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Legal Developments in the The UK Legal 500 2019

Ofcom publishes review of the wholesale broadband access market

March 2011 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 3 December 2010, Ofcom published its final statement setting out its analysis of the state of competition in the wholesale broadband access (WBA) market and the measures it is taking to protect consumers in situations where competition alone is insufficient. 


Ofcom ruling

December 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 2 November 2010, Ofcom issued a decision concluding that the pricing policies of BT Group plc (BT) in relation to its offering of residential broadband services did not amount to a margin squeeze prohibited by s18 of the Competition Act 1998 (Chapter II) and/or Article 102 of the Treaty on the Functioning of the EU.

Softlanding Systems, Inc v KDP Software Ltd & anor [2010]

December 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The Court of Appeal has upheld the recent High Court decision in Softlanding Systems, Inc v KDP Software Ltd & anor [2010]. The High Court had rejected Softlanding’s claim that KDP was in breach of its contractual obligations by failing to supply the required technical support post termination, and granted an injunction in favour of KDP, restraining Softlanding and its acquirer, Unicom, from using KDP’s software.

High Court refers questions to ECJ in ‘software clone’ case

December 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In SAS Institute Inc v World Programming Ltd [2010], the High Court had to consider whether the production of software that emulates the functionality of an earlier software program, but without there being any copying of the source code, amounts to copyright infringement. Following its judgment in July 2010, the High Court has referred several questions to the European Court of Justice (ECJ) concerning interpretation of the Software Directive (Council Directive 91/250/EEC) and the Information Society Directive (European Parliament and Council Directive 2001/29/EC). The decision of the ECJ is probably a couple of years away but it will provide much-needed clarity on various key issues relating to so-called ‘software clones’ or ‘drop-in replacement’ programs.


Minister’s support is not illegal state aid

November 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 21 May 2010, the EU’s General Court ruled that statements made by the French Minister of the Economy in July 2002 to the French press, pledging financial support from the French state to struggling public company France Telecom (FT), and the government’s subsequent offer of a €9m shareholder loan to the company, did not constitute illegal state aid. The judgment overturns a European Commission decision from August 2004, which held that the loan the French government offered FT six months after the Minister’s initial public statements, was illegal state aid. The Commission and French operator Bouygues Telecom challenged the General Court’s ruling by lodging an appeal at the European Court of Justice (ECJ) in August 2010.


New teeth for advertising standards watchdog

November 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The Advertising Standards AUTHORITY (ASA) will have significantly extended responsibilities for online marketing from 1 March 2011. The ASA has been granted new powers to adjudicate on marketing communications used on businesses’ own websites and on other non-paid-for online space under their control, such as social networking sites. The new remit will apply to all sectors, all businesses and all organisations, irrespective of size. 


CAT rules against O2 in appeal

November 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 7 October 2010, the Competition Appeal Tribunal (CAT), dismissed an appeal brought by Telefónica O2 (O2) against Ofcom’s failure to liberalise its public wireless network licence to enable it to use its 900MHz and 1,800MHz band spectrum for 3rd Generation (3G) mobile technology. The CAT found, by majority decision, that the relevant EU legislation, which required member states to ‘make available’ these bands for Universal Mobile Telecommunications System (UMTS) (ie 3G) technology by 9 May 2010, did not create a directly effective right for O2 to deploy 3G services on these bands as of that date. In doing so, however, the CAT was highly critical of Ofcom’s conduct in the matter.


Background


Following the merger of T-Mobile and Orange earlier this year, the UK now has four mobile network operators (MNOs): 


European Court declares that golden shares are illegal

October 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 8 July 2010, the European Court of Justice (ECJ) declared that the holding of golden shares by the Portuguese state in Portugal Telecom (PT) contravenes the EU rules on free movement of capital and establishment.1 The judgment was handed down a week after the Portuguese government exercised these rights to block Spanish operator Telefónica’s bid for PT’s stake in Vivo, the leading Brazilian mobile operator.

The Portuguese government used its golden shares to veto the offer despite shareholders representing almost three-quarters of the shares voting in favour of the bid. The Portuguese government’s position remained unchanged after the ruling even though Telefónica extended the offer deadline until several days after the judgment. However, the government eventually agreed to the deal on 2 August 2010 after Telefónica increased its offer for the third time to €7.5bn. PT has also agreed in a separate deal to acquire a 22.4% stake in Brazilian telecoms company Oi Telemar, which is partially state-owned. PT’s presence in the Brazilian telecoms market is considered to be of significant strategic and political importance to the Portuguese government as it is a rapidly expanding market and as such is a key part of the growth of Portugal’s largest telecoms company.

Licensee beware: software licences might not be as ‘perpetual’ as you first thought

October 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In recent months we have assisted on several high-value software licensing transactions, all of which involved long debates about the ‘perpetual’ nature of the licences granted. This prompted us to revisit the important lessons to be learned from the judgment recently handed down in BMS Computer Solutions Ltd v AB Agri Ltd [2010], which all customers should be aware of when purchasing perpetual licences for their business-critical software.

