488

This is the latest edition of Baker & McKenzie's

column on developments in EU law relating to IP,

IT and telecommunications. This article

summarises recent developments that are

considered important for practitioners, students

and academics in a wide range of information

technology, e-commerce, telecommunications and

intellectual property areas. It cannot be exhaustive

but intends to address the important points. This

is a hard copy reference guide, but links to outside

web sites are included where possible. No

responsibility is assumed for the accuracy of

information contained in these links.

A. General intellectual property1. Inland Revenue issues guidance on Interest and

Royalties Directive - On 2 August 2004 the Inland

Revenue issued a guidance note form following the

implementation of the EC Directive on Interest and

Royalties (Council Directive 2003/49/EC) in the UK

by the Finance Act 2004. The changes introduced,

which are aimed at avoiding international double

taxation on certain payments of interest and

royalties, also necessitated a revised claim form for

income covered by the Directive.

� Guidance note

http://www.inlandrevenue.gov.uk/cnr/dt-guide-

note-7.pdf

B. Copyright and trade marks1. New UK Trade Mark Regulations published in

preparation for EC accession to Madrid Protocol -

On 17 September 2004 the UK government published

the Trade Marks (International Registrations

Deisgnating the European Community, etc)

Regulations 2004. The Regulations amend the Trade

Marks Act 1994 and the Community Trade Mark

Regulations 1996. These amendments are necessary

as a result of the accession of the European

Community to the Madrid Protocol. Amongst other

things the Regulations introduce a new definition of

‘International trade mark (EC)’ entitled to protection

under both the 1994 Act and the 1996 Regulations.

They will come into effect in three separate stages; 1

October 2004 (Regs 10 and 13), 1 November 2004

(Reg 15) and 1 April 2005 (the remainder).

� Regulations

http://www.legislation.hmso.gov.uk/si/si2004/20

042332.htm

� Explanatory Memorandum

http://www.legislation.hmso.gov.uk/si/em2004/

uksiem_20042332_en.pdf

2. Commission issues Communication on the

Management of Copyright and Related Rights -

On 27 August 2004 the Commission issued a

Communication on the Management of Copyright

and Related Rights in the Internal Market. It

considers whether current methods of rights

management are hindering the function of the

internal market especially in the light of the advent

of the information society.

� Communication

http://europa.eu.int/eur-lex/en/com/cnc/2004/

com2004_0261en01.pdf

3. Additional three Regulations to enter into

force with the Madrid Protocol - On 1 October

the Protocol relating to the Madrid Agreement will

enter into force. As a result three Regulations will

enter into force on the same day to give effect to its

requirements. These are Council Regulation (EC)

No 1992/2003 amending Regulation (EC) No

40/94, Commission Regulation (EC) No 781/2004

amending Commission Regulation (EC) No

2869/95 and Commission Regulation (EC) No

782/2004 amending Regulation (EC) No 2868/95.

� Information Notice

http://europa.eu.int/eur-lex/pri/en/oj/dat/2004/l_25

6/l_25620040803en00230023.pdf

C. PatentsNo Developments

D. Data protection/privacy1. Directive on the obligation of carriers to

communicate passenger data published - On 6

August 2004 the text of Directive 2004/82/EC was

EU update

Baker & McKenzie’s regular article trackingdevelopments in EU law relating to IP, IT &telecommunicationsHarry Small, David Halliday, Miriam Andrews, Emily Keim and Robert Coffey of

Baker & McKenzie

Computer Law & Security Report Vol. 20 no. 6 2004 ISSN 0267 3649/04 © 2004 Elsevier Science Ltd. All rights reserved

489

published in the Official Journal. The Directive

adopted on 24 April 2004 requires airline carriers to

provide advance information regarding passengers.

It came into force on 5 September 2004. Member

States will have a further two years to implement it.

� Directive

http://europa.eu.int/eur-lex/pri/en/oj/dat/2004/l

_261/l_26120040806en00240027.pdf

2. European Parliament to challenge passenger data

decision in ECJ - On 30 July 2004 the European

Parliament formally filed its legal challenge to the

controversial Commission Decision on the Adequate

Protection of Air Passenger Data (2004/535/EC) with

the European Court of Justice which found that

protection afforded by the United States in respect of

the transfer of personal data relating to transatlantic

passengers was adequate under EU data protection

law. The Parliament will be exercising its right under

Article 230 EC and seeking the annulment of the

international agreement contained in the decision or

of the decision’s finding of adequacy or both on the

grounds that the agreement is a violation of the Data

Protection Directive.

