Trade Mark / May 2003

TRADE MARK Merchandising The Court of Appeal has published its decision in the case of Arsenal Football Club Plc -v- Reed substantially overturning the decision of Mr Justice Laddie in the High Court. The Court of Appeal applied the European Court of Justice’s decision that where a third party used in the course of a trade a sign that was identical to a validly registered trademark on goods which were identical to those for which the trademark was registered then the registered owner could prevent this third party use. Mr Justice Laddie had held that the mark ‘Arsenal’ was a badge of allegience rather than indicating the origin of the goods and as Mr Reed had made it clear his goods were not official Arsenal FC goods then he was not infringing the club’s trademark. But the Court of Appeal held that whilst the mark may well be a badge of allegience – that though would not prevent its use by a third party and thus jeopardise the function of a trademark, namely the ability to guarantee origin. The Court therefore held that the High Court should have followed the ECJ’s decision and given judgement for Arsenal. Whilst not strictly…

Trade Mark / May 2003

TRADE MARK Merchandising A Scottish Court has confirmed the approach of Mr Justice Laddie in Reed -v- Arsenal Football Club when it allowed a street trader to continue selling branded ‘Celtic’ and ‘Rangers’ associated football club goods. The defendant, Joseph Gallacher, could have faced up to 10 years in jail when he was charged with breaching the Trademarks Act 1994 by selling unlicensed merchandise. Sheriff Laura Duncan halted his trial and acquitted Gallacher, ruling he was not “infringing” by using the clubs’ logos on his gear. The Sheriff (Judge) followed the Arsenal case – where it was successfully argued that unlicensed use of the club’s crest was allowable because it was “a badge of allegiance” and not a deliberate trademark breach. Following the decision, a delighted Gallacher claimed it was “another victory for the man on the street”. He said: “I did not believe I was doing anything wrong and that has judged to have been the case. The crests are a badge of allegiance and the clubs are finding it hard to explain otherwise”. Gallacher had told the court that he sold the goods from the back of his van on match days at the Ibrox and Celtic Park…


COPYRIGHT Record Labels, Music Publishers, Merchandising CARLTON FILM DISTRIBUTORS -v- VCI & VDC As a result of a High Court decision last month companies pursuing royalty audit claims have acquired a new procedural weapon. It has now been established that in appropriate cases the court will order pressing plants to disclose their manufacturing records to an audit claimant prior to the commencement of any court proceedings. One of the most contentious areas in royalty audits is access to manufacturing records so audit claimants can compare numbers of units accounted with numbers of units actually manufactured. Companies being audited often will not, and sometimes cannot, provide manufacturing records. This leaves audit claimants in a difficult position. Should they pursue claims where they have reasonable suspicions but no hard evidence that all units manufactured have not been properly accounted? It is possible to obtain disclosure of documents from the potential defendant prior to commencing court action. But what if that company says it has no manufacturing records? This was the dilemma facing the claimant in Carlton Film Distributors -v- VCI and VDC. Carlton had entered into a licence agreement with VCI for the manufacture by VCI of videos. The licence agreement contained…


COPYRIGHT Internet, Record Labels The RIAA (Recording Industry Association of America) has issued lawsuits against four students in the United States to prevent the illegal downloading of music files. Two of the students are from Rensselaer Polytechnic Institute, one from Princeton and one from Michigan Technological University. The Record Industry’s previous tactic (e.g. in the UK) had been to send university and employers formal notices detailing their approach to the illegal downloading of music in educational institutions and the workplace (see Law Updates April 2003 BPI Targets Universities Over Illegal Downloads). These actions are against students who set up sites where sound recordings could be searched and then facilitated downloading and the lawsuits claim that one of the sites could distribute over 1 million MP3 files. See:,1412,58351,00.html

Copyright , Internet / May 2003

COPYRIGHT Internet The Supreme Court of Canada is to review the position of Internet Services Providers who facilitate the transmission of music on the internet. The case in question, known as the ‘Tariff 22 case’ began in 1995 when the Society of Composers, Authors and Publishers of Music in Canada (SOCAN) filed an application with the Copyright Board of Canada for the creation of a new royalty to cover music on the Internet. SOCAN argued that all parties involved in an Internet transmission – from the poster to the Internet service provider to the recipient – are liable for the communication and thus all bear some responsibility to pay an appropriate licence or royalty fee. Canadian Internet service providers (ISPs) led the opposition to the SOCAN proposal arguing that as mere intermediaries (much like phone companies) who should not be held liable for the content transmitted over their equipment. In 1999 the Copyright Board ruled that music transmitted over the Internet qualified as a public performance under the Copyright Act and therefore could be subject to a royalty. It also determined that ISPs could rely on a provision that exempts intermediaries from liability where they function strictly in an intermediary…