Kingsway Hall sees Red

Kingsway Hall Hotel Ltd v Red Sky IT (Hounslow) Ltd [2010] examines the use and enforceability of exclusion clauses in a contract for the provision of software and related services. In the wake of BSkyB Ltd & anor v HP Enterprise Services UK Ltd & anor (Rev 1) [2010], it provides further salutary lessons for IT suppliers on the proper management of their sales and contracting processes. Under the Unfair Contract Terms Act (UCTA) 1977, certain exclusions and limitations of liability are either unenforceable or subject to a test of reasonableness.

ECJ rules on the validity of the Roaming Regulation

On 8 June 2010, the European Court of Justice (ECJ) rejected the attempt by various leading European mobile network operators (MNOs) to challenge the validity of a cap imposed by the EU on the roaming fees they can charge customers travelling overseas. From the point of view of these providers, price-capping regulation has effectively curbed a lucrative market that was worth approximately €8.7bn at the time the regime came into force in 2007.

Mobiles win as Ofcom consults on control

On 20 April 2010, the Court of Appeal upheld an appeal by mobile operators Telefónica O2, T-Mobile, Vodafone and Orange, challenging the Competition Appeal Tribunal’s (CAT) power to direct Ofcom to revise its price controls on mobile termination fees with retrospective effect (Vodafone Ltd & ors v British Telecommunications (BT) plc & anor [2010]). The ruling coincides with an Ofcom consultation on the level of price controls for mobile call termination for the period 2011-15, which proposes to dramatically reduce the maximum level of fees by adopting a new calculation methodology recommended by the European Commission.


Liability: Transfield revisted

In IHL169 we wrote of the effect of the House of Lords judgment in Transfield Shipping Inc v Mercator Shipping Inc [2008] (also referred to as The Achilleas), which cast some doubt on the application of the traditional rule on remoteness set out in Hadley v Baxendale (1854). 


In short, Transfield found that types of loss arising from a breach of a commercial contract were not recoverable, even though reasonably foreseeable, if the parties did not intend the party in breach to have assumed liability for them when the contract was formed. This led to some confusion as to how Hadley was to be applied going forward and was of particular interest in the IT industry where liability is often a critical issue.


E-tendering

On 24 March 2010, the Office of Government Commerce (OGC) published guidance (‘Implementing e-tendering’ (the Guidance)) on the implementation of e-tendering as part of the public procurement process. The release of the Guidance comes at a time when, in light of the current economic climate, Alistair Darlings’ spending cut targets in the 2010 Budget and the recent general election, saving money is a priority for the government.

Commission clears Orange and T-Mobile merger with conditions

On 1 March 2010, the European Commission conditionally cleared the proposed merger between Orange UK Ltd (Orange) and T-Mobile (UK) Ltd (T-Mobile), during phase one of its investigation. To resolve the Commission’s competition concerns, the parties have agreed to amend an existing network sharing agreement with Hutchison 3G UK Ltd (H3G) and to divest a quarter of their combined spectrum in the 1800 MHz band, which could be used by rivals to run faster mobile broadband services.

Transaction

The proposed transaction consists of a 50:50 joint venture, encompassing the mobile businesses of Deutsche Telekom’s T-Mobile and France Telecom’s Orange, as well as Orange’s fixed broadband business. The Commission was notified of the proposed transaction under Council Regulation (EC) No 139/2004 (the EU Merger Regulation) on 11 January 2010.

Steely Neelie Kroes set to take on Digital Agenda portfolio

The European Parliament has voted to appoint outgoing Commissioner for Competition Neelie Kroes as Digital Agenda Commissioner (which covers telecommunications and the internet). Following a faltering and lacklustre first confirmation hearing, at which Kroes gave vague and evasive responses to members of the European Parliament’s (MEPs’) questions on key issues such as extending price caps on mobile phone roaming fees, the redeployment of broadcast frequencies for wireless broadband and revisions to digital copyright law, Kroes was recalled for a private second hearing with key party leaders during which she seemingly won over her sceptics.

Kroes’ credentials as a competition law enforcer are formidable. Over the course of her five-year tenure as Commissioner for Competition, she has shown herself as a force to be reckoned with. By taking on multinational behemoths, such as Microsoft, and by breaking the billion euro barrier for fines Kroes has earned the nicknames ‘Steely Neelie’ and ‘Nickel Neelie’. However, the role of Commissioner for Competition is an executive position, rather than a legislative one, so it remains to be seen what Kroes’ new appointment will herald for information and communication technologies (ICT), which are in need of far-reaching regulation to bring them into the 21st century.

Death of the salesman?Implications of a landmark ruling

March 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 26 January, Ramsey J handed down a 468-page judgment in BSkyB Ltd & anor v HP Enterprise Services UK Ltd (formerly Electronic Data Systems (EDS) Ltd) & anor (Rev 1) [2010]. The decision, awaited since July 2008, saw Ramsey J uphold (in part) BSkyB’s claim that EDS had won the contract to supply BSkyB’s new customer relationship management (CRM) system by mis-selling its capabilities. HP, which took over EDS, has allegedly been ordered to pay £200m in interim damages, although the company is reported to be seeking leave to appeal.

Background

Cloud computing:key issues for SMEs

February 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Although many definitions exist, broadly speaking ‘cloud computing’ is the outsourcing of specified IT functions via the internet (the cloud) to provide or receive services that would otherwise only be available if the end user had installed the appropriate hardware and/or software on desktops, or on local networks controlled by that organisation itself. Such services may include the use of software over the internet or remote storage of business data by a third-party provider. One benefit of this is that businesses can structure payment for these services differently (for example pay-as-you-go or on a subscription basis), rather than having to pay large sunk costs for long-term software licences, and the purchase and installation of IT infrastructure necessary to support the services locally.

