Mills & Reeve: Technology Law Update

Covert recordings may be admissible in Employment Tribunals

As technology becomes more sophisticated, so do the challenges faced by employers.  A seemingly common query relates to the legality of covert recordings made by employees of face to face meetings with managers or colleagues on smart phones or tablets.

In Vaughan v London Borough of Lewisham and others, the Employment Appeals Tribunal (EAT) made clear that covert recordings are not inadmissible in Employment Tribunal proceedings merely because they were obtained in a clandestine or distasteful manner.

In this particular case, involving an employee claiming to have been subjected to unlawful disability discrimination, “dozens” of covertly recorded conversations were held inadmissible but only because their relevance to the legal issues in dispute was unclear.  The employee was invited to submit a new application to admit specific and relevant recordings, with an indication given that these may be held admissible.

The scope for objecting to the use of covert recordings of face to face meetings in Employment Tribunals is limited, notably where the private life of those unaware that the conversation was being recorded is not discussed.

Whilst flagging the willingness of employees to deploy covert recordings as evidence in Employment Tribunal proceedings, this case highlights the importance of training managers how to manage and employees how to conduct themselves appropriately in the workplace.

Whilst technology leaps forward, the old adage that a person should never say anything that they would not wish to have repeated has perhaps never been more true. 

Since it is impossible for employers to police what their employees do or say at all times, employers should consider prohibiting covert recordings at work, with any such conduct leading to disciplinary action. 

IP-related business support initiatives

As the UK works its way through the economic downturn, the Government are introducing lots of incentives to try to encourage entrepreneurs and businesses to set up shop and stay in the UK and, more importantly, to pay UK taxes. 

The UK IPO has recently published a factsheet providing an overview of the IP-related business support initiatives and financial incentives available to SMEs in the UK, which includes information in relation to:

-          The Growth Accelerator

-          The Patent Box

-          The Design Council’s Design Leadership Programme

-          UKTI’s Passport to Export

-          The Technology Strategy Board’s Catapult Centres, SMART initiative and Innovation Vouchers

-          The Manufacturing Advisory Service

-          Pro Bono advice clinics organised by the Chartered Institute of Patent Attorneys and the Institute of Trade Mark Attorneys

-          The EPO Patent Libraries

-          The British Library’s Business and IP Centre

-          and the IPO’s own IP Masterclasses, Get It Right First Time seminars, IP Healthchecks, IP Insight newsletters, Mediation Service, Opinion Service, and IP Audit Scheme.

Anything ICANN do for trade mark protection

Yesterday evening I attended a talk by Tony Willoughby on domain name disputes, which gave an interesting insight into the process of enforcing your trade mark rights under the current Nominet and ICANN procedures. Prior to the talk the topic of conversation included the introduction of new generic top-level domains, or gTLDs, by ICANN and the potential impact on trade mark owners (and their purses) an increased number of suffixes might have.

Following the announcement in June 2011 that gTLDs were going to be opened up to .anything, .everything and .everyone, as summarised on our previous Naked Law blog post, ICANN announced earlier this week that there will be a further opportunity for trade mark owners to protect their rights.

From 26 March 2013, rights holders will be able to submit their trade marks for verification to the Trademark Clearinghouse. Once independently verified by the Clearinghouse the trade mark owner will have the opportunity to register their trade marks as domain names for each new gTLD before the general public. They will also benefit from an alert service which will notify the trade mark owner when a domain name is registered that matched the trade mark in the Clearinghouse register.

The proposed cost is $150 for recording one trade mark for one year. Trade mark owners are however likely to face additional costs if they decide to register additional domains and the alerts service appears to work like current trade mark watch services, leaving it up to the trade mark owner to decide whether to pursue the registrant in order to obtain the offending domain name.

Foxed Fox: Tough copyright remedy confirmed extinct.

Copyright infringers always have to fear the criminal law.  An even more potent sanction was “conversion” damages.  The copyright owner was entitled to treat the infringing goods as his own, and when the infringer disposed of the infringing goods, to treat ALL the proceeds of sale as belonging to him.

