Legal Update

CIF - LEGAL UPDATE

Cloud Industry Forum Legal Update - Issue 10 2017

Contents

Introduction 1 Headline Stories 2 Legislative Updates 3 Case Law Updates 3

Consultations 4 Julian Hobbins Monthly Book Recommendation 5 Deputy Chair Cloud Industry Legal Forum (CILF)

Introduction

Another rocky month for the “strong and stable leadership” of Theresa May? As Brexit uncertainty looms (this round of negotiations really must break the deadlock), Westminster has been rocked by ministerial scandals. To lose one minister is unfortunate. To lose two in a week is just careless? A sexual harassment scandal led to the resignation of Michael Fallon, now the former Defence secretary. This was followed on social media by thousands following live as Priti Patel, the former Secretary of State for International Development, was summoned to Westminster to resign. This was a rare and truly modern social media phenomenon. Downing Street considered that Patel had broken the ministerial code by conducting a series of secretive meetings with senior Israeli officials without the knowledge of the Government while claiming to be on a family holiday.

As Westminster (hopefully) manages to clean itself up a bit, the EU looks to clean up online disinformation. In this month’s newsletter, I note that the EU has launched a public consultation into fake news, perhaps looking to crack down on what has been the scourge of the internet for the past 18 months. In this month’s headline story I consider the findings of a new report that highlights the number of claims brought by sports and music bodies in the High Court. These industries are facing near constant attacks on their intellectual property from pirates, making this an interesting, if somewhat unsurprising trend. Perhaps we can take some comfort in the fact that, although there are plenty of problems with the world, there are still plenty of people who want to tackle them.

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This month’s newsletter also contains an update on the progress of the Data Protection Bill and considers the ruling in Banner v Endemol Shine, which suggests that copyright protection may be available for TV show formats, despite the failure of this particular claim. As ever, dear reader, if there is anything you would like me to focus on in the coming months please let me know.

Headline Stories

High Court dominated by football and music rights claims

The three claimants who brought the most claims in the High Court for the year ending on 31 March 2017 were music and football bodies. Figures compiled by law firm RPC show 107 claims (by far the most) were brought by Phonographic Performance Ltd, a body that licences music and performing rights and collects royalties for tens of thousands of performers and record companies. The Football Association (FA) and the Performing Rights Society, another music licencing body, were next, with 39 and 27 claims respectively. It is worth noting that BT and Sky, both major broadcasters of UK domestic football, were also in the top 10 claimants in terms of the number of cases brought.

This suggests that both industries are taking a much firmer stance when it comes to protecting the value their intellectual property rights. It seems likely that this is a response to new technological developments, which make it easier to broadcast and access copyrighted materials. Does this signal that the big players are losing their grip? Or will legal action redress the balance by deterring would-be pirates and developing the legal framework around IP infringement?

RPC’s analysis suggests that there has been particular rise in the number of cases brought by the FA. In 2013, the body brought only 5 claims in the High Court. It is suggested that this is due to a clampdown on pubs suspected of showing football matches without the proper licence. Ciara Cullen, partner at RPC, said “the FA is tackling illegal streaming and underpayment of licensing fees with a robust litigation strategy – and pubs are feeling the brunt of the challenge.”

But is focussing on claims against pubs really the right strategy? According to the Campaign for Real Ale, a consumer organisation focussed on promoting British pubs, pubs are closing at a rate of 27 a week, primarily due to dwindling customer numbers. As pub attendance falls, so too does the number of people likely to be watching illegally broadcast matches in their local. Clearly illegal streaming in these venues is still a major problem and causes significant damage to sport and music businesses, but this can often look like a small problem when compared with the vast potential for online streaming.

Online streams are primarily accessed by individuals in their home, and the numbers can be truly staggering. A notable recent case saw an unnamed individual agree to pay substantial damages to Sky after admitting illegally streaming the world title boxing match between Anthony Joshua and Wladimir Klitschko on Facebook. The stream gained over 600,000 viewers, dwarfing the number of people likely to view an illegally broadcast match in the pub.

