Centrica v Accenture Appeal Judgment
In the Court of Appeal, Longmore LJ has given a resounding endorsement to the trial judge’s findings in the case generally referred to as Centrica v Accenture and more properly cited as GB Gas Holdings Limited v (1) Accenture (UK) Limited, (2) Accenture SCA, (3) Accenture International SARL, (4) Accenture Inc [2010] EWCA Civ 912. In a complex series of preliminary judgments Mr Justice Field had found against Accenture, the IT consultancy group, on all of the preliminary issues in a judgment handed down on 6 November 2009 (see [2009] EWHC 2734 (Comm)).
Centrica’s claim is for nearly £200m in relation to the alleged failure of the IT customer billing system which was to be created and installed by Accenture.
Longmore LJ differed from the trial judge on only one of the nine issues that were under consideration by the Court of Appeal: ‘The contrast between “causes” and “has or is likely to have an adverse effect” is marked and, in an agreement drafted with sophisticated legal assistance, must be intended to have a different effect. Nor is it surprising that the parties would have wanted to draw a line in relation to any question of Fundamental Defect at the end of the Warranty Period. If it had not become clear by the end of that period that a defect was fundamental, the parties agreed that it was to be given no higher status than that of being a Material Defect.‘ But Longmore LJ indicated that ‘nothing much was likely to turn on the difference’.
There was one stand-out point in the original preliminary judgment. The contract stated that once Centrica had provided notice to Accenture of any ‘fundamental’ defect in the system, Accenture was obliged to take reasonable steps to fix the problem. Centrica claimed that it had notified Accenture of a fundamental defect but Accenture had refused to take any steps in response. Accenture argued that no single ‘fundamental’ breach had occurred and they were therefore not liable. Centrica claimed that a series of lesser breaches could be aggregated to form a ‘fundamental’ breach. Mr Justice Field agreed with Centrica. That view was supported by Longmore LJ, but the context of the ruling is important, given its emphasis on the (yet to be established) factual context:
[counsel for Centrica] submitted that the judge had merely held that there was no obstacle in law to accumulating or aggregating individual Material Defects to constitute a severe adverse effect but left to the trial judge the question whether any such aggregation did in fact produce a severe adverse effect. To my mind the use of the word “can” in both limbs of the issue indicates that [counsel] was right about that and that the judge did not purport to decide what the factual position was. That would have required factual evidence not deployed before the judge. But whatever the judge decided I would make clear that the decision of this court is confined to the legal questions whether it is contractually possible for individual breaches of warranty to be aggregated to produce a “fundamental” breach of warranty and whether the consequences of individual fundamental breaches of warranty can be aggregated to produce a severe adverse effect. …Accenture’s case, if I have understood it correctly, [is that] no Material Defect can, in the contractual scheme, be combined with any other material defect to produce a severe adverse effect for the purpose of constituting a Fundamental Defect. … this would have the effect that even fundamental breaches of warranty (individually causing an adverse effect) could not be combined, nor could breaches of warranty (of a non-fundamental kind) be combined although they each had a severe adverse effect. It is not likely that the parties could have contemplated such a (to my mind) bizarre result. This consideration might mean that Centrica’s general submission … is correct but I would prefer not to express a final view on that since one can never know in advance what facts will be proved at trial and deciding such a point without any factual background is too dangerous.
Nintendo v Playables
In Nintendo Co Ltd and Nintendo of Europe GmbH v Playables Ltd and Wai Dat Chan [2010] EWHC 1932 (Ch), Nintendo were granted summary judgment in an action against importers of the R4 game copier device concerned with copyright infringement and the avoidance of copy-protection devices. Prior to the hearing, HMRC and trading standards officers had seized more than 165,000 game copiers intended for the defendants and the parties had achieved a partial settlement of their claim which involved the defendants giving contractual undertakings in relation to dealing in the devices.
The summary judgment claim focused on the circumvention of copy-protection provisions, ie ss 296ZD and 296 of the Copyright, Designs and Patents Act 1988. There was also an element relating to copyright infringement by authorisation in respect of some copyright works transiently copied into the random access memory in the course of use of the defendants’ devices.
