Wright, Johnston & Mackenzie Solicitors

Adverts which “think for themselves” criticised by privacy group

The trade body for the online advertising industry, the Internet Advertising Bureau (IAB), has published guidelines for companies to ensure that behavioural advertising does not breach users’ rights to privacy.  The new guidelines aim to combat current advertising practices, in which advertising companies track users’ online activity which in turn allows these companies to specifically target adverts to individual users specifically, according to their browsing history.

The new guidelines have three main objectives:-

1. to make advertisers or website operators inform users that their usage data is being stored and being used for advertising;

2. to give users a choice about whether they receive advertising or not; and

3. to oblige companies to clearly outline the procedure in the event that the user wishes to “opt-out”.  The information to decline must be prominently displayed and easily accessible on the website.

This is really no more than the law currently requires when it comes to unsolicited electronic marketing.

Nick Stringer, Head of Regulatory Affairs at the IAB, described the new guidelines as “significant developments in offering people greater transparency and choice regarding behavioural advertising”. The new guidelines have been backed by a number of high profile names including Google and Yahoo!

Despite the implementation of the new guidelines, privacy activists have expressed concern that the protection to users offered by the new rules remains inadequate.  The digital rights body, The Open Rights Group (ORG), has expressed concern about the process that users must follow to “opt-out”.  They claim that any “opt-outs” would be stored by a cookie.  This would mean that when a user changed machine or deleted their browsing history, they would require to “opt-out” again equating in their view to an “illegitimate attempt to substitute acquiescence for consent”.

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ICANN postpones limitless domain name plan

A controversial proposal to create an unlimited number of new internet domains has been postponed by the International Corporation for Assigned Names and Numbers (ICANN) following harsh criticism from brand owners, corporations and individuals.

Much of the criticism of ICANN’s proposal falls into two camps: first, that ICANN has failed to provide adequate protections for trademark owners; and second that ICANN is charging exorbitant rates for the new domains.

ICANN says the new top-level domains (akin to .com and .net) will provide more innovation, choice and competition on the Internet, especially for non-English domains. The new domains would be anywhere from 3 to 63 characters in length and could support Chinese, Arabic and other scripts.

The ICANN proposals would also allow companies to run their own Top Level Domains such as .microsoft and .ibm at a cost of $185,000 apiece.

However, the proposals currently provide no protection for trade mark and brand name owners. The system could be open to abuse from those who gain control of names related to major brands and try to profit by selling the name to that brand owner, by pretending to be that company or by attracting visitors to a website that displays adverts.

To counter this practice, every time a new domain is launched, many brand holders feel that they must register their name and many variations of it at that domain in order to stop other people profiting from it. Typically companies that use just one or two domain names for their websites and email communications may hold many other names as defensive registrations of this type.

ICANN has reacted to these concerns by putting the proposals on hold and has stated that it hopes to include additional trademark protection mechanisms in the TLD proposals and reduce costs for trade mark holders.

ICANN has said that it has no way of measuring how many new TLDs will be created, but its best guess is that 500 domains will be registered at first. If that estimate is accurate it would under the current proposals present brand owners with the cost and administrative burdens of registering thousands of domain names.

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Consumer gets 8 months’ free use of a laptop due to legal error by online retailer

In a recent opinion placed before the European courts, the Advocate General has held that online retailers cannot reclaim a share of the purchase price from shoppers who return goods to them, having had some benefit from the product.

Online consumers are permitted to return their purchases to the retailer within the first week of receiving the goods and expect a full refund. In cases where the retailer does not send the appropriate papers to the customer informing them of this right, then the right to return the goods and withdraw from the contract is extended until the correct papers are intimated to the consumer.

The Advocate General’s ruling in this matter is not final: her opinion is issued in advance of the court hearing and does not bind the court in any way, although it is highly persuasive.

The right of return is contained within Article 6 of the Distance Selling Directive and in the UK is reflected in the Distance Selling Regulations. This aims to give online consumers, who have no opportunity to see their purchase before buying, equivalent (or stronger) protection to those who buy from shops face-to-face.

