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February 9, 2015
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Government consults on Late Payment Directive (2011/7/EU) and “challenging grossly unfair terms and practices”.
Court of Justice of European Union finds exhaustion principle does not apply to copyright works whose medium is altered to the extent that a new work is created.
Government publishes response to consultation on reducing duration of copyright in certain unpublished works.
Ofcom varies licences of UK’s four mobile network operators to improve mobile coverage across country.
Nominet offers more domain security for.uk registrants.
Information Commissioner’s Office consults on “The ICO Plan 2015 to 2018”.
Ofcom publishes applications for second national commercial digital radio multiplex and asks for comments.
Ofcom rules Saints and Scroungers did not present material facts in a way that was unfair to complainant, despite error in using wrong photographs.
Government launches consultation on implementation of Collective Rights Management Directive (2014/26/EU).
Independent Press Standards Organisation publishes latest set of adjudications and announces names of those appointed to its Appointments Panel.
High Court grants injunction restraining harassment by photography but declines to grant injunction restraining publication.
The Films (Definition of “British Film”) Order 2015 comes into force.
Government consults on potential change to structure and operation of Horserace Betting Levy.
ASA rules ads from online directory services uk-phone.com and CTN Solutions misleadingly implied they were associated with easyJet.
ASA rules giffgaff’s horror film parody ad on YouTube was inappropriately targeted.
Committee of Advertising Practice publishes interim advice on making online marketing communications to children clearly identifiable.
Government consults on Late Payment Directive (2011/7/EU) and “challenging grossly unfair terms and practices”.
The Late Payment of Commercial Debts (Interest) Act 1998 and subsequent Regulations created a statutory framework in the UK for tackling late payment. The legislation’s key provisions are:
- businesses are entitled to charge interest of 8% above the Bank of England Base Rate for any late payment;
- administration costs for chasing late payment can be claimed by business, on a sliding scale depending on the size of the debt;
- payment contracts must not infringe on a business’s right to claim interest and administration costs for late payment;
- mandatory 30-day payment terms for transactions with public authorities; and
- maximum 60-day payment terms between businesses, unless they agree longer terms and this is not grossly unfair to the supplier.
The original Late Payment Directive (2000/35/EU) recognised that: “Heavy administrative and financial burdens are placed on businesses, particularly small and medium-sized ones, as a result of excessive payment periods and late payments. Moreover, these problems are a major cause of insolvencies threatening the survival of businesses and result in numerous job losses”. It therefore introduced a right to claim interest in the event of late payments and to reasonable compensation, as well as a maximum payment term (subject to exceptions).
The Directive also gave representative bodies the power to challenge certain contract terms and practices deemed “grossly unfair” on behalf of small businesses. This power was transposed into UK law with the Late Payment of Commercial Debt Regulations 2002 in relation to terms that seek to “oust or vary the right to statutory interest” following a late payment.
In 2011, the Directive was recast and it extended these powers to allow representative bodies to challenge all contractual terms or practices with regards to late payment considered “grossly unfair” on behalf of any business. The Government is seeking views on how to clarify its transposition of this broader power.
In particular, the Government is seeking views on:
▪ who might be covered by a representative claim (individual businesses, or groups of businesses);
▪ which organisations can bring a claim;
▪ options for dispute resolution; and
▪ the resources available to bring a case.
The Government is also consulting on whether to refine further the definition of “grossly unfair” payment practices. Building on precedent in other jurisdictions, the Government says that it could legislate to provide indicative criteria that the courts could take into account when assessing whether a practice is unfair. This could include consideration of when there is a disparity in bargaining power between the parties involved.
Subject to the views expressed, the Government says that it may subsequently decide to make consequential changes to the UK’s statutory framework.
The consultation closes at 11.45 am on 9 March 2015. To access the consultation documentation, click here.
Court of Justice of European Union finds exhaustion principle does not apply to copyright works whose medium is altered to the extent that a new work is created.
The claimant, Stichting Pictoright, is a copyright collecting society looking after the interests of visual artists, such as illustrators, artists, graphic designers and photographers, in the Netherlands.
The defendant, Art & Allposters International BV, is an online marketer of posters and other reproductions, such as framed posters, posters on wood and images on canvases, depicting the works of famous artists whose copyright is exploited by Pictoright pursuant to agreements with its members, the copyright holders.
