Welcome to the emw law Technology Law Update which keeps you up to date with developments in technology law that are either directly applicable to your business or may be of general interest since they affect the wider business community.

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Freedom of Information

On 1st January 2005 the Freedom of Information Act 2000 (“the Act”) comes fully into force. The Act is designed to give individuals the right of access to information held by central government in over 100,000 “public bodies” including local authorities, the health service, education establishments, the police and quangos.

The Act provides that, with certain limited exceptions, all public bodies are under an obligation to supply information they hold to the general public. Already, public bodies are required to draw up “publication schemes” listing all the information that they intend to make available. By 1st January 2005, all public bodies will be required to deal with individual requests by the public for copies of that information.

The Act’s remit however extends beyond existing public bodies:

1. Firstly, the Secretary of State has the ability to designate any non-public body as a public body for the purposes of the Act if he is of the opinion that such non-public body is exercising functions of public nature or if the non-public body is providing contractual services to a public body which you would assume to be carried out by that public body.
2. Secondly, any private organisation holding information on behalf of a public body can expect that public body to pass its obligations under the Act onto the private organisation under the terms of its contractual arrangements.

Therefore, any organisation that holds information on behalf of a public body will be, if it is not already, affected by the Act. Firstly, it should be aware that the Secretary of State may ultimately designate it as a public body, which will mean that it becomes directly subject to the provisions of the Act. Secondly, the public body for which it holds information is likely to require that its contractual arrangements with the organisation are such that the organisation must abide by the provisions of the Act so that the public body is not itself in breach of the Act and therefore insist on a variation to any existing contracts so as to achieve this.

WEEE and ROHS

Regular readers of our Technology Law Update will recall that we gave an update on the forthcoming implementation of the Waste Electrical & Electronic Equipment Directive (“WEEE Directive”) and the Restriction on Certain Hazardous Substances in Electrical & Electronic Equipment Directive (“ROHS Directive”) in last quarter's Update. The DTI has finally produced draft regulations designed to implement the WEEE Directive and ROHS Directive into English law. Consultation on these draft regulations closed in October and we await the outcome following that consultation. We will provide further information in future Updates.

Cyber-Libel, Defamation in the Online Community A Matter of Convenience?

The case of King v Lewis establishes that internet libel is committed at the place where defamatory words have been downloaded.

The alleged libels consisted of two texts stored on websites based in California. The text complained of contained remarks that the claimant was anti-Semitic. Under UK law the tort of libel is committed wherever publication takes place. With a text on the internet being published where it is downloaded and as the download had taken place in the UK, the claimant had been libelled in the UK (subject to any defence on the merits).

The Defendants attempted to argue, unsuccessfully, that the US as opposed to the UK was the appropriate forum. If successful then the claimant's action for libel would almost certainly have not survived in the US by virtue of the 'public figure' rule. In essence this rule requires that the US courts must grant summary judgement for the defendant in defamation actions unless a public figure claimant can show readiness to offer clear and convincing evidence of actual malice and as such this presents a very high hurdle for the claimant.

This case serves to highlight that under UK law publication does not merely take place at the location of the ISP where the defamatory statement is stored but extends to any location where these statements are downloaded. A well structured email and internet usage policy is now all the more important for not only ISP's but any company operating or making use of e-commerce.

Investing in Databases

A database will attract the database right if there has been a substantial investment in obtaining, verifying or presenting its contents. The Database Right affords the owner protection against (a) unauthorised extraction and/or reutilisation of the whole or a substantial part of that database; or (b) the repeated and systematic extraction or reutilisation of insubstantial parts of the contents of the database. Extraction or reutilisation can be direct or indirect. This is a particularly valuable right for organisations involved in the supply of information. However, assessing whether or not there has been a substantial investment in obtaining or verifying the content is not as straight forward as it may seem. A distinction will be drawn between obtaining independent material for inclusion in the database, on the one hand, and the creation and verification of that material prior to its inclusion on the other. Investment in the latter will not be taken into account when determining the extent of the investment in the database. For example, the resources used to establish the dates, times and the team pairings of the matches in a football league (i.e. the content) will not count in determining the extent of the resources used to draw up the fixture list (i.e. the database) for the purposes of organising football league fixtures. Similarly, the resources used to draw up the list of runners for a horse race will not be counted in determining the resources used in creating a database of pre-race information in which the list appears.

This will come as a surprise to information and data supply companies who may want to renew their processes and procedures to make sure their databases are protected by the database right.

Shapes as Trade Marks

In a recent case Philips claimed for infringement of its registered trade mark which consisted of the design of a 3 headed electric rotary shaver featuring a clover design. The Defendant counterclaimed that the mark was invalid on the grounds that the mark consisted exclusively of the shape of the goods which was necessary to obtain a technical result. As such the mark was not capable of registration as a trade mark by virtue of s3 (2) (b) of the Trade Marks Act 1994 (“TMA”). Philips argued that only certain areas of the shape performed a technical function and that the clover leaf element was included in the shape for aesthetic reasons and was therefore capable of registration.

It was held that there needed to be an objective assessment of the shape and an identification of its essential characteristics or features. If these were solely for achieving the technical result then the mark was not capable of registration and it made no difference that the shape included non-essential features. It was found that the clover leaf was not an essential feature of the shape of the mark but it was a part of the faceplate that formed an essential characteristic of the shape. The whole faceplate contributed to the overall technical objective of giving the user a smooth, effective and comfortable shave and as a result the whole faceplate contributed to achieving the desired technical effect. Despite any aesthetic purpose of the clover leaf it was found that the mark was invalid under s3 (2) (b) of the TMA.

It follows from this judgment that a trade mark that consists of a shape will be liable to be revoked if it can be proved that the shape was necessary to obtain a technical result. The test to be applied is an objective assessment of the shape and its essential features. In the Philips case proof of distinctiveness was held to be no bar to the application of the relevant provision of the TMA.

Protect your Valuables

A company recently took its insurers to court over a claim for the interruption caused to its business as a result of the deletion of source code which was critical to a company’s business by a virus disguised as a Christmas card. The source code was held on the Managing Director’s laptop, on two computers at the company premises and at a remote site. The virus destroyed the code on the MD’s computer and shortly afterwards the two computers were stolen from the Company premises. The Company then discovered that the remote site had also been corrupted by the virus and it therefore had no copies of the source code. The court supported the insurers in rejecting the company’s claim for the interruption cause to its business during the recompilation of the code on the basis that it was excluded under the terms of the policy. The deletion of the code by the virus was excluded as “consequential loss arising from the loss of information on computer systems caused deliberately by malicious persons” and the loss as a result of the theft was excluded as a result of a general exclusion for erasure and loss or corruption of information on computer systems unless resulting from a Defined Peril (eg. flood etc). As this may be common to many policies, it may be worth triple checking your security arrangements for business critical code.

A Tax on Success

Any variation of restrictions on shares may give rise to a change in their value and that "added value" will be subject to income tax. This means that only part of your shares' entire value has been growing under the capital gains regime. There is, however, an opportunity to avoid further income tax on the growth of your shares' value. Click here for further information.

For further information on the above issues or for advice in connection with any other technology law matters, please contact a member of the Technology & Commerce Team at emw law:

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Disclaimer

Whilst we endeavour to ensure that the information in the Update is accurate, complete and up-to-date we make no warranties or representations in respect of such information as it is for general interest only and does not constitute legal or professional advice. As the application of the law can vary widely depending on the facts and circumstances of a particular matter, you should always take specific legal advice before taking or refraining from taking any action which may have legal consequences. We accept no liability for any loss suffered as a result of your use of any information provided in the Update.

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