November 26, 2013

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General

High Court ruling suggests courts are increasingly likely to uphold entire agreement clauses.

High Court considers the distinction between repeated renunciation and continuous renunciation of contract to be “more apparent than real”.

European Parliament passes draft law putting in place a loan guarantee mechanism to help small and medium sized enterprises in cultural and creative sectors to expand.

Technology

Court of Appeal dismisses copyright infringement in software appeal by SAS Institute against World Programming Ltd.

ASA says Carphone Warehouse ad should have described cost of phone as “inclusive” rather than “free” because cost indicated was not a genuine stand-alone price.

High Court grants film studios orders requiring the six main ISPs to block SolarMovie and TubePlus aggregation sites.

Ofcom consults on a blueprint for meeting growing demands placed on UK’s wireless communications infrastructure over the next two decades.

PhonepayPlus publishes new guidelines for industry and advice for consumers on misleading digital marketing practices.

Nominet approves plans to offer registrations directly before the “dot” in .uk.

Broadcasting

Ofcom rules Channel 5’s Emergency Bikers was not unfair despite incorrectly stating that the complainant had been kept in police custody.

Ofcom finds ITV’s Calendar News report unfair because the presentation of material facts wrongly led viewers to understand that the complainant was associated with a drug trafficking case.

Music

Advocate General opines that radio and TV transmission of copyright works in spa bedrooms constitutes “communication to the public” under the Copyright Directive.

Publishing

Press Complaints Commission upholds complaint against The Guardian from Sir Christopher Geidt.

Film & TV

Court of Appeal upholds High Court decision that BSkyB’s use of “NOW TV” trade mark for internet TV service does not infringe Starbucks (HK) Ltd’s Community registered trade mark for “NOW”.

Gambling & Betting

Ofcom publishes audience research into gambling advertising on television.

Advertising

Trading Standards becomes Advertising Standards Authority’s legal backstop power.

General

High Court ruling suggests courts are increasingly likely to uphold entire agreement clauses.

In a case concerning the terms and formation of a contract for the provision of warehousing, packaging, distribution and storage services, the High Court has rejected claims that the defendant security firm breached the claimant supplier’s exclusivity, there being no evidence to support the supplier’s case that an oral agreement granting exclusivity had been incorporated into the contract.  More interestingly, however, even if it had been, the court was clear that an entire agreement clause in the written agreement precluded the supplier’s reliance on it.

The claimant supplier argued that the contract was made partly orally and partly in writing, and it was orally agreed that it would supply the services on an exclusive basis for two years.  It claimed the defendant had breached the obligation of exclusivity and that it was therefore entitled to terminate the agreement for repudiatory breach and claim damages. 

The defendant’s case was that no exclusivity term was ever orally agreed and that, even if such a term had been orally agreed, it had no contractual effect because of an entire agreement clause as follows:

“This Agreement, and the attached Exhibits, embody the entire Agreement and understanding of the parties with respect to the subject matter and shall supersede all prior and contemporaneous agreements and understandings, oral or written”.

Dismissing the supplier’s claim, Lady Justice Gloster found that on the evidence there was no actual oral agreement as to the alleged exclusivity term and even if there were, the entire agreement clause in the written agreement, in the circumstances and as a matter of construction, precluded the supplier from seeking to rely on an alleged collateral agreement, oral term or understanding to assert that the defendant had an obligation to use the supplier’s services on an exclusive basis.  The critical point was that the parties had clearly envisaged that their agreement would need to be a formal agreement in writing.  The notion that some terms of the agreement between the parties were going to be left on a vague, informal oral basis, or that there were to be two related contracts, one written and one oral, or a collateral oral agreement, sat “very unhappily” with their commercial intention.

Gloster LJ was referred to a number of authorities dealing with entire agreement clauses.  In particular, she noted that in Lewison, Interpretation of Contracts (5^th edition) it stated that where a contract contains a clause stating that the written contract contains the parties’ entire agreement, that will usually prevent a finding that a collateral contract has been made.  Gloster LJ also noted that in Ravennavi SPA v New Century Shipbuilding [2007] 2 Lloyd’s Rep 24, Moore-Bick LJ stated as follows:

“The effect of an entire agreement clause… must depend primarily on its terms… I am unable to accept the suggestion… that clauses of this kind can be construed by reference to their supposed purpose or that their significance is diminished if they are found among what are sometimes called the ‘boilerplate’ provisions of a formal contract…”

In the present case, Gloster LJ considered the entire agreement clause to be clearly apt and intended to operate “in the way in which its terms would suggest”.  Gloster LJ accepted that the written agreement was inapposite in certain respects (Mileform’s role was inaccurately described) but that did not justify the wholesale disregard of the entire agreement clause or the importation of a variety of alleged oral assurances and agreements.  Nor was this a case where one party had waived reliance on the entire agreement clause.  Thus, even if there had been an oral agreement, or representation, as to the alleged exclusivity term, the entire agreement clause precluded any such term from taking effect (Mileform Ltd v Interserve Security Ltd [2013] EWHC 3386 (QB) (5 November 2013) – to read the judgment in full, click here).