Commission victorious in ‘regulatory holiday’ action brought against Germany

February 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 3 December 2009, following an action brought by the European Commission under article 226 of the EC Treaty (now article 258 of the Treaty on the Functioning of the EU) the European Court of Justice (ECJ) confirmed that Germany had failed to comply with its obligations under the European regulatory framework for telecommunications (the Common Regulatory Framework (CRF)). The ECJ’s judgment in European Commission v Germany [2009] confirms that Germany acted unlawfully by adopting a national law excluding ‘new markets’ from regulation – so called ‘regulatory holidays’.

The case is a victory for the Commission, and Commissioner Reding who will be moving to take charge of the new Justice, Fundamental Rights and Citizenship portfolio, but the updated regulatory package may increase the scope for similar provisions in the future.

Agreement finally reached on EU telecoms reform package

January 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 5 November 2009 the European Commission announced that the European Parliament and Council of Ministers had finally reached an agreement on the issues outstanding in the reform of the EU Common Regulatory Framework for Communications (CRF). Disagreement between the European Parliament and the member states (via their position in the Council) earlier this year had threatened to significantly delay the vital reform of the CRF.

Dispute resolution clauses in IT contracts

January 2010 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Given the relatively frequent occurrence of disputes over contracts for the supply of software and IT services, dispute resolution provisions are an important feature. In the recent case of Ericsson AB v Eads Defence and Security Systems Ltd [2009], the High Court had an opportunity to consider such provisions and their relationship with rights of termination and remedies under the contract.

ISPs: the new age of innocence

November 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The role of internet service providers (ISPs) is under scrutiny as never before. Policy makers have long been tempted by the possibility of tasking ISPs with some form of responsibility for monitoring web traffic as a panacea for illegitimate internet activity, ranging from child pornography to terrorism. Historically, attempts to legitimise or enforce interference by ISPs in web content and web traffic has been ferociously resisted by advocates of net neutrality.

European Commission adopts guidelines on the application of the state aid rules to broadband deploym

November 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 1 October 2009 the european Commission’s new guidelines for the application of the state aid rules to the rapid deployment of broadband networks (the guidelines) entered into force, following their publication in the Official Journal of the EU.

Ofcom issues consultations on mobile number portability

October 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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ON 3 AUGUST, OFCOM ISSUED TWO consultations on its review of mobile number portability (MNP). The first addresses the process by which consumers switch mobile service provider and the second addresses the means by which the mobile operators route ported calls between each other. The consultations have important practical implications for consumers, as well as financial implications for the mobile operators.

Sink or swim: the importance of website disclaimers

October 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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IN THE RECENT CASE OF PATCHETT & ANOR v Swimming Pool & Allied Trades Association Ltd [2009] the Court of Appeal considered the question of whether a website owner owes a duty of care to users when making statements on its website.

Proposals for a competitive Digital Britain

October 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The Government published its much anticipated White Paper on Digital Britain (the Final Report) on 16 June 2009. The Final Report provides a roadmap for the fulfilment of the government’s ambition to make the UK one of the world’s leading digital knowledge economies.

New Privacy Notices Code of Practice

October 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 12 June 2009 the Information Commissioner’s Office (ICO) launched the Privacy Notices Code of Practice (the Code), following consultation with organisations and members of the public. The Code is intended to help organisations collect information properly by drafting clear and informative notices.

Telecoms Council send reform package to conciliation

On 11 june 2009 the European union Council of Telecoms Ministers (the Telecoms Council) sent the European telecoms reform package to conciliation in response to an eleventh-hour amendment by the European Parliament concerning the right to internet access (known as ‘amendment 138’). The package proposes to establish a new European telecoms body, enhance regulation of the telecoms market and European radio spectrum (the Better Regulation Directive), and strengthen the protection of consumers (the Citizens Rights Directive).

Data protection in the 21st century

The Information Commissioner’s Office (ICO) has recently published a report commissioned from RAND Europe (an independent, not-for-profit research institute) in July 2008 on the EU Data Protection Directive (95/46/EC) (the Directive).

European Parliament votes to adopt updated Roaming Regulation

BY A LARGE MAJORITY OF 646 TO 22 THE European Parliament has voted to adopt a compromise position on the European Commission’s (the Commission) proposals to amend the Roaming Regulation (Regulation 717/2007).

Online behavioural advertising

THE INTERNET ADVERTISING BUREAU (IAB), a UK online trade association, has recently published ‘Good Practice Principles for Online Behavioural Advertising (OBA)’, which come into effect on 4 September 2009. Several key internet advertisers have signed up to the Principles, including Google, Yahoo, AOL, Microsoft Advertising and Phorm.

Costs awarded against Ofcom in regulatory appeals

A fact of life for regulators, who are required to take decisions on points of policy, resolve disputes and, potentially, make infringement decisions, is that they cannot please all stakeholders all of the time. In many instances parties may seek to take advantage of their right of appeal to the specialist Competition Appeal Tribunal (CAT) in which case the regulator will more often than not seek to defend the position it has taken.


Video on demand: the final frontier?

