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Company & Commercial

United Kingdom

Overview
Including: Corporate Governance; Directors' Remuneration Report Regulations 2002; Directors' Duties; Partnerships; Late Payment of Commercial Debt Regulations 2002; Use of Standard Terms of Business.

Levi Roots - otherwise known as Keith Graham, and famed for his appearance on the BBC programme Dragon's Den - has won his High Court battle in relation to his Reggae Reggae Sauce, but at the cost of revealing that the sauce is not based on a secret family recipe. The judge dismissed both the claimants' claim for breach of confidence and breach of contract.

Since December 2008 there have been over 100 adjudications before the Companies Names Tribunal, all of which - until now - have been in favour of the applicant. A recent case demonstrates that where a similar name is adopted by a company for genuine reasons, that company's rights can be protected.

Corporate Tax

United Kingdom

Overview
Including: Calculating Corporation Tax Profits; Loan Relationships, Forex and Derivatives; Goodwill, Intellectual Property and other Intangibles; Withholding Tax; Groups of Companies; The International Aspect; Controlled Foreign Companies; Stamp Duty; Further Corporation Tax Reform.

The economic pressures of the downturn have highlighted a potential dilemma for directors, who may find themselves torn between their duties under the Companies Acts to defend their company's interests and a natural desire not to litigate against a powerful regulator, such as Her Majesty's Revenue and Customs.

Information Technology

United Kingdom

Audit rights are commonly included in IT contracts in order to allow one party to access information held by the other party in relation to the agreement between them. A recent High Court decision provides useful guidance on which information or documents are likely to be disclosable under such a clause and which information or documents may be withheld.

In what should be the final instalment in a long-running case, a decision was recently issued in SAS Institute Inc v World Programming Ltd following the referral back to the High Court from the European Court of Justice. For the software industry as a whole, this final judgment is likely to be welcomed as bringing certainty to the area of protecting computer programs with copyright.

Historically, software vendors have tended to take a relaxed approach to software licence 'over-use', but in light of the current economic climate, some are adopting an increasingly aggressive stance to licence tracking and enforcement. As far as compliance is concerned, prevention is better than cure, and implementing an effective software asset management programme is a worthwhile investment.

The Article 29 Working Party has launched binding corporate rules for data processors, which were previously available only to data controllers. Processors can use such rules to ensure that personal data transfers outside the European Economic Area comply with EU data protection rules. With the recent rise in successful UK controller binding corporate rules, the uptake of processor applications is likely to follow suit.

Until last year there had been little guidance at UK or EU level on data protection principles for cloud computing contracts. However, both the Information Commissioner's Office and the Article 29 Working Party have now published guidance documents on the matter, highlighting the potential issues and providing practical tips for the processing of personal data by suppliers in the European Economic Area.

The High Court recently found that a take-or-pay clause requiring the defendant to take a "minimum" 500 days of consultancy did not constitute an unenforceable penalty; rather, it considered the clause commercially justifiable. Nonetheless, the judge accepted that, in principle, such a clause could constitute a penalty. However, it is unfortunate that he did not expand on why any test of commercial justifiability should apply.

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Intellectual Property

European Union

Overview
Including: Trademarks; Designs; Patents; Copyright.

In a long-anticipated judgment, the Court of Justice of the European Union has ruled, perhaps unsurprisingly, that when applying for a trademark, it is necessary to identify the goods and services for which protection of the trademark is sought with sufficient clarity and precision.

United Kingdom

The High Court recently ruled that a sub-licence is capable of surviving termination of its head licence in certain (albeit fact-specific) circumstances. Licensors concerned by this decision should ensure that where they grant licences permitting sub-licensing, it should be a condition of such permission that the sub-licence include an express provision for automatic termination on termination of the head licence.

A recent High Court decision dismissed trademark infringement and passing-off claims in respect of television channel name 'Discovery History'. The claimant failed to demonstrate that use of the word 'history' was not merely descriptive of a channel providing history programmes. While a commonly used word can acquire goodwill and reputation as a mark, it can be difficult to prevent competitors from using such a word.

The Supreme Court recently issued its decision in the long-running case of Schütz v Werit. The decision is of particular importance to the producers of replacement parts for consumer goods, and in relation to the delicate (and blurred) line between making a patented article (which amounts to infringement) and simply repairing a product (which does not).

