HomeInsightsNeed to Know – 2014.06.16

Contact

+44 (0)20 7612 9612
info@wiggin.co.uk

It is intended for reference purposes only and does not constitute definitive advice. Links to the original source materials are included where there are no restrictions in terms of access. References may also be made to sources that require separate registration or subscription. A link to a source does not necessarily imply endorsement of the source or the material provided through the link. For further information on any of the matters discussed in this summary please contact Alexander Ross. If you have any comments, queries or suggestions please contact us at comments. All suggestions and comments are most welcome.

Introduction

This week’s update includes, amongst other things, the news that it looks like the copyright exceptions relating to personal private copying, quotation and parody are back on the agenda and will be coming into force on 1 October 2014.  We also report on Nominet’s news that short .uk web domains are finally available.  On the data protection front, the Article 29 Data Protection Working Party has announced that it will analyse the consequences of the recent Google Spain decision regarding the removal of search engine results, with a view to producing guidance for EU data protection authorities.  In addition, European Commissioner Viviane Reding has outlined the recent progress made with the European Council on the proposed data protection reforms.  Finally, the update includes an interesting decision by the Press Complaints Commission relating to Clause 14 (Confidential sources) of the Editors’ Code of Practice.

General

High Court considers correct approach to interpretation of contractual provisions requiring a party to have a specific “purpose”.

Private copying exception and quotation and parody exceptions to come into force 1 October 2014.

Government says it is committed to tackling IP crime, including online.

Technology

Nominet launches short .uk web domains.

Ofcom consults on plans to extend UK Broadband’s spectrum licence.

Data Protection

Article 29 Data Protection Working Party to analyse consequences of recent Google Spain decision on removal of search engine results.

European Commissioner Viviane Reding outlines progress made on proposed data protection reforms.

Broadcasting

BBC Trust publishes draft framework for BBC’s commercial services.

Prize Draws, Promotions and Competitions

PhonepayPlus issues £120,000 fine against PRS “prize draw” operator and orders refund to consumers.

Publishing

Press Complaints Commission finds no breach of Clause 14 (Confidential sources) of Editors’ Code of Practice.

Advertising

Committee of Advertising Practice publishes advice on use of celebrity and other testimonials in marketing communications.

General

High Court considers correct approach to interpretation of contractual provisions requiring a party to have a specific “purpose”.

Ruling on the meaning of anti-avoidance provisions in a contingent value right agreement, Mr Justice Blair held that the ordinary principle of statutory construction applies to a contractual provision that requires a person to have a specific “purpose”, namely that the relevant purpose is the dominant one.  The judge rejected the argument that the term “the purpose” meant the sole purpose (notwithstanding the use of the definite article) since this would, in context, deprive the term of any effect.  The judge also rejected as too wide a construction applying the provision where the relevant purpose was only one purpose (Starbev GP Ltd v Interbrew Central European Holdings BV [2014] EWHC 1311 (Comm) (29 April 2014) – to read the full judgment click here). 

Private copying exception and quotation and parody exceptions to come into force 1 October 2014.

The Public Administration, Disability, and Research, Education, Libraries and Archives statutory instruments were approved by parliament on 14 May 2014 and came into force on 1 June 2014.  These instruments amend relevant sections of the Copyright, Designs and Patents Act 1988.

As set out in Lord Younger’s statement on 8 May 2014, the Joint Committee on Statutory Instruments had some questions about the personal copies for private use and quotation and parody statutory instruments.  It would appear that the questions have been resolved as the Government re-laid the Regulations (which contain no material changes) before Parliament on 9 June with a view to their coming into force on 1 October 2014.  For a link to the “new” Regulations, click here.

Government says it is committed to tackling IP crime, including online.

In a new report detailing the extent of IP crime and the UK’s response to it, launched on the first day of the International IP Enforcement Summit on 11 June 2014, the Government has underlined its commitment to tackling IP crime.

Opening the summit, Business Secretary Vince Cable outlined the importance of IP rich industries to the UK economy and society.  Better collaboration, with industry and across borders, is a key theme of the summit on how to strengthen the fight against IP crime, estimated to account for 10% of global trade.

IP Minister Lord Younger said: “The value of IP to the economy is unquestionable.  The UK invests much more in knowledge and ideas than it does in assets such as buildings and machinery, and IP intensive industries account for a third of all jobs in the EU.  The Government is committed to supporting these industries and making sure that intellectual property rights are understood and respected.  Working together is the best way to tackle this issue”.

