In House Lawyer Seminar

In House Lawyer Seminar
Manchester, 7 October 2015

The Modern Slavery Act 2015
Alison Treliving

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Why do businesses need to know about it?
 Section 54 requires commercial organisations over a certain size to disclose
what activities they have undertaken to eliminate slavery and human
trafficking from their supply chains and their own business

What is “slavery and human trafficking”
“Slavery”
where ownership is
exercised over a
person, where
individuals are coerced
into providing their
services or do so
unwillingly under threat
of a penalty
“Human
Trafficking”
arranging or facilitating
the travel of individuals
with a view to exploiting
them (being “exploited
includes slavery,
servitude and forcedor
compulsory labour)

Who do the provisions apply to?
 Any commercial organisation;
 Carrying out a business or part of a business in the UK which supplies goods
or services; and
 With a total annual turnover (including that of any subsidiary companies) of
not less than £36m.

What are these new disclosure obligations?
 Must produce a slavery and human trafficking statement each financial year.
 Statement must set out the steps taken to ensure that the business and
supply chain is free of slavery and human trafficking (or confirm that no such
steps have been taken).
 Statement must be published on website with a prominent link or, if there is
no website available upon request (within 30 days).
 Comes into force in October 2015.

What information must be included in the statement?
 The Act does not set out precisely what form the statement must take, but
sets out six suggestions as to what information should be included.
 The Government is to publish detailed guidance in due course, including
details of transitional arrangements for businesses whose financial year
coincides with the new obligation.
 No financial or criminal sanctions, but:
 Failure by a business to comply could lead to an injunction being granted against it
in the High Court.
 Risk of negative publicity, threat to brand value, company reputation and investor
relations.

What should businesses be doing now?
 Assessing if you are caught by these requirements;
 Deciding who will be responsible for compliance (HR? Compliance? CSR?
Legal?);
 Auditing the business and supply chains to help determine the level of
exposure and any particular areas of risk;
 Developing or updating supplier codes of conduct, tender requirements and
supplier contracts etc;
 Putting in place internal policies and codes of conduct;
 Considering training requirements;
 Ensuring there are effective grievance and whistleblowing mechanisms
in place.

Consumer Law – An Update
Russell Kelsall

Overview
 Consumer Rights Act 2015
 Online Dispute Resolution for Regulations

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Consumer Rights Act 2015

Some headlines…..
“Could the new Consumer Rights Act spell good news
for games?”
The Guardian
“Right to 30-day refund becomes law”
BBC News
“Consumer Rights Act 2015: 5 new rights you should
make the most of”
Essex Chronicle

The BBC’s take on it all…….
If a haircut is not to your satisfaction, you now have a right to a refund

The BBC’s take on it all…….
Services, like facial treatments, must be delivered with "reasonable care"

Background
 The Consumer Rights Act 2015 (“CRA”) came into force on 1 October 2015
 It applies to all contracts with “consumers”
 The phrase “consumer” means “an individual acting for purposes which are
wholly or mainly outside that individual’s trade, business, craft or profession”
 It has replaced many statutes for consumer transactions including:
 Sale of Goods Act 1979
 Supply of Goods and Services Act 1982
 Supply of Goods (Implied Terms) Act 1973
 Unfair Contract Terms Act 1977
 Unfair Terms in Consumer Contracts Regulations 1999
 The Competition and Markets Authority has issued guidance on unfair terms

CRA
 The CRA is split into three parts:
 consumer supply contracts (so dealing with issues like satisfactory quality, fitness
for purpose, description, ownership);
 unfair terms and notices (so dealing with what your terms and conditions say); and
 miscellaneous and general provisions
 We’ll focus on the first two parts

Supply of Goods and Services

Supply of Goods - Rights
 Implied terms (broadly the same):
 description
 satisfactory quality
 fitness for a specified purpose
 ownership
 sample
 Six month reversed burden of proof (unless the customer wants to use his
short-term right to reject)
 After the first 30 days, the consumer must have either a repair or
replacement

Supply of Goods - Remedies
 If the goods don’t conform to the contract then the rights are:
 a short-term right to reject (see Sections 20 and 22);
 a right to repair or a replacement (see Section 23);
 the right to a price reduction or a ‘final right to reject’ (see Sections 20 and 24); or
 a general right to claim damages.

