The high-profile spat between Dolce and Gabbana and Diet Prada continues to create quite a stir among fashion circles – long after the now-infamous D&G ad campaign in 2018, which set this whole public affair in motion. The Italian brand has accused the self-professed ‘fashion watchdog’, Diet Prada, of fuelling a large-scale backlash to its misjudged ad, by unleashing a volley of social media content, as well as its contended “illegal publication of Stefano Gabbana’s private conversations” on Instagram.

 

Dolce and Gabbana alleges that by way of their heavily followed Instagram account, Diet Prada’s founders initiated a “smear campaign”, consisting of “serious and repeated defamatory conduct” aimed at harming the Italian brand to the value of €3 million in damages.

 

While the long-running legal battle is being played out in foreign courts, it poses some very pertinent questions that are as relevant to UK companies as they are to global brands – namely, the growing role social media is playing, not only in acting as a medium for defamatory comment, but being used as a tactic for applying pressure on the opposing side during legal proceedings.

 

Applying pressure in the hope of a settlement is nothing new; using such a public platform in which to do so is certainly a growing trend. Social media has popularised and accelerated many things in society – its vast reach, instant impact, and widespread adoption, makes it a perfect channel for engaging with untapped audiences and amplifying your message.

 

However, there’s a big disclaimer that comes with using this method to interact with people – whether you’re a business or an individual. Defamation occurs when someone causes substantial harm to the reputation of another by publicising a false statement – inappropriate or ill-considered written words, posting private correspondence in which allegations about someone else are made, sharing, forwarding or commenting on news or gossip, will all potentially be grounds for a libel case.

 

It’s so commonplace to use the likes of Instagram as a means of communicating with people, it becomes second nature to share material on the platform; it’s vital however that companies think twice about using social media channels as a pressure tactic in an ongoing legal case, or as a means of attacking competitors given the risk such behaviour could expose you to.

 

It’s essential to tread carefully when using social media and other media outlets for any form of publicity, whatever the motivation, and equally important to recognise when it’s happening to you as a business. When does a social media post cross the line? Where do the boundaries lie? Has something happened which harms your or your business’ reputation? Can you legitimately object and challenge the way in which a competitor has spoken about you on-line?  Once subject to targeted attack, the erosion of your reputation can be difficult to recover from.

 

As a business, it’s important to understand your rights when it comes to instances of defamation and the breach of privacy of your staff and directors, and to engage in PR and other business strategies appropriately through the right channels. Dolce and Gabbana’s bitter duel with Diet Prada has been played out in a very public way over a number of years. Businesses need to avoid airing their dirty (even if fashionable) laundry in public – it is ultimately and inherently unattractive, being publicity for all the wrong reasons. Instead, harnessing the power of social media positively to facilitate the creation or exchange of information in order to promote a business is much more likely to give that business greater longevity and credibility.

 

 

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Melanie McGuirk and Sarah Bazaraa comment on the judgment in the libel case of Johnny Depp v News Group Newspapers Limited.

 

Described as the biggest libel trial of the 21st century, staged over 16 days, across five courtrooms and with witnesses giving evidence both in-person and via video-link from LA, Chicago, the Bahamas and Australia; Johnny Depp’s libel claim against The Sun’s publisher, News Group Newspapers Limited and its journalist, Dan Wootton, drew to a close yesterday.   

The judgment held that the meaning of The Sun article published in April 2018 with the headline, “GONE POTTY How can JK Rowling be ‘genuinely happy’ casting wife beater Johnny Depp in the new Fantastic Beasts film?’ was substantially true.

Mr Depp has lost his defamation claim. The judge examined serious allegations concerning 14 incidents during which it was contended Mr Depp was controlling, verbally or physically abusive towards his former wife Amber Heard when under the influence of alcohol and/or drugs. Having done so, the judge found that The Sun had proved that it was more likely than not that Mr Depp had committed physical violence against Ms Heard; caused her to suffer significant injury; and on occasion caused Ms Heard to fear for her life.

