HomeInsightsNeed to Know – 2014.06.23

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Introduction

Amongst other things, this week we report on the latest Newzbin decision, as well as an interesting Court of Appeal decision in relation to the implication of contractual terms.  The update includes the news that Nominet has published new rules and processes for .cymru and .wales domain names, together with various Ofcom updates.  New guidelines on open justice and reporting restrictions in criminal courts has been published, and ATVOD has frozen its fees for 2014 to 2015.  We also report on new CAP guidance on the disrepute rule, as well as an interesting ASA finding in relation to an ad claiming “unlimited” cloud storage.  Finally, the update includes two Ofcom decisions in relation to The Jerry Springer Show and The People’s Voice respectively.

General

Court of Appeal considers correct approach to implication of contractual terms.

Technology

ASA finds “Unlimited” cloud storage ad misleading because fair usage policy was not clearly presented.

Technology and Construction Court rules on contractual liability for internet telephony security breach.

Nominet publishes rules and processes for .cymru and .wales.

Ofcom publishes report on availability of communications services in UK cities.

Ofcom publishes amendments to Wireless Telegraphy licence regulations in the 870 to 876 MHz and 915 to 921 MHz spectrum bands allowing their use on a licence exempt basis.

Data Protection

Information Commissioner’s Office orders marketing company based in Glasgow to stop bombarding public with nuisance marketing calls.

Broadcasting

Ofcom finds episode of The Jerry Springer Show too violent for lunchtime viewing.

Ofcom finds The People’s Voice cannabis debate in breach of broadcasting rules on due impartiality.

Publishing

New guidelines on open justice and reporting restrictions in criminal courts published.

Film & TV

High Court finds individual behind Newzbin websites liable for infringement of film studios’ copyright.

Authority for Television on Demand freezes fees for 2014 to 2015.

Advertising

CAP issues guidance and Advertising Code amendments on disrepute rule.

General

Court of Appeal considers correct approach to implication of contractual terms.

Allowing an appeal from a decision of Mr Justice Morgan, the Court of Appeal has held that a term should not be implied into a commercial lease to the effect that where a tenant (M&S) exercised a break clause in the lease, it would be entitled to a refund of a proportion of any rent paid in advance relating to the period after the break date.  The court revisited the principles applying to the assessment of whether a term can be implied into a contract, emphasising once more that the implication of terms is, in essence, an exercise in interpretation and in this case the lease, read as a whole against the relevant background, could not reasonably be understood to include such a term. 

Arden LJ said that the starting point was that, if there was no express term, none would be implied because if the parties intended that a particular term should imply to their relationship they would have included a term to that effect, rather than left it to implication.  Arden LJ also noted that in Mediterranean Salvage v Seamar Trading [2009] EWCA Civ 531, the court made clear that it would not imply a term as a matter of interpretation, following the approach adopted in AG of Belize v Belize Telecom Ltd [2009] 1 WLR 1988, unless it was “necessary that the agreement should contain such a term to achieve the parties’ express agreement, purposefully if construed against the admissible background”.  Arden LJ accepted that there was a degree of imprecision about the word “necessary” and that what is necessary must depend on the particular type of contract.  She also accepted that a party does not show that a term is unnecessary simply by showing that the parties’ agreement could work without the implied term.  A term may be implied if it is necessary to achieve the parties’ objective in entering into the agreement.

Applying those principles to the current case, Arden LJ was satisfied that no term should be implied to the effect that M&S should be entitled to any refund.  The fact that there was no case precedent for implying a term for repayment of rent in such circumstances formed part of the admissible background against which the lease, in this case, should be interpreted.  It made it all the more likely, Arden LJ said, that a reasonable person, having knowledge of this background, would conclude that if the parties had really intended there to be an implied term for repayment they would have made express provision for it (Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd [2014] EWCA Civ 603 (14 May 2014) – to read the judgment in full, click here). 

Technology

ASA finds “Unlimited” cloud storage ad misleading because fair usage policy was not clearly presented.

The claim “Unlimited Cloud Storage” on www.justcloud.com linked to a pop-up window explaining that the unlimited plan was for home users only.  The complainant, a home user, challenged whether the claim was misleading because he was told that he had exceeded a fair usage limit and he had been re-classed as a business user. 

