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September 2010

What's new in the world of procurement policy?
With the end of the holiday season, it's time to take stock of what has happened in the world of procurement policy following the arrival of the UK's Coalition Government. As a general comment, it is interesting to see that, arguably, we are becoming uncharacteristically more "rule" bound whilst some influential voices in Brussels are calling for increased flexibility in public procurement.

Google announces change to AdWords trade mark policy
Google has announced an AdWords policy revision which will align its European policy on using trade marks as keywords with that of, amongst others, USA UK and Ireland. The change will affect the EU and EFTA regions where, at present, Google will disable keywords in response to a complaint that the use of a trade mark as a keyword is an infringement of the trade mark owner's rights. As of 14 September 2010, Google will 'no longer prevent advertisers from selecting a third party's trademark as a keyword' in the affected regions.

ASA publishes guidance on environmental claims
The ASA has published new guidance on environmental claims relating to the updated sections of the CAP Code. Marketers and advertisers must ensure that they accurately translate conclusions from research into marketing materials and caveat any findings where there are conflicting schools of thought. Care must also be taken not to exaggerate environmental claims, and to provide consumers with claims that take into account the full life cycle of a product.

IAB National Search Marketing Barometer shows search is not fully integrated into marketing strategy
A survey carried out by the Internet Advertising Bureau (the 'IAB'), the 'IAB Search Marketing Barometer 2010', shows that 99% of UK advertisers believe that search advertising is still not fully integrated into the marketing mix and that advertisers can and need to find ways to more effectively link search advertising with their other marketing activities.

FSA outlines rules regarding the advertising of financial promotions on 'new media'
The FSA has reminded the financial services industry of its obligations when communicating financial promotions to customers through 'new media'. The latest Financial Promotions Industry Update clarifies that the FSA's financial promotions rules apply irrespective of the media used. Therefore, advertisers must ensure that any advertising on social networking sites such as Facebook and Twitter or on forums, blogs and iPhone applications complies with FSA's financial promotion rules.

Court of Appeal reluctantly follows ECJ's ruling in 'smell-alike' perfume case
Despite reservations regarding the implications of the judgement for consumer choice and competition, the Court of Appeal has followed the ruling by the European Court of Justice (ECJ) and found in favour of L'Oreal in the case of L'Oreal S.A. v Bellure NV (C-487/07). This decision has notable consequences for the advertising of lawful replicas and copies.

Participation TV ('PTV') to be regulated by Ofcom
From 1 September 2010, all forms of PTV will be regulated by Ofcom and will therefore no longer fall within the Broadcasting Code as editorial content but under the BCAP Television Advertising Standards Code (the 'BCAP Code') as advertising content. No action will be required for most PTV channels as a result of these changes, however broadcasters must comply with the BCAP Code from the above date. The changes are most likely to affect the providers of Adult Chat and Psychic PTV services, who will need to apply to amend their Ofcom licences before 1 September 2010.

Apple launches iAds targeted mobile advertising platform for iPhone, iPad and iPod Touch
1 July saw the launch of Apple's new mobile advertising platform, iAds, in the USA, which aims to compete directly for mobile advertising spend with Google's AdMob service.

Direct Marketing Association publishes new Code of Practice
The Direct Marketing Association (DMA) has published an updated code of practice (the 'Code'), which sets the rules that govern its members' activities. Most significantly, the fourth version of the Code contains guidance relating to the collection of data on children under 12 years old and the use of environmental claims in advertising.

Ofcom launches consultation into product placement
Ofcom has launched a consultation concerning the new standards devised by the media regulator to govern the introduction of product placement on television. The consultation will run from the end of June until 17 September 2010, and follows the introduction of the Audiovisual Media Services (Product Placement) Regulations 2010 in April. Ofcom has stated that following the consultation, revised rules for TV and radio will be issued at the end of 2010 and incorporated in Ofcom's Broadcasting Code. Ofcom has also revealed proposals that could potentially lead to far-reaching changes to commercial communications on radio.

Recent ASA adjudications
Paddy Power's blind footballers cleared by ASA
ASA emphasises the need for clarity in Michelin money-saving advertisement
ASA Rules Diesel 'Be Stupid' ads likely to cause serious or widespread offence and unsuitable to be seen by children
Burger ad 'misleading on size
ASA adjudicates on Zynga Game Networks Facebook advertisement

News From Europe - Interesting Times Ahead For EU Licensed Gambling Operators
Recent European Court judgments and the Commission's approval of 'local' licensing regimes mean that gambling operators established within the EU can no longer comfortably rely on the so-called EU defence. There are certainly still advantages to being licensed in a Member State but more jurisdictions within the EU are proposing a local licensing option in relation to certain online gambling products (in this update we report on proposals in Belgium, Cyprus and Greece). Member States introducing these types of systems are also considering means, such as ISP blocking, to prevent citizens residing within their territory from accessing unlicensed operators. We also report about how French authorities have already begun to exercise their powers by investigating unlicensed operators. Meanwhile authorities outside of the EU seem to be following the lead of Member States by seeking means to stop citizens from accessing online gambling websites.

Controversial New Gambling Legislation In Belgium
On 10 January 2010 the Belgian government adopted a new Gambling Act. Even though the new Gambling Act is expected to enter into force on 1 January 2011, it has caused a lot of controversy and is now the subject of a complaint to the European Commission.

UK or Not UK - That Is The (Very Taxing) Question
HMRC would appear to have a mandate to challenge the taxable status of certain offshore gambling operations where they suspect that those operations are, for general betting duty purposes, based in (or partly in) the UK. We are aware of a number of operators who are currently subject to such HMRC challenges.

The Levy and the Tote - Déjà vu all Over Again
We have written many times over the last few years about the Horserace Betting Levy and the sale of the Tote but to avoid trawling our archive we have set out a brief summary of the key events in the long-running sagas which have afflicted both.

Gambling Minister Looks To Reduce Regulation
John Penrose, the minister with responsibility for gambling, has asked the gambling industry to make suggestions as to how gambling regulation might be reduced in a way that does not compromise integrity or result in extra costs.

