Commercial Revision

7/31/2019 Commercial Revision

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E-Commerce

Electronic Commerce Directive (EC Directive) Applies to both B2B & B2C contracts and dealings Regulates provision of goods & services by information society service providers

(ISSPs) An ISSP is any service provided for remuneration, at a distance, by means

of electronic communication (reg.2) Consumer is any person acting for purposes other than his trade, business

or professionInformationAn ISSP must make the following information easily, directly and permanentlyavailable (reg.6(1)):

a) Name of service providerb) Address of where service provider established

c) Email and details of service providerd) Details of any trade registratione) Information regarding a supervisory body if authorised (if applicable)f) Details of any regulatory body and membership detailsg) If subject to VAT must give VAT number

Commercial communications Defined as a communication in any form, designed to promote, directly or

indirectly, the goods, services or image of any person pursuing commercialactivity (reg.2)

An above communication must identify the party who is making it, clearlyidentify that an offer is promotional and it must ensure that any conditionsare made accessible, clear and unambiguous (reg. 7(a)-(d))

Information when contract concluded Prior to placing an order an ISSP shall provide the following information in a

clear and unambiguous manner (reg. 9(1)):a) Technical steps to conclude the contract b) Whether contract will be filed by ISSP and whether it will be

accessiblec) Technical means for identifying and correcting input errors for orderd) Languages offered for conclusion of contract

Placing the order

When an order is placed by electronic means, an ISSP must acknowledgereceipt to customer without undue delay and by electronic means

Non-compliance with EC DirectiveNon-compliance may lead to the following statutory remedies:

i. Claim for damages for breach of statutory duty (reg.13)ii. Court order to require ISSP to supply T&Cs in accordance with

reg.9(3) (reg.14)iii. Right to appl y to court for rescission if ISSP doesnt provide means

for correcting input errors under reg.11(1)(b) (reg.15)iv. Protection of right to seek court relief to stop infringement of any

rights (reg.20)


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Consumer Protection (Distance Selling) Regulations Mainly to protect consumers under distance contracts meaning a consumer

contract for goods or services under an organised distance sales or serviceprovision scheme, making use of distance communication (reg.3)

Regs.5&6 - The Regulations do not apply to land, building, financial servicesand auction contracts. The requirements imposed by regs.7-18 and 19(1) donot apply to food, drink and perishables (reg.6(2))

Reg.7 Information to be provided by the supplier includes:a) Details of the supplier and his commercial purposeb) Details of the goods or servicesc) Prices including taxes and delivery costsd) Payment, delivery and performance detailse) Notice of cancellation rightsf) Period of validity of price and offerg) Details about substitutability of goods

Reg.8 details about right of cancellation (reg.8(2)), obligations to returngoods, complaints procedure and after sales service and guarantees

Reg.10(1) right of cancellation by notice. If notice given in writing or otherdurable medium (eg. E-mail) then contract treated as if never formed(reg.10(2))

Reg.14 provides for return on cancellation of sums paid by consumer ASAP,and in any case within 30 days starting with the day of notice of cancelation

Reg.24 If a consumer receives unsolicited goods, he is entitled to treat thesegoods as an unconditional gift

Privacy and Electronic Communications Regulation Aid data protection in the realm of electronic communications Reg.4 regulations dont relieve person of obligations under Data Protection

Act 98 in terms of personal data Reg.5 Providers of public electronic communications must take appropriate

measures to safeguard security of service Reg.6 prevents the accessing and storing of information from a users

computer, except where that person is told Reg.7 limits traffic data, the nuts and bolts that make electronic

communication transmission work. This data must be erased/modified so it ceases to be personal data unless the subscriber gives permission for

retention of data Reg.8 permission in relation to reg.7 covers when data is trafficked to acompetent authority under a statutory power or under any provision relatingto the settlement of disputes (reg.8(4))

Regs.22&23 deal with transmission of unsolicited communications (junk mail) where the identity and address of the sender is concealed. This isforbidden UNLESS the recipient has opted in (reg.22(3))

Payment in E-Commerce transactions Protections for the consumer in E-Commerce:

a)

ss83&84 Consumer Credit Act 1974 limits losses to 50 prior tonotification to the bank that card is lost, stolen or misused


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b) Distance Selling reg.21 consumers can cancel a payment wherefraudulent use of a card is made under a contract covered by theregulations. The consumer is entitled to be re-credited or have moneyreturned to him

c) Burden is on the card issuer to sow use of a card was authorised bythe card holder (reg.21(3))


