With the latest series of Dragons’ Den recently gracing our TV screens every Sunday evening, one recurring hurdle for a lot of the budding entrepreneurs is IP protection.

Properly considering intellectual property (IP) rights in your overall business strategy is often key to clinching a deal in the Den. Particularly if you are producing products for sale, the Dragons will frequently fire questions relating to what patent protection you have obtained, what trade mark have you got registered and whether you own the domain name.

IP protection and strategy should be a high priority for manufacturers, whose most valuable asset may be its IP rights. IP rights help an owner to prevent competitors from offering similar products, using similar brand names, open up opportunities to make money out of licensing your IP rights and often impress the Dragons.

So what are some of the key IP considerations?

1. Carry out some basic online searches

Invest some time into checking search engines, Companies House and online trade mark registries at the UK Intellectual Property Office (UKIPO), Office for Harmonization in the Internal Market (OHIM) and further afield depending on where your target market is) to check whether your chosen brand name/logo is already being used by a third party. Also check similar names/logos as this can  lead to risk of trade mark infringement. You may want to obtain official clearance searches (via a trade mark attorney) that you can rely on more than your own searches. Check if the domain name is available.

2. Protect your confidential information

Whilst it is normally a good idea to keep your new business idea a secret before you are ready to market (to maintain a competitive edge), it is absolutely essential if you have developed a product (including software) or a process that could be patentable. If you do not maintain confidentiality you risk losing the ability to patent it. Please ask us if you need a non-disclosure agreement to protect your position.

3. Develop your trading name

If you have decided to operate as an incorporated company in the UK then you need to decide on your company name and properly incorporate your company at Companies House. We can assist you with this. Note that you can decide to trade under different names than your ‘limited company’ name as this entrepreneur has done with her brand Good Bubble.

You may also want to purchase/register domain names and variants on the name – this is something you should be able to do easily, if the domain names are not already held by a third party through a recognised domain name registrar.

4. Protect your name and logo

Consider registering your main trading name, brand names and logos. You will also need to think about where your target market is and whether you want to go for UK protection, EU wide protection (called “community” marks) or further afield. Whilst you may gain automatic IP rights without registration in certain names and logos, registered rights provide much stronger protection against third parties – better you own the trade mark than someone else! We recommend you take legal advice in registering trade marks. This vitiligo skin care entrepreneur “forgot” to put her trade mark on her packaging almost losing the Dragons’ confidence (but she secured investment).

5. Consider other IP protection

As well as trade marks, you can register other types of IP including patents and design rights. Patents can be key in the manufacturing industry in order to protect various inventions as well as the production processes. When looking at your IP strategy you should consider where your current and future target markets are and whether IP protection is appropriate. Some countries like China have a first-to-file system, meaning that if someone goes off and registers your trading name before you, you will find it very difficult to then obtain the registered name (Apple and Facebook have both faced this issue!).

In the UK there are various IP rights that arise automatically including copyright and unregistered design rights. It can be important to retain evidence of your creation and often creators will sign and date their own work and sometimes even post it back to themselves. On websites, marketing materials and certain goods, owners of copyright tend to assert their rights by inserting a short copyright notice, for example: © Michelmores LLP (sometimes followed by the year created). This is not essential but makes third parties aware of your IP rights. Also not essential, but potentially helpful, is to assert your rights over your trade marks whether registered (by inserting the ® symbol) or unregistered marks (by inserting the ™ symbol). Note that it is a criminal offence to use the ® symbol for an unregistered mark, so be careful.

You may also want to protect your IP by not telling anyone about it – i.e. by keeping a trade secret. Keeping recipes as trade secrets is sometimes used in the food and drink industry, which this entrepreneur of a new range of crisps (Tags®) might have considered.

6. Clean up ownership of IP

Most investors want to see that the company they are investing in owns all of the IP rights or has clear licences to use the IP rights. Often in start-ups, an entrepreneur will invent something which is technically owned by him/her as an individual. In order for the invention to be owned by the company, there must be a legal assignment from the inventor(s) to the company. Investors may even ask to see this agreement. Care must also be taken to ensure IP rights are legally transferred through employment contracts, consultancy contracts, design contracts and other contracts where individuals or third parties are developing IP for the company.

A lot of the above require time and financial investment, so we often advise clients to prioritise various stages if budgets are tight (as well as wider considerations like employment contracts, directors’ service contracts, shareholder agreements and articles of association). This yoga product entrepreneur explained that he had spent £60,000 (!) on registering his intellectual property rights (his company has a patent for his exercise apparatus).

If you have a good brand or product, you will probably be copied at some point. If you have registered rights you should be in a much stronger position to dissuade potential copiers and stop actual copiers.

Michelmores: We have developed a range of Business Starter Packs, specifically designed to provide starting or expanding businesses with their essential and basic legal documents, support and commercial advice.  Getting your ‘legals’ cleaned up can make your business much more appealing to potential investors/Dragons (as well as ensuring you are complying with your legal obligations).

The Intellectual property Office (IPO): Contains lots of information on IP rights and has also taken a keen interest in the Dragons this series with its IP blog on each episode – an interesting read for any entrepreneur (particularly if you’re thinking of applying to the Den!).

This article is in no way an exhaustive list of IP or business start-up considerations, for more information please contact David Thompson, Partner in our Commercial team.

Ashley Madison, a site encouraging extra-marital affairs, recently suffered a data security breach by hacker group “Impact Team” which led to several gigabytes of data including names, payment details, emails and even the website’s source code being leaked.

How do occurrences like this happen?

Advances in technology have enabled all of us to collect, learn and share information about each other more quickly than ever before. Businesses now have advanced tools available to store and protect vast amounts of customer data. But hackers also have increasingly sophisticated methods of gaining unauthorised access to this data. And so begins a digital game of cat and mouse. Cyberattacks are more common than many realise, and readers may already be aware of high profile cyberattacks that affected JP Morgan Chase, Target, Home Depot and Sony Pictures. The scale of the problem is indicated by the Department for Business, Innovation and Skills (“BIS”) reporting that 81% of large corporations and 60% of small businesses reported a cyber breach in 2014.

