Update: IT/IP

New cookie law

The new browser law was intended to come into force this month, but we are still none the wiser following the ICO's statement that it might not be ready until autumn. Directive 2009/136, created as part of the telecoms package, has still not been written into UK regulations so the final form of the law cannot yet be read. However, it is not likely to differ from the directive. Information commissioner, Christopher Graham, said: 'Organisations running websites in the UK must wake up to the fact that this is happening. Once the new regulations are published there will be a major job of education and guidance to be undertaken. In the meantime, both the business community and public sector organisations need to start thinking clearly about how they will meet the requirements of the new directive.'

The new law is intended to give people more control over what information businesses can store on access from consumer computers. It provides: 'Member states shall ensure that the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his or her consent, having been provided with clear and comprehensive information, in accordance with directive 95/46/EC, inter alia, about the purposes of the processing.

'This shall not prevent any technical storage or access for the sole purpose of carrying out the transmission of a communication over an electronic communications network, or as strictly necessary in order for the provider of an information society service explicitly requested by the subscriber or user to provide the service.'

Football Dataco

In March, the Court of Appeal considered Football Dataco Ltd & Ors v Sportradar GmbH & Anor [2011] EWCA Civ 330, a case concerning database right and copyright. Football Dataco and other claimants owned and exploited a database '“ Football Live. The defendant Sportradar was accused of breach of database right and copyright. The data included details of goals scored, goal scorers, who had penalties, substitutions, yellow cards, etc. It was updated and also provided to licensees while matches were still taking place.

The defendants were a German business which assembled data from public sources about UK football matches and marketed it as Sports Live Data. The data was held in Germany and Austria but could be accessed in the UK by links.

Both defendants and claimants appealed the UK original High Court decision and the Court of Appeal has now held that Sportradar and UK users had not infringed Firstdata's copyright. The court said: 'There may be copyright in Football Live. But what is alleged to have been copied is mere data on any reasonable view.'

'Its recording may sometimes involve some skill (who scored in a goalmouth scramble) but it is not creative skill.'

This is consistent with earlier case law. 'Manchester United 1, Liverpool 0' does not involve intellectual creativity, whereas the 11 words protected in the Infopaq case did.

Infopaq had looked at directive 2001/29/ EC which contains an exemption of temporary acts of reproduction (article 5). In Infopaq it was found that what was taken when news items were reproduced was intellectually creative. In Dataco what was taken was not in this category. Certain questions were referred to the European Court of Justice.

In relation to database right, the following question has been referred to the ECJ for a ruling: 'Where a party uploads data from a database protected by sui generis right under directive 96/9/EC onto that party's webserver located in member state A and in response to requests from a user in another member state B the webserver sends such data to the user's computer so that the data is stored in the memory of that computer and displayed on its screen,

(a) is the act of sending the data an act of 'extraction' or 're-utilisation' by that party?

(b) does any act of extraction and/or re-utilisation by that party occur

(i) in A only;

(ii) in B only; or

(iii) in both A and B?'

Therefore the database part of the case is now stayed until the ECJ answers the questions.

Internet selling

Competition and IP lawyers regularly receive questions about internet selling. Many distribution agreement and ecommerce distribution policies contain clauses about purchase of adwords, use of the internet for sales, cross-border selling and the like. The EU's advocate general's recommendation in the case Pierre Fabre in March are interesting and are likely to be followed by the ECJ.

Pierre Fabre banned internet selling for its high-quality personal care products and said they must be sold in pharmacies. In 2010 in the EU vertical guidelines issued with the new EU regulation 330/2010, which governs the competition law on distribution, franchising and other 'vertical' agreements between supplier and buyer, new rules were included on internet selling. As with the previous version, the guidelines provide: 'In principle, every distributor must be allowed to use the internet to sell products.'

The guidelines then set out important new principles for the first time '“ four new 'hardcore' (banned) restrictions, including the prohibition of 'an agreement that the distributor shall limit its proportion of overall sales made over the internet'. It states: 'This does not exclude the supplier requiring, without limiting the online sales of the distributor, that the buyer sells at least a certain absolute amount (in value or volume) of the products offline to ensure an efficient operation of its brick and mortar shop (physical point of sales), nor does it preclude the supplier from making sure that the online activity of the distributor remains consistent with the supplier's distribution model.'

These words make it clear that suppliers can require retailers to have stores before allowing them to sell online. The guidance states: 'Under the block exemption, the supplier may, for example, require that its distributors have one or more brick and mortar shops or showrooms as a condition for becoming a member of its distribution system.'

It is very hard for suppliers to lawfully refuse to allow resale of products online under EU competition law. In Pierre Fabre the EU's advocate general has said that that company broke EU law when it refused to allow products to be sold online. There may be some products where an internet selling ban is justified but they will be rare.

In that case, it said: ' PFDC's claim that the ban is justified on public health grounds, as correct use of its products requires the advice of a pharmacist, appears to be objectively unfounded. It is clear to the advocate general that such products are not medicinal products and there is no regulatory requirement which would mandate their sale in a physical space and only in the presence of a qualified pharmacist.'

It is best to take competition law advice before banning internet selling and ensure that there are good reasons which comply with the vertical guidelines.

Patent rights

Under the Patents Act there is a right of an employee to claim a share of an invention where it is of outstanding benefit to the employer. Cases have been few and far between. Now the Court of Appeal has looked at the law in this field in a case involving Unilever and an employee, Professor Shanks.

In Unilever v Ian Alexander Shanks [2010] EWCA Civ 1283, Shanks had invented a measuring device for use in diabetic blood testing kits while working for Unilever. Unilever had assigned the patent to another group company for a nominal sum and over ten years it earned £23m in revenue before the patent expired. The professor claimed a share. He also claimed that had Unilever exploited it properly it would have earned £1bn in royalties and he wanted a share of the higher sum.

The Court of Appeal held that the compensation should be based on what Unilever had earned not what it might have earned, and said there was no implied best endeavours to exploit obligation on employers.

IT contracts

In March the government published the first contracts under its transparency scheme. This is a £1.5m student assessment deal between the secretary of state for education and Slough-based NFER Trading. For example, it gives contracts with Morgan Cole and Capsticks Solicitors for legal services and the value of the contracts.

Broadcasting rights

Competition lawyers describing the competition rules as they apply to exports and imports in the EU have always struggled with the special area of broadcasting. If it is the law that a company exporting a case of pharmaceutical products or branded sports shoes is free to buy IP protected products put on the market anywhere in the 30 EEA states by the rights owner or with the owner's permission and export them elsewhere in the EEA/EU, then why was broadcasting treated differently?

It was a discrepancy which was hard to explain on legal grounds other than that it seemed to be a special case after the Coditel decision many years ago. Now consistency is achieved again as the advocate general reached her decision (if followed by the ECJ).

The opinion looked at whether an English pub could broadcast football matches to drinkers from abroad at cheaper rates than had the pub bought a UK licence. Should the pub be treated like the importer of cheap cars or pharmaceuticals from another EU state and be lauded by the European Commission for ensuring the single market is achieved and that consumers can buy wherever goods are cheapest, or castigated as evil infringers of intellectual property rights? The AG held that the publican was free to purchase a Greek satellite decoder card from Greece at a tenth of the price of a UK one and could not be prevented from doing so.