There's slow and then there's the European Commission

The main directive that governs the processing of personal information in the European Union, the Data Protection Directive 95/46/EC, was signed by the European Parliament and Council on 24 October 1995.  It had to be implemented by member states within 3 years from the this date of adoption (not to be confused with its publication date in the Official Journal – Official Journal L 281 , 23/11/1995 P. 0031 – 0050).

The UK started out well, with the Data Protection Act 1998 getting royal assent on 19 July 1998.  However, most of the Act’s operative provisions did not come into effect on the passing of the Act but came into effect late, on 1 March 2000.

However, the European Commission has for many years considered the implementation of the Directive by the UK to be inadequate.  In particular, the Commission considers that the powers given to the Information Commissioner, the UK’s national data protection authority, are insufficient.  There have been many rumours over the years about preliminary steps being taken by the Commission to enforce proper implementation of the Directive, but with no official confirmation.

This week we at last have confirmation that the Commission is after the UK, with a press release giving some details about its request that the UK strengthen the powers of the Information Commissioner.  The request is in the form of a reasoned opinion – the second stage under EU infringement procedures.  The Commission has four concerns about the implementation of the Directive in the UK:

• the Information Commissioner cannot monitor whether third countries’ data protection is adequate. These assessments should come before international transfers of personal information;
• the Information Commissioner can neither perform random checks on people using or processing personal data, nor enforce penalties following the checks;
• the courts in the UK can refuse the right to have personal data rectified or erased; and
• the right to compensation for moral damage when personal information is used inappropriately is also restricted.

The UK now has two months to inform the Commission of measures it has taken to ensure full compliance with the Directive, else it risks being taken to the Court of Justice of the European Union (CJEU).  The Commission’s press release quotes Viviane Reding, the relevant Commissioner (Commissioner for Justice, Fundamental Rights and Citizenships):

“Data protection authorities have the crucial and delicate task of protecting the fundamental right to privacy. EU rules require that the work of data protection authorities must not be unbalanced by the slightest hint of legal ambiguity. I will enforce this vigorously. I urge the UK to change its rules swiftly so that the data protection authority is able to perform its duties with absolute clarity about the rules. Having a watchdog with insufficient powers is like keeping your guard dog tied up in the basement.”

Sadly, the UK had an excellent opportunity to make most of the necessary amendments when the Criminal Justice and Immigration Act 2008 and Coroners and Justice Act 2009 went through Parliament. The 2008 Act introduced monetary penalties powers for the Information Commissioner.  With these powers in place, specific mention could have been made about their use in the provisions on assessments introduced by the 2009 Act.  There was debate in the House of Lords on extending the assessment notice provisions at ss.41A-41C of the Data Protection Act 1998, which are currently restricted to Government bodies, to the private sector.  An amendment was proposed by Lord Dubs, a member of the Joint Committee on Human Rights, to extend the scope of these provision, but the amendment was not moved. It would have been possible, had the Government wished, to broaden the scope of assessment notices to include the assessment of transfers/exports of personal information.

(The link to the Data Protection Act 1998 above is to the consolidated act, which therefore includes ss.55A-55E inserted by s144 of the 2008 Act, and ss.41A-41C inserted by s173 of the 2009 Act.)

One of the most difficult rights of the Data Protection Act 1998 for an individual to exercise is the right of access to that individual’s personal information, particularly if that individual is in a dispute with the data controller (the holder of the personal information).  The problem is that if any individual is willing to accept the risk and cost of going to court to seek a court order to require compliance, then the court has a discretion on whether it makes an order and the terms of that order.  This has always been a frustration for advisers to individuals.

Still, there is finally a chance that the threat of being brought to the CJEU will prompt the UK to address the shortcomings of the Data Protection Act 1998 in time for the 15th anniversary of the passing of the Data Protection Directive 95/46/EC.

Luck of the draw

Workplace Sweepstake Pot

A number of helpful guidelines have been published by law firms advising on how to make sure workplace sweepstakes, presumably for the World Cup, stay legal.  In essence, to stay within the “work lottery” exemption under  the Gambling Act 2005,  make sure the whole pot goes out in winnings. 

If your office has been public-spirited enough to decide that some of its World Cup sweepstake pot should go to charity, it is more difficult to get this within the relevant exemption in the Gambling Act 2005 (the “incidental non-commercial lottery”).  It may therefore be running an unlawful lottery, as it will almost certainly not be licensed. 

So what do you do with this unwelcome news? I’m afraid this is a classic example of lawyers hijacking an event with wide public interest in order to generate publicity – you could say this post is merely another example. What is the point of lawyers describing what may be a commonplace situation without helpful practical advice? 

Commercial lawyers understand that as with many things in life, it’s a matter of risk. Here, the risk of the Gambling Commission descending upon you to prosecute you for having a charity lottery is very small. You were almost better off not knowing that you were operating an illegal lottery. That said, lawyers can get the assessment of risk wrong, too. For example, I would have put the risk of being prosecuted for a poor taste, joke tweet on Twitter at near zero, but the Paul Chambers case disproves that (see our post on this below). 

