The High Court’s recent decision in Lachaux v Independent Print Ltd (and Ors) on the construction of the “serious harm” requirement in section 1(1) of the Defamation Act 2013 (“DA 2013”) provides welcome clarification on the new thresholds introduced by DA 2013 for defamation claims.
In Lachaux, the court had to decide, as a preliminary issue, whether certain articles published in the defendant’s newspapers had caused, or were likely to cause, serious harm to the applicant’s reputation within the meaning of section 1(1) of the DA 2013. The newspaper articles contained allegations made by the applicant’s ex wife about the applicant, which included claims of domestic abuse and kidnapping.
Section 1(1) of DA 2013 provides that a statement is not defamatory unless its publication has caused, or is likely to cause, “serious harm” to a claimant’s reputation. Since DA 2013 came into force, there has been some uncertainty as to the construction of “serious harm”.
The key issue for the court to decide was whether section 1(1) required:
- that the relevant statement had a tendency to, or was inherently likely to, cause serious harm to the applicant’s reputation; or, alternatively
- whether, on the balance of probabilities, the relevant statement had, in fact, caused, or was likely to cause, serious harm to the applicant’s reputation.
The court construed section 1(1) in accordance with the latter, more narrow interpretation of that provision. It said that the intention of the legislature when enacting DA 2013 was to go beyond showing a “tendency” to reputational harm. Following DA 2013, claimants should have to prove as a fact, on the balance of probabilities, that serious reputational harm has been caused by, or is likely to result in the future from, the relevant publication. Furthermore, the court was entitled to have regard to all the relevant circumstances, including evidence of what actually happened after publication. Importantly, the court stated that the question of whether a statement caused serious harm is to be judged on the date on which the issue falls to be determined. This should provide applicants with an extended time during which to gather evidence demonstrating that serious harm has, or is likely to, occur.
It appears that, as a result of Lachaux, in order for a statement to be actionable, there is now a requirement to show proof that it caused actual or likely serious harm to the applicant’s reputation. It has been argued that this requirement may have the effect of making it especially difficult for applicants to successfully establish a claim in defamation, due to the obvious difficulties of providing evidence of serious harm in certain instances. However, it is important to note that the court did indicate that serious harm could be evidenced by inference, which inference should be judged on the basis of the gravity of the imputation, together with the extent and nature of the publication’s audience. In instances involving statements published by an entity with a large readership, a court is more likely to draw an inference of serious harm.
In Lachaux, the court found that the articles complained of had caused serious harm to the claimant’s reputation, which harm could be inferred based on: (i) the seriousness of the allegations complained of; (ii) the reputable nature of the newspapers; and (iii) the inherent likelihood that the publications had been read by a substantial number of people who knew, or knew of, the claimant (considering the length of time he had been in the UAE, together with the large number of professional and personal contacts that he had in the UK). These are useful examples of the types of factors that a court may take into account when deciding whether serious harm may be inferred in a particular case.
Accordingly, while the court’s interpretation of section 1(1) seems to support the legislature’s intention of minimising the risk of trivial defamation claims being brought before the courts, it should not create an impossibly high hurdle for claimants to surmount, particularly given the fact that serious harm may, in certain instances, be established by inference.
The main provisions of the Consumer Rights Act 2015 (“CRA”) came into force on 1 October 2015. The CRA consolidates and clarifies existing consumer rights legislation into one comprehensive source and makes certain changes that affect all businesses selling to consumers. The key aspects are:
Sale of goods
- Rules relating to satisfactory quality, description, fitness for purpose and sale by sample under the Sale of Goods Act 1979 will continue to apply. In addition, the goods must now match a model seen or examined by the consumer.
- Contracts under which goods which are to be manufactured or produced and then supplied to the consumer will be treated as sales contracts and the goods will be treated as goods and not the end product of services.
- Where goods are both supplied and installed by a trader, the goods will not conform to the contract if not installed correctly.