Consumer’s Rights: Short-Term Right to Reject
 The short-term right to reject generally lasts for 30 days from the day after
delivery (see Section 22(3)). This is different from the old law. This time-
frame can be paused if the customer agrees to a repair (see Section 22(6))
 The reversed six month burden of proof does not apply if the consumer
wants to use this right (see Section 19(14)). The customer would therefore
need to prove on the balance of probabilities, when using this right, that the
goods were unsatisfactory on the date of delivery
 If the consumer validly exercises this right, he is entitled to a full refund of
any monies paid without “undue delay” (see Section 20(10)) and within 14
days
 The consumer gets returned whatever he gave (see Section 20(11))

Consumer’s Rights: Repair or Replacement
 For the first time for non-sale contracts, the customer now has a legal right to
ask for a repair or replacement where there goods do not comply (see
Section 23)
 However, the customer is only required to ask for one repair or replacement;
he cannot be forced to accept more than one
 It’s the customer’s choice on whether he asks for a repair or replacement.
However, it cannot pick one which is impossible or disproportionate (see
Section 23(2))
 If he asks for a repair, he cannot use his short-term right to reject (if it exists)
while you’re repairing the vehicle unless a reasonable time passes(see
Section 23(6)). Similarly, if he asks for a replacement, he can’t use his short-
term right to reject (if it exists) while you’re replacing it unless a reasonable
time passes (see Section 23(7))

Consumer’s Rights: Reduction or Final Right
 For the first for non-sale contracts, the customer now has a legal right to ask
for a price reduction or use his final right to reject (see Section 24)
 However, these rights can only be used after one repair or replacement
where either (a) that repair or replacement hasn’t been completed in a
reasonable time or (b) the problem still exists
 If the customer exercises the final right to reject, he gets back his money paid
minus a deduction for use (see Section 24(8)). This deduction can be
applied even if the final right to reject is used in the first six months (see
Section 24(10)(a); for other goods (like vehicles) there’s no right to make a
deduction if this right is used in the first six months)

Digital Content
 Now clear that implied terms for quality, fitness for particular purpose and
description apply to digital content
 Rights where the content does not conform (bear in mind 6 month burden)
are:
 repair or replacement (see Section 43);
 reduction in price (see Section 44); or
 other remedies
 The consumer’s primary rights are repair or replacement (and there’s no limit
to one). It’s only when they can’t be done, or won’t be done, that the
consumer is entitled to a price reduction (see Section 44(3))
 Limited right to a refund in particular circumstances (see Sections 42(5) and
45)
 Can’t limit or exclude liability (see Section 47)

Services
 The implied terms are broadly the same: to perform the service with
reasonable care and skill, to pay the supplier a reasonable price for the
service and to complete the service within a reasonable period of time.
 If the service does not conform to the contract, the rights are broadly:
 to require a repeat performance (see Section 55) (new); or
 to claim a reduction in the price (see Section 56) (broadly new); or
 other remedies.
 If a repeat performance is asked for, this must be provided free and within a
reasonable time and without significant inconvenience to the consumer
 Refunds must be given without any undue delay
 Liability can’t be restricted or excluded

Unfair Terms and Notices

 The new provisions apply to a contract between a trader and a consumer. It
also applies to notices which purport to restrict or exclude a trader’s liability
 General provision that an “unfair term” or an “unfair consumer notice” is not
binding on a consumer
 Terms or notices are unfair if, contrary to the requirement of good faith, they
cause a significant imbalance in the parties’ rights and obligations under the
contract to the consumer’s detriment (see Sections 62(4) and 62(6))
 List of indicative and non-exhaustive unfair terms set out in Part 1 of
Schedule 2
 Three new grey list items:
 disproportionately high charges where consumer decides not to conclude or perform
 where trader is allocated to decide characteristics of subject matter after contract
 where trader is allowed to decide price after consumer is bound

 But if a term is transparent and prominent (guidance is expected), it is
excluded from the fairness test if (a) it specifies the main subject matter of
the contract or (b) it’s about the appropriateness of the price (see section
64(1))
 Traders must ensure that terms or notices must be transparent. They will be
transparent if expressed in “plain and intelligible language” and is “legible”
 There’s a clear duty on the Court to assess fairness of terms: the Court must
consider whether the term is fair even if none of the parties to the
proceedings has raised that issue or indicated that it intends to raise it (see
Section 71(2)). But the Court must have before it “sufficient legal and factual
material to enable it to consider the fairness of the term” (see Section 71(3))
 Now the provisions are no longer limited to those contracts which haven’t
been “individually negotiated”

