An article on the website of ZD Net UK, published: 27 November 2009 18:03 GMT, caught my interest. So according to this article a pub owner was allegedly fined because a user had downloaded copyright material without the consent of the copyright holder over the Wi-Fi facility provided by the pub owner. My initial reaction was that this article could not be accurate. How can you be liable for providing a Wi-Fi Hotspot? You cannot be expected to monitor users. However this initial reaction needs to be considered rather more carefully. Although the provider of the open Wi-Fi Hotspot did not itself download the copyright material, by making access to the Internet available to the public, to my mind, it is arguable that they are contributory infringers. What if such illegal downloads happened on several occasions from the same Wi-Fi Hotspot? Under the existing harmonized European copyright laws, a copyright owner has the exclusive right to authorize or to prohibit the communication of copyright protected work over the Internet. The work does not have to be accessed it is enough that it is made available to the public. It is arguable that by providing an open Wi-Fi Hotspot to the public, it is implied that the provider is accepting some responsibility for how it is used. This is quite a common postulation in civil law.
By coincidence the Digital Economy Bill is currently going through the Upper House. The bill proposes to allow ISPs to eventually shut down user’s accounts after several notifications about illegal downloads of copyright material. The user has to be “suspected” of downloading copyright material without consent. If you are a business that provides a Wi-Fi Hotspot, you may be exempt as a public communications service, but this is not certain from the bill so far.
Also relevant is the Data Retention (EC Directive) Regulation 2009 which came into force 6 April 2009. The regulation implements Directive 2006/24/EC (“The Data Retention Directive”) of the European Parliament and of the Council of 15 March 2006. The Regulation requires ISPs to retain details of users’ internet access, email and Internet telephony for 12 months. ISPs must also be able to respond to access requests by law enforcement and other designated authorities. The details of UK citizens communications to be retained include IP addresses; log in and log off times; the sender; recipient; date and time of emails and other information to identify users. The public communications service will not have to retain this information unless they receive former prior notification to do so.
If you are a business providing Wi-Fi Hotspot it would be worthwhile taking proactive action to stop illegal downloading of copyright material. Some of the actions I suggest include the following. You may wish to block all known illegal P2P websites. You can make sure users accept a policy that prohibits them from downloading copyright material illegally in your Hotspot. None of these actions will guarantee that a user will not use your Wi-Fi Hotspot for downloading copyright material illegally, but you will minimise your own exposure to liability if a user should do so.
Internet Inteligence You Can Use
London, UK – August 06 2009 – In order to protect your intellectual property in today’s world, it is best to use a combination of experienced legal specialism and technical expertise. This is why Peter Adediran Internet Lawyers is partnering with Envisional.
Envisional complements Peter Adediran’s firm’s legal skills with the technical expertise to ensure successful solutions for obtaining evidence and monitoring ongoing intellectual property infringement.
“We are delighted to be partnering with Peter Adediran Internet lawyers,” said Andy Churley, head of products at Envisional “many small and medium sized businesses rely on the internet to promote their brand and sell their products and services. These sorts of businesses are particularly prone to intellectual property infringements; being able to call on recognised specialists in internet monitoring and internet law provides SMEs a powerful weapon with which to protect their business.”
“I am very pleased to be associated with Envisional a leading pioneer in making the Web a safer place to do business. ‘Look before you leap’ that is your greatest asset in fighting intellectual property infringement and Envisional has the tools that I need to give my clients the best advice” Peter Adediran
About Peter Adediran Internet Lawyers
Peter Adediran Internet Lawyers is a leading Internet-focused firm of solicitors regulated by the Solicitors Regulation Authority. Based in London’s docklands, Peter Adediran’s clients include small to medium sized businesses, entrepreneurs and creative individuals. The practice focuses exclusively on matters of Internet law, providing its clients with specialized attention and problem solving skills in trademark, domain name and copyright protection.
