In-house news vlog – March 2015

Get to grips with the top stories for in-house lawyers with our monthly newscasts brought to you by Radius Law and LexisNexis.

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News stories covered this month...

Section 1 of 5: Data Protection & Security (tune in from 00.24)

  • Right to be forgotten

Ever since the landmark case that gave individuals the right to have Google links to information about them removed in certain instances, known as the right to be forgotten, Google has been inundated with delisting requests.

The Advisory Council to Google has now issued guidance which summarises the criteria that should be used for delisting requests. The Council has identified four sets of criteria to be used by Google when considering delisting requests. None of these four are determinative by themselves. The criteria is; the data subject's role in public life, the nature of the information - public or private interest, the source of information and motivation for publishing it and the timing and relevance of the information. The Council has also made it clear that the protection of human rights is a responsibility of the state, and in the cases where there are limitations to these rights, it is the state, rather than Google, which must make the decision.

  • Bring your own device (tune in from 01:20)

The continuing trend towards bring your own device policies, which allows employees to use their own electronic devices rather than their employers, offers many advantages, not least the possible cost savings and, as it is often something that workers request, it should help to boost employee engagement. Any implementation of a BYOD policy does require careful thought to ensure that data security risks, that will inevitably arise, are properly managed. Such as; ensuring the devices are protected against viruses and that there is appropriate encryption software to protect against data being exposed, if the device is lost or stolen. The Working Group on data protection in telecoms has now published a working paper providing guidance on the privacy and security risks that organisations must address before allowing their employees to use personal devices. The ICO also has guidance which is available on its website.  The links to these papers are available on the written version of this bulletin.

Section 2 of 5: Employment (tune in from 02:27)

  • Duty of care for travelling employees

When travelling internationally we may often feel that the transportation does not meet the same safety standards that we have come to expect as normal back at home, but what may not be so obvious is the extent of the employer’s duty to conduct risk assessments for its travelling employees.

In the recent case of Dusek and Storm Harbour Securities, where Mr Dusek was tragically killed in a helicopter crash in Peru it was held that his employer was liable, as it had failed to undertake a reasonable risk assessment.  The court found that even brief enquires by the employer would have identified that the helicopter was unsuitable, was flying a route that was inherently dangerous in bad weather, and the flight was operated by a company in financial difficulties.

For companies that have employees travelling for company business this case makes it clear that it is no longer simply a case of booking some flight tickets. A risk assessment must be undertaken which may not be a simple exercise, particularly when the travel is to destinations where health and safety regulations are not at the standards that are the norm in the UK. For further reading, see: what is the scope of an employer's duty of care?

  • Woolworths (tune in from 03:29)

As many of you will be aware the loss of Woolworths from our high street also ignited a debate over EU Collective Redundancies Directive and whether: (1) the UK Government had correctly interpreted the Directive and (2) whether the trigger for collective consultations is 20 or more redundancies within 90 days from one location or from the entity as a whole. The Employment Appeals Tribunal (EAT) decision in Woolworths’ case was that the whole entity was relevant rather than the individual stores.  However, the Advocate General of the European Court of Justice has now issued an opinion disagreeing with the EAT and noting that the aim of the directive was to protect workers where large numbers of redundancies were being made. This meant that the establishment in question had to be local employment.  We will have to wait to see if the European Court of Justice follows Advocate General’s opinion which is the norm but not obligatory.  This may take another six months and until then we are stuck with the Woolworths decision.

Section 3 of 5: Advertising (tune in from 04:33)

  • New guidance on native advertising

In the last few weeks there have been a few reminders about the need for clarity and honesty in advertising. The Internet Advertising Bureau has issued guidance on native advertising. TripAdvisor has been fined €500k by the Italian Competition authority (AGCM), for misleading advertising claims. Advertisers have been reminded by the Committee of Advertising Practice (CAP) that they need to be clear with their online marketing to children.

Native advertising is a form of online advertising that matches the form and function of the platform on which it appears. This can be in many different guises, for example it may be ads that appear alongside search results, sponsored tweets and adverts that have the look and feel of editorial content. Two of the key guidelines for native advertising formats are: (1) provide consumers with prominent visual cues, enabling them to immediately understand that they are engaging with marketing content (e.g. brand logos) and (2) it must be labelled using wording that demonstrates a commercial arrangement is in place (e.g. 'paid promotion' or 'brought to you by').

TripAdvisor may be feeling it has been harshly treated by the Italian authorities, as it was accepted that it has stringent measures to ensure that published reviews are not fake. Nevertheless the authority deemed that the checks are not sufficient to support TripAdvisor claims that the reviews on the site are true and reliable.  There is a liability exemption for hosting providers prescribed by the EU ecommerce directive, but it was held that this was not applicable to TripAdvisor because its services extend beyond just providing a platform; it also provides a ranking tool.