- Pre-contract information required under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (for example, the identity of the trader) will be treated as included as a term of the contract.
- A new system of remedies has been introduced. Consumers will now have a 30 day “short-term right to reject” goods that do not conform to the contract. After expiry of this period, the consumer will have the right to repair or replacement. The trader will only have one opportunity to repair or replace the goods before the consumer has the right to a price reduction or a final right to reject.
- The CRA recognises digital content as a new category of product. It clarifies the position in relation to digital content not provided on tangible media (for example, where digital content is downloaded) by giving consumers of digital content the same rights as if they were buying goods, regardless of the way the digital content is supplied.
- Where digital content is provided on tangible media (for example, on a disk), and the digital content does not conform to the contract to provide that content, then the goods themselves (i.e. the disks) will not be in conformity with the contract. The significance of this is that the remedies available for goods (rather than digital content) will apply (including the two express rights to reject as set out above).
- There are no rights to reject digital content and no corresponding obligations on the consumer to return or delete that content. A right to a full refund is only available where the trader has no right to supply the digital content. In respect of other breaches, the consumer has the right to repair or replacement. In contrast to the remedies for goods, the trader has more than one opportunity to repair or replace the content. The consumer also has a right to a price reduction (potentially as much as a full refund) where repair or replacement is impossible or not carried out within a reasonable time and without significant inconvenience to the consumer.
- Where digital content supplied causes damage to a device or to other digital content, the trader must either repair the damage or financially compensate the consumer for the damage if the consumer can demonstrate that the damage was caused by the trader’s failure to exercise reasonable care and skill.
Supply of services
Any information provided to the consumer about the trader or service, by or on behalf of the trader, will now be treated as a term of the contract if taken into account by the consumer. This recognises that consumers may be disadvantaged where they rely on a trader’s statement and the trader later does not comply with it. Thus, businesses selling to consumers should review their marketing materials and make their consumer-facing staff aware of the changes and new risks involved in making voluntary statements to consumers which are later not complied with.
Unfair contract terms
The requirement of reasonableness under the Unfair Contract Terms Act 1977 is replaced with a fairness test. A term is not binding on a consumer if, contrary to the requirement of good faith, it causes significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer. There are two exclusions from the assessment of fairness: the main subject matter of the contract and the price payable under the contract, provided that these terms are prominent and transparent.
It is important for businesses selling to consumers to understand the changes brought about by the CRA and adapt their practices accordingly. Most importantly, existing terms and conditions and marketing materials should be reviewed and staff trained to avoid potential future compensation claims.
Benefits of the Community trade mark (“CTM”) system
Since 1996, the CTM registration system has been widely used by businesses all around the world as a way of obtaining protection for their brands in the EU, and for good reason. For those that have or plan to have a presence in some or all of the Member States, the system offers excellent value for money. For the price of two or three national registrations, a brand owner can, via the CTM system, obtain protection in all the Member States of the EU (currently twenty-eight).
The CTM systems has attracted even those businesses that have a presence in only one Member State (with no immediate plans for expansion), the system has still been an attractive one. For a relatively small price, a CTM acts almost as a form of insurance against a conflict in the future (with a later user of a confusingly similar brand) should the business ever decide to extend its trade into neighbouring European territories.
The ‘use it or lose it’ rule
At least, that has been the case until now. As with most trade mark systems around the world, the CTM system enforces a ‘use it or lose it’ rule. This means that a CTM can become vulnerable to cancellation if it is not used within five years of registration. As a unitary right for a single European market, it has always been considered (although hotly debated) that use of a CTM in a single Member State equals use in the ‘Community’ (i.e. the EU), shielding it from any attack or allegation that it should be cancelled on the grounds of non-use.
