Archive for the ‘Competition Law’ Category

New Media Law moves!

On Monday 8th December, New Media Law moved from Little Portland Street in Noho, to Hanover Square in Mayfair.

The full address of our new office is:

24 Hanover Square

London, W1S 1JD

All other contact details remain as they were previously.

We look forward to welcoming you to our new office very soon!

UK Music Industry announces record growth

The UK music industry announced record year on year growth in 2013 of 9%.

This is a phenomenal success, when one considers that the UK economy as a whole grew by 1.9%.

Perhaps the corner has in fact been turned….

 

See the UK Music report in full here: 

http://www.ukmusic.org/assets/general/UK_MUSIC_Measuring_Music_September_2014.pdf

MIPCOM attendance

new-logo.jpg

MIPCOM

We are delighted to announce that the following of our lawyers will be attending MIPCOM this year, from Sunday (11th) to Wednesday (15th) October.

 

Ian Penman – Partner   ( ian.penman@newmedialaw.biz )   ( +44 7765 244 111 )

Paul Hosford – Partner  ( paul.hosford@newmedialaw.biz )   ( +44 7765 244 222 )

Michael Hekimian – Counsel  ( michael.hekimian@newmedialaw.biz )   (+44 7979 345 181 )

 

For further information, please contact:

+ 44 20 7291 1670

info@newmedialaw.biz

Screen and cache copies are not an infringement of copyright

A recent Court of Justice of the European Union decision confirms that browsing websites does not infringe copyright:

Newspaper Licencing Agency Ltd and others v Public Relations Consultants Association Ltd [2014]

Article 5 of Parliament and Council Directive 2001/29/EC of 22 May 2001 established that website copies on an end-user’s computer screen and in the Internet ‘cache’ of the computer’s hard disk could be made without the copyright holders’ authorisation while the end-user is browsing the internet. The copies in question were held to be “temporary”, “transient or incidental” in nature and an “integral and essential part of a technological process”.

The Public Relations Consultants Association (“PRCA”) use a third party called Meltwater to monitor reports on press articles published online.  The reports are compiled using key words inputted by the PRCA.  Meltwater wanted their customers’ acts of reproduction to be exempted from the Article 2 reproduction right.

The Newspaper Licensing Agency collectively licences newspaper content and wanted Meltwater and its customers to obtain authorisation from copyright holders for providing and receiving the media monitoring service.

The PRCA appealed to the Supreme Court in the UK, who referred certain questions to the Court Of Justice of the European Union in Brussels (the “CJEU”). The CJEU interpreted Article 5(1) as well as Article 5(5) of the Directive to decide whether the conditions were satisfied.

Following the precedent set in Football Association Premier League Ltd v QC Leisure (which established that the conditions of Article 5(1) and Article 5(5) need to be satisfied), the CJEU held that this was a special case since the on-screen and cached copies were only for viewing websites. These copies were held not to conflict with a normal exploitation of the works and did not unreasonably prejudice the legitimate interests of the properly safeguarded rights holders.

Bankole Kasumu, Intern, New Media Law LLP

Ian Penman spoke at rAsia conference in Moscow, 25-28 June 2014

Ian Penman, one of the founding partners of New Media Law, spoke (for the 2nd time, having attended the conference in 2013) at the rAsia conference in Moscow in June.

For further details of the conference, please see: http://rasia.com/

Ian presented on the background and function of New Media Law at 12.30pm at the “TELL Academy” on Thursday 26th

He also spoke on the subject of “LEGAL ASPECTS OF THE NEW DIGITAL ENVIRONMENT” in the Main Hall of rAsia at 3.15pm  on Thursday 26th. http://rasia.com/2014/forum/ru/full26

The presentation focussed on legal developments across Europe and the USA, notably the drive to “encrypted” content and storage, following on from the closure of sites such as KAZAA (www.kazaa.com) and LimeWire (www.limewire.com)  and the impact of the “Kim Dotcom” litigation.

