Archive for April, 2012

Law Society of Scotland World IP Day Conference 2012

This year’s Law Society of Scotland World IP Day Conference was held at the Faculty of Advocates on 27 April 2012. The conference boasted two top notch speakers Pete Wishart MP and Aileen Alexander who will be active players in the field of IP over the next few years.

Mr Wishart is the MP for Perthand North Perthshire (and fomer member of Scottish band Runrig!).  He spoke about the importance of creative industries in Scotlandand the UK and the value that they bring to the economy.  He stressed the importance of adequate robust legal protection for the creative industries to ensure new content continues to be generated. He spoke in support of the Hargreaves Report (Digital Opportunity – A Review of Intellectual Property and Growth), which is aimed at modernising the UK’s IP laws to stimulate innovation and to allow it to be adequately protected and rewarded in the digital age.  One of the main themes of Mr Wishart’s talk was the creation and development of the Digital Copyright Exchange (DCE).  The DCE was propsed by Hargreaves to offer a quick and efficient licensing network of copyright works which had ‘opted in’ to the scheme. It would for example, allow someone wishing to use a piece of music in a film to quickly and efficiently find out who the owner is and the terms/cost on which they can use the track. Mr Wishart could provide an inside track view and advised that Richard Hooper will report on his recommendations to introduce the DCE in the summer of this year with a view to having the DCE up and running within the year.  Given the various legal challenges which the Digital Economy Act and previous Intellectual Property Reviews like the Gowers Review have faced, the progress and possible enactment of such a key plank of the Hargreaves’ report will be very interesting and could create a world first DCE.

The second speaker Aileen Alexander, is a senior legal manager of Glasgow 2014 Limited, the Organising Committee of the Glasgow 2014 Commonwealth Games. She provided an interesting insight into the variety of steps which have been and will be taken to protect the intellectual property associated with the Commonwealth Games (a link to the act can be found here). This included the registration of the Glasgow Games’ trade marks and logos both in the UK and in other Commonwealth Countries, the measures they will take to monitor and prevent ‘ambush marketing’ (when unauthorised companies try to promote themselves at the games to the detriment of the official sponsors).

 Many thanks to the organisers of this excellent and thought provoking event!


Mark Cruickshank

ASA decision on misleading website prices

The Advertising Standards Agency (ASA) has published another decision on misleading pricing information contained on an organisation’s website.

In this case, an internet service provider, Heart Internet, omitted a £10 set-up fee from its price comparison table, and displayed prices that excluded VAT. A small white on grey footer at the bottom of the page stated that the prices were VAT exclusive.

Following the complaint, Heart agreed to update the product table so that customers were aware of the charge before commencing the ordering process. However, Heart argued that its footer complied with the ASA’s requirements.

The ASA’s decision
The ASA held that this breached the ASA’s CAP Code. Rule 3.18 of the Code states that:

…VAT-exclusive prices may be given only if all consumers to whom the price claim is addressed pay no VAT or can recover VAT; marketing communications that quote VAT-exclusive prices must prominently state the amount or rate of VAT payable

As a number of the packages were likely to be seen as packages for consumers (in particular those called Starter Pro and Home Pro), the ASA held that the prices should have been displayed as VAT inclusive prices.

Whilst the ASA agreed that the Business Pro package was aimed at businesses and a VAT exclusive price could be displayed, the ASA noted that the Code requires that the rate of VAT needs to be prominently stated. The ASA held that the footer at the bottom of the page was not sufficient, and therefore that the price claim in relation to the Business Pro package also breached the Code.

The ASA’s decision follows on previous decision about unclear pricing on websites, and serves as a timely reminder that businesses need to ensure that the pricing they display is clear and complies with the requirements of the Code.

Our colleagues over on Brodies PublicLawBlog have blogged on a recent decision of the Information Tribunal in relation to the definition of personal data.

The Tribunal’s decision places a strong emphasis on the Court of Appeal’s 2003 decision in Durant v the FSA, a widely criticised decision which applied a particularly narrow interpretation to the term, and led many to think that the European Commission may commence infraction proceedings against the UK for a failure to properly implement the Data Protection Directive.

Brodies PublicLawBlog

Here’s a phrase you won’t hear very often: the Information Tribunal has recently issued an interesting decision. (I of course use the word “interesting” the way all lawyers use it, which is to say quite wrongly. I also use the term “Information Tribunal” quite wrongly, as it is of course now the First-Tier Tribunal (Information Rights).)

The decision, involving the Financial Services Authority, concerns personal data – that most vexing of subjects – and in particular the interaction between Freedom of Information and the Data Protection Act. In this case, the Tribunal overturned a decision of the (UK) Information Commissioner, who had decided that the names of junior members of FSA staff could be withheld under section 40 of the (UK) Freedom of Information Act 2000 (the personal data exemption, equivalent to section 38 of FOISA) because the names were personal data and their disclosure would not be compatible with the data protection principles. The Tribunal…

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What does an obligation to act in good faith actually mean?

