November 6th, 2013
Philip James, Partner & Joint Head of Technology at Pitmans has been quoted by BBC News Online in an article looking at the installation of face-scanning technology at Tesco’s petrol stations. The technology, made by Lord Sugar’s digital signage company Amscreen, will use a camera to identify a customer’s gender and approximate age, before showing an advertisement tailored to that demographic.
“This technology is similar to the way social media sites tailor adverts to users based on the content of their profile. The capture of facial signatures represents a potentially much greater infringement of customers’ privacy in the absence of prior consent.”
Philip James was quoted on this topic in:
November 1st, 2013
Pitmans’ trade mark attorney Simon Stanes explains the changing background to trade mark proceedings behind the fast-track procedures and discusses the potential results. This republished article was written for the Business Magazine November 2013 edition.
Technology start-ups protecting their brand names are responsible for much recent activity in the trade marks field.
The 1 October 2013 change to UK trade mark opposition procedure aims to encourage SMEs to defend their rights by blocking new applications for confusingly similar trade marks.
The new “fast-track” opposition introduced by the UK Intellectual Property Office (UK IPO) is designed to lower cost, complexity and duration of opposition proceedings. It also removes the perceived risk of larger defendants prolonging proceedings and driving up both parties’ legal costs.
Need for change?
Since the UKIPO ceased blocking new conflicting applications during the examination process, opposition rates have stayed comparatively low at 4-5% (The corresponding figure at the European Union trade mark office (OHIM) consistently runs at around 15%).
Although the UK IPO still notifies trade mark owners of conflicting applications, the perceived cost and administrative burden of challenging discourages SMEs from enforcing their rights.
The fast-track system
The new system seeks to remove all evidence procedures from oppositions based on:
- identical marks and identical goods/services,
- identical marks and similar goods/services and
- similar marks and identical or similar goods/services.
These simplest cases turn on a notional comparison between the opponent’s and the applicant’s trade marks in relation to the products listed in their specifications.
The fast-track runs in parallel with the existing opposition process. A fast-track opponent is limited to opposing with three registrations and for any over five years old, evidence of use must be supplied at the time of filing the opposition.
The defendant may file evidence in support of their application only in exceptional circumstances. The UK IPO anticipates that in most cases a fast-track opposition will proceed to a decision on the basis of written submissions only without an oral hearing.
Pitmans SK comment
The removal of the UK IPO’s power to block trade mark applications based on prior rights did much to free up the application process and avoid lengthy fights with the UK IPO where the owner of a prior right had no interest in opposition. The current low rate of opposition is also a potential boon to SMEs seeking registration.
The potential downside of low opposition rates is a build up of conflicting registered rights, leading to consumer confusion and later cancellation action. This could ultimately bring uncertainty and dwindling confidence in the strength of a UK trade mark registration.
Due to the requirement to accompany filing with evidence of use, the fast-track is only optimised for newer registrations within their initial five year grace-period. Potential fast-track opponents also need to assess the degree of similarity between the trade marks, their commercial fields and the availability of evidence of enhanced reputation.
The UK IPO’s discretion to allow evidence will likely form a flash-point for conflict between fast-track opponents and defendants seeking to bolster their defence.
Ultimately the traditional evidence based opposition remains available for trade marks with a degree of reputation or where sufficient evidence of use cannot be supplied at the outset. With scale-limited costs awards and increasingly strict time limits, this route still remains suitable for SMEs.
It will be interesting to see whether the fast-track scheme leads to an increase in the opposition rate in the UK
Key points for tech companies
- Class 9 is key for tech companies to registering brands. This covers a huge range of electronic goods with potentially large demand for similar marks. The fast-track procedure will be particularly relevant in this class.
- If you receive notification from the UK IPO of a similar competitor trade mark and wish to oppose, you only have two months to proceed.
- It is extremely important to carry out pre-filing trade mark searches prior to adopting a new brand. This simple step can provide early warning of potential problems and avoid the cost and disruption of legal action and rebranding post launch.
- Keep records of your use of your key brands, including brochures, advertisements and invoices, as well as commercial data, such as sales figures. Once a trade mark registration is over five years old, you will need to provide this evidence if you want to take enforcement action.