Not anymore. The UK Intellectual Property Enterprise Court (IPEC) recently held in The Sofa Workshop Ltd v Sofaworks Ltd  EWHC 1773 (IPEC) that Sofa Workshop’s CTMs for the “Sofa Workshop” trade marks should be revoked in their entirety despite evidence that the marks had been used on an extensive scale in the UK over a number of years. The Court was firmly of the view that use of a CTM in just one Member State (irrespective of the size of that Member State) is not enough to maintain a CTM.
The IPEC deals with intellectual property issues and forms part of the Chancery Division of the High Court in the UK. It’s far from clear whether or not the Court of Appeal or the Court of Justice of the European Union (CJEU) would share the same view as the IPEC in its decision in the Sofa Workshop’s case, but it’s unlikely that we will find out very soon. This is because the challenge against The Sofa Workshop’s CTMs was filed in response to an action for trade mark infringement and passing off brought by The Sofa Workshop against Sofaworks. Although The Sofa Workshop failed in its trade mark infringement claim, it succeeded in the passing off claim, and therefore emerged as the “winner” in the case, despite losing its CTMs.
Time for a review
As a result of the IPEC’s decision in The Sofa Workshop case, and unless and until a higher court comes to a different decision, businesses should think carefully before embarking upon trade mark litigation in the UK based on CTMs that are over five years old. Unless the trade mark in question is used in at least one other territory (as well as in the UK), steps should be taken either to acquire a national UK trade mark registration to supplement the CTM, or to convert the CTM into a UK trade mark registration (but this would involve giving up the CTM at a time when we may not have heard the last word on the matter) before any litigation is commenced. Ideally, all businesses (whether or not any imminent enforcement action is required) should review their trade mark portfolio to check for any vulnerability.
For new applicants, it will be important to decide at the outset whether to file a CTM or a national trade mark application, or indeed both, depending on their plans for use of the trade mark beyond the first five years.
There is an infinite number of legal matters on which filmmakers seek advice. Nevertheless, certain questions frequently arise: is permission required to use material from a book? Does a contract have to be in writing? May classical music be used in the background of a scene? Does an interviewee need to sign a release? How do I protect my share of net profits if the film is successful? Marriott Harrison’s Head of Media, Tony Morris, has written the Filmmaker’s Legal Guide which addresses the practical legal needs of those producing, financing and exploiting all manner of audio-visual productions – features, documentaries, shorts, television programmes and other audio-visual content.
The book’s pitch is not to lawyers and the Guide is not intended to be a legal text book. The key issues that require consideration in the context of contractual or other legal imperatives are analysed and explained in a manner that concentrates on the practical needs of filmmakers. The text makes extensive uses of examples that are both instructive and, frequently, a reminder of how to avoid problems.
Divided into five parts, the Guide addresses in turn: content, rights, a general introduction to contracts, cast and crew agreements and, finally, production contracts. In turn, each part comprises a number of sections that cover a wide range of subjects including copyright, protecting ideas, moral rights and performers’ consent, clearing third party rights, fair use, moral rights, defamation, music, titles, documentaries, interviews and trade marks. The contract section includes useful tips on how to create a binding agreement – or indeed, to avoid being bound in negotiations. The structure of different contracts in film/audio-visual production is analysed. The Appendices include eight sample contracts.
Although written from the standpoint of an English lawyer applying English law principles, much of the practice described is of more general application. Intellectual Property Law has been largely harmonised throughout the EU; nevertheless, there are some differences of application – one example being that of moral rights. In relation to certain subject matter, the US First Amendment may enable a documentary maker to use a broader palate from which to analyse and comment than the equivalent English law. There are references to these similarities and differences in the text.
While addressing the practical needs of the filmmaker, the Guide is not intended to be a substitute for tailored advice on the specifics and intricacies of individual projects. Filmmakers are recommended to take informed advice at a level that will equip them to deal effectively with the legal requirements of any particular project in which they are involved – and in some cases that may involve lawyers practising in more than one jurisdiction.
The Filmmakers’ Legal Guide will be published in October 2015 as an e-book by Brown Dog Books and The Self-Publishing Partnership. More information may be obtained from email@example.com.