Following a three-month consultation period, in March 2009 the Department of Culture, Media and Sport (DCMS) published a statement on the government’s plans for implementation of parts of the Audio-Visual Media Services Directive 89/552/EEC, amended by 2007/65/EC (the Directive). EU member states must implement the Directive by 19 December 2009. The Directive is seen as an update to the Television Without Frontiers Directive (TWF Directive) that was adopted in 1989, and amended in 1997, to establish rules for EU-wide television broadcasting.

Update: extension of the domain name landscape put on hold

We updated you in IHL169 about the Internet Corporation for Assigned Names and Numbers’ (ICANN) proposals to accept applications for new generic top-level domain names (gTLDs). The proposed plans would mean a radical increase in the number of available gTLDs, with the introduction of up to 800 new ones. We highlighted the risks these proposals would pose for brand owners, in particular in relation to brand protection and the increased amounts of time and money that may be required to monitor new domain name registrations.


Spectrum auctions: Court of Appeal rules on CAT’s jurisdiction to hear appeals

March 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 12 December 2008 the Court of Appeal dismissed appeals brought by O2 and T-Mobile (the appellants) against a judgment of the Competition Appeal Tribunal (CAT) refusing to accept jurisdiction to hear appeals against Ofcom’s decision on the conduct of spectrum auctions (T-Mobile (UK) Ltd & Telefónica O2 (UK) Ltd v Offi ce of Communications [2008]).

Proposal for new consumer rights Directive targets e-commerce

March 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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A new consumer rights directive that will apply to goods and services purchased in the EU – whether bought in a shop, over the telephone or via the internet – has recently been proposed by the European Commission.

The future of data protection enforcement

January 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Much has been written about the importance of compliance with the Data Protection Act (DPA) 1998, serving the valid and important purpose of raising awareness in the business community of the obligations imposed by DPA 1998. However, this has been somewhat undermined by the Information Commissioner’s Office’s (ICO) seemingly limited powers to punish organisations for breaching DPA 1998, especially when compared to other regulatory bodies.


Advocate General supports France Télécom appeal

January 2009 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In July 2003 the European Commission issued a decision fining Wanadoo Interactive, a subsidiary of France Télécom, €10.35m for predatory pricing in relation to ADSL-based internet access services for the general public. 


UK to implement EU data retention Directive

November 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The final phase of the EU Data Retention Directive 2006 (the Directive) is due to be implemented into UK law by March 2009. The Directive provides that certain communications data relating to e-mails and telephone calls must be retained for a minimum period by public communication providers (PCPs). In the UK, examples of PCPs include telecoms companies such as BT and Vodafone. This retained communications data may then be used by public authorities to assist in the investigation of criminal activities. 


Standard of review by the Competition Appeal Tribunal

November 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Section 192 of the Communications Act 2003 provides for a right of appeal to the Competition Appeal Tribunal (the Tribunal) in relation to a broad range of decisions taken by Ofcom under its Communications Act 2003 powers. Under this provision, affected parties have a right of appeal ‘on the merits’ before the Tribunal against, for instance, regulatory infringement decisions, the determination of disputes and other regulatory statements or interventions. Appeals against decisions taken by Ofcom under its concurrent Competition Act powers can similarly be appealed to the Tribunal ‘on the merits’ pursuant to s46 of the Competition Act 1998.


UK government consults on proposed reform of European telecoms regulation

October 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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COMMUNICATIONS IS AN IMPORTANT PART OF BRITISH industry, accounting for £51.2bn in revenues in 2007, according to Ofcom’s latest Communications Market Report. Of that figure, telecoms revenues represent a reported £38.8bn, up 4.1% from 2006. As well as being financially important to the UK economy, communicating on the telephone is taking up an increasing part of our daily life. A staggering 99 billion minutes of outbound voice calls were made from UK mobile phones in 2007, on top of the 148 billion minutes made from fixed lines.

Peer-to-peer update

October 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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RECENT NEWS REPORTS HAVE HIGHLIGHTED individuals’ increasing use of the internet to share copyright-protected material, such as music and computer games. This type of sharing circumvents any requirements to pay the publishers for use of the copyrighted material and is unlawful if done without the permission of the copyright owner. The music and publishing industries are facing a huge loss of revenue as individuals obtain copies of songs, films and games without paying for them.

The release of the digital dividend

September 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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AS A RESULT OF DIGITAL SWITCHOVER (DSO), WHICH is due to be completed in the UK by 2012, the 368MHz of the radio spectrum currently used for analogue television will be freed up. Although the government has decided to reserve 256MHz of the 368MHz for digital terrestrial television (DTT), this leaves 112MHz of cleared spectrum (the frequencies between 470MHz and 862MHz), together with a few adjacent frequencies, available for other uses. This remaining spectrum is known as the ‘digital dividend’.

How long should you keep personal data?

September 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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THE DATA PROTECTION ACT (DPA) 1998 SETS OUT several principles governing how personal data should be processed. One of these principles deals with how long such data should be retained. Schedule 1(5) to the DPA provides that:

CAT provides guidance on Ofcom’s dispute resolution powers

ON 20 MAY THE COMPETITION APPEAL TRIBUNAL (CAT) handed down its judgment in the termination rate dispute appeals. In that judgment the CAT overturned Ofcom’s decisions in a number of disputes that had arisen between mobile network operators (MNOs) and BT, finding that Ofcom had made a number of errors in its approach and had misapplied its dispute resolution powers.