Online Dispute Resolution

Online Dispute Resolution (“ODR”)
 This is a follow on to the implementation of the ADR Directive on 9 July 2015
or 1 October 2015 (by the Alternative Dispute Resolution for Consumer
Disputes (Competent Authorities and Information) Regulations 2015 (“ADR
Regulations”))
 On 9 January 2016, further provisions of the ADR Regulations come into
force (mainly in Regulation 19A):
 If under any enactment, rules of a trade association or terms of a contract, an online
trader is obliged to use an ADR procedure provided by an ADR entity or EU listed
body, the trader must:
 provide a link to the ODR platform in any offer made to the consumer by email; and
 tell consumers of (i) the existence of the ODR platform and (ii) the possibility of using the
ODR platform for resolving disputes (and this information must also be included in terms for
online sales contracts and online services contracts)
 An “online trader” must include on its website a link to the ODR platform and the
trader’s email address
 An “online marketplace” must include on its website a link to the ODR platform

Summary & Questions

Directors duties for health and safety
Rob Elvin

Agenda
 Introduction - Why does H&S matter?
 Key H&S laws for directors
 Penalties for non compliance and the new Sentencing Guidelines
 What is expected of directors?
 Case law
 IOD Guidance
 HSG 65
 Key messages and conclusion

40squirepattonboggs.com
 Key figures for Great Britain (2013/14)
 1.2 million working people suffering from a work-related illness
 2535 mesothelioma deaths due to past asbestos exposures (2012)
 133 workers killed at work
 78 000 other injuries to employees reported under RIDDOR
 629 000 injuries at work from the Labour Force Survey
 28.2 million working days lost due to work-related illness and workplace injury
 £14.2 billion estimated cost of injuries and ill health from current working conditions
(2012/13)
[Source: HSE]
Health and safety statistics

The Hidden Costs of Failure
Insurance
1:11
Operations Sales Strategy Financial
Insured vs. uninsured
costs: the iceberg
effect Loss of market share
Loss of up to 37%
annual profit and
5% operating costs
Discontinuity resulting in
lack of confidence
amongst employees and
other stakeholders
Limiting growth
strategies
If you think safety is expensive, try having an accident!

Health and Safety law in the UK
Enabling Act
Regulations
A.C.O.P.s
Guidance Notes
European
Directives

The Health and Safety at Work etc Act 1974 –
Section 37
Liability of senior officers or managers if:
1) Consent
2) Connivance
3) Neglect
NB – there is no positive duty on directors

Manslaughter
 Gross negligence manslaughter - Individuals
 Corporate manslaughter - Corporates
 Death
 Gross breach of relevant duty of care
 Failings attributable to senior management
 “Those that play a role in making management decisions about, or actually managing,
the activities of an organisation as a whole or a substantial part of it.”
 Nb - This specifically includes management at a regional level within a national
organisation.

Penalties for non-compliance
 Magistrates' Court
 up to £20,000 (unlimited for serious offences (i.e. those previously punishable by a
fine of £5,000 or above) committed after 12 March 2015) and/or 12 months in prison
for most offences
 Crown Court
 unlimited fine and/or up to 2 years in prison for most offences
 Corporate Manslaughter
 unlimited fine
 remedial and publicity orders
 Gross Negligence Manslaughter
 imprisonment
 fines
 Director disqualification
 Compensation

 Fines for breaching HSWA up by 25% and for breaching regulations up 60%
 Sellafield Limited (environmental) - £700,000
 Network Rail Infrastructure Limited (H&S) - £500,000
 United Utilities (environmental) - £750,000
 Tata Steel (H&S) - £200,000
 Thames Water (H&S) - £300,000
 Thames Water (environmental) - £250,000 – upheld by Court of Appeal
 Fines for very large companies could be up to 100% of the company’s pre-tax net
profits – even if this results in fines of £100+ million.
 Hugo Boss (H&S) - £1m
Sentencing trends

What impact are Sentencing Guidelines expected
to have?
 Sentencing H&S offences - the new regime - Health and safety offences,
corporate manslaughter and food safety and hygiene offences guidelines
 Very similar to environmental guidelines (offences sentenced after 1 July
2014)
 Prescriptive tariff based approach based upon
1. Culpability
2. Harm or RISK of harm
3. Size of organisation BASED ON TURNOVER
 To get to STARTING POINT and RANGE OF FINE
 RANGE OF FINE is meant to provide FLEXIBILITY and DISCRETION

