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Publishing Law Newsletter - Edition 2 Date: 09/08/2007

Publish and be damned!
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Since our last newsletter Tin Tin has been removed from the shelves and branded a dangerous racist and President Putin has raised the spectre of state censorship of academic publishing. However, it is still the commercial rather than state threats to the industry that have attracted most debate and particularly the continuing challenges posed by the additional channels of distribution from supermarkets to the information superhighway. Apparently, Business Week in the U.S. has been theorising over which newspaper will be first to publish solely online and it suggests that the San Francisco Chronicle is the perfect candidate. Meanwhile local newspapers, like the Bath Chronicle, are moving to weekly publications with breaking news online and magazines are increasingly, albeit reluctantly in certain cases, embracing their online alter egos.

If you aren't actually publishing online there is a good chance that you are at least using digital platforms to promote your business. In this newsletter we bring you some thoughts on agreements to clear rights in online syndicated content and give a word of warning if you are thinking of posing as a consumer to post book reviews on Amazon (or elsewhere) or to seed positive comments about your publications in a blog.

Back in the very human world of journalistic exposés, the body of law and regulatory decisions relating to the right to privacy is burgeoning. We highlight just one of these decisions which has been pursued all the way to the House of Lords and which arises out of the publication of extracts of Ian Brady's medical records several years ago.

Finally, with Britney and Lindsay Lohan attracting so much media interest in their respective meltdowns are you out there looking to contract a teen celebrity biography? If so then look no further than the Wayne Rooney story for some tips on the tricky issue of securing a binding contract with a minor.

Please let us know if there are any other issues that you would like us to look at in future editions of this Newsletter or let us have your thoughts on some of these issues.

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In this edition we examine the following topics.
Blogs & Reviews: Unfair Commercial Practices?
Online Content Clearence: best or reasonable endeavours?
Disclosure of Sources
Contracting with teen-celebrities
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Blogs & Reviews: Unfair Commercial Practices?

The Unfair Commercial Practices Regulations 2007 have been referred to as the rogue trader regulations and it is fair to say that they are aimed at outlawing shady retail practices. However, there are provisions in these regulations of which upright members of the publishing fraternity may wish to take note. The regulations are generally designed to protect consumer's economic interests from being harmed by misleading, aggressive and generally unfair practices. Some unfair practices are defined but there is also a broad penumbra of activity that might be deemed unfair if it satisfies defined tests. The regulations will come into force in December 2007 and will be policed by Trading Standards authorities. Sanctions will vary from written reprimands to criminal prosecutions but it seems likely that most transgressions will be dealt with at the lower end of that scale.

In relation to the specifically outlawed practices, readers of this newsletter may wish to avoid falling foul of the regulations by bearing in mind the following points: -

  1. Make a clear distinction between advertorial (i.e. paid for content) and editorial.
  2. Do not participate in a blog promoting your publications (or post reviews on sites such as Amazon) without making your identity clear (i.e. do not falsely pose as a consumer).
  3. Take care not to have an overactive email programme sending persistent and unwanted emails.
  4. Do not directly address promotions or marketing material to children or attempt to invoke "pester power".

This is by no means a comprehensive list of the relevant provisions. Guidance on the implementation of the regulations is currently in consultation and it will be some time before we see what real effect the new regulations will have. It may be of comfort to note that these regulations do not provide for any private law remedies that is to say neither consumers nor competitors can invoke the regulations to complain about your business activity. We will report further on any significant relevant provisions in the coming months.

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Online Content Clearence: best or reasonable endeavours?

Many online publishers are currently entering into partner agreements to share online content. More often than not the content in question is user-generated (“UGC”) and the only effective rights clearance that the site host carries out is by means of a stipulation in the terms of upload imposing clearance obligations on the user. The advent of the Viacom Google litigation in the US over copyright infringement on Youtube has left online publishers keen to find any form of protection against similar such claims. In content syndication agreements (particularly those in relation to UGC) the receiving party will seek an indemnity in respect of intellectual property claims and/or will require that the party providing any content has carried out some form of rights clearance. You may come across a contractual requirement that the providing party "use [all] reasonable/best endeavours to obtain all licences, consents and waivers to enable exploitation".

Unless you have robust pre-publication clearance procedures for all user-generated content you should strongly resist a "best" endeavours obligation or an "all reasonable" endeavours clearance clause of this type. Why?