The case concerned the sale by Allposters of images on canvas. In order to produce the images on canvas, a synthetic coating or laminate would be applied to a paper poster depicting the work. The image would then be transferred to canvas by means of a chemical process. Finally, the canvas would be stretched over a wooden frame. The image of the work would disappear from the paper poster during the process. Allposters referred to both the process and the result as a “canvas transfer”.
Pictoright issued proceedings in the Netherlands against Allposters claiming copyright infringement by virtue of the sale by Allposters of its canvas transfers without the consent of Pictoright’s members, i.e. the copyright owners.
The claim was dismissed at first instance, but upheld on appeal. Allposters appealed to the Dutch Supreme Court, arguing that, upon distribution of a work incorporated into a tangible object that had been offered for sale by the copyright holder, or with his consent, the distribution right was exhausted under Article 4(2) of the Copyright Directive (2001/29/EC). Therefore, any subsequent alteration to that object could not impact on further distribution and could not constitute infringement.
The Supreme Court asked the CJEU whether the exhaustion principle under Article 4(2) of the Copyright Directive applied in a situation where a reproduction of a copyright work, which had already been marketed in the EU with the copyright holder’s consent, had been altered, for example by being transferred to canvas, and had been re-placed on the market in its new, in this case “canvas”, form.
The CJEU found that the exhaustion principle applies to the tangible object that the artistic work embodies and not to the author’s intellectual creation. Further, replacing the medium in which the work had first been incorporated resulted in the creation of a new object incorporating the copyright work. In this particular case, the transfer to canvas amounted to an alteration that was sufficient to constitute a new reproduction of the work within the meaning of Article 2(a) of the Directive, which was covered by the exclusive right of the author and therefore required his or her authorisation. The distribution right of the artistic work in that situation could not, therefore, be said to have been “exhausted”. (Case C-419/13 Art & Allposters International BV v Stichting Pictoright 22 January 2015 (unreported) – to access the judgment in full, go to the curia search form, type in the case number and follow the link).
Government publishes response to consultation on reducing duration of copyright in certain unpublished works.
On 31 October 2014, the Government launched a consultation on using the power in section 170(2) of the Copyright, Designs and Patents Act 1988, which enables the Government to reduce the duration of copyright in certain unpublished works that currently remain protected by copyright until the year 2039, regardless of the age of the work.
The Government received a range of responses from 43 interested parties. Although many respondents were supportive of the Government’s proposed measures, a number of respondents raised some concerns with the policy and its potential negative impact on owners of copyright works. These concerns ranged from the impact on the commercialisation of 2039 works by rights holders to potential conflict with the European Convention on Human Rights. The Government says that it “recognises these concerns” and, as a result, has decided not to take action in this area at this time. It will instead seek further views from affected parties. It intends to meet with interested parties “in the near future” to discuss concerns raised during the consultation, and to explore the possible direction of future work in this area. For a link to the Government’s response to the consultation, click here.
Ofcom varies licences of UK’s four mobile network operators to improve mobile coverage across country.
This follows an agreement reached between the Government and EE, O2, Three and Vodafone in December 2014 to increase mobile coverage.
The licence variations commit the four operators to provide voice coverage across 90% of the UK’s landmass by the end of 2017.
In light of these variations, Ofcom will shortly consult further on the annual licence fees for the 900 MHz and 1800 MHz spectrum bands.
The Government directed Ofcom in 2010 to revise these fees to reflect full market value after the completion of the 4G auction. The two bands are used for 2G and 3G, including voice calls, and some 4G services.
EE, O2, Three and Vodafone each signed terms to vary their licences by 30 January 2015. To read Ofcom’s press release, click here.
Nominet offers more domain security for.uk registrants.
Nominet says that it has been investing significantly to help all .uk owners protect their domains. Following a successful launch to registrars in October 2014, registrants can now opt to use two-factor authentication access to Nominet’s online services. This is a two-step verification process that provides an extra layer of security to users accessing online systems.
Two-factor authentication improves security, as an intruder would have to gain access to the device where it is installed, as well as acquiring knowledge of the password/passphrase. Nominet says that this new service will reduce the risk of DNS hijacking or confidential information being compromised.
