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Sophie Lawrance quoted in Global Competition Review on Apple vs Motorola

Sophie Lawrance is quoted in Global Competition Review on Apple’s complaint to DG Comp about Motorola’s use of patents

Sophie Lawrance at Bristows says the timing of Apple’s complaint could indicate the company is trying to derail Google’s proposed acquisition of Motorola Mobility. “Apple and Google compete directly in the mobile telecommunications sector, and the complaint appears to reflect this as much as anyspecific issues with Motorola’s licensing of itsessential patents,” she says.

Lawrance adds that one of the reasons Apple is adopting this aggressive stance could be that it holds fewer essential patents than its rivals. “These patents form the basis for many technology companies’ bargaining positions so Apple has recently been trying to bolster its essential patent portfolio.”

Keeping a Guarantor Liable

Teresa Edmund and Frances Beattie explain the protection afforded to landlords when a third party guarantees a tenant's lease covenant.

This article appeared in the 28 January 2012 edition of Estates Gazette. To view a copy of the article, please click HERE.

PhoneDog v Kravitz - Who owns tweeps?

In California Noah Kravitz is being sued by his former employers PhoneDog for keeping, after he had left their employment, twitter followers who had followed his account whilst he was an employee.

Whilst an employee, Mr Kravitz had tweeted under the name @PhoneDog_Noah. After he left PhoneDog he kept his account and his 17,000 followers but changed his name to @NoahKravitz. Eight months later, PhoneDog filed a claim against Mr Kravitz alleging that the followers were a customer list and therefore PhoneDog’s property and that PhoneDog had invested substantial resources into building up the list. PhoneDog claim damages of $2.50 (£1.60) per follower for eight months (a total of $340,000 (around £222,000)).

Although this is an American case, the decision will be awaited with interest by many in the UK where an increasing number of employees use twitter, facebook etc. to promote the company for which they work. It should serve as a reminder to employers of the importance of reviewing and updating social media policies and ensuring that these policies make it clear who owns content on twitter and what will happen to an account when an employee leaves employment.

SABAM v Scarlet

SABAM, a management company representing rightsholders, has been precluded by the Court of Justice of the European Union (“CJEU”) from being granted an injunction against Scarlet, an internet service provider (“ISP”), which would force Scarlet to install a system for filtering electronic communications passing via its services in order to prevent copyright infringements.

Background

SABAM had concluded that Scarlet’s users were downloading the copyrighted works of their members. SABAM obtained an order against Scarlet requiring it to bring such infringements to an end or to make it impossible for its users to distribute or receive copyright material through their service.

Scarlet appealed, claiming that the injunction was contrary to Article 15 of the E-Commerce Directive (the “Directive”), which provides that Member States shall not impose a general obligation on ISPs to monitor information which they transmit or store. Scarlet argued that the injunction would impose a de facto obligation to monitor. Indeed, it was common ground between the parties that the injunction would require Scarlet to:

identify, within all of the electronic communications of all its customers, the files relating to peer-to-peer traffic which contained copyright works; and
determine which of those files were being shared unlawfully; and
block that unlawful file sharing.

Decision

The CJEU noted that rightsholders may apply for an injunction against ISPs and that such an injunction could extend to preventing further infringements.

However, the injunction granted by the Belgian court was found to exceed the limits set out in Article 15(1), in that it imposed a general monitoring obligation.
The Court also found that the injunction would be incompatible with a principle of

Draft Finance Bill 2012

Patent Box

The proposed patent box regime is intended to tax certain profits arising from patented technologies at a reduced rate of 10% rather than the main corporation tax rate (currently 26%, though this will be reduced to 25% in April 2012). Following a consultation document published in June 2011, a number of concerns were raised about the narrow scope of the patents to be included and the complicated calculation methods that were to be used to determine which profits were to be included in the patent box and which were not.

The draft clauses published (which were published at the same time as a response to the June 2011 consultation document) made some significant amendments to the proposed regime including: extending the regime to patents granted by certain other EU national patent regimes; extending the period for which profits generated before a patent was granted can be included in the regime from 4 years to 6 years; and making some important changes to the technical aspects of the calculation of the profit to be included in the regime, including simplification of the divisionalisation rules and a simpler calculation for small claims.