H&S Sentencing Guidelines

H&S Sentencing Guidelines - Individuals

“The Management failures are not confined to specific individuals or failures at
certain levels to follow established procedures. They demonstrate …a custom
within the company which was too lax and… to a degree complacent, and senior
management must bear its share of responsibility”
“Nonetheless the record of Network Rail reflects the fact that accidents at level
crossings were prevalent. That makes clear the necessity for all the directors to
pay much greater attention to their duties in this respect”
“There was evidence before us (but not the judge) that the bonuses of the
directors had been adjusted downwards to a minor (though inadequate) extent in
part because of the poor level crossing safety record to which we have referred.
Plainly the bonuses should have been very significantly reduced”
What is expected of Directors?
Sellafield/Network Rail

What is expected of Directors?
Southern Water
Against the backdrop of 160 previous offences, the court said:
“In the absence of any explanation as to what the main board of the company
has done to reform itself, to eliminate its offending behaviour and to give a
detailed explanation of what happened in the incident which was before the
learned judge, there is very little mitigation that can be put forward. It is very
important – and we wish to make this clear – that in offences of the seriousness
of the kind represented by this case it is incumbent on the Chief Executive and
main board of the company – particularly one with a serious record of minor
criminality which this company has – to explain to the court the cause of its
offending behaviour, the current offence and its proposals for protecting the
public from such further offending”.

 Satisfy yourself key components of H&S management system present and
actually applied in practice
 Ensure resources and competence in place – then can delegate
 Ensure monitoring and review takes place
 HSE Current Strategy – Directors to be:
 Champions of health and safety
 Be held accountable for its delivery
So, what is expected of Directors?

HSG65 - Plan, Do, Check, Act Framework

HSG65
Plan
 Determining your policy
 Planning for implementation
 Arrangements
 Clear direction
 Ensure communication
 Plan for change
 Measure performance
Do
 Risk profiling – identify risks and prioritise by risk rating
 Competence/resource
 Implement safe system of work – work equipment, training, supervision

HSG65
Check
 Monitoring
 Active (audits)
 Reactive (analysis of accidents/near misses to establish trends)
Act
 Review
 Revisit policy, arrangements, procedures etc. based on results of monitoring
 Changes in legislation

 Re-issued in mid-2013
 Changed to align it with changes to HSG65
 Documents meant to be considered together
 "Protecting the health and safety of employees or members of the public who
may be affected by the [companies'] activities is an essential part of risk
management and must be led by the Board".
 "Health and safety law places duties on organisations and employers, and
directors can be personally liable when these duties are breached: members of
the Board have both collective and individual responsibility for health and
safety."
IOD “Leading Health and Safety at Work”

3 essential principles
 Strong and effective leadership from the top
 Worker involvement
 Assessment and review
Key components
 Is the health and safety management system fit for purpose?
 Is the health and safety management system being implemented and followed
in practice?
 Checklist
NOTE – Not just what you knew but what you ought to have known
IOD “Leading Health and Safety at Work”

The message:
 Increase leadership focus on health and safety compliance
 Make management (collectively and individually) accountable for health and
safety failures
 Not just about fines it is also about reputational impact and good business
Conclusion

The draft EU General Data
Protection Regulation
Caroline Egan

The draft Data Protection Regulation
 Why is it needed?
 existing Directive dates from 1995
 national implementation means 28 different data protection laws in Europe
 multi-national groups answerable to national regulator in every country in which they
operate
 Why a Regulation?
 direct effect, so limited scope for national changes

Timeline and status
 January 2012
 Commission Proposal for Regulation
 March 2014
 European Parliament adopts its text of the Regulation
 June 2015
 Council of Ministers adopts its final text of Regulation
 "Trilogue" discussions ongoing between Commission, Parliament and
Council
 likely to be concluded late 2015
 likely to be adopted mid-2016
 Coming into force
 one or two years from adoption?
 national regulators and Commission view

Key provisions of the Draft Regulation
Fines
 Up to €100 million or 5% of global turnover - Parliament draft
 Up to €2 million or 2% of global turnover – Council
 Sliding scale for breaches. Most serious are:
 processing without legal basis or appropriate consent
 non-compliance with rules on automated processing, including profiling
 non-notification of data breach
 failing to undertake impact assessments where required
 inability to demonstrate compliance with security requirements
 using processors without complying with due diligence/contract requirements
 non-compliance with rules on transfers outside the EEA

Fines
 Joint and several liability of all controllers and processors involved
 as between themselves, can agree split of liability
Other sanctions
 Periodic data protection audits

One-stop shop for multi-nationals?
 Commission draft – regulated by national regulator (lead authority) in EU
country where have main establishment:
 Council draft – as above but local regulator can act on complaints/breaches
where:
 Subject matter relates only to establishment in their member state; or
 Substantially affects data subjects only in their member state
 Consistency Mechanism:
 In important cross-border cases, lead authority acts as co-ordinator and:
 Jointly agreed decision implemented by regulator best able to protect data subject
 If regulators don’t agree, refer to European Data Protection Board
 The most contentious point