The ASA considered that the claim “unlimited” would be interpreted by readers to mean that they would be able to use the service to store as many personal files as they wished at any time without limit or penalty. The ASA noted that although the pop-up window stated that the service should be used for home and personal use only, it did not state that a restriction would be applied if users exceeded a specified limit. 

Because the qualification was not clearly presented and because the pop-up contradicted the “unlimited” claim, the ASA found the ad in breach of CAP Code rules 3.1 and 3.3 (Misleading advertising), 3.7 (Substantiation), 3.9 (Qualification) and 3.11 (Exaggeration).  To read ASA Adjudication on JDI Backup Ltd (18 June 2014), click here.

Technology and Construction Court rules on contractual liability for internet telephony security breach.

The court dismissed a claim brought by a VoIP service provider against a customer for £35,000 in respect of calls made on the customer’s system after its router had been hacked.  Although the court was prepared to accept the implication of a term in the contract that the customer would take all reasonable steps to ensure its system was adequately protected, the court was not prepared to infer that the customer had failed to do so simply from the fact that its system had been breached.  The court also found that the customer had not breached an express obligation to “…use all reasonable endeavours to keep [its password] confidential and inaccessible to third parties”, on the basis that the service provider failed to stipulate exactly what reasonable endeavours the customer should have used to prevent this happening (Frontier Systems Ltd (trading as Voiceflex) v Frip Finishing Ltd [2014] EWHC 1907 (TCC) (10 June 2014) – to read the judgment in full, click here).

Nominet publishes rules and processes for .cymru and .wales.

Nominet ran a three month consultation on proposals for .cymru and .wales and says that it has also worked closely with the Welsh Government to ensure that the new domains are good for Welsh businesses, good for Wales and those who want to address the Welsh market, and support the Welsh language online.

Nominet has published a short analysis of the responses it received and a policy statement setting out its conclusions following the consultation.

Nominet’s advice to trade mark holders is to act now in order to secure the corresponding domain name by submitting it to the Trademark Clearing House before the end of July.

For businesses operating in Wales, but without registered trade marks, there will be a further opportunity to secure domain names that match the business name or brand.  Those who wish to register their interest should go to http://ourhomeonline.org.uk/sign-up-for-updates.  To read Nominet’s press release in full, click here.

Ofcom publishes report on availability of communications services in UK cities.

In particular, the report looks at the availability of fast broadband networks.  It summarises and updates the work Ofcom has published so far in this area, introduces some new commissioned research, and sets out Ofcom’s plans for further work during the rest of the year.

Essentially, the report shows that there are still significant gaps in availability of standard and superfast broadband services in sample UK cities, and proposes possible explanations for this.  To read Ofcom’s report, click here.

Ofcom publishes amendments to Wireless Telegraphy licence regulations in the 870 to 876 MHz and 915 to 921 MHz spectrum bands allowing their use on a licence exempt basis.

Ofcom explains that the bands would primarily be used for short range devices, land-based use of earth stations on moving platforms (to enable the delivery of broadband on trains and coaches) and two different modes of operation for Citizens’ Band Radio.  The Regulations will come into force on 27 June 2014.

Also, following a consultation, Ofcom has published minor changes to fees for aeronautical, broadcasting and fixed link wireless telegraphy licences.

Broadcasting fees have been introduced to cover the costs that Ofcom incurs when dealing with the sector and new fees have been introduced to cover coordinated fixed links in the 70 and 80 GHz bands.

The changes also reflect the liberalisation of spectrum rights of use for the Public Wireless Networks (2G and 3G) in Guernsey, Jersey and the Isle of Man to make them technology neutral.

These amendments came into effect on 27 March 2014.

To read Ofcom’s amendments to the Wireless Telegraphy licence regulations, click here.  To read Ofcom’s statement on fee changes, click here.

Data Protection

Information Commissioner’s Office orders marketing company based in Glasgow to stop bombarding public with nuisance marketing calls.