The devices fit into one of the slots on the Nintendo DS. They each contain either built-in memory or a further slot of their own which accommodates a micro-SD flash card. Copies of games can be stored on this memory either by connecting the device itself to a computer using an adapter or by extracting the memory card used with it and connecting that to a computer, again using an appropriate adapter. The devices also contain circuitry, software and data (including a copy of the NLDF) which enable them to pass the tests performed by the DS to verify that the game card inserted is genuine. In this way, the accused devices enable unlawful copies of Nintendo games to be played successfully on the DS, as well as other material.
One of the defences which had been raised was that the devices had lawful uses but Floyd J observed ‘the lawful uses must be uses of the accused devices in conjunction with the DS console. One such suggested lawful use is for home-made games. However, such use will still circumvent the ETM [effective technological measures within the meaning of s 296ZD], or otherwise the game will not play. The mere fact that the device can be used for a non-infringing purpose is not a defence, provided one of the conditions in section 296ZD(1)(b) … is satisfied.’ He goes on to describe the devices as ‘templates for infringement’.
There is a passing reference in the judgment to doubt about whether s 296 of the CDPA properly implements the Directive. On the question of jurisdiction and possibly infringement taking place abroad, Floyd J endorses the approach taken by Laddie J in Sony v Ball [2004] EWHC 1738 (Ch).
Adwords: Portakabin Judgment Published
On 8 July, the Court of Justice gave its ruling in the latest AdWords dispute, a reference from the Hoge Raad der Nederlanden (Netherlands) in Portakabin v Primakabin.
The reference to the Court of Justice had been made in the course of a dispute between Portakabin Ltd and Portakabin BV (Portakabin) and Primakabin BV concerning the display of Internet advertising links on the basis of keywords identical with, or similar to, the Portakabin trade mark. The case involves a long list of issues, including display of advertisements on the basis of a keyword identical with a trade mark, the treatment of keywords reproducing a trade mark with ‘minor spelling mistakes’, advertising second-hand goods online and Primakabin’s removal of the Portakabin badge from some goods and its replacement with a Primakabin badge.
Primakabin sells and leases new and second-hand mobile buildings. Apart from manufacturing and marketing its own units, such as work shelters or temporary offices, Primakabin is also engaged in selling and leasing used units, including those manufactured by Portakabin. It is not part of the Portakabin group.
For the ‘AdWords’ referencing service, Primakabin chose the keywords ‘portakabin’, ‘portacabin’, ‘portokabin’ and ‘portocabin’. The last three variations were chosen in order to avoid a situation in which internet users might miss Primakabin’s ad because they had made minor spelling mistakes in typing the word ‘portakabin’. Originally, the heading of Primakabin’s ad, which appeared once one of the aforementioned words had been entered into the search engine, was ‘new and used units’. Subsequently, that heading was amended by Primakabin to ‘used portakabins’.
In 2006, Portakabin brought an action against Primakabin before a court in Amsterdam in which it sought an order requiring Primakabin, on pain of a fine, to cease all use of signs similar to the Portakabin mark, including the keywords ‘portakabin’, ‘portacabin’, ‘portokabin’ and ‘portocabin’.
While it is for the court in the Netherlands to apply the ECJ’s rulings in accordance with the facts as it finds them to be, the ECJ seems to hint that Primakabin may have overstepped the right to use another’s trade mark in this case. But it also seems to give a firm indication that few restrictions can apply where second-hand goods are being sold, when the description is largely accurate.
Data Protection and FOI: ECJ’s Balancing Act
The Court of Justice has given judgment in Case C-28/08P, Commission v Bavarian Lager. The case required the Court to consider data protection and freedom of information rights as competing rights and to strike a balance between them.
The EU Commission had declined to release all information in its possession relating to a meeting, but only insofar as it refused to name five persons who attended a meeting – the minutes and views expressed were disclosed. The Court of Justice ruled that it was within its rights to restrict disclosure in this way. The Court of Justice judgment declines to take on the ‘big issues’ that many sought to see resolved in this case – in broad terms, the Court ruled that Bavarian Lager had failed to show why it needed to know the names and that, in the absence of any credible claim to need to know, the data protection/privacy rights triumphed, almost by default. The Court’s judgment contrasts with that of the Court of First Instance and with the Opinion of the Advocate General.