High Court considers the distinction between repeated renunciation and continuous renunciation of contract to be “more apparent than real”.

In a shipbuilding dispute the claimant buyers applied under s 68(2)(d) of the Arbitration Act 1996 to set aside an award of an arbitral tribunal which found that while the defendant ship yard had renounced two ship building contracts the claimant buyers had later affirmed them.  The grounds for the application were that the tribunal failed to deal with all the issues that were put to it and in particular that the renunciation by the defendants was “continuous”.  The tribunal, the claimants argued, had failed to appreciate the difference between repeated and continuous renunciation.

In rejecting the application, Mr Justice Flaux observed that the distinction the claimants sought to make between repeated and continuous renunciation was “strikingly absent” from their written closing submissions to the tribunal.  Far from making separate arguments about repeated renunciation on the one hand and continuing renunciation on the other, they had essentially dealt with them as aspects of the same overall issue.  In Flaux J’s view, the issue was whether, subsequent to the affirmation, the defendants had renounced the contracts, reviving the claimants’ right to terminate.  Once it was recognised that that was the “issue” for the purposes of s 68(2)(d), the suggestion that the tribunal did not deal with it was not arguable.  However, even if the “issue” was a narrow one of continuing renunciation, the judge was satisfied that the tribunal did clearly deal with it.  Specifically, the tribunal had looked at four instances of renunciation in turn and concluded that the defendants’ email of 19 October 2007 was renunciation and that a further email of 22 October 2007 was not a fresh breach but constituted “a continuation of the Yard’s existing renunciation”.  That was a fair indication that the tribunal had the case of continuing renunciation in mind. 

In any event, the judge considered that any distinction between repeated and continuous renunciation was “more apparent than real”.  In a very real sense, he said, the supposed distinction between a repeated renunciation and a continuing renunciation through silence was a “semantic one”, since persisting in a previously expressed renunciation could be characterised as repetition.  Indeed, the tribunal had itself made that point.  It had set out a summary of the legal principles applicable to waiver or affirmation, one of which was:  “A party who has waived one anticipatory breach is not debarred from accepting its subsequent repetition, and repetition may consist in simply persisting in a previously expressed renunciation”.  This was both a clear indication that the tribunal had the concept of continuing renunciation well in mind and that it was not in any real sense distinct from repeated renunciation (Primera Maritime (Hellas) Ltd v Jiangsu Eastern Heavy Industry Co Ltd [2013] EWHC 3066 (Comm) (15 October 2013) – to read the judgment in full, click here).

European Parliament passes draft law putting in place a loan guarantee mechanism to help small and medium sized enterprises in cultural and creative sectors to expand.

The aim of the “Creative Europe” programme is to promote the mobility of European artists and works, and help audiovisual professionals to adapt to the digital age over the next seven years.

The new programme will have a total budget of more than €1.4 billion.  The new guarantee mechanism, put in place by MEPs last week, should leverage funding for micro-enterprises in the cultural and creative sectors.  All potential players in cultural and creative projects – video games, theatre or street artists – will get easier access to funding by obtaining European bank loans partially guaranteed by the new mechanism.

In the audiovisual field, films, video and multimedia games, documentaries and short films will be eligible for “Creative Europe” support.  The European Parliament inserted a specific provision on funding for sub-titling, dubbing and audio description of European films, which should facilitate access to, and the circulation of, European works across borders.

The text was approved by 650 votes to 32, with ten abstentions.  If the Council approves the text voted by Parliament, the new programme will apply from January 2014.  To read the European Parliament’s press release in full, click here.

Technology

Court of Appeal dismisses copyright infringement in software appeal by SAS Institute against World Programming Ltd.

Over a period of 35 years SAS Institute Inc developed an integrated set of programs for data processing and analysis tasks.  The core program enabled users to write and run their own application programs in order to adapt the SAS system to work with their data.  The language used was specific to the SAS system.

World Programming Ltd developed its own system, using the SAS language, which was designed to emulate the SAS components as closely as possible to ensure that the same inputs would produce the same outputs.  This enabled users of the SAS system to run the application programs they had developed for use with the SAS system on the WPL system as well.

