The Court it should be emphasised is not just patents -- it does masses of other cases with as many as 80% of its cases in the last two years being on trade marks, passing off, designs and copyright, and include licensing disputes and other related matters
Nor is it just "county": it will sit anywhere in England and Wales and will hear cases in which damages could be as high as £500,000. It has heard cases between individuals and small and medium sized businesses -- which is its primary focus -- but also multi-nationals, such as Unilever and SC Johnson & Son.
The guide provide you with vital information about the court and how to use it.
So far, since its rules were changed in 2010, it has been highly popular.
Facebook/Instagram have apparently learnt the quick way whether their proposed new terms and conditions would be acceptable – see Newsnight (18.12.2012) and NY Times and clarified in the Guardian. However, their repeated “skirmishes” with the public over terms and conditions highlights a larger concern: the fact that everyone knows, including those running web sites, that the large majority of users do not read terms and conditions before using a web site – even if the web site requires the user to click to agree; still less look at changes in terms. Is it now time to limit what terms web site owners can enforce without showing that there is a real prospect of those terms being read and understood by the user and willingly accepted? Is “zombie” acceptance by clicking on an unknown quantity really acceptable? Shoule we even contemplate a Europe wide approach to such terms?
The issue was emphasized in the recent “free" face cream opportunity (Guardian), where users signed up to (expensively paid for) monthly deliveries unless they cancelled within a short time period. Of course many had not read the small print which told them this would happen.
In a more recent case, Spreadex v Cochrane, in May this year David Donaldson QC (sitting as a deputy judge) rejected Spreadex summary judgment claim for £50,000 incurred on betting on the site. Spreadex relied on a click to agree term which said that the users would be liable for all (spread betting) trades using their user ID. Cochrane said that the use resulting in his £50,000 bill was unauthorized – by young son of his girl friend, while the computer had been left on – facts which had to be accepted because this was a summary judgment application. The judge held primarily that (because Spreadex’ terms committed it to nothing, as it could refuse to accept any trade) there was no contract. He also decided that, if there had been a contract, the term would have not been enforceable against a consumer under the Unfair Terms in Consumer Contracts Regulations 1999. One reason, amongst others, was that a user was most unlikely to have read this specific term, let alone understood it amongst the 49 pages of terms and conditions, which was itself only one of 4 documents the user was invited to read – maybe every time they logged on! In which case Spreadex would presumably never have done any business.
A similar case, but not click-to-agree arose in the USA in 2009: Hine v Overstock.com. There the decision was also on an interim issue. The claim was over a much smaller sum, a restocking charge of US$30, but it was brought as a representative action.However, should one need to rely on these type of judgments which still leave users (and web site owners) with considerable uncertainty and in many cases are “in the wings” – relying on extreme cases? Bluntly, is it not time to accept, as most high street shops do, trading on the internet is done on a common set of key contractual conditions? On can address specific procedural issues for getting the goods or service to the customer, of course. And if a web site owner wishes to change them they need to show much more positive acceptance (and an expectation of understanding) by the user than mere “acquiescence in ignorance”?
Wilkinson had written some excellent material for teaching communication skills to nurses. Predecessors of the London Strategic Health Authority (LSHA) wanted to use this, amongst other material in a “unified” training product. The agreement said that LSHA would own all the work which was carried out for them – which used the pre-existing material known as the “Wilkinson Variant”.
LSHA wanted to use this (the developed material AND the pre-existing material) in a programme of licensing abroad (although as an English NHS body their primary interest was in the England). Wilkinson saw red, and sued for infringement, saying, not unreasonably, that the rights in the pre-existing material belonged to her. The LSHA countered by saying that the rights belonged to them.
In a Pyrhhic victory for both parties His Honour Judge Birss QC decided that the agreement had not assigned rights in the pre-existing material to the LSHA. However, it had assigned rights in the developed work to the LSHA. Therefore, in order to give commercial efficacy to the agreement, a (non-exclusive) licence would be implied for the LSHA in respect of the earlier material. The kicker however was the scope of this licence: Wilkinson argued that it should be restricted to use within the NHS; the judge held that it should be unrestricted.