Australia: Betfair, Sportsbet And The Productivity Commission Report On Gambling
June was an eventful month for the gambling sector in Australia with the release of the Productivity Commission Final Report on Gambling (the "Report") and the handing down of judgment in the cases of Betfair v Racing New South Wales & Another and Sportsbet v State of New South Wales and Ors.

Gambling Commission Publishes Advice On When A Prize Machine Is A Gaming Machine
In May 2010 the Gambling Commission published a guidance note setting out how it determines whether a particular prize machine is a gaming machine. This guidance was subsequently amended in July to reflect the HMRC skills with prizes machines and taxation review. Although the interpretation of the Gambling Act 2005 is ultimately a matter for the courts, the guidance note should be a helpful steer for manufacturers and suppliers of prize machines and those who make prize machines available for use, such as publicans, in determining whether they may require a licence from the Commission.

Latest Advertising Standards Authority Adjudications on Gambling Advertisements
In this article we describe the outcome of two recent adjudications into adverts by Paddy Power and Bet365.

A Round Up Of DCMS And Gambling Commission News
As might be expected it has been a quiet quarter in terms of DCMS and Gambling Commission publications and consultations as the new government takes shape and assesses its priorities. Nevertheless, below we set out two pieces of news which have been announced recently.

Equality Act 2010 provisions to come into force on 1 October
After a long period of stakeholder consultation, the Government Equalities Office (GEO) has now announced that most of the key provisions of the Equality Act 2010 will come into force on 1 October 2010.

National Lottery Commission Provisionally Refuses To Allow Camelot To Offer Ancillary Services
On 16 July 2010 National Lottery operator Camelot's proposals to allow customers to pay household bills, top-up mobile phones and other similar services through its National Lottery terminals were provisionally rejected by the National Lottery Commission (the "NLC") because it considered there to be a significant risk of the proposal breaching EU/competition law.

August 2010

OFT consultation on Competition Act investigation procedures guidance
On 20 August 2010 the OFT launched a consultation on its proposed guidance concerning the procedures it follows during Competition Act investigations. The Competition Act 1998 prohibits agreements which prevent, restrict or distort competition in the UK and also anti-competitive behaviour by dominant undertakings. The draft guidance builds on existing, less detailed guidance and aims to reflect the ways in which the OFT's procedures have changed since the existing guidance was published in March 2005. It also introduces new initiatives, including offering informal discussions with potential complainants before they file a complaint and a commitment to decide within four months whether or not to formally open a case. The OFT believes that providing potential complainants and defendants with greater clarity should also help it to improve delivery of its investigations.

Wish you were here ... ?
With the news that BAA workers across its six airports may go on strike and travel companies (such as Sun4U and Goldtrail) are collapsing, employers may need to reconsider how to deal with staff who are unable to return from their holidays on time through no fault of their own. Employers have a number of options in this situation.

High Court holds that emulating software functionality does not infringe copyright, but refers decision to ECJ for confirmation
In July 2010 the High Court provisionally ruled that the copyright in a software program was not infringed by copying its programming languages, interfaces or functionality. However, a number of important questions about the scope of copyright protection under the EU Software Directive and Information Society Directive are to be referred to the ECJ. The eventual outcome of this case is therefore of enormous interest to the software industry - and to those commissioning and licensing-in software.

Outsourcing and data protection: new guidance about data transfers outside the EEA
Important new guidance has been published for organisations transferring personal data to third parties outside the EEA, particularly where the transfer involves further transfers to sub-processors. The guidance follows the new form of model contract which was introduced in May this year, and is essential reading for all organisations which transfer customer or employee data to processors outside Europe.

Time left to train?
Following its announcement earlier this week that it will adopt a "one-in, one-out" approach to new regulations with a view to reducing the regulatory burden on businesses, the Government is now consulting about the future of the right to request time off work to train. The results of the consultation will feed into the Government's regulatory review.

Holiday and sick leave - first tribunal decisions come through
The first tribunal decisions on holiday and sick leave are coming through, seeking to apply the European case law relating to the right of employees on sick leave to accrue and take their holiday entitlement.

Coalition Government revives order directing Ofcom to auction and liberalise spectrum, but leaves Ofcom open to legal challenge with new direction to conduct competition assessment
In a press release issued on 28 July 2010, the Department for Business, Innovation and Skills ("BIS") announced 'new' Government plans to "revolutionise the country's digital infrastructure". Those plans take the form of a draft Order (the Wireless Telegraphy Act 2006 (Directions to Ofcom) Order 2010) directing Ofcom to, among other things, auction and liberalise various spectrum bands. The Order is now before Parliament awaiting approval.

July 2010

Default Retirement Age to go - consultation begins
The Government has announced that it is planning to scrap the Default Retirement Age ("DRA") in the UK from October 2011 under proposals published for consultation today.

National minimum wage changes
The Government has published legislation which will increase the rates of national minimum wage from 1 October 2010.

The Bribery Act 2010
The UK's Bribery Act (the "Act") has far reaching consequences for Africa. Précised in this article are a number of factors for African companies with an association to the UK to take into consideration.

Early termination: Government consults on regulation of ancillary charges in consumer contracts
Last week the Government issued a "Call for evidence" on whether or not ancillary charges in consumer contracts should in future be subject to the fairness test under EU consumer law. Although phone and internet contracts are not specifically mentioned, the consultation is relevant to the hot topics of minimum contract periods, early termination charges, minimum notice periods, itemised billing and non direct debit, which have been the subject of recent Ofcom guidance. Network operators have until 23 August to respond to the consultation.

Bribery Act 2010 - Consultation process and delayed implementation
The Bribery Act 2010 introduces a new comprehensive anti-bribery code with four distinct offences. From an employment law perspective, the most significant of these is the new corporate offence of "failing to prevent bribery". This is a strict liability offence which can attract unlimited fines. Commercial organisations will, however, have a defence if they can show that they had adequate procedures in place to prevent bribery.

Do standard property sale conditions prevent sub sales?
This case considers the extent to which standard conditions of sale for property transactions prevent sub sales.