Why is it important to be on top of data protection?

The consequences of a data breach can be severe. BIS reported that the cost of breaches nearly doubled in 2013/14, with the average cost for the worst cyber-security breach in a year estimated between £600,000 to £1.15 million for large businesses and £65,000 to £115,000 for smaller ones. Such costs may not be backed off to a business’ insurance.

In the Ashley Madison case, the media exposure has been astounding. There has been irreparable damage to Ashley Madison’s goodwill as well as two suicides linked to the data leak. A google search for “Ashley Madison suicides”, for example, now returns just under 18 million results. Not a position any business wants to find itself in.

In the UK, a breach of data protection law can lead to a £500,000 fine from the Information Commissioner’s Office (“ICO”), the UK regulator for data protection. This is likely to significantly increase in the next few years when the General Data Protection Regulation is implemented and there is also the possibility of civil claims from aggrieved data subjects.

How do I help prevent myself from being the next Ashley Madison?

One of the many issues which flows from the Ashley Madison data breach is whether anything could have been done to prevent the breach in the first place, or at least limit its impact.

With this in mind, keeping information secure is a cornerstone of data protection legislation in the UK.  Monetary penalty notices overwhelmingly relate to the 7th data protection principle, which requires appropriate technical and organisational measures to be taken against unauthorised or unlawful processing of personal data (“7th DPP”). That said, there is no “one size fits all” solution when it comes to information security.

Whilst implementing a robust data protection policy does not often find itself towards the top of a business’ to-do list, a robust data protection policy and cybersecurity strategy, as well as effective implementation of the 7th DPP can help to reduce the likelihood of a breach in the first place and go a significant way towards minimising the impact.

Amongst other aspects, a well crafted data protection policy will explain what data is being handled, who is allowed to access that data and which processes are being applied to that data. The process of implementing a data protection policy can also prove valuable in itself because it can act as a catalyst for a more general review of data protection practices, by leading business to ask the following questions:

• Do we collect more data than we need?
• Do we store data for longer than we need to?
• Where do we save and do we encrypt user passwords? Could we easily encrypt more of this data, our servers?

Asking these questions is key as failure to encrypt information in accordance with and otherwise adhere to the 7th DPP, for example, is an aggravating factor when the ICO is considering enforcement action.

Life is short: have an affair – Review your data protection practices.

Given the sophistication of recent cyberattacks and the ease with which an employee’s mistake can lead to customer data being distributed (for a recent example see: Soho sexual health clinic errantly discloses names of 780 HIV positive patients), businesses need to be aware that data privacy matters, have strong cybersecurity measures in place and take data security seriously. Implementing an effective data protection policy and keeping it under regular review can be a valuable tool to a business’ cyber defences, helping to ensure it is in a better position possible to minimise the impact of any attempted cyber-attack or data breach.

Modern communication has changed, talking has become old-fashioned, instead people ‘tweet’,’ like’, ‘retweet’, ‘unlike’ and ‘favourite’. Social media has provided a forum for anyone to freely air personal views and share information with their groups.  Whilst this is hugely popular amongst the 304 million monthly active users on Twitter, it does raise issues in relation to protection of users’ intellectual property (‘IP’) rights.

Despite the differences between English and US law, both jurisdictions agree that copyright can exist in as few as 140 characters, in images or in videos. This has recently come as a surprise to many Twitter users who have had their ‘tweet withheld’ as a result of a copyright takedown notice being submitted by the original author of the posted material.

Recent instances of users’ jokes being reported for copyright infringement has been met with criticism by some Twitter users who consider that social media platforms are now taking an increasingly heavy handed approach to IP protection. In reality, its stance has changed little since its inception. Under the Twitter Rules and Terms of Service, unauthorised use of copyright material is not permitted and users are encouraged to share content by ‘retweet’, which acknowledges the author. The requirements on users therefore remain the same.  However, the decision by Twitter to increase the transparency of its procedures and clearly mark reported content as ‘withheld’ has brought its efforts to identify violations of IP rights to the attention of its users.

Some users have pointed to the precedent of unattributed use of content on social media since its inception and raised concerns over the way in which copyright can be proven in relation to jokes or anecdotes.

Whilst potentially irritating for users in the context of everyday exchanges, any increased activity by social media platforms will no doubt be welcomed by businesses seeking to enforce rights against IP infringers. A common example of IP infringement in a social media context is the use of ‘lookalike’ accounts which use the branding, images and text to pass itself off as a business. Takedown notices are usually issued as soon as the infringement is discovered as these fake accounts can be highly damaging to businesses’ reputation.

The concept of removing infringing material from websites is by no means new. Twitter is required to comply with relevant legislation (Digital Millennium Copyright Act 1998 in the USA and the Electronic Commerce (EC Directive) Regulations 2002 in the UK and across Europe) in relation to the content that it hosts. In order to protect itself against liability for damages, other civil remedies or criminal sanctions, a website provider is required to ‘respond expeditiously to remove or disable access’ to any information which it knows to be infringing.

With this is mind, it is clear that Twitter must act promptly to disable access to infringing tweets, or risk a claim being made against it by the original owner of the IP rights. Although neither the UK nor US legislation specifies what information should be communicated to other website users in respect of the disabled content, it appears that Twitter has adopted a transparent approach in relation to the removal of content.

It is interesting to see the mixed reaction of users in relation to Twitter’s perceived increased intervention in relation to IP rights.  It does not appear that there has been a change in approach; it has simply become more visible.

It is a valuable reminder for businesses and individuals that IP rights do apply on social networks in the usual way and that there are relatively simple methods of removal where creative works have been used without permission.  It is therefore of fundamental importance for rights holders to be fully aware of their rights and how best to protect these.