Liability of processors
 For first time, direct obligations on processors, including:
 Security measures
 Records of processing activities
 Privacy impact assessments
 Compliance with cross-border data transfers
 Co-operation with controller on compliance
 Fines also applicable to processors

Transfers outside the EEA
 Transfers to third countries (including the US) permitted on the following
basis:
 An adequacy decision applies eg approved countries
 existing adequacy decisions will remain in force until replaced, amended or suspended
 Standard contractual clauses adopted by the Commission (eg EU Model Clauses)
 existing standard clauses will remain applicable until replaced, amended or suspended
 Approved data protection certification of the controller or processor in the third
country
 Approved code of conduct and enforceable commitment to apply appropriate
safeguards
 Approved binding corporate rules (BCR)
 In all other cases, requirements listed in Art 44

Safe Harbor - the end of the road?
 Not mentioned in draft Regulation
 European Court of Justice decision 6 October 2015 in Schrems v Data
Protection Commissioner
 Decision - interplay of Directive and the EU Charter of Fundamental Rights
means
 national regulators not obliged to accept Safe Harbor certification as providing
adequate protection for data
 In short term, put in place Model Clauses?

Justification for processing/consent
 Must be processed lawfully, fairly and in transparent manner
 Collected for specified, explicit and legitimate purposes, and not further
processed in a way incompatible with those purposes
 Ongoing discussions as to what comprises incompatible use, particularly where
relying on "legitimate interests" justification
 Where individual's consent is the justification:
 It must be informed, freely given and "unambiguous"
 Where consent is in document also concerning another matter, must be
distinguishable from the other matter

Consent
 Consent can be withdrawn at any time
 Cannot make, eg provision of service, conditional upon consent for
processing if not strictly needed for performance
 Highest level of penalty for non-compliance
 Burden of proof of consent on controller

Privacy Impact Assessments (PIA)
 Obligation on controller (or processor on behalf of controller) to carry out PIA
before carrying out processing activities posing "high risk" to rights and
freedoms of individuals, including:
 Systematic profiling activities
 Processing of sensitive personal data
 ICO already very keen on PIAs
 Highest level penalty for non-compliance

Privacy by Design & Default
 Applies to controllers only
 Privacy by design
 Requires right level of data protection to be embedded in life cycle of applications,
taking account of
 available technology
 cost
 risks
 May include data minimisation and pseudonymisation
 Privacy by default
 Default privacy settings must respect principles of:
 data minimisation
 purpose limitation
 transparency

Accountability
 Records of data processed
 Controllers must have policies and measures in place to ensure (and be able
to demonstrate) compliance with Regulation
 Where appropriate must include data protection policies
 Can choose to demonstrate compliance by:
 Compliance with approved codes of conduct
 Certification mechanism

Mandatory data breach notification
 Notification to the supervisory authority is mandatory in case of a data breach
which may result in
 discrimination,
 identity theft or fraud,
 financial loss,
 unauthorized reversal of pseudonymisation,
 damage to the reputation,
 loss of confidentiality of data protected by professional secrecy or
 any other significant economic or social disadvantage
 Notification to be made immediately but no later than 72 hours after having
become aware of the breach
 A processor shall notify the controller without undue delay
 A notification to the data subject is mandatory unless the data was encrypted
or otherwise protected

Profiling – Big Data
 Form of automated processing intended to use a profile to evaluate personal
aspects of individual, including:
 Performance at work, economic situation, health, preferences, reliability or
behaviour, location or movements
 Individuals must be informed about existence and consequences of profiling
 Profiling based on sensitive personal data, or with effect of discriminating
against individuals on a basis of race, religion, etc, prohibited
 Individual right to object to solely automated evaluation decisions

Profiling – Big Data
 Profiling producing significant legal effects for individual requires explicit
consent.
 Limited exceptions
 Anonymous profiling not caught by Regulation
 Pseudonymous profiling is.
 Highest level of penalty for non-compliance

Right to be forgotten/erasure
 Right of individual to obtain erasure of data and links to it where:
 No longer necessary for original purpose
 Individual withdraws consent, or storage period expires and no legal justification
remains
 EU court so orders
 Data unlawfully processed
 Erasure by controller and third parties required “without delay”, except in
limited circumstances

Other principal provisions of the Regulation
 Extra territorial effect
 Data Protection Officers (not required unless mandated by national law)
 Codes of Conduct
 Certification
 Data subject access requests and data portability