About Envisional
Established in 1999, Envisional Ltd is a leading provider of services which protect companies from online brand abuse and reduce reputational risk. Tackling issues such as: domain name infringements, logo & trademark abuse, phishing, cyber-squatting, brand larceny, counterfeiting, claims of association, negative commentary, media piracy and fraud detection, Envisional is at the forefront of brand protection. Envisional is part of London-listed Group NBT plc (LSE: NBT.).
Group NBT plc is a leading provider of domain-name management and Internet-related services through the six trading brands, NetNames, NetBenefit, Easily.co.uk, Speednames, Ascio and Envisional. Group NBT has over 300 employees and is headquartered in London, with offices in Copenhagen, New York, Nice, and Munich.
For further information about Envisional or Group NBT please visit www.envisional.com or www.groupnbt.com
All company or products names used in this communication are for identification purposes only. All trademarks and registered trademarks are the property of their respective owners.
In the United States freedom of speech is protected by the First Amendment to the United States Constitution and by many state constitutions and state and federal laws.
It is not surprising that in the United States the burden of proof for defamation is on the Claimant to prove that what was written or said was false. In the United Kingdom the burden of proof is on the Defendant to prove that what was said or written about the Claimant was true. The contrast in where the burden of proof lies between the two countries is just one of the ways in which you can see how different countries balance out freedom of speech and defamation. This difference has led to individuals forum shopping in different jurisdictions for the most Claimant friendly jurisdiction to bring an action for defamation a phenomenon called “libel tourism”.
The Internet has blown the realm of defamation wide open with instant access, this fact, coupled with broad principles of UK jurisdiction has helped London become the most popular tourist destination for online defamation claims. Ever since the old case of Duke of Brunswick v. Harmer in 1849 which established the multiple publication rule, UK courts have repeatedly held that even where the defendant’s publication is distributed mainly in another jurisdiction, as long as it is downloaded by a number of readers in the UK then that is enough to constitute a separate actionable publication in the UK.
It is also worth noting that even if the publication has been on the Internet for over a year. The publication starts running again from the next time it is downloaded.
Take for example the Ukrainian businessman and legislator Rinat Akhmetov who brought 2 proceedings in the High Court of Justice, Queen’s Bench Division in London. In one of the cases, Akhmetov secured a quick apology and a settlement. The other claim was against the internet publication OBOZREVATEL. According to reports Mr Akhmetov won a default judgment of £50,000.00 against this website which only published in Ukranian.
In Berezovsky v Forbes, Russian Oligarch Boris Berezovsky sued American publisher Forbes over accusations of corruption in a magazine article in the UK Mr Berezovsky could do so since there were readers who had downloaded the material in the UK and he had a reputation in the UK. The UK courts do not always take the view that UK has jurisdiction in all such cases. In the case of Dow Jones & Co Inc v. Jameel. A claim for libel was brought against the Wall Street Journal OnLine article report that alleged that financial support had been provided by Saudis to Al-Qaeda, which hyperlinked to a list of alleged donors to Al-Qaeda including the name of Mr Jameel. As only five people had downloaded the article in the UK the Court of Appeal dismissed the claim for negligible publication as an abuse of process.
Even if a Claimant is successful in bringing a claim in the UK for defamation relating predominantly in another jurisdiction, it is not clear whether such UK judgments would be enforceable in any other country, so it is worth checking that the defendants have sufficient assets in the UK to enforce judgment before bringing a claim.
Online Social Networking
We are in the Facebook, My Space and You Tube era. Over 150 million people are logged in to Facebook and businesses need to be where their customers are. The web and Internet has gone back to what it does best which is to facilitate communication. However along with the benefits of a map of every person on the internet and how they are connected come some major legal challenges.
Successful adoption of online social networking for enterprises requires careful planning and execution. The key risk areas of Web 2.0 and online social networking are:
the technical aspects of the web such as Web 2.0 server software; content syndication; messaging protocols; standards oriented browsers; and plugins & extensions all have intellectual property infringement, invasion of privacy and trespass implications.
Safeguarding intellectual property against competitive and malicious threats is another key risk area. As always there is the issue of who owns the rights to content on the internet? What is the scope of the doctrine of fair dealing in respect of the content in the Web 2.0 context?
