LloydLaw LLP

Do business websites need to provide a phone number?

The recent ECJ (European Court of Justice) ruling requiring any business website which deals with consumers to provide a means of contact in addition to their postal and email addresses has caused a fair degree of consternation. It's still not clear whether the UK will follow the ruling which appears to have given the generic "contact form"  a status above and beyond the poor man's email address.

The ECJ ruled that businesses dealing with consumers needed to provide either a telephone number or a contact form (described as an "electronic enquiry template") giving consumers the opportuntity to contact them rapidly in what the court described in a "direct and effective manner" before any contract was formed.

The case was about a German car insurance company, known as DIV, that offered its services exclusively on the internet. On its website DIV provided an email address but no phone number. The body representing German consumers took legal action on the basis DIV had an obligation to mention its telephone number to give consumers a chance to talk to DIV before they entered into any agreement.

On the face of it, that makes sense because we all know as consumers there are times when it is quicker and simpler to pick up the phone. On the other hand, it's obvious there's a cost impact of employing staff to answer those questions. I assume that DIV could probably offer more competitive rates than over insurance companies because it didn't trouble itself with answering the phone to its customers, who presumably could have gone to another insurance company if they had wanted to.

Be that as it may, the judgement is relatively clear and businesses operating in the consumer market in the UK are now on notice that they may be required to provide either a phone number or a contact form which must be responded to promptly if they are going to enter into contracts with consumers.

There's a helpful,detailed note on Out-Law.com about the impact of the decision on UK businesses with a post script noting that  BERR (The Department for Business Enterprise and Regulatory Reform) was still considering the impact of the decision for UK businesses operating in the e-commerce sphere.

Louis Vuitton and the Danish Artist

Legal disputes are increasingly being fought online, and any brand owner seeking to enforce its rights will find both the issues and the correspondence firmly placed in the public domain. Not that this should be a major problem, of course, and I don't think it's a bad thing.  But clients and their lawyers should be in no doubt, that whatever they might say ("please do not post this letter on the internet/your blog etc"), anything they write will find their way online.

One recent example is luxury brand, Louis Vuitton's claim against the Danish artist Nadia Plesner. Ms Plesner designed a T-shirt and a poster featuring a Darfur victim holding a Vuitton handbag which she was selling as part of her Simple Living Campaign to raise funds for Darfur. According to LV, both the bag, and the design on the bag, resembled their own bandbags, and one of their idiosyncratic designs.

LV started by writing to Ms Plesner by email and "express mail", a letter which the artist has posted on her website.  In pre-internet days, you would only get to see these sorts of  letters when they were written to your own clients. Nowadays though, you get these classic cases of legal voyeurism as you find out what LV were saying before they got serious:

Although we applaud your efforts to raise awareness and funds to help Darfur, a most worthy cause, we cannot help noticing that the design of the Simply Living Products includes the reproduction of a bag infringing on Louis Vuitton' Intellectual Property Rights, in particular the Louis Vuitton Monogram Multiecolore Trademark to which it is confusingly similar. We are surprised of such a promotion of a counterfeit bag.

Except of course, it's not an actual bag. It's just a picture of one and according to Ms Plesner, it's different as she points out in her response, which she's also posted online. Not  that it had much effect on LV who were clearly not impressed and they have now issued proceedings against her.

Who knows who will win, and whether LV will be bothered that some supporters of Ms Plesner take a dim view of their actions? We will see. Having made the case so public though, Ms Plesner now has the help of a couple of Dutch lawyers and a Danish one although how they are all going to agree, is probably more of a challenge than fighting off Louis Vuitton's claim.

Standardisation of Legal Documentation

Standardisation of legal documentation is always a tricky issue, but things are definitely moving that way. Given my support for Professor Richard Susskind's contentions on changes that will take place in the provision of legal services, I am starting to come across subtle changes to the legal landscape.

Richard Susskind's focus, as expressed recently in The Times is "on the extent to which some, much or all of what lawyers do can be undertaken more quickly, more conveniently and less expensively, and in a less forbidding way, by systems than by conventional work."

To that end, I noticed that Paul Graham, a US software developer who is both a prolific writer and a partner in Y Combinator talked about how Y Combinator was working standardise legal documents for start ups, when he spoke at the Future of Web Apps in London in the latter part of 2007.