Data Protection Sanctions: A Practical Quick Reference Guide
This week saw the publication of the Information Commissioner's Annual Report 2009/10, entitled "Upholding information rights in a changing environment", which covers the period from April 2009 to March 2010 and coincides with Christopher Graham's first year as Information Commissioner.

Ofcom Launches Consultation into Product Placement
Ofcom has launched a consultation concerning the new standards devised by the media regulator to govern the introduction of product placement on television. The consultation will run from the end of June until 17 September 2010, and follows the introduction of the Audiovisual Media Services (Product Placement) Regulations 2010 in April.

Reform of the Data Protection Directive: call for evidence and issues to keep on the radar
Some potentially far reaching changes have been mooted as part of the reform of the Data Protection Directive. Consultation meetings took place in early July, following on from the European Commission's 2009 consultation exercise. The Commission has published a questionnaire which sets out specific options for potential reform. The UK Ministry of Justice has launched its own consultation to help to inform the UK's negotiating stance. Organisations processing personal data should have these issues (many of which will impose stricter obligations on data controllers) on their radar - so that they can assess the impact on their business operations and, if necessary, lobby to influence the detail of the revised Directive. We highlight some of the key issues in this article. The deadline for responses to the UK consultation is 6 October 2010.

New ICO guidance on personal information online: a must-read
The ICO recently published its "Personal information online code of practice". This is the ICO's most detailed guidance to date on how to comply with the Data Protection Act 1998 in the ecommerce environment, and is a must-read for all online businesses. The Code sets out the ICO's views on how the broad principles of the Act apply to a range of online scenarios, and is in effect a benchmark for good practice. The Code provides pragmatic advice on some complex issues, including hot topics like behavioural advertising, cookies, collecting data from children and security of online forms.

Additional paternity leave - review your policies now!
Employers should, if they have not done so already, review and amend existing maternity and paternity leave policies, since the new additional paternity leave rights are relevant to the partners of employees becoming pregnant now.

Net Neutrality: The Debate hots up in the UK and EU
Ofcom published a Discussion Document on Traffic Management and 'net neutrality' on June 24 (see Note 1 below). The European Commission published its Questionnaire, for the Public Consultation on the Open Internet and Net Neutrality in Europe, on June 30 (see Note 2 below). Both documents seek views from stakeholders and other interested parties but do not, at this stage, contain concrete proposals.

Procurement Lawyers' Association event on Issues in Evaluating Public Sector Tenders
On 1 July 2010 Olswang hosted a Procurement Lawyers' Association ("PLA") event on Issues in Evaluating Public Sector Tenders, which was attended by approximately eighty lawyers and other professionals involved in public procurement.

The Court of Appeal fetters the power of parties to stipulate in the arbitration agreement that the arbitral tribunal should comprise members of a religious community
The power to select the tribunal which is to determine a dispute is one of the major attractions of arbitration over litigation. The recent decision of the Court of Appeal in N.Jivraj v S. Hashwani [2010] EWCA Civ 712 (22 June 2010), however, has seemingly fettered that power where parties seek to dictate that the tribunal should comprise members of a particular religious group. The judgment concludes that, parties will only validly be able to require that the tribunal should comprise members of a particular group of shared religion or belief if the belonging to that group is necessary and proportionate for the proper discharge of the tribunal's function to resolve the dispute in hand.

Rambus settles European Commission 'patent ambush' investigation
The Commission's long running 'patent ambush' investigation has been settled by Rambus giving pricing commitments on future licence royalties. Therefore no formal finding of a patent ambush exists, but the Commission has indicated what might constitute such an abuse.

European Commission clears Oracle's acquisition of Sun Microsystems
The European Commission has published its full decision clearing the Oracle acquisition of Sun, despite an in-depth Phase II investigation and strong concerns over the database market. The Commission has relied heavily on the specific nature of open source software, and a number of "public commitments" made by Oracle.

European Commission report on quantifying antitrust damages
Earlier this year the European Commission published a report prepared by Oxera on quantifying antitrust damages. The report aims to assist the Commission in developing its guidance for the benefit of national courts and parties to antitrust damages actions.

Commission launches monitoring of patent settlements between pharmaceutical companies
The European Commission has asked a number of pharmaceutical companies to provide copies of their patent settlement agreements. The information provided could prompt the Commission to take action against specific companies under the competition rules.

Footing the bill for cartel liability: directors beware
A recent English High Court judgment brings closer the prospect of a company being able to sue employees and executives to recover fines imposed for breach of competition rules. This may have important implications for companies, directors and insurers, as well as raising questions as to the effectiveness of antitrust fines.

Morgan Crucible CEO's appeal against extradition for cartel activity fails in the UK Supreme Court
Following the carbon and graphite products cartel finding, the UK Supreme Court has unanimously dismissed an appeal against extradition to the USA on human rights grounds by Ian Norris, the former CEO of Morgan Crucible plc.

The Good Harvest decision - No guarantee for guarantee
Readers will be aware of the important decision in the Good Harvest case, which has significant implications for landlords, tenants and tenant's guarantors. The decision held that, where there is an assignment of a lease (which is a "new tenancy" under the Landlord and Tenant (Covenants) Act 1995), an outgoing tenant's guarantor cannot give a direct guarantee for the assignee's performance of the tenant's covenants in the lease. The decision also reinforced doubts held by some as to whether the outgoing tenant's guarantor can guarantee the outgoing tenant's obligations in the authorised guarantee agreement. The property industry has been waiting for an appeal to be heard against the High Court decision, but the case has now been settled so the opportunity has been lost, on this occasion, to have the law clarified by the Court of Appeal. The High Court decision and its implications set out below, therefore, remain. However, it will not be a surprise, bearing in mind the commercial importance of the issue, if the Court of Appeal has its say before too long.

Reforming the Structure of UK Regulation
The Queen's Speech of 25 May 2010 announced that the Government would restructure the UK's tripartite regulatory system through the Financial Services Regulation Bill (the "FS Regulation Bill"). Under the FS Regulation Bill, responsibility for macro-prudential regulation would be taken away from the FSA and passed to the Bank of England, which would also have "oversight" of micro-prudential regulation.