� Letter from the President of the European

Parliament

http://www.statewatch.org/news/2004/jul/pnr-

ep-court-letter.pdf

� Commission Decision

http://europa.eu.int/comm/internal_market/pri

vacy/docs/adequacy/pnr/c-2004-1914/c-2004-1914

_en.pdf

E. Competition law1. Commission launches investigation into

Microsoft /Time Warner acquisition - On 25

August 2004 the Commission announced that it is

to open an in-depth investigation into the

proposed joint acquisition by Microsoft and Time

Warner of US company ContentGuard. The

investigation will centre around whether the

proposed acquisition would create or strengthen a

dominant position by Microsoft in the market for

Digital Rights Management.

� Press Release

http://europa.eu.int/rapid/pressReleasesAction.

do?reference=IP/04/1044&format=HTML&aged=

0&language=EN&guiLanguage=en

F. Telecoms1. Commission presents a proposal for a

Regulation on satellite radio navigation - On 16

September the Commission published a proposal

for a European Parliament and Council Regulation

on the implementation of the deployment and

commercial operation phases of the European

programme of satellite radio navigation

(COM(2004) 477 final). The proposal aims to

implement two of the four phases of the ‘Galileo

programme’, which aims at putting in place a

worldwide satellite radio navigation and positioning

infrastructure, specifically for civil purposes.

� Proposal

http://europa.eu.int/eur-

lex/en/com/pdf/2004/com2004_0477en01.pdf

2. Commission and OFCOM consider

treatment of Voice over Internet Protocol under

new EU Framework - In June 2004 the

Commission produced an information and

consultation document concerning the application

of the EU regulatory framework for electronic

communications to Voice over Internet Protocol

(VoIP). This document explains the conditions that

apply to these different types of services and the

degree to which a provider of VoIP based services

will face obligations under the EU framework. The

Consultation ended on 31 August 2004.

The UK’s Office of Communications (Ofcom) is

carrying out a parallel consultation, responses to

which are required by 15 November 2004.

http://europa.eu.int/information_society/topics

/ecomm/doc/useful_information/library/commiss_s

erv_doc/406_14_voip_consult_paper_v2_1.pdf

� Ofcom consultation

http://www.ofcom.org.uk/consultations/current

/new_voice/?a=87101

See longer article below

G. Information technology1. Deadline passes for implementation of two

Electronic Waste Directives - The 13 August 2004

was the deadline by which EU Member States were

due to have transposed into their national legislation

two EU Directives. They are Directive 2002/96/EC on

Waste Electrical and Electronic Equipment and

Directive 2002/95/EC on the Restriction of the use of

certain Hazardous Substances in Electrical and

Electronic Equipment. The are aimed at tackling the

environmental problems caused by the growing

amount of electric and electronic waste. The two

Directives seek to ensure that old electric and

electronic products are recycled or reused. Only

Greece has currently met this deadline. All other

EU update

490

states are in the process of adopting legislation. The

UK issued its final consultation on the

implementation of the Directives on 30 July 2004.

The deadline for responses is 29 October 2004.

� Press Release

http://europa.eu.int/rapid/pressReleasesAction.

do?reference=IP/04/1033&format=HTML&aged=

0&language=EN&guiLanguage=en

� UK Consultation

http://www.dti.gov.uk/sustainability/weee/index

.htm#Consultation_on_Government_implementati

on%20<http://www.dti.gov.uk/sustainability/weee/

index.htm>

H. e-Commerce1. Commission launches information portal on

citizens' rights - On 6 September 2004 the EU

launched a new on-line portal called “Dialogue

with Citizens”. It offers internet users, access to a

series of guides setting out EU-wide rights and

opportunities in the old 15 Member States of the

EU. Information about the 10 new Member States

will be added within the next few weeks.

� Press Release

http://www.europa.eu.int/rapid/pressReleasesA

ction.do?reference=IP/04/1067&format=HTML&

aged=0&language=EN&guiLanguage=en

� Website

http://europa.eu.int/citizensrights/index_en.cfm

2. Financial Services (Distance Marketing)

Regulations in the UK come into force - On 31

October 2004 the Financial Services (Distance

Marketing) Regulations will come into force in the

UK. They implement the European Directive on

the distance marketing of financial services

(2002/65/EC).

See longer article below

� Regulations

http://www.legislation.hmso.gov.uk/si/si2004/20

042095.htm

3. Commission issues Communication on legal

framework of b2b marketplace - On 14 July 2004

the Commission issued a communication to the

Council, Parliament and European Economic and

Social Committee entitled ‘Enhancing Trust and

Confidence in Business-to-Business Electronic

Markets’. The communication is aimed at

improving understanding of the applicable legal

framework of B2B electronic markets and

addressing potential barriers to the internal market

which may arise from different national rules on

unfair trade practices.