It’s the luck of the draw. 

Speaking of draws, let’s hope last night’s dire 1-1 against USA was England’s one and only poor performance of the World Cup and that your team in your office sweepstake wins, but only if you drew England.

nothing rien nichts niente nada ничего موشي

Nil Karaibrahimgil, popular Turkish singer known simply as Nil

In our blog Will European MSS get off the ground? we discussed the Ofcom proposals for the setting of the licence fees for the UK 2GHz spectrum required for the complementary ground components of the European Union mobile satellite systems authorised to Inmarsat Ventures and Solaris Mobile by Commission Decision 2009/449/EC.  We thought that perhaps the fee Ofcom was proposing of £554,000 per 2 x 1 MHz nationwide, being the Administered Incentive Pricing of the GSM mobile operators’ spectrum, was a little high, given that each of the mobile satellite systems operators requires 2 x 15 MHz bandwidth (15 x £554,000 = £8,310,000 each).

However, without any consultation that we are aware of, one of the last acts of Stephen Timms as Minister for Digital Britain appears to have been to conduct the spectrum bargain sale of the decade.  Instead of setting a licence fee of the order of hundreds of thousands of pounnds or more, the outgoing Labour Government passed the Authorisation of Frequency Use for the Provision of Mobile Satellite Services (European Union) Regulations 2010, which, at Regulation 4(5) includes the following amazing provision:

OFCOM shall not charge the selected applicants for the granting of an authorisation.

Yes, you read that right. No charge. According to Regulation 4(2), the authorisations shall be granted for 18 years from 14 May 2009.

So what happened to Administered Incentive Pricing? What did the outgoing administration read into Commission Decision 2009/449/EC or the earlier EU Decision 626/2008/EC that made them think that the UK could not charge for the spectrum authorisations that it and all member states are required to make in connection with the EU authorisaton of mobile satellite systems operators and forego over £16 million in authorisation/spectrum licence fees? What can the 2G and 3G operators do to challenge this give away?

English court gets sniffy about being led by the nose

UK Trade Mark 777757

The recent Court of Appeal case of L’Oréal SA & Ors v. Bellure NV & Ors [2010] EWCA Civ 535 is probably the best, recent example of an English court attempting to tweak the nose of the Court of Justice of the European Union (formerly European Court of Justice)(CJEU) that you are likely to find. In its ruling the Court of Appeal acknowledged that it is bound by the European Communities Act 1972 to give effect to judgements of the CJEU and applied the CJEU ruling in Case C-487/07, a referral to the CJEU from the Court of Appeal at an earlier hearing on the case.  However, the leading judgement of Jacobs LJ does an excellent job of showing how unfair and perverse the ruling of the CJEU is when applied to the facts of the case. 

The case involved a small Belgian producer of smell-alike perfumes and its UK distributors, who sold the cheap versions of well-known designer brands to low-end retailers in bottles and packaging that were not identical but were generally similar to the brands’ packaging.  However, the defendants advertised the cheap perfumes in comparative lists which indicated by designer brands which perfume the cheap version smelled like.

 The brands brought various passing off and trademark infringement claims against the defendants.  Certain questions relating to the interpretation of the relevant parts of the Trade Marks Directive were referred to the CJEU for a preliminary ruling, and as a result the CJEU determined that use of a registered trademark in a price and smell comparison list could be a trademark infringement and that stating in comparative advertising that a product of service was an imitation or replica of a trademarked product can be prevented by the trademark owner.

 There are some notable passages in the judgement that show where Jacobs’ sympathies lay:  

Does trade mark law prevent the defendants from telling the truth?  Even though their perfumes are lawful and do smell like the corresponding famous brands, does trade mark law nonetheless muzzle the defendants so that they cannot say so?
…
I have come the conclusion that the [CJEU]’s ruling is that the defendants are indeed muzzled.
…
There is no good reason to dilute the [right of traders to make honest statements about their products] in cases where the speaker’s motive for telling the truth is his own commercial gain.
…
The [CJEU]’s decision in this case means that poor consumers are the losers. Only the poor would dream of buying the defendant’s products.  The real thing is beyond their wildest dreams. Yet they are denied their right to receive information which would give them a little bit of pleasure; the ability to buy a product for a euro or so which they know smells like a famous perfume.
…
If a trader cannot (when it is truly the case) say: “my goods are the same as Brand X (a famous registered mark) but half the price”, I think there is a real danger that important areas of trade will not be open to proper competition.” 

We have to agree with Jacobs LJ.  We would find it extremely difficult to advise a manufacturer or distributor of an imitation or replica product or service on how to advertise its products or services in comparison with a registered trade mark product or service.  The CJEU does not make it clear what it means by “unfair advantage” in the relevant provisions, nor what is meant by the CJEU’s opinion that “riding on the coat-tails” of a trademark is prohibited.  Is it even possible to cite a registered trademark in a comparative advertisement after the CJEU ruling?

This is not what the Trade Mark Directive or Comparative Advertising Directive should be about.