Substantially true 

Although the published allegations against Mr Depp were of criminality, the libel claim was a civil case. This meant that the standard of proof which The Sun was required to meet was one of balance of probability (i.e. was it more likely than not that the conduct occurred). Due to the serious nature of the allegations at issue, the court required greater evidence to be satisfied that the truth defence was established on the balance of probabilities – not an easy threshold for The Sun to meet.

With that in mind, it is perhaps surprising that The Sun ran the single defence of truth rather than additional defences, such as that the article comprised the journalist’s honest opinion or was in the public interest. This suggests The Sun was very confident in its truth defence. At the heart of this confidence will have been The Sun’s reliance on the testimony of Ms Heard. While not a party to the litigation, the evidence of Ms Heard will have been crucial to The Sun’s defence.

It is worth noting that the case did not settle before trial (as many libel cases do), again suggesting that the newspaper believed it would win. A cynic might comment that a newspaper can sell even more newspapers about a case while court proceedings continue.

A matter of fact 

It was difficult to speculate on the outcome before the judgment was handed down, as the case came down to matters of fact. The majority of the 125-page judgment comprises a detailed review of the witness evidence presented to the court by the parties, including witnesses who were friends, relatives, former and current employees of the former couple.

After hearing all the evidence from the witnesses directly and seeing how they responded to questioning under cross examination, the judge had to consider whether it was more probable than not that the article was substantially true in its meaning. That is the view the judge had reached, finding in relation to 12 of the 14 incidents that there was evidence of assault by Mr Depp on Ms Heard, putting her in ‘fear of her life’ during three of them.

Early reports on the decision state that Mr Depp may appeal what his lawyers have called ‘a perverse and bewildering’ ruling. However, it is acknowledged that the trial judge has seen and heard the witnesses and his or her view as to where credibility lies is entitled to great weight. The appeal court may well be reluctant in this case to interfere with the judge’s findings of fact, which he has plainly gone to a great length to set out in detail in his judgment.

 

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Mr Justice Mann has handed down his decision in the case brought by Sir Cliff against the BBC and South Yorkshire Police for infringement of his right to privacy.

In 2014, unknown to Sir Cliff, he became the subject of an investigation by the police in relation to an allegation of an historic sex offence. The investigation was at that time being conducted by South Yorkshire Police.  Mr Daniel Johnson, a BBC reporter, had found out about the investigation from a confidential source and approached the police about it.  That led to a meeting between Mr Johnson and the police at which he was told about an intended search of Sir Cliff’s home, a secure gated complex in Berkshire, and at which it was agreed that Mr Johnson would be given advance notice of the search when it had been arranged.

The search took place on 14 August 2014 and the BBC immediately gave prominent and extensive television coverage to it (including footage from an overhead helicopter), as the search was happening and afterwards.  The story attracted world wide coverage. Sir Cliff wholly denied the allegations. He remained under investigation until June 2016, when it was announced that there would be no charges brought against him.

The questions for the judge to decide were:

The judge held that the question of whether the existence of a police investigation is something in relation to which that person has a reasonable expectation of privacy is not something which has to date been clearly judicially determined.  He took into account the report of Sir Brian Leveson in his enquiry into the culture, practices and ethics of the press that it should be made abundantly clear that save in exceptional and clearly indentified circumstances (for example, where there may be an immediate risk to the public), the names or identifying details of those who are arrested or suspected of a crime should not be released to the press nor the public.  The judge also referred to the fact that this guidance is reflected in the police’s own guidance on relationships with the media.

The judge held that as a matter of general principle, a suspect has a reasonable expectation of privacy in relation to a police investigation. If the general public was universally capable of adopting a completely open and broad-minded view of the presumption of innocence so that there was no risk of taint either during an investigation or afterwards (assuming no charge), then the matter would be different.  However, the fact of an investigation as a general rule will of itself carry some stigma, and mud will invariably stick.

The judge held that an accused should at least prima facie have a reasonable expectation of privacy in respect of an investigation, although expressly did not find that there is always an invariable right to privacy.

