Recently, there has been an interesting ruling by the European Court of Justice (ECJ) on two joined cases, both relating to alleged multi-jurisdictional defamation by means of material published on the internet. The inherent conflict of the globality of the internet and the territorially limited jurisdiction of national courts was the key issue.

eDate Advertising v X

In 1993, X and his brother were sentenced by a German court to life imprisonment for murder. X was released on parole in January 2008.

eDate Advertising (established in Austria) linked from the info news section on its website to a report that named X and stated that he had lodged an appeal against his conviction. In addition to a brief description of the crime, the report also contained a quote from X’s lawyer saying that X intended to prove that several of the principal witnesses for the prosecution had not told the truth at the trial. X requested eDate Advertising to stop reporting on the matter and to refrain from any future publication. eDate Advertising did not reply but removed the disputed information from its website.

Not satisfied with this, X brought an action before the German courts to prevent eDate Advertising from using his full name when reporting about the crime. eDate Advertising argued that the German court had no jurisdiction to make any order restricting publication outside of Germany. Therefore, the court referred the matter to the ECJ to make a ruling on whether it had such jurisdiction.

Martinez v MGN

The French actor Olivier Martinez and his father brought an action before the Paris Regional court that his private life had been interfered with, following a posting on the website ‘www.sundaymirror.co.uk’, entitled ‘Kylie Minogue is back with Olivier Martinez’, with pictures and details of a meeting between Kylie and Olivier.

The action was brought against MGN, the publisher of the Sunday Mirror. MGN raised the objection that the Paris Regional court lacked jurisdiction to make any order restricting publication, as the article was in English and on a UK website. The Parisian court also referred the matter to the ECJ to rule on jurisdiction.

The ECJ found that:

Where there was an alleged infringement of personality rights by way of content placed on an internet website, the claimant could bring an action either 1) before the courts in the country where the publisher is established, or 2) before the courts where the claimant is based, or 3) before the courts of each country where the allegedly infringing content is or has been accessible online.

Conclusion

The ECJ appears to be adopting a wide interpretation in order to protect an individual’s personality rights on the internet, allowing potential claimants several options as to how they want to bring an action against any infringer. Publishers should take a more careful approach to what and how they post information. In light of this clarification, ‘forum shopping’ by claimants may become more prevalent.

On 11 October 2011 the new EU Consumer Rights Directive was formally adopted by Member States. It substantially strengthens consumer rights in all 27 EU countries, particularly when shopping online.

Here are a few of the key benefits to consumers:

1) Hidden charges and costs on the Internet will be eliminated

From now on, consumers must explicitly confirm that they understand that they have to pay a price and will be protected against hidden “cost traps” on the Internet, for example,paying for ‘free’ services, such as recipes.

2) Increased price transparency

Traders have to disclose the total cost of the product or service, as well as any extra fees. Consumers will not have to pay charges or other costs if they were not properly informed before they place an order.  This is an issue that has attracted particular focus in the budget airline market.

3) Banning pre-ticked boxes on websites

Currently, consumers often unwittingly end up with additional services on a default basis having failed to un-tick associated boxes. These pre-ticked boxes will be banned across the EU meaning that positive “buy-in” will be necessary.

4) 14 Days to change your mind on a purchase

Previously, the time period where a consumer could withdraw from a sales contract was 7 calendar days. This has been extended to 14 calendar days. The time period will also start from the moment the consumer receives the goods, as opposed to the old legislation, which was from the conclusion of the contract. In addition:

• Where a seller hasn’t clearly informed the customer about the withdrawal right, the return period will be extended to a year;
• Where a trader calls a consumer beforehand and presses the consumer to agree to a visit (solicited visit), the consumer will also enjoy the right to withdraw;
• Online auctions, such as eBay are also included (though goods bought in auctions can only be returned when bought from a professional seller); and
• The EU has introduced a model withdrawal form which can be used for any contract in the EU, making it more accessible and faster for consumers.

5) Better refund rights

Consumers must now receive their refund within 14 days of the withdrawal. This includes the costs of delivery. Also, if traders want the consumer to bear the cost of returning goods after they change their mind, they have to clearly inform consumers about that beforehand, typically in their terms and conditions, otherwise they have to pay for the return themselves. Traders must also give an estimate of the maximum costs of returning bulky goods before the purchase, so consumers can make an informed choice before deciding from whom to buy.

6) Eliminating surcharges for the use of credit cards and hotlines

Traders will not be able to charge consumers more for paying by credit card (or other means of payment) than what it actually costs the trader. Traders who operate telephone hotlines will also be unable to charge more than the basic telephone rate for the telephone calls.

7) Information on digital products

More detail will be provided, including product compatibility with hardware and software and the application of any technical protection measures, for example limiting the right for the consumers to make copies of the content.

Unified approach for businesses over Europe

The new legislation provides common rules for all businesses to ensure a similar approach in trading. These include:

• A single set of core rules for distance contracts and off-premises contracts in the European Union, creating a level playing field and reducing transaction costs for cross-border traders, especially for sales by internet; and
• Standard forms, for example one to comply with the necessary information requirements on the right of withdrawal.

The full text of the directive will be published in the Official Journal shortly. Member states will have two years from the publication in the Official Journal to implement the Directive into national legislation.