He also spoke on Friday 27th: http://rasia.com/2014/forum/ru/full27

WHY THE NEW IT SOLUTIONS ARE IMPORTANT FOR MEDIA AND CONTENT AND HOW THESE NEW IT SOLUTIONS WILL CHANGE MEDIA AND CONTENT

in a panel chaired by Ralph Simon in Hall A of rAsia at 10.15am

The panel focussed on what the new technological developments mean for the content and media industries.

And again on:

ALWAYS CONNECTED.  THE NEXT STEP IN WIRELESS

in a panel chaired by Shaukat Shamim, of YouPlus, in Hall A of rAsia at 17.00

The panel focussed on what the move to wireless means for content owners and advertisers.

For further details, please contact: esther.mchale@newmedialaw.biz

or, Ian himself, at: ian.penman@newmedialaw.biz

CHINA TO OPEN INTELLECTUAL PROPERTY COURTS

On 6 June 2014, the Chinese government took a major step forward in the protection of IP.

As someone who is married to a card-carrying member of the Chinese Communist Party (the daughter of the Chairman of Dong Feng Motor Co, Liuzhou, no less), I take a special interest in these affairs.

As Chairman Mao famously said: “A journey of a thousand miles begins with a single step…”.

China has voted to establish specialised courts for intellectual property rights.  The decision was endorsed at the third meeting of the Central Reform Leading Group on Comprehensively Deepening Reforms, a top-level decision-making and coordinating body established by the 3rd Plenum of the 18th Central Committee of the Chinese Communist Party in November 2013.

The introduction of a court which specialises in Intellectual Property is as a crucial step forward for the protection of IP rights in China.  It continues a process of started in 1993 when the first IP tribunal was set up within Beijing’s First Intermediate People’s Court.

A great leap forward – without doubt.

 

Ian Penman

Partner

New Media Law LLP


For more details, please contact: ian.penman@newmedialaw.biz

Or our Marketing Manager, Esther McHale at: esther.mchale@newmedialaw.biz


New Technology Transfer Block Exemption and Guidelines


On 21 March 2014 the European Commission (Commission) adopted a revised Technology Transfer Block Exemption Regulation (TTBE) and accompanying Guidelines (Guidelines).  The new rules will take effect from 1 May 2014 and follow a series of consultations on the draft texts that the Commission launched in 2011 and 2013.  We asked EU and competition law barrister Suzanne Rab of Serle Court about the key implications in practice. 

What, in brief summary, is the TTBE?

The TTBE provides a safe harbour or ‘block exemption’ for certain categories of technology transfer agreements that fulfil the conditions set out in the TTBE.  Where the requirements of the TTBE are met, the agreement will be compatible with Article 101 TFEU without the need for individual assessment.  The TTBE applies to a variety of IP licensing scenarios including licences of patents, know-how and software copyright.    As with other block exemption regulations, the application of the TTBE is conditional on the parties’ market shares not exceeding certain thresholds.  These apply to both the relevant technology and product markets concerned by the technology licensing arrangements (20% combined for agreements between competitors and 30% for agreements between non-competitors).  The application of the TTBE is also conditional on the non-inclusion of certain ‘hardcore’ restrictions which are set out in Article 4.  In addition, the TTBE contains a list of ‘excluded’ restrictions (Article 5) which do not benefit from block exemption but whose inclusion does not automatically prevent the TTBE applying to the rest of the agreement.  Such restrictions are subject to individual assessment to determine whether they are compatible with Article 101.  The Commission has published accompanying Guidelines which help parties and their advisors to determine whether the TTBE applies.  The Guidelines also provide guidance on the application of Article 101 to technology transfer agreements which do not benefit from the TTBE.  

In terms of the revised TTBE adopted on 21 March 2014, what are the main changes from the current TTBE which expires at the end of April 2014?

The key changes are the following: ·         The scope of exempted restrictions on passive sales has been narrowed.  As between non-competitors, the 2004 TTBE allowed a restriction of passive sales into an exclusive territory or exclusive customer group allocated by the licensor to another licensee during the first two years that this other licensee is selling the contract products into that territory or customer group.  This exception from the hardcore restriction on selling into allocated territories is removed.  However, the Guidelines allow this type of restriction where the restrictions are objectively necessary for a licensee to enter a new market.