Although there was no suggestion that WPL had access to, or had copied, the source code of the SAS components, SAS Institute brought proceedings in the UK seeking to establish that WPL’s actions infringed copyright in its computer programs.  SAS alleged that:

i)              WPL had used the SAS Manuals as a technical specification for WPS and had copied a substantial part of those manuals in creating WPS itself, thereby infringing copyright in the SAS Manuals (the “Manual to Program Claim”);

ii)             WPL had indirectly infringed copyright in the SAS Components in creating WPS (the “Program to Program Claim”);

iii)            WPL had infringed the copyright in the SAS Manuals by reproducing a substantial part of them in WPL’s own WPS Manual and WPS Guide (the “Manual to Manual Claim”); and

iv)            WPL had repeatedly used the SAS Learning Edition outside the scope of the applicable licence to obtain additional information about the SAS System, and to check that the operations of WPS precisely replicated those of the SAS Components; it had thereby infringed SAS Institute’s copyright in the SAS Learning Edition and had acted in breach of contract (the “Learning Edition Claim”).

In the High Court, following preliminary rulings by the Court of Justice of the European Union in relation to the interpretation of Articles 1(2) and 5(3) of the Software Directive (91/250/EC) and Article 2(a) of the Copyright Directive (2001/29/EC) concerning the copyright protection of the language, interfaces and functionality of computer programs, Mr Justice Arnold dismissed SAS Institute’s claims, finding that the functionality, or underlying elements, of a computer program were not protected by copyright.  Arnold J did, however, find limited breaches of copyright in relation to the Manual to Manual Claim.  SAS Institute appealed all of Arnold J’s decisions, other than the Program to Program Claim since, following the CJEU’s decision, it accepted that neither the SAS Language nor the functionality of the SAS System was protected by copyright under the Software Directive.

Lord Justice Lewison upheld Arnold J’s decisions and dismissed the appeal, although he disagreed with some of the judge’s reasoning.  The matter had not been helped, he said, by the fact that the parties could not agree as to what exactly the CJEU had found.  Of the CJEU’s decision, Lewison LJ said: “The language in which the court expressed its judgment was, at times, disappointingly compressed, if not obscure”.

In respect of the Manual to Program Claim, Lewison LJ noted that what is protected by copyright is the form of expression of an intellectual creation.  The intellectual creation itself is not protected, he said, and the functionality of a computer program does not count as a form of expression.  Therefore, the copying alleged by SAS Institute was not the copying of the form of expression of an intellectual creation.  In other words, what WPL took was not capable of protection by copyright. 

As for the Manual to Manual Claim, since, as with the Manual to Program Claim, it concerned the underlying elements of the program itself, which were not protected by copyright, it followed that that appeal also had to fail. 

Finally, Lewison LJ dismissed the appeal in respect of the Learning Edition Claim, finding that, in disagreement with Arnold J, WPL did indeed have the right to use the Learning Edition under its licence with SAS Institute.  There was, therefore, no restriction on the number of employees whom WPL could authorise to observe, study and test the program, provided that they did so one at a time and at a single workstation at a time in accordance with the provisions of the licence.  WPL was not, therefore, in breach of the licence by authorising multiple employees to use the program for the purposes of observation, testing and study.  Lewison LJ therefore reached the same conclusion as Arnold J, but for different reasons.  (SAS Institute Inc v World Programming Limited [2013] EWCA Civ 1482 (21 November 2013) – to read the judgment in full, click here).

ASA says Carphone Warehouse ad should have described cost of phone as “inclusive” rather than “free” because cost indicated was not a genuine stand-alone price.

The Carphone Warehouse website advertised the Samsung Galaxy S4 Mini phone.  A column headed “Phone cost” described the phone as “FREE” on Vodafone and T-Mobile 24-month tariffs.  The T-Mobile cost was “£27 per month” and the Vodafone cost was “£25 per month”.

The complainant, who believed that the cost of the handset was included in the monthly contract price and that equivalent SIM-only plans were cheaper, challenged whether the “free” claim was misleading. 

The Carphone Warehouse believed the description of the phones as “free” complied with the CAP Code because it was a conditional purchase promotion and the paid-for items (the “tariff”, which was made up of inclusive call minutes, texts and data allowance) could be bought without the free item (the phone) if preferred, and had a genuine stand-alone price.

The ASA understood that in the case of both the Vodafone and T-Mobile tariffs with which a “free” phone was offered, the same tariff was sold on a SIM-only basis for the same price on the same 24-month contract.  However, the ASA also noted that better packages for less were available on one month and 12-month SIM-only T-Mobile contracts and that cheaper similar Vodafone SIM-only tariffs were available.  In addition, the ASA noted that the SIM-only Vodafone tariff was not available on the same SIM type that the “free” phone required.  As such, the ASA concluded that the per month costs in the ad included the cost of the phone and that the price claims were not genuine stand-alone prices for the tariffs.  The ad was found in breach of CAP Code rules 3.1 (Misleading advertising), 3.7 (Substantiation) and 3.25 (Free).  To read ASA Adjudication on The Carphone Warehouse Ltd (20 November 2013), click here.

