easyDispute over trade mark

July 21, 2010 by John H Leave a Comment

My colleague Ed Weeks (on his Boardroom Disputes blog) has written a number of times over the past couple of years on the dispute between Sir Stelios Haji-Ioannou and the easyJet board.

This dispute has now developed an intellectual property angle, with Sir Stelios threatening to terminate the airline’s licence to use the “easyJet” trade mark. The trade mark is owned by Sir Stelios’ company easyGroup IP Licensing Limited, and is licensed to easyJet Airline Company Limited under an agreement which Sir Stelios is now threatening to terminate.

easyGroup has issued a “cure notice” to easyJet threatening to terminate the licence agreement unless there is an improvement in easyJet’s punctuality record within the next 90 days. This follows newspaper reports that fewer than 50 per cent of easyJet flights from Gatwick were on time in June.

Should easyGroup proceed to terminate easyJet’s licence, the result would undoubtedly be a huge court battle, given the importance of the easyJet name for the airline. I doubt that the licence agreement contains an express right to terminate for poor punctuality performance: presumably easyGroup are relying on more general obligations, as typically found in trade mark licences, for the licensee to provide services under the licensed mark to a high standard and not to bring the trade mark (or its owners) into disrepute.

Given the risks to both sides of this course of action, I would be very surprised if the licence were terminated. More likely this is being used by Sir Stelios as leverage in his long-running battles with the easyJet board.

Sir Stelios’ ire has no doubt only been increased by the way in which his own personal name and image have been dragged into the controversy over easyJet’s punctuality (and its reluctance to release its performance figures) by easyJet’s main competitor, Ryanair. Ryanair apologised for its ads referring to him as “easy Jet’s Mr Late Again”, but its newspaper ads printing this apology provided another opportunity for it to take a dig at easyJet.

As a final observation, I notice that the Telegraph news item refers to Sir Stelios threatening to remove “the easy brand name”. easyGroup – which owns a large number of trade marks which include “easy” as a prefix – has made a number of attempts over the years to claim the name “easy” itself as a trade mark, without success. I wonder if easyGroup have taken the opportunity themselves to provide a small boost for their claim to “easy” as a brand name.

Filed under Intellectual Property Rights Tagged with , , , ,

“I have read, understood and agree to… unfair treatment?”

July 9, 2010 by John H Leave a Comment

Go to almost any website selling goods or services online, and at some point in the transaction process you are likely to find a statement along the following lines:

I confirm that I have read, understood and agree to the terms and conditions [link].

The FSA has released a guidance note (PDF) stating that, in their view, this declaration is “unfair” under the Unfair Terms in Consumer Contracts Regulations 1999 (“Unfair Terms Regulations”). As the FSA put it:

Firms should draft contracts in plain and intelligible language and must also give consumers a proper opportunity to read all the terms of the contract. Consumers should check the details of the contracts they enter into. But a contract term requiring consumers to declare that they have read and understood the terms of the contract is likely to be unfair because it binds customers to terms which, in practice, they may not have any real awareness of.

While this guidance relates specifically to financial services, it is consistent with the OFT’s guidance on consumer contracts generally. Online sellers, especially those dealing with consumers rather than business customers, should therefore consider wording along the lines of the FSA’s proposed alternative for such declarations. For an online seller this might read:

These are our standard terms and conditions [link] upon which we intend to rely. For your own benefit and protection you should read these terms carefully before signing them. If you do not understand any point please ask for further information.

Sellers should also ensure that they review their online consumer contracts carefully to ensure the terms themselves comply with the Unfair Terms Regulations. To assist in this, the OFT has produced a number of guidance documents. These include their Unfair Contract Terms Guidance (PDF) and its annexes giving specific examples of unfair terms (PDF), as well as specific guidance for a number of sectors.

Filed under Contracts and T&Cs Tagged with , , ,

Competition closed?

February 23, 2010 by John Halton 3 Comments

Apple has upset the developers (and users) of thousands of adult-themed apps, which it has pulled from its iPhone app store in the past few days.

One developer accused Apple of “experimenting with our livelihoods” and said the iPhone ecosystem was being “run by puritans”. However, Apple argued that it had received thousands of complaints from customers, in particular women and parents, objecting to material such as “Wobble” – an app which displayed pictures of women’s breasts.