In his essay, derived from the speech he gave, he talks about the importance of standardisation generally, and how Y Combinator has commissioned generic legal documentation:

One of the most important things we've been working on standardizing are investment terms.  Till now investment terms have been individually negotiated. This is a problem for founders, because it makes raising money take longer and cost more in legal fees.  So as well as using the same paperwork for every deal we do, we've commissioned generic angel paperwork that all the startups we fund can use for future rounds.

Some investors will still want to cook up their own deal terms. Series A rounds, where you raise a million dollars or more, will be custom deals for the forseeable future.  But I think angel rounds will start to be done mostly with standardized agreements.  An angel who wants to insert a bunch of complicated terms into the agreement is probably not one you want anyway.

Who Owns Outlook Contacts?

A recent High Court judgment on the ownership of an Outlook list of “Contacts” highlighted the critical question of who owns such a list when it has been created in a business. Is it the employer or the employee?

In PennWell Publishing v Ornstein [2007] EWHC 1570 Mr Justice Fenwick came down on the side of PennWell, the employer, regardless of the fact that the employee had incorporated his own “personal” contact information into the database as well as information he had brought with him at the time he started the job.

The judgment makes interesting reading for anyone who has been or may be involved in a situation where employees (often at a relatively senior level) leave a business to set up in direct competition. It is the sort of thing that happens all the time, whether or not the parties end up in court.

Anyone who has worked in any business will be familiar with employees either taking home or sending themselves contact lists, precedents, or presentations in digital form. It is now so easy to do, that employers find it very difficult to protect what they perceive to be “confidential” and proprietary information.

Essentially, this case was about employees leaving PennWell Publishing, the UK arm of a US business to business media publishing  group, to set up themselves up in competition. It involved an injunction which was initially granted on PennWell’s behalf, allegations of dishonesty and even court orders providing for forensic examination of a personal computer which belonged to Mr Junior Isles, who was one of the employees and a defendant in the case.

Mr Isles had taken a copy of his Outlook database with him, albeit in the form of an Excel spreadsheet just before he left PennWell’s employment on the basis that the information in his contacts database belonged to him. PennWell claimed amongst other things that the information in that contacts database actually belonged to them.

PennWell claimed they had an email policy which stated that “employees may only use the email system for business use”. Unfortunately, PennWell were unable to prove that Mr Isles was aware of the policy or that it had been incorporated into his contract of employment. Although they could show he had been sent an email about it, PennWell were unable to prove that the relevant “”Network Access Policy” and “E-mail Policy” had been attached to that email.

As the Judge said:

“In my judgment, had that email policy been effectively communicated to Mr Isles, it would have been clear to him that the email system provided to him was to be used only for business purposes and therefore, that in adding to or maintaining contact details on that system, he was doing so exclusively for the employer’s benefit and not his own.”

In the absence of the effective communication of that policy (and all employers need to take note of the importance of effective communication) the Judge felt that the status of such address lists was a “difficult issue”.

“On one view, these lists plainly consist of confidential information of the employer. They include details of the individuals with whom the employee is expected to and will have made contact during his employment for his employer's purposes. They are backed up, generally, on a system maintained or at least paid for by the employer.”

“On the other hand, in the new electronic age, electronic address books, whether on mobile telephones, communicators or e-mail systems, are inevitably used by individuals, whether employees or executives, for the convenient storage of those that they wish to contact. In the absence of a declared e-mail policy, it may well be that such employees will use such systems, including on mobile telephones provided for their use, for retaining the records of all sorts of contacts, from personal friends and family, through friendships that they have developed in work and journalistic contacts of the kind I have referred to above, through to the normal business contacts of their employer".

For all these preceived difficulties the Judge did not appear to find too hard to come down on the side of the employer in this case and concluded that the database “has at all material times been with PennWell since it was created in the Outlook system of PennWell and that Mr Isles is not entitled either to exclusive or shared use of it.”

Regulations Create Markets

James Governor points to a Seth Godin post about change being the lever for growth - Do you have to be Anti-Change to be Pro-Business?

James' comment that "regulations create markets" probably applies as much to the legal profession as any other. Changes to laws, changes to business and changes to markets all create opportunities for solicitors. Whether it's MiFID, the new Companies Act 2006, Freedom of Information Act 2000 and the body of law that's being created, all these changes affect businesses and rather than rail against regulation as businesses are sometimes inclined to do, we should embrace it for the opportunity it provides.