Last year, Leigh blogged about when it might be reasonable to withhold consent under a contract. Today, I’m going to blog about another contract cliche, the obligation to act in good faith.

Last month, the High Court considered a case where one of the parties to a long term outsourcing contract was alleged to have breached an obligation to act in good faith. Given that an obligation to act in good faith is often viewed as fairly weak, the result may come as a surprise to some readers.

The background
Contracts often contain obligations on the parties to act in good faith, particularly where there is an agreement to agree, as a court will not step in and “make” an agreement where the parties have been unable to do so themseleves.

In this case, Mid Essex NGS Trust entered into an outsourcing agreement with Compass Group (trading as Medirest) for the provision of catering services.

The contract contained a general duty on both parties to act cooperate in good faith throughout the term:

The Trust and the Contractor will co-operate with each other in good faith and will take all reasonable action as is necessary for the efficient transmission of information and instructions and to enable the Trust or, as the case may be, any Beneficiary to derive the full benefit of the contract.

Unusually, it appears that the process for determining and calculating service credits was not clearly defined in the contract (or if it was, there was a disconnect between the pro forma schedule and the front end of the contract).

Instead, the Trust had rights under Clause 5.8 of the contract:

The Trust or any beneficiary shall ascertain whether the Contractor’s provision of the Services meets the performance criteria as specified in the Service Level Specification or, if the criteria are not so specified, meets the standards of a professional provider of the Services. Where such performance criteria or standards have not been met by the Contractor in the performance of the Services then the Trust shall be entitled to levy payment deductions against the monthly amount of the Contract Price payable to the Contractor in accordance with the terms of the Payment Mechanism. In addition, the Trust may by notice to the Contractor award Service Failure Points depending on the performance of the Services as measured in accordance with the Service Level Specification. Service Failure Points which are agreed or determined to have been awarded in circumstances where such award was not justified shall be deemed to have been cancelled

Under the contract, the Trust was entitled to terminate the contract if the number of service failure points (SPFs) exceeded 1,400 in any six month rolling period.

Break down in the relationship
There appear to have been a number of initial teething problems, which led to the Trust conducting it’s own monitoring. The Trust then appeared to act irrationally in determining what was required to remedy a failure, and imposing incredibly high and repeated deductions and SPFs.

Following a number of incidents where Medirest felt that service failure points and charges deductions for service level breaches were being set unreasonably, Medirest gave notice to terminate for material breach because it believed that the Trust was acting in a manner that constituted a material breach of the Trust’s obligations. The Trust also claimed that it was entitled to terminate on the basis that Medirest had exceeded the specified number of SPFs.

The court’s decision
Where a party has discretion under a contract, the law (Abu Dhabi National Tanker Co v Product Star Shipping Ltd) says that such discretion should be exercised in good faith and not in a manner that is arbitrary, capricious and irrational.

Cranston J held that Clause 5.8 contained a discretion on the part of the Trust, and that the manner in which the Trust exercised that discretion breached both that duty and its obligations under Clause 3.5, which the court construed widely.

Amongst the more absurd examples of behaviour cited by Cranston J in coming to this conclusion were the following SPFs and deductions that the Trust sought to impose:

  • a box of out of date ketchup sachets in a store room: 30,860 SPFs and a deduction of £46,320. Box was removed immediately on being brought to attention of Medirest ( a mere 1,400 SPFs were required to trigger a right for the Trust to terminate for material breach).
  • a bag of out of date (by three days) bagels belonging to staff or patients: £96,060 deduction. Bagels had been removed immediately.
  • one day out of date chocolate mouse: deduction of £84,540

This was against charges of approximately £180,000 per month!

As the Cranston J said, the Trust’s actions not only had a financial implication. They also “poisoned” the relationship between the parties. Indeed, not only did the court hold that the Trust was in material breach, it also held that there had been repudiatory breach by the Trust (although given that the Trust was also entitled to terminate, no post termination damages were due by either party).

From the Trust’s perspective, being able to set and determine the service credits and SPFs that would apply (rather than have a detailed service credit regime in the contract) must have appeared very attractive, as it would give the Trust a very strong stick with which to manage to contract.

However, as is so often the case, power corrupts, and in this case the Trust misused that power to such an extent that a court has held that it was in breach of contract.

For other organisations, the case is a good reminder not only of how the courts will interpret an obligation to act in good faith (particularly in a long term contract), but also the underlying obligations to exercise discretion in a fair an just manner.

It also emphasises the importance of acting with a calm head when problems arise in a contractual relationship. This is something that the Trust may now be regretting.

