that the market for video entertainment grew by 10.1% in the first quarter of 2013.
The figures show growth across physical and digital formats, with consumers spending £536.3 million between January and March 2013.
The value of physical sales for the first quarter was £362.1 million, up 7.2% on the first quarter of last year, driven by strong sales of Blu-ray discs, which grew 44% in the same period in 2012 to £65.3 million. January to March also saw sales of Blu-ray players break through the five million barrier, with 5,010,100 stand-alone players having been sold since launch, indicating the enduring appeal of high definition to British audiences.
The BVA figures show that 2.8 million copies of Skyfall were sold since its release in February 2013. The rest of the top five, The Twilight Saga-Breaking Dawn, Part 2, Taken 2, Game of Thrones, Series 2 and Madagascar 3, all made a significant impact on the quarter’s growth. Official Charts Company statistics indicate that new release volumes were up 24% on the year to date.
Digital video maintained the strong headway shown during 2012. Overall consumer expenditure on digital video in the first three months of 2013 was up 55.5% on 2012, rising to £116.3 million, according to IHS Screen Digest. The BVA says that this was driven by viewers’ appetite for downloading video titles, available at the same time as they are released on disc, to keep for repeat viewing and a variety of TV- and web-based video-on-demand offers, including the growing popularity of new subscription services, all of which make available a wide selection of TV and film titles. To read the BVA’s press release in full, click here.
ASA finds LuckyAcePoker ad misleading because a significant condition of the “Get £10 Free to play with” offer was not clear.
The ad for the Cassava-owned website www.luckyacepoker.com appeared on a social networking site. Text included “Join Now & Get £10 Free to play with!”
In response to a complaint from an existing Cassava account holder who did not receive the advertised bonus, LuckyAcePoker explained that the Ts & Cs, which could be viewed on the website, stated “entry to the promotion is available only to persons over the age of 18 who do not have any previous account with the promoter”.
The ASA said that the ad made no reference to the existence of Ts & Cs or where to locate them and considered that consumers were likely to understand the claim to mean that the bonus was available to all new customers of LuckyAcePoker. The ASA also considered that the availability of the bonus only to consumers who had not previously registered with any sites operated by Cassava was a significant condition that should have been made clear in the ad itself. Because that was not the case, the ASA concluded that the ad was misleading and breached CAP Code rules 3.1 (Misleading advertising), 3.9 (Qualification), 8.2 (Sales promotions) and 8.17.1 (Significant conditions for promotions). To read ASA Adjudication on Cassava Enterprises (Gibraltar) Ltd, (8 May 2013), click here.
Court of Appeal upholds High Court decision that business customers of betting exchanges are not required to pay horserace betting levy.
The claimant, William Hill Organisation Ltd, sought judicial review of the decision of the Horserace Betting Levy Board that customers of betting exchanges are not required to pay the horserace betting levy pursuant to s 27 of the Betting, Gaming and Lotteries Act 1963 (mostly repealed by the Gambling Act 2005, other than the provisions relating to the levy, which have been provisionally repealed). The Association of British Bookmakers was an interested party in support of William Hill and internet betting exchange, Betfair, was an interested party in support of the Board.
Under the 1963 Act, only a “bookmaker” can be made to pay the levy. William Hill contended before the High Court that those who enter into betting transactions through a betting exchange in the course of their business are bookmakers within the meaning of the Act. Under s 55 of the Act, a “bookmaker” is any person carrying on the business of “receiving or negotiating” bets. William Hill argued that business users of betting exchanges “received” bets within the meaning of the Act.
The High Court dismissed William Hill’s application on the grounds that a person who operates through a betting exchange may in the course of doing so find himself receiving a bet, but he did not carry on the business of receiving bets. He was not, therefore, a bookmaker and, accordingly, was not liable to pay the levy. William Hill appealed. The appeal turned on the question of whether a customer, which as part of its business, bets on a betting exchange, receives or negotiates bets.
The court noted the difference between betting exchanges and traditional bookmakers. It noted also that legislation over the years has always sought to distinguish between the bookmaker, who clearly receives bets, and the punter, who makes them. Betfair accepted that it was a bookmaker. The question was whether those who used its facilities were themselves bookmakers. The answer lay, the court said, in the persistence with which the legislation has maintained the difference between those who make bets and those who receive them, between the customer and bookmaker. This difference, the court said, held good whether the punter was in the business of making bets or not. In the light of that distinction, the court held that those who use a betting exchange could not be said to receive or negotiate bets within the meaning of s 55 of the 1963 Act. (R v The Horserace Betting Levy Board [2013] EWCA Civ 487 (3 May 2013) – to read the judgment in full, click here).
ASA finds TalkTalk ad misleading because it failed to make clear that its “best value” comparison claim was based on price alone.
A national press ad for TalkTalk Telecom Ltd included, in large print, “Britain’s best value unlimited TV broadband and phone”; smaller print stated “compared to Sky, Virgin and BT†”. The ad included a list of features of the TalkTalk package.
Sky complained that the claim was misleading in that it implied that TalkTalk offered a product of comparable quality to the named competitors, but at a lower price. Sky asserted that that was not the case, as its TV service included 37 pay channels not available with the TalkTalk package, as well as over 200 free channels, compared to Talk Talk’s 74.
TalkTalk said that it intended the claim to relate to a comparison based on price alone. It added that all of its advertising was aimed at customers seeking a low cost package because it always sought to provide the best value packages available in the market. TalkTalk said that its low price position, which had resulted from its history of offering low prices and exceptional value, was well understood by consumers.
The ASA said that the main body of the ad placed greater prominence on the elements of the package itself, and in particular because the words “unlimited TV” were the largest text on the page. In that context, it considered that consumers would be likely to understand that price was only one aspect of the comparison being made by TalkTalk, and would consequently expect the TV, broadband and phone elements of the TalkTalk package to be comparable with those offered by Sky, Virgin and BT.
Because the “best value” claim was not adequately qualified to make clear that it related to a comparison of package prices only, and because it understood that the features of the packages being compared were not in all cases comparable, the ASA concluded that the claim breached CAP Code rules 3.1 and 3.3 (Misleading advertising), 3.7 (Substantiation) and 3.33 and 3.35 (Comparisons with identifiable competitors). To read ASA Adjudication on TalkTalk Telecom Ltd, 8 May 2013, click here.
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