Artists , Privacy / May 2003

PRIVACY Artists In a 104 page High Court judgement, Mr Justice Lindsay ruled that Hello! magazine had breached commercial confidentiality by publishing photographs secretly taken of the Douglas/Zeta-Jones wedding, and that Hello! had breached the Press Complaint’s Commissions’ code of conduct – but that there had been no invasion of the couple’s privacy in law. The Judge held that the evidence that Hello! and OK had competed to win the right to cover the wedding was enough to demonstrate that commercial confidentiality should apply and that the couple were entitled to damages as a result of this. The judge commented that “I hold the Defendants to be liable…. under the law as to confidence. It will have been noted that an important step in my coming to that conclusion has been that, on balancing rights to confidence against freedom of express for the purpose of granting or withholding relief, I have been required by statute to pay, and have paid, regard to the Code of the Press Complaints Commission. The Hello! Defendants broke their own industry’s Code.” But Mr Justice Lindsay did not uphold the couple’s claim in privacy and indeed went some way to suggest the court would not…

Licensing , Live Events / May 2003

LICENCING Live Concert Industry The London Evening Standard reported (08/04/03) that the Astoria in Charing Cross Road faces a fight for its public entertainment licence after Westminster Council renewed efforts to remove the venue’s public entertainment licence. The venue has had a number of high profile problems and in the eight months between September 2001 and May 2002 the emergency services were called to the venue 152 times. In October 2001 there was a double shooting linked to rap band So Solid Crew at the Astoria. The Council initially refused the venue’s licence but the Astoria’s owners, the Mean Fiddler Group Plc, successfully appealed the decision in the Magistrate’s Court. Westminster Council have now lodged an appeal against the Magistrate’s decision asking the superior court to uphold the original decision to refuse the licence. The case will be heard before the Superior Court who will review the magistrate’s decision. COMMENT : Licensing law in the United Kingdom is currently under review by Parliament (see Law Updates March 2003 Musicians Union Spearheads Challenge to Proposed Licensing Legislation) and new provisions regulating the private security industry will soon be incorporated into UK law. The House of Lords have rejected parts of the proposed licensing…


COPYRIGHT Internet, Record Labels Easyinternetcafes have agreed to pay costs and damages totalling £210,000 to the British record industry as a result of the High Court judgement awarded against the internet café chain in January 2003 as a result of the chain’s activities in illegally downloading music and burning CDs for customers (see Law Updates February 2003). See,7496,933184,00.html

Internet , Privacy / May 2003

PRIVACY Internet, Telecommunications The draft DTI (UK government’s Department of Trade & Industry) Regulations to implement the European Commission’s Privacy and Electronic Communications Directive were published on the 27th March 2003. The Privacy Directive aim is to ensure that the rules which currently apply to phone and fax services will be extended to email and SMS and that privacy will be respected when individuals use electronic networks and services. Key new features include the right of individuals to give consent (in the form of an opt in) prior to the sending of unsolicited commercial email and SMS messages. Cookies and similar software tracking devices will be subject to a requirement for greater transparency and anyone using them on a web site should provide information about them to subscribers or users and offer users the opportunity to refuse them. There are also stronger rights for individual subscribers who will be able to decide whether or not they want to be listed in subscriber directories. The full consultation document is available on the DTI web site at: For comment by Melissa Bailey, see

Artists , Live Events , Taxation / May 2003

TAXATION Live Concert Industry, Artists The ECJ (European Court of Justice) held on appeal that the meaning of ‘cultural bodies’ in the context of the supply of cultural services in the concert industry could extend to individual performers who would not need to charge VAT for their services. This case arose out of an appeal from the Federal Court of Justice in Germany (Bundesgerichtshof) by a German promoter against a criminal conviction for failing to account for VAT in respect of soloists engaged by him for a concert tour. The commercial nature of the activities did not preclude the services and their providers from being exempt from VAT in Germany. Reference: Criminal proceedings against Hoffman ECJ Case C-144/00