The interpretation of the terms “best” and “reasonable” endeavours is sensitive to the context of a particular contract in which the terms are found, however, a recent case has provided some useful guidance on the level of obligation that each imposes. As a starting point the judge in the recent case took the view that "all reasonable" and "best" endeavours effectively means the same thing. The case also affirms the view that there is a difference between “best endeavours” and “reasonable endeavours”. Best endeavours being at the high end of a scale of obligation and reasonable endeavours further toward the low end.

As a broad rule of thumb reasonable endeavours probably only requires the party to take one reasonable course of action to achieve a given end and does not require that party to sacrifice its own commercial interests or to expend significant sums of money to achieve that end. By contrast best endeavours requires a party to take all steps in its power to achieve a certain result. (There are other variations on these phrases e.g. reasonable commercial endeavours and utmost endeavours, however there is no specific case law to assist in interpreting these alternative terms. It is quite likely that they will be interpreted as conforming to reasonable and best endeavours respectively).

Returning to the question of clearance obligations, in our view, a reasonable endeavours clause would be satisfied by the imposition of clear terms of upload and a responsive notice and take down policy whereas a best endeavours requirement would only be satisfied by the implementation of active pre-publication clearance. This has clear costs implications for any syndication deal but it should also be noted that this general guidance applies across all commercial contracts and there will almost always be strong commercial reasons for negotiating firmly in respect of any clause containing an obligation qualified by any form of endeavours.

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Disclosure of Sources

Almost every week there seems to be another judgment or PCC decision adding to the body of authorities on the right of Privacy. In each case a decision is reached by balancing the interests of free speech against the need to deal with unauthorised disclosures of confidential information. The Court of Appeal recently carried out such a balancing exercise between protection of a journalist’s source in the interests of free speech, and deterrence of the unauthorised disclosure of confidential medical information. This case made it all the way to the doors of the House of Lords who refused to hear any further appeal.

The claimant, Mersey Care NHS Trust, (“the Hospital”) provided high security mental health care treatment to Ian Brady. In November 1999 the defendant Robin Ackroyd, a freelance investigative journalist, obtained certain confidential information relating to Ian Brady. On 2 December 1999 an article attributed to Gary Jones was published in The Mirror about Ian Brady’s hunger strike and subsequent forced feeding (“the Article”). The Article was clearly based on, and indeed contained verbatim extracts of, confidential medical records belonging to the Hospital. The Mirror declined to disclose to the Hospital the name of the person or persons who had provided it with the medical records, and so the Hospital sought an Order for disclosure of the source.

At the trial in April 2000 the Hospital obtained an order for disclosure of the source. This order was upheld after appeals to the Court of Appeal and the House of Lords (in 2002). To the Hospital’s surprise, compliance with the order revealed only the name of Mr Ackroyd and not the name of the original source. The Hospital invited Mr Ackroyd to divulge his source, and when he declined to do so it instituted further proceedings against Mr Ackroyd. At trial in January 2006, the Judge allowed Mr Ackroyd to keep his source confidential but gave the Hospital permission to appeal.

It is established law that where a person, albeit innocently, becomes involved in the wrongful act of another, that person comes under a duty to assist the person injured by the wrongful acts, by disclosing any information that might identify the wrongdoer. In this case the wrongful act was the disclosure of Confidential records by a Hospital employee. This duty to assist is balanced by the legally recognised need to maintain the right to freedom of expression by protecting journalistic sources.

The Court of Appeal had to examine whether the Hospital had shown, on the evidence, that it was both necessary, (i.e. there was a pressing social need) and proportionate for the court to order the journalist to disclose the name of his source. It stressed that the balancing exercise was a matter for the Judge hearing all the evidence to carry out and not for an appellate court. It emphasised that the Court of Appeal should respect the decision of the trial judge unless it was persuaded that he had erred in principle or reached a conclusion that was outside the ambit of conclusions that a judge could reasonably reach.

The Court of Appeal confirmed that the second case against Mr Ackroyd was different to the original case against The Mirror. The passage of time (it was 7 years since the original disclosure) had undermined some of the Hospital’s arguments in favour of disclosure as there had been a history of leaks of information from the Hospital, and a high turnover of staff. This reduced the need for disclosure as it would not act as a deterrent to prevent future leaks, and it was likely that the source was no longer involved with the Hospital. The evidence of Mr Ackroyd also showed that the source was motivated to make the original leak by a misguided public interest and not for financial gain, and furthermore, the stance of Mr Brady towards supporting the Hospital regarding the disclosure of his medical records had changed.