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The Data Protection Act 1998

Brought in to protect individual privacy and harmonise UK law with that of other member states

Effect of the act falls into two categories:1) Allow individuals to access information held about them2) Protect information about individuals from being disclosed

improperly Under the DPA 98 a data controller must be registered before h e can

lawfully process any personal data about a data subject These terms are defined under s1(1) DPA 98:

Simply summarising and making observati ons about data is not processi ng (Johnson v Medical Defence Union)

Data also needs to be defined:


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Class C refers to a relevant filing system. This is defined as follows:

A manual filing system would have to be highly organised and on par to acomputerised one to be considered a relevant filing system (Durant vFinancial Services Authority)

Personal Data CA in Durant held that data would relate to an individual only if the data

concerned a persons privacy The CA suggested a two stage test:

a) Is the information biographical in a significant sense?b) Does the information have the individual as its focus, rather than

other persons or matters? The Information Commissioner published guidance on the decision in Durant

and came up with the following points:An individuals name will only be personal data if it appears with otherinformation about the individualThe following are examples of personal data so long as the info. Can belinked to an individual:

i. Medical historyii. Salary details

iii. Information on tax liabilitiesiv. Bank statement informationv. Information on spending preferencesThe Commissioner suggested the following were not personal data: i. Mere reference to a persons name

ii. Mention of attendance at a board meeting in the minutesiii. An individuals name appears on an email, in the sense it was

sent or CCd

Eight principles of good practice Anyone processing personal information must comply with eight enforceableprinciples of good information handling practice (s4(4)DPA98)

The principles are contained in Schedule 1 and states the data must be:1) Fairly and lawfully processed

Not fair for customer to send form to opt out of receiving product info. (BritishGas v Data Protection Registrar). Silence did not equate to acceptance

2) Processed for limited purposes3) Adequate, relevant and not excessive4) Accurate and up to date5) Not kept longer than necessary6) Processed in accordance with the individuals rights7) Secure


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8) Not transferred to a country outside the EEA unless the country hasadequate protections in place

There is further guidance on the 1 st principle of processing information fairly.At least one of the conditions in Sch.2 DPA 98 must be met for it to beconsidered that the information was processed fairly:

a) Individual consented to processingb) Processing was necessary for performance of a contract c) Processing is required under a legal obligationd) Processing is necessary to protect the vital interests of the

individuale) Processing is necessary to carry out public functionsf) Processing is necessary to pursue the legitimate interests of the

data controller or 3 rd parties All data controllers must be registered on a public register. It is a criminal

offence to process data in the absence being registered (s21(1) DPA 98)

Registration period is 12 months. It is renewable every 12 months for a fee of 35 per data controller

Sensitive personal data This is a sub-section of personal data. There are tighter controls on

processing sensitive personal data. Sensitive data is defined under s2 asinformation consisting of:

a) Racial/ethnic origins of data subject b) Political opinionsc) Religious beliefsd) Physical or mental health conditionse) Sexual lifef) Commission or alleged commission of an offence

Sensitive personal data must be processed in accordance with Schedule 3which lists exceptions such as when there has been explicit consent or theprocessing is necessary to exercise a legal obligation

May be divulged if in connection with legal proceedings

In many of the Sch.2 & Sch.3 conditions it must be necessary to processpersonal data. The Commissioner suggests when judging whether a conditionis necessary to consider whether:

a)

Purposes for which the data are being processed is validb) Such purposes can only be achieved by the processing of personaldata; and

c) Processing is proportionate to the end pursued

Does the DPA 1998 apply?a) Data subject must be a living individualb) The data must fall within the definition (s1(1) DPA 98) so consider if i ts a

relevant filing systemc) The data are personal datad) Some processing has been involvede) At least one pre-condition for processing within sch.2 is met and if its

sensitive personal data, at least one from sch.3 is met too


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f) The data are processed in accordance with the eight principles set out insch.1

Rights of data subject and others under DPA 98o The right to subject access (s.7)

Entitles a data subject to be informed by a data controller, upon request inwriting, whether any personal data are being processed, what they comprise,their purpose and to whom they have or may be disclosed to

o Right to prevent processing likely to cause damage/distress (s.10)Data subject is entitled to require, upon written notice, that a data controllercease or not commence processing if this is to cause anyone damage or harm.This right doesnt apply where any of the conditions in paras.1 -4 of sch.2 arefulfilled. The data controller must reply within 21 days

o Right to prevent processing for purposes of direct marketing (s.11)Right for any data subject to require (in writing), a data handler ceases or not begins any processing for purpose of advertising or marketing

o Rights in relation to automated decision taking (s.12)Individual is allowed to object to decisions significantly affecting the individualthat are solely based upon the automated processing of their data.