Alas for a Fox; for in Twentieth Century Fox v Harris ([2013] EWHC 159 (Ch)) the UK High Court has confirmed that this remedy no longer exists.  Following  Mr Harris’ defeat in the Newzbin case ([2010] EWHC 608 (Ch)), in which Newzbin were found to have “engaged in a deliberate course of conduct well knowing that the vast majority of the materials in the Movies category … are … likely to be protected by copyright and that the users of Newzbin who download those materials are infringing that copyright”, Mr Harris set up Newzbin2, apparently not having learnt a sufficient lesson the first time.  Fox argued that they were entitled to damages on the basis of infringement of a property right – like (unlawfully) selling the copyright owner’s car: Fox should be entitled to claim all the proceeds of sale (without regard, of course, to any costs Mr Harris had incurred).  Fairly short shrift was given to the argument.  The remedy was abolished by the Copyright Designs and Patents Act 1988 when it no longer provided for conversion damages (section 96).

Copyright owners of course can still rely on an entitlement to damages reflecting the flagrancy of the infringement and in Performing Rights Society Ltd v Burns and another [2012] EWHC 221 (Ch), a fair estimate was assessed at 3 times the charge which would otherwise have been made for use of the copyright work or Beals Mortgage v First Global Financial Services ([2012] EWHC 3761 (QB) para 174, 175) where twice the usual damages was appropriate; or for an account of profits, .  This ought to make it unprofitable for the infringer to carry out the infringement.  Alternatively, they can turn to the criminal law.

The Unified Patent Court Agreement is signed. A pan-European (minus) patent is in sight?

Yesterday was a historic day.  The Agreement for a Unified European Patent Court has been signed, after months of wrangling.  Several European Presidents have sought it as a feather in their cap, and have not quite made it.  But at last political energy has overcome commercial misgivings -- at least to get a signature.  We still have to wait for the agreement to be ratified - by 13 Member States, including France, Germany and the UK (the three largest patent filing countries in the EU).  Poland (amongst a small group of other countries) have not yet signed, believed to be because they have a report that it does not make good economic sense.  Pressure will grow in the UK for a full economic impact assessment to be carried out before ratification.

The Agreement provides for a "single" court for Unified Patents (Regulation adopted in 17 December 2012 -- but with still some significant hurdles like how it is financed) and for EPC Patents, unless they are opted out.  The Court will have national and, for some groups of countries, regional divisions, as well as a central division divided between France, Germany and the UK. 

The procedural rules are substantially drafted, and will be subject to consultation shortly.  One area which is sure to crop up is the impact of the arrangements on legal professional privilege: companies are concerned that these could put them at risk of discovery applications in relation to the USA, to such an extent that, unless this is resolved, some companies are considering only applying for national patents in Europe. 

The aim is to have a relatively short and low cost procedure, which will make decisions applicable throughout the EU.  Good for EU wide businesses, but could be a deteriment to businesses primarily operating in one Member State.  More details and comments later.

The EU and US - a new special (economic) relationship?

This afternoon, Brussels and Washington announced that the EU and the US are intending to launch negotiations on a trade and investment agreement which could result in the biggest bilateral trade deal ever negotiated. The negotiations will commence once the relevant internal procedures for approval have been completed.

The press release provides a broad outline of the three main areas which the parties are seeking to negotiate; market access, regulatory issues and non-tariff barriers and addressing shared global challenges and opportunities in the 21st century. Changes to the regulatory frameworks in particular could potentially have a significant impact on technology and life sciences businesses. If the EU and US can find common ground on standards and procedures and reach regulatory compatibility, for example in relation to pharmaceuticals or medical devices, the need to comply with two sets of regulatory approvals for products and the associated costs to businesses will be reduced.

A joint statement from United States President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso can be found here.

Local TV Comes A Few Steps Closer

The roll-out of local television has taken a few steps forward over the last couple of weeks.  On 4 February, Ofcom announced the award of the London local TV licence to ESTV Limited, which will operate under the London Live name.  With a potential audience of up to 4 million homes, the London service will have the largest reach of all local TV services in the UK.  Applications were received by Ofcom to run local TV services in 19 of the 21 areas in which Ofcom invited applications.  15 local TV licences have now been granted, with further awards expected in the coming months.  No applications were received in Swansea or Plymouth and Ofcom will soon be seeking final expressions of interest for those local TV licences.