High Court grants film studios orders requiring the six main ISPs to block SolarMovie and TubePlus aggregation sites.

This was another application for website-blocking orders under s 97A of the Copyright, Designs and Patents Act 1988, which empowers the court “to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright”.  The orders were sought by a number of major film studios in respect of two websites located at www.solarmovie.so and www.tubeplus.me which provide access to streams of a large range of films and television programmes.

The claimants’ evidence was that over 99% of the content accessible via each website was likely to be protected by copyright.  The mode of operation of the websites was broadly similar to that of the FirstRow website in FAPL v BSkyB [2013] EWHC 2058 (Ch).  As in the case of FirstRow, the websites did not host the content in question.  Rather, they ensured that the content was comprehensively categorised, referenced, moderated and searchable.  In the case of SolarMovie, links to content were supplied by registered users subject to approval by moderators.   A key purpose of moderation was control over the quality of the link and the material to which it provided access.  In the case of TubePlus, it was not clear to what extent links were provided by users and to what extent by the operators of the website.

Users wishing to access content via one of the websites were provided with a number of these links in response to searches or when browsing.  Typically, clicking on a link enabled the user to view a stream of the chosen content on an embedded player (additionally, some of the TubePlus links provided access to downloads).

The ultimate source of the content varied.  In the case of television programmes, it was typically a copy captured from a broadcast or (in the case of older programmes) a DVD.  In the case of films, it was likely to be a Blu-Ray disc or DVD, but in other cases it might be a television broadcast or a copy of a film made in a cinema using a camcorder or mobile phone.  Users who provided links to SolarMovie were required to specify the “quality” (i.e. source) of the link.

The claimants’ case was that the operators of the websites infringed their copyrights in two ways: first, by communicating the copyright works to the public within s 20 CDPA, alternatively by acting as joint tortfeasors with the operators of the host websites; and secondly by authorising infringements by users.  The claimants contended that some UK users of the two websites, namely users who submitted links to infringing content to the websites, infringed their copyrights by communicating the copyright works to the public.  The defendant ISPs did not resist the claimants’ application.

Granting the order, the judge, Mr Justice Arnold, applied principles he himself formulated in a number of cases, most recently EMI v BSkyB [2013] EWHC 379 (Ch) and FAPL v BSkyB.  In order for the court to have jurisdiction to make the orders sought, four matters had to be established.  First, that the defendants were service providers (which they obviously were).  Secondly, that users and/or the operators of the websites infringed the claimants’ copyrights.  Thirdly, that users and/or the operators of the websites used the defendants’ services to do that.  Fourthly, that the defendants had actual knowledge of this (which they obviously did).

The judge was satisfied that those conditions were met.  In particular, the judge was satisfied that the operators of the two websites communicated the claimants’ works to the public.  On the evidence it would be very difficult for members of the public to access much of the content directly from the host sites if it were not made available by the websites.   Even where the content could be accessed from the host sites, the two websites made it much easier for members of the public to find what they wanted.  Viewed from the perspective of the user, the two websites did in a very real sense make the content available to the public.  While it was arguable that the mere provision of a hyperlink was not enough to constitute communication to the public, there was no material difference here between the websites and the FirstRow service, which went beyond the mere provision of hyperlinks, “intervening in a highly material way to make the copyright works available to a new audience”.

The judge said that even if he were wrong about that, the host sites communicated the claimants’ works to the public and the operators of the two websites were jointly liable for this (see EMI v BSkyB).  It was also clear that the communication targeted the UK (see FAPL v BSkyB).

There was also communication to the public by users of the websites.  Many, if not most, of the users in question did not merely provide a link to the host site, they also uploaded the content to the host site.  In the judge’s view, the combined effect of these acts amounted to communication to the public even if the mere provision of a hyperlink did not.

For these reasons, and on the basis that the both users and the operators of the websites used the defendants’ services to infringe the claimants’ copyrights, the defendants having actual knowledge of this, Arnold J made the orders sought by the claimants, those orders being proportionate in the sense that the claimants’ IP rights outweighed the free speech and information rights of the operators of the websites and their users. Wiggin LLP acted for the claimant film studios (Paramount Home International Entertainment Ltd v British Sky Broadcasting Ltd [2013] EWHC 3479 (Ch) (13 November 2013) – to read the judgment in full, click here).

Ofcom consults on a blueprint for meeting growing demands placed on UK’s wireless communications infrastructure over the next two decades.

Ofcom has identified a number of new spectrum bands as potential candidates for future mobile broadband use.  When combined with developments in mobile technology, such as 5G, and the introduction of more advanced mobile networks, Ofcom estimates that this new spectrum could boost mobile data capacity by more than 25 times between now and 2030.