The patent box is intended to come into effect over 5 years, starting in April 2013.

R&D Tax relief

Changes to the existing research and development tax relief system are to be included in the Finance Bill 2012 – there are some improvements, particularly for small and medium sized enterprises, but there are also measures balancing out the effect of apparently generous amendments.

The rate of additional deductions for SMEs will be increased from 100% to 125% (giving rise to a deduction of 225% in total) and the rule capping the amount of any repayable tax credit being capped at the company’s PAYE/NIC liability will be removed. To offset this, the rate of the repayable tax credit to SME

ICO releases new Information Rights Strategy

The UK’s Information Commissioner’s Office published its Information Rights Strategy at the end of December. The strategy sets out the ICO’s overall mission and outlines how the ICO intends to achieve it. The ICO’s strategy documents can be useful tools for organisations in planning their own data protection and freedom of information strategies. In particular, such documents indicate the ICO’s priority fields of action and explain where the ICO will be focusing its resources.

The ICO’s strategy is divided into a number of themes. The overall impression is that the ICO is aiming to be perceived as a robust yet pragmatic regulator.
One of these themes is the application of a risk-based approach. The ICO acknowledges that it has only limited resources and that these should be deployed in the highest risk areas, and where they will be most effective. The ICO’s current priority areas are confirmed as health, credit and finance, criminal justice and internet and mobile services. Organisations should expect continued scrutiny of these sectors by the ICO this year. It will come as no surprise, given a number of high profile personal data security breaches in 2011, that the ICO will also still be focused on the general issue of information security.

The ICO does recognise the challenge of limited public engagement by noting a need to take account of “the importance the public attach to the different information rights”. However, it accepts that some of the positions it may take on matters that are in the public interest will not always be universally popular. For instance, the ICO may choose to highlight privacy concerns with a new technological development, even if it is popular with consumers, where the ICO perceives such action is in the public interest.

Another theme is the message that “prevention is better than cure”. The ICO will continue to invest in th

Move On Up - Bristows

The Lawyer has published a profile of Bristows: “All-equity, a hugely consistent growth strategy and plenty of female partners.”

To read a copy of the article, please click HERE.

Cookie Jar - February 2012

The Cookie Jar is brought to you by Bristows' Technology, Media and Telecommunications Team. Every month we comment on issues affecting suppliers and users of TMT - changes in law, recent cases and market trends. The Team is led by Philip Westmacott and Mark Watts. The Cookie Jar is edited this month by Naomi Singh.

TUPE: Service provision changes and the last word on insolvency

The trend in the judiciary peeling back the scope of a service provision change (SPC) continues in Enterprise Management Services Ltd -v- Connect-Up Ltd & Ors 2011. This case confirms the line of cases (Metropolitan Resources Ltd -v- Churchill Dulwich Ltd 2009; Kimberley Group Housing Ltd -v- Hambly 2008; Clearsprings Management Ltd -v- Ankers 2009 and OCS Group UK Ltd -v-Jones 2010) which say that for there to be an SPC the activities which are performed for the client must be fundamentally and essentially the same. Hunter -v- McCarrick 2011 is a case which, on complicated facts, resulted in a finding that there is no SPC where there is a change in the identity of the customer at the time of transfer. The last case we refer to in this update is Key2Law Surrey) LLP -v- De’ & Ors 2011 in which the Court of Appeal upheld the EAT’s decision in the same case regarding the application of TUPE 2006 in the context of insolvency.

Enterprise Management Services Ltd -v- Connect-Up Ltd & Ors 2011

This was an IT case where there was held to be no SPC because the activities pre- and post- transfer were not essentially or fundamentally the same and there was fragmentation of the services post “transfer” so that no SPC took place.

Leeds City Council (LCC) provided IT support services to 300 schools. In 2004 it put the service out to tender, a process which resulted in Enterprise Management Ltd being granted preferred bidder status and entering into a framework agreement for the provision of IT support services to LCC schools. Schools were offered two service levels: (a) total support to both curriculum and administration networks; or (b) full support for maintenance of Management Information Software (MIS) which involved he

A Buyer's Guide to Acquiring Properties from NAMA

Since last summer, NAMA has been updating the original list of properties which have been through the enforcement process and are potentially set to go on the market in Ireland, the UK and beyond.