This story demonstrates the effects of one of the growing trends in computing over the past couple of years: the adoption of closed platforms for mobile computing. Apple has led the way in this, but other platforms – such as Moblin, Android and Nokia’s Ovi store – are now encouraging (or even requiring) users to obtain their software from official app stores.

The point is not whether those who control these platforms are puritans or libertarians: rather, it is that (unlike “traditional” open computing systems) the applications which users can install and run on their devices are under that control in the first place. This is a significant change in computing practice, and the rows such as that over adult iPhone apps may be what propels this from being a “geek” issue to one of wider concern. (What happens when China, say, requires Apple to block politically-unacceptable apps?)

I wonder also how long it will be before someone brings a challenge against Apple and other gatekeepers under competition law. In the context of UK and EU competition law, there would seem a good case for saying that Apple has a “dominant market position” in the iPhone apps market – after all, setting aside “jailbroken” iPhones, its app store has a 100% market share for iPhone apps.

Developers finding themselves locked out of the iPhone app store may well consider Apple to be abusing that dominant position, in breach of competition law – especially given the rather different treatment of apps for “established” adult entertainment brands, such as Playboy, whose own app apparently remains available.

It would be interesting if the European Commission ended up forcing Apple (and others) to open up their platforms – though perhaps the market will take care of it in the meantime, as platform owners decide the risks of relaxing their grip on their devices are outweighed by the consequences of having to get involved in controversies such as that over Wobble and its fellow apps.

Filed under Competition Law, Legal Issues Tagged with , , , ,

Google’s “superphone”: who’s in control?

January 11, 2010 by John Halton 1 Comment

The Google Nexus One “superphone” has been attracting a great deal of media coverage since its launch last week – though the coverage has turned sour for Google today, with widespread reports of customer dissatisfaction as early adopters receive their new purchases.

Most complaints relate to technical problems (such as getting the phone connected to a 3G network) or to the availability (or otherwise) of discounted deals. A further layer of “meta-complaints” then quickly sprang up as people expressed their dissatisfaction with how Google had handled their original complaints. However, the complaint that caught my eye was the seemingly more minor one of the 190 MB limit on installed applications.

The Nexus One’s storage capacity can be expanded to 32 GB using a Micro SD card. However, at present applications have to be installed on the phone’s internal memory of 512 MB. In practice the amount of space available is reported at only 190 MB. Google explained at the Nexus One launch event that this is to “protect [software developers] from piracy”, and that they are working on other means to achieve this through encryption.

The point is that it is Google that has imposed this restriction, not the customer who buys the device. If I buy a netbook – a concept seen by some as threatened by the rise of the smartphone – I can install any software I like on it and use the hardware as I choose. (Indeed, the netbook on which I’m typing this has an entirely different operating system from the one with which it was supplied). If I buy a smartphone, I’m subject to whatever restrictions the manufacturer and/or network operator decide to impose on it (a point made eloquently by Jeff Atwood in this post).

This highlights a wider problem as we move into an era of mobile technology and cloud computing: who’s in control? As computers move into our pockets and our software and data move out into the cloud, we gain a great deal in convenience, but we may be losing out on control. At the very least, we need to make sure we understand the trade-offs we’re making, whether as individuals or businesses.

Filed under Mobile Computing, Technology Tagged with , , ,

Google Dashboard: full disclosure?

November 5, 2009 by John Halton Leave a Comment

This morning, Google has launched Google Dashboard, a “privacy dashboard” intended to help users see what information Google holds about them across its various services.

Google is able to track a huge proportion of its account-holders’ online activities. Google has my personal emails (27,473 conversations since 2004), my personal contacts’ details, a full history of my web searches and of much of my web browsing. It knows what videos I’ve watched on YouTube, and what RSS feeds I’ve read through Google Reader.

It’s useful to have this summary of the different ways in which Google knows about us. That said, does this really tell us what Google knows? As any company in the data management business can confirm, the power of personal data comes not from the raw information, but from the ability to analyse that information in order to identify patterns of behaviour and so on.

So a criticism that could be made of Google Dashboard is that it is an example of “informing to conceal”. We are given apparently comprehensive details of the information Google possesses about us. But the real privacy concerns – not to mention the commercial value to Google of the information – comes from what they are able to deduce about us from this information: and that, not surprisingly, they are keeping to themselves.