·         All forms of exclusive grant-back obligations will be excluded from the TTBE.  This narrows down the scope of the TTBE.  The 2004 TTBE excluded only those exclusive grant-backs that related to severable improvements.  The aim is to ensure that there are incentives for follow-on improvements.

·         Clauses entitling the licensor to terminate the licence in the event of a challenge to the validity of the technology in a non-exclusive licence will not benefit from the TTBE.  Up to now it has been typical to provide the licensor with a right to terminate the licence in the event of a challenge to the IPR but this carve-out no longer enjoys the protection of the TTBE.  However, such a clause will amount to an excluded restriction so that its inclusion which not automatically prevent the TTBE applying to the remainder of the agreement.·         The current requirement that the purchase of raw materials or equipment in the context of a technology licence must be secondary to the technology licensing in order for the TTBE to apply has been removed.  The new TTBE will apply to such purchases where they are directly related to the production or sale of the contract products which are produced using the licensed technology. 

What was the main thrust of feedback from the consultation process?

The feedback from the first (late 2011) consultation was broadly positive in that most commentators thought that the TTBE and Guidelines were important tools to assist parties to determine the application of EU competition law to their licensing agreements.  Comments focused on issues such as the scope of application of the TTBE, market share thresholds, hardcore restrictions, grant-backs and cross-licensing.  The second consultation which expired on 17 May 2013 was supportive of the Commission’s intention to retain the broad structure of the TTBE and focused on amendments of an incremental nature.  Most comments related to market share thresholds, the treatment of termination clauses in the event of a challenge to the validity of IPR, grant-backs and patent pools.     

Are there any surprises and/ or provisions that will prove controversial?

The new TTBE is not a radical overhaul of the existing rules – it is more an evolution and tightening up of the existing structure.  Despite some simplification, the list of hardcore restrictions as between competitors remains substantially the same.However, the refined scope does mean that the new TTBE is less permissive than the previous version in some respects, in particular as regards the ability to impose restrictions on passive sales, grant-backs and termination provisions as already discussed.The changes to the Guidelines that are particularly noteworthy concern settlement and technology pools.  These changes coincide with the Commission’s competition law investigations into abuse of patent rights.The Guidelines provide that settlement agreements which lead to otherwise delayed or limited market entry may be restrictive of competition under Article 101(1).  If the parties are actual or potential competitors and there is a significant value transfer from the licensor to the licensee, the Commission will be vigilant to the risk of market sharing.  This reflects the Commission’s sustained interest in provisions which are frequently referred to as ‘reverse payments’ (in the current context, typically payments from the licensor to the licensee).  Another feature of the Guidelines is the stance on no-challenge clauses in settlements.  The Commission recognises that such clauses are often an inherent feature of settlements but considers that they may infringe Article 101, particularly where the underlying IPR is a necessary input for the licensee’s production.  This may strike industry as surprising since the very aim of settlement is to draw a line under disputes between the parties.  The extended provisions of the Guidelines on technology pools clarify the application of the safe harbour to pools.  The Commission notes that the concept of essentiality covers not only the position where the technology is essential for producing a particular product but where this is essential to meet a particular standard.  The safe harbour will apply not only to the creation of the pool but also to any licensing out to members.  However, any licensing arrangements between the pool and third parties will not be covered by the TTBE since such arrangements are considered by the Commission to be multiparty licensing arrangements where the parties collectively set the conditions for licensing.  

Has anything changed since the draft TTBE was circulated following consultations in 2011 and 2013? The Commission had initially proposed that the lower 20% market share threshold that applies to competitors would also apply to agreements between non-competitors where the licensee owns a substitute technology that it uses for its own in-house production.  Commentators thought that this would increase the complexity of the TTBE and was, in any event, a relatively unusual scenario.  The Commission has decided to retain the existing market share thresholds for competitors and non-competitors.Following the 2013 consultation, the TTBE will continue to apply to exclusive agreements which entitle the licensor to terminate the licence in the event of a challenge to the IPR (assuming that the TTBE market share thresholds are met).  This concession (i.e. exempting such clauses in the case of exclusive licensing) is intended by the Commission to achieve a better balancing of the incentives to innovate against the public interest in removing invalid IPR from the register.  Another refinement is that the Guidelines make clear that a restriction on passive sales in an agreement between non-competitors might be necessary for a period of longer than two years to enable the licensee to recover the costs of penetrating a new market. 