November 1st, 2013
Changes in the financial climate over the past half decade or so has seen a change in the landscape of how SME’s and Corporates alike fund their business on a day to day basis. All you need to do is to have a look at statistics produced by The Bank of England on a quarterly basis to see the continued downward trend in “traditional” bank lending, writes banking expert Jim Meechan, consultant at law firm Pitmans, for the Thames Valley Business Magazine November edition. The article is kindly republished:
How are businesses continuing to function on a day to day basis – the answer is to ensure that their “cash flow” continues and this can be achieved by considering “alternatives”.
There are a number of alternatives some of them being around for a number of years but were further down the pecking order whilst the traditional forms of bank funding was more readily available. Invoice Finance for example was considered by some as almost being the lender of last resort to being an accepted part of working capital finance for all sizes of business.
Government initiatives via The Enterprise Finance Guarantee Loan Scheme (EFG) seems to be moving in the right direction. Lending from this initiative exceeded £80m in the second quarter of 2013. Under the EFG the government acts as a guarantor on 75% of individual bank loans of between £1,000 and £1m. The scheme was originally designed to assist companies that have viable business proposals but little or no security to offer against a loan.
One of the newer forms of alternative finance is via Peer to peer lending. This has been around since 2005 but of late has been courting quite a bit of press coverage as well as government scrutiny. Peer to peer lending is “what it says on the tin”- lending money to peers without having to go through the banks or other financial institutions. Peer to peer lenders are individuals who have some cash to invest with the hope of a better return than they would normally get on a bank deposit for example. Returns vary and can be anything from between 6% and 12% pa. At the moment this is regarded as a loan that is not subject to regulation however this will change next year when the Financial Conduct Authority (FCA) will regulate the peer to peer market.
So how do you get a peer to peer loan? Have a look on line as most of the peer to peer lenders are web based – it’s fairly straight forward and it takes much of the administration and red tape associated with bank lending out of the equation. As a borrower, you would register with a company and you would then be put into a category based on your credit score. When grouped, the lender can decide where they want to invest their money.
There are examples out there showing that one peer to peer lending platform has grown significantly since it started earlier this year and has introduced over £10m of loans to the SME community ranging from £25,000 to £1m. The loans have been a mix of house building, leisure and renewable energy. This particular “loan platform” has shown some remarkable growth in a fairly short period of time although it is acknowledged that it is the proverbial “drop in the ocean” when compared to more traditional bank lending facilities. As awareness of the peer to peer market grows and the new regulatory environment kicks in next year peer to peer may well gain a foothold in the financial mainstream – a cautionary footnote however – already some industry insiders are suggesting that the low interest rates and negative sentiment towards banks will not last indefinitely and the attractive returns for small investors will be undermined if default rates rise. It is too early to get a proper steer on this as the loans in the main are fairly new. It is important that sites are accurate and transparent in relation to the information they provide (good or bad).If the sector is facing a bad debt hurdle, the fear is that the industry as a whole could be impacted by one or two platforms failing to clear it and some investors losing some of their investment as a result.
Finally and probably one of the easiest forms of alternative funding – do you have rich relatives? A loan from a supportive family with a bit of cash to spare can provide the funds required at perhaps more competitive rates and less onerous covenants than from a traditional commercial lender – hopefully the loan will be repaid within the agreed timescale and framework thus avoiding family disputes.
As with all decisions relating to finance it is important that proper advice is obtained, we at Pitmans have a wealth of experience and would be delighted to assist with any projects being considered.
October 31st, 2013
Expert technology partner Philip James was asked to comment for legal magazine The Lawyer on the California-based software multinational Adobe, following it’s cyber attack admission that it had suffered a far greater breach of data security in a cyber attack earlier this month. Adobe has launched an internal investigation, and lawyers forecast that third-party suppliers to Adobe will fall under the spotlight.
Philip James commented: “There are likely to be significant supply chain implications with this breach. It is by no means definite, but I would not be surprised if the breach were the fault of a third party.”
James warned that Adobe would be particularly concerned about the breach potentially coming through cloud computing, the process by which data is held on third-party servers in various jurisdictions.
“Adobe will be reviewing its contracts with suppliers, and while they are a sophisticated company with a sophisticated legal department, it doesn’t necessarily follow that all their contracts are up to date – especially in relation to such a fast evolving area.”
Lawyers suggested the most significant commercial implication for Adobe is the theft of its source code. James commented: “Exploiting vulnerabilities in the application will now be much easier. I suspect this is only the beginning of this story and more will emerge over time.”
