Naked Law

Breaking News - Challenge to the Digital Economy Act is unsuccessful

We mentioned back in December that BT and Talk Talk had been granted a judicial review of the Digital Economy Act.

Well today we’ve heard that the High Court has rejected most of the claims put forward by the ISPs, including that it was ‘rushed through’ Parliament before the election.

The Judge, Mr Justice Parker, did agree that the obligation on ISPs to cover 25% of the costs of enforcing the new regime was unlawful, but this will have little effect on the implementation of the Act in practice. As decision has only just been announced in the High Court we haven’t been able to get a copy of the judgment yet, but see here and here for more information about the ruling.

And don’t forgot of course that this still isn’t the end of the Digital Economy Act saga - Ofcom are currently in the process of reviewing whether the obligations on ISPs to block access to websites involved in copyright infringement are feasible, so there’s still more to come from this yet….

Purchasing a domain name?

So, picture this scenario that we recently came across.  You've got an idea for a product, you've thought of a really clever name for it and you've tracked down who owns the domain name reallyclevername.com.  You've even negotiated a deal with the domain name owner for the sale of reallyclevername.com, and have a contract ready for signature.  You're virtually ready to launch the product, right?  Wrong.

It's easy to forget that using a domain name could infringe someone else's trade mark, even if you had no intention of taking unfair advantage of that trade mark. 

Under ICAAN's Uniform Domain Name Dispute Resolution Policy (UDRP), to succeed in an action against a domain name owner, the complainant must show that (a) the domain name is identical or confusingly similar to a trade mark in which the complainant has rights, (b) the domain name owner has no rights or legitimate interest in the name, and (c) the domain name is being used in bad faith.  Now we'd imagine that you're not going to use the domain name in bad faith, so you should be able to defend an action under the UDRP.

However, if someone else has registered really clever name for goods or services that are identical to those you wish to provide, your use of reallyclevername.com will almost certainly infringe their trade mark and entitle them to damages, an account of profits and/or an injunction requiring you to stop using the reallyclevername.com domain name.  Your reallyclevername.com domain name could also infringe another person's trade mark if it is similar to the trade mark, is used in connection with similar goods or services and its use is likely to confuse the public into believing that there is a link between your reallyclevername.com domain name and the other party's trade mark.  That would be quite annoying if you'd paid a substantial amount for reallyclevername.com, and so our advice when you are looking to purchase a domain name is to always check the trade mark registry in your jurisdiction (in the UK, this is the Intellectual Property Office) and to carry out an internet search to see if the really clever name is being used by any other entities before you go ahead and buy reallyclevername.com.

Has the Faccenda Chicken come home to roost?

We've been working on a social media policy for a client.  As a point of reference, we took a look at a precedent on a popular legal information service.  This suggests the following:

You are not permitted to add business contacts made during the course of your employment to personal social networking accounts, such as Facebook accounts or LinkedIn accounts.

OR

The contact details of business contacts made during the course of your employment are regarded as our confidential information, and as such you will be required to delete all such details from your personal social networking accounts, such as Facebook accounts or LinkedIn accounts, on termination of employment.

I understand why these have been included.  Lists of contacts (and more particularly customers) are valuable to businesses and typically protected in employment contracts through confidentiality provisions and restrictive covenants.  The advent of social networking sites has meant that businesses have lost control of this information (because it is held by employees within their personal accounts).  These clauses are intended to limit the risk - but I just can't see them working.

The clauses suppose that lists of contacts are still the company's information ("our confidential information").  But most LinkedIn users can now see each others' lists of contacts - are they really "confidential"?  I can see the first option (no use of LinkedIn) working - but for most businesses I'd have thought that the adverse effect on business development of a blanket ban on business social networking would outweight the benefit of retaining control of the customer list.

My feeling is that businesses will need to rely on restrictions over what ex-employees do with information rather than which information they are entitled to have.  Claiming "ownership" over someone's list of contacts is rather outmoded and out of keeping with social media norms.  For example, a company could hardly require staff to hand over all their LinkedIn contacts when leaving - apart from anything, this would probably breach the Data Protection Act (you link to the individual, not the company).  So you can keep the list - but you can't sell competing products to them.

This made me wonder whether the notion of customer lists being protectable trade secrets is sustainable in the era of social media.  Will it seem quaint or Big Brotherish in the future that companies tried to "own" the social capital created by their employees?

The rules on cookies are changing – are you prepared?

Most people will be aware that the rules on the way in which you are able to use website cookies are about to change. The new rules are causing quite a fuss in the media, but will they really make any difference to the way businesses operate their websites?

For now, I think the answer to that is probably no.

The EC Directive governing use of cookies - the EU Privacy and Electronic Communications Directive, otherwise known as the “e-Privacy Directive”, currently requires website owners to inform visitors about the use of cookies, the purpose for which they will be used and the right to opt-out. The amended Directive places an obligation on website owners to obtain “explicit consent” from visitors before using cookies.

But at the moment the Government is unsure how to tackle these changes.

As a result, it has not yet published any guidance or recommended solutions for implementing the new rules before they come into force on 25 May. The Information Commissioner’s Office (ICO), who will be responsible for enforcing the rules once they come into force, has also confirmed that it is unlikely to take any enforcement action against businesses in the short term. So come 25 May, in practice the new rules will have little impact.

However businesses do need to start thinking about what they should be doing to comply with the rules now. Why? Well here are some examples:

1. You don’t want to be caught unawares and then face a mad panic to comply when things start moving forward.
2. It will probably take some time to decide on a useful and workable approach for your business.
3. Once the Government’s guidance is published, the ICO is likely to be less lenient in enforcing the rules.

So, although the new rules will not make much difference at this stage, they are likely to at some point in the near future. As a result, I would recommend adopting the famous scouting motto - Be Prepared!