The case was brought by a German consumer who purchased a laptop computer from an online retailer. Although she had owned and used the computer for eight months before returning it, the Advocate General held that retailer was unable to levy a ‘charge’ for use during this period above the direct cost of returning the goods. The retailer had failed in this eight month period to inform the consumer of her right to withdraw from the contract.

The Advocate General went on to say that, even if the European court did not agree with her on this point, it should not be in the discretion of EU countries to write national laws allowing for such levies.  In other words the UK could not.

So the message to retailers is clear: it is essential that the Distance Selling Regulations are followed, and that the appropriate ‘right of return’ notice must be served on customers when their purchases are shipped to them.

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Reduction in UK Trade Mark and Patent Fees

The Intellectual Property Office (“IPO”) has unveiled a proposal to make it easier and cheaper to register trade marks and patents in the UK. The IPO believes that the measures will ensure that Britain remains “a competitive option for businesses looking to protect their intellectual property”.

The proposals include an early assistance service for applicants, greater flexibility in the payment process, a discount for applications filed electronically and a reduction in the opposition fee. However, fees for requesting a time-extension will increase.

The proposals are a response to the announcement of a 40% reduction in EU trade mark office fees.

Patent and trade mark applications were also down 12% in the UK last year, with other EU countries experiencing similar decreases. Despite the current economic climate, the IPO hopes that the proposals will counteract this fall in consumer demand.

The IPO is currently consulting with the public over its proposals and responses to the proposals are due by 1st June 2009.

If you have any queries in relation to patents or trade marks, or protecting your intellectual property rights in general, please contact a member of the iTech team.

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About face by Facebook

The founder of Facebook, Mark Zuckerberg, has said that that the social networking site will withdraw changes recently made to its terms of service in respect of retention of data.

The wording of the new terms seemed to suggest Facebook would retain personal data even if a user deleted their account; they deleted a provision that said users could remove their data at any time. Mr Zuckerberg had said that the reasoning behind this was to ensure that any comments or messages left by that person on pages of other users would not also disappear.

The changes had been questioned and heavily criticised.  Simon Davies of Privacy International called the changes “a breach of faith by Facebook” and criticised the company for allowing commercial and legal concerns to come before its commitment to its users. He recommended that Facebook should commit to a privacy policy that would allow users to delete all data from its systems within a specified time period.

Mr Zuckerberg had originally defended the changes, but in the face of widespread negative feedback, he announced that Facebook would be returning to its previous terms of service. However, he said the move was only temporary “while we resolve the issues that people have raised”. The company still intends to substantially revise the terms from their current form. Mr Zuckerberg stated that the terms would be written clearly in language that everyone can understand.  Currently, it is not clear how much data, or what types of data, is retained by Facebook if a user decides to terminate their account.

The reaction to the Facebook changes are reflective of wider debate about ownership of data stored on social network accounts - including comments posted and videos and photos uploaded by users – and what happens when a user decides to terminate their account. Mr Zuckerberg stressed that users “own their information and control who they share it with”.

Meantime, it only proves it’s always worth reading the small print…

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European Court clarify law on database infringement

A recent ruling has clarified that the European Database Directive is infringed when data is taken from someone else’s database, regardless of what the intended use of the data is.

The Directive created what is commonly termed the “sui generis right”. This is legal protection for databases where there has been “either qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents”.

The Directive protects database owners in the event of “extraction and/or re-utilisation of the whole or of a substantial part of the contents of the database”.

This recent case involved two Bulgarian legal publishers. Apis-Hristovich EOOD said that that rival company Lakorda AD (which had been set up be ex employees of Apis) had copied its databases of legal information and legislation. The question of whether the Directive had been infringed by the mere obtaining of information was referred to the European Court of Justice (ECJ).

The ECJ clarified that “extraction” happens as soon as material is taken from a database and stored elsewhere.

Lakorda tried to argue that it was free to use the contents of the database as the Bulgarian laws contained in it were not protected by copyright. The court however disagreed saying that the “sui generis right applies independently of whether the database and/or its contents are protected by copyright”.

For more information on the Database Directive contact a member of the iTech team.

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