Read the full article here.
October 29th, 2013
Jim Meechan, banking & finance consultant at Pitmans LLP comments on how not to fall foul of compliance requirements. Following the article in The Times on 17 September 2013 titled ‘Barclays to refund customers after mistakes on personal loan interest charges‘, Jim and Joanne Davis, a Partner at DWF, discusses if banks are doing enough to address compliance concerns?
What issues does the disclosure raise and what should other firms learn from them?
Joanne Davis (JD): Under the Consumer Credit Act 1974 (CCA 1974), and following the introduction of the Consumer Credit Act 2006 (CCA 2006), lenders are required to provide prescribed statements using defined terms to customers in relation to regulated agreements. The contents of annual statements are difficult to interpret and, in some cases, complicated for IT teams to program.
Failure to provide the correct statements when required to do so means no interest can be charged on the account for the period during which the lender is in breach. The failure can be rectified by providing the pre-scribed statement in its correct form, and interest will begin to accrue again from the date the statement is sent to the customer.
Requirements under CCA 1974/CCA 2006 are prescriptive and failing to comply can be costly. This no doubt fails to come as a surprise to lenders who already bear a considerable cost burden when it comes to compliance.
In order to ensure lenders stay compliant, they must be absolutely sure their products and system program-ming are compliant from the outset. It is important to ensure their automated systems are working effectively by checking and auditing their IT systems regularly to make sure that statements are ‘sent’. Strong back-up systems and processes should also be implemented so statements cannot ‘slip through the net’–an easy mistake to make.
Does this sort of disclosure indicate that firms are more aware of compliance is-sues?
Jim Meechan (JM): There have been a number of changes within the regulatory environment, as well as the introduction of new regulators. There is an awareness of compliance and regulatory requirements so I think the answer here is yes–firms know what is required and they are addressing these issues.
The situation is said to be linked to changes in requirements in October 2008. In what way did the law change at this time?
JM: In October 2008 the Consumer Protection from Unfair Trading Regulations, SI 2008/1277 came into force. The Regulations provide consumer protection from unfair or misleading trading practices, and also ban misleading omissions and aggressive sales tactics, such as doorstep selling.
JD: Lenders should also be sure to keep abreast of compliance and regulatory changes at all times. This is particularly true at the moment as the regulatory environment in the finance world is undergoing some sub-stantial changes.
Should firms be reviewing their loan/consumer credit book?
JM: Absolutely. Financial institutions that have provided loans that fall within consumer credit legislation should be checking that the information in customers’ statements is fully compliant with the terms of CCA 1974/CCA 2006 and that any changes the firm has made to its terms and conditions have been implemented and documented in a clear, coherent and unambiguous way.
JD: The best approach to ensure lenders do not fall foul of compliance requirements in this area is to have regular internal system audits – if errors are found they can be rectified early, reducing potential refunds of interest that will become due during the period of non-compliance.
If lenders do find any errors in their statements or processes, they should act quickly to ensure they continue to treat customers fairly at all times–especially when considering the fines the regulator can impose for failures to do so. Lenders are advised to rectify any errors quickly and honestly with the customer while at the same time making it clear that as soon as the lender complies and sends the revised statement, there are no enforceability issues or further claims available to the customer.
The Office of Fair Trading (OFT) is handling the refund process. Would you anticipate a different approach from the Financial Conduct Authority (FCA) when it takes assumes oversight of the consumer credit field next year?
JD: It is envisaged the FCA will adopt a proactive rather than reactive stance to compliance. When it takes over the policing of consumer credit in April 2014 it will be enforcing lack of compliance with the principles of business such as ‘treating customers fairly’. This will be a different requirement from those the OFT has had.
Transparency with the regulator and treating customers fairly are absolutely key to ensure that, if errors oc-cur, the potential exposure to damage is minimised. Honesty is the best policy and this is the approach banks and finance houses are taking where regulatory errors are discovered–including taking positive steps to ensure customers are given their statutory entitlement and that they do not suffer any detriment.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.
October 28th, 2013
Pitmans’ Corporate Partner and Hospitality specialist, Daniel Jacob, was asked to write a checklist for BigHospitality, an on-line resource for those working in and interested in the hospitality industry, on key pieces of advice for any business looking to grow.