In balancing this right to privacy with the press right to freedom of expression, the judge recognised that sexual abuse of children is matter of serious public concern, and abuse carried out by those in a public position and who had contact with children in that position is of particular concern. Police investigations into such people are a matter of legitimate public interest.  The judge concluded however that it does not follow that because an investigation at a general level is a matter of public interest, the identity of the subject of the investigation attracts the same character.  Knowledge of the identity of the subject of the investigation is not necessarily a material legitimate addition to the stock of public knowledge, and does not contribute materially to the genuine public interest as regards the existence of police investigations in this area. The judge stated that public figures are not “fair game” for any invasion of privacy.

Other important factors in the decision were that the BBC did not afford Sir Cliff a sufficient opportunity to challenge the publication before it happened, being more focused on preserving the exclusivity of its own scoop. The investigation and search were further subsequently “presented with a significant degree of breathless sensationalism”.

The judge ordered the BBC should pay Sir Cliff damages in the sum of £210,000 (a significant amount and over double that awarded to Max Mosley in relation to his privacy claim against the News of the World), including £20,000 in aggravated damages, following the BBC’s decision to nominate its story for an award at the World’s Television Society Awards as the “scoop of the year”.

Since the decision has been handed down, it has been reported that the BBC is looking to appeal it on the basis that the judgement could have far reaching effects for media freedom and the public’s right to know.  It is being argued that in many situations publishing the name of someone under investigation has led to other witnesses and victims coming forward. Moreover the police should be kept under scrutiny in a free society, and this decision will make this much harder for the press to do.

Nonetheless, contrary to some reports in the media, the judge did not make it unlawful for anyone under investigation to be named. This is not necessarily ‘a dark day for press freedom’, as the decision is being described. It is accepted that it is often a difficult decision for a broadcaster whether to name a suspect before they have been charged. Where there is a genuine public interest in a person being named, the press rightly continues to be free to identify the person being investigated notwithstanding this judgment. Nonetheless, after careful consideration of the facts in this particular case, the judge vindicated Sir Cliff’s claim that the nature of the BBC’s reporting and the level of intrusion into his privacy was in this case plainly excessive.

 