However this can’t be hitting broadcaster’s pockets too hard; the latest Premier League TV deal is worth a record breaking £5.14 billion over 3 years. For the moment at least, sports broadcasters certainly have the resources to put up a serious fight against the pirates.

The same cannot be said for the music industry, which has seen a decade of declining sales and major upheaval due to the impact of technology. But there are now signs that industry is shaking off this slump. By engaging with online streaming and social media platforms, companies have adapted to the new ways in which people listen to music, and are benefitting as a result. Warner Music, the world’s third largest record company is on track to increase its streaming revenue for the 2017 financial year (ending in September) by almost 50%. Industry bodies have suggested that 2017 will be the year in which internet streaming will surpass physical sales as the largest source of global recorded music sales. The value of the music industry is still well below its 90s peak and only time will tell whether it can reach the same heights in the digital age. At least things are finally looking more positive; there might be some wisdom adapting, as well as tacking the pirates head on.

A no-nonsense approach to all forms of infringement is still the foundation of IP protection, the effect of litigation as a deterrent shouldn’t be underestimated and it is often the only way to recouping some of the lost revenue. But it also seems evident that some liberalisation can be helpful in discouraging piracy by giving people more options to access content legitimately. But so far there are no signs that the tightly controlled Premier League TV deal will change its format. What is certain, however, is that the sports and music industries are increasingly on the lookout for those who flout the law: the battle is hotting up. www.cloudindustryforum.org 2 CIF - LEGAL UPDATE

Legislative Updates

Data Protection Bill gets second reading in House of Lords and reaches Committee stage

On 10 October 2017, the Data Protection Bill (implementing the EU’s General Data Protection Regulation in EU law) was given its second reading in the House of Lords. Regular readers will remember that this newsletter reported the Bill’s first reading back in September, a formality in which the Bill is introduced to Parliament, but is not debated by Members or Peers. Now, however, Peers have had the opportunity to scrutinise the Bill and present their concerns.

The debate touched on key areas of the Bill, from the age of consent for online services, to the flow of EU-UK health data, to the limits of the national security and defence exemption. It has been reported that the Lords plan to table amendments relating to the journalism exemption and the role of the Information Commissioner’s Office, and a large number of other amendments appear to be in the works. For example, an amendment recently laid down by Lady Kidron could compel tech companies to follow a code of practice aimed at protecting children online.

The next step is for the Bill to pass through the Committee stage, which started on 30 October 2017 and is set to run until the end of November. A group of Peers will go through the Bill line by line and prepare a detailed analysis. The committee will then present its findings to the House of Lords (the Report stage). The date for this has not yet been set, but you can be sure that this newsletter will keep you updated as the Bill progresses through Parliament and the features of this key piece of legislation are finalised.

Case Law Updates

Banner v Endemol Shine: UK copyright protection for TV formats?

On 19 October, judgement was handed down in the case of Banner Universal Motion Picture Ltd v Endemol Shine Group Ltd & Anor [2017] EWHC 2600. Banner Universal Motion Picture (BUMP), which had been assigned the rights to the “Minute Winner” TV show format, which developed in 2003, brought an action against Friday TV, a Swedish production company, for copyright infringement. The claim related to a game show format developed by a Danish citizen by the name of Mr Banner.

BUMP alleged that Friday TV had misused confidential information that was disclosed during a 2005 meeting in Stockholm to develop the gameshow “Minute to Win It”, the rights to which were sold in over 70 countries. At the meeting, Mr Banner said that he pitched the concept of Minute Winner to Friday TV and sent a synopsis of the programme to the production company afterwards. It was claimed that this synopsis was a dramatic work protected by copyright.

The case was dismissed at summary judgement on the grounds that there was no copyright in the synopsis. However the ruling did state that it is possible, in principle, for a TV game show format to benefit from copyright protection. The problem in this case was that the synopsis lacked specificity and did not identify a coherent structure for a distinctive and recognisable show. In his ruling, Snowden J stated that “the features were, in truth, commonplace an indistinguishable from the features of many other game shows”. In fact, the judge held that even if “Minute Winner” enjoyed copyright protection, it’s only similarity with “Minute to Win It” is that the tasks are completed within one minute, but that the tasks themselves bore no resemblance.