� Communication

http://europa.eu.int/eur-lex/en/com/pdf/2004/com

2004_0479en01.pdf

I. InternetNo developments

J. Media1. Commission publishes Communication on the

interoperability of interactive TV standards - On 2

August 2004 the Commission issued a

Communication setting out its position on the

interoperablility of digital interactive television

services as required under Article 18 of Directive

2002/21/EC on a Common Regulatory Framework for

Electronic Communications Networks and Services.

The Communication states that Member States

should continue to promote open and interoperable

standards for interactive digital TV on a voluntary

basis, and that the digital television market should be

permitted develop unhindered for the moment.

� Press Release

http://europa.eu.int/rapid/pressReleasesAction.

do?reference=IP/04/1012&format=HTML&aged=

0&language=EN&guiLanguage=en

2. Commission adopts a Communication on the

implementation of the ‘Television without

Frontiers’ Directive indicating a satisfactory

application by member States - On 28 July 2004

the Commission adopted a Communication on the

implementation of Articles 4 and 5 of the

‘Television without Frontiers’ Directive

(89/552/EEC). Article 4 calls upon the Member

States to ensure, where practicable and by suitable

means, that the broadcasters within their

jurisdiction reserve the majority of their

transmission time to European works. Article 5 calls

upon the Member States to ensure, where

practicable and by suitable means, that broadcasters

reserve at least 10% of their broadcasting time or

programming budget to European works of

producers independent of broadcasters.

The report the Commission adopted showed a clear

increase in the scheduling of European works. It

found that broadcasters are now devoting an average

of 2/3 of their transmission time to European works.

� Press Release

http://europa.eu.int/rapid/pressReleasesAction.

EU update

491

do?reference=IP/04/998&format=HTML&aged=0

&language=EN&guiLanguage=en

� Directive

http://europa.eu.int/eur-

lex/en/consleg/pdf/1989/en_1989L0552_do_001.pdf

K. Outsourcing1. Commission launches consultation on

electronic public procurement - On 13 September

2004 the Commission launched an on-line

consultation aimed at businesses that tender for

public contracts to identify possible obstacles to

electronic public procurement, increase efficiency

and modernise public procurement markets. This is

part of the process of drawing up an Action Plan

to ensure Europe obtains the maximum possible

benefit from the implementation of the new

provisions on electronic public procurement

included in the legislative package of procurement

Directives adopted in February 2004. The legislative

package includes two new Directives: Directive

2004/18/EC on the coordination of procedures for

the award of public works contracts, public supply

contracts and public service contracts and Directive

2004/17/EC coordinating the procurement

procedures of entities operating in the water,

energy, transport and postal services sectors.

The deadline for responses is 15 October 2004.

� Consultation

http://europa.eu.int/yourvoice/consultations/in

dex_en.htm

� Press Release

http://europa.eu.int/rapid/pressReleasesAction.do?r

eference=IP/04/1095&language=EN&guiLanguage

=en

L. Article on Financial Services(Distance Marketing) Regulations2003The Financial Services (Distance Marketing)

Regulations 2003 (the “Regulations”), which will

come into force on 31 October 2004, implement the

European Directive on the distance marketing of

consumer financial services (2002/65/EC) (the

“Directive”). The Directive was adopted on 23

September 2002, and amends, amongst others, the

earlier EC Directive on the protection of consumers

in respect of distance contracts (97/7/EC).

The Regulations cover distance contracts for

financial services, that is services of a banking,

credit, insurance, personal pension, investment or

payment nature. Distance contracts are defined as

contracts:

“between a supplier and a consumer under an

organised distance sales or service-provision

scheme run by the supplier or by an intermediary,

who … makes exclusive use of one or more means

of distance communication [e.g. telephone, fax,

mail, email] until the contract is concluded. ”

Two of the more significant provisions are

regulations 7 and 9. Regulation 7 provides that a

supplier must provide detailed information to the

consumer prior to concluding the distance

contract, and Regulation 9 concerns the

consumer’s right to cancel.

Under Regulation 7 the supplier must provide

detailed information to the consumer and the

contractual terms and conditions on a durable

medium (Reg. 8). The necessary information

includes details of the supplier’s identity,

representatives and supervisory authority; of the

financial service’s characteristics and cost; of terms

of the distance contract, including its cost,

duration and cancellation rights; and of any redress

and compensation schemes. The supplier commits

a criminal offence if he does not make clear his

commercial purpose when he is providing the

information. Under Regulation 3, Regulations 7

and 8 do not apply if the supplier is an authorised

person, appointed representative or professional

providing financial advice and bound by rules made

by the Financial Services Authority (“FSA”) under

the Financial Services and Markets Act 2000.

Regulation 9 gives the consumer the right to

cancel a distance contract, so as to terminate it,

and sets out how the consumer can do this.