The report showed that:

  • the top 5 counterfeit products investigated by Trading Standards are clothing, tobacco, alcohol, footwear and DVDs;
  • 72 million links to infringing digital material were removed by the British Phonographic Industry, up from 10 million in 2012 to 2013; and
  • the specialist City of London IP Crime Unit is investigating nearly £30 million worth of IP crime in its first 9 months.

The Business Secretary also announced the strengthening of the enforcement relationship with China.  Following his recent visit to Qingdao, where Dr Cable launched the Global Digital Media and Entertainment Alliance, he set out how the UK and China are working more closely to tackle intellectual property crime.

The summit, hosted jointly by the IPO and the Office for Harmonization in the Internal Market, gave more than 300 delegates from across the world the opportunity to discuss best practice and collaboration to strengthen the way this global issue is addressed.  Summit delegates considered how to tackle trade in counterfeit goods as well as the challenges posed by the digital world, both through illegal downloading and streaming, and from new and emerging technologies such as 3D printing.  To read the Government’s press release in full and for a link to the report, click here.

Technology

Nominet launches short .uk web domains.

Nominet says that, with research revealing that three quarters of British internet users prefer sites ending in .uk when searching or buying online, the introduction of “example.uk” will allow businesses a more succinct web address, comparable to what is available internationally with the likes of Germany’s .de and France’s .fr.  When presented with a series of new domains, such as .company, or .london, sites ending in .uk remained the first choice for 93% of internet users.  

Over ten million existing UK domain holders will be offered first choice on the shorter equivalent of their current address, with five years to decide whether they want to use it in addition to, or instead of, the domain they already have.  Nominet will be contacting these customers to ensure they’re aware of their opportunity to exercise this right.

People can sign up for the new .uk domains through domain name registrars, alongside existing domains, such as .co.uk or .org.uk.

Nominet expects the new domain will appeal to tech-savvy entrepreneurs and start-up businesses wishing to tap into positive “brand UK” attributes, such as tech start-up Lowdownapp, switching from a .co. and independent craft lager company Saint Lager, who will be switching from a .com to enjoysaint.uk.  To read Nominet’s press release in full, click here.

Ofcom consults on plans to extend UK Broadband’s spectrum licence.

Ofcom has launched a consultation on proposals to grant an extension to the spectrum licence held by UK Broadband Ltd within the 3.4 GHz band.

The licence authorises use of two 20 MHz blocks of spectrum in the frequency ranges 3480-500 MHz and 3580-3600 MHz.  UK Broadband has requested an indefinite extension to the licence beyond the current expiry date of July 2018.

The consultation sets out why Ofcom believes granting the request would promote competition and encourage investment and innovation, in line with its statutory duties to further the interests of citizens and consumers.  Ofcom proposes to apply an annual licence fee from the current expiry date.

The UK Broadband holdings sit within a wider 190 MHz band of spectrum, between 3410 and 3600 MHz.  Ofcom says that it expects to award this additional spectrum via an auction in 2015/16.  It is likely to be used for mobile broadband.

Ofcom is inviting views from interested parties and will consider responses before reaching a final decision on the UK Broadband request later this year.  The consultation closes on 25 July.  To access the consultation documentation, click here.

Data Protection

Article 29 Data Protection Working Party to analyse consequences of recent Google Spain decision on removal of search engine results.

The Working Party has announced its decision to analyse the consequences of the recent CJEU ruling in the Google Spain case (Case C-131/12 Google Spain SL v Agencia Española de Protección de Datos) and to identify guidelines in order to develop a common approach for EU data protection authorities on the implementation of the ruling.  The guidelines will be intended to help data protection authorities build a coordinated response to complaints by data subjects if search engines do not erase their content when removal has been requested.

The Working Party will, it says, consult relevant stakeholders in due course.

In the meantime, the Working Party invites search engines to put in place user-friendly and pedagogical tools for the exercise by their users of their right to request the deletion of the search results links containing information relating to them.  More generally, search engines should ensure compliance with the opinion of the Working Party on data protection issues related to search engines.

As regards Google, the Working Party welcomes the form it swiftly developed as a first step toward compliance with EU law following the CJEU ruling, even if at this stage it is too early to comment on whether the form is entirely satisfactory.

The Working Party says that this initial reaction to the Google response to the CJEU’s ruling is to be seen in the wider context of ongoing exchanges between the European data protection authorities and Google about compliance with EU data protection law.  To read the press release in full, click here.

European Commissioner Viviane Reding outlines progress made on proposed data protection reforms.