For more information please contact Charlotte Bolton, Solicitor in the Commercial Disputes & Regulatory team on charlotte.bolton@michelmores.com or on 01392 687745

The recent Court of Appeal case of King v Chiltern Dog Rescue [2015] decided on 9 June 2015 marks a decisive swing away from what was seen by many as an overly flexible application by the courts of the law on deathbed gifts, also known as ‘Donatio Mortis Causa’ or ‘DMCs’ in recent cases.

The case overturns the previous High Court decision in King v Dubrey [2014] which we commented on in December 2014. Readers will recall from that article that the now overturned High Court decision represented a widening of the requirements needed for a valid deathbed gift. There had been widespread concern amongst the legal profession, charities and others, that this decision might open the floodgates to DMC claims and that it represented a further reflection of the erosion of the strict requirements of testamentary disposition. The recent successful appeal by two of the previous claimants (Redwings Horse Sanctuary and Chiltern Dog Rescue Society), thankfully, marks a return to the strict application of deathbed gift requirements.

Requirements for Deathbed Gifts

DMCs occur when a gift does not comply with the formal legal requirements regarding the transfer of property or those of a valid Will, but meets the 3 primary requirements of a deathbed gift, namely:

1. The gift must be in contemplation of death, which under the rule in the case of Re Craven’s Estate (No.1) [1937] Ch.423 needs to be ‘within the near future’;
2. The gift must be made to take effect upon the death of the Donor;
3. The Donor must deliver either the subject matter of the gift or the means of coming into possession of the subject matter to the donee or their agent;

Background to the Law

Up until 1990 the DMC could not apply to land because the Donor could be said to be ‘parting with dominion’ where they retained the legal and equitable interest in the property, i.e. the subject matter of the gift.

The landmark case of Sen v Hedley [1991] Ch 425 changed this and in so doing the landscape of DMCs going forwards.

The case of Vallee v Birchwood [2013] was a further key decision which had the effect of widening the previously narrow application of the law of DMCs. The case concerned a Miss Vallee, an adopted daughter of the Donor whom Miss Vallee visited twice a year. On one such trip to visit in August 2003, her father stated he may not be alive by the time of her next visit (which was due to take place at around Christmas time of that year) and he gave her the key and Deeds to his house (an unregistered property), his war medals and a photograph album. He died in December 2003, just over 4 months after his daughter’s last visit and shortly before she was due to visit him next.

The Court found that the Donor had made the gift ‘in contemplation of his death’ notwithstanding that he had died over 4 months after the purported gift. By way of comparison, in previous reported decisions the period between the gift and the death of the Donor had been a few days: 5 days in the case of Re Craven’s Estate (No.1) [1937] Ch.423, 3 days in the case of Sen v Hedley and 3 days in the case of Woodard v Woodard [1995] 3 All ER 980.

The Court’s decision that the gift was a valid DMC was heavily criticised in the case of King v Chiltern Dog Rescue and should be relied on only with great caution, if at all, going forwards.

King v Dubrey/King v Chiltern Dog Rescue

The present case involved a Miss Fairbrother who gifted her house to her nephew, 4-6 months before she died. This gift was to the disappointment of seven charities that were set to inherit the house under the Will in addition to the rest of the Deceased’s Estate. The nephew, who was living with his aunt and caring for her, claimed that when his aunt’s health deteriorated she passed him the Title Deeds to the property and said “this will be yours when I go”.

The Court decided at first instance that the gift of the house was a valid DMC notwithstanding that the Donor was not thought to be seriously ill and had not visited a doctor recently, she was not about to undergo an operation or a dangerous journey, she did not express a date by which she thought she might be dead, or say she would die shortly. Additionally, the Court decided the gift was ‘made in contemplation of death’ despite Miss Fairbrother surviving the gift for four months as it was still ‘conditional upon death’.

This first instance decision was overruled on appeal which considered that it, as well as Vallee, had been wrongly decided and stepped outside of the bounds of DMCs.

In coming to this decision, the Court of Appeal considered that the first requirement – that the Donor must have contemplated his impending death – was not met in either the case of Vallee or in the first instance decision in King v Dubrey.

In Vallee, the Donor, like many elderly people, was approaching the end of his natural life span but he did not have reason to anticipate his death in the near future from a known cause.

In King v Dubrey, although it was obvious that at the age of 81 most of the Donor’s life was behind her, there was still no evidence that she was suffering from any specific illness, she was not about to undergo a dangerous operation or to undertake a dangerous journey.  It could not, therefore, be said that she was contemplating her impending death for a specific reason at the time of making the gift.

In addition, the words “this will be yours when I go” were reflective of a statement of testamentary intent, rather than a gift conditional upon death within a period of time.  Also, and potentially crucially to the court’s ultimate decision, the Donor’s repeated, unsuccessful, attempts to prepare a will with her nephew’s assistance after the purported gift showed that they both assumed that she had the ability to dispose of her house by will, which would not have been the case if she had made a DMC.

Conclusion

The Court of Appeal’s reasoning was that it was important to keep DMCs within its proper bounds. DMCs are an anomaly in the law insofar that they enable a Deceased to transfer property without complying with legal formalities.  Such an anomaly could potentially be used as a device to validate ineffective wills which could have had far reaching and unwanted implications on the freedom of testamentary disposition.  The decision is an affirmation that the law of DMCs cannot be used as a flexible alternative to the testamentary requirements set out in Wills Act 1837.

The positive outcome for the charities in King v Chiltern Dog Rescue [2015] means that all seven charities under the King v Dubrey case will benefit; the Chiltern Dog Rescue Society, the Redwings Horse Sanctuary, the Blue Cross Animal centre, the Donkey Sanctuary, the International Fund for Animal Welfare, the PDSA and the World Society for the Protection of Animals.

The decision could be particularly significant to charities that may be disputing or defending a DMC claim: going forwards DMCs will be significantly harder to establish than they had become.