Ofcom says that demand for extra capacity is likely to be fuelled by an even greater dependence on mobile devices and applications as well as significant growth in machine-to-machine (M2M) communications, a key enabler of the “internet of things”.  Ofcom says that connecting devices in this way has the potential to deliver significant benefits to society in areas such as transport, healthcare, energy and agriculture.  Globally, up to 50 billion devices are forecast to be connected to the internet by the end of the decade.

However, Ofcom says, there is not an unlimited supply of spectrum available to meet this demand and it has to “balance the interests of all spectrum users and ensure that this scarce national resource is used as efficiently as possible”.  This involves ensuring that the needs of existing users, such as broadcasters and users of wireless cameras and microphones, are appropriately protected. 

Ofcom says that it is already working to increase the amount of spectrum available for mobile data in a number of areas:

• 2.3 and 3.4 GHz bands: Ofcom is working closely with the Ministry of Defence to move this spectrum from the public sector into commercial use.  This spectrum is suitable for mobile broadband and could be released through an auction in 2015-16.  The public sector has access to just over half of the UK spectrum, and Ofcom is working with the Government to identify ways of increasing opportunities for commercial access in the future;
• 700 MHz band: while no decisions have yet been made, Ofcom is investigating the potential to rearrange the bands used for digital terrestrial TV.  This could release more of this prime spectrum for mobile broadband use sometime after 2018, while ensuring that consumers would continue to have the opportunity to benefit from digital terrestrial TV; and
• White spaces: over the next six months, around 20 organisations will be participating in an Ofcom pilot to road-test “white space” technology.  A variety of innovative applications will be tested, ranging from sensors that monitor the behaviour of cities, to dynamic information for road users and rural broadband in hard to reach places.  These new services will utilise the gaps, or “white spaces”, that sit in the frequency band used to broadcast digital terrestrial TV.

In addition to these immediate priorities, Ofcom has identified a number of spectrum bands that might be suitable for use for mobile data in the longer term:

• the UK Government is currently assessing the possibility of reorganising the 2.7 GHz radar band potentially to release up to 100 MHz of spectrum for other uses, which could include mobile broadband; and
• additional spectrum in the 3.6 GHz band, which is currently used for satellites links.  Mobile services should be able to share this band by coordinating with existing satellite users.

The consultation closes on 30 January 2014.  For a link to the consultation documentation, click here.

PhonepayPlus publishes new guidelines for industry and advice for consumers on misleading digital marketing practices.

PhonepayPlus says that consumer complaints relating to digital marketing now represent around 20% of the total number of complaints it receives.  The regulator says that it receives on average over 200 complaints per month.

Accordingly, the regulator has published guidelines for the premium rate services industry on the use of certain digital marketing practices that it has identified as being potentially misleading to consumers.  PhonepayPlus also has new advice to help prevent consumers from being caught out.

The Guidance document outlines eight practices often used by affiliate marketers which are either always misleading or have the potential to mislead consumers.  These include the use of content locking, adware and certain promotions on social networking sites.  The Guidance aims to assist providers of PRS that conduct affiliate and other marketing online in ensuring that their promotions remain complaint with the PhonepayPlus Code of Practice.

Paul Whiteing, Chief Executive of PhonepayPlus, said: “Digital Marketing is a fast changing area and consumers can be well served by innovation.  However, providers must ensure that their marketing, be it in-house or through affiliates, is compliant.  The Guidance re-confirms providers’ responsibilities under the Code, highlights a number of practices identified over the last 18 months that may be considered misleading and, critically, suggests a number of practical steps providers can take to help ensure that their marketing is compliant”.

In addition, PhonepayPlus has published advice to help prevent consumers from being caught out.  The regulator says that it has seen cases where consumers have been misled by affiliate promotions, even where they did not intend to use a PRS.  For links to the Guidance and consumer advice, click here.

Nominet approves plans to offer registrations directly before the “dot” in .uk. 

Nominet says that from summer 2014 “example.uk” domain names will be available.

Any unique “example.uk” domain name (e.g. one that does not have an equivalent name already registered as a .co.uk or a .org.uk) will be available on a first-come, first served basis from launch.

Over ten million existing .uk customers will be offered 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.

In the small proportion of instances where there could be competition, e.g. where one person holds example.co.uk and another holds example.org.uk, the shorter domain will be offered to the .co.uk registrant.

The wholesale price for the new domains will be £3.50 per year for single year registrations and £2.50 per year for multi-year registrations.  This is the same price as a current co.uk domain, ensuring the cost of a domain name will remain a very small proportion (around 1.5% for a small business) of the cost of being online.