In a press conference following a meeting of the Justice Council of the European Union on 6 June 2014, Commissioner Reding said of data protection reform, “we clearly moved from dormant to dynamic negotiations”.

According to Commissioner Reding, agreement has been reached on two very important pillars of the data protection reform, namely the rules that govern data transfers to third countries and the territorial scope of the proposed Data Protection Regulation.

In terms of data transfers, Commissioner Reding said that the Regulation sets out three avenues that can be used to make legal data transfers.  First, when the Commission has found that a third country is “adequate” in terms of data protection.  This means that certain conditions, set out in the law, such as having robust data protection legislation or a data protection authority in place, are met.  Secondly, when appropriate safeguards exist, including for example binding corporate rules approved by data protection authorities.  Thirdly, in clearly defined specific situations that necessitate the transfer, such as a tax or competition investigation.

These three roads will lead the way to secure data transfers”, Commissioner Reding said.

As for the territorial scope of the Data Protection Regulation, Commissioner Reding said that, “EU data protection law will apply to non-European companies if they do business on our territory”.  She continued: “This might strike you as self-evident.  But let me tell you: far from it.  It was one of the most contentious points when I presented the data protection reform in January 2012”.  Commissioner Reding said, referring to the recent Google Spain case (in connection with the removal of data from search engine results lists) that she was, “glad that the European Court of Justice in its recent landmark ruling on the right to be forgotten brought some clarity confirming the Commission’s view”.

The Council also discussed the one-stop shop principle according to which there should be one decision by one single data protection Regulator when it comes to cross-border services involving data processing.  This will, according to Commissioner Reding, “cut red tape for companies and citizens and make sure data protection rules are applied consistently throughout the EU”.  Commissioner Reding continued: “Positions are coming closer to the model for such a system with the general understanding that there should be a “lead authority” which works closely with other concerned authorities, notably the local authority with which citizens lodge a complaint (to ensure “proximity”)”.

Commissioner Reding concluded by saying: “In short: the data protection reform is on track. It is on the right track to ensure “the completion of the Digital Single Market by 2015” – as Heads of State and government agreed in October”.  To read Commissioner Reding’s comments in full, click here.

Broadcasting

BBC Trust publishes draft framework for BBC’s commercial services.

The BBC Trust has published a draft framework setting out the remit and requirements of the BBC’s commercial services: BBC Worldwide, BBC Global News Ltd and BBC Studios and Post Production.

This is, the Trust says, the first time the Trust’s expectations for the BBC’s commercial services have been set out in a single, public document, and mirrors the service licences already in place for individual BBC services such as BBC One and Radio 2.

The commercial services framework stipulates five key principles to ensure that the operations of the BBC’s commercial services are consistent with the principles of licence fee-funded services, and that the services operate fairly in relation to the wider market.

The five principles are:

  • strategic alignment of commercial services and public service activities – commercial activity must be consistent with the BBC’s public purposes and uphold the good reputation of the BBC;
  • how, where and when commercial business can be conducted – commercial activity should principally focus on securing a return from BBC content and brands.  When exceptions are considered the Trust will require a clear rationale.  If acquisitions or equity investments are proposed, the Executive Board must be satisfied that they are necessary to meet business objectives and that all other options have been considered.  Larger or more significant proposals will be subject to approval from the Trust;
  • generating a return for licence fee payers – through a mix of upfront investments and dividends for reinvestment in licence fee-funded public services;
  • commercial efficiency – the Trust will set a baseline requirement for commercial efficiency, which each commercial subsidiary must meet.  The BBC Executive Board must set commercial targets for each business and regularly report on progress to the Trust; and
  • separation between publicly funded BBC activity and its commercial services – there must be appropriate financial and operational separation between publicly funded and commercial activities to comply with state aid law and ensure the commercial services do not gain an unfair advantage in the market as a result of their links with the BBC.

The framework makes clear that the BBC Executive Board is responsible for setting and reviewing commercial strategies and business plans, although significant commercial proposals remain subject to Trust approval.  The Executive Board will report quarterly to the Trust on the performance of the commercial services.  The Trust will review the BBC’s compliance with the framework at least once every five years.

The Trust will now seek views on the draft from industry stakeholders and interested members of the public before publishing a final framework later this year.  To read the Trust’s press release in full, click here.

Prize Draws, Promotions and Competitions

PhonepayPlus issues £120,000 fine against PRS “prize draw” operator and orders refund to consumers.

Misleading letters that were sent to consumers led them to believe that they had won prizes such as £20,000 cash, £250 of shopping vouchers, HD ready TVs and makeovers but in reality it was a PRS “prize draw”.