IT systems: dangers of supplying before signing

IT SYSTEM CONTRACTS TEND TO BE COMPLEX and lengthy documents that take many months to draft and negotiate. As an IT system is usually key to the day-to-day running of a business, there may be a temptation to begin the supply of the new IT services before the final contract has been signed. Parties may regard a letter of intent as sufficient comfort that the parties intend to finalise the contract, but the recent case of RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG (UK Productions) [2008] is an example of the dangers of beginning system supply arrangements without having a signed written contract in place. In addition, this case demonstrates that although letters of intent can be binding, parties should not generally rely on them as a substitute for a detailed contract.

Data protection update

DATA PROTECTION IS A HOT TOPIC IN THE UK. Recent data security failures by large organisations have highlighted this area of law and, in particular, the lack of heavyweight enforcement powers available to the Information Commissioner.

Deutsche Telekom abuse of dominance decision upheld

IN MAY 2003, THE EUROPEAN COMMISSION FOUND that Deutsche Telekom had abused its dominant position in the markets for direct access to its fixed telephone network, breaching Article 82 of the EC Treaty.

Exclusion clauses: reasonableness revisited?

EXCLUSION AND LIMITATION OF LIABILITY REMAINS one of the most controversial areas in IT contracts. Given the potential disruption and financial loss that could result from the failure of IT systems, suppliers, on a ‘risk/reward’ basis, routinely try to exclude and limit their liability as far as possible.

One of the fundamental issues when considering these clauses is statutory control under the Unfair Contract Terms Act (UCTA) 1977, which subjects exclusion clauses to the reasonableness test where they are on a supplier’s standard terms or where the clauses apply to negligence. In recent years, the courts appear to have been less ready to strike these clauses down as unreasonable, although this may have been a function of suppliers’ lawyers being more careful to avoid drafting manifestly unreasonable clauses. The first-instance decision in Regus (UK) Ltd v Epcot Solutions Ltd [2007] will therefore have sounded a note of concern for suppliers, and they will be relieved that the decision has recently been overturned on appeal.

Retail websites: a review by the OFT

MANY RETAIL BUSINESSES USE WEBSITES TO SELL their products over the internet. In recent years the growth of such internet business has been enormous and most large retailers now have a website through which their goods (and, to a certain extent, services) are sold.

Ofcom consults on mobile mis-selling and cashback offers

IN THE FACE OF INCREASING CUSTOMER COMPLAINTS, a voluntary code of practice for the sale and marketing of subscriptions to mobile networks was published by Ofcom and signed by the five mobile network operators (3, O2, Orange, T-Mobile and Vodafone) in July 2007. This code of practice imposed a number of obligations on the mobile operators relating to best practice for the marketing and selling of mobile phones, whether directly through an operator’s own sales channels, or indirectly through third-party independent retailers.

Ofcom warned the industry at the time the code was adopted that it would regulate to introduce mandatory rules if the level of complaints it received was not reduced. Despite this warning, Ofcom has continued to receive large numbers of complaints: an average of 700 per month to January 2008, compared with 460 in July 2007.

Ofcom’s digital dividend review

In December 2007, OFCOM published a statement setting out its approach to awarding the digital dividend, ie the spectrum freed up by digital switchover (DSO) for new uses. Spectrum is a scarce resource, so Ofcom recognises that the way it is managed and used is an important issue for advanced economies. In its digital dividend review (DDR), Ofcom has considered how it should award some of the most valuable spectrum likely to be released for new uses in the next 10 to 20 years.

Computer programs: can they be patented?

A recent case in the UK courts has looked at the thorny issue of patenting computer programs.

In Astron Clinica Ltd & ors v Comptroller General of Patents and Trademarks [2008] the claimants successfully appealed a decision by the UK Intellectual Property Office (IPO) to refuse patent claims for its computer program. Following on from this case, the IPO has amended its practice so that patents for computer programs are now arguably more likely to be granted in the UK.

Data Protection Act: enforcement notices

March 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Data protection has been brought sharply into focus by recent losses of large amounts of data, for example, HMRC’s loss of two computer discs containing personal data on 25 million people. In recent years, there has been an enormous growth in the collection and use of personal information and the Information Commissioner, Richard Thomas, has said that a number of public and private sector companies have in the past admitted to him that they have also lost data.

Ofcom’s dispute resolution powers

March 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In December 2007, the Competition Appeal Tribunal Tribunal (CAT) published a preliminary issues judgment in relation to the scope of OFCOM’s dispute resolution powers under s185 of the Communications Act 2003 (the Act). The CAT interpreted the scope of the Act, taking into account the underlying EU directives – in particular the Access Directive (2002/19) and the Framework Directive (2002/12). The CAT concluded that the interpretation of s185 should be construed widely and that on the facts of this case Ofcom had the power to resolve such a dispute. The CAT also concluded that the absence of agreement between British Telecommunications plc (BT) and Orange meant that there was a ‘dispute’, irrespective of the contractual provisions between the parties and the question of whether contractual dispute resolution mechanisms had been exhausted.