Techblogger article on electronic money in this month’s edition of The Journal

Have you seen the weirdly unconvincing Usain Bolt London Olympics advert , in which the fastest man to have ever walked on the planet appears to jog through treacle, to the deeply irrelevant accompaniment of  Ocean Colour Scene?

Well, in an “online exclusive” for the Law Society of Scotland’s Journal, I have written about the new law behind the new technology which the rubbish advert is trying to sell you.

My article discusses the EU’s Green paper Towards an integrated European market for card, internet and mobile payments, and also adds an overview of the current e-money regime.

Essentially the Green Paper has invited comment on a wide array of potentially relevant means of regulation, which is a reflection of the novelty of policy in this area.

The final ACTA?

Depending on your viewpoint, the Anti-Counterfeiting Trade Agreement (ACTA) is either a necessary tool for the international protection and enforcement of intellectual property rights or an unwarranted intrusion into people’s private lives which will be abused by rights holders and amounts to an infringement of civil liberties. ACTA has been a hot topic in the IP world and has resulted in protests similar to objections raised regarding similar recent proposed legislation in the United States – SOPA (Stop On-Line Piracy Act) and PIPA (Protect IP Act).

The highly controversial ACTA (the current text of which can be found here)  is embarking on a key phase of the legislative process which will shape how and if it is to become law in the EU. It has recently been submitted to the Court of Justice of the European Union (CJEU) for a ruling on its legality and thereafter, depending on the decision of the CJEU, it could be passed to the European Parliament for a decision on whether it will become law or not.

What is ACTA and why is it so controversial?
ACTA is an international agreement signed by around 30 countries including most of the Member States of the EU, the US, Australia, Canada, Morocco, New Zealand, Japan and South Korea. It proposes a legal framework for the enforcement and protection of intellectual property rights and it is particularly aimed at tackling counterfeit goods and preventing online piracy. Substantively, ACTA restates much of the existing law in the UK and reinforces measures which are already available to rights holders.

For example, they can already seek injunctions (interdicts in Scotland) in a Court action and seek orders for delivery up/destruction of illegal goods using the Intellectual Property (Enforcement etc) Regulations 2006 and governing UK IP legislation if it suspects infringement is occurring. However, it will mean that these same rights and remedies are now available in the other signatory countries where they may not have been previously. Further, it could engender an integrated approach for mutual assistance amongst the signatory states which could mean that intellectual property rights are more easily enforced in an international forum.

ACTA’s critics argue that it contains vaguely worded provisions which could potentially allow internet service providers to monitor and disconnect repeat infringers and that it makes available unfair statutory damages for online music infringement to rights holders. The critics of ACTA also argue that it will give customs officers much greater powers to search and seize goods which are suspected of infringing intellectual property to prevent them from crossing national borders.

In addition to these concerns, there is a huge amount of suspicion surrounding ACTA because it has largely been drafted and negotiated behind closed doors. In truth there is nothing odd in this approach as all such trade agreements are formed in this way but this alleged secrecy has been seized upon by critics. Critics also claim that the main sponsors of ACTA have ignored protests, particularly in Poland, against the Agreement and that it will be used to curb innovation because major corporations will use ACTA to prevent competition.

Whether any of these criticisms are justified remains to be seen. However, the wording of the current version of ACTA suggests that it is open to interpretation (or misinterpretation!).

What next for ACTA?
The MEP David Martin is the Rapporteur for ACTA and he is currently canvassing opinions and consulting with stakeholders on the Agreement before he provides a recommendation on the final ACTA text to the International Trade Committee on 24/25 April. The Committee make its decision on 30 May and the European Parliament will then vote in June or July to either pass ACTA into law or reject it.

It is a case of ‘watch this space’ to see how ACTA proceeds through the legislative process. Whatever the CJEU and the European Parliament decides, ACTA will no doubt continues to be promoted and criticised in equal measure.

Mark Cruickshank

Mobile apps, accessibility and the Equality Act

The One Voice for Accessible ICT Coalition has published a report warning that elderly and disabled users are at risk of digital exclusion if mobile apps are not developed with accessibility in mind. The One Voice for Accessible ICT Coalition’s members include accessibility charity Abilitynet, BT, the UK technology trade association Intellect, Lloyds Banking Group and City University London.

The findings of the report are not surprising, and are reminiscent of similar warnings many years ago when web 1.0 was taking off, and traditional websites contained many accessibility problems. However, given the exponential growth in the use of smartphones (particularly as a low cost alternative to getting online) and the increasing reliance upon delivering services online, the warning is perhaps even more concerning this time around.

Seven steps to accessibility
To help mitigate these potential problems, the Coalition advocates that app developers follow their Seven Steps to Accessibility.

The seven steps are largely common sense, but should help organisations to ensure that accessibility of their apps is factored in at an early stage, particularly when combined with guidance such as BS8878.