Two-factor authentication is free and optional and uses the Google Authenticator app and plug-in which are freely available on all major platforms. The current password and optional passphrase system will remain in place and can still be used as an appropriate security measure. For more information, click here.
Information Commissioner’s Office consults on “The ICO Plan 2015 to 2018”.
The ICO has a three-year rolling plan which details how it intends to achieve its six objectives to ensure that:
- organisations have a better understanding of their information rights obligations;
- enforcement powers are used proportionately to ensure improved information rights compliance;
- customers receive a proportionate, fair and efficient response to their information rights concerns;
- individuals are empowered to use their information rights;
- the ICO is alert and responsive to changes which impact on information rights; and
- the ICO is efficient and well prepared for the future.
The ICO has updated its Plan for the period from April 2015 to March 2018, taking into account emerging priorities. There are uncertainties, it says, given that there will be a new Parliament in May. In addition, it is expecting the findings of the recent Triennial Review of the ICO before April 2015 and the new EU data protection reforms are likely to have a “significant impact” on its work within the period of the Plan. The ICO says that it will therefore review the Plan and revise it where necessary.
Before finalising the Plan for the start of April 2015 the regulator is interested in hearing the views of organisations, individuals and ICO staff. Responses to this consultation must be submitted by Friday 27 February 2015. To access the Plan and the consultation documentation, click here.
Ofcom publishes applications for second national commercial digital radio multiplex and asks for comments.
Ofcom has published non-confidential versions of the two applications it has received to run a second national commercial digital radio “multiplex” in the UK. The new multiplex will deliver around 15 new national DAB stations from next year.
Ofcom has received applications from:
- Listen2Digital: a joint application from Babcock’s Media Services business and Orion Media, a commercial radio group; and
- Sound Digital: a consortium of Arqiva, the transmission company, and commercial radio broadcasters Bauer and UTV Media GB.
Each application will be assessed against specified criteria, in a “beauty contest”.
Ofcom hopes to award the licence by summer 2015 and the first new digital stations are expected to be on air in 2016.
Ofcom invites comments on the applications from listeners and the industry. The closing date for comments is 2 March 2015. To read Ofcom’s press release and for details as to how to respond, click here.
Ofcom rules Saints and Scroungers did not present material facts in a way that was unfair to complainant, despite error in using wrong photographs.
An edition of Saints and Scroungers, broadcast on BBC1, included two graduation photographs of the complainant, Jade Oakley, with her parents, which were shown in reference to her father’s attempt to hide assets from the police by giving a house to his daughter, Joanne Oakley (the complainant’s sister).
Jade Oakley complained that she was treated unfairly in the programme as broadcast because it included a photograph of her whenever a reference was made to her sister’s alleged involvement in a fraud case. She added that the programme had not made it clear that her sister was not found guilty of fraud.
Ofcom considered that while Jade Oakley was not identified in the programme, she may have been rendered identifiable to a limited number of individuals who would have been familiar with her. Ofcom recognised that the inclusion of the photographs, in the mistaken belief that they showed the daughter whom Mr Oakley had involved in his attempts to hide his assets, had the potential to create unfairness to the complainant. However, it said that the programme did not make a specific allegation that either of Mr Oakley’s daughters had knowingly been involved in fraudulent activity.
Notwithstanding that the photographs of the wrong daughter had been included in the programme in error, given the steps taken by the broadcaster to obscure Jade Oakley’s identity so that she would not be recognisable to an ordinary viewer and that no specific allegation was made in the programme that Mr Oakley’s daughters had knowingly been involved in fraudulent activity, Ofcom concluded that the programme did not present material facts in a manner that materially and adversely affected viewers’ perceptions of the complainant. Ofcom considered therefore that the broadcaster had taken reasonable care to satisfy itself that material facts had not been presented in a way that was unfair. To read Ofcom’s adjudication on a Complaint by Miss Jade Oakley published in Issue 272 of the Broadcast Bulletin (2 February 2015), click here.
Government launches consultation on implementation of Collective Rights Management Directive (2014/26/EU).