Nominet says that all of its existing domains (.co.uk, .org.uk, .net.uk, .me.uk, .plc.uk, .ltd.uk and .sch.uk) will continue to run as normal.

Nominet is planning a major programme of communication with its customers to ensure people are aware of the changes, and intends to announce a definitive launch date by February 2014.  To read Nominet’s press release in full, click here.

Broadcasting

Ofcom rules Channel 5’s Emergency Bikers was not unfair despite incorrectly stating that the complainant had been kept in police custody.

The programme was part of a series that followed the work of motorcycle police and paramedic units around the country.  It included footage of Mr Ireland being questioned, restrained, ejected from a music festival and arrested for being drunk and disorderly.  Mr Ireland was also shown in a promotional trailer for the programme being restrained and arrested.

Mr Ireland complained that he was treated unfairly because he had not been held in police custody overnight, as the programme and trailer as broadcast stated, and that his privacy had been unwarrantably infringed.

Ofcom considered that the programme makers had reasonably relied on information about Mr Ireland provided to them by the police and although this information was shown subsequently to be incorrect, the programme makers had taken reasonable care as at the date of broadcast to ensure that information was presented in the programme fairly and that material facts were not presented in a way that was unfair to Mr Ireland.  Ofcom added that in any event, given that Mr Ireland was shown being arrested for being drunk and disorderly (which was not disputed), the inclusion of a reference to him being kept in custody overnight as opposed to being held in custody for two to three hours was unlikely to have materially and adversely affected the way in which viewers would have perceived Mr Ireland in a way that was unfair.

Ofcom noted that Mr Ireland appeared to have been filmed openly and in a public place, i.e. the side of a public highway, but that he could reasonably be regarded as being in a vulnerable state because he was under the influence of alcohol.  Ofcom therefore considered that he had a reasonable expectation of privacy, albeit limited as he was in a public place.  However, it concluded that there was a genuine public interest in broadcasting the footage and that this, coupled with the broadcaster’s right to freedom of expression, outweighed Mr Ireland’s limited expectation of privacy in relation to the broadcast of footage of him in both the programme and the trailer.  To read Ofcom’s adjudication on a Complaint by Mr Gary Ireland, published in Issue 242 of the Broadcast Bulletin (18 November 2013), click here.

Ofcom finds ITV’s Calendar News report unfair because the presentation of material facts wrongly led viewers to understand that the complainant was associated with a drug trafficking case.

An edition of ITV’s regional news programme, Calendar News, broadcast a report on the trial of 11 people for trafficking drugs into south Yorkshire.  Shots of the exterior of A Coole Electrical’s industrial unit and the company’s sign, which included its name, were shown.

A Coole Electrical complained that it was unfairly portrayed in the programme as broadcast which gave the incorrect impression that it was involved in a drug smuggling operation.

ITV accepted that with hindsight it would have been preferable for the report not to have included the shots or, if it had, to have stated that the current tenants of the building had no connection to the trial or the criminality being reported.  However, it did say that the report did not state or suggest that A Coole Electrical was involved and no explicit link was made between the company and the criminal activities being reported.

Ofcom said that without an explanation that A Coole Electrical had no connection with the case other than the fact that it was the new tenant of the industrial unit that had been used previously by the criminal gang as its base, the inclusion of footage of A Coole Electrical’s sign and business unit in the report was likely to have led some viewers to understand, wrongly, that it was associated with the drug trafficking case being reported.  Ofcom therefore took the view that the broadcaster had failed in the report to take reasonable care to satisfy itself that material facts were not presented, disregarded or omitted in a way that was unfair to A Coole Electrical.  The programme therefore breached Rule 7.1 of the Broadcasting Code.  To read Ofcom’s adjudication on a Complaint by A Coole Electrical Ltd, broadcast in Issue 242 of the Broadcast Bulletin (18 November 2013), click here.

Music

Advocate General opines that radio and TV transmission of copyright works in spa bedrooms constitutes “communication to the public” under the Copyright Directive.

A copyright collecting society in the Czech Republic (OSA) issued copyright infringement proceedings in the Czech courts against a residential health spa establishment, also in the Czech Republic, claiming fees for the transmission of copyright works in guests’ bedrooms.

Under Czech copyright law, the transmission of copyright works via radio or television, for which royalties might be claimed, does not include making a work available to patients when providing health care in healthcare establishments.

The Marienbad health spa company provided in-patient and out-patient care using local natural medicinal springs. In 2008 it installed TV and radio sets in its guests’ bedrooms and began giving access to works managed by OSA.  However, the spa did not have a licence agreement with OSA.  Accordingly, OSA issued proceedings claiming CZK 546,995 (approximately €21,000).  The spa claimed to be covered by the exception provided for in Czech copyright law and argued that OSA was abusing its monopoly position by charging fees higher than those charged in neighbouring Member States.