For more information please contact Tony Cockayne, Head of the Disputed Wills & Trusts team on 01392 687601 or email tony.cockayne@michelmores.com.

This year’s winner of the Michelmores Charity Run and local athlete, Owen Walpole – who finished the course in an incredible 16 mins 6 seconds, is soon to be jetting off to Africa to continue the pursuit of his dream of competing at the top level in Athletics as a 1500m runner and gain support for his foundation, Isaiah Walpole. We caught up with him to hear more about his running career and what local businesses can do to support him to help meet his goals…

Tell me a little about your background

I was born and bred in Exeter and went to school in Torquay. I played a number of sports but running was my first love – my limited co-ordination meant I was sadly never going to be the next Lionel Messi! I put all my energies into athletics – running in particular, and I’ve found it a great way to bring people together and have fun.

What got you interested in running?

I remember my parents first took me to the Exeter Harriers as a six year old – they have always been running fanatics. Mum is still a competitive masters athlete and has been coached by my Dad for decades – watching her compete and train always inspired me as a youngster and still does.

What made you decide to train to become a professional athlete?

Last year I started a graduate role in Glasgow with NHS Scotland and whilst I enjoyed the job my running took a hit and I felt it was limiting my progression. After chatting to Myles Edwards who runs a charity and trains out in Iten, I knew I didn’t want to look back and think ‘what if?’, so I decided to take the plunge and head to Kenya. I have plenty of time to forge a career but an athletics career is finite.

Why have you chosen Iten as the place for your training?

Once I had made the decision to put everything into improving as an athlete Iten stood out. It is the home of distance running and has produced a host of Olympic champions and world record holders such as David Rudisha and London Marathon champion Eliud Kipchoge. It has an almost mythical reputation as the heart of Kenyan running dominance and, with its altitude base, was somewhere I had always dreamed of visiting.

What’s your ultimate dream?

The dream is to get a Great Britain vest and compete in a major championship. The Olympic Games is the one that you really dream about as a kid and is something I still haven’t let go of.

My goal for next season is to make good improvements on my personal bests at both 1500m and 5k and qualify for a final at the British Championships.

Why is it so crucial to have local businesses sponsor your journey?

In order for me in continue pursuing my dream and improving my running in Iten I require sponsorship. As a local athlete it would be fantastic to have the support of a business that is embedded in the local community. In exchange I would happily get involved in any company events, wear their logo on my sports kit at a host of local, regional and national event as well as talk about the support given in my fortnightly Western Morning News column.

As well as allowing me to pursue my dreams as an athlete the support of a local organisation would allow me to grow the foundation that I have set up – Isaiah Walpole – which supports a primary school in Kenya to stay open and take on new pupils but it also has a bigger vision.

Can you tell us more about this foundation?

Several years ago former marathon runner Isaiah Kosgei decided he needed to give something back to his home town of Segero, Kenya, so with his own money he built a not-for-profit primary school. King David School provides an education to over 170 children and has already done great things for the local community. On my first trip to Kenya I met Kosgei and visited the school and I immediately wanted to get involved and help the project.

With over 1million children of primary school age not in education in Kenya we firstly want to expand King David School to accommodate a greater numbers of pupils – calculating the cost of supporting a child’s educational needs for one year to be £78.50 for a child in Year 1-4 and £58 for a child in Year 5-8. Our long term vision however is to build a Technical College for older children to  learn a trade – the college would follow our not-for-profit principles, providing cost neutral or free education where it is needed.

As we carry out this work I am keen to forge links with local schools and organisations in the South West. So as well as training full time as an athlete, I plan on spending a lot of time in schools and other community groups throughout Devon. I want to help to grow the foundation and create links between the two communities by organising cultural exchanges and fund raising events.

Education should be a basic right for all kids regardless of their economic status, and our foundation will help to cover the cost of school fees, school meals, uniform and educational materials.

Workers with no Fixed Workplace: ‘Working Time’ can include time spent travelling to and from home

Federacion de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and another (C-266/14)

Background

Neither the Working Time Directive, nor the Working Time Regulations 1998, stipulate whether travel to and from a place of work, or between places of work, should be considered as working time. The government’s non statutory guidance suggests that ‘time spent travelling for workers who have to travel as part of their job e.g. travelling sales reps or 24 hour plumbers’ is included in working time, but that ‘normal travel to and from work’, and ‘travelling outside of normal working hours’, is not.

Facts

Tyco Integrated Security SL, and another company within the same group, specialised in security system installation and maintenance, each company employing around 75 technicians. Although, initially, the technicians were each assigned to a particular province or area of Spain, in 2011 the companies closed their provincial offices and assigned all their employees to their central office in Madrid.

Each technician used a company vehicle to travel from their home to the sites for installation or maintenance, before returning home at the end of the day. The distances from their home to the assignments varied, and were sometimes more than 100km. They received details of their assignments via an ‘app’ on their mobile phone, which showed their task list for the day.

The companies did not regard the first journey of the day (from home to first assignment), or the last journey of the day (from last assignment to home) as working time. As a result, they calculated the working day as starting from the arrival of the technician at their first assignment, and ending when they left their last assignment.

The technicians brought a complaint in a Spanish court that the companies were breaching the working time rules by not including their first and last journey of the day.

The Spanish court noted that the Working Time Directive only refers to either ‘working time’ or ‘rest time’ – there is no provision for situations falling between the two. However, they considered that the workers were told by mobile phone what route to follow and where the work must be done, and so they were no longer able to choose how close they lived to their place of work. As a result, it was likely that travelling time cannot be considered as rest time. That being said, neither was the employee, strictly speaking, at the employer’s disposal during the journeys to the first assignment and home from the last assignment.

The Spanish court stayed proceedings, and referred a question to the European Court of Justice (‘ECJ’) as to whether time spent travelling by a ‘peripatetic’ worker, at the beginning and end of the day, constitutes ‘working time’, or a ‘rest period’.

