Naked Law

A cautionary DPA tale...

The Data Protection Act 1998 contains a lot of obligations, some requiring substantive thought and effort to ensure compliance.

On the other hand, some of the obligations are more straightforward, such as the obligation to register with the Information Commissioner if you are a data controller. It costs £35 (per year) and, once you've worked out what activities you need to declare, probably takes about ten minutes to fill in the form. Failure to register as a data controller is a criminal offence, assuming you are a data controller.

Two London based solicitors however have failed to comply with this most basic of requirements, despite repeated warnings from the Information Commissioner. As a result they have been named, shamed and fined £815 each.

This little episode shows three things to the world at large: if you process data you need to think about data protection; the Information Commissioner is not completely toothless; and Solicitors are not above the law. Whilst the fines are not exactly gargantuan in scale, the potential loss of reputation for individuals who are trusted with personal data could be significant.

The (strange) language of lawyers

I was reviewing a software contract this week and, in the space of the first four clauses, came across three statements prefaced with the phrase "for the avoidance of doubt" (including two in the very first clause).  These are classic go-to words used by fidgety lawyers (and non-lawyers groping around for something that sounds "legal").  And I have always disliked them.

It would be nice to think that lawyers sounding legal for the sake of it was a thing of the past (perhaps now indicative of lawyers who are insecure about the value of their services - "you've got to come to us because only we understand lawyerspeak").  But not only is "for the avoidance doubt" a rather arcane and archaic expression - it also raises more questions than it answers.  Why raise the issue of doubt?  Could there be some doubt?  It's rather like someone who begins a diatribe with the give-away words "with all due respect".  Labelling something respectful (or lacking doubt) doesn't make it so - and almost invariably betrays the opposite.

The notes from the old Norton Rose M5 Group on "drafting legal documents", which apparently come substantially from a chap called Jim Leaver, say it better than I could:

"The expression "for the avoidance of doubt" should itself be avoided.  It is remarkable how often in practice the expression is used to preface a provision which, far from avoiding doubt, actually creates it.  There are good reasons why the expression should not be used.  On general principles the whole agreement should be drafted in such a way as to remove ambiguity and uncertainty.  One of its main (if unproclaimed) purposes is to avoid doubt.  The draftsman should ask himself why he feels it necessary to state that purpose expressly in relation to one particular provision."

It's the sort of phrase that is used when the writer isn't actually sure about the meaning of the clause or its effect on the rest of the contract.  It almost always signals either poor drafting or areas where the parties aren't quite sure what they've agreed.  I'd put it (in Room 101) with that staple of dull journalism "in a very real sense".

EULA hoops?

Consumer group the National Consumer Council plans to lobby the OFT and European Commission to insist that terms and conditions in End User Licence Agreements (EULA) are available to consumers at the point of sale, in plain English, in local law and on fair terms. In a recent report the NCC surveyed 25 well known products noting that many agreements sprung EULAs on consumers after purchase, with lengthy impenetrable terms and governed by the law of the place of origin not the user.

Over half of the EULAs contained no information on the external packaging that a licence agreement was required and only 4 gave an option to preview the agreement online before purchase. It seems only fair that consumers should have a right to read the terms of use prior to purchase (and in any event providers need to be careful EULAs are properly incorporated into their contracts with consumers if they want to be able to rely on them at a later date).

The agreements were littered with terms such as 'does not affect your statutory rights' which would be enough to bring the Plain English Campaign out in protest.  It certainly seems that when dealing with consumers short, clear licences are the order of the day!

The NCC suggest that licence terms should vary for the country in which the product is purchased. Perhaps it would be relatively easy for large US multinationals to adapt their agreements for EU countries, but one could argue that it would be unfair to insist that software providers to make all of its product licences nation specific especially in countries with poorly developed copyright law.  Equally, or perhaps of more pressing concern, the costs of localising the EULAs and obtaining legal advice in each country are likely to be prohibitive for many small software providers.

Searching for the truth

There has long been a belief in the independence in the English Courts. Probably those elsewhere in Europe characterise this as bloody mindedness, as yet another decision diverges from the European norm. Colin Birss QC, who appeared on behalf of the Treasury in the Astron Clinica case I have just posted about, shed a rather different light on the matter in a recent talk (18 Feb 2008) at the Queen Mary Intellectual Property Research Institute (QMIPRI), drawing on the saga of patentability of computer software.