DC Marketing Limited made the calls to try and get people to purchase solar panels partly financed by the Green Deal Home Improvement Fund.  An ICO investigation found the company also frequently gave a false name to avoid detection.

It is against the law for a company to make marketing calls to an individual who has opted out of receiving them by registering with the Telephone Preference Service (TPS) or informing the company directly.  It is also against the law for a company to give out false information in an attempt to avoid detection.

The ICO became aware that DC Marketing Limited were still contacting individuals who had asked not to be contacted after 280 reports were made to the TPS and the ICO from angry members of the public.

The ICO has published detailed guidance for companies carrying out marketing explaining their legal requirements under the Data Protection Act and the Privacy and Electronic Communications Regulations.  The guidance covers the circumstances in which organisations are able to carry out marketing over the phone, by text, by email, by post or by fax.

The ICO says that it is also continuing to work with the government, OFCOM, the telecommunications industry and consumer groups, including Which?, to tackle the problem of nuisance calls.  To read the ICO’s press release in full, click here.

Broadcasting

Ofcom finds episode of The Jerry Springer Show too violent for lunchtime viewing.

A complainant watching the talk show on Pick TV at 1 pm on 27 January 2014, alerted Ofcom to the “unacceptable” level of violence shown in the programme.  Over the course of the programme’s 55 minute duration, violent altercations broke out on 12 separate occasions including participants landing punches or slaps on others and vicious hair pulling. 

In Ofcom’s view, the cumulative effect of these very frequent violent altercations resulted in levels of violence which far exceeded audience expectations.  Ofcom also found that because the generic warning before the programme began did not specifically and adequately inform viewers of the repeated scenes of violence included within this particular programme and because the pre-watershed broadcast provided the potential for some children to view the material, the violence was not justified by context. 

In addition and in contrast to the broadcaster’s argument that the violence had been appropriately limited by security staff interventions, Ofcom found that the violence was encouraged to some extent and presented as entertainment which heightened the level of offence.  As such, the broadcast was found in breach of Broadcasting Code rules 1.11 (violence must be justified by context) and 2.3 (generally accepted standards).  To read Ofcom’s adjudication on Jerry Springer published in Issue 256 of the Broadcast Bulletin (16 June 2014), click here.

Ofcom finds The People’s Voice cannabis debate in breach of broadcasting rules on due impartiality.

The People’s Voice (TPV) is a linear internet television service that broadcasts a variety of discussion and general entertainment programmes, including Sonia Poulton Live.  A complainant alerted Ofcom to an episode of the series which featured a discussion regarding the legalisation of cannabis during which the presenter “expressed strong views supporting the use of cannabis”. 

Ofcom considered that the debate surrounding this subject is clearly a matter of political controversy relating to current public policy and therefore that due impartiality should be observed.  Ofcom considered that, taken overall, this programme gave a one-sided view on the matter because it did not include any views that could reasonably and adequately be classed as supportive of the current policy of cannabis being classified as an illegal drug. 

Ofcom noted TPV’s argument that a further programme on the issue of the legalisation of cannabis, the Richie Allen Show, was broadcast 10 weeks later and showed “a much more balanced and impartial approach to the subject”.  However, due to the considerable length of time between the broadcast of the two programmes, Ofcom said that the two could not be reasonably described as being editorially linked.  As such, Ofcom found that the Sonia Poulton Live broadcast was in breach of Broadcasting Code rule 5.5 (due impartiality).  To read Ofcom’s adjudication on Sonia Poulton Live published in Issue 256 in the Broadcast Bulletin (16 June 2014), click here.

Publishing

New guidelines on open justice and reporting restrictions in criminal courts published.

The Newspaper Society reports that a third updated set of guidelines on open justice and reporting restrictions in the criminal courts has been published by the Judicial College, Newspaper Society, Society of Editors and the Media Lawyers Association.

The guidelines have been designed to provide a single useful reference for courts and media.  A checklist sets out the points to consider before any restriction upon press access or reporting is made.  It summarises the automatic and discretionary reporting restrictions and where the law permits such exceptions to the open justice principle.  Each section concludes with a bullet point summary of the key principles designed to help users.