Financial Services Act 2010
The Financial Services Act 2010 (the "FS Act") received Royal Assent on 8 April 2010, resulting in a number of new rules and duties being imposed on the FSA. The FS Act was less ambitious than earlier versions of the bill as the out-going government had to make concessions to get it passed. As yet, it is unclear how it will apply to the new CPMA.

Banks still in the regulatory spotlight
In its budget on 22 June 2010, the Government announced that it will introduce from 1 January 2011 a bank levy based on the balance sheets of UK banking groups and building societies; the aggregated subsidiary and branch balance sheets of foreign banks and banking groups operating in the UK; and the balance sheets of UK banks in non-banking groups. The rate of the levy will be charged at a rate of 0.07%, although there will be a lower rate of 0.04% in 2011. There will also be a reduced rate for wholesale funding with more than one year remaining to maturity of half the main rate (0.02% then 0.035%).

The Bribery Act 2010 expected to be in force by April 2011
The new Bribery Act 2010 (the "Act") received Royal Asset on 8 April 2010 and is likely to come into force in April next year subject to the drafting of guidance by the Secretary of State on "adequate procedures" (see below). The Act ushers in a more comprehensive framework of new bribery offences to replace existing piecemeal legislation. The Act encompasses both individuals and commercial organisations with wider definitions of bribery arming the courts and prosecutors with more forceful means to tackle corruption within the UK and overseas. While the Act has no special application to the financial services industry, firms will wish to put in place "adequate procedures" to prevent bribery, at the least so as to be able to take advantage of the related statutory defence.

New UK Corporate Governance rules in force
On 28 May 2010, the UK Corporate Governance Code was published replacing the Combined Code for all companies with a premium listing with reporting years beginning on or after 29 June 2009.

Retail Distribution Review rules finalised
In a speech on 24 June 2010, Hector Sants stated that the FSA's existing major policy initiatives, including the Retail Distribution Review (RDR), will continue under the new regulatory structure. The impact of the RDR, launched in June 2006, on the independent financial adviser industry will be great: on 19 September 2009 the Financial Times quoted from a report by Ernst & Young predicting that just 10,000 of the existing 35,000 independent financial advisers in the UK would survive the RDR reforms; an additional 10,000 would survive as restricted advisers. The scope of the rules excludes recommendations to professional clients and eligible counterparties.

Final Negotiations on the Alternative Investment Fund Managers Directive on hold until September 2010
On 17 and 18 May 2010, the European Parliament's Committee on Economic and Monetary Affairs ("ECON") and the Council of the European Union ("the Council") arrived at their respective positions concerning the proposed Alternative Investment Fund Managers Directive ("the Directive"). Trilogues had begun between the Council, the European Parliament and the European Commission, in order to arrive at common agreement before a plenary vote in the European Parliament on a compromise version of the Directive which was anticipated in July (which would have meant that the Directive would be required to be implemented into law by EU Member States by July 2012).

Agreement near on the powers of the three new European Supervisory Authorities
As a response to perceived weaknesses in the European financial supervisory framework, on 24 September 2009, the European Commission (the "Commission") published draft legislative proposals to replace the existing 'Level 3' committees (that is, the Committee of European Banking Supervisors ("CEBS"), the Committee of European Insurance and Occupational Pensions Supervisors ("CEIOPS") and the Committee of European Securities Regulators ("CESR")) with the following new bodies:

Enforcement Round-up
Since our last bulletin, the FSA has, albeit with one significant setback, continued to successfully ramp up its enforcement function. The FSA has already levied over £50m in fines in the first 6 months of this year, more than in any previous full year.

June 2010

Software patents: will the UK Intellectual Property Office follow the European Patent Office's recent Enlarged Board of Appeal opinion?
The Enlarged Board of Appeal of the European Patent Office has recently issued an opinion about patentability of computer programs. For the UK patent community the implications of this opinion are potentially significant, but it is not yet known how the UK courts and UKIPO will react to the opinion.

Outsourcing: no TUPE service provision change where no work in progress and no employees transferred
In a recent ruling the Employment Appeal Tribunal ("EAT") held that there was no service provision change for TUPE purposes where no work in progress and no employees were transferred. This is the first case on professional services to reach the EAT, and it highlights the fact that in such cases the transfer of work in progress will be a key factor in determining whether or not TUPE applies.

OFT publishes recommendations on good practice in online behavioural advertising
The Office of Fair Trading (the OFT) has published its market study into online targeting of product pricing and advertisements by means of online behavioural advertising. The study makes various recommendations about this evolving area, including wider use of, and refinements to, the IAB's Good Practice Principles and further guidance from the Information Commissioner on when users' consent is required.

Tax: the Emergency Budget - good for UK innovation?
The Emergency Budget on 22 June was full of headline-grabbing rate changes, but also contained some proposals that will be particularly relevant to technology businesses. We comment on some of the key points below.

Competition: Rambus settles European Commission 'patent ambush' investigation
The Commission's long running 'patent ambush' investigation has been settled by Rambus giving pricing commitments on future licence royalties. Therefore no formal finding of a patent ambush exists, but the Commission's settlement decision indicates its views on what might constitute such an abuse.

Public procurement: commission investigates possible breach in the telecoms sector
The European Commission is pursuing Portugal over an alleged breach of the public procurement rules. The action relates to the direct award of telecoms contracts to three telecoms operators. The case highlights the importance - for bidders as well as public authorities - of ensuring technology and telecoms procurements are compliant with the rules.

Stop press! US Supreme Court decision in Bilski Appeal
On 28 June the US Supreme Court issued its eagerly-awaited decision in the Bilski case. In short, the decision has not limited the scope of what is considered patentable subject matter in the US, and does not appear to indicate a change in the patentability of computer-implemented inventions or other methods. Software patents that have been drafted to comply with the "machine or transformation test" should still be patentable following this decision.