English Courts try to follow what they understand the law as interpreted by the European Patent Office to be; they then state this law in a relevant decision. However, the European Patent Office then changes its view of the law, but the English Courts are bound by their earlier decision.

This explains the bumpy ride software patents have had in the UK, and that there is (in theory at least) still a difference between the UK courts and the European Patent Office on what is patentable, as reflected in the English decision of Aerotel v Macrossan. What can be learnt from this analysis is that one cannot be certain what is patentable; even if it is (or is not) now, that may change. Which is good for lawyers but not necessarily good for innovation and those who have to invest in patents. Of course patents are not alone in creating uncertainty – there are plenty of other happenings in, for example, the internet arena which make innovation in this area exciting from a legal perspective.

Treading softly where the European Patent Office boldly go

In another case in the saga of whether software is patentable, the UK Patents Court has attempted to close the gap between UK case law and the European Patent Office by confirming that software, on its own, whether or not recorded on a recording medium or operating in a computer IS PATENTABLE, apparently defying a common sense in interpretation of the words that “computer software” is not patentable “as such”.

In a sleight of hand, which surely has more in common with an unpatentable business method or playing a game, David Kitchen J. decided in Astron Clinica to complete the previously (apparently) incomplete element of the jigsaw of UK caselaw on software patents. This decision confirms that, in the UK, a computer programme, in abstract and on its own, but which when used has a technical effect, is potentially patentable – subject of course to the usual questions of novelty and obviousness.

Part of the rationale is that this would allow the patent owner to sue a person in the UK where that person exports software to another jurisdiction, rather than equipment containing it. It reflects a modern appreciation of the way in which technology works – software, and real value, is often distributed without any physical embodiment being created, such as by direct distribution to a mobile telephone.

If somewhat giddying, this approach does have the distinct benefit of bringing this aspect of UK law closer to the European Patent Office, although leaving (as he had to do) the question of how you determine what technical effect is relevant. This remains governed by the case of Aerotel v Macrossan. We will have to wait a while before seeing what happens to that rule, as the EPO has curtly dismissed Jacob LJ’s suggestion that the issues be reviewed by an enlarged board of appeal at the EPO.

These decisions show a serious problem is looming in the software field. This is that the law in the EPO changes, and the law in the UK may try and change to follow it; and both do so in timescales which are significantly less than the life of a patent. It is perhaps better that a patent now be granted in respect of subject matter which is later shown to be unpatentable – when the law next changes – than vice versa, but what is good for patent owners if often an extra burden for the competitive innovative environment, and is likely to result in yet further costly problem solving in the courts.

Money for old dope

Some of us have to plan for old age and dependents. But if you were a performer the State will do it for you – at least it seems that the French State will, having undertaken during their presidency of the European Commission to resuscitate a proposal that was thought to have been put to bed once and for all. Extension of copyright protection for performers and recordings (now from 50 to 95 years, rather than the slightly more modest 70 years rejected in the Gowers Review) is apparently back on the agenda in the European Union. With majority voting on IP matters in the EU shortly to become a reality, and supporters like Cliff Richard who is to say it will not get through, especially if the big business sting is taken out of it by ensuring (at least when it is implemented) that the right belongs to the artist rather than the record company.

I suggest that we all lobby the European Parliament for an extension of performance rights to lawyers - performing in Court, performing in negotiations - entitling them to an inalienable right to a share of the benefit to their client for 95 years. That would surely make all Euro MPs vote against it. Indeed, why should this proposal not be widened to other intellectual property rights such as patents, or more generally to service providers – perhaps even to politicians for political services rendered!

A beer and open source cocktail

We are planning to mix up a heady concoction of ale and conversation (about open source software) in a Cambridge drinking establishment on Wednesday next week (27 February). 

We are hoping to bring together some interested (and, with a bit of luck, interesting) parties to chat about some of the perennial issues around open source (its "viral effect", the extent to which it can be used by businesses to make money, the concerns of investors in early stage software businesses) - as well as some more recent issues (such as changes in the new GPLv3 last year).