o Right to compensation (s.13)Anyone may sue a data handler as primarily or vicariously liable for breaches of the act that lead to damages or distress. It is a defence if the data handler hastaken reasonable care to comply with the act (s.13(3))

o Right to rectification, blocking, erasure and destruction (s.14)Gives court the right to order a data handler erase, block or delete data which isinaccurate or personal data which contains expressions of opinion based on

inaccurate datao Right to ask Commissioner to assess if act has been contravened (s.42)

Commissioner has discretion as to form and manner of assessment. Hell usuallyserve an information notice on the controller stating why it has been served andrequesting information. There are criminal sanctions for failure to comply withthe notice (s.47)

Exemptions Part IV DPA 98 deals with a wide range of exemptions (ss27-39 & Schs 7&8) The reason behind most exemptions is public policy

Issues of national security, crime, taxation examination marks and socialwork will often be exempt to a degree but it is rare for there to be a blanket exemption

Under s29(3), personal data are exempt from non-disclosure provisions andthe right of a subject to access where the disclosure is for the purpose of preventing/detecting crime

Under s 35(2), personal data are exempt from the non-disclosure provisionswhere the disclosure is necessary:

a) For purpose of, or in connection with any legal proceedings; orb) For the purpose of obtaining legal advice

Enforcement, offences and civil damages (p.308)


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IP rights, Logo

1. TM2. Copyright (artistic, graphic)3. Passing Off

IP rights, Name1. TM2. Passing off

Copyright 1. Would Copyright Arise?

o Originality (s1(1)(a)) Must be the authors own work and not copied.May be an original arrangement of unoriginal material

o Minimum effort Must be a certain amount of effort (eg. cant copyright

a straight lineo Recorded LDMA works must be recorded (s3(2))

2. Type?o Literary works (s3(1), including computer programs (s3(1)(b))o Artistic work (s4(2)(a) for graphics, photos etc.)

3. Duration?o For literary, dramatic and musical works its life of the author plus 70

years running from the end of the year of the authors death (s12) o 50 years from creation for computer generated work o If copyrighted work produced industrially for sale (eg. Wallpaper print)

then duration is 25 years4. Who owns it?

o Owner is the author of the work (s11(2)) BUTo If employee produces then employer owns (s11(2))

5. Rights of the owner?o The owner has the right to carry out any of the restricted acts listed in

s16(1)(a-e)o Creative author does retain certain rights known as moral rights (p.215)

6. Rights been infringed?o Any of the acts listed in s16 will constitute an infringement (copying,

publishing, performing etc.)o

Primary Infringement being responsible for the copying (s16-21) and isliable regardless of state of mindo Secondary infringement dealing with / facilitating manufacture of

infringing goods (s22-26) and is only liable if knew, or had reason tobelieve, he was dealing with infringing copies

7. Defences?o Fair dealing (s29&30) / Permitted us8. Remedies?o S96(2) provides for a range of remedies including; damages (based on

tortious compensatory measure and not against innocent infringer (s97)),injunctions and account of profits


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Database Right

A database covers information held in both paper and electronic form Database right exists where there is substantial investment in obtaining,

verifying or presenting the contents of the database (reg.13 1997regulations)

substantial investment (whether financial or human) means:a) in quality or quantity; orb) in obtaining, verifying or presenting data

Ownershipo The maker of the database is the first owner (reg.15)o The maker is the person who took the initiative in obtaining, verifying or

presenting the contents of the databaseDuration

o 15 years rom the end of the calendar year;a) of completion of the database; orb) during which database was first made available to the public (reg.17)

Infringement o Infringement is the extraction or re-utilisation of all or a substantial part

of the contents of a database without the consent of the owner (reg.16) Extraction permanent or temporary transfer of contents in whatever

form Re-utilisation making contents available to the public by any means Substantial in terms of quantity or quality or both Substantial part can include repeated low level extraction and re-

utilisation


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Law of Confidential Information Not strictly an IP right but developed through case law and the equitable

jurisdiction of the court to restrain unconscionable behaviour

Elements of confidentialityThree-point tests outlined in the Coco v AN Clark case:1. Did the information have the necessary quality of confidence about it?