The Court stressed that as the underlying principles involved in dealing with this kind of dispute are now reasonably clear, it should not be necessary for cases of this kind to reach the appellate courts in the future.

Comment

There are a few points of guidance that can be usefully drawn from this case:

  1. Despite growing pressure to reinforce privacy rights the courts recognise that it remains important to protect journalistic sources.
  2. Sources may well have a better chance of remaining anonymous if they have leaked information for public interest reasons rather that financial gain.
  3. If disclosure of a source will not give rise to any possible benefit (e.g. a deterrent effect) it is less likely to be ordered.
  4. If the source for a programme/article is another Journalist, Editors should disclose this fact at an early stage.
  5. The legal principles to be considered in these ‘balancing act’ cases are now clear and accordingly cases of this type should rarely need to be referred for appeal.

 

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Contracting with teen-celebrities

You might ask what Wayne Rooney has done for publishing. In fact, a recent case concerning his management highlights important issues for book publishers and literary agents contracting with under 18s. While there might not be many literary authors under 18, books written (or ghost written) by minors, particularly celebrities, are increasingly popular.

The law of contracts with minors (under 18s) has not benefited from any significant review since a case in 1978. Nevertheless, it is well established that a minor can avoid (get out of) a contract unless it satisfies a 2 part test. A contract will only be binding if:

  1. it can be classed as a contract for “necessaries” or for employment/ apprenticeship/training (or is regarded as analogous to those sorts of contracts); and
  2. it is for the minor’s benefit.

In the Wayne Rooney case, Rooney already had a playing contract with Everton FC when he signed a contract with a management company (Proform). He then decided that he wanted to be represented by a different management company (Proactive) and he contracted with the new company. Proform sued Proactive for unlawful interference with and procuring the breach of their contract. Proactive’s principal line of defence was that the Proform contract did not satisfy part 1 of the above test and that because Rooney could get out of it at any time Proactive could not be liable for interfering or procuring a breach of it. This argument had not been tested by a case before but the judge agreed with the principle. He then had to go on to apply the above test to the Proform contract.

In examining the Proform contract the judge held that Rooney’s contract with Everton FC was the contract by which Rooney made a living i.e. it was analogous to a contract of employment. The Proform agreement did not provide an income stream for him so could not be analgous to a contract for employment. Nor did it provide a means for Rooney to develop his skills therefore it was not analogous to a contract for training. There was no suggestion that it provided any other “necessaries”. Rooney was not bound by the Proform agreement and so Proform’s claim that Rooney had been unlawfully poached by Proactive was dismissed.

In assessing the nature of the contract the court contrasted the role of a music manager to that of a footballer’s manager: “Music group managers organise matters that are essential to the very business of the musical artiste. Players' representatives do not undertake matters that are essential to the player's training or his livelihood. They do not enable the minor to earn a living or to advance his skills as a professional footballer.”

What have the courts said about this in the context of publishing? The answer is very little, there has been one significant publishing case which applied the 2 stage test.

In 1965 Charlie Chaplin’s son Michael tried to stop publication of a ghosted autobiography, which he had previously approved, on the grounds that at the time of approval he was a minor. The Court of Appeal decided that the publishing contract allowed Michael Chaplin to start making a living as an author and was for his benefit. They saw the contract as analogous to a contract for employment and it was therefore upheld. However, this case was peculiar to its facts and might be of no use at all to publishers attempting to rely upon the legal consent to publication of young celebrities who have no intention of becoming writers.

One important reason for the Chaplin decision was the fact that under the terms of Chaplin’s publishing agreement the copyright in the book had been assigned to the publisher, and the law stated that any property which had passed under a voidable contract could not later be returned. Forty years ago it might not have been unusual for a publisher to acquire the copyright, but authors will now normally only grant a licence, in which case no property actually passes to the publisher, merely a permission to publish.

So what does this mean for publishers and literary agents? Traditionally publishing contracts provided for an income stream to a minor and were more likely to be enforceable as contracts for employment than literary agents’ contracts which are more akin to the sports agent’s position. However, the increasing role of literary agents in negotiating merchandising and endorsement deals for the author and in some instances for providing media training opens an interesting question. The Rooney case did not decide if contracts for these secondary income streams would