We have already invited a number of clients and contacts along, but if you would be interested in joining us, please send me an email, and (space allowing) I will let you know the details.

IT outsourcing: the future is green?

Much to the envy of my fellow Naked Lawyers, last Friday I was fortunate to lunch at Claridges. Not solely, I might add, so I could sample the rather good food (asparagus, duck, chocolate parfait) but also because the IT industry trade association Intellect was holding one of its Industry Leadership lunches there. I was pleasantly surprised by the mix of multinational and much smaller suppliers that were represented, along with the usual raft of consultants and legal and financial advisors.

After lunch there was a talk by Guy Hains, President and CEO of the European Group for CSC who spoke about recent trends in IT outsourcing. I found the following points particularly interesting:

• the feeling that the industry should put together some kind of guidance or code dealing with the transfer of outsourcing deals from one supplier to another (eg at the end of the first supplier’s term). This is an area fraught with difficulty, not least because contractually the purchaser and original supplier are usually stuck with whatever they agreed at the outset of the project, at a time when (generally) they are friends and the end of the relationship seems too far off to worry about. I am sure some industry consensus on how to manage the handover from the outgoing to incoming supplier would not go amiss.
• the indication that purchasers are becoming more concerned about green issues including the environmental impact of their IT kit. Guy’s view was that suppliers need to be addressing this and seeking to drive down the costs of greener solutions, or risk being left behind. Certainly the introduction of the WEEE directive and other environmental protection legislation means that both purchasers and suppliers have an interest in reducing the negative environmental effects of their IT – but of course purchasers will not want to pay more for this in the long run.

Broadcasting borders bulldozed

Summary judgement against distributors of conditional access cards to obtain access to foreign broadcasts was refused in an English Court hearing (Premier League Ltd v QC Leisure and others [2008] EWHC 44 (Ch)) a couple of weeks ago. Last week we reported that the Premier League had successfully prosecuted a user of a card when they used it to watch Bolton Wanderer’s matches.  In the QC Leisure case, Mr Justice Barling held that it was arguable that certain provisions restricting the distribution of conditional access cards – particularly to persons outside the exclusive broadcast territory, could infringe Article 81 of the Treaty of Rome.

However, it seems unlikely that any such victory will be more than pyrrhic: Coditel (Case 262/81 Coditel SA, Compagnie Générale pour la Diffusion de la Télévision v Ciné-Vog Films SA) upheld exclusive copyright licensing with territorial restrictions for broadcasts.  It seems unlikely that the existence of supporting provisions, such as prohibitions on export of cards or activation of cards by users outside the exclusive territory can so undermine the territorial limits on the licence itself as to save the users outside the exclusive territory from infringement.  Because of the difficulty in controlling the footprint of a satellite signal it is likely that inability to control users would seriously undermine the value of territorial restrictions.

See also IPKat's comment on this case here.

Orange: the pips won't be ordered to squeak

“Digital” and “dominance” can fit too well together.  There have long been concerns about the way in which digital technology, by the ease with which it can be used to control access to information, technology and services, may result in businesses building and then perhaps abusing a dominant position.  Microsoft dominating access to interfaces with their software; DRM being used to reach into the home; media players being manipulated or managed by their content suppliers; markets being partitioned by conditional access technology.

Such concerns were no help for Hutchison Mobile in the High Court which made clear that fishing on the back of suspicion is not enough.  Vigilantes against abuse will have to look for stronger leads than this.

Hutchison were seeking pre-action disclosure.  They suggested this might show that O2 (UK) Limited,  Orange Personal Telecommunications Services Limited,  T-Mobile (UK) Limited and Vodaphone Limited were exploiting the steps required for mobile phone number portability as a barrier to entry into the market.  Hutchison hoped that documents would show gossip: “we really like this position; keeps out the smaller players”.  Of course a request for pre-action disclosure is potentially a draconian step, especially if it does not focus on a small number of highly pertinent documents – and here it looked more like a fishing expedition for cod at the height of their abundance. The request was thrown out on the grounds that the class of requested documents was even wider than would be permitted under standard disclosure – a prospect of picking up some revealing hot gossip was not enough.  Pre-action disclosure needed to be tightly restricted to a narrow class of highly relevant documents.  Usually not an easy call in a competition law claim.