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The Intellectual Property Enterprise Court (IPEC) finds in favour of a brand owner subjected to online substitute sales and awards significant damages.
Brand owners who sell through online trading platforms (either directly or indirectly) often face “substitute sales”. This involves an online seller advertising products under a popular brand listing to attract customers but thereafter supplies generic, imitation or substitute products to the shopper.
In June 2017, an Amazon seller was held liable for trade mark infringement and passing off for substitute selling through the claimants’ Amazon listing and was ordered to pay £25,359.75 compensation . The decision is a helpful precedent for brand owners, particularly as the judge was prepared to “wield a broad axe” to the assessment of compensation.
BACKGROUND
The claimants relied on a logo trade mark for DESIGN ELEMENTS for the sale of flagpoles made in China, packaged into the claimants’ own branding and sold through eBay and Amazon.
The defendant also sells flagpoles made in China. It “tagged onto” one of the claimants’ Amazon listings, undercutting its price and thereby winning the “buy box” (which awards top rate sellers the most prominent advertisement and the ability for shoppers to buy with one click).
The defendant argued that the listing was generic as it did not include any reference to the DESIGN ELEMENTS trade mark, that it was entitled to use the listing to sell flagpoles that met the listing’s generic description and that Amazon did not allow new listings when there is an existing listing which matches the product concerned. Further, it had not used the claimants’ trade mark because this does not appear in the product description, and the phrase “by Design Elements” in the listing did not amount to use of a trade mark but indicated the seller who created the listing.
The claimants argued that “Design Elements” had been confirmed as being both the brand and the manufacturer, as required by Amazon for listings. It was a matter of fact that the defendant was selling a different flagpole produced with a different specification by a different manufacturer and with a different brand to that advertised in the listing. As such it was not allowed under Amazon’s terms and conditions to “piggyback” onto the claimants’ listing.
WAS THERE USE OF THE TRADE MARK?
The court held there was use of the claimants’ trade mark, in that the defendant had been offering for sale goods under the trade mark. When the trade mark appears in the description “By Design Elements”, this indicates the origin of the goods. The average consumer can easily identify this information as being the manufacturer. The supplier has its own separate place in the listing.
WAS THERE A LIKELIHOOD OF CONFUSION?
The defendant argued that it had used the listing for over 4 years with no instances of actual confusion and that there was no reference to confusion in the customer reviews for the listing.
The judge held that, given that the defendant’s product would have the same qualities of utility, quality and price as the claimants’, even if the average consumer realised the error as regards trade origin on receipt of the product, the product fulfilled that customer’s requirements. He or she may not therefore complain and there was a real possibility of unreported actual confusion. Moreover, there was a likelihood that an average consumer would consider the product came from Design Elements. Trade mark infringement and passing off was therefore found.
COMPENSATION
The claimants elected to be awarded damages, based on their lost profits in respect of each sale made by the defendant which would otherwise have been a sale by the claimants, an estimated 1,755 flagpoles. The judge decided the net profit per unit sold by the claimants was £14.45 per unit. The judge accordingly calculated the claimants’ lost profits as £14.45 x 1,755 = £25,359.75.
SO WHAT?
This case is good news for brand owners. Even though the claimants’ branding did not appear on its product or in the product listing description on Amazon, and even through there were no photographs of the product in branded packaging in the listing itself, the “By Design Elements” statement in the listing was considered sufficient to amount to trade mark use.
The decision is particularly helpful to any brand owner who sells products where the design of the product is equally as important as the brand, meaning that consumers are often not minded to return a substitute product they have been supplied because it has a utility which satisfies their reason for purchasing the product in the first place.
It is further encouraging that even with incomplete and unsatisfactory disclosure from a defendant on the number of sales made (such disclosure typically always being incomplete), the court was prepared to adopt a very pragmatic and broad brush approach to the calculation of compensation.
The case is also a clear signpost to brand owners that ensuring that its brand name appears in a product listing description and in photographs of the product packaging will increase the prospects of a successful claim. This should encourage defendants to come to a quicker and more prompt settlement of a dispute without litigation being necessary.
The Group is grateful to Melanie McGuirk of Pannone Corporate LLP for this Brand Briefing.

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Arbitration is a form of ADR (alternative dispute resolution). It can be used as a way to avoid court proceedings. If someone has infringed your intellectual property or accused you or your business of doing so, you may be wondering what the benefits of arbitration are versus litigation. If so, it is important to understand exactly what arbitration is as a form of ADR and its effectiveness in relation to IP disputes.

IP Disputes

A dispute can arise in many different circumstances involving various different types of intellectual property, including artistic works protected by copyright, registered and unregistered design rights, trade marks and brands, inventions, trade secrets and know how. 

Parties typically end up in dispute where it is alleged that one party has used or misappropriated the intellectual property of the other without permission, with a view to shortcutting the investment which has been made into the development of the relevant IP. Disputes most often arise between competitors or parties who are (or were) in a contractual relationship relating to the IP (such as licensor and licensee or join venture collaborators).

Arbitration vs. Litigation in IP Disputes

Litigation is the process of a dispute being decided upon in a court of law, by a judge who (in the case of IP disputes) typically has experience of the specialist relevant law. There is a specialist IP court, the Intellectual Property Enterprise Court (IPEC), intended to provide a less costly and less complex alternative to the High Court (which is intended for larger and more complex claims).

Arbitration is when the two parties in dispute agree to appoint a third party arbitrator to resolve their dispute. The arbitration can take on a number of different forms, depending on the issues or the complexity of the case. The parties typically have more flexibility to agree where an arbitration will take place and the rules which will govern the procedure of the arbitration. An arbitrator’s decision is final and binding, and is not usually subject to appeal (in contrast to the position in court proceedings). Arbitration can be less costly than court litigation, and there is an extensive international enforcement regime for arbitration awards which is helpful if your opponent is based in another country.