When a business blog works

Nice story from Love Creative about how their website and blog helped them win the work. Reassuring.

Does CSR matter?

A few weeks ago I met a lawyer from Heinz (the makers of tomato kethcup and baked beans amongst other things).  We had a chat about what firms - and individual lawyers - she instructed and it was interesting to pick up on the "who" and the "why". What surprised me most though was her assertion that in future all law firms instructed by Heinz will have to conform to Heinz's corporate social responsibility ("CSR") policies and her view was that most law firms would struggle to match Heinz's diversity requirements.

Diversity, which is another post in itself, is not so much the issue, but more the fact that this conversation confirms that some businesses are now imposing the same standards on their suppliers as they do on themselves. Actually, I suspect that diversity may be a policy in itself, outside the wider definition of CSR, but the fact remains that CSR is an increasingly important  issue for all law firms, both large and small. The Lawyer is currently promoting a conference and masterclass on "CSR in Law Firms" which will be taking place in London on 22 and 23 January 2007. It claims to be "the only conference of its kind" and offers to be a "full exploration of internal CSR strategies in law firms to ensure you attract, retain and inspire both internal staff and external clients".

I don't think this can be underestimated and I am acutely aware that we don't have a clear CSR policy in place at LloydLaw. Sure, we do a bit of pro bono work from time to time, and we support some organisations that we think are worth supporting, but do we need to do more than that? From the perspective of our clients, we probably don't at this stage, but I have a more than a strong suspicion that may change. 

Ryanair Domain Name Disputes

Michael Coulston has clearly been a thorn in the side of Ryanair for some time but although the airline was successful in its claim to recover the domain name ryanair.org.uk, it has failed in its bid to stop Mr Coulston, an aggrieved passenger, from using the domain name ryanaircampaign.com.

From a consumer's perspective, the WIPO decision opens the way to anyone with a grievance creating what has become known as a "- sucks" site (or a "bitch" site as The Register puts it)  and to be able to publicise its claims provided they are lawful. And its a warning for any business that falls out with a customer as to what might happen.

Legally, the two cases are interesting. By way of background, Michael Coulston once had a bad experience travelling with Ryanair when his luggage was lost and his holiday ruined. According to the decision of the independent expert in the Nominet Dispute Resolution process  Mr Coulston has since "devoted considerable time and energy to publicising what he preceives as deficiencies in the way in which Ryanair deals with problems and complaints by its customers."

Ryanair has used the name since 1985 and it is undoubtedly well known in the UK and Europe. The company actually owns several registered trade marks consisting of or containing the name Ryanair and it has registered various ryanair domain names, although not, it must be said, ryanair.org.uk.

That was registered by Mr Coulston in September 2003 and he used it to promote his "Ryanair Refund Campaign". Nominet, the domain name registrar for all UK domains, received a complaint from Ryanair in May 2006 and the matter was dealt with by Anna Carboni, one of Nominet's "independent experts". She found that the registration of the domain name was an "abusive registration" taking the view that Mr Coulston had registered the domain ryanair.org.uk "in manner which took unfair advantage of and was unfairly detrimental to Ryanair's rights" and ordered the domain name to be transferred back to Ryanair.

The decision appears to be fair one although I would question her assertion that "someone who types in the address ryanair.org.uk (into a search engine) is likely to expect to be taken to a website operated by Ryanair". I would be surprised if any major airline, or any commercial business operated using a .org domain name. 

Mr Coulston was not deterred by the Nominet decision and on 29 July 2006 he registered the domain ryanaircampaign.org. Ryanair then took its complain to WIPO (the World Intellectual Property Organisation) and its lawyers, Howrey LLP invoked the arbitration procedure claiming the name was either "confusingly similar" to Ryanair's trade marks or alternatively, that Mr Coulston's website did not amount to "fair and honest criticism" and that the domain name had been registed in bad faith.

Clearly the critical difference between the two adjudications was the use of the word "campaign" which David Bernstein, the Sole Adjudicator in the WIPO process, felt distinguished the domain name.

"If a domain name used for a criticism site combines the trade mark with appropriate other elements (as contrasted with a domain name that is indentical to the trademark) a legitimate interest may be found if the respondent (i.e. Mr Coulston) has used the domain name in ways designed to avoid deception and undue confusion. That is the case here".