Filed under Data Protection, Privacy and Security Tagged with , ,

The cost of online privacy

November 4, 2009 by John Halton Leave a Comment

The European Commission is taking an increasingly interventionist approach towards internet regulation, particularly as regards individuals’ privacy rights. Earlier this week, the Commission announced that it was taking further steps to require the UK to fully implement EU laws on the interception of communications, while legislation currently working through the European parliament will require all websites using cookies to obtain express permission from users. These measures are particularly aimed at the restriction of “behavioural advertising” (also the subject of an OFT investigation).

In each case, the Commission claims (with some justification) to be acting in response to citizens’ concerns about their fundamental privacy rights. However, this may be a case where European citizens should have taken the old advice to “be careful what you wish for”.

It is unlikely that many people will shed tears over the fate of the Phorm “Webwise” system, which proposed to monitor web users’ activities in order to serve up advertisements matching their interests. The controversy over whether the system was legal under UK law led to the Commission’s investigation into the UK’s implementation of EU laws on the interception of communications, in particular the Regulation of Investigatory Powers Act 2000 (RIPA). The Commission has three complaints concerning RIPA:

  • the lack of an “independent national authority to supervise interception of communications”;
  • the permitting of interceptions where the interceptor has “reasonable grounds for believing” that consent to do so has been given, where EU rules require “freely given, specific and informed” consent;
  • restriction of prohibitions and sanctions for unlawful interception only to “intentional” interception only, whereas the EU law requires member states to impose liability even for unintentional interception.

If UK law has to be tightened, especially on the second and third items, this will have a considerable impact on many businesses, not just those involved in online advertising.

The proposed new law on cookies could have an even bigger impact on online advertising and the surfing experience of European web users. Current EU law requires websites to offer visitors the “right to refuse” cookies. The UK has interpreted this quite broadly, with the Information Commissioner’s guidance (PDF) taking a pragmatic approach in which it was sufficient for companies to inform users in their privacy policies and leave it to individuals to block cookies using their browser settings.

The proposed change is intended to “clarify” the original law by requiring express consent from users before a website places a cookie on their computer. It has been suggested that this will mean websites have to show a pop-up to users entering the site, explaining what cookies are used (and for what purpose) and requesting consent. As many users hate pop-ups even more than they hate online advertisements, this is likely to have a significant adverse impact on many people’s web experience, and put EU-based websites at a disadvantage compared with their international competitors.

In addition, increased refusal of cookies will make online advertising more difficult and less profitable, which will increase the pressure on websites to charge users for accessing content. Again, one wonders whether many people would prefer the current trade-off between privacy rights and availability of “free” content over a web in which they encounter pop-ups and paywalls at every turn.

The Guardian’s recent supplement on the fortieth anniversary of the internet recalled an early (1994) description of the web as a place “where pornographers and Nazis walk freely, where criminals roam unchecked and where anarchy reigns”. These developments are another reminder of how far we have come from the Wild West days of the early, unregulated web. The web is now a highly-regulated environment: it remains to be seen whether it can retain its other benefits as the effects of this regulation become more apparent.

Filed under Behavioural Advertising & Cookies Tagged with , , , , ,

“Independently safeguarding” children’s websites

September 11, 2009 by John Halton Leave a Comment

The new Independent Safeguarding Authority is attracting a lot of media coverage today, with news stories focusing in particular on compulsory registration for those regularly giving children lifts to social/sports clubs.

However, those operating websites (and other “interactive communication services”) for children should be aware that their activities may also fall within the ISA’s remit when the new regime becomes fully operational in just over a year’s time. The Safeguarding Vulnerable Children Act 2006 (PDF) defines the “regulated activities relating to children” for which ISA-registration is required. These include:

moderating a public electronic interactive communication service which is likely to be used wholly or mainly by children

(see paragraph 2(1) of Part 1 of Schedule 4, on p.67 of the linked PDF).

So if you are operating a website for children, anyone involved in “moderating” that site will need to be registered with the ISA. “Moderating” involves any function relating to:

  • monitoring content;
  • removing or blocking content; or
  • controlling access to, or use of, the service,

for the purposes of protecting children, where individual concerned either has access to the content involved or contact with users of the service (see paras 2(4) and 2(5), Sch.4 Part 1).

Equivalent provisions apply to those operating websites and other interactive services for vulnerable adults.

Employers who engage people who are not ISA-registered, or who are recorded by the ISA as being barred from working with children or vulnerable adults, could face a £5,000 fine or even imprisonment. The ISA website summarises employers’ obligations in more detail.