Actions to take now
 If aren't compliant with current law, get compliant!
 Privacy Impact Assessments
 Suggestions from ICO
 Consent and control
 assess true level of consent and control given to customers; especially children
 Accountability
 effective and demonstrable privacy processes
 Staffing
 whether or not must have Data Protection Officer, establish who will be responsible for
ensuring you comply; and give them appropriate authority and resources
 Privacy by design
 Embed compliance in systems and processes, especially new ones
 start to prepare for data minimisation

Actions to take now
 Data/processing audit
 Breach prevention
 review own technical and organisational security measures
 when using processors:
- Check your due diligence measures
- Check your contract terms, and incorporate new mandatory requirements
 Breach management
 draft and implement breach management process

Intellectual Property Update
Andrew Clay

What am I going to talk about?
 Patent Box Update
 The Sofa Workshop trade mark case
 Website blocking orders against trade mark counterfeiters
 UPC and Unitary Patent Update
 IP filing statistics
 Home Copying

Patent Box 1
 Low corporation tax regime introduced on 1 April 2013 for income derived
from the commercialisation of patented inventions.
 Headline CT rate of 10% from 1 April 2017 instead of currently scheduled 19
percent.
 However, as a result of a November 2014 agreement reached by a European
intergovernmental group looking at tax practices (The OECD Forum on
Harmful Tax Practices), the existing Patent Box scheme is going to be closed
for new entrants with effect from 30 June 2016.
 The reason for the change was that some countries (notably Germany) were
concerned that the current UK Patent Box scheme could be misused by
businesses to unfairly reduce their overall tax payments. That opportunity for
misuse arose as the UK’s existing Patent Box regime does not require a
claimant for the relief to carry out any R&D in the UK.

Patent Box 2
 The intergovernmental group agreement did however provide that the
existing UK Patent Box scheme will remain in operation, for those that
have opted into it before 30 June 2016, until 30 June 2021.
 The existing Patent Box regime will be replaced by a new scheme with effect
from 1 July 2016. Details of the new scheme have yet to be published but it
is very likely to be less generous.
 What you need to do now: make a patent box election before 30 June
2016. You don’t need to qualify for the relief when you make the election.
This leaves the door open.
 File patents if you have not already done so. They won’t be granted until after
30 June 2016 but that should not matter.
 You could buy in patents – but you would need to do that before 30 June
2016. Then you carry out development work afterwards.

The Sofa Workshop Ltd v Sofaworks Ltd [2015]
EWHC 1773 (IPEC)
 The claimant, The Sofa Workshop, and the defendant, Sofaworks, both sell
sofas and other furniture. The Sofa Workshop has two CTMs for the word
mark SOFA WORKSHOP and brought a claim for trade mark infringement
against Sofaworks on the basis of its CTMs, as well as a claim for passing
off.
 As part of its defence, Sofaworks challenged the SOFA WORKSHOP CTMs
on the basis, inter alia, that the SOFA WORKSHOP CTMs should be
revoked as they had not been used to a sufficient extent to maintain the
registrations.

EWHC 1773 (IPEC)
 If a CTM has not been put to genuine use in the European Community within
5 years of registration or for any continuous period of 5 years after
registration, the CTM may be revoked for non-use – article 15 of Reg
207/2009.
 Sofaworks conceded that The Sofa Workshop had used the SOFA
WORKSHOP CTMs in the UK, but contended that such use in the UK alone
was not sufficient to amount to genuine use within the EU.
 The CJEU in Lena Marken BV v Hagelkruis Beheer BV considered the
question of whether use in one Member State was sufficient to amount to
genuine use in the EU. The CJEU held that the "territorial scope of the use is
not a separate condition for genuine use but one of the factors determining
genuine use" and that "the territorial borders of Member States should be
disregarded in the assessment of ‘genuine use in the Community".

EWHC 1773 (IPEC)
But the CJEU also added that:
“Whilst there was some justification for thinking that a Community trade mark
should … be used in a larger area than the territory of a single Member State in
order to be regarded as ‘genuine use’, it cannot be ruled out that, in certain
circumstances, the market for the goods or services for which a Community trade
mark has been registered is in fact restricted to the territory of a single Member
State”.
Relying on the above passage, Hacon J inferred that genuine use in the Community
will for the purposes of Article 15, as a general rule, require use in more than one
Member State. Hacon J said that there is an exception to that general requirement
if the market for the relevant goods or services, to which the marks are applied, is
restricted to the territory of a single Member State.
Hacon J found that the SOFA WORKSHOP’s only use of its CTMs had been in the
UK and that no exception to the general rule was present in this case: you can buy
a sofa in Belgium. The judge therefore concluded that the SOFA WORKSHOP
CTMs were liable to be revoked for non-use.

