Wright, Johnston & Mackenzie Solicitors

Bluebeat.com waves “hello, goodbye” to Beatles songs

British recording label EMI Music has won a court injunction in Los Angeles to prevent US online music store Bluebeat.com from streaming or selling tracks by EMI artists on their website. 

The injunction means that Bluebeat is banned from directly or indirectly selling or streaming any content owned by EMI pending a trial later this year, where both sides will present their formal arguments.

EMI owns the recording rights to the Beatles music, as well as artists like Coldplay and Pink Floyd. They sought the injunction after becoming aware that Bluebeat were selling songs by their artists on their website at a discounted price of 25 cents each.

Famously, the Beatles are one of a handful of recording artists that do not yet sell their songs online.

EMI are seeking a permanent injunction on Bluebeat, preventing them from selling or streaming any EMI artist’s work and are also seeking royalties for the songs already sold.

However, Bluebeat argue that they have developed a “psychoacoustic process” that creates sounds that simulate but are different from EMI’s copyrighted sound recordings.

They argue that this technology enables them to sell music that sounds identical to original recordings, making it exempt from copyright infringement under a section of the US Copyright Act which applies to recordings that “imitate or simulate those in the copyrighted sound recording”.

Music by tribute bands are typically covered by this section of the law – for example, a Beatles tribute band would not be guilty of violating recording copyright, but would still be required to pay publishing royalties on any songs they recorded.

The case is due to commence later this year and the iTech team will let you know the outcome.

If you wish any advise in relation to copyright or intellectual property rights in general, please contact a member of the iTech team.

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ASA's remit to extend to website content

The way in which complaints from members of the public about advertising on the web are dealt with is set to change radically, as the scope of the CAP Code is extended to include websites.

The CAP Code is a set of rules for advertising created by the Committee of Advertising Practice. Any consumers who believe that an advert is misleading or offensive or in breach of the CAP Code can complain to the Advertising Standards Agency.

At present, the CAP Code regulates advertising by all media but contains an important exception for “website content, except sales promotions and advertisements in paid-for space”.

This means that, for example where a company advertises its own goods or services on its own website, the ASA have no authority to take any action, therefore preventing consumers from making complaints about the majority of adverts on the internet.

Therefore if an individual wants to make a complaint about an advert on a website, it can only be made to the Office of Fair Trading (OFT) or Ofcom.

However, the extension means that the ASA will be given the authority to take action against offending websites, where previously their hands were tied. It is expected that ASA will be able to adopt sanctions such as requiring the advertiser to remove the advert, or advising the OFT of any breaches of the law.

The Government hopes that the changes will put consumers in a better position to raise concerns about advertising within website content, and also allow action to be taken by ASA where it is shown that a website is in breach of the CAP Code.

The changes are anticipated to come into force as early as next summer and perhaps surprisingly have been supported by many web advertisers.

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Chip seller guilty of copyright infringement

In recent editions of iTech, the team have reported on how the courts are cracking down on copyright infringement – for example with rulings that copying a few words from a book and downloading and sharing music and movies from the Internet can constitute copyright infringement.

In a further example of the courts’ toughening stance, the UK Court of Appeal has ruled that Christopher Gilham, who sold computer chips that enabled pirated games to be played on games consoles, was guilty of copyright infringement.

The decision came in the same week as Microsoft cut off over a million Xbox users from using the Xbox Live gaming facilities for modifying their games console, which the iTech team report on later in this issue.

Under UK copyright law, it is an offence to sell or distribute “any device, product or component which is primarily designed, produced or adapted for the purpose of enabling or facilitating the circumvention of effective technical measures”. In other words, selling equipment which helps someone chip their games console can be unlawful.

The case fell to be decided on whether Mr Gilham’s selling of the computer chips via a website enabled others to infringe copyright.

To prove copyright infringement it is usually necessary to show that a “substantial part” of the copyrighted work has been copied. Mr Gilham’s legal team argued that when users play games on consoles it is only a small part of the game which is being copied at any time and this did not constitute a “substantial part” of the copyrighted work.

However, the court did not agree with Mr Gilham’s arguments and concluded that this case did not have to be decided on whether a “substantial part” of the game was copied.

The court explained that each computer game consists of many small sounds and images that are subject to copyright and each of these sounds and images has an original composer or artist. It is not only the game as a whole that is subject of copyright, but each of these individual elements.

Therefore at any point when the game is being played, the original composer or artist’s work is being copied to the console’s memory and when substantial parts of these sounds and images were displayed, this constituted copyright infringement.

Mr Gilham’s selling of the computer chips therefore also constituted copyright infringement. 

If you wish any advice on copyright or intellectual property rights in general, contact a member of the iTech team.