This content is based on material first published on LexisPSL Competition. A free trial is available here:http://www.lexisnexis.com/uk/lexispsl/competition/home

NEW MEDIA LAW signs Joint Venture agreement with PLEIMO.COM

Ian Penman, partner of New Media Law says:

“We are delighted to be officially on board with such an amazing new company as Pleimo.com.  Pleimo is the most exciting development in the world of musicians for many years, bringing a brand new revenue stream to the creative people that need it most”.

Pleimo is a new digital music service, originating from Brazil, and created by the inventor and entrepreneur, Dauton Janota.

It provides an immediate income to musicians whose fans decide to use its music streaming service, and nominate their favourite act.  Pleimo pays a monthly amount to each act, from the streaming subscription income.

Pleimo also offers a-la-carte downloads (per iTunes); ticketing services (per Ticketmaster); merchandising services and music publishing services to its artist clients.

Ian Penman from New Media Law has been appointed an executive director of Pleimo Corp (in the USA), as well as Pleimo Limited and Pleimo Music Limited (in the UK).

Rick Riccobono from New Media Law has been appointed to Pleimo Corp’s Advisory Board.

 

For further information, please contact: Esther McHale, Marketing Manager, New Media Law: esther.mchale@newmedialaw.biz  Tel: +44 207 291 1670

New Media Law and Pleimo

Photo: Left to Right: Christian Ulf-Hansen, Artist & Writer Relations, Pleimo; Gustavo Vaz, VGRI (Brazil); Richard Homer, Solicitor, New Media Law; Ian Penman, Partner, New Media Law/Director Pleimo; Rick Riccobono, Consultant, International Digital Rights Licensing, New Media Law/Advisory Board Member, Pleimo; Dauton Janota, CEO, Pleimo.

Getty makes its photos free!

In a radical move, Getty Images has allowed some 35,000,000 of its photographs, including images as varied as Adolph Hitler or Al Capone, to Marilyn Monroe or Marion Morrison (aka John Wayne), to be used royalty free without the Getty watermark.  The condition is that the user “embeds” a credit/link at the bottom of the image, which links to Getty.  Of course, that will also give Getty access to data (as to the photograph’s use) which it may be able to monetize.

Nevertheless, a brave step, which is akin to what groundbreaking “free music” services such as (originally) Qtrax.com, then Spotify.com, and now Pleimo.com did for access to music.

For further details on licensing of copyright images, please contact:

Ian Penman, Paul Pattinson, Daniel Eilon, Michael Hekimian or Richard Homer at New Media Law

www.newmedialaw.biz

Tel: 020 7291 1670

Should Ofcom have the power to block or approve media and news deals?

A 4 February 2014 report published by the House of Lords communications committee has urged for changes to the regulation of media ownership.  It finds that the UK communications regulator, Ofcom, should take a more prominent and leading role in deciding whether media transactions or concentration should be approved. 

Merger control in media transactions be a complex area given the relationship between merger control review by the UK competition authorities on competition grounds and the potential for political/ public interest intervention on newspaper and/ or media public interest grounds.  Currently, the UK Government is able to intervene in a newspaper or a broadcasting/ media merger where the Secretary of State believes that a merger may raise a relevant public interest consideration and the transaction constitutes a relevant merger situation under the standard UK merger control rules.  There are specific public interest considerations for newspaper cases and also broadcasting and cross-media cases. 

When the UK sought to develop its laws in relation to public interest scrutiny of media mergers the relevant Government minister said in 2003 that:  “[media] plurality is important for a healthy and informed democratic society.  The underlying principle is that it would be dangerous for any person to control too much of the media because of his or her ability to influence opinions and set the political agenda” (Hansard, Lord McIntosh of Haringey (Parliamentary Under Secretary, DCMS) 2 July 2003). 