Paid employees will need to pay a £64 fee to register with the ISA (registration is free for volunteers). For existing employees, in all likelihood it will be the employers who end up paying these fees. Any barred individual is committing a criminal offence by being engaged in any regulated activity, even as a volunteer.

This new regime is still some way off from coming fully into force. The ISA will start the registration process in July 2010, and the legal requirement on employers to check employees’ status will only come into force in November 2010. However, businesses involved in regulated activities – including children’s websites and interactive services – should be making plans to ensure their staff are registered in a timely fashion next summer.

Filed under Regulatory Issues Tagged with , , ,

Disclaimed?

July 29, 2009 by John Halton Leave a Comment

One of the most unloved (and unread) features of commercial websites, the “disclaimer”, may have been given a new lease of life by a recent court decision which appears to have endorsed a disclaimer as a means of avoiding liability for inaccurate statements made on a website. However, in my view this case is not an endorsement of website “small print” so much as a sensible refusal by the courts to impose costly duties of care on websites providing information to the public.

Gary and Karen Patchett were suing the Swimming Pool and Allied Trades Association (SPATA) after their swimming pool contractor – whose details they had obtained from SPATA’s website – ceased trading. The Patchetts claimed that SPATA’s website had failed to make it clear that the contractor was only an “associate member”, and thus not covered by SPATA’s insurance scheme.

The court held that SPATA did potentially owe a duty to the Patchetts, as the site was directed only to those planning to have swimming pools installed rather than the general public at large. However, SPATA was not liable, because (as Lord Clarke put it in his judgment), “when the website is read as a whole, it urges independent enquiry” before people made a buying decision.

In particular, Lord Clarke singled out the following statement on the site:

“SPATA supplies an information pack and members lists which give details of suitably qualified and approved installers in the customer’s area. The pack includes a Contract Check List which sets out the questions that the customer should ask a would-be tenderer together with those which must be asked of the appointed installer before work starts and prior to releasing the final payment.”

Had the Patchetts requested the information pack and members list, they would have seen that their contractor was not a full member of SPATA, and hence SPATA were not liable for the inaccurate statement on their website.

What are the implications of this for businesses with websites providing information to the public?

1. Don’t panic

Many lawyers will be taking this opportunity to encourage their clients to review their website “disclaimers”, warning them of the dangers this case poses to those who fail to do so.

However, the first lesson to draw from this case is the courts’ reluctance to impose a duty of case on website owners to those using their sites, even where a website is directed towards a specialised audience who are likely regard it as authoritative (as in the case of SPATA).

2. Be alert

That said, the case does show the need to ensure information on commercial websites is kept accurate. SPATA may have fought off the Patchetts’ claim, but the inaccurate and misleading information on their website will have cost them dearly in legal costs (not all of which they will be able to recover from the Patchetts), lost management time and adverse publicity.

SPATA were not saved by a legalistic disclaimer buried on an obscure corner of their website. Looking at their 2006 site on the Internet Archive, the statement about their information pack was set out on the first-linked page from their welcome page. There is every reason (including a famous Lord Denning judgment) to believe that the courts will look less favourably at the sort of small-print verbiage lurking on many sites behind the “Terms and conditions” link.

The lesson is not “rely on your lawyers” but “make sure you are clear and accurate in the first place”.

3. Follow the money

A final practical observation. The reason SPATA ended up in court was, in the end, because the Patchetts’ contractor had gone bust and had no money with which to compensate them. SPATA did have resources to meet a claim, and hence the Patchetts (quite reasonably) sought redress from them.

Even if your involvement in a transaction is pretty tangential – there was no direct contact between the Patchetts and SPATA, beyond Mr Patchett’s accessing their website – if you are the “last person standing” with any money, then you may well be a target for legal action. As observed above, this is a far from pain-free experience even if you eventually win.

This should concentrate businesses’ minds on making sure they get their website content right. It is notable that, looking at SPATA’s current website, they appear to have concentrated on removing room for misunderstanding rather than adding legalistic disclaimers.

That strikes me as the right approach – but (and you knew this was coming, didn’t you?) my firm’s insurers will want me to emphasise that (like everything else on here) this is my personal view and should not be relied upon as legal advice!