The concept of putting bad feelings behind you and starting again is fraught with difficulty on the internet. As recent cases have shown, although a web server is supposed to contain a permanent trace of internet activity and search engines are supposed to be trail markers on the web it is surprising how information just seems to be inaccessible. What obligations do website owners have to their users or to law enforcement officers to retain such data?
Are applications really free on social network sites? Ofcourse applications on social networks are not free because businesses pay to advertise on the applications. Social networks allow for hypertargeting of advertisements to very specific criteria because of the information social networking members elect to share on their profiles. What implications does this have for privacy?
Finally there is the increasing pest of malicious anonymous postings in discussion groups damaging reputations that have taken years to build. How do you limit your legal exposure if someone is using your website in this way? How do you verify user’s identities? How do you restrict libellous content on your website or respond to harmed parties?
On the 2nd July 2009 from 9:30 am to 11:00 am the writer will give a presentation on how to overcome the legal challenges set out above at Barclays Plc, Head Office, Level 30 1 Churchill Place, Canary Wharf E14 5HP. There will be 2 other expert speakers at the event.
Attendance is by invitation only. If you are reading this posting and wish to attend, please let us know by sending a request for an invitation to peter@peteradediran.com.
Anyone who has ever had to deal with issues of jurisdiction or evidence gathering in an Internet related law suit will know what I am talking about when I say these issues have there challenges for lawyers.
The case of Al Amoudi v. Brisard and another [2006] EWHC 1062 (QB) in the High Court Queens Bench Division is a good example of a lawsuit that involved the issues of jurisdiction and evidence relating to the Internet.
On 9 December 2004, claimant Mr Mohammed Hussein Al Amoudi made a libel claim against the defendants M Jean-Charles Brisard and JCB Consulting International SARL with respect to two articles prepared by the 1st defendant M Brisard and posted on the website of the 2nd defendant JCB Consulting International, access to which is available commonly. At the heart of Mr Al Amoudi’s claim was the assertion that there was a rebuttable presumption of law that an article placed on an Internet website that is open to general access has been published to a substantial number of people within the jurisdiction. In their Defence the defendants denied that there had been any such substantial publication of the words complained of, in other words, that there was no such presumption of substantial publication merely by the offending content being made available to the public through the website in the jurisdiction. Mr Al Amoudi’s lawyers were convinced that the defendants had no real prospect of defending the issue at trial and applied for summary judgment regarding those aspects of the defence which contest that publication had taken place “within the jurisdiction”.
The application for summary judgment failed and Gray J handed down judgment refusing the request to remove the statement in the defence denying substantial publication.
In summary the arguments in favour of Mr Al Amoudi were as follows:
1. That serious charges relating to international terrorism are involved and that the items published were made available to a “substantial” quantity of readers in the UK jurisdiction.
2. While there is no precedent supporting that the rule for newspaper and book publication may be applied to Internet posting, the generally recognized practice is that where the publication in question is addressed to the world in general, the claimant is not required to prove publication to individuals.
3. The English court has already evaluated damages in connection to another publication by this defendant on the same website.
Argument in favour of M Brissard and JCB Consulting
1. That the claimant only relies on the presumption of damage and that he has chosen not to sue the defendant in the US, Saudi Arabia or Switzerland, calling for a more cautious approach by the court.
2. That it is a misconception under English law to presume that because an item is available on the internet a substantial amount of readers have gained access to it.
3. It can be claimed that publication over the Internet has taken place if and only if the material is accessed and downloaded by a third party within the jurisdiction; and only at trial can the claimant assert that a jury would be perverse not to draw such inference.
4. That the issue of the extent of publication of the two items should be left to the jury to decide on the evidence.
Conclusion
A dispute existed between the two parties as to the difference between a presumption and an inference that the words of the items published on the internet were made available to a “substantial but unquantifiable” amount of readers in the UK jurisdiction. For many reasons, the court held that it cannot be immediately accepted under English law that a claimant may rely on a presumption of law that a substantial publication has taken place merely because an item has been published on the Internet. However at trial, the jury after the exchange of witness statements may infer that there was substantial publication of the said items within the jurisdiction. It is also important to note that It can be claimed that publication over the Internet has taken place if and only if the material is accessed and downloaded by a third party within the jurisdiction. So if you think that you might be in an Internet dispute you need to make sure you get the evidence at the time of the offending behavior. The more evidence you can gather and store safely the stronger your case will be when you eventually end up in court.
