Archive for January, 2010

Sky V. EDS – Misrepresentation Claims Side-Step Classic Breach Of Contract Defences

A mere 18 months after the case finished the judgement in Sky.v EDS has been published.  To be fair to the judge it is a massive 450 page judgement.

The case arose out of a failed IT implementation by EDS (now part of HP) for BSkyB (it was a Siebel CRM implementation for you techies out there).  Sky was claiming losses in the region of £700m, EDS was hiding behind a £30m limit of liability clause.

The case was mostly about misrepresentations (untrue statements) made by the EDS’ sales team in sales meetings prior to contract.  I am not saying this is typical behaviour but I was going to call this article “Salesman tells Fibs to Get Sale Shocker!”.

Here are the key points from my perspective

1.  The limit of liability did not protect EDS against liability for fraudulent misreps (what most people would call a “lie”, and what the judge called deceit). This is not new law.

2.  EDS were also liable (up to the £30m cap) for negligent misrepresentations.

What’s the difference between a fraudulent misrep and a negligent misrep? If you know the statement is wrong its fraudulent, if you don’t actually know the statement is wrong, but your should have known it was wrong, then its negligent.

Normally there is an “entire agreement” clause that would prevent liability for pre contract negligent misreps. However, in this case the clause was not well enough drafted.  (Expect lots of lawyers to be worriedly reviewing “their” entire agreement clauses to make sure they work. I say that with a degree of smugness because my standard clause does work). 

3. EDS claimed that the reason the project failed was because of Sky not doing its part in the project (a standard defence, and often true).  However, while the “it’s the client fault” defence can work against breach of contract claims, it doesn’t work against misrep claims (whether based on fraudulent misrep or negligent misrep).

All in all not a good day for EDS. Unsurprisingly I read that EDS is planning to appeal.

What is the outcome? Some commentators are saying that IT suppliers will not tender for big projects. I can’t see that happening. However, they may exercise more control over sales teams. Perhaps lawyers will now be compulsory at all sales meetings. Good news for lawyers!

Please don’t take my BlackBerry away

In the news this week was a patent infringement claim from Kodak against the makers of the BlackBerry.  This is not the first attack on the BB, and the iPhone is subject to a number of IP infringement claims.  I guess everyone wants a share of the presumably huge profits these devices make. 

Ignoring the merits of the claim can I, with the greatest respect, ask Kodak to BACK OFF.

I love my BB, and I don’t want anyone to take it away.   My wife has a different view. She now deliberately books holidays in places with poor reception!  

In that context I did hear about one law firm limiting the amount of time per day their lawyers could use their BB’s – a sort of tacograph for lawyers. Interesting.

Perhaps there is an employment law issue here. I asked Tony Hadden in Brodies’ employment  and pensions team (the top ranked team in Scotland) and this is what he said “While there is no case law here (yet),  there may be a problem in terms of the Working Time Directive which theoretically limits the amount an employee works to 48 hours a week.  Also Recent European decisions (Stringer and Pereda) have emphasised that the Working Time Directive relates to health and safety and employers need to understand that they have an obligation to ensure that employees hours do not impact on their health”.   

Here is what I say “Euro Wimps”!  What is wrong with ignoring your spouse, kids and friends to check your BB every twenty minutes in the evening and at weekends?  

 Actually, I think I may have answered my own question there.  

    

Google Phone and Blade Runner – is there a nexus?

The family of popular science fiction author Philip K. Dick alleges that Google is infringing the writer’s intellectual property rights.

In 1968 Dick wrote the novel “Do Androids Dream of Electric Sheep”, and in 1980 the book was made into a movie (and given the distinctly snappier title of “Blade Runner”). Blade Runner’s plot revolves around “Nexus 6 replicants” – robots who look like humans. Google has just launched a new smartphone named “Nexus One”.

Google claims that it is just using the word “Nexus” to mean a place where things converge. Isa Dick Hackett, Dick’s daughter, is quoted in the Telegraph as saying: “Google takes first and then deals with the fallout later”. “In my mind, there is a very obvious connection to my father’s novel. People don’t get it. It’s the principle of it. It would be nice to have a dialogue. We are open to it. That’s a way to start.”

I’m sympathetic to Ms Hackett’s view. Blade Runner is one of the most famous and influential science-fiction films of all time. It’s a highlight of Harrison Ford’s glittering career and star villain Rutger Hauer has lived off it ever since. It’s fair to say that it has given the term “Nexus” far wider exposure than it would otherwise have attained (especially amongst geek sci-fi “fanboys”, who just happen to also like buying new technology).