Advocate General’s Opinion

The Advocate General gave his opinion that the first and last journeys of the day should be classified as working time. He indicated that, to meet the definition of ‘working time’, workers must be at the workplace, at the disposal of the employer, and carrying out their activity or duties. The Advocate General viewed travelling as an integral part of being a peripatetic worker, and a ‘place of work’ could not be reduced to the physical presence of the technicians on customers’ premises. Further, travelling was inherent in the performance of their activities.

The most difficult criterion to determine was whether workers could be said to be at the disposal of their employer during the first and last journey. However, in the Advocate General’s opinion, travelling was still done within the context of the hierarchical relationship which linked the worker to the employer. The journeys were subject to the authority of the employer, in that the employer could choose to change the order of customers or cancel an appointment, or require workers to call on an additional customer on their journey home.

Therefore, the time spent by workers travelling from their homes to the first customer and from the last customer to their homes must be considered ‘working time’.

Tips for Employers

This is only an opinion of the Advocate General and is, therefore, not binding on the ECJ or the national courts and tribunals. However, such opinions are usually followed by the ECJ.

There is currently little existing ECJ case law in this area. We will keep you updated with developments.

Northern Ireland Court of Appeal considers the inclusion of voluntary overtime in holiday pay

On 17 June 2015, the Northern Ireland Court of Appeal heard submissions in Patterson v Castlereagh Borough Council, regarding whether voluntary overtime should be included in the calculation of holiday pay.

Although the outcome will not be binding on the English Courts, it will certainly be persuasive. We will inform you of the result as soon as the Judgment has been delivered.

On 18 June, DECC announced the Government’s plans to end public subsidies for new, onshore wind farms by introducing legislation to close the Renewables Obligation across Great Britain for such farms a year early, from 1 April 2016. The end to the subsidies (issued in a form known as ‘ROCs’) had been scheduled for 2017.

In DECC’s announcement, the Energy and Climate Change Secretary, Amber Rudd, said:

“…… we are driving forward our commitment to end new onshore wind subsidies and give local communities the final say over any new windfarms. Onshore wind is an important part of our energy mix and we now have enough subsidised projects in the pipeline to meet our renewable energy commitments”. 

DECC’s figures indicate that, in 2014, over £800 million of Government subsidies helped onshore wind to generate 5% of the UK’s total electricity.

Fergus Ewing, Scottish Minister for Business, Energy and Tourism, has warned that the Government’s decision could be the subject of a judicial review, noting that around 70% of onshore wind projects in the UK planning system are located in Scotland.

DECC’s announcement confirms that certain projects will be eligible for grace periods, which the Government is minded to offer to projects that already have planning consent, a grid connection offer and acceptance, as well as evidence of land rights. DECC considers that such eligible projects could capture up to 5.2 gigawatts of onshore wind capacity.

DECC’s statement provides that the Government will look at options to continue support for community energy projects, as part of the Feed-in Tariff Review later this year, but this may be of little comfort to developers who have already expended substantial time, money and effort on existing projects.

Regen SW has indicated that, within the South West, there are a number of sites, representing 84.2 megawatts of capacity, which have planning permission granted or are under construction, and that there are further sites, representing 46.2 megawatts of capacity, with planning permission being submitted.  It is unclear, however, how many of these projects will meet the grace period requirements.

The grace periods will be critical for developers who have made significant financial commitments, just by putting projects into the planning system, yet alone obtaining all relevant consents.  Developers will be keen to ensure that projects which are under development in the existing regime are not penalised.

ROCs are gradually being replaced by a new regime, focussed on Contracts for Difference (‘CfDs’), for which a finite pot of public money is available. The early demise of ROCs may have an impact on the timing of the next CfD auction and we await guidance on whether CfD support will still be available for onshore wind projects.  Continuing uncertainty will undermine confidence in the CfD auction process and lead to reduced investment in the onshore wind market.

Dale Vince of Ecotricity, interviewed on BBC Radio 4 just after the announcement, commented that most developers had already factored in the change of policy (which was clearly trailed in the Conservative Party manifesto) and that it wouldn’t affect their business. Unsurprisingly, Mr Vince then pointed out that the policy seemed to be driven by a desire to preserve goodwill in Tory-voting, rural constituencies, rather than out of any concern to meet renewable energy targets in the most cost-efficient manner.

Developers will be keen to advance in a timely fashion with their current projects, since any delays could make projects ineligible for ROCs support and, therefore, unviable.  If the Scottish National Party does press for judicial review, developers will watch with bated breath, since they could benefit from the outcome of any ensuing litigation, but this is unlikely to produce a swift resolution of the issue.

If you think that your projects may be affected by this announcement and would like to consider your options further, Michelmores’ Energy and Renewables team is on hand to assist and advise.  

In 2014, the cheese industry saw a record surge in exports including £77 million of sales to France and £19 million of sales to Italy. This business represented a third of the overall dairy exports of £1.5 billion. With such rising demand, it is important that cheese makers consider obtaining “protected name” status not only to prevent poor imitation, but also to encourage tourism and increase business revenue.

There are estimated to be over 700 distinct varieties of cheese produced in the UK. However, only 16 of these having been awarded protected status. In comparison, Italy and France respectively have 49 and 51 of their cheeses currently protected. Please see the British Cheese Boards website for more background information, including the differing types of protection which are available in this context.

11 of the UK’s 16 protected cheeses are located in the South West and include household names such as: Single Gloucester; Dorset Blue; and Westcountry Farmhouse Cheddar. Despite this, there are many producers both across the South West region and the rest of the country that could capitalise on the advantages of protected food name status.

Such protected status creates an element of exclusivity surrounding produce and could arguably be seen as a contributing factor in the surge of international cheese exports.