The CRM Directive (on the collective management of copyright and multi-territorial licensing of online music) was published on 26 February 2014 and entered into force on 10 April 2014. It must be transposed into national law by 10 April 2016.
The policy underpinning the Directive is part of the European Commission’s “Digital Agenda for Europe” and the “Europe 2020 Strategy for smart, sustainable and inclusive growth”. It is one of a set of measures aimed at improving the licensing of rights and the access to digital content. These are intended to facilitate the development of legal offers across EU borders of online products and services, thereby strengthening the Digital Single Market.
The Directive’s main objective is to ensure that collective management organisations act in the best interests of the rights holders they represent. Its overarching policy aims are to:
- modernise and improve standards of governance, financial management and transparency of all EU CMOs, thereby ensuring, amongst other things, that rights holders have more say in the decision-making process and receive accurate and timely royalty payments;
- promote a level playing field for the multi-territorial licensing of online music; and
- create innovative and dynamic cross-border licensing structures to encourage further provision and take up of legitimate online music services.
The Directive sets out the standards that CMOs must meet to ensure that they act in the best interests of the rights holders they represent. It establishes some fundamental protections for rights holders, including those who are not members of CMOs. These include detailed requirements for the way in which rights revenues are collected and paid, how the monies are handled, and how deductions are made.
The Directive provides a framework for best practice in licensing, including obligations on licensees around data provision. It also creates scope for the voluntary aggregation of music repertoire and rights with the aim of reducing the number of licences needed to operate a multi-territorial, multi-repertoire service.
All these measures are underpinned by detailed requirements to ensure effective monitoring and compliance, overseen by a national competent authority. Those requirements include ensuring that proper arrangements are in place for handling complaints and resolving disputes.
The Government says that the Directive’s provisions for improved transparency and governance broadly complement existing domestic legislation for the regulation of CMOs. The Copyright (Regulation of Relevant Licensing Bodies) Regulations 2014 require UK CMOs to adhere to codes of practice that comply with minimum standards of governance and transparency under those Regulations. There is also provision for regular, independent reviews of compliance and access to an Ombudsman who acts as the final arbiter in disputes with a CMO. UK CMOs self-regulate in the first instance, but the Government has a reserve power to remedy any problems in self-regulation and to impose sanctions where appropriate.
The 2014 Regulations were developed and implemented against the backdrop of the Directive. However, they do not currently extend to those organisations that also collectively manage rights but which have a different legal form to CMOs. The Directive calls these organisations “independent management entities”. In contrast to CMOs, IMEs are for-profit commercial entities that are not owned or controlled by right holders. Under the Directive they will be obliged to provide information to the rights holders they represent, CMOs, users and the public.
In addition, there is no specific provision in UK law for the regulation of the multi-territorial licensing of online musical works. The Directive introduces new provisions to ensure that cross-border services meet certain standards, including transparency of repertoire and accuracy of financial flows related to the use of the rights.
The consultation closes at 11.45 am on 30 March 2015. To access the consultation documentation, click here.
Independent Press Standards Organisation publishes latest set of adjudications and announces names of those appointed to its Appointments Panel.
IPSO has published a further set of adjudications on complaints made against those publications it regulates. None of the complaints was upheld by the Committee.
IPSO has also announced the names of those that have been appointed to its Appointments Panel. This independent panel is responsible for appointing the Chairman and Board members of IPSO and the three lay positions on the Editors’ Code of Practice Committee.
The IPSO Appointments Panel has three members who are not from a newspaper or magazine publishing background. One member must be a serving editor, however, and one other will come from a publishing background. The Chairman of IPSO, Sir Alan Moses, sits on the panel ex officio, except when the Chairman is being appointed.
The Appointments Panel is Sir Hayden Phillips (Chairman), Sir Alan Moses, Chairman of IPSO, Lloyd Embley, Group Editor-in-Chief at Trinity Mirror, Keith Perch, a former regional newspaper editor, Wendy Harris, a former civil servant with considerable executive and non-executive experience of regulation, and Mehmuda Mian, a solicitor with considerable non-executive experience, including as a BBC trustee. To read IPSO’s press release and for a link to the latest adjudications, click here.
High Court grants injunction restraining harassment by photography but declines to grant injunction restraining publication.