The updated guidelines reflect and incorporate numerous changes in both statute and case law that have taken place in the last few years and that are relevant to the reporting of the criminal courts.  For a link to the guidelines, click here.

Film & TV

High Court finds individual behind Newzbin websites liable for infringement of film studios’ copyright.

In the long running Newzbin saga, the High Court has found that David Harris was liable for infringement of the claimant film studios’ copyright in many films and TV programmes as a result of his involvement with the websites owned by Newzbin Ltd.  Mr Harris was found to be behind two Newzbin websites as primary controller and was at the heart of concerted efforts to remove funds from the Newzbin company in order to prevent the claimants from recovering either damages or costs pursuant to the earlier Newzbin judgments.  Further, the court found, Mr Harris was the driving force behind the other defendant companies, which he had used for the purposes of syphoning off monies from Newzbin and receiving and channelling to him, or for his benefit, revenues earned from the operation of the Newzbin websites.  The court also found that Mr Harris had conspired with the other defendant companies and organisations to injure the claimants by unlawful means, including by infringing their copyrights and by conspiring to defraud them.

The court found that Mr Harris had masterminded and directed all the actions of Newzbin throughout the relevant period, including those actions which were found to constitute infringing conduct.  “If ever there was a clear case of a company director “intending, procuring and sharing a common design” to commit an infringement with the company, and “making it his own”, then this is it”, Barling J said.

The film studios’ success was all down to the presentation to the court of certain internet discussions between Mr Harris and various business associates, in which he spoke freely and openly about his actions and intentions.  (Twentieth Century Fox v David Harris [2014] EWHC 1568 (Ch) (16 May 2014) – to read the judgment in full, click here.)

Authority for Television on Demand freezes fees for 2014 to 2015.

The television on demand regulator has frozen the fees that pay for consumer protection in the media sector.  The decision to freeze fees follows three consecutive years in which average fees have fallen.

While the fees paid by 116 UK operators of on-demand TV will not rise, ATVOD has promised enhanced protection for consumers, by devoting more resources to investigating potential breaches of statutory rules.

The new tariff, which follows a consultation and has been approved by Ofcom, retains the progressive banded structure first adopted for 2011-12.  The biggest operators pay most, and the structure offers concessionary rates for micro-scale, small-scale and non-commercial service providers.

The key outcomes are:

  • fees frozen in all tariff bands;
  • concessionary rates of £91 – £96 for non-commercial service providers;
  • concessionary rates of £137 to £145 and £183 to £193 for commercial service providers with turnover below £50,000 and £100,000 respectively;
  • a three band standard tariff based on the turnover of the service provider, with rates set at £732 to £771, £4,740 to £6,151 and £9,480 to £12,302; and
  • a cap of £25,000 on the total fees paid by any single provider.

Commenting on the decision, ATVOD Chief Executive Pete Johnson said: “The proposals we set out in the consultation took account of the work we had done in partnership with the industry through a joint working party and were endorsed by the majority of respondents.  We are very pleased to be able to freeze fees after three consecutive years in which average fees have fallen.  The outcome demonstrates the effective operation of a co-regulatory arrangement which allows statutory rules to be rigorously enforced in a manner which minimises the impact on compliant services”.  To read ATVOD’s press release in full, click here.

Advertising

CAP issues guidance and Advertising Code amendments on disrepute rule.

Following the recent ASA ruling that a Paddy Power ad which encouraged consumers to bet on the outcome of the Pistorius murder trial brought advertising into disrepute, CAP has considered the use of rule 1.5 and, as a result, has issued some updated advice on it.

The CAP Code already enables the ASA and CAP to require persistent offenders to have their non-broadcast advertising run past the Copy Advice team before it can be published.  CAP has now extended this to include advertising by those who have been found to bring advertising into disrepute. 

The new guidance states that in circumstances where the ASA considers it should have been foreseeable to a marketer that publishing an ad would amount to a serious breach of the Code, either due to the sensitive nature of the subject matter and the circumstances in which it appears, or because the marketer had breached assurances to the ASA that the copy in question would not be used again, then it may hold that that ad has brought advertising into disrepute.  To read CAP’s advice note, Bringing advertising into disrepute (19 June 2014) in full, click here.

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