On 21 September 2011, the Senate Judiciary Subcommittee on Antitrust opened a hearing to look at the state of competition in online search engines.

The subcommittee is specifically looking at whether Google abuses its market position by fixing its search results to promote its own websites and services. Opening the hearing, the honourable Herb Kohl said “For the last five years or so, Google has been on an acquisition binge, acquiring dozens of Internet-related businesses, including, in health, finance, travel, and product comparison. This has transformed Google from a mere search engine into a major Internet conglomerate. And these acquisitions raise a very fundamental question – is it possible for Google to be both an unbiased search engine and at the same time own a vast portfolio of web-based products and services? Does Google’s transformation create an inherent conflict of interest which threatens to stifle competition?”

In response to the concerns raised, The executive chairman of Google, Eric Schmidt, who gave evidence before the subcommittee on 21^st September, said “I can assure you we’re not cooking anything…..Google does nothing to block access to any of the competitors and other sources of information.”

When asked by the subcommittee whether Google was a monopoly company, Mr Schmidt said the search engine giant was “in that area“, adding that it recognised it had a special responsibility because of its position.

The US Federal Trade Commission (FTC) is also investigating the same competition issue and the New York Times reported that FTC officials privately debated this month whether to allow the agency’s Bureau of Competitions to issue subpoenas to Google, and the FTC is now close to moving forward with handing out the court orders. The Financial Times reportedly said that attorneys-general in California, New York and Ohio have also launched antitrust investigations into Google. US law dictates that for any breach to have occurred, an actual detriment to customers must be identified.

Closer to home, Google is also subject to an investigation by the European Commission, launched in November 2010. This followed various complaints by other search engines and companies, most notably Microsoft, all of whom allege that Google gives unfavourable treatment to their services in unpaid and sponsored search results, coupled with an alleged preferential placement of Google’s own services.

Google offers two types of search result – unpaid results that are displayed in the main body of the page and “ads” (previously called sponsored links).

The investigation will try to determine whether Google’s method of generating unpaid results adversely affects the ranking of other organisations, specifically specialist search providers, such as price comparison sites. Google argues that these sites are ranked poorly because the websites duplicate information from other sites.

Finally, the investigation is also probing how Google deals with advertising partners. It has been alleged that Google imposes exclusivity obligations on advertising partners, which Google has refuted.

Whereas an offence is only committed in the US if the authorities can establish that there has been a detriment to consumers, there is no such requirement in EU law. The European Commission will need to examine Google’s actual search algorithm and email trail to determine whether EU laws have been followed. If a breach of EU law has been committed, the European Commission can fine a company up to 10% of its annual global turnover.

A recent Court of Appeal (CA) ruling has highlighted the importance of assignees/licensees of patents registering their interests with the Intellectual Property Office (IPO) without delay.

The patents concerned, held by the claimant, Schütz, were for a bulk container for liquids that contained a flexible bottle in a metal cage. The defendant, Werit, had used the product and replaced damaged or worn bottles with bottles that it had developed. The bottles were then sold in the original caging.

The Court of Appeal overturned the High Court’s ruling and held that the patented product should be considered as a whole, and the cage and the bottle as component parts. By putting a new bottle into the cage, Werit was effectively completing the patented product. In doing so without a licence, Werit had infringed Schütz’s patent.

However, Schütz’s patent licence was granted in 1994 and not registered until 2008. Section 68 of the Patents Act 1977, as amended in 2006, provides that “…the court…shall not award [the claimant] costs or expense unless…the transaction, instrument or event is registered within the period of six months beginning with its date…”. Nonetheless, the CA decided it would not be unfair for Schütz to recover costs for the period after it had registered its licence as it had ‘put its house in order’.

All assignees or licensees of patents must protect their interest by registering it with the IPO. This ensures potential third party purchasers are put on notice of the interest and will protect a costs claim in the event of patent infringement.

(Case: Schutz (UK) Ltd v Werit UK Ltd and another [2011] EWCA Civ 927, 2011)

The High Court has ordered BT to block access to Newzbin2, an illegal filesharing site. The original Newzbin site was shut down following a successful action for copyright infringement. However, it appears the operators simply upped anchor and moved offshore, beyond the reach of the UK courts, and set up Newzbin2, an almost identical website located at the same URL. So now the industry has set its sights on the ISPs.

The successful test case against BT was brought jointly by 20^th Century Fox, Universal, Warner Bros, Paramount, Disney and Columbia Pictures, all members of the Motion Picture Association (MPA). The landmark ruling has generated headlines, debate and trended on Twitter. However, the blocking technology won’t be finalised until October. Ironically, the movie industry bosses have ensured that now more people than ever know about the notorious Newzbin site and they have three months to plunder and pillage the site’s content.

This is clearly not the silver bullet in the fight against online copyright infringement. Blocking sites via ISPs naively underestimates the ability of the internet to evolve and circumvent restrictions. It also raises questions of censorship, initiated by deep-pocketed Hollywood moguls protecting their commercial interests.

Perhaps, rather than suing every variant of every website and cutting off one head to watch two grow back, the industry should listen to its customer base. The music industry is getting the hang of legal downloads, why not TV and movies?