The Czech courts sought a preliminary ruling from the Court of Justice of the European Union, asking whether the Czech copyright exception was contrary to the Copyright Directive (2001/29/EC).  In other words, it asked whether the transmission of the works into spa guests’ bedrooms constituted “communication to the public” under the Directive.  It also asked whether EU law precluded a Member State from according a single collecting society exclusive rights within its territory.

Advocate General Sharpston found that the transmission of copyright works in spa bedrooms did indeed constitute “communication to the public” within the meaning of the Directive.  Therefore, the Czech law copyright exception, which effectively disallowed remuneration to authors for the communication of their works by means of TV or radio to patients in bedrooms in a spa establishment, which is a business, was contrary to the provisions of the Directive.

Distinguishing the case from Case C-135/10 Società Consortile Fonografici v Marco Del Corso (unreported), in which the CJEU found that the broadcast of background music in a private dental clinic did not amount to “communication to the public”, the Advocate General said that Spa establishments typically have a broader and less determinate clientele than dentists.  Further, the availability of access to TV and radio broadcasts in bedrooms could well influence a patient’s choice of establishment and such availability of choice was “likely to be significant”.  In addition, the TV and radio sets were used in the context of enjoyment of the accommodation facilities, not of its health care treatments.  This situation was, the Advocate General said, analogous to that of the hotel guests in Case C-306/05 Sociedad General de Autores y Editores de España v Rafael Hoteles SA [2006] ECR I-11519, in which the CJEU found that the TV transmission of works in hotel bedrooms constituted “communication to the public”.

As for whether the monopolistic nature of copyright collecting societies was precluded by European law, the Advocate General found that it was not since it pursued a legitimate objective compatible with the EU Treaties, it was justified by overriding reasons of public interest, and it was suitable for securing the attainment of that objective and did not go beyond what was necessary in order to attain it.  (Case C-351/12 Ochranný svaz autorský pro práva k dílům hudebním, o.s. (OSA) v Léčebné lázně Mariánské Lázně a. s. (14 November 2013) – to access the judgment in full, go to the curia search form, type in the case number and follow the link).

Publishing

Press Complaints Commission upholds complaint against The Guardian from Sir Christopher Geidt.

The PCC has upheld a complaint from Sir Christopher Geidt, Private Secretary to HM The Queen, against The Guardian about three articles published on 8 May 2013.

The articles, a news report, profile of the complainant, and editorial leader, discussed the complainant’s role in relation to the creation of a Royal Charter on press regulation and noted his successful 1991 defamation claim.  The complainant said that the newspaper had seriously misrepresented the position in breach of Clause 1 (Accuracy) of the Editors’ Code of Practice. 

The complainant said that, contrary to the claims in the coverage that he was “tasked with handling the creation” of the Royal Charter and “jointly responsible” for setting it up, the Government was responsible for the creation of the Charter, and the Queen acted only on the advice of her Prime Minister.  His role was only to act as a channel of communication between the Government and the Queen in her role as Head of State.  The complainant was also concerned that the coverage had repeated allegations that had led to the libel action without making clear that in addition to paying substantial damages and costs (which had been noted in the coverage), the defendants had withdrawn the allegations and given undertakings and unconditional apologies.

The newspaper argued strongly that there was a public interest in investigating the complainant’s involvement in the Royal Charter process, which was regarded by many as opaque.  Nonetheless, it offered to publish a lengthy correction, in its Corrections & Clarifications column, accepting that it had “overstated and misrepresented” the complainant’s role, along with an apology for the “serious errors”.  The item also included further detail about the outcome of the legal proceedings.

The PCC noted that it was “no part” of its role to interfere with proper press scrutiny of the process of government, and acknowledged the newspaper’s “early recognition” that a correction and apology was necessary in this instance.  Nonetheless, the three items had contained “serious overstatements, presented as fact” on the nature of the complainant’s role.  Noting that this was a “particularly concerning case [because] the inaccuracies were central to the reporting; they appeared across all three items; and they directly contributed to the newspaper’s criticisms of the nature of the complainant’s role and his personal suitability to fill it”, the PCC upheld the complaint.  To read PCC Adjudication on Sir Christopher Geidt v The Guardian (19 November 2013), click here.

Film & TV

Court of Appeal upholds High Court decision that BSkyB’s use of “NOW TV” trade mark for internet TV service does not infringe Starbucks (HK) Ltd’s Community registered trade mark for “NOW”.

When BSkyB announced it was to launch a new internet TV service under the name NOW TV, Starbucks (HK) Ltd (together with two other companies all of which were part of the same Hong Kong-based group of broadcasting, media and telecommunications companies) issued trade mark infringement and passing off proceedings against BSkyB in respect of Starbucks’ Community trade mark for NOW (registered for telecommunications and broadcasting services) and the group’s various TV services operating under the NOW sign in Hong Kong.