The Environment Secretary Elizabeth Truss, recently urged cheese makers to register a protected food name status over their goods commenting that:

“Growing our British cheese industry will help to bring greater investment, jobs and tourism to local communities. And by trademarking our best-loved cheeses we are not only celebrating our rich heritage of cheese making, but also protecting them from pale imitations.”

These are clearly important benefits for businesses to protect their brands and in particular consider whether their products that may be capable of obtaining protected status. A list of the products which have protected status can be found here.

One word of warning. Undoubtedly the application process for the protected status is not for the faint hearted. By way of example, the campaign to protect Melton Mowbray pork pies took 11 years to complete. However, the benefits to be reaped can be considerable, particularly when trading in products with a wider national or international appeal.

For more information, please contact David Thompson, Head of Food and Drink, Michelmores LLP on 01392 687656 or at david.thompson@michelmores.com

Regulatory investigations are an increasingly common part of corporate life, particularly in the financial services sector. In addition to large fines, civil claims may also be launched off the back of public criticism from a regulator in the knowledge that whistle-blowers or sensitive documents from the investigation already exist. Therefore, what is good strategy on the one hand may not be good strategy on the other.

Risk management is made more complex by the fact investigations can emanate from overseas regulators across jurisdictions – particularly the US.  Since 2010, the volume of requests from the US Securities Exchange Commission (SEC) for co-operation from foreign regulators has increased by 59% and the volume of requests received by the Financial Conduct Authority (FCA) from foreign regulators has increased by 36%.

This throws up a number of difficult issues to navigate.  Do you turn yourself in to the regulator and self-report in return for a lower fine and immunity?  The price to pay for public acknowledgment of wrongdoing might be increased levels of civil claims.  If so, do you categorise and volunteer all relevant emails and data, in a timely fashion instead of opting for a ‘document dump’?  Co-operating with the regulator means claimants will more easily be able to find and identify the most sensitive evidence and courts will decide if an attempted selective waiver of legal privilege is effective.

Deutsche Bank is a case in point.  It received a record $2.5bn of fines following an admission of guilt under a deferred prosecution agreement (DPA) with US authorities relating to alleged Libor rigging.  The FCA said that the Bank repeatedly misled it during Libor investigations, took too long to produce relevant documents and was slow to fix inadequate systems and control which contributed to an enhanced fine.  The two joint Chief Executives of the Bank are also to stand down.

This is all grist to the mill for civil claims being played out in the High Court.  Unitech Global is pursuing Deutsche Bank for damages, and resisting enforcement of $150m of loans, relating to the alleged mis-sale of interest rate swaps linked to Libor.  In the wake of regulatory sanction, it was able to successfully amend its claim to allege that the bank impliedly represented that it would not falsely or fraudulently manipulate the benchmark.   The courts have compared the case to a diner sitting down at a restaurant who makes an implied representation that he or she can pay for their meal – a reasonable person in either scenario would not infer or suspect dishonesty.

Similarly, and having been fined £290m by UK and US authorities in relation to Libor fixing, Barclays is defending a £50m damages claim brought by its customer Rhino Enterprises, which claims false Libor submissions undermined various swap arrangements which triggered administration.  It has also alleged the bank engaged in anti-competitive behaviour by colluding with other banks to manipulate Libor.  This is separate to the $2.43bn of fines Barclays received for allegedly rigging Forex and Isdafix benchmarks.

In a further lawsuit brought by Property Alliance Group against RBS relating to swaps for damages of £30m, RBS has been ordered to handover documents setting out its negotiations with the FCA over its £390m fine for Libor manipulation and which are also kept confidential under seal as a condition of its DPA with US regulators.  The papers will be inspected by a Judge before ruling on whether they are admissible.  This case re-affirms the general approach of the English Courts – that confidentiality does not trump a litigant’s obligation of full and frank disclosure or the principle of open justice.

The disclosure of papers handed over in confidence or inadvertent waiver of privilege is problematic where it forms part of negotiations with regulators, duties to statutory auditors must be discharged, conflict of interests arise with directors or senior managers who are implicated and internal audit, risk and compliance functions generate significant levels of detailed analysis and guidance.  Governance protocols and training programmes can help identify those with authority to liaise with counsel and the allocation of tasks during an investigation.

Technology also has to be understood as IT infrastructure and software which underpin data storage and security systems are a target for investigators.  A leading provider of data recovery, forensics and e-disclosure services recently carried out a survey in which 44% of UK respondents had been involved in an internal investigation and 33% in a regulatory investigation during the last 12 months.  Where are your servers or data managers based?  Are they backing-up data in multiple jurisdictions where the rules on confidentiality, privilege and disclosure are different?

“Wire Fraud” is a US federal crime which includes devising a scheme to obtain money on false pretences in communications sent via e-mail servers.  This has been relevant to traders engaged in Forex manipulation who became infamous for the use of online chat-rooms to exchange confidential client information.  From a legal point of view, the boundary between a legitimate exchange of publically available information and market manipulation is the element of collusion and dishonesty, which is not always easy to evidence but has been dredged from servers.  Traders facing disciplinary action may look for whistleblowing angles or state that a number of practices, such as “layering” or “front-running”, were commonplace and an accepted part of the culture.

There is no indication of any let-up.  The Governor of the Bank of England Mark Carney has promised a crackdown on rogue traders and declared the “age of irresponsibility is over“.  The outcome of the Fair and Effective Markets Review published on 10 June 2015 recommends more wide ranging regulation of derivatives and Forex markets and longer jail sentences for financial crime to correct “ethical drift“.  This is on top of tougher regulatory rules already on the way for senior management on boards, operating committees, in-house lawyers and those with “Significant Influence Functions”.  The Senior Managers Regime (SMR) will enable regulators to fine individuals and ban them from working in the industry.

These are very complex inter-related issues to grapple with.  In terms of setting priorities, managing cross-border privilege whilst undertaking an internal investigation, possibly as a pre-cursor to self-reporting, is high up the list.  In particular, because US regulators still hold a certain fear factor where co-operation is advisable if non-criminal outcomes are to be negotiated.  Legal counsel can also be used to devise pre-emptive risk management strategies or when necessary, to avoid misunderstandings about the basis on which employees or ex-employees co-operate with an internal investigation or a regulatory fact-find.