Filed under Contracts and T&Cs Tagged with , ,

Vulnerability notified

July 16, 2009 by John Halton 1 Comment

One of the benefits of cloud computing is that it allows applications to be updated easily without the involvement of end-users. On the other hand, one of the biggest risks of cloud computing is that it allows applications to be updated easily without the involvement of end-users, exposing them to security risks or unwelcome changes in functionality.

A small, but telling, illustration of this is a recent incident with the Google Reader Notifier. This is a small add-on for the Firefox browser that helps people keep in touch with their RSS feeds on Google Reader by putting a small notifier on their status bar. It’s an ideal application of small-scale cloud computing: it means people can keep track of their feeds in an unobstrusive manner from any computer on which they have the notifier installed. I’ve been using it for some time.

Google Reader Notifier screenshotToday, however, I noticed a new and highly unwelcome addition to my toolbar: an ugly and intrusive link to “eBay: UK Site” (see right for a similar version, from here). I had no idea where this had come from, but a quick foray onto Google revealed that the culprit was the latest update to the Google Reader Notifier. Like many others, I have now uninstalled this add-on, thus solving the problem, and a cascade of one-star reviews is likely to reduce the number of people installing the add-on in future.

This is a small incident in itself, but it does highlight a couple of issues of more general application.

  1. As browsers become more complex – complex enough to become operating systems in their own right – the number of potential vulnerabilities increases accordingly. In this case, it was a simple matter to uninstall the add-on and remove the problem – but in the meantime, those people using the add-on have had their privacy and computer security compromised.
  2. It demonstrates the need for businesses to take care in how they use cloud computing. Many free-of-charge cloud applications are of high quality and usefulness, making them tempting to use for business purposes. However, they are weak on legal protection and transparency: businesses using them may have no comeback for outages or poor service, and are vulnerable to sudden changes in the software or even in the ethics of the people providing the cloud application. Businesses need to select their cloud computing providers with the same care as conventional IT suppliers, and with the same attention to the contractual terms.

Filed under Malware, Privacy and Security Tagged with , , ,

Chrome OS: the browser as operating system

July 8, 2009 by John Halton 3 Comments

Widely predicted for some time, and now official: Google is to produce its own operating system, Chrome OS. Google describe this modestly as an “attempt to re-think what operating systems should be” in a world of cloud computing and web applications.

On a “traditional” operating system, the browser is just one application among many. In Chrome OS, the browser will be the main interface, with applications being run through the browser as web applications. As Google put it:

For application developers, the web is the platform. All web-based applications will automatically work and new applications can be written using your favorite web technologies. And of course, these apps will run not only on Google Chrome OS, but on any standards-based browser on Windows, Mac and Linux thereby giving developers the largest user base of any platform.

Is this a “Windows killer”, as some have predicted? The focus on web applications and netbooks suggests otherwise. It sounds like Google  is aiming at providing an alternative experience for those who want access to web-based applications while on the move, and who will probably continue to have Windows running on their main PCs.

I wonder if versions produced for larger PCs will be designed for “dual booting”, so that people can turn their computer on within a few seconds to access the web using Chrome OS, and then boot into Windows for more substantial work requiring conventional, installed software such as Microsoft Office. Chrome OS is built on an underlying Linux platform and – however much it may frustrate those who, like this writer, use Linux quite happily for their everyday computing – most consumers have proven stubbornly resistant to using non-Windows OSes on their PCs, to an extent which even Google may struggle to overcome. Presenting Chrome OS as quick-to-use alternative sitting alongside Windows may be an easier sell.

What Chrome OS does illustrate is how relatively unimportant operating systems are becoming in a cloud computing era. Google clearly sees the OS not as an important revenue-generator in itself, but as a means to increasing use of its revenue-generating services online. As Google put it:

any time our users have a better computing experience, Google benefits as well by having happier users who are more likely to spend time on the Internet [looking at Google advertising, as they might have added].

Chrome OS will accelerate the trend towards our computing experience being conducted through our web browsers, regardless of the operating system.

It will also no doubt increase the scrutiny of Google from privacy regulators and competition authorities in the US, Europe and elsewhere. The Department of Justice in the US is already investigating Google’s deal with book publishers, and Microsoft will no doubt be asking the European Commission why it is wrong for Microsoft to bundle a web browser with its operating system, but OK for Google to bundle an operating system with its web browser.

Filed under Cloud Applications Tagged with , ,

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