EWHC 1773 (IPEC)
There was a second line of attack:-
Article 7 of the CTM Regulation provides that trade marks shall not be registered as
CTMs where they are "devoid of distinctive character". However, if a trade mark has
become distinctive through the brand owner’s use of that mark, it shall be registrable as a
CTM even if the mark would ordinarily be considered non-distinctive or descriptive.
Hacon J found that the SOFA WORKSHOP CTMs were descriptive of sofas and sofa
beds (among other things) but had acquired distinctiveness through use in the UK.
However following Liz Earle Beauty Co Ltd v OHIM, the proprietor of a word mark must
establish acquired distinctiveness in all EU Member States in which the average
consumer is liable to recognise the mark’s descriptive character. The SOFA
WORKSHOP CTMs consisted of words that were descriptive in English, so The Sofa
Workshop had to demonstrate that they had acquired distinctiveness in Ireland, Malta,
the Scandinavian countries, the Netherlands and Cyprus (being countries where the
English language was sufficiently widespread that SOFA WORKSHOP would be
considered descriptive by the average consumer). The Sofa Workshop had not
demonstrated this and the judge therefore concluded that the SOFA WORKSHOP CTMs
were invalidly registered on this ground as well.

EWHC 1773 (IPEC)
Lessons
The Sofa Workshop Limited could have applied to have their CTM’s converted
to national trade marks under Article 112 of Regulation 207/2009 but did not
make their application in time. If they had done so then they could have
preserved their filing/priority date.
Key marks should be protected both nationally and via CTM’s if economic to do
so.
The need to show acquired distinctiveness through use in all territories where a
CTM is non-distinctive or descriptive is a particular issue for marks that use
English words due to the prevalence of English speakers in many EU Member
States. Another good reason for choosing a made up word or device as a trade
mark. A good rule for Denmark but not for the UK…

Website Blocking Orders - 1
 Copyright holders have been able, since 2002, to obtain injunctions (but not
damages) against ISPs that have "actual knowledge" of another person
using their service to infringe copyright (section 97A(1), CDPA).
 But what about ISPs that have "actual knowledge" of another person using
their service to infringe trade marks?
 This question arose in Cartier International AG and others v British Sky
Broadcasting Ltd and others [2014] EWHC 3354 (Ch). Claimants sued
various ISP’s (Sky, BT, EE,TalkTalk and Virgin who together had more than
95% of UK ISP market) and whose services allowed access to six sites (with
URL’s such as www.cartierloveonline.com; www.hotcartierwatch.com;
www.iwcwatchtop.com; www.replicawatchesiwc.com) selling counterfeit
Cartier, Montblanc and IWC watches, jewellery and other items.

Jurisdiction to make the order?
 The third sentence of Article 11 of the IP Enforcement Directive (2004/48/EC)
provides that EU member states must ensure that IP rights-holders can apply
for an injunction against intermediaries whose services are being used by a
third party to infringe an IP right. Not implemented into UK law as not thought
necessary at the time.
 Section 37(1) of the Senior Courts Act 1981 (SCA 1981) provides that the
High Court may grant an injunction in all cases in which it appears to be just
and convenient to do so.
 Section 37(1) had to be construed to give effect to the result intended by the
Enforcement Directive under the principle in Marleasing SA v La Comercial
Internacional de Alimentación SA (Case C-106/89) [1990] ECR I-4135.

Conditions to be satisfied
The threshold conditions to be satisfied were:-
1. The ISPs must be intermediaries within the meaning of the third sentence
of Article 11 of the Enforcement Directive.
2. The users or the website operators must be infringing.
3. Those users or operators must be using the ISPs' services to infringe.
4. The ISP must have actual knowledge of 3.