Ofcom's dispute resolution jurisdiction not time-limited
On 11 June 2010, the UK Competition Appeal Tribunal ("CAT") published its ruling on two preliminary issues in an appeal by BT relating to a dispute about the price of wholesale leased lines. The CAT concluded that there was no distinction between current, prospective or historical disputes in relation to the scope of Ofcom's jurisdiction under s.185(1) of the Communications Act 2003 ("the Act"), and that the question of compliance with cost-orientation conditions did not raise 'price control matters' as defined by s. 193 of the Act and so no reference would be made to the Competition Commission.

The Importance of Complying with Lease Requirements to Break the Lease
Although the outcome of this case is no surprise, it highlights the importance for parties, seeking to exercise a right to break a lease, to ensure that they comply with the lease requirements for where the break notice is to be served (as well as any other lease requirements in relation to the break right).

UK Court decisions on priority entitlement
A patent's entitlement to its priority date is often critical to the validity of the patent as it defines the date at which the prior art is assessed. Two UK High Court cases within the last year have considered the law relating to priority, in particular relating to precisely who is entitled to claim priority. This practice note briefly highlights the issues at hand in these cases and makes suggestions for best-practice with regard to ensuring priority entitlement in the UK.

Anti-piracy: Ofcom publishes draft Initial Obligations Code under the Digital Economy Act
Ofcom has published a draft Code which fleshes out some of the controversial anti-piracy provisions of the Digital Economy Act 2010 ("DEA"). This is one of three interrelated consultations, the others relating to enforcement of the Code and cost-sharing.

Ensure that the right party gives a break notice
This case highlighted the perhaps obvious point that where a landlord or a tenant has a right to break a lease, the landlord or the tenant as the case may be, must give the notice exercising that right.

Outsourcing: Good practice for call centres dealing with customers with disabilities
Ofcom has issued good practice guidance aimed at call centres, following research highlighting the difficulties encountered by customers with visual and hearing disabilities. This guidance is useful in supplementing a business's existing accessibility policies and practices, and serves as a reminder of the wide scope of a service provider's legal duty to make "reasonable adjustments" to ensure its services are accessible to the public.

The application of procurement law to land development agreements
In April's Managing Construction Risk in Development Agreements: Public Procurement, we provided guidance on the application of public procurement law to land development agreements and discussed the key pointers arising out of the relevant case law of the European Court of Justice (the 'ECJ'). In the last month or so, there have been three further legal developments which illustrate that this is still a lively issue.

European Commission investigates possible breach of public procurement regulations in the telecoms sector
The European Commission is pursuing Portugal regarding an alleged breach of the public procurement rules relating to the direct award of technology contracts to three telecoms operators. Given the potential impact of procurement non-compliance on suppliers, it is increasingly important that both public authorities and bidders for public contracts in the technology sector understand the law.

Preventing adverse effects on competition from large grocery retailers
If faced with a restrictive covenant or exclusivity arrangement benefiting a large grocery retailer, then the Groceries Market Investigation (Controlled Land) Order 2010 may assist in having the covenant released or preventing enforcement of the arrangement.

Managing your team to victory during the World Cup 2010
For the next month the nation will be gripped with football fever. For many employees the excitement of cheering for their team to lift the trophy may be too much to bear quietly in the workplace. Many employees will wish to watch their team play and will take time off to do so - some arranging this officially, others, not so officially. It's not just the teams who need a well thought out game plan; employers also need to keep their team playing until the final whistle.

Infrastructure Competition - Regulation of Wholesale Local Access
One of Ofcom's main responsibilities as the UK National Regulatory Authority (NRA) for electronic communications is to periodically review various markets and determine if any Communications Provider has Significant Market Power (SMP) on them and, if so, what regulatory remedies should be applied.

Procurement Law Update - June 2010
Recent developments in the English High Court would seem to demonstrate the degree to which the current economic climate is impacting upon those contractors which are investing time and money on bidding for public sector contracts.

Bilta (UK) Limited (in liquidation) v M. Nazir & Ors [2010] EWHC 1086 (Ch) (17 May 2010)
The English court has recently held that an application to the court for a stay of court proceedings in favour of arbitration under section 9 of the Arbitration Act 1996 is not subject to the procedural rules and time limits contained in the Civil Procedure Rules (which are the rules that govern civil court proceedings).

On a practical level, the effect of the decision is that it potentially gives a party who is contesting the court's jurisdiction on the grounds of an arbitration agreement, a longer time within which to do so than a party who is contesting the court's jurisdiction on other grounds, for example, on grounds of a jurisdiction clause which confers exclusive jurisdiction on a foreign court. More important, however, is the symbolic significance of the judgment which confirms and strengthens the prevailing view of the English courts that, save for exceptional circumstances such as a serious irregularity in the arbitral process, arbitration should be treated as a self-standing system of dispute resolution independent, to the greatest extent possible, of the rules applicable to English High Court procedure.

European Court of Justice decides that Dutch gambling rules comply with EU Treaty
Today the European Court has published two judgments which conclude that EU Member States can restrict nationals from accessing the websites of gambling operators established and licensed outside of their territory in other Member States. Closely following the Bwin/Liga v Santa Casa judgment of last year, the European Court has again ruled that the EU principle of free movement of services does not apply automatically to the gambling sector and Member States are able to enforce rules which prevent licensed operators from offering their gambling services if such restrictions are objectively justified, non-discriminatory and proportionate.

European News - Challenging times ahead for EU gambling operators?
In the articles below, we summarise some of the legal developments affecting the gambling sectors in other territories throughout Europe. Some countries are taking steps to implement legislation which will open their gambling markets to some commercial competition (Italy has been slowly opening its gambling markets over recent years while France is just beginning this process). Meanwhile other countries continue to debate how the gambling sector should be regulated in the future (including the Netherlands, Germany, Poland, the Czech Republic and Finland).

News from the US - Unlawful Internet Gambling Enforcement Act finally comes into force
With a target date of 2008 for implementation, the Unlawful Internet Gambling Enforcement Act (UIGEA) finally came into effect in the USA on 1 June. UIGEA was originally approved back in 2006 but implementation was delayed because of protests from civil liberties groups and the vague nature of the legislative text. The UIGEA requires financial institutions to block transactions to and from online gambling websites and effectively enforces a ban on online gambling.