Despite NAMA’s rumoured intention to dispose of all of the UK assets on its books by the end of 2013, currently only a rather conservative number of properties has been earmarked for sale, as evidenced by NAMA’s own website. Recent press reports indicate that NAMA will not approve sales of properties for less than their acquisition values. This has ruled out the possibility of “fire sales” which is good news for the property market, but bad news for investors looking for a bargain.

The list is dominated by residential developments, although public houses and retail units are also among those of the secured properties which may be sold following the appointment of receivers arising from a default in the governing loan facility.

How will NAMA properties be marketed?

There is no obligation on the receivers to advertise prospective sales on the open market - their duty is to obtain the best return possible for the Irish tax-payer, so it may be that special purchasers are solicited off the radar. The receivers are listed on the NAMA website, so if a buyer is interested it may be worth them registering their interest with the receiver and asking to be notified when a property comes on the market. As is customary in England & Wales, any offers may be considered up until contracts are exchanged, so the property may not be taken off the market until that point.

How will buyers be aware of NAMA’s involvement?

It is not clear whether the sales particulars will identify the property as a NAMA one. The title deeds will not have been updated to show NAMA as the beneficiary of the charge, however t

Happy new year, sort of...

The trading receipts for the Christmas and January period will have been particularly important for many businesses this year. But with relatively big names La Senza, Hawkins Bazaar, D2 Jeans and Past Times already calling in the administrators it looks like 2012 will continue to be difficult.

This is not breaking news for landlords, many of whom have already agreed rent deferrals/standstills with tenants in order to keep a property tenanted (as an alternative to being served with lease disclaimers by the liquidator of an insolvent tenant). It is not hard to imagine that, as the financial difficulties continue, tenants who want to remain in their premises in order to continue trading, and landlords who want to mitigate their exposure to insolvent tenants, will explore more creative commercial arrangements. So is it possible to put in place an agreement that will allow the Landlord to improve its position where its tenant becomes insolvent?

The short answer is not very easily (and certainly not without a certain degree of risk). This is because where an arrangement between a landlord and tenant bestows advantageous terms on a landlord in circumstances where the tenant is close to being insolvent, there is a risk that the arrangement might be challenged were an insolvency practitioner to be appointed as a result of the tenant's insolvency.

That is not to say that every transaction with a potentially insolvent tenant will be challenged (or is even capable of being challenged) by an insolvency practitioner. The law in this area is complex, and is highly dependent on the factual matrix surrounding each particular arrangement (for example the proximity of the transaction to the tenant's insolvency and whether it can be demonstrated that the parties' intention was to improve the landlord's position relative to the other creditors). By way of a high-level guide (rather than a comp

Rent Review - Late Reviews

It is standard for a rent review to be scheduled to take place on regular intervals throughout the term of a lease. The duration of each interval is a matter for negotiation between the parties and market practice changes over time. Seven year intervals were once the norm. More recently, five, three and (where the rent review is linked to the retail prices index) yearly rent reviews are more common.

Whilst it is sometimes the case that time is of the essence in relation to a rent review clause so that failure to initiate or complete the review on that date can have serious consequences for either the landlord or the tenant, it is more usual for the parties to agree that time will not be of the essence. The result is that many rent reviews are settled some time after the rent review date to which they relate.

Whilst the parties are free to agree any mechanism for dealing with late reviews which they feel is appropriate, a common solution is to place the tenant under a duty to continue to pay rent at the existing rate whilst the rent review is negotiated. Once the review is concluded, if the rent has increased the tenant must pay to the landlord a balancing payment equivalent to the shortfall in rent for the period from the review date up to the date of settlement or the next quarter day.

Where a rent review clause is drafted on terms which allow for the rent to fall as well as rise (an “upwards / downwards review”) the review clause should similarly require the landlord to pay back to the tenant a balancing payment equivalent to the amount by which the rent already paid by the tenant following the review date exceeds the reviewed rent.