Appeals launched against findings of abuse of dominance by Telefónica

February 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In July of 2007, Telefónica was fined €151,875,000 for abusing its dominant position in the market for national and regional wholesale broadband access in breach of Article 82 EC, the highest fine imposed by the European Commission in the telecommunications sector. The Commission’s decision has been appealed on two fronts, by both Telefónica and Spain, who are concerned about the Commission’s interference in a market already regulated by the Spanish telecoms regulator.

Policing discussion boards

February 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The past few years have seen a huge increase in the use of the internet. In particular, the use of sites that contain ‘discussion boards’ and other types of sites that allow individuals to enter information to build up the content of a particular web page. In many cases, such information is not checked or edited by a third party before it is uploaded. Individuals will often voice personal opinions and beliefs, which in some cases may be offensive, defamatory or infringe another individuals’ privacy. The internet enables such statements to be widely disseminated in a short space of time to a large audience. This article sets out some of the issues that should be considered if you have a website that enables individuals to post content.

Data protection: what is personal data

January 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The information commissioner has produced a new technical guidance note designed to clarify what constitutes ‘personal data’ for the purposes of the Data Protection Act 1998 (DPA).

Ofcom consults on regulation of next generation access networks

January 2008 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In October 2007 the Office of Communications (Ofcom) published a consultation paper (the consultation) in relation to the development and regulation of next generation access (NGA) networks. These new networks are designed to address the capacity constraints created by increasing consumer demands and new services, and will require a significant investment. Ofcom considers that the move to NGA networks will raise a number of challenges, and invites stakeholders to comment on its proposed approach for regulating the NGA networks.

Abuse of a dominant position: refusals to supply interface information

November 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Monday 17 September 2007. D-Day for Microsoft, when the European Court of First Instance (the CFI) issued its much anticipated judgment on Microsoft’s appeal against the European Commission. In March 2004, the Commission found Microsoft guilty of infringing Article 82 of the EC Treaty (the Treaty) by abusing its dominant market position in the market for client PC operating systems. Article 82 states:

Ownership of copyright in software

November 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Many companies fail to take into account the thorny issue of who owns the copyright in commissioned software. This issue is also relevant for other commissioned works that may be protected by copyright, such as a company logo or website.

Airline passenger data transfers to the US

November 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Following the terrorist attacks on 11 September 2001, the US implemented legislation requiring air carriers operating flights to, from or through the US to provide the Department of Homeland Security (DHS) with access to passenger data, known as passenger name records (PNR), held by airlines in their automated reservation and control systems.

Data security - House of Lords recommends urgent action

October 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The current UK data protection regime does not impose legal obligations on a data controller to notify the Information Commissioner's Office (ICO) or individual data subjects when personal data has been compromised.

Report of the European Commission on market reviews under the electronic communications Framework

October 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In July 2007 the European Commission (the Commission) published its second report (the Report) assessing the market review mechanisms under the Regulatory Framework for electronic communications networks and services (the Framework) and in particular assessing the consultation procedure under Article 7 of the Framework Directive (Directive 2002/21).

High Court injunction orders T-Mobile to connect calls to Truphone VoIP numbers

September 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 17 July 2007 the High Court imposed a mandatory interim injunction on T-Mobile, requiring it to connect calls made by customers of its network to customers using Truphone numbers. The Court considered that Truphone had a sufficiently strong case and that the balance of convenience was weighted towards the grant of interim measures. T-Mobile was ordered to begin routing Truphone’s calls on the basis of the rates proposed by T-Mobile from 23 July 2007.

New guidance on collecting personal information via websites

September 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The UK Information Commissioner’s Office (ICO) has recently issued a practice note that deals with the issues to consider when collecting personal information via a website. Although the substance of the guidance is not new, it consolidates existing advice into one simple guide called ‘Collecting personal information using websites’.

The future of broadcasting: rights and regulation in the digital world

August 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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We are living in a time of constant change in the way that we, as consumers, spend our leisure time, especially when it comes to watching television or enjoying other forms of audiovisual content. Our viewing options have developed steadily over the past 50 years, from cinema to analogue terrestrial television, and from videos to multi-channel television delivered by cable and satellite.

Reducing the cost of using moblie phones abroad: the European Roaming Regulation

August 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 23 May 2007 the European Parliament's plenary session voted with a strong majority in favour of a regulation on international mobile roaming charges. The European Commission considers that the international roaming charges are currently very high, affecting 37 million tourists and 110 million business customers. With the adoption of the proposed regulation on roaming (the Proposed Regulation), citizens crossing borders within the EU will be able to communicate at affordable and transparent prices.

EESC Opinion on the Electronic Communications Framework Review

On 28 April 2007 the European Economic and Social Committee (EESC) published its Opinion on the European Commission's review of the current EU Regulatory Framework for electronic communications networks and services (the Framework).

Outsourcing in the financial services sector - are you ready for MiFID?

The implementation of the Markets in Financial Instruments Directive (MiFID)1 represents a key business challenge in 2007 for financial institutions and their outsourced service providers. Outsourcing in the financial services sector, particularly of back and middle-office functions, such as asset management systems, continues to grow at an unprecedented rate. FSA outsourcing rules have been in place for banks and insurance companies for some time. However, new European legislation arising from the EU's Financial Services Action Plan2 has resulted in the recent updating of the FSA's rules. Interestingly, a March 2007 survey from Handysoft revealed that ‘almost one third of UK-based financial institutions and firms are not expected to meet the MiFID compliance deadline of November 2007'.