As is well known, Mark Zuckerburg’s Facebook was being sued by Connect U in 2007 who claimed that Zuckerburg was commissioned to write the code for their Harvard Connection Project but instead had stolen their ideas to set up Facebook.
The accusations were for fraud, copyright infringement and misappropriation of trade secrets. According to the Reporter, Facebook settled out of court for $65 million in a part cash part shares pay out announced in April 2008. This high profile case is a good illustration of a very common occurrence between developers and clients.
The problem of who owns what does not seem an important one until suddenly your concept is valued at $15 billion. It should be important to you from the outset. When commissioning developers ownership of the intellectual property rights in the end product should be very specific. The developer will be writing the code using its tools, software and business methods. It may also be using third party software.
So the developer may use its own methodologies, source code, object code, know how, trade secrets or inventions (whether or not patentable). The client may not be entitled to the creative development process behind the developers work. The client will be entitled or should be entitled to the end-product. The client may be entitled to the object code underlying the creative work.
There is also the issue of the scrip code being secure enough to withstand the numerous attacks of hackers. The time where you simply put up a sleek looking website and start trading is past you now need to consider the issues involved more carefully.
If you have heard of Gary Cooper the 16 year old teen prodigy, then you may know that his online shop GC´s PC´s is under investigation by the trading standards.
In general misleading claims on companies websites should be reported to your local trading standards department (www.tradingstandards.gov.uk). Advertisements on websites such as banner ads and pop ups, special offers, prize draws and competitions are the ambit of the Advertising Standards Authority. Where the ASA do not have authority they can pass your complaint on to the Office of Fair Trading or to Ofcom whichever is more appropriate.
A number of complaints and claims were made against Mr Cooper alleging inter alia false and or misleading advertisements; unauthorised charges; and breaches of the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982. According to Computer Active issue 287 Mr Coopers “terms and conditions on his webiste are contradictory muddled and in parts breach consumer statutory law”.
Sadly on a cursory look at a muber of companies websites Mr Cooper´s terms and conditions are certainly not the exception. You may feel that a condition is unnecessary or expensive to implement but the point in fact is that non-complaince with the law could cost you a lot more in the long term and may even cost you your business. Courts will often not enforce onerous and muddled terms. Also consumers are increasingly savvy about what their rights are.
The laws you should consider in preparing your terms and conditions should include: The Consumer Protection (Distance Selling) Regulations 2000; The Electronic Commerce (EC Directive) Regulations 2002; and the The Privacy and Electronic Communications (EC Directive) Regulations 2003. Not taking laws relating to web business seriously may become a pain in your terms and conditions, as it is alleged has happened to Mr Cooper.
HMV Oxford Street London - Get Closer
Long time running music retail specialist chain HMV has been under new management with the appointing of Simon Fox since 2006.
Fox, who after having a couple years to review the company’s progress, is finally reacting to the declining profit margin and declining retail sales of recorded music that have caused the company such turmoil in recent years.
With the direction of their new more ‘visionary leader’, HMV has made several other changes. HMV has made an attempt to re-brand themselves as an ‘entertainment retailers’, general retailers of everything and anything entertainment. And they claim it is working, boasting a turnover increase for HMV UK and Ireland of nearly £150 million in 2008 (HMV Group, 2008). Gennaro Castaldo, Head of PR for HMV admits “during 90’s which kind of coincided with our growth as a company we probably focused to much on commercial side and we didn’t sort of put enough care and attention in the HMV brand and how we thought to actually engage with our customers and we recognise that partly through necessity as much as anything else. We have to find another way to engage with our customers” (Castaldo, 2008).