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Microsoft pulls the plug on online gamers

Microsoft have banned approximately 1 million Xbox 360 owners from access to their online Xbox Live service for modifying their consoles to allow them to play pirated games. The move is the latest attempt by Microsoft to crack down on video-game piracy.

Each user of Xbox Live accepts the Xbox Live terms and conditions of use when signing up to the service. These terms and conditions state that users are to use “only authorized software and hardware to access the (Xbox Live) Service,” and that users agree that their software and hardware “have not been modified in any unauthorized way”.

However, some users alter their consoles by installing software that allows them to run unofficial – and sometimes illegal- games and programs.

Microsoft have stated that those who modify their consoles in this way “violate the Xbox Live terms of use, will void their warranty and result in a ban from Xbox Live”.

A message displayed on affected consoles said there was “no recourse for terms of use violations”. The banned consoles will be unable to connect to Xbox Live and the owners of the affected consoles will have to buy a new Xbox to get back online.

The move coincided with the release of the hotly anticipated Call of Duty Modern Warfare 2 game and it is speculated that Activision, the makers of Call of Duty, pressurised Microsoft into the ban as pirated versions of the game became available days before its release.

The ban is a major step in the games industry’s battle against video game piracy. Microsoft hopes that barring access to online services will provide a huge deterrent to video game piracy- particularly where so many games on the Xbox 360 are built around online play.

Following Microsoft’s actions, US law firm Abington IP launched a website offering affected Xbox users the opportunity to sign up and launch a class action lawsuit against Microsoft.

Abington IP has not yet confirmed if the lawsuit will go ahead and the iTech team will keep you up to date with progress.

If you wish any advice on terms and conditions or need any assistance drafting appropriate terms and conditions and privacy policies for your website or business, please contact a member of the iTech team.

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Advertising forum hopes to protect consumers’ rights

This month the European Commission formed the Stakeholder Forum on Fair Data Collection. 

The Forum will consist of a number of businesses who will attempt to regulate the recent growth in companies’ gathering and use of personal data. They will also share their plans for protecting consumers’ personal information. 

The Forum will be mainly concerned with the way in which online retailers use information on users’ browsing habits and demographic information to target consumers.  This is known as behavioural advertising - where companies build a profile of information about users based on which websites they visit so that advertisements can be more narrowly targeted towards the interests of the individual users.

The use of behavioural advertising has grown significantly in recent years with almost 60% of advertisers indicating that they would like to use this sort of marketing strategy in 2009/2010.

The Forum aims to address the privacy and data protection issues involved in this practice and also alleviate the concerns of consumers, whom the European Commission believe are worried about the use of their personal data.

The intention is for this Forum to meet three times a year to discuss the following issues:

· use of incomprehensible privacy policies;
· misleading and aggressive personal data collection methods;
· the breaking of existing rules on data collection;
· the best way to obtain informed consent for data collection;
· how to allow consumers to see what information is held on them; and
· whether or not consumers are told enough about the collection of data and how data is used to profile them. 

These issues have also recently come to prominence in the UK.  The Office of Fair Trading last month said that it will investigate whether behavioural advertising and the targeting of services at certain groups of people break the law on consumer rights.  In addition a group of MPs and Lords have also recently called for this practice to be banned except where advertisers have the internet user’s explicit consent. 

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Mobile customers’ data sold illegally

Pressure to increase penalties for those who are convicted of trading illegally in personal data (or knowingly or recklessly disclosing it) has become greater. This follows the announcement that millions of items of customer information were illegally sold by T-Mobile staff throughout the past year.

It is alleged that ex-T-Mobile employees illegally sold customers’ information to ‘brokers’ who paid hefty sums of money for information such their names, addresses, phone numbers and when their contracts would come to an end. The information was then used by rival companies, to ‘cold call’ T-Mobile users, as their contracts ran out. The scam is said to be the biggest of its kind in the UK.

The ex-employees’ actions will almost certainly be considered a breach of data protection law and the Information Commissioner’s Office are now preparing a prosecution file against the relevant employees. It remains to be seen whether the ICO will take any action against T-Mobile themselves for breach of their obligations as data controller.

However, anyone found guilty will only be faced with a maximum fine of £5,000. The ICO considers that this limited penalty is unlikely to provide a deterrent to those breaching data protection laws, especially given the sums likely to have been made by the ex-employees for selling the data.

As the iTech team reported in October, there is currently a Government consultation underway which proposes custodial sentences and higher penalties for these types of crimes. If the ex-employee’s actions occurred after these proposed punishments were introduced, the perpetrators could face up to two years in jail or a fine of up to £500,000.

If you have any queries concerning data protection and your obligations under the Data Protection Act, please contact a member of the iTech team.

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