Regulation 10 specifies that the cancellation period

runs from 14 days from conclusion of the contract

or receipt of the terms and conditions if later (30

days for life assurance and pension contracts).

These provisions do not apply to an authorised

person providing financial advice (Reg. 3). There

are exceptions to the consumer’s right to cancel,

notably baggage insurance and travel insurance

contracts of less than one month, paid by

contracts where the price of the service depends on

fluctuations in the financial market outside the

supplier’s control (such as unit trusts) (Reg. 11).

Cancellation of a distance contract also cancels

any secondary attached contract (Reg. 12). On

cancellation, the supplier must refund within 30

days any sum to the consumer less any

proportionate charge for service actually provided

EU update

492

EU update

by the supplier prior to cancellation (Reg. 13).

Other miscellaneous parts of the Regulations

deal with cancellation in cases of credit card fraud:

where a credit card issued to a consumer is used

fraudulently by someone else to make a payment

under or in connection with a distance contract

(except where covered by the Consumer Credit Act

1974), the consumer can cancel the payment and

have all sums paid recredited or returned by the card

issuer (reg. 14). It is also made a criminal offence to

demand payment or to take or threaten enforcement

action for unsolicited financial services (reg. 15).

Finally, regulations 16 to 22 deal with the

relevant enforcement authorities, how they should

consider complaints and what sanctions (including

injunctions) they can impose.

� [The Regulations amend the Unfair Terms in

Consumer Contracts Regulations 1999 (SI 1999

2083), Consumer Protection (Distance Selling)

Regulations 2000 (SI 2000 2334), Enterprise Act

2002, Enterprise Act 2002 (Part 8 Community

Infringements Specified UK Laws) Order 2003 (SI

2003 1374) and the Enterprise Act 2002 (Part 8

Notice to OFT of Intended Prosecution Specified

Enactments, Revocation and Transitional

Provision) Order 2003 (SI 2003 1376).]

M. European Commission andOFCOM publish consultations onVoice over Internet Protocol

As broadband internet connection becomes

increasingly common, the range of products and

services that might be described as Voice over

Internet Protocol (VoIP) or Voice over Broadband

(VoB) has similarly increased. The regulation of

VoIP is therefore something that is being addressed

by the European Commission and national

regulators. The five Directives that comprise the

E-communications Framework Directive require

technology neutrality. These five Directives are the

Framework Directive (2002/21/EC) and four

specific directives, being the Authorisation

Directive (2002/20/EC), the Access Directive

(2002/19/EC), the Universal Service Directive

(2002/22/EC) and the Privacy

Directive(2002/58/EC. VoIP presents some very

practical difficulties and challenges for regulators,

however, which require equally practical solutions.

In its consultation on VoIP the Commission has

sought views as to how such issues as access to

emergency services, network availability in case of

a force majeure event, and in-line powering of

terminals, should be addressed.

Regulation of VoIP is complex, due in part to

the fact that products and services range from

licensing of software, enabling VoIP calls, which a

residential user may download, to the provision of

services of the type that may be classed as Publicly

Available Telephone Service (PATS). Current

regulatory requirements which apply to many

PATS, such as universal service and caller location

identification for emergency services, may prove

impossible for VoIP providers to comply with.

The Commission Consultation, therefore seeks to

find a means by which a balance between the

interest of providers, the interests of consumers,

and public policy interests can be struck.

When the results of the Commission

Consultation are issued, these will form the basis of

non-binding guidelines. Although non-binding,

these guidelines are expected to influence the

approach of national regulators. Ofcom has stated

that it will await the guidelines before making a

final statement regarding VoIP. It appears, however,

that regulation will take the form of ensuring that

customers are made aware that some of the services

that they have traditionally expected from PATS,

such as service levels in the event of catastrophic

network breakdown, will not be made available, or

cannot be expected, from VoIP. Any attempt to

regulate VoIP according to the standards developed

for fixed line seem likely to fail, not least because

they are technically impossible to achieve and to

contravene the commitment to technology

neutrality. The Commission recommends that

information should be included in customers’

contracts detailing how the VoIP supplier deals with

access to emergency services, and likewise that

suppliers should make customers aware of the likely

effect of power failure on their VoIP service. The

Commission’s approach therefore favours consumer

choice rather than heavy-handed regulation.

Ofcom is currently consulting on VoIP issues,

and the closing date for responses is 15 November

2004. Ofcom expects to make a final statement,

based on its own and the Commission’s

consultation, in early 2005.

For further information on any of the above,

please contact Harry Small

(harry.small@bakernet.com) of the Intellectual

Property & Information Technology Department

of the London office of Baker & McKenzie (tel: +

44 20 7919 1000). Mr Small was assisted in the

preparation of this article by Miriam Andrews ,

Emily Keim, Robert Coffey and David Halliday.