So while a claim to recognise copyright protection for TV game shows failed in this instance, it is significant that the court recognised the possibility for copyright to exist in a TV show format if the right criteria is met. And a note of more practical advice to readers; this situation could easily have been avoided with the correct non-disclosure agreements and care should always be taken when sharing information in a commercial setting.

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Consultations

EU launches Public consultation on specifications for Cooperative Intelligent ransportT Systems

On 10 October 2017, the European Commission launched its consultation on Cooperative Intelligence Transport Systems (C-ITS). Broadly speaking, C-ITS sit within the wider category of Intelligent Transport Systems and are systems which allow vehicles to communicate with each other, road infrastructure and other drivers. Developments in this area have the potential to vastly improve traffic management and safety by allowing vehicles to coordinate and share information.

The Commission particularly hopes to gather information that will be useful in deciding what changes and amendments need to be made to the 2010 ITS Directive in several areas which have been identified as technologically ready for large scale deployment:

• Hazardous location notifications, for example: warnings for upcoming slow or stationary traffic, weather conditions or road works. • Signage applications, for example: in-vehicle speed limits and signage, traffic signal priority for emergency services, and intersection safety and optimisation systems.

Updating the law in this area is essential to ensure that these technologies are able to deliver their promised benefits to safety and efficiency on our increasingly busy roads.

The consultation will run until 5 January 2018 and aims to gather input from transport operators and drivers, vehicle manufacturers and suppliers, ITS providers, and road and transport authorities, among others, as well as members of the public. Readers wishing to give feedback can do so by following the link below: https://ec.europa.eu/info/consultations/public-consultation-specifications-cooperative-intelligent-transport-systems_ en

EU launches public consultation on fake news and online disinformation

On 13 November 2017, the European Commission opened a consultation into the fake news and online disinformation. The EU is looking for feedback that will allow it to properly assess the scale of the problems associated with fake news and disinformation, whether current measures have been effective in reducing the spread of fake news and what should be done to reduce the spread of disinformation online.

Fake news is a label applied to any journalism which intends to mislead the reader in order to make a financial or political gain, often by using sensationalist language and made up facts to grab the reader’s attention. The apparent increase in fake news online has been widely reported and is seen by some as a fundamental threat to Western democracy.

It is good then, that the EU is taking note and is looking for ways to tackle this problem. The spread of fake news online requires a firm international response. The best approach, however, remains unclear. Could we see stricter rules and enforcement against writers and the fake news sites themselves, or will more accountability be placed on the social media sites where fake news is shared and gains the most exposure?

The consultation will run until 23 February 2018 and aims to gather input from social media platforms, news organisations, academia, civil society organisations and citizens of the EU. Readers wishing to give feedback can do so by following the link below: https://ec.europa.eu/info/consultations/public-consultation-fake-news-and-online-disinformation_en

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Monthly Book Recommendation

The Fourth Industrial Revolution by Klaus Schwab

This month’s newsletter touches on the way in which the development of technology can impact society, whether in entertainment, work or transport. I have therefore decided to recommend The Fourth Industrial Revolution by Klaus Schwab.

Mr Schwab is an engineer and economist, best known as the executive chairman and founder of the World Economic Forum. As such, there are few better placed to be able to outline properly the challenges and opportunities technology will present to us in the near future.

This book is a great introduction to the potential benefits and problems that could arise in areas such as artificial intelligence and the internet of things. Readers looking for a definitive appraisal of whether a development will be good or bad will not find their answer here (or indeed anywhere), which is illustrative of just how tricky some of these issues are. Instead, Mr Schwab offers policy recommendations as a lens through which to view these challenges. If we’re going to make good decisions, it helps to know where we’re going and this book will leave readers well placed to think critically about the future.