Mr Bernstein took the view tha the domain name had not been registered in bad faith and Ryanair's complaint was denied. His decision, in full, can be found here.

Mr Coulston's campaign which is to be found at www.ryanaircampaign.org continues.

Thinking about Clients

Matt Homan, a US lawyer who blogs at the [non]-billable hour, has created his own "Client Manifesto". It's food for thought for lawyers and clients:

15 Rules for Clients:  A Mini Manifesto

You are a client.  You need a lawyer.  Here are 15 rules (guidelines, actually) that may help you find and understand your lawyer:

1.  You have wants.  You have needs.  Focus on the needs first.  Wants are bonus.

2.  If you are seeing a lawyer because your dispute is “not about the money, but about the principle of the thing” don’t be surprised if your lawyer runs away. You can never be satisfied.  Also, it’s really about the money.

3.  Your case/matter is the most important thing happening to you right now.  It is not the most important thing happening to your lawyer right now.  It may not even be in his top ten.

4.  If you think your lawyer is trying to kill your deal, remember this:  though there may only be a “one percent” chance your deal will go bad, your lawyer sees that “one percent” over and over again. She’s looking out for you.  She cares about you and your business. She also doesn’t want her malpractice premiums to go up.

5.  You want to buy results, not time.  Most lawyers sell time, not results.  Make sure you both understand the difference before your first bill arrives.  You will certainly understand the difference after.

6.  If you want to find a lawyer who sells results, look hard. There are a few of them out there.  They are the ones who can still smile because they get to see their children before 9:00 at night.

7.  Big firm lawyers are not more efficient.  Or smarter.  Or cheaper.  They are certainly not cheaper.

8.  Make sure your lawyer understands your business.  If your lawyer doesn’t understand your business, find out if he’s going to learn about it on his time, or yours.

9.  You are your lawyer’s boss.  You are not her only boss.  She has hundreds of other bosses too.  Each one of them thinks their matter is more important than yours.

10.  How messy is your lawyer’s desk?  When they bill you for thirty minutes of “file review,” how much of that time was spent looking for your file?

11.  When you call a lawyer for the first time, how long does it take for him to return your calls? After you hire that lawyer, expect it to take at least three times as long.  Same goes for e-mails.

12.  Does your lawyer have reputation for being a “bulldog?”  That probably means they are an asshole.  To everyone.

13.  Look for a lawyer with a technology IQ no more than fifty points less than yours.  If you live in e-mail and your lawyer doesn’t, learn to like your mail carrier.

14.  If you hate your lawyer, fire him.  He probably deserves it, and you aren’t getting his best work anyway.

15.  You wouldn’t automatically marry the first person you date, so don’t automatically hire the first lawyer you see.  A great lawyer-client relationship can last a lifetime.  Your lawyer can be your advisor, counselor, confidant, and friend.  Most lawyers are good people genuinely interested in their clients’ best interests.  Find one you like, stick with him or her, and spread the word.  Oh, and stop telling lawyer jokes.  They aren’t really that funny.  ;-)

Knowing When Your Business is Ready for Sale

There's a very good article over on The Intuitive Business Blog about "How you know when your business is ready for sale".

Although it's obviously written by a US lawyer for US businesses (Joyce Colson, a partner at Colson Quinn) precisely the same points could apply to any UK-based business. She highlights - and I'll paraphrase a bit:

1. Customers: Do you have enough of them?
2. Corporate House Cleaning: We are not suggesting getting rid of management. Rather, do you have your memorandum and articles of association up to date. Are you company books including any   corporate minutes up to date and have you filed everything you need to at Companies House?
3. Employees: Have you got employment contracts in place? Are your stock options all clear?
4. Contracts. Do you have them? Where are they? Are they signed?
5. Assets, IP and otherwise:  Do you have them? Trade marks, patents etc. Where are they? Do you own them?
6. Finances and Accounting: Have you clarified things with your accoutant and are they ready to act on the sale of the company?
7. Founders. Key Stockholders. Is everyone on board for the sale of the company? What do your corporate documents require for the sale of the business, e.g. simple majority, approval of preferred shareholders?  Do you have a shareholders agreement? If not, as Joyce says, " get one pronto". She goes on:

"There is nothing like the potential of a sale to get people fighting over what may or not occur because of their failure to allocate who owns what in the company."

The whole article is well worth a read.