o There must be a considerable degree of preliminary development so not just a vague idea. Hirst J in Fraser and others suggested the idea must:

a) Contain some element of originalityb) Be clearly identifiable (as an idea of the confider)c) Be of potential commercial attractivenessd) Be sufficiently well developed to be capable of actual realisation

2. Was the information imparted in circumstances importing an obligationof confidence?

o Unlikely in a social situation (de Maudsley / Shaw). More likely in abusiness situation, where confidentiality is expressly discussed or wherethere are accepted trade practices

3. Was there any unauthorised use of the information?o If the first two tests are satisfied was the information used commerciallyo There is no unauthorised use if the information does not have thenecessary quality of confidence about it

Remediesa) Injunction to stop wrongdoer gaining an advantage / springboard doctrine

if one business would gain an unfair advantage over othersb) Compensatory damagesc) Account of defendants profits d) Order for delivery up or destruction of the offending documents

All remedies are at the courts discretion An injunction is the most common remedy

Former employees There are different classes of information relating to confidentiality as

outlined by Guolding J in Faccenda Chicken:1. Class 1 mundane , easily obtained information thats availabl e to the

public2. Class 2 confidential information that an employee knows or ought to

know and enters the employees mind through his own stock in trade.This information may be confidential during employment but isnt upontermination

3. Class 3 Highly confidential information (trade secrets, client informationetc.). This information is protected under an implied term of

confidentiality and good faith between the parties, both during and upontermination of an employment contract


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Passing Off

Elements of passing off 1. Goodwill

o The business must have the benefit of a good name and reputationo The claimant has the burden of proving goodwill. This is a question of

fact and may involve:a) Healthy accountsb) Number & diversity of customersc) Length of trading historyd) Advertising expendituree) Evidence from customer and other traders

2. Misrepresentation leading to confusiono A false representation which deceives or confuses the claimants

customerso Market surveys and evidence from customers may be used BUT a judge islikely to determine if this point is satisfied

3. Damageo Actual or potential (lost sales / inferior product damaging reputation)

4. Defenceso Careful and honest use of defendants own name or mark o Use was not in a trade context o Claimant has o goodwill or the goodwill is owned by anothero Claimant acquiesced or encouraged useo No provable damage or loss to the claimant

5. Remedieso Injunctiono Damages (nominal if passing off was innocent)o An account of profitso An order to cover up marks or repackage


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Trade Marks

Easier to enforce than a passing off claim as no need to prove goodwill orconfusion

Public registration also means the mark is available for all to see BUT often both claims will run concurrently

Trade Mark structure1. Is the mark capable of registration?

Is the mark capable of being represented graphically and capable of being distinguished rom other undertakings (s1(1) TM Act 1994)

2. Would the mark be refused under the absolute grounds (s3)? Devoid of any distinctive character (s3(1)(b)) Is descriptive as an adjective or is geographical (s3(1)(c)) Uses customary language in a trade (s3(1)(d)) Is deceptive (s3(3)(b)) Application made in bad faith (s3(6)) Shapes can be registered but this is rare (s3(2))

3. Would the mark be refused under the relative grounds (s5)? Identical to earlier mark and the goods/services are identical (s5(1)) Identical to earlier mark for similar goods/services (s5(2)(a)) Similar to earlier mark and to be registered for same goods/services

(s5(2)(b)) Mark identical/similar to a previous mark with a strong reputation

(s5(3)) so trying to register coc-cola for a cars Will breach any law, eg. Passing off (s5(4)(a))

o Similarity of marks Court looks at the visual and conceptual similarities (Sabev BV vPuma). Confusion as to trade source is considered

o Similarity of goods/servicesBritish Sugar desert sauce NOT similar to toffee preservative. Court gave relevant factors to consider:

a) Comparison of use, user and physical nature of goods

b) Way in which the goods are soldc) Extent to which the goods are competitive

o Marigold case injunction against toilet roll named marigold. Thetoilet roll and rubber glove goods deemed similar as Marigold arguedthey may expand into this market and so they overlap


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4. Infringement

YIs mark not similar? No infringement

N

YIs the mark identical & Infringement (s10(1))the goods/services identical

N

(1) Is mark similar or identical Y(2)Has mark got a reputation in UK & Infringement (s10(3))Proposed mark makes unfairadvantage of/ Or is detrimental to thedistinctive character of the mark (See Bass v Boss guidelines below)

N

(1) Is mark identical and goods/servicesSimilar? OR

(1) is mark similar and goods/services Infringement (s10(2))similar/identical?AND

(2) Is there likelihood of confusion by public

No Infringement


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Documents

Commercial Revision