How secure is your data?

Recent reports have suggested that the majority of individuals do not understand the importance of protecting their data when they are online. However, of equal, if not more, concern is the number of organisations that do not appear to be aware of their responsibilities in relation to the security of the data that they hold. In light of several recent incidents where large organisations have been found to not protect their customers' data with a sufficient level of care, it is useful to highlight the implications of such failures.

Electronic Communications Regulation and Markets 2006: Commission report

On 29 March 2007 the European Commission published its annual European Electronic Communications Regulation and Markets report. The report outlines key market developments and the regulatory environment in the telecoms sector in the EU. It notes that consumers now have more choice, but that the full potential of the internal market remains unexploited. The Commission intends to adopt proposals for the amendment of the regulatory framework, including a revised recommendation on relevant markets during 2007.

Infringement proceedings against Germany for granting 'regulatory holidays'

April 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 26 February 2007 the European Commission (the Commission) decided to send Germany a letter of formal notice indicating its intention to open infringement proceedings against Germany before the European Court of Justice (ECJ). The reason for this development is a recent legislative amendment in the German telecoms legislation that effectively grants a 'regulatory holiday' to Deutsche Telekom. Were it not for this amendment, Deutsche Telekom would be required to open up its fast internet access network, following a regulatory condition imposed by the German telecommunications regulatory authority, Bundesnetzagentur (BNetzA).

Data protection compliance and enquiry agencies

April 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In many situations where a company instructs an external service provider, the services will involve an element of processing personal data. Failure to ensure that the service provider complies with data protection legislation can lead to serious consequences for the instructing company as well as the service provider itself.

Microsoft leads the fight against spam

March 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Microsoft has recently won a claim, at summary judgment, for an injunction and compensation against a spammer and his business that offered lists of e-mail addresses for sale. Microsoft's actions, following its activities to combat the sending of spam, should encourage other businesses to take greater action to fight unsolicited e-mail and those who send or instigate it.

The CAT rules on its jurisdiction to reach an infringement decision

March 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 22 January 2007 the Competition Appeal Tribunal (CAT) handed down a judgment on its jurisdiction in VIP Communications Ltd's (VIP) appeal against the Ofcom decision that T-Mobile had not breached Article 82 of the EC Treaty or the Chapter II prohibition of the Competition Act 1998. T-Mobile, an intervener in the appeal, contested the jurisdiction of the CAT to substitute its own infringement findings in place of Ofcom's non-infringement decision. The CAT rejected T-Mobile's arguments and found that it has a wide jurisdiction to replace Ofcom's decisions with its own findings in accordance with para 3(2) of Sched 8 to the Competition Act.

Commission's recommendations to Ofcom on mobile voice call termination

February 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 22 November 2006 the European Commission sent a letter to the UK Office of Communications (Ofcom) commenting that 3G auction costs should not be taken into account by Ofcom in its calculation of wholesale termination tariffs for mobile network operators (MNOs). Wholesale mobile voice call termination (MCT) is the service necessary for a network operator to connect a caller with the intended mobile recipient, when the recipient is using a different network.

Offshore outsourcing – getting down to business

February 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Undoubtedly, 2006 was the year when offshore outsourcing came of age. Driven by ever-growing confidence in the services of offshore providers, approximately half of the outsourcing deals agreed last year contained some offshored services, and more significantly, by value, roughly half of the year's outsourced contracts went overseas. By marked contrast, those figures were each less than 30% in 2005.

Data protection law protects illegal downloaders

January 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In the recent Dutch case of Foundation v UPC Nederland, a claim to force internet service providers (ISPs) to release the names and addresses of some of its users who were accused of illegally downloading material via peer-to-peer software was rejected on data protection grounds.

Ofcom’s strategic telecoms review –one year on

January 2007 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Ofcom published its strategic review of telecommunications in September 2005. The Review aimed to examine the prospects of the sector in the next ten years and determine the strategic direction of the regulator's activities in relation to telecoms. The most important outcome of the Review was the acceptance of legally binding undertakings from BT in lieu of a reference under Part 4 of the Enterprise Act 2002. The undertakings intended to provide equality of access to BT's infrastructure through the organisational and structural separation of its access network division, Openreach.

Update on the laws on distance selling

November 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 20 May 1997 the European Parliament and Council published the Distance Selling Directive. The objective of this Directive was to ‘approximate the laws, regulations and administrative provisions of the member states concerning distance contracts between consumers and suppliers'. Member states were required to implement the Directive by 4 June 2000. In the UK, the Directive was transposed in the form of the Consumer Protection (Distance Selling) Regulations 2000, subsequently amended in 2005 (the UK Regulations).

Ofcom's final consultation on wholesale mobile voice call termination

November 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 13 September 2006 the Office of Communications (Ofcom) published the latest consultation on its review of the market for wholesale mobile voice call termination (MCT). MCT is the service that allows a network operator to connect a caller with the intended mobile recipient, when the recipient is using a different network. This is a wholesale service because it is purchased by network operators, rather than by the customers themselves. This third and final consultation sets out Ofcom's proposed views on market definition, countervailing buyer power and significant market power (SMP).

Ofcom's consultation on revised enforcement guidelines

October 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In July 2006 the Office of Communications (Ofcom) published for consultation revised enforcement guidelines for handling complaints and disputes in relation to breaches of the UK and EC competition rules and the ex ante conditions under the Communications Act 2003 and the Broadcasting Acts 1990 and 1996 (the Guidelines).