In relation to broadcasting and cross-media mergers, the principal media plurality considerations are set out in section 58(2C) of the UK Enterprise Act 2002 and include: “the need, in relation to every different audience in the United Kingdom or in a particular area or locality of the United Kingdom, for there to be a sufficient plurality of persons with control of the media enterprises serving that audience.” 

UK communications regulator Ofcom conducted a significant research study and extensive stakeholder consultation on plurality matters between November 2011 and June 2012.  In October 2011 Ofcom stated that: “We have defined plurality as a) ensuring there is a diversity of viewpoints available and consumed across and within media enterprises and b) preventing any one media owner or voice having too much influence over public opinion and the political agenda.” 

The committee now recommends that Ofcom should undertake periodic reviews of media plurality every four to five years to examine the sufficiency of plurality at the relevant time.  This power to examine and ultimately require divestments in tightly defined circumstances would arise independently of any structural change in the market such as a merger or acquisition. 

As a further change from the current rules, the committee recommends that Ofcom rather the Secretary of State should have final decision making power over whether specific media transactions should be approved, based on a balancing of the effect on competition and plurality. 

The committee’s report comes following an extensive public consultation.  Media plurality issues have come under scrutiny recently.  In the decade since the current regime was put into operation, only three cases have raised plurality “issues” such as to warrant a further inquiry.  Critically, there has been no final UK determination in a case involving only plurality issues.   

In BSkyB/ ITV, BSkyB had acquired material influence over ITV, an important UK broadcast news provider.  The Competition Commission concluded that sufficient media plurality remained for each major audience in the UK, both for a TV audience and a cross-media audience (taking into account the readership of News International’s newspapers).  BSkyB was required to divest its shareholding in ITV to below 7.5 per cent, for reasons connected with competition and not media plurality. 

The second case involved News Corporation’s proposed acquisition of the shares in BSkyB that it did not already own.  This was a highly unusual case which is unlikely to have many if any counterparts. The case did not reach a final decision by the Secretary of State so provides no definitive support for the efficacy or otherwise of plurality controls.  Quite the contrary, the case contributed to a full review of whether the existing media plurality test in the UK is workable in practice. 

A third case involved Global Radio’s acquisition of the entire issued share capital of GMG Radio Holdings Limited, the third largest UK commercial radio operator and operator of several radio stations across the UK.  On 3 August 2012 the Secretary of State issued a public interest intervention notice.  The intervention notice was issued on the basis that the media plurality public interest test might be relevant to consideration of the merger.  Despite the issue of the intervention notice, the Secretary of State announced that, on the advice of Ofcom, she would not refer the acquisition to the Competition Commission on media plurality public interest grounds.  The case was nevertheless referred but only on competition grounds.  The Competition Commission published its final report on 21 May 2013.  Global was required to partially divest some of the acquired or its own stations in each of the overlap areas to address the substantial lessening of competition found by the Competition Commission. 

Against this background, it appears that giving greater powers to Ofcom is intended to serve as a check on political interference that most ‘mainstream’ (i.e. non-media) media are insulated from. However, whether the Government will relinquish determinative power to Ofcom in the review of often high profile media transactions remains to be seen.   

The proposal to allow Ofcom to intervene even outside a specific transaction is highly controversial, albeit there would be a higher bar to intervention in such cases. 

The recommendations also propose to maintain a clear distinction between competition and plurality. Pluralism is designed to capture issues other than those that are covered by competition inquiries into market concentration.  The analysis has to encompass also the capacity of an entity to unacceptably influence public debate quite separately from any competition issues.   

Whether the recommendations will be implemented at all or in their proposed form is a matter of debate.  The recommendations also sit rather uncomfortably with the mandate of the new Competition and Markets Authority which will replace the Office of Fair Trading and the Competition Commission from April 2014. Its remit will be to have tighter reins on the sector regulators rather than giving them a wider berth. 

This post was prepared in consultation with Suzanne Rab, independent barrister specialising in competition and regulation at a leading chambers in Lincoln’s Inn.  Suzanne provided evidence to the House of Lords Select Committee review of media plurality.

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