In what should be the final instalment in a long-running case, a decision was recently issued in SAS Institute Inc v World Programming Ltd following the referral back to the High Court from the European Court of Justice. For the software industry as a whole, this final judgment is likely to be welcomed as bringing certainty to the area of protecting computer programs with copyright.

A recent High Court case highlights the perils of two companies using identical trademarks for different goods and seeking to co-exist. However amicable the relationship may start out, there is often room for the arrangement to sour. This makes the careful drafting and 'future-proofing' of co-existence agreements essential, as the parties in this case discovered to their cost.

It is rare for an English court to be asked to determine an account of profits in an IP infringement action and even rarer for an account of profits to be determined by the Court of Appeal. A recent Court of Appeal decision, which largely overturned an earlier Patents County Court decision, provides useful guidance on the determination of an account of profits.

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Litigation

United Kingdom

Overview
Including: Courts; Commencing litigation; Court process; Appeals.

While the courts are increasingly willing to give effect to broader notions of business common sense in construing commercial agreements, a recent Court of Appeal decision highlights the limits of this approach. Despite the thrust of recent decisions, it provides an instance of the written word trumping an arguably more intuitively commercial construction.

The Court of Appeal recently confirmed that a chief executive's announcement made orally to staff on behalf of the board amounted to a contractual commitment to a minimum bonus pool and the company was obliged to maintain the bonus pool for distribution among staff. This decision provides guidance as to the circumstances in which an oral statement can suffice to give rise to binding contractual obligations.

In Eco 3 Capital Ltd v Ludsin Overseas Ltd the Court of Appeal confirmed that there is no separate, standalone requirement to prove an intention to deceive in order for a defendant to be liable under the tort of deceit. The case involved a claim for fraudulent misrepresentation arising from the claimant's loss of £2 million in a failed property investment scheme.

In Royal Bank of Scotland plc v Highland Financial Partners LP the Court of Appeal set aside a judgment on the grounds that it was obtained by fraud. The decision is understood to be the first domestic case in which a UK bank has had a judgment set aside on the grounds that it was obtained by fraud, and provides a good example of when a summary judgment may be set aside on these grounds.

In a recent case the Court of Appeal confirmed that in certain situations claimants may recover heads of loss that were not expressly claimed in their pleading. However, the court's decision does not mean that claims need not be properly pleaded. The court also made general comments about how notice of matters to be considered at trial may be given.

The Commercial Court recently considered a claim for breach of duty in recommending investments on which substantial losses were incurred following the claimant's failure to meet a margin call, and the distressed sale of the investments, in the wake of the collapse of Lehman Brothers. The decision confirms the focus in claims on the suitability of the recommended product and whether adequate explanations of the risks were provided.

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Media & Entertainment

United Kingdom

Footballer Rio Ferdinand has lost his privacy battle against the Sunday Mirror over an article published about him in 2010. The bottom line in the decision was that the public interest in publishing the article outweighed his reasonable expectation of privacy. The threat of appeal has enabled Ferdinand to request that parts of the public judgment be removed. However, for now, the media can revel in a rare 'kiss and tell' privacy win.

The Court of Justice of the European Union has issued its judgment on the legality of the Football Association Premier League (FAPL) licensing agreements for the broadcast of live matches. Most commentators have hailed it as a victory for publicans looking for an alternative to a commercial BSkyB subscription. However, the court's findings on copyright may lead to the FAPL prevailing on the judicial equivalent of the away goals rule.

The controversy surrounding the number and effect of privacy injunctions issued by the English courts led in part to the formation of the Committee on Super-injunctions. Following the committee's recommendations, a new practice direction has been issued for a pilot scheme to record statistical data in relation to certain non-disclosure injunctions, along with new guidance on best practice in interim non-disclosure orders.

The appropriateness of a jury trial, rather than a trial by judge alone, in defamation actions has been examined in two recent cases. In practice, the courts are keen to avoid juries in defamation cases. The government's draft Defamation Bill would remove libel and slander cases from Section 69(1) of the Senior Courts Act 1981, so that there would never be a presumption of trial by jury.

The communications regulator Ofcom operates a "fit and proper person" test for broadcast licence holders, which has received much attention in the context of allegations of phone hacking at the News of the World and the potential impact on BSkyB's broadcast licence. Compared with other regulators that operate similar tests, Ofcom has published little or no guidance on interpretation.

In a recent case the Court of Appeal of England and Wales set out nine principles, derived from decisions of the European Court of Human Rights, which should be applied when considering the possible infringement of a party's right to freedom of expression under Article 10 of the European Convention on Human Rights.

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