Preparing your business for private equity
Recently a number of high profile retailers have been acquired by private equity ("PE") houses demonstrating a renewed interest from PE in retail businesses. Most notable amongst these acquisitions are Hobbycraft which was acquired by Bridgepoint for in excess of £100m, Pets at Home which was acquired in a secondary buy-out by KKR for £955m and Cath Kidston which was acquired by TA Associates for £100m.

TUPE - Don't let it catch you out
Drives to improve efficiency in this challenging economic climate mean that more retailers are making decisions to outsource, insource, sell or buy parts of their businesses.

Adding value?
In a recent post-election poll by the BBC, 24 of 28 leading economists expected VAT rates to go up; the majority predicting a rise to 20% by the end of 2011. A 2.5% increase in VAT, predicted to raise over £11.5bn a year, looks attractive - yet the Coalition's "Programme for Government", published on 20 May 2010, does not mention VAT once. In his first TV interview as Prime Minister David Cameron refused to be drawn on the topic, instead stating simply "You're going to have to wait for the first Budget."

May 2010

The Coalition Government employment agenda
The Coalition Government has now set out its legislative agenda for the next five years through publication of "The Coalition: our programme for government". In this, the Government commits to reviewing "employment and workplace laws for employers and employees to ensure they maximise flexibility for both parties while protecting fairness and providing the competitive environment required for enterprise to thrive". The Queen's Speech earlier this week, which dealt with the legislative programme for the next 18 months, had little employment content other than a commitment to remove barriers to flexible working and the promotion of equal pay.

M&A: Consolidation movement in the EU's e-gambling sector
Widespread industry consolidation has been a burning issue in the European online gambling sector for some time now, with many industry participants and commentators predicting that 2010 will see the start of large scale mergers and acquisitions amongst key players on the market. Robert Willis, an Associate at Olswang, discusses the latest developments in Europe and the US.

The Uncertainties of Double Insurance
This case concerns the implications for insurers of both the seller and buyer insuring a property for the period between exchange and completion where the property is damaged in that period. It is generally important to understand the implications of a buyer taking out its own insurance in the light of the seller's continued insurance of the property in that period. Some buyers insist on the right to rescind the contract if the property is (extensively) damaged or destroyed between exchange and completion. The standard conditions of sale (4th edition) for residential property transactions allow the buyer to rescind if at any time before completion the physical state of the property makes it unusable for its purpose at the date of the contract (see condition 5.1.2- under those conditions the seller retains the risk until completion). This position can be contrasted with the standard commercial property conditions (2nd edition), where the buyer does not have a right to rescind if the property is damaged or destroyed between exchange and completion. Some buyers seek to amend that standard position.

Incorporation of all Agreed Terms in Sale Contract
This case looked at whether a contract to sell land was invalidated (as a result of statute) by a failure to include a term that was part of a larger transaction.

Conservatives pledge tough stance on marketing to children
The Conservative Party Manifesto, launched 11 March 2010, contained a number of pledges aimed at restricting marketing to children. Now the Conservatives have formed the new Government alongside the Liberal Democrats, it seems likely that these pledges will form part of the Government's agenda in the new Parliament.

Labour falls foul of privacy laws with automated campaign calls
The Information Commissioner's Office (ICO) has ruled that the Labour Party breached privacy rules by making automated telephone calls to almost half a million individuals without their consent.

UK inches towards product placement reform
Following an announcement by then-Culture Secretary Ben Bradshaw, draft legislation to allow product placement on UK-produced television was laid before Parliament on 22 March 2010.

Trade mark infringement and intermediary liability: ECJ rulings on Google AdWords
The European Court of Justice has handed down its rulings in the three Google AdWords cases referred by the French court and in a similar case referred by Austria. The decisions will have practical implications for brand owners, advertisers and for search engines and other online intermediaries. While the legal and commercial dust from the rulings is still settling, we provide a brief overview of the key points from the judgments.

OFT launches market study into consumer contracts
The Office of Fair Trading (OFT) has announced the launch of a market study to examine when, how and why contracts may cause difficulties for consumers. The OFT intends to consider both the views of the consumer as well as how firms approach consumer contracts. The results of the study should be of benefit to companies wishing to make important terms and conditions clear to consumers buying their products.

Budget airlines in libel spat
The founder of EasyJet, Sir Stelios Haji-Ioannou, has commenced a libel action against rival budget airline Ryanair. The lawsuit is in response to a Ryanair advertisement which depicted Sir Stelios with a Pinocchio-style long nose.

New CAP and BCAP advertising codes
CAP and BCAP have launched new advertising codes for broadcast and non-broadcast advertising which will replace the existing codes on 1 September 2010. Whilst the protections in the existing codes have been maintained, there are key changes in certain areas including protection for children, social and environmental responsibility, health, and consumer protection.

Recent ASA adjudications
ASA tackles Tombola over "offensive" TV ad
Premier Inn Lenny Henry spot "too scary" for children's TV

Alternative Investment Fund Managers Directive - Final Negotiations Begin
On 17 and 18 May 2010, the European Parliament's Committee on Economic and Monetary Affairs and the Council of the European Union arrived at their respective positions concerning the proposed Alternative Investment Fund Managers Directive. The Directive will affect the operation of all non-UCITS funds managed or marketed in the EU, and non-EU funds marketed in the EU, in particular hedge funds and private equity funds. Final negotiations will now take place between the Council, the European Parliament and the European Commission, in order to arrive at a common agreement before a plenary vote in the European Parliament on a compromise version of the Directive. A plenary vote is planned for July, which would mean that the Directive would be required to be implemented into law by EU Member States by July 2012.

Recent case law on the interpretation of arbitration agreements
Three years on from the House of Lord's expression in Fiona Trust of the presumption that business people want arbitration to be a one-stop method of adjudicating all of their related disputes, two recent cases show how the courts are applying that presumption in construing arbitration agreements.