Daniel Jacob has provided seven top tips for entrepreneurs looking to avoid falling foul of the law. He comments:
“The step from single sites to multiple units is often about more than just replicating the original business plan. As businesses grow, take on larger lease obligations and employ greater numbers of staff, it is important to understand how the business can protect itself from legal perspective.
We have found that whilst clients have benefited from using pop up restaurants at alternative venues to grow brand awareness and to generate a greater social network following, the cost, compliance issues and management time required, mean that is something to be carefully considered and to complement a developed marketing plan.
Taking care over the detail from day one is also important. It is hard to recover from giving away too much equity to investors, getting the lease terms wrong or finding yourself in a legal structure that does not allow the business to grow as intended or exposes it to unnecessary risk.”
View the full checklist here.
October 22nd, 2013
YFM Equity Partners have recently supported the management buyout of technology manufacturer GTK UK.
GTK UK have developed an enviable position as a leading global provider of electronics solutions including Optoelectronics, Connectors & Cable Assemblies. Over the last 20 years, GTK have provided their customers with high quality, high performance products from their offices across the UK, Germany, Taiwan & China and by working with manufacturing affiliates in the Far East. The company is headquartered in Basingstoke and has a facility in Taiwan. GTK’s turnover in 2013 was £9.4m (€11.12m). They employ 64 people globally.
Assisted by Private Equity specialist, Roger Gregory of Pitmans LLP, the MBO was led by GTK’s Managing Director John Morath and Directors Steve Robinson, Julie Arrowsmith and Fred Edwards.
Commenting on the deal, Roger Gregory said: “I am delighted to have been involved with such an experienced team who will doubtless be in an even better position to drive the business forward given YFM’s backing. It’s great to be able to support a local business, especially one whose headquarters are so close to where I live.”
October 21st, 2013
Mr. Justice Popplewell recently dismissed the lawsuit filed by liquidators of Madoff Securities International Ltd after a lengthy trial in the High Court through which they were seeking to recover around $50 million. The ruling exonerated the UK defendants including former Bank Medici AG Chairwoman Sonja Kohn and the Directors of Bernard Madoff’s European organisation, including his children Mark and Andrew.
Andrew Madoff’s lawyer, David Archer, Partner at Pitmans LLP said of the ruling that “The High Court has completely vindicated the role of the Directors of Bernie Madoff’s English trading company and has confirmed that Mark and Andrew Madoff were honest Directors who knew nothing of their father’s fraud. The Judge has expressed profound sympathy for what the Defendants, including Andrew and his brother’s family have been put through. He commended them for their personal integrity and has criticised the way in which this unfounded Claim has been relentlessly pursued. Andrew Madoff and his family are pleased that, after a thorough review of all the facts, justice has been served.”
Full reports and further information can be found on the following links:
October 7th, 2013
Pitmans solicitors has been appointed to the Pension Protection Fund’s legal panel which will provide insolvency, restructuring and general corporate advice to the Fund. Pitmans are one of only ten firms nationally to be successfully appointed to the insolvency panel.
The Pension Protection Fund is a “lifeboat” for members of defined benefit pension schemes, providing a guaranteed level of pensions benefits where an employer undergoes an insolvency process. In certain circumstances the Pension Protection Fund, together with the Pensions Regulator and Trustees, will agree terms for the consensual entry of a scheme into the Fund, involving an insolvency event in relation to the employer but which allows the employers’ business to continue. Pitmans has advised and will continue to advise the Fund in relation to such arrangements.
Pitmans is a full service law firm with over 220 employees, including 35 partners and over 150 fee-earners, working from offices in London and the Thames Valley. Through a comprehensive range of specialist sector teams, services are tailored to meet the exact needs of clients. To see details of the full range of services please go to www.pitmans.com.
Our specialist pensions team deliver definitive, pragmatic and first class advice whilst possessing the skill to be flexible to suit client’s strategic requirements and operational practices. Through PTL, a leading Independent Trustee specialist and part of the Pitmans group, we can provide technical advice for trust based Pension Schemes and governors for Contract based Pension Schemes, as well as acting for open, closed and paid up pension arrangements. They specialise in acting as an Independent Trustee to work based pension schemes, working closely with their clients’ to deliver good outcomes for members, employers and other trustees.