The activity that we have seen here, and the regular monthly list of Advertising Standard Authority actions, demonstrate that just ensuring adverts are correct is not sufficient.  Advertisers must instead consider any risks of the adverts being misleading or not completely transparent and then ensure that they plug such gaps.

Section 4 of 5: Commercial (tune in from 06:39)

  • Thorney Golf Club v Myers Catering Ltd

This case concerns a Thorney Golf Clubs right to terminate. Although a contract was not signed, there was a draft in circulation since 2009 and it was accepted that the draft represented the terms of the agreement between the parties.

Clause 4 provided 'In order for this contract to be reasonable for both parties to develop and invest in a viable business development plan an initial term of three years (with the fee reviewed annually) must be agreed…’

Clause 6 provided ‘for termination, and in particular that either party could terminate the agreement without giving reason in writing giving four months’ notice or any such period that was mutual to both parties.’

In 2010, the golf club gave notice to terminate the agreement and the following day Myers Catering Ltd ceased to provide catering services at the club. The golf club brought proceedings, claiming sums alleged to be due from Myers Catering. Myers Catering counterclaimed for damages for repudiating breach of contract.

Myers Catering argued that the agreement provided for an initial term of three years, terminable thereafter by either party on four months' notice. The golf club claimed that it was for a fixed term of three years, but terminable nonetheless at any time by four months' notice within the initial three years.

The Golf club initially triumphed at court but Myers Catering successfully appealed arguing that the judge had failed to understand what a layman would have understood from reading the terms and that 'initial term' would naturally convey to the lay person a fixed term which continued thereafter for as long as the parties might wish.

It is easy to see how both conclusions could be reached, given the ambiguous words of the contract, illustrating the importance of clear drafting to avoid costly court trials.

  • Sebry v Companies House (tune in from 08:31)

The recent High Court case of Sebry v Companies House is a case that demonstrates how cataclysmic consequences can arise from a simple administrative error.  In this case, Companies House had accidently registered Taylor and Sons Ltd as being in liquidation instead of Taylor and Son Ltd.  Before the mistake was realised the information had already been disseminated both by word of mouth, and via Companies House 'bulk products', i.e. subscription services such as Experian and Dunn & Bradstreet. As a result of the negative publicity this created, the company lost key contracts, supplier credit terms and cash advances from its bank, which quickly led to the company filing for its own administration.

It is understood that Companies House had correct checking procedures in place, but they admit they failed to follow them.  This is certainly a lesson for us all on the importance of checking the detail. For further reading, see: beware a typo might cost you millions.

Section 5: Intellectual Property

  • Fresh Trading Ltd (tune in from 09:32)

Fresh Trading Limited, which trades as Innocent Smoothies had a legal battle over the intellectual property in the logo that depicts the outline of a simple face that is topped by a halo.  The logo was designed by an external design company called Deepend Design Ltd in 1998, in return for a shareholding in Innocent Smoothies. Deepend Design Ltd went into liquidation and the shares were never allotted to it.  The rights to the logo that were owned by Deepend Design Ltd were purchased from the liquidator and transferred to a new company, Deepend Fresh Recovery Limited, which applied to invalidate Innocent’s EU Community trademark for the logo, by arguing that it owned the copyright to it.  As a result, the EU trademark action was stayed pending the determination of the UK copyright action.

The relevant piece of wording from the contract read as follows:

‘[Fresh] receive full intellectual copyright of any work, creative idea or otherwise, presented by the agency and then subsequently approved by Fresh. Work not approved by Fresh remains under the ownership of Deepend.’

There were complex arguments advanced from both sides and ultimately the court concluded that although legal title had not transferred particularly, as it had not seen any signed contract, there had been an equitable assignment of the rights in the logo to Innocent Smoothies.

Some commentators have been surprised by this decision, particularly given the fact that Deepend were never rewarded with the shares in Innocent Smoothies. What is clear is that had Deepend made some sensible precautions, most particularly ensuring the contractual terms were clear and that the payment (of shares) was made in a timely fashion, it would not have found itself in a court battle and probably would have still been trading today.  It’s also a salutary lesson for those that commission works, particularly in the early stages of their business.  The intellectual property may be of little value at that stage in the life of the business, but fast forward ten years, and as in this case, the growth of the brand and value of the intellectual property may be exponential, leaving the business owners wishing that they had got the terms and conditions sorted at the outset.

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