Culpable delay can preclude extension of time limits for commencement of arbitration under section 12 of the Arbitration Act 1996
In SOS Corporacion Alimentaria SA & Or v Inerco Trade SA [2010] EWHC 162 (Comm), the Commercial Court considered the circumstances in which extensions of time will be granted under section 12 of the Arbitration Act 1996 for arbitrations commenced out of time. The court's decision to refuse the claimant's application for an extension illustrates the perils of delaying commencement of arbitration proceedings beyond the applicable deadline. As a consequence, the claimant suffered the triple indignity of suffering significant damage to its goods, finding itself time-barred from obtaining any remedy, and being left to pick up the legal bill from three separate applications for extensions.

Incorporation of an arbitration agreement by reference - the English court provides clarification of the law where multiple contracts exist between the same parties
The ruling in Habas Sinai Ve Tibbi Gazlar Isthisal Endüstri A.S. v Sometal S.A.L. [2010] EWHC 29 (Comm) clarifies whether general or specific words of incorporation are required successfully to incorporate an arbitration agreement by reference to a previous contract between the same parties. In doing so, the court cast light on a misleading term used in previous related authorities and formulated a new means to ascertain the nature of the words required.

The relevance of merit in a challenge to an award on the grounds of serious irregularity under section 68(2)(d) of the Arbitration Act 1996
It is a guiding principle of arbitration that each party must have a reasonable opportunity to put forward its case to the tribunal and to deal with that of its opponent. The corollary of that principle is the tribunal's duty to consider issues put forward by the parties. Under section 68(2)(d) of the Arbitration Act 1996 a party can challenge an award for serious irregularity where it can be shown that the tribunal failed to deal with all of the issues that were put to it and which the court considers has caused or will cause substantial injustice to the applicant. Although reference is made to a failure by the tribunal to deal with all of the issues that were put to it, the onus on the tribunal is in fact (only) to deal with those essential issues which were put to the tribunal and which were necessary to be dealt with for a fair decision on the principal issues relating to the claim(s) or the specific defence(s) raised in the course of a reference.

Three jurisdictions seek to raise their profile in the arbitration world
Bahrain Arbitration Centre
Cyprus International Arbitration Centre
Singapore - becoming Asia's leading arbitration centre

ICCA elects new president
The International Council for Commercial Arbitration has elected Jan Paulsson as its next President.

IBA Guidelines for Drafting International Arbitration Clauses
The International Bar Association's Arbitration Committee has published the final draft of its Guidelines for Drafting International Arbitration Clauses. The Guidelines explain in simple terms the essential issues to which parties should have regard when drafting their arbitration agreement, including the implications of opting for institutional or ad hoc arbitration, the need to define the scope of the arbitration agreement, the significance of the seat of the arbitration. They also set out suggested wording and some optional elements to consider, such as express confidentiality provisions. The Guidelines can be found on the IBA's website and comments are invited by 1 June 2010.

News from the Olswang International Arbitration Group
Publications
AIJA Annual Arbitration Conference

Player Contracts: Training compensation: ECJ ruling in Olivier Bernard case
The European Court of Justice (ECJ) recently ruled that football clubs can seek compensation for training young players, as long as that compensation is directly related to the club's cost in training that player. April Carr, an Associate in the EU & Competition team at Olswang LLP, examines the reasoning of the ECJ in Olympique Lyonnais SASP v Olivier Bernard and Newcastle United FC, and explains why the Fédération Française de Football's Charter breached the Treaty on the Functioning of the European Union.

Enlarged Board of Appeal finds referral on patentability of software inadmissible
The European Patent Office (EPO) Enlarged Board of Appeal was asked to consider the patentability of computer implemented inventions. The Enlarged Board of Appeal determined that there was no inconsistency in previous board of appeal decisions which would allow the referral. Applicants are therefore unlikely to see any change in procedure at the EPO.

The ICO Publishes Updated Regulatory Action Policy
The ICO recently published its updated Data Protection Regulatory Action Policy, confirming its targeted and risk-driven approach to enforcement action. For organisations which comply with data protection legislation the policy is arguably of academic interest only; it is however a useful read for in house lawyers and risk and compliance teams wanting to keep on top of the ICO's recently extended enforcement powers.

Adjudication - Conflicting interim payment provisions - Can a losing party withhold payment following an adjudication where it wants to challenge the decision?
The case of Fenice Investments Inc v Jerram Falkus Construction Limited [2009] EWHC 3272 (TCC) considered how conflicting interim payment regimes within the same contract should be construed. It highlights the importance of checking that contract provisions do not conflict. It also serves as a reminder that a losing party must pay the sum awarded in an adjudication, even if the decision is to be disputed.

Jim Ennis Construction Limited v Combined Stabilisation Limited - Final Accounts and settlement agreements
In the recent case of Jim Ennis Construction Limited v Combined Stabilisation Limited [2009] EWHC B37 (TCC) His Honour Judge Raynor QC delivered a judgment which should make anyone involved in agreeing or negotiating "final accounts" take notice because it indicates how two parties can think they are agreeing a final account pursuant to a construction contract, but instead enter into a separate settlement agreement. A key point to note is that if the Court does conclude that a settlement agreement has been entered into, a dispute arising out of that agreement does not relate to a construction contract for the purposes of the Housing Grants, Construction and Regeneration Act 1996 and, in the absence of any specific term of that settlement agreement to the contrary, such a dispute cannot be referred to adjudication for resolution by either party at any time.

Breach, Repudiation and Frustration in the context of Development Agreements
The recent case of Gold Group Properties Limited v BDW Trading Limited (formerly Barratt Homes Limited) [2010] EWHC 323 (TCC) has highlighted the narrow application of the doctrine of frustration in the development context.

Illegality as a negligence defence
The case of K/S Lincoln and Others v CB Richard Ellis Hotels Ltd [2009] EWHC 2344 (TCC) required Mr Justice Coulson to make some fairly unusual case management decisions in relation to the claimant's application to strike out a paragraph of the defendant's defence. It also provides a useful summary of the court's approach to claims of illegality.

April 2010

Shifting sands of software patentability
This article gives a clear summary of the current approaches of the US Patent Office, the European Patent Office and the UK Intellectual Property Office when examining software patents. It is a useful guide for patent applicants and gives concrete examples.