Principles to be applied in deciding whether to grant the orders
The orders needed to be proportionate: Article 3(2) of the Enforcement
Directive imposed a general requirement of proportionality as did Article 17(2)
of the Charter Charter of Fundamental Rights of the EU.
In considering proportionality, the following factors were particularly important:
1. The comparative importance of the rights that were engaged and the justifications for interfering
with those rights.
2. The availability of alternative measures which were less onerous.
3. The efficacy of the measures which the orders required to be adopted by the ISPs, and in
particular whether they would seriously discourage the ISPs' subscribers from accessing the
websites.
4. The costs associated with those measures, and, in particular, the costs of implementing the
measures.
5. The dissuasiveness of those measures.
6. The impact of those measures on lawful users of the internet.
7. The substitutability of other websites for the target websites was relevant

The Outcome
The court made blocking orders substantially in the form sought by the claimants, subject
to three safeguards:-
1. The orders (and similar future orders) should permit affected ISP subscribers to
apply to the court to discharge or vary the orders.
2. The internet page displayed to users who attempted to access the blocked
websites should state not only that access has been blocked by court order, but
should also identify the parties that obtained the order and state that affected users
have the right to apply to the court to discharge or vary the order.
3. The orders should incorporate a sunset clause such that the orders would cease to
have effect at the end of a defined period, unless either the ISPs consented to the
orders being continued or the court ordered that they be continued, with the court's
provisional view that the defined period should be two years.

UPC and Unitary Patent - 1
To recap: this is a package of legislative measures, treaties and rules aimed at
introducing a near Europe wide single unitary patent (similar to the community
trade mark or the community design right) and a means of enforcing some
types of patents on a near Europe-wide basis.
This package is intended to make patenting cheaper for European businesses.
There is no provision in the current legislation to make the unitary patent
mandatory. The existing "classical" European patent, obtained via the EPO, will
continue to be available as will national patents.
The Unified Patent Court will alone have jurisdiction over unitary patents.
The Unified Patent Court will, for an initial extendable period of seven years,
have non-exclusive jurisdiction over existing classical European patents. After
this transitional period its jurisdiction will become exclusive.
It will however be possible, during the extendable seven year period, to opt out
of its jurisdiction for the life of existing and pending classical European patents.
The Unified Patent Court will never have jurisdiction over national patents.

Update 1: Spain
Spain’s attack on the Unitary patent fails – May 2015.
Update 2: Italy
Italy signs up for the Unitary Patent – late September 2015: the 26th member state to do
so. It had initially objected to the system.
Update 3: renewal fees
When a patent is granted by the European Patent Office the holder will be able to apply
to have the patent treated as a Unitary Patent having effect in (now) 26 member states of
the EU rather than a bunch of national patents. The renewal fee for the Unitary patent
was announced in June 2015 by the EPO: it will be equivalent to the national renewal
fees of the four most popular renewal states: see next slide.
Update 4: the legislation machine grinds on
Various measures are being agreed such as on 1 October 2015 the Protocol to the
Agreement on a Unified Patent Court on provisional application, which allows some parts
of the UPC Agreement to be applied early, to enable final preparations for the Court to be
made (such as recruitment of judges and testing IT systems) and early registration of opt-
outs. The aim is to have the Court up and running from the start of 2017.

Comparison of renewal fees
Year True TOP 4 25 MS
€ €
2 35 0
3 105 1 298
4 145 1 874
5 315 2 545
6 475 3 271
7 630 3 886
8 815 4 625
9 990 5 513
10 1 175 6 416
11 1 460 7 424
12 1 775 8 473
13 2 105 9 594
14 2 455 10 741
15 2 830 11 917
16 3 240 13 369
17 3 640 14 753
18 4 055 16 065
19 4 455 17 660
20 4 855 19 197
Total 35 555 158 621

IP in Numbers: Some Perspective - 1
WIPO 2014 edition of IP facts and Figures
 2.6m patent applications filed in 2013.
 More than 1m patents in force in China in 2013 for the first time.
 More patent applications filed in China ((825k) than in the US (571k).
 9.45m patents in force globally - up about 8%.
 26.3m trade marks in force globally - up about 8%.
 90% of utility model applications filed in China. China accounted for 85
percent of all utility models in force in the World.
 Almost 3 million industrial design registrations were in force at end 2013, of
which 1.2 million were in China.
 We live in a period of rapidly expanding IP and Asia is the biggest global
player now.

And finally…
Can your kids copy their CD’s for private use? No.
Prior to 1 October 2014, it was unlawful to "rip" or copy the contents of a CD on
to a laptop, smartphone or MP3 player for personal use, although this kind of
format-shifting activity had become commonplace.
The Copyright and Rights in Performances (Personal Copies for Private Use)
Regulations 2014 introduced an exception into UK copyright law permitting the
making of such personal copies, as long as they were only for private use – this
was implemented via a new section 28B of the Copyright, Designs & Patents
Act 1988.
But the regulations were set aside in British Academy of Songwriters & Oths v
Secretary of State for Business, Innovation And Skills [2015] EWHC 1723
(Admin).
Time for the formal written warning to the kids then…

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