In December 2014, the husband of the claimant, Mrs Kerner, was convicted of two offences of sexual activity with a child in breach of trust and received a suspended sentence of 18 months. The sentence became the subject of considerable comment and media interest.
On the morning of 22 January, as Mrs Kerner and her son, Jack, left home to go to school, they were rushed upon by two men with photographic equipment and long lenses who described themselves as “freelance” and aggressively photographed the two. Mrs Kerner and her son ran back into the house and asked the men to go away, but they did not. One remained for over an hour, continually taking photographs including taking “intrusive photographs through the front bedroom window” and photographs of Jack.
Mrs Kerner applied for an emergency interim injunction later that day based on apprehended harassment within the meaning of the Protection from Harassment Act 1997. The interim injunction requested sought to restrain harassment by photography or videoing of Mrs Kerner or of Jack. It also sought to restrain harassment by the publication by any third party of any material identifying Mrs Kerner or her son, or any details about them.
The court recognised that there was no way that the photographer defendants could be traced, identified and notified in the available time. The court was also satisfied that there was a real risk that, in the absence of an injunction, the conduct of the morning might be repeated and it was more likely than not that Mrs Kerner would obtain at a trial relief against harassment by them. The court therefore granted an interim injunction to that effect.
However, the court refused to grant the second limb of the requested interim injunction, which it noted was effectively a Non-Disclosure Order and therefore subject to the Master of the Rolls’ Practice Guidance ([2012] 1 WLR 100). The court noted that the claimant intended, once an order was obtained, to give notice of it to the media generally, who had not been forewarned of the application contrary to the Practice Guidance and contrary to s 12(2) of the Human Rights Act 1998. Further, the court found that the evidence fell “a long way short” of establishing that harassment by publication was likely to occur. In addition, the form of order sought was “far too broad” and not based on the Model Order attached to the Practice Guidance.
On 29 January 2015, the return date of the interim injunction granted on 22 January, Mrs Kerner asked the court to continue the interim injunction granted.
Mrs Kerner told the court that she had attempted to identify the defendants. She had given notice to three newspaper groups, none of which had responded, and had contacted the DVLA in an attempt to trace the registered keeper of the car driven by one of the photographers. She confirmed that she would serve proceedings if and when she identified a defendant but, at present, neither had been served or notified.
The court was satisfied that the interim injunction granted the previous week should continue until trial or further order. It also considered how the case should be managed and requested that Mrs Kerner give an undertaking to the effect that she would use all reasonable endeavours to trace the defendants and would, if unable to do so within three months, apply to the court for directions as to the further conduct of the case. This, the court said, was to ensure that the interim order did not, by default, become permanent because the defendants could not be traced. (Katherine Elizabeth Kerner v WX [2015] EWHC 128 (QB) (27 January 2015) and [2015] EWHC 178 (QB) (29 January 2015) – to read the judgments in full, click here and here).
The Films (Definition of “British Film”) Order 2015 comes into force.
The Order was made on 28 January 2015 and came into force on 29 January 2015. Essentially, it amends and updates the statutory cultural test contained in Schedule 1 to the Films Act 1985. Films that are certified by the Secretary of State as having passed the test are entitled to apply for tax relief on film production costs in accordance with Part 15 of the Corporation Tax Act 2009.
Paragraphs 4A to 4C (applying to films, documentaries and animations respectively) of the Schedule set out points-based systems based on a number of criteria, including the setting, subject matter, characters, language, location of work and participants in the production of the film.
Article 2 provides for application and exempts certain films from the amendments made by the Order if the latest version of the Schedule (as provided by the Films (Definition of “British Film”) (No 2) Order 2006) does not apply to them. It also provides that the test will not apply if an application for certification was made before the Order came into force. Further, if principal photography or shooting commenced before the Order came into force, but no application for certification was made, the film production company may choose whether the amendments made by the Order should apply to that film; accordingly, such films will be assessed against the applicable rules for that film as if the Order had not been made.
As for the cultural test, the amendments increase the points available if certain percentages of film production work (50% and 80%) take place in the UK. They also increase the points available for language use and provide that points awarded for a film’s British setting, subject matter, characters and language will equally be awarded for the same criteria in relation to other EEA states. The effect is that the number of points available has changed from 31 to 35. Accordingly, the pass mark has changed from 16 to 18 points. To access the new legislation, click here.