Data protection not a valid excuse for failing to supply customer data under a franchise agreement

October 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In the recent case of Grow With Us Ltd v Green Thumb (UK) Ltd, the Court of Appeal held that the Data Protection Act 1998 could not be used as an excuse by a party for its failure to meet its contractual obligations to supply customer data under a franchise agreement.

The Computer Misuse Act 1990 and denial of service attacks – an update

September 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Earlier this year we wrote about an unsuccessful attempt to prosecute an individual who had allegedly sent an e-mail bomb to a company (known as a ‘denial of service attack'). That Magistrates Court decision led to renewed calls for the Computer Misuse Act 1990 (CMA) to be updated to include a specific section dealing with such an offence.

Court of Appeal decision on CAT's powers to impose time limits

September 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 15 June 2006 the Court of Appeal held that the Competition Appeal Tribunal (CAT) was wrong to consider that it had the power to order that a new investigation be carried out within a specified time. The appeal was about the powers of the CAT when dealing with appeals under the Competition Act 1998 (the Competition Act) against decisions made by regulators, such as the OFT or the Office of Communications (Ofcom).

How does the Data Protection Act 1998 apply to photographs?

The Data Protection Act 1998 (DPA) sets out principles for collecting and using information about a living individual (personal data) to protect that individual's right to privacy. In some circumstances, the DPA applies to photographs of individuals.

Court of First Instance ruling on 3G mobile network sharing

In May the Court of First Instance (CFI) held that national roaming arrangements on the German third generation (3G) mobile market do not fall within the ambit of Article 81 of the EC Treaty (the Treaty) and partially annulled a decision of the European Commission. The CFI ruled that, in granting an exemption on national roaming, the Commission had carried out insufficient analysis as to the applicability of Article 81 of the Treaty to these arrangements.

ECJ declares transfer of personal data to the US unlawful

The European Court of Justice (ECJ) has recently ruled that a controversial agreement between the European Commission and the US authorities to transfer personal information concerning airline passengers to the US is unlawful.

Buying and selling a customer database: practice note issued

The Information Commissioner’s Office has recently issued a good practice note on the data protection issues involved in buying and selling a customer database. This article reflects the guidance described in that note.

Bridging the broadband gap: European Commission's strategy

On 21 March 2006 the European Commission published a communication on bridging the broadband gap (the Communication). The Commission has identified a substantial gap in the take-up of broadband between urban/developed and rural/less-developed areas. As broadband is a substantial driver of growth and employment, the Commission is keen to ensure that broadband internet services are rolled out across the entire EU.

European Commision's proposal on international roaming Regulation

For a number of years, the European Commission has been investigating the price levels of international roaming services and explored the options for regulation in a first round of consultation. Now, the Commission has outlined a ‘Proposal for a Regulation (EC) of the European Parliament and of the Council on Mobile Roaming Services in the Single Market’ (the Proposal), aimed at reducing the price of international mobile roaming within the EU. The Proposal provides for the regulation of international roaming pricing both on the wholesale and the retail level.

Compensation under the DPA: claimants must show direct link to contravention

The Data Protection Act 1988 (DPA) contains a provision that enables an individual to claim compensation for damage suffered due to a breach of the DPA.

E-mail filtering and screening: guidance on privacy issues

April 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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Most of us use e-mail to communicate in the work environment, both internally with our colleagues and externally with clients, customers and other third parties. The growth in e-mail activity over the past decade has led to the increased use of e-mail filtering and scanning by Internet Service Providers (ISPs) and E-mail Service Providers (ESPs) to cut out viruses, spam and other unsuitable e-mails. It is estimated that in some large companies, 90% of the e-mails received are spam. Viruses are even more damaging. There is, therefore, a huge incentive for companies to use filtering tools to scan e-mails before they are received by the intended recipient.

Ofcom's guidance on discrimination by SMP providers

March 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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In November 2005 the UK?s telecoms regulator, the Office of Communications (Ofcom), published its guidance on undue discrimination by SMP providers (the Guidelines).

Copyright infringement of a computer program

March 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The recent High Court judgment in Nova Productions Ltd v Mazooma Games Ltd and others; Nova Productions Ltd v Bell Fruit Games Ltd again highlights the problems which claimants face in attempting to prove copyright infringement of computer programs based on a similar ‘look and feel’.

Denial of service attacks: further delay to amendment of Computer Misuse Act 1990

February 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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The second reading of the Computer Misuse (Amendment) Bill 2005 was due to be heard in December 2005. However, this reading has been postponed until 17 March 2006, leading to a further delay in the attempts to strengthen and update the Computer Misuse Act 1990 (the Act) to include an explicit offence for ?denial of service? attacks.

Finding significant market power following the CAT decision in Hutchison 3G

February 2006 - IT & telecommunications. Legal Developments by SJ Berwin LLP.

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On 29 November 2005 the Competition Appeal Tribunal (CAT) handed down its judgment in Hutchison 3G (UK) Ltd v Office of Communications (the Appeal). It held that the Office of Communications (Ofcom) had erred in its finding that Hutchison 3G (H3G) had significant market power (SMP) on the market for wholesale mobile voice call termination on H3G’s network.