Betting on Europe: Tax regimes for gambling operators in the EU and beyond
The laws of the European Union (EU) go some way to ensure that companies established in one of the 27 EU countries (Member States) can trade freely in (and offer their services to consumers based in) other Member States. There is however little by way of harmonisation of tax laws throughout the EU, with the exception of certain EU-imposed taxes such as value added tax (VAT). The imposition of taxes (including direct taxes, such as corporation tax and income tax, and gambling duties) remains a competency of each Member State. Indeed the preservation of Member State sovereignty over taxation constitutes one of the major hurdles to a fully harmonised EU.

Court of Appeal decides Ofcom and CAT cannot retrospectively modify SMP conditions
On 20 April 2010 the Court of Appeal issued an important judgment deciding that Ofcom, and therefore the Competition Appeal Tribunal ("CAT"), had no jurisdiction retrospectively to change a price control in the form of a significant market power ("SMP") condition in the markets for mobile call termination ("MCT").

Virtual Assignment Arrangements are Upheld
The Supreme Court has recently rejected an application for leave to appeal a significant decision of the Court of Appeal on "Virtual Assignment Arrangements". As a result, the Court of Appeal's decision on this important issue stands and is detailed below.

Trespassing on the Public Highway
This case considers whether a squatter can become the owner of part of a public highway by adversely possessing for the requisite statutory period. The Court of Appeal has held that the squatter cannot become an owner in those circumstances.

Guidance from the OGC on Negotiating Key Terms in ICT Services Contracts
The latest step in the evolution of the Government's model ICT Services Model Agreement is a negotiating guide published by the Office of Government Commerce ("OGC"). Although aimed at the public sector, many of the issues covered in the guidance will also be helpful to private sector organisations procuring technology services.

Data breaches: Zurich Insurance plc gives undertakings to improve information security after losing personal financial information of over 46,000 customers
The Information Commissioner's Office (ICO) has found Zurich Insurance plc in breach of the Seventh Principle of the Data Protection Act after Zurich lost an unencrypted back up tape. The back up tape contained financial personal information belonging to 46,000 policy holders of Zurich Insurance plc, as well as containing personal details of an additional 1,800 third parties.

Data Protection Directive: European Commission promises new proposal before end of 2010
In a recent speech given by Viviane Reding, Vice-President of the European Commission, a long-awaited reform of Directive 95/46/EC (the Data Protection Directive) was announced. Whilst a detailed timetable was not provided, Viviane Reding's announcement clarified that Article 16 of the Directive (which deals with the confidentiality of processing) would be revisited and revised and a new legal framework would address, amongst other things, the challenges of online social networking, e-commerce, cloud computing, video surveillance, behavioural advertising and data security breaches.

The Bribery Act 2010
The Bribery Act 2010 is new legislation approved by Parliament in April to combat bribery in public and private sectors. This article considers some of the key points that organisations should know about the act and the actions that they may need to take.

An update on the "Patent Box" tax regime
In the Pre-Budget Report in December 2009 the Chancellor announced the Government's intention to introduce a 10% corporation tax rate on income derived from patents, to "strengthen the incentives to invest in innovative industries". These plans were confirmed in last month's Budget.

The Equality Act 2010
In one of the last acts of the Government prior to the general election, the Equality Act 2010 has now received Royal Assent. Existing discrimination legislation, some of which is 40 years old, will mostly be repealed and from October, the Equality Act 2010 will be the key statute governing equality in the workplace. We consider below some of the main employment provisions.

Digital Economy Act 2010 given royal assent
The Digital Economy Bill received Royal Assent on 8 April 2010. The Act introduces some, but by no means all, of the measures proposed in the Government's Digital Britain report published in June 2009. It seeks to address issues facing the media and technology industries and implements measures in respect of online copyright infringement, public service broadcasting, the regulation of video games and the UK's communications infrastructure. Certain of the measures in the Act came into effect immediately; some will be brought into force by statutory instrument at a later date, while the majority of provisions will come into force in June.

Managing Construction Risk in Development Agreements - April 2010
We are pleased to attach the sixth and final article in our series concentrating on construction risk in Development Agreements from the Developer's perspective. This article considers some issues arising in the context of public procurement.

Delays in reaching agreement on the draft proposed directive on Alternative Investment Fund Managers
Both the European Parliament and the Council of the European Union ("the Council") have delayed arriving at their respective positions on the proposed directive on Alternative Investment Fund Managers ("the Directive"). Both bodies must reach a compromise on the Directive as part of the co-decision process.

FSA sets out its priorities for 2010/11
On 17 March 2010, the FSA published its Business Plan for 2010/11. The Business Plan sets out the FSA's priorities and initiatives for the coming year to address the risks identified in the FRO, which was published on 10 March 2010.

FSA Enforcement still on the front foot
The first quarter of 2010 has seen no let up in the FSA's determination to follow its credible deterrence strategy as part of its tougher stance on enforcement.

Client assets come under the spotlight
On 19 January 2010, Sally Dewar, Managing Director of Risk at the FSA wrote to CEOs of major insurance brokers and investment firms which are able to hold money or assets on behalf of clients, drawing their attention to the FSA’s concerns over the handling of clients’ money and assets.

FSA makes further moves towards product regulation
The FSA has become increasingly concerned about product design, characterisation and communication, particularly in relation to capital protection products, payment protection insurance ("PPI") and with-profits products. Traditionally the FSA has taken steps through its supervision of its firms to encourage them to treat customers fairly while refraining from actual regulation of products. The focus has been on disclosure, sales processes and suitability. The FSA now sees significant limitations to this approach.

Regulatory changes for building societies
On 26 March, the FSA announced that new handbook guidance to ensure building societies diversifying from traditional business models have proper risk management systems and skills will come into effect on 1 April 2010 (with transitional provisions). This announcement follows Consultation Paper 09/17 "A Specialist Sourcebook for Building Societies: Enhanced supervisory guidance on Financial and Credit Risk Management" which the FSA published in June 2009.

• Introduction
• People
• Key Facts
• Corporate Responsibility