However, is Google actually breaking any laws? For a start, it’s not clear which type of intellectual property right the Dick family is seeking to rely on. It’s unlikely to be copyright, because Google aren’t using a specific Nexus 6 replicant character. (In any case there’s probably a question mark over who would own the copyright in the Blade Runner characters – it could be either the writer of the book or the director of the movie).

The Dick family is more likely to seek to rely on “Nexus” being a trade mark, or an indication of origin which, when used, would make consumers think of Philip K. Dick and his books. There are numerous hurdles for the Dick family to clear here, the most difficult being that “Nexus” was never actually trade marked by Philip K. Dick. (In contrast, the term “droid” from Star Wars was trade marked by George Lucas, and Motorola recently paid Lucas to license “Droid” for their new phone.)

In the absence of a registered trade mark, the basic question you have to ask is: “Is the use of “Nexus” going to make anybody think that the phone has been created by, or in some way approved by, Philip K . Dick?”

In a peculiar way, it occurs to me that the plot of Blade Runner may actually help Google here. As every good geek knows, Nexus 6 replicants have an in-built 4-year lifespan. It could be argued that there’s no way Google would want to invite an association with Nexus 6 replicants, because this might make consumers think that their phone is likely to seize up and die after 4 years!

ps – Deckard was a replicant.

A bit of a fizz swizz

I was amused by this cautionary tale from Dundee that appeared in the papers last week. Essentially, a couple successfully sued their wedding venue for serving up bottles of Lambrini at the drinks reception at their wedding.

The decision hinged on whether the slightly sparkling, £1.49 a bottle, low-alcohol and made-from-pears drink, Lambrini, was “sparkling wine”, as promised in the receipt issued by the venue in advance of the wedding. Despite the venue’s argument that they had purchased the drink from the wine section of a local cash and carry, the judge held that Lambrini was not wine. It is perry (made from pears), a drink that is fundamentally different to wine (which is made from grapes). Indeed, the judge went as far as to refer to Lambrini as “frankly, an inferior product”.

The couple received around £500 in compensation, to cover their embarassment and disappointment. I suspect, however, that having gone to court they may not end up remembering their big day for the right reasons, and winning £500 in damages is unlikely to make much of a difference.

It just goes to show the importance of ensuring that your contract clearly describes what you are buying, and why you should not include vague or uncertain descriptions that are open to interpretation. In this case, it may have been wise for the couple to confirm in advance exactly what wine would be served.

Mind you, even then, that might not be enough. I spent a couple of months last year going around wedding venues, and was constantly amazed at the number of venues that proclaimed to offer a “champagne reception”, but at which it transpired they would serve (non-Champagne) sparkling wine. Nothing wrong with that (provided that it is a nice bottle of Proseccco or Cremant de Limoux rather than Lambrini), but if the contract says a “Champagne reception” then I would expect a Protected Designation of Orgin Champagne to be served.

Maybe “sparkling wine reception” doesn’t have the same ring to it.

PS The future Mrs Sloan and I are leaving nothing to chance in relation to our wedding later this year; we are BYOB’ing (sparkling wine and all).

A Freedom Too Far?

It’s as if Mel Gibson shouted “FREEDOM (of information legislation)!” at the end of Braveheart. The Scottish Government is proposing that Freedom of Information legislation should be extended to cover a wider range of bodies which deliver public services in Scotland, making Scotland the most “open” country in the UK.

Further bodies can be “designated”, or brought under the scope of the Freedom of Information (Scotland) Act 2002 through powers set out in section 5 of the Act. According to the Scottish Government, bodies should only be considered for inclusion in a section 5 order where they undertake significant work of a public nature or receive significant public funding.

The specific bodies so far identified are building contractors on large public projects; private prison operators; leisure and culture trusts set up by local authorities; the Glasgow Housing Association; and the Association of Chief Police Officers in Scotland. Consultation with these bodies will take place in spring 2010.

In most cases it’s a fair cop (geddit).

However, the addition of “building contractors” private prison operators and leisure trusts seems uneccessary because information they have/generate in relation to a public sector contract is probably already caught under existing FOI legislation.

Happy New Year…

..and sorry about the lack of posts recently.

Martin and I are involved in a mega deal that was due to close before Xmas, but that has rumbled on into January, John is busy dealing with overflow, and Eleanor is is New Zealand (by far the best option).

I promise we will start blogging regularly again soon.

In the meantime one thought. I have started to see billboard adverts for Google’s browser (Chrome). This is a free product (at least for now). Quite strange I thought.  However, on reflection this is probably linked to the EC forcing MS to give Euro users of Vista a choice of browsers.   Round 3 of the “browser wars” ahoy.


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