Commenting on the recent success, Pitmans Restructuring and Pensions Partner, Denise Fawcett said “in the current economic climate companies are struggling to pay their pensions liabilities and insolvencies are inevitable. In appropriate circumstances an employer can agree terms with stakeholders, including the Pension Protection Fund and with the support of banks and investors, that can ensure the survival of a viable business and a better return to the pension scheme than would be the case in the event of insolvency of the employer. In turn, this reduces the liabilities of the Fund and the burden on the levy payer. We are delighted to have been appointed to the panel of firms that will assist the Fund in achieving this outcome.”
October 1st, 2013
Whilst doing a bit of research for this article I noticed that the ‘Banking Update’ that I had written was exactly a year to the day that I started to ‘tap’ away on this one.
Last year we were half a decade in to “the crisis” so what’s happened in the past year? Well I am sure there have been a number of events, initiatives etc but for the most part nothing cataclysmic or indeed euphoric in the main it seems fairly benign.
We now have a new Governor of The Bank of England; Lord King has retired from his post and has been replaced by Mark Carney who promptly told BBC Radio 4’s Today programme that there must be a change of culture in “socially useless” banks that disconnect themselves from the real economy. Carney went on to add that Banks can be useful to society when they focus on helping businesses invest and create jobs, but they must ensure that they do not lose that focus.
Moving on from the new Governor I thought it was worth a look at how the “UK’s big five stock market listed banks have fared in the first half of this year. The answer is quite impressive – collectively they have reported half year profits well in excess of £18 billion and as such we are on course for a strong outcome for the year as a whole. So are we out of the woods yet? It would be good to say yes but there are a number of issues still to deal with before then. Bear in mind that the taxpayer is owed around £65 billion from the bailouts of Royal Bank of Scotland and Lloyds.
In addition to the bail out banks bear in mind that Barclays has asked it’s investors for almost £6 billion through a share issue to help fill a £12.8 billion hole in it’s balance sheet identified by the Prudential Regulation Authority (PRA). The cash call was larger than expected, as too was the extra £2 billion set aside for mis-selling payment protection and interest-rate swaps.
So with the Libor- rigging scandal rolling on, regulation changing gathering apace and the economies of many countries taking small steps towards recovery, there remains a number of issues that may manifest themselves before the end of the year that banks may need to address.
There have been many surveys and polls undertaken to gauge the moods and trends nationally, locally and by sector. Pitmans, in conjunction with The Thames Valley Business Magazine conducted their second “Funding your business” survey. This time around it was noted that there was a growing number of respondents from within the SME community who indicated that lack of debt finance was stifling their ability to grow (30% up from 22% the previous year). This survey was Thames Valley centric. On the other hand a nationwide survey was carried out by Zurich concluded that SME’s are growing in confidence that the UK’s economic recovery is around the corner. According to Zurich the number of SME’s who believe the economy will improve this autumn has almost doubled to 38% from 20% earlier this year. By my calculations this still leaves 62% of SME’s who may think otherwise. Indeed plans to boost credit to SME’s was dented when Nationwide delayed it’s launch into this sector until 2016.
A good ‘finger on the pulse’ guide to what is going on out there is the quarterly report published by The Bank of England (Trends in Lending). The recent report concluded that the weakness in lending to SME’s over the past 18 months is likely to reflect a combination of demand and supply factors. Earlier editions of Trends in Lending noted that demand for credit by SME’s was muted over 2012. The latest SME finance monitor reported that around 75% of SME’s had not applied for a new or renewed credit facility in the year to 2013.
Overall there is a general perception that credit conditions for SME’s are improving and in April Bank of England and HM Treasury announced an extention to the funding for lending scheme in such a way as to provide considerably greater incentives for banks to lend to SME’s.
Pitmans have contacts with main stream banks and can assist with securing senior debt for suitable projects; we can also assist with the acquisition of mezzanine finance, invoice finance, equity and specialist fund finance as appropriate.
It’s amazing what you come across whilst undertaking research for an article – I completely missed this but it seems like the cause for the financial crisis has been established – The Guardian ran an article in which the former drug tsar, David Nutt concluded that “Coked-up bankers” caused the credit crunch. This was backed up by an A&E specialist based at Cork University Hospital who concluded that”people were making insane decisions and thinking they were 110% right … this it seems led to the chaos”
Now we know … we can assist with funding but you are on your own after that!