BSkyB’s logo was as follows:

                       

Starbucks CTM was as follows:

 

BSkyB counterclaimed for a declaration that the CTM was invalid. 

The High Court found in favour of BSkyB and Starbucks appealed the decision.

The Court of Appeal agreed with the High Court’s finding that Starbucks’ CTM was devoid of distinctive character that would serve to identify Starbucks’ service and to distinguish it from services offered by other undertakings.  The mark was not inherently distinctive for a TV service and was therefore precluded from registration by Article 7(1)(c) of the Community Trade Mark Regulation (207/2009/EC) in relation to the services in question.  The fact that there were other instances in which the word “now” was distinctive of a service did not assist, the court said.  Further, it must have been obvious to Starbucks that in choosing to use the word “now”, it was running the risk of invalidity on the ground that the message that was conveyed by such an everyday word to the average consumer designated a characteristic of the service.

The Court of Appeal also dismissed the appeal in respect of Starbucks’ passing off claim as there was no evidence of goodwill within the jurisdiction.  “It is not enough that the claimants have undoubtedly acquired a goodwill somewhere else” (i.e. Hong Kong), the court said.  Further, the universal presence and accessibility of the internet, which enabled access to be gained in the UK to programmes emanating from Hong Kong, was not a sufficiently close market link to establish an identifiable goodwill with a customer base in the UK.  There was more to establishing goodwill in a market than simply showing that programmes can be viewed in the jurisdiction: “Generating a goodwill for a service delivery generally involves making, or at least attempting to make, some kind of connection with customers in the market with a view to transacting business and repeat business with them”, the court said.  (Starbucks (HK) Ltd v British Sky Broadcasting Group Plc [2013] EWCA Civ 1465 (15 November 2013) – to read the judgment in full, click here).

Gambling & Betting

Ofcom publishes audience research into gambling advertising on television.

Ofcom commissioned analysis earlier this year to look at the volume, scheduling, frequency and exposure of gambling advertising on UK television.

Gambling on television was permitted following the Gambling Act 2005, which came into force on 1 September 2007.  Prior to this, the only gambling advertising that was permitted on television was for football pools, bingo premises and the National Lottery.  Ofcom says that it initiated the research to help inform it about how television gambling advertising has changed since the 2005 Act came into force. 

The research was based on analysis of BARB viewing data and categorises gambling adverts into four types: online casino and poker services; sports betting; bingo; and lotteries and scratch cards.

The research found that the total number of gambling advertisement spots shown on television increased from 152,000 in 2006 to 537,000 in 2008 after the market was liberalised, reaching 1.39 million in 2012.

Of all gambling advertisements on television in 2012, there were 532,000 bingo adverts; 411,000 adverts for online casino and poker services; 355,000 adverts for lotteries and scratch cards; and 91,000 sports betting adverts.

In terms of shares of each type of gambling service in 2012, bingo accounted for 38.3% of adverts; online casino and poker services accounted for 29.6%; lotteries and scratch cards represented 25.6%; while sports betting adverts accounted for 6.6% of the total.

Gambling accounted for 0.7% of all advertising spots across commercial television in 2006, compared to 1.7% in 2008 and 4.1% in 2012.

The research also found that adults’ exposure to gambling advertising has increased over time.  In 2006, there were eight billion “impacts”, i.e. the number of times an advert was seen by viewers.  This grew to 30.9 billion impacts in 2012 when gambling adverts accounted for 3.2% of all advertising seen by adult viewers.  For a link to the full research, click here.

Advertising

Trading Standards becomes Advertising Standards Authority’s legal backstop power.

Although the ASA previously made it clear that it did not consider Trading Standards a strong enough brand to deter illegal behaviour, it is now “pleased” to announce that it has reached an agreement with Trading Standards to act as its legal backstop.  Trading Standards has taken over the role from the OFT which no longer has responsibility in this area.

Any advertiser that persists in breaking the rules through misleading, aggressive or otherwise unfair non-broadcast advertising could now face referral to Trading Standards who can consider taking action against advertisers under consumer and business protection laws.

In reaching the new arrangement the ASA says it “worked closely with the National Trading Standards Board (NTSB) and London Borough of Camden (LBC) in England and Wales, the Department of Enterprise, Trade and Investment in Northern Ireland and the Convention of Scottish Local Authorities (COSLA) in Scotland – ensuring UK wide coverage”.

New case handling principles have been agreed and, importantly, the ASA remains responsible for regulating advertising, allowing Trading Standards to focus its resources on other consumer issues.  To read the ASA press release, click here.