More significantly, Ofcom finally awarded the local TV multiplex licence for digital terrestrial TV (DTT) on 28 January.  Delays in the multiplex licence award had been causing frustrations for local TV service licence holders keen to push ahead with their broadcast plans.  The multiplex licence was awarded to Comux UK Limited, a company which will be owned by the holders of the local TV service licences and supported by Canis Media.  In addition to the areas in which Ofcom has already started the process of licensing local TV services (including Birmingham, Leeds, London, Manchester and Norwich), Comux has offered to cover a range of other locations (including Bedford, Cambridge, Luton and Stoke) if local TV services licences are awarded in those areas.  Once DTT broadcasting starts later this year, local TV channels will be found at position 8, in England and Northern Ireland, and position 45, in Wales and Scotland, on the Freeview electronic programme guide (EPG).

Finally, Mills & Reeve client Mustard TV, the local TV licence holder in Norwich, launched its online service on 31 January, with a lively mix of news, sport and lifestyle programming.  Other local TV licence holders will be doing the same soon as they continue to build towards the first DTT broadcasts later in 2013.

New PCI DSS Cloud Computing Guidelines

On 7 February, the PCI (Payment Card Industry) Security Standards Council issued the PCI DSS Cloud Computing Guidelines Information Supplement.  The PCI Security Standards Council develops, manages and raises awareness around payment data security though its PCI Data Security Standard (PCI DSS).  PCI DSS compliance is a benchmark for online merchants and payment service providers.  The Cloud Computing Information Supplement sits alongside, and does not replace, PCI DSS.  The guidance will be of use to both cloud service providers and merchants using cloud technologies for the storage and processing of cardholder data.  Using the guidance will help cloud providers and cloud customers to identify and define their respective security responsibilities, a process that is essential in achieving and maintaining PCI DSS compliance.

Can IP law keep up with new technology?

A hot topic of debate over the last few years has been whether or not the law can keep up with rapid advances in technology. Our very own Isabel Napper has recently commented on potential legal issues in the 3D printing industry for Computer Weekly.

If you're interested in reading more, you can read the article here.

Data security - what's 2013 got in store for you?

Over the last month or so, we've seen a few reports and comments from the Information Commissioner's Office (ICO) concerning data security and use of data. Here’s a round-up of a few key stories:

1. Data audits

Christopher Graham is recommending regular data audits for local government and the NHS to reduce the need for fines relating to “stupid basic errors” like sensitive information being left on an unencrypted memory stick (which of course then gets lost or left behind…). Although Graham was addressing concerns about fines in the public sector, the principle behind conducting regular data audits is a sound one for the private sector as well, and particularly for companies that hold a lot of personal data.

An audit allows a company to take stock of what practices need urgent attention, what it is doing well and how it can continue to improve data security. It is also a useful opportunity for companies to give staff a refresher on what they should and shouldn’t be doing in relation to data security.

2. Data protection reforms

The ICO has recently published its latest thoughts on the proposed reforms to the Data Protection Directive, which you can read here.

It believes that this is likely to be a key topic over the coming year and there is going to be a lot of focus on getting the reforms in place by 2014 at the latest (as the European Parliament and European Commission is due for re-appointment at that time).

By that point the process will have taken around six years in total. Given the technological advances made in that time, will the new legislation be out of date before it even gets used? Only time will tell…

3. Cookie enforcement

In December, the ICO published its latest report on cookies and a summary of the enforcement activities it has undertaken since the new legislation came into force.

Unsurprisingly (if you have used the internet at all over the last few months), the ICO says that consent banners are now the most commonly used means of obtaining explicit consent and, for the first time, the ICO has actually given examples of some popular websites using these banners.

So far only one website the ICO has looked at has been given a deadline for compliance due to its failure to take any steps at all to request consent to use cookies. If it doesn’t comply within the specified timeframe, the ICO is threatening to name and shame (which would be the first under the new regime) – probably enough of an incentive for most to take action.