In relation to civil actions, regulators have paved the road and litigants pursuing Libor related misrepresentation claims in the High Court have sign-posted the way for others to follow (even if they never get to trial).  Libor, Forex and Isdafix manipulation all have the potential to cast a very long shadow by virtue of the fact claims based on fraud will not be time barred, settlements based on fraud can be revisited and documentation from regulatory fact finds or negotiations is available to call upon.  For example, it is now known that the former Chief Operating Officer of Barclays Capital once described the Libor curve as being based on “fantasy rates”.  It remains to be seen whether the current litigation climate is the beginning of the end or the end of the beginning.  In the meantime, the line between regulatory investigations and civil claims has never been more blurred.

In our increasingly digital age, where a rapidly growing number of people in the UK are purchasing smartphones, laptops and other mobile devices, the average person now owns more and more digital assets.

A digital asset is any digitally stored content which is owned by an individual, including images, music and online accounts such as social networking profiles.

This increase in digital assets is creating complications when the owner dies, leaving their Personal Representatives (PRs) to deal with these assets.  Often, PRs will not have regard to digital assets at all, let alone give proper consideration as to how they should be distributed.

The Current Legal Standpoint

Pursuant to the Administration of Estates Act 1925, PRs have a duty to collect and administer the assets of the Deceased’s Estate, this includes digital assets.  Failure to dispose of digital assets correctly could amount to a breach of that duty.  Aside from the legal requirement to administer these assets in the proper fashion, PRs will want to protect the Deceased’s information which could otherwise be easily deleted or lost.  Understanding the importance of distributing these assets in the correct way is key.

The issue of digital assets is made even more complicated by the fact that there is currently no legal protocol in place to assist PRs with the correct way to examine and distribute these assets.

The Society of Trust and Estate Practitioners (STEP) are currently drafting a protocol.  STEP intend to create a best practice policy for online providers to adopt.  In the meantime, PRs often turn to their solicitors for advice on how to administer these assets.  Below is a checklist which will assist in explaining how to deal with different types of digital asset.

Checklist for administering Digital Assets

Whereas computer usage and internet access used to be largely confined to desktop computers, increasing numbers of other devices are now being used in the average UK household to access and store digital assets.  According to OfCom, in 2014, 61% of adults in the UK were using smartphones and over four in 10 households owned a tablet. These figures have risen 10% and 20% respectively since 2013, showing a steady increase in the ownership of devices capable of storing such assets.

PCs, Laptops, Mobile Phones and other devices

• Firstly, check the ownership of the device itself.  If it was supplied to the Deceased by his employer, you will need to contact the employer to find out how to return the device as it may contain confidential information.  This is of vital importance as a PR may infringe the employers’ rights if he disposes of a device which contains confidential information.
• If the Deceased owned the device, check what digital assets are stored on it.  For example, music downloaded from the iTunes Store or digital images downloaded from a website.  Although the Deceased owned the device, this does not necessarily mean he owned the rights attached to the information stored on it.
• Determine whether the Intellectual Property (IP) rights associated with the digital asset are owned by the Deceased.  It is useful to check the terms and conditions of the digital assets to determine the protocol following death of the account holder.  For example, if the digital asset is music downloaded from iTunes, Apple restricts the use of the content solely to Apple devices used by the account holder (the Deceased).  The right to use the content is lost upon death.
• Take any appropriate action before distributing the device, which will usually include copying the information stored on the device before wiping the hard drive.  For mobile phones, PRs should download any information, such as images and remove the SIM card.  It is also important to check with any relevant mobile phone contract provider to see whether the contract terminates on death or any outstanding payments need to be paid.

Intellectual Property created by the Deceased

• Check whether the Deceased personally owned the rights associated with the digital assets on his device.  This may be because the Deceased created the work and it was protected with IP rights.  For example, the Deceased may have created literary or artistic work that he then copyrighted.
• Ascertain whether the Deceased created the work in the course of his employment.  If so, the PR will need to check whether the employer owns the IP rights, pursuant to the Designs and Patents Act 1988.
• If the Deceased owned the rights, the PR will need to create a secure backup copy of the work before deleting it from the device which is to be distributed or sold.  The PR should always check the terms of the Will as the Deceased may have explicitly provided for a gift of the digital asset to a beneficiary, separate from the device itself.
• In the absence of an express reference in the Will, digital assets with little or no IP value are likely to form part of the residual Estate.  It is important to note that where the Deceased died intestate, digital assets will not fall within the statutory definition of ‘personal chattels’. Therefore, digital assets will not automatically pass to the surviving spouse under the intestacy rules.

Online Accounts

Digital assets are often accessed through the online accounts set up by the Deceased, such as email and social networking accounts.

• Check what online accounts the Deceased held.
• If the PR does not have the login details to the accounts, the relevant Internet Service Provider (ISP) such as Google, Apple or Twitter may be able to assist in allowing the PR to gain access to the accounts and download any information needed to administer the Estate.
• The ISP will also be able to provide information on what happens to the digital assets stored on an account after the death of the account holder.  Often, the account will be terminated and permission granted to the authorised PR to access the content.
• Another option which is often used for social networking profiles is “memorialisation”, whereby the ISP preserves the online content created by the account holder to honour the memory of the holder following their death.  Facebook profiles are often memorialised to allow friends and family to post comments on the Deceased’s profile before it is permanently removed.

Conclusion

When a PR is faced with distributing or selling a Deceased’s personal belongings, it is likely this will include digital devices.  Clearly a brief inspection of the devices’ contents before simply disposing of it will not suffice.  Rather, it is essential that a full and proper inspection of the digital assets is carried out and any appropriate action taken depending on the individual IP rights associated with the assets.