In the autumn of 2007, HMV also trialled new ‘concept stores’ in rural shopping malls in the United Kingdom such as Dudley in the Midlands, suggesting that at last they have realised what other high street retailers and music retail independents have about ‘experiential retail’.
HMV claims all product lines in the trial outperformed the rest of their stores and HMV now has plans to open more concept store. The stores offer an aesthetically appealing environment and invite consumers to come in and interact with video screens and gaming trials. On the media side of things, consumers will come into store and to interact in their hands on computer zone to ‘social network’ in store, buy online and order online. By offering in-store online ordering HMV mentions that they reduce their catalogue offering and prevent obsolete stocking issues (Castaldo, 2008). They have also developed a new re-branding strategy with their marketing campaign titled ‘get closer’ with quotes and lyrics from famous musicians and movies (Castaldo, 2008).
But exactly how does the campaign, or the experiential store for that matter, get consumers any closer to the music, movies or games that they love? Is the notion of coming in-store to sit at a computer and do what they can do from the comfort of their own homes appealing to consumers? Is this a wow factor move for HMV or is it a realistic viable business solution?
The recorded music industry in the United Kingdom and worldwide has been hit hard by the decrease in trade value of recorded music over the past few years, which fell by 13.37% in 2007 alone, falling below ₤1 billion for the very first time since the 1990s. This downward trend represents an industry entering into the decline phase of the product/business life cycle (Hill and Jones, 2004).
In conjunction with this decline, or arguably one of the culprits of this decline, are music retailers, sellers of recorded music, who have seen a decline in music retail sales of 14.5% in the last year. For physical music retailers, in particular physical music specialist chains, who have held the majority of sales and market share for recorded music since their inception in the 1920s, this is a major affliction to their business. While the facts would suggest that music consumption is declining, this may not be the case.
Music consumers in today’s economy of abundance are consuming more music than ever before and accessing music across a multitude of platforms, including live, physical recorded, digital recorded, peer-to-peer, streaming, music videos, music in games, and many more (Jennings, 2007). It is estimated that in 2006, consumer spending on entertainment in the United Kingdom was 17% of all disposable income and rising, which is more than the amount spent on housing and food (Howkins, 2007). Unlike, digital sales for music, the majority of physical sales, 60.2% for 2007, are made by older buyers over the age of 35, and of this 60.2%, 41.2% of this physical consumption is made by women, suggesting a completely different target market for physical music consumers than in the past (predominantly male, under the age of 20) (BPI, 2008).
Not only is recorded music sales still a major revenue stream to tap into for the music industry, but the opportunity for physical retailers is an undeniable one. Physical music sales still represent over 90% of album sales (BPI, 2008). Sales for the seven-inch format vinyl rose to over one million last year, up from 201,380 in 2000 representing a revival in popularity for this format amongst consumers (Kearns, 2008). And while digital is a growing area and one that must concentrated on in order to offer customers multi-channel options, digital retail sales in the United Kingdom still only represents ₤145 million in retail value, which is only 10.2% of the total music retail value. Physical sales still hold over 85.2% of sales with a retail value of over ₤1.2 billion (IFPI, 2007). The same goes for digital sales world-wide. Digital sales account for an estimated 15% of the global music market (IFPI, 2008). In the United States similar evidence would support this notion of physical consumption still existing in an ever present way on a global scale. Josh Groban (a vocal pop singer appealing to exactly the demographic of the HMV consumer, +35 and female) released the album ‘Noel’, which sold over 3.7 million units, 97% of which were bought in the form of a physical album (Christman, 2008). In addition, the sale of music is still largely a retail environment that invites purchases for gifting; making physical music an attractive buy for consumers (one can not very well wrap up an MP3 file). HMV admits that gift buying accounts for 50% to 60% of physical stock in HMV stores (Castaldo, 2008). And from a self conducted survey on Oxford Street, 36 out of 40 respondents said they still buy music in a physical form. The United Kingdom is at a particular advantage to this interest in music as well, considering British artists accounted for 51.9% of albums sold in the UK in 2007 (BPI, 2008), representing the strength of the British music scene and an opportunity for music retail in the United Kingdom to take notice.