What does the law say?
The relevant law here is the Equality Act 2010, which obliges service providers not to discriminate against people with disabilities by reason of their disability. It also contains (more limited) obligations not discriminate on the grounds of age.

The obligations include a duty not to indirectly discriminate against people on the grounds of age or disability, a duty not to discriminate on the terms of service, and an obligation to make reasonable adjustments. You can read more about these duties in this blogpost.

These duties have interesting implications for evolving areas such as mobile apps, where accessibility technologies and standards are still immature, and are often dependant upon the hardware and software accessibility features built in to the mobile device by the device manufacturer.

What if a service provider offers a service through a conventional website, which is accessible to all users, but wishes to provide a better mobile solution using a bespoke mobile app? Does the Equality Act work in such a way as to hinder innovation for the wider world by preventing a service provider from launching a mobile app if that app is not accessible to users with disabilities?

This is something that Jonathan Hassell and I chewed over on World Usability Day last year. Ultimately, each case will depend on its facts but the answer to the question is, I think, no.

Proportionate means to acheive a legitimate aim
The duty not to indirectly discriminate against disabled or elderly users applies where:

A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B’s

However the duty is only infringed where the service provider cannot show that the provision, criterion or practice is “a proportionate means of achieving a legitimate aim”.

In this case, the service provider’s aim is to improve the ways in which its customers can access its services on the move and when using mobile devices (the “legitimate aim”), and provided that the service provider has given reasonable congniscance to any accessibility measures that are available when designing the mobile app, it is likely that its actions are proportionate.

This is particularly so where the app is only made available on certain platforms, and where elderly or disabled users can already access the service through other channels such as the conventional website or by telephone.

So the fact that an app cannot be made accessible to a specific group of users should not stop the service provider from making it available to the wider public.

Reasonable adjustments
Whilst an initial mobile app may not be accessible to disabled users, service providers do have a duty, under the reasonable adjustments obligation, to continue to review the means through which they provide services and consider whether any adjustments can be made which will improve the accessibility to users with disablities (this obligation does not apply to potential age discrimination).

This is an evolving duty, and so requires service providers to take advantage of new technologies and techniques – for example, new hardware or operating system features, and new W3C standards.

As with conventional websites, service providers should therefore ensure that accessibility improvements are continually reviewed as further versions of the app are developed.

Post from our colleagues over on EmploymentBlog on a recent employment tribunal decision involving harassment via social media…

Brodies Employment Blog

Laura Christie

The case law around social media continues to develop with a new case being considered by the Northern Ireland Industrial Tribunal last week.  Mr Teggart brought a claim against his employer, Teletech UK Limited, for unfair dismissal.  Mr Teggart had been dismissed for harassment and bringing the company into disrepute as a result of him posting obscene comments about a female colleague on his facebook page and, when asked by the colleague to remove the comments, posting further lewd comments about her.

The Tribunal found that the dismissal was fair on the basis that the comments amounted to harassment, which was contrary to the employer’s dignity at work policy.  This was despite the fact that the colleague in question did not have access to Mr Teggart’s facebook page.  The Tribunal did not accept that the comments had brought the company into disrepute, but it considered that the harassment of the colleague was…

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We are currently preparing our autumn 2012 seminar program and will post details here soon.

If you would like to be amongst the first to hear about our autumn seminar programme then follow this link to register your details on the Brodies website.

If there is a particular topic that you would like to see us cover, or are interested in bespoke training for your organisations on any of the issues we cover here on Brodies TechBlog then please contact Martin Sloan or your usual Brodies contact.

Six weeks to go – is your organisation prepared for the cookies law?

With six weeks remaining until the end of the one year grace period given by the Information Commissioner’s Office (ICO) for compliance with the new cookies laws, it’s vital that organisations can demonstrate to the ICO that they are well on the way to compliance.

Whilst the ICO was reported last week as having said that enforcement in relation to first party cookies is unlikely to be a priority, this doesn’t mean (contrary to some reporting that is going around) that organisations can now ignore the new laws.

Until an organisation has audited its cookie usage, identified the types of cookies it uses, and the intrusiveness of those cookies, it won’t be in a position to show that it has determined that certain cookies are low risk and therefore it has taken appropriate steps. Doing nothing is unlikely to go down well with the ICO.

If you have not started assessing the changes that you might need to make to your website then now is the time to start.

Guide on complying with the new regulations
To help organisations understand what they need to do, we have prepared a short guide (PDF) setting out the key steps to compliance.

Cookies law resources page
We have also created a dedicated page on TechBlog which brings together various blog posts on the new laws and links to external guidance from organisations such as the ICO and the International Chamber of Commerce.

You can access the page by following this link:

We will continue to update the page as more guidance is issued.

In the meantime, if you have any questions on the new law and the steps that your organisation should be taking, contact me or your usual TIO Group contact.

Twitter: @BrodiesTechBlog feed

April 2012
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