PRs have an overriding duty to exercise “reasonable care and skill” when carrying out the administration of the Deceased’s Estate (Trustee Act 2000).  Seeking guidance on the correct actions to take when faced with the Deceased’s digital assets is undoubtedly a reasonable step that all PRs should take.

For more information, please contact Tony Cockayne, Partner and Head of the Disputed Wills and Trusts team at Michelmores LLP.

An appeal brought by the Hong Kong based PCCW Group against Sky for passing off was dismissed by the Supreme Court (“the Court”) on 13 May 2015.

Interestingly, this is the first ‘passing off’ case heard by the highest court of England since the iconic Jif Lemon case in 1990.

The PCCW Group (referred to in the judgment as “PCCM”) has operated the internet television service known as “NOW TV” in Hong Kong since March 2006.  The service is not available in the UK but a number of Chinese speaking residents (both permanent and temporary) were aware of the NOW TV service and the Court considered it was possible for UK residents to be aware of it via You Tube or PCCM’s  own websites.

In March 2012 British Sky Broadcasting Group (“Sky'”) announced its intention to launch a new internet based television service ‘NOW TV’. Shortly after this announcement PCCM issued proceedings against Sky on the basis that its use of “NOW TV” amounted to passing off.

The Court affirmed the earlier decisions at first instance and the Court of Appeal. The Court considered that PCCM did not have actual goodwill in the jurisdiction. The existence of such goodwill is a key ingredient in the context of a passing off action. Mere ‘reputation’ was held to be insufficient.

The Court considered both the importance of protection from unfair competition and the public interest in free competition in making its decision. Lord Neuberger commented:

“In my view, a claimant who has simply obtained a reputation for its mark in this jurisdiction in respect of his products or services outside this jurisdiction has not done enough to justify granting him an effective monopoly in respect of that mark within the jurisdiction.”

The Court held that PCCM could not make out a case of passing off in this instance as PCCM’s business was based in Hong Kong and the availability of NOW TV service via websites in the UK was intended to promote the business in Hong Kong only. Whilst PCCM had developed a small reputation in the UK, no goodwill had attached to PCCM’s NOW TV service in the UK as there were no UK customers.

For traders, the message from the Court is that the traditional approach continues to apply. The English Courts will not protect traders who do not enjoy custom in the jurisdiction who are seeking to restrain their competitors by reference to passing off. Given the reach now afforded through the internet, the Court’s view is that ‘reputation’ can easily be acquired and to allow this to form the basis of a passing off claim would tip the balance in favour of unfair competition. Traders therefore still need to demonstrate sufficient goodwill to acquire this form of protection and this should be carefully considered when bringing or defending passing off claims.

Read the case in full

The winners of the 2015 Michelmores Property Awards have been announced, celebrating ten outstanding property and construction projects across the region.

Torquay-based architects Kay Elliott were the big winners of the night, taking home the prize for ‘Building of the Year’ for its work on the town’s iconic Abbey Sands building – on the site of the former Palm Court Hotel which was destroyed by a fire in 2010. The firm also won the coveted ‘John Laurence Award for Professional Firm of the Year’, recognising its strong performance in the South West and beyond.

The Dawlish Emergency Project, to re-establish the railway line and sea wall destroyed after severe storms in February 2014, was awarded a ‘Special Infrastructure Prize’. The project team, comprising Network Rail, engineering and development consultancy Mott MacDonald and other contractors, successfully restored the railway line back to use in just eight weeks.

Holland Park, by Exeter-based Heritage Developments, was named ‘Residential Development of the Year 40 Units and Under’, for its collection of stylish, Zero Carbon homes. Meanwhile, Linden Homes’ Home @ Heartlands development near Pool, won ‘Residential Development Project of the Year 41 Units and Over’.

Two Plymouth-based projects were also recognised – including Help for Heroes Personnel Recovery Centre, Plymouth, submitted by Interserve Construction and Plymouth University’s Marine Station, submitted by Balfour Beatty.

Other winning projects include joint winners for ‘Heritage Project of the Year’ – Exeter Mathematics School, and Samuel Jones Smoke & Ale House. Whalesborough Farm, near Bude, Cornwall was awarded ‘Eco Project of the Year’.

Emma Honey, Head of Real Estate at Michelmores, said:

“This year we received the highest number of entries in the last five years of the competition − signaling a strengthening property and construction sector in the South West. The quality of the entries has been very impressive with tough competition in each category, so many congratulations to all the winners on their fantastic achievements.”

The Michelmores Property Awards − now in its 13th year, celebrates excellence in the property and construction industry, across the commercial and residential sectors in Devon, Cornwall, Somerset and Dorset. The Awards Dinner was hosted by comedian and writer Rory McGrath at Exeter’s Sandy Park Conference Centre, on 19 May.

The 2015 Michelmores Property Awards winners in full:

Commercial Project of the Year with a Value Over £5million

• Help for Heroes Personnel Recovery Centre, Plymouth – submitted by Interserve Construction

Commercial Project of the Year with a Value Under £5million

• Marine Station, Plymouth University – submitted by Balfour Beatty

Building of the Year

• Abbey Sands, Torquay – submitted by Kay Elliott

Heritage Project of the Year

• Exeter Mathematics School – submitted by Kier Construction
• Samuel Jones Smoke & Ale House, Exeter – submitted by St Austell Brewery

Eco Project of the Year

• Whalesborough Farm, Bude, Cornwall – submitted by Trewin Design Architects

The John Laurence Award for Professional Firm of the Year

• Kay Elliott, Torquay

Residential Project of the Year 41 Units and Over 

• Home @ Heartlands, Pool, Cornwall – submitted by Linden Homes

Residential Project of the Year 40 Units and Under (but more than 6)

• Holland Park, Exeter – submitted by Heritage Developments

The Special Infrastructure Award

• The Dawlish Railway Project – submitted by Network Rail and Mott MacDonald