To enter the prize draw cost consumers £1.53 per minute to call from a BT landline (with a minimum five minutes and 35 seconds charge) or six text messages at a cost of £1.50 per message, plus any network charges, and it could also be entered by post.  The Regulator’s independent Tribunal ruled that the case was “very serious”.

PhonepayPlus has accordingly ordered Wye Valley Promotions Ltd to refund all complainants who claim a refund for the full amount they spent on the service within 28 days of their claim and provide evidence to the Regulator that this has been done.

Jo Prowse, Acting Chief Executive of PhonepayPlus, said: “Wye Valley Promotions Ltd mislead consumers with personal letters and ‘claim forms’ that led them to believe they had won big prizes, but in reality the letters were little more than adverts for a prize draw.  PhonepayPlus’ Tribunal has ruled that it was a very serious case and ordered that Wye Valley Promotions must give a refund to consumers who request one.  The PhonepayPlus Code of Practice exists to protect consumers and the vast majority of premium rate service providers who stick to the rules and practice good business. Misleading consumers in this way will not be tolerated”.  To read the PhonepayPlus press release in full, click here.

Publishing

Press Complaints Commission finds no breach of Clause 14 (Confidential sources) of Editors’ Code of Practice.

Richard Hillgrove VI complained to the Press Complaints Commission that an article headlined “How the Nigella drug allegations surfaced”, published by The Sunday Times on 22 December 2013, revealed his identity as a source of information in breach of Clause 14 (Confidential sources) of the Editors’ Code of Practice.

The article followed the conclusion of the trial of two former assistants to Charles Saatchi and Nigella Lawson, during which allegations had been heard by the court that Ms Lawson had used controlled drugs.  At that time, the complainant had published theories on his blog about the nature of photographs of Ms Lawson and Mr Saatchi which had been widely published and which had prompted solicitors acting for Ms Lawson to write to the complainant, threatening to take legal action against him.  The article reported that the complainant had approached the newspaper after the publication of the photographs and had attempted to negotiate the publication of allegations regarding Ms Lawson’s use of drugs and her treatment of Mr Saatchi’s daughter.  The article identified the complainant as the source of a number of emails apparently from a named third party, which he had forwarded to a journalist.

The complainant accepted that it was legitimate for him to be identified as the recipient of correspondence from solicitors acting for Ms Lawson, but he considered that the newspaper had breached Clause 14 by identifying him as the source of information contained in the story because he had clearly marked the correspondence as confidential.  He had also requested, via an email to the newspaper, that it would “not write an article stating emails are from [the third party] but they will strictly be written as source/friend”.  The newspaper had agreed to this request, the complainant said.  The newspaper did not accept that it had agreed to treat the complainant as a confidential source.

The PCC emphasised that it was not required to make any finding in relation to the article insofar as it referred to the third party and that it was required to consider, solely, whether the complainant could be considered to be a confidential source.

In this instance, it was relevant to the PCC’s consideration that the complainant, an experienced public relations professional, was plainly familiar with the relevant conventions.

The assurances which the complainant had sought from the newspaper were, at best, ambiguous in relation to his own position, the PCC said: in the correspondence exchanged before publication it was not clear to whom the request for anonymity extended, not least because the complainant had acknowledged the possibility that he might be quoted in the article.  The exchanges could not reasonably be construed as confirmation by the newspaper that the complainant would be treated as a confidential source.  The complaint was therefore not upheld.  To read PCC Adjudication on Richard Hillgrove v The Sunday Times (11 June 2014), click here.

Advertising

Committee of Advertising Practice publishes advice on use of celebrity and other testimonials in marketing communications.

CAP says that testimonials in ads can be an effective way to engage audiences who place value in hearing about real life experiences of a product or service.  However, testimonials must be genuine and advertisers must hold contact details from the individuals providing them (CAP Code rules 3.45 and 3.46).  In short, any alteration to a quotation which doesn’t fairly reflect the reviewer’s experience will breach the CAP Code.

CAP refers to the 2013 ASA Adjudication on Slimzene.  On its website, Slimzene quoted the singer Adele as saying “I lost 32kgs [sic] in four weeks with No Special Diet, No Intense Exercise!” with the raspberry ketone diet.  The ASA found that Slimzene breached the food rules when they made unauthorised health claims about their food supplements, which rendered Adele’s testimonial misleading, but it also turned out Adele had not used the product at all.  To read the CAP advice on testimonials in marketing communications, click here.

Topics