One advantage of arbitration over litigation is that it is possible to keep the dispute completely private. The confidentiality of both parties is kept during the process. This can be very valuable if protecting the reputation of a business is a priority, as claims of IP infringement or theft can be serious and damaging. In contrast, the owner of the IP may wish the outcome of a decision to be public knowledge, as this forms part of a deterrent for stopping future infringers. 

Arbitration Outcomes

The outcomes sought during litigation are often the same as those awarded through the arbitration process. However, if urgent action is required – such as an interim injunction – then litigation will be the better choice.  In IP disputes, the focus is often on getting an infringer to stop what it is doing, and monetary remedies can be a secondary consideration. The objective typically is to explore a commercial resolution of the dispute through an exchange of correspondence and sensible settlement negotiations.

It is perhaps because of this that arbitration is not commonly used in the UK when it comes to IP disputes. Both parties must agree to an arbitration. If the parties to a dispute are not in a pre-existing contractual relationship (in which arbitration may be incorporated into the contract as an alternative to litigation), such agreement can be difficult to secure when parties are in an adversarial situation and are seeking not to give away any tactical advantage from any potential litigation. 

There are nonetheless certain circumstances where arbitration should not be forgotten as an option, including where your opponent and its assets are based abroad or where there is a cross border element to an IP dispute, in which case arbitration may avoid an argument over which country’s courts have jurisdiction. 

Other forms of ADR, and in particular mediation, enable the parties to reach solutions that are not based on winning or losing, and that promote ongoing commercial relationships. The point is that parties to an IP dispute should always consider whether any form of ADR over and above litigation would better suit their commercial objectives in securing a resolution of that dispute.

For more information regarding your IP and any disputes surrounding it, please get in touch with the team here at Pannone Corporate on 0800 131 3355

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Are you getting stung online?
We’re excited to announce that today, we are teaming up with the British Brands Group to host a free event to help brand owners, retailers and distributors tackle substitute selling across online marketplaces.
The event is being held on the 10th of November at the National Motorcycle Museum, Solihull.
What is substitute selling?
Substitute selling is when an online seller  ‘tags onto’ an existing brand listing but supplies a substitute product rather than the advertised product. The seller takes advantage of the higher ranking of an established brand listing to sell inferior, generic or imitation products at a cheaper price.
The shopper doesn’t receive what they ordered, the brand owner loses sales and brand reputation is undermined by the sale of unauthorised third party goods. Official distributors of the brand also lose out.
Brand owners are reporting monthly losses of tens of thousands of pounds with many commenting that the problem is now too widespread to ignore.
Why attend?
Many brand owners simply do not know whether they are losing sales to online substitutes or, if they suspect, what to do about it. This event will guide you through the practical, commercial and legal issues arising from substitute selling, and offer you a strategy for tackling the problem.
The schedule:

10:00 Registration and coffee
10:30 Welcome
John Noble, British Brands Group
10:45 What is substitute selling and how does it work?
Melanie McGuirk and Sarah Bazaraa, Pannone Corporate LLP
11:15 Case study 1: how to identify the problem
Jake Currier, Bonnington Plastics
11:45 Case study 2: tackling substitute selling in-house
Sam Lucas, R H Smith & Sons
12:15 Lunch will be provided
13:00 The Trading Standards Perspective
Gavin Terry, Chartered Trading Standards Institute
13:30 Litigating in IPEC
Peter Sully, Storage Solutions
14:00 The legal perspective – key lessons
Melanie McGuirk and Sarah Bazaraa, Pannone Corporate LLP
14:30 Tea/coffee
14:45 Working collectively against online substitutes
John Noble, British Brands Group
15:15 Questions and discussion
15:50 Closing comments
16:00 Close
Please email Melanie McGuirk at melanie.mcguirk@pannonecorporate.com or telephone 0161 393 9040 for more information.