Effectively LSHA had all that they wanted – and only a bill for about 1/3 of the costs. The lesson is that a lot of money can be spent on resolving disputes over loose wording in copyright matters. The razor needs to be sharper next time. Practitioners will see that this licence was greater in scope than many of them would have anticipated – the next agreement (if it relies on implied licences, which of course it would be better if it did not) needs to be more tightly worded. The case also illustrates some of the problems for resolving disputes where the issue is costs, especially if costs depend on a conditinal fee agreement.
I have been advising recently on a potential claim relating to “ownership” of data, where a company outsourced some of its administrative functions and now, due to a perfect storm of a poorly implemented subcontracting arrangement, and an insolvency, it now has no contractual right to obtain its data from the storage provider ultimately holding the data relating to the outsourced functions.
There are plenty of lessons to be learned from this scenario but for this post I’ll comment briefly on ”ownership” of data or information because last month, in an entirely unrelated data-related kerfuffle, the Technology and Construction Court refused an application made by Fairstar Heavy Transport to require an individual (its ex-CEO) and a cloud storage provider to hand over emails which had been forwarded to the ex-CEO’s service company’s email address, meaning that responses had not reached Fairstar’s servers. Worse for Fairstar, the forwarded emails were apparently automatically deleted from Fairstar’s servers. It was thought that the emails contained information important to Fairstar in respect of a different dispute involving a Chinese shipyard.
The application was made on the basis that Fairstar had a proprietary claim to “ownership” of the content of the emails – in other words, that Fairstar owned the content of the emails as property. Other legal issues prevented Fairstar from making other possible claims such as contractual “ownership” or an intellectual property claim – primarily that Fairstar was seeking to avoid enforcing the ex-CEO’s service contract for other reasons.
The judge dismissed the application after a review of the relevant case law, which he noted suggest strongly that in English law there is no general proprietary right in content or information. It’s a timely reminder that, despite increasingly expressed views that “the data belongs to X”, legal rights in data and information are less robust, and more complicated, than one might think. Various intellectual property rights may potentially exist in a data set, or an email exchange, depending on the circumstances, and the use of data or information provided by one party to another might be limited by contract – but don’t simply assume that “it’s our data”: it might not be that straightforward.
Hot on the heels of the Information Commissioner (see below), the European Commission has anounced a public consultation to collect views about how business and research know-how is protected across the EU (perhaps with one eye on a New Year's Resolution).
About time, some might say. As the Commission itself has noted, keeping vaulable information secret is often the only or most effective way that businesses have to protect their intellectual property - after all, not every good idea is patentable. The Commission has picked up concerns regarding the effectiveness of legal protection against the misuse of confidential information, which is currently only regulated at national level (without harmonisation across the EU), and decided to analyse the situation.
Changes to the laws on the protection of confidential information are likely to be highly relevant to the technology sector. You can follow, and contribute to, this consulation on the Europa website between now and 8 March 2013.
Legal advisors relentlessly remind software developer clients that they need to be rigorous about putting in place appropriate contracts or assignments of copyright (to the client). But still businesses miss out.
Harmony claimed Foss were infringing Harmony’s copyright, after Foss continued to use the licensed software even though Harmony had terminated their licence. In a complex case, all the software in question had been written by one Mr Chari, now the principal of Harmony.
However, while Mr Chari had created the most important program, Petro, this was when he was working for his previous employer. The Court (and Canadian Federal Court of Appeal) found that copyright in the software – at least enough to undermine the case – was actually owned by his previous employer; and so the action against Foss failed. Galling for Harmony, when the only reason Foss were using the software was because Harmony had provided it to them.
Ultimately, the steps taken to obtain agreement from people just browsing your website should be proportionate to the likelihood that you will need to rely on your website terms against those people.
George Osborne has just announced plans for a new type of employment contract.
Primarily aimed at fast growing and medium sized companies but open to all employers, under an “owner-employee” contract employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax. In exchange, the employees give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required to provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual 8.
Will this go the same way as the no-fault dismissal regime for micro-businesses? It depends on whether this proposal is seen as an easy way for employers to circumvent valuable employee rights and how the tax exemption would effect the employee share schemes already found within start up and tech businesses.