To ensure that there is no incentive for either party to delay settlement of the review in order to benefit from interest on any balancing payment, the rent review clause will ordinarily impose a duty to pay interest upon

Dilapidations Protocol Becomes Part of the Civil Procedure Rules

The dilapidations protocol is not new. Published by the Property Litigation Association (first version published in 2002 and revised in 2006 and 2008), its aim was to encourage the early resolution of disputes in landlords’ claims for damages for dilapidations without the need to litigate. The Property Litigation Association sought to achieve this aim by improving communications between the parties through establishing a timeline for the exchange of information. The protocol also included a standard form of schedule of dilapidations. However, although the protocol was considered “best practice”, it was not formally incorporated into the CPR. From 1 January 2012, the dilapidations protocol has been adopted as a formal pre-action protocol under the CPR.

The dilapidation protocol has changed – but not much

The dilapidations protocol is broadly in the same form as the 2008 version but aims to create a “level playing field” so neither the landlord nor the tenant can submit exaggerated claims. The key changes are:

Tenant’s Endorsement

The tenant or the tenant’s surveyor must include an endorsement on its response to the schedule of dilapidations served by the landlord or its surveyor confirming that in its opinion:

the works detailed in the response are all that are reasonably required for the tenant to remedy the alleged breaches of its covenants or obligations;
any costs set out in the response are reasonably payable for such works; and
account has been taken of what the tenant, or the tenant’s surveyor, reasonably believes to be the landlord’s intentions for the property.

The endorsement aims to prevent the tenant or its surveyor from proposing a lower costing than what he/she honestly believes to be correct or remo

The Issue of Insurance for Tenant's Works

When a tenant wishes to carry out works to its premises, either fitting-out works at the start of a lease term or further fitting-out/refurbishment works during the term, it is important that the tenant ensures the works are covered by insurance. If the tenant is not adequately covered, it may find itself liable for the costs of any damage caused to the landlord’s property; a liability which could be substantial (for example, if the tenant’s contractor causes a fire which destroys all or part of the building).

Insurance provisions under a lease and licence for alterations

It is common practice for the landlord of a commercial premises to insure the building in its own name and to recover the cost of that insurance, or a fair proportion of it, from the tenant. The landlord will then be responsible for the cost of repairing or reinstating the tenant’s premises if it is damaged as a result of an insured risk, provided the tenant has not done anything (or permitted anyone else to do anything) to invalidate the landlord’s insurance. The tenant is required to take out its own insurance policy for its plant, machinery, fixtures, fittings and contents at the premises.

If a tenant wishes to carry out works to its premises, this will usually be permitted under the terms of its lease, provided the landlord’s written consent is obtained. Landlord’s consent is commonly documented via a licence for alterations, under which the tenant will be obliged to: obtain consent for the works from the landlord’s insurers; make good any loss or damage to the building caused directly or indirectly by the works; and to indemnify the landlord against all losses arising from the carrying out of the works. The works will be stated to be at the sole risk of the tenant and the landlord will only be obliged to insure the works if, once completed, they

Vacant Possession - A Tenant's Guide

Current economic conditions have meant that many tenants have looked to reduce their property overheads by exercising their break rights. Often, their break clauses are conditional on a number of factors, including giving up the property with vacant possession. However, what does vacant possession actually mean? Although each break clause should be reviewed on a case by case basis, there are some basic principles:

Ensure the property can be physically occupied

This part is twofold – (a) ensure there are no items left on the property and (2) ensure there are no persons left on the property.

Beer in the cellar, furniture, goods and rubbish have all been held to preclude vacant possession subject to a de-minimus test. The case law has shown a two stage test developing - firstly looking at whether the party providing vacant possession, by its actions, showed the requisite intention to give vacant possession and secondly, whether the party getting vacant possession can enjoy physical possession of the property without hindrance or objection from the date vacant possession should have been provided.