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On Thursday, 8 September 2016, we are holding our annual In House Lawyers Conference jointly with BCL at the Innside Hotel next to Manchester’s new development, Home. The Conference is always well attended with in house legal teams from a wide range of well known businesses across the Greater Manchester area coming to keep up to date on legal developments.
The program is designed to give in house lawyers practical advice on key legal matters and case law, and to provide information and guidance on any recent changes in the law. The event runs from 10am to 3pm and is a combination of seminars and workshops. Delegates can select their preferred two workshops from the four provided depending on the relevance to their practice area.
The workshops this year include interactive sessions on the topics of TUPE, an update on recent developments in contract law, renewing occupational leases on favourable terms and effective negotiation.
The last workshop is being presented by Dr Karl Mackie, one of the best known commercial mediators in the UK, identified by The Lawyer as one of the top 100 most influential lawyers and founder CEO of CEDR (the leading mediator provider). The workshop is based on Karl’s experience of being called in to assist with disputes arising from ‘failed’ negotiations or problem scenarios that require more complex negotiation skills.
The Conference opens with a presentation by one of the leading Queen’s Counsel in EU and competition law, Aidan Robertson QC of Brick Court Chambers, who will explain some of the legal consequences of Brexit.
Following a presentation on the incoming Data Protection Act Regulation and what in house lawyers need to know, the Conference closes with a session by Alison Ewing, Associate Director at Grant Thornton, who will present on the well received topic of what to look for when reviewing financial statements, including guidance on interpreting accounts to draw conclusions about a business. Entries which cause concern and ‘red flags’ will be examined, in addition to how the selection of accounting policies can impact the accounts.
If you are an in house lawyer and would like to attend the Conference, please get in touch.

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Whether a startup business or one with a longstanding history, some of the most important aspects of your business can be those which are easily overlooked. In addition to those tangible assets that are on the balance sheet, the intellectual property underpinning your business is often of vital importance. In the modern world, intellectual property can be one of the most valuable assets that a company has. Putting in place simple steps to defend it is vital for the continuing success of a business.

1 – Register Everything

First and foremost, registering your intellectual property should be the first line of defence. In the UK, registering a trademark or design right is in most cases very cost effective and straight forward and will assist in the protection of your brand and bespoke products. Inventions which may be commercially successful should also justify the greater costs of registering a patent.

The Intellectual Property Office is the government body responsible for all IP rights in the UK. You can find much helpful information on its website as regards how to register your IP.

Remember, you own the intellectual property if you create something protectable.  If an employee creates something in the course of their employment, the business who employs that employee will own any IP subsisting in the creation. There may be cases where you or your business have bought rights from the original creator or owner in order to make sure that you control them.

2 – Monitor Competitor Behaviour

Keeping a keen eye on the activity in the market is key if you want to spot any misuse of your IP. New companies and new products trying to piggyback on your rights to shortcut the time and cost you have invested in your brand or products can be the easiest to spot, but you may even find cases of long-standing competitors skirting the line of infringement.

Having one individual conduct periodic searches online and in trade specific sources is only a small task, but it can be extremely beneficial if misuse of your IP is uncovered before the infringement becomes material.

3 – Documentation

Comprehensive and thorough documenting and record keeping is one of the best defences when it comes to your IP. In the event that a matter becomes contentious, these documents will comprise the evidence and proof which supports your case. Ensuring such data or documents are dated or time stamped and the author clearly recorded should be a priority in terms of normal housekeeping.

4 – Object To and Challenge Unlawful Use of Your IP

Even with the above best practice put into place, there will always remain a likelihood of your IP being infringed or misused. For this reason, you need to be prepared to defend your business and maintain the integrity of your IP when infringement or misuse is discovered. Sometimes something as simple as a cease and desist letter can work, as many companies or individuals will fear further repercussions or full-blown legal action if they do not explore a resolution of the dispute with you on sensible commercial terms. Injunctions and court action may also be required depending on the severity of the infringement.

 

Do you need more information or guidance in regards to IP? Contact the Pannone Corporate team today, either on 0800 131 3355 for our Manchester office or by filling out the contact form.

 

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