Government consults on potential change to structure and operation of Horserace Betting Levy.
The consultation seeks views on a bespoke statutory framework that could replace the Horserace Betting Levy. It builds on two previous consultations on Levy reform or replacement conducted in 2014. The Government says that there is no preferred option at this stage.
The consultation closes on 12 March 2015. To access the consultation documentation, click here.
ASA rules ads from online directory services uk-phone.com and CTN Solutions misleadingly implied they were associated with easyJet.
uk-phone.com stated in its Ask sponsored ad, “Phone Number Helpline – Phone Customer Service & Support easyjet.uk-phone.com/ For General Enquiries & Feedback”. Similarly, CTN Solutions Ltd stated in its Bing-sponsored search result “Call easyJet Direct – 0843 XXXX XXX. contacttelephonenumbers.co.uk for easyJet Customer Services for bookings & flights”. Both companies also promoted easyJet’s customer services phone number on their websites, but published disclaimers below the ads that stated that the websites were not affiliated with easyJet or other companies listed on the sites.
Following complaints from easyJet, the ASA found that the numerous references to the airline carrier in both ads, the use of “easyJet” in the URL (uk-phone) and the use of “easyJet” in orange text similar to the company logo, together with claims “To get connected to” could be interpreted to mean that the companies were associated with easyJet. The ASA also said that the disclaimers contradicted rather than clarified the overall impression of the ads. The ASA found the ads to be in breach of rules 3.1 (Misleading advertising) and 3.9 (Qualification) of the CAP Code. To read ASA Adjudication on uk-phone.com (28 January 2015) click here and ASA Adjudication on CTN Solutions Ltd (28 January 2015) click here.
ASA rules giffgaff’s horror film parody ad on YouTube was inappropriately targeted.
The video for the mobile network, giffgaff, opened with sounds of a woman screaming for help. She was running along a road at night pursued by a man who appeared to be holding a chainsaw. As the ad developed, a stream of screaming characters was introduced, each being pursued by the last including a clown, a zombie, a pumpkin head, a doll holding a blow torch, a ghost and a man with an upside down head. The collective of characters was then seen as a mock choir, “singing” outside a house. On-screen text stated “When you’re scared, you’re not the boss. At giffgaff we’re all the boss. giffgaff the mobile network run by you”.
Following complaints that the ad was inappropriate for children and unduly distressing, the ASA found that young viewers were unlikely to understand the plot’s twist or recognise that the monsters were not as they appeared. As such, the ASA considered that the ad was unsuitable for young children to view. Although the ad had been targeted in line with the profile of the YouTube account holder who was over 18, the ASA noted that it was played before a programme of interest to very young viewers and that any over 18s watching were likely to be doing so in order to accompany young children. Because giffgaff had no control over the age of people accessing the account of an over 18-year-old, the ASA said that it was reasonable, in view of the content of the programme material being watched at the time, for consumers to expect that only advertising material that was suitable for a young audience would be shown. The ASA concluded that the ad had not been targeted appropriately, despite using YouTube’s targeting filters to their full extent, and was therefore in breach of the CAP Code rule 1.3 (Social responsibility).
The ASA dismissed the complaint of undue distress saying that the ad was unlikely to cause fear to adults given that no graphic imagery was seen in the opening sequence and a skip function was included to enable those who preferred not to see the ad to bypass it. To read ASA Adjudication on giffgaff Ltd (4 February 2015), click here.
Committee of Advertising Practice publishes interim advice on making online marketing communications to children clearly identifiable.
Rule 2.1 of the CAP Code provides that marketing communications “must be obviously identifiable as such”. CAP is urging marketers to review online content they have published or intend to publish. If there is any doubt about whether children will recognise the commercial intent, CAP “strongly advises” marketers to make it clear that the content or parts of the content constitute a marketing communication, for example, by labelling the content in a clear and timely manner.
The interim advice follows CAP’s established position on identifying marcoms in different media and also recent rulings by the ASA relating to online media. CAP intends to publish new guidance later this year to help marketers put in place steps to ensure that children are able to recognise marketing communications within different types of immersive content. To read the interim advice, click here.
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