That said, the case law is far from conclusive, and judges have distinguished cases on the facts. In John Laing Construction Ltd v Amber Pass Ltd (2004) the failure of the tenant to return the keys and leaving security guards at the premises was held not to be inconsistent with providing vacant possession. This is in contrast to the recent case of NYK Logistics (UK) Limited v Ibrend Estates BV (2011). In this case, the tenant sought to exercise its break clause to terminate its 2 year lease of a warehouse at a rent of £278,000 per annum. The break clause was conditional on giving 6 months’ notice, paying the rent up until the break date and giving up possession of the premises on the break date with vacant

Glossary of Real Estate Terms ... Continued

Nuisance – A nuisance is a condition, activity, or situation that interferes with the use or enjoyment of property. Nuisances can be of two kinds: (1) public or common nuisances affect the public and are an annoyance to all, or at least an indefinite number of people. Typically, the nuisance will interfere with a common right, such as obstruction of a highway preventing people from passing; (2) private nuisances cause damage to a specific person, or a limited and definite number of persons and can arise where one person uses his own property so as to injure another. Examples include the creation of excessive noise, smells, smoke, and so on which materially affect one’s neighbours in their enjoyment of their land.

Permitted development – The Town and Country Planning (General Permitted Development) Order 1994 (as amended) grants planning permission for certain types of development for which it will not be necessary to obtain planning permission. Therefore, where the development consists of development within the curtilage of a dwelling house or certain types of change of use, planning permission is deemed to be granted and it is not necessary for an application to be made.

Overage – An overage provision in a contract for the sale of land means that the buyer will have to share with the seller any increase in the value of the property that is realised after the property has been sold. This means that even after the seller has sold the land, he will receive payment if the land increases in value. Overage provisions are commonly used where the land being sold will be redeveloped, or there is reasonable expectation that valuable planning permission will be granted. The Seller will be able to sell at the current market value of the land and still obtain a share of the profits when the redevelopment is complete.

Planning permission &ndash

UCP - January 2012

. . . is the monthly employment email update service brought to you by Bristows' employment team.

Realty Bytes - Winter 2012
In this edition we consider the issues that should be considered by a buyer thinking of purchasing a property from the National Asset Management Agency (NAMA) and a Landlord facing the possibility of tenant insolvency. We also continue our series of articles on Landlord and Tenant matters that are of relevance in the current market.

The Lawyer: The New Data Protection Regulation - An Opportunity Missed

On Wednesday 25 January we saw the European Commission’s proposal for updating the European Union’s data protection regime in the form of a new Data Protection Regulation.
The contents of the document weren’t entirely unexpected, partly as a result of various clues and hints that had emerged from DG Justice over the last year or two, but also because a draft of the Proposal was leaked and had been circulating on the Internet since December. This leaked draft had sent shock waves through much of the business community, particularly high tech industry, as it seemed to be an utterly uncompromising piece of legislation written entirely from the point of view of individuals whose data is being processed. With fines of potentially up to 5 per cent of worldwide turnover and an obligation to notify individuals within 24 hours of any breach affecting their data, it didn’t appear to pay much heed to the interests of business or the need to continue growing the internet economy.
Would the “official” regulation contain similar horrors?
What finally emerged on the 25 January has changed quite significantly with many of the most controversial issues in the leaked proposal having been watered down – a bit. In some areas the changes are modest – the maximum fines are now ‘merely’ 2 per cent of worldwide turnover rather than 5%, which is still disproportionately high and there is now a slight exception with respect to breach notification within 24 hours if feasible – but overall it appears that the Commission has made some attempt to listen to many of the criticisms. What isn’t clear is whether the changes are, as many would hope, the result of strong and effective lobbying by industry groups, particular high tech industry, or the result of the many internal critici

The New Data Protection Regulation - An Opportunity Missed

On Wednesday 25 January we saw the European Commission’s proposal for updating the European Union’s data protection regime in the form of a new Data Protection Regulation.

Read Mark Watts, Data Protection Partner's article for The Lawyer - HERE.

Reuters quotes Mark Watts on EU data laws

Georgina Prodhan, European technology, media and telecoms correspondent quotes Mark Watts in a piece called Analysis: New EU data laws command the tide but not the cost.

For the full article, please click HERE.

Mark Watts in The Lawyer on online privacy rules

Please see a full copy of the article, HERE.

Third party legal costs funding: open to arbitrating parties too

The implementation of a new Code of Conduct[1] for third party ‘litigation’ funders is applicable to arbitration as much as court proceedings and may encourage parties to consider such finance when submitting to arbitration. Its introduction follows the recommendations in Lord Justice Jackson’s January 2010 Review of Civil Litigation Costs[2].

Whilst this Code currently remains voluntary, all members of the new Association of Litigation Funders will be bound by the Code, and it is therefore suggested that interested parties approach those funders that have signed up to the Code. The Code creates a framework to minimise potential pitfalls, focused on the requirement that a contractually-binding funding agreement is in place. It includes the following elements of security to an arbitrating party:

A funder must have sufficient financial resources to meet all the costs it agrees to fund, limiting the risk of insolvency to an arbitrating party;

A funder is not entitled to assert undue influence over the conduct of arbitration proceedings above that defined in the contractual agreement; and

A funder is not entitled to terminate any agreement mid-proceedings without due cause.
The Code reflects an increasing acceptance of the merits of third-party funding in the United Kingdom. Its introduction has generated interest in the market, as exemplified by developments such as the first ever listing of a litigation fund (Argentum Capital Limited) on the Channel Islands Stock Exchange (CISX)[3]. The recent judicial and political encouragement to third-party funders looks set to continue, and with a gro

Arbitrators not obliged to alert parties to potential arguments

The Commercial Court has confirmed that section 33 of the Arbitration Act 1996 does not oblige arbitrators to alert a party to a potential line of argument different to that which it has advanced.
Section 33(1)(a) states:“The tribunal shall act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent”.
In the recent case of ED & F Man Sugar Limited v Belmont Shipping Limited [2011] EWHC 7992 (Comm) it was arguedthat this duty required arbitrators who were aware that a party had failed to advance an argument based on a particular case-law precedent to enquire of the party whether it wished to do so.
The issue was especially germane in this case as the arbitral tribunal had noted in its decision that the Claimant had not relied upon a shipping case known as The Happy Day and indicated that the potential consequences of that case had not therefore affected the tribunal’s decision. It was argued by the Claimant that the tribunal knew that reliance on the Happy Day case would have materially affected the tribunal’s decision and so it followed that the tribunal was under a duty to alert the Claimant to this pursuant to Section 33.
The Commercial Court disagreed, stating that "arbitrators are not barred from asking a party whether it has considered raising a different case from that which it has advanced but section 33 of the ... Act does not oblige them to do so."
It is relevant to note that the arbitration in question was conducted on the basis of a documents-only procedure. It was common ground that had there been an oral hearing, the tribunal may well have asked the Claimant if it had considered raising a different case from that which it had advanced, or alternatively the Happy Day argument may well otherwise have ar

Proposed EU directive on Alternative Dispute Resolution

In November 2011 the European Commission adopted a proposal on the use of alternative dispute resolution (“ADR”), including arbitration and mediation, for resolving consumer disputes. The aim is to ensure that all consumer complaints can be submitted to an ADR entity and that disputes arising from cross-border transactions can be more easily resolved.
The proposal was prompted by concerns over perceived gaps in the availability of ADR, a lack of consumer and business awareness, and the uneven quality of ADR procedures across the EU. The proposal is expected to become a Directive by the end of 2012 and Member States will then have 18 months to implement it.
The main elements of the proposal are:

Ensuring that ADR procedures exist for all consumer disputes
Member States will have to ensure that appropriate ADR entities exist to deal with any disputes between consumers and businesses.

Providing consumers with information on ADR
Consumers should be able to quickly identify which ADR entities are able to deal with their dispute. It is suggested that the business’ website and the main commercial documents provided to customers should contain information on the most appropriate ADR entity..

Ensuring the quality of ADR
Finally, the proposal aims to ensure that ADR entities across the EU are impartial, transparent, effective and fair. It is hoped that this will strengthen the confidence of both consumers and businesses, and ensure that ADR procedures effectively address shortcomings associated with court procedures.
It should be noted that it is expected that Member States will have a discretion as to how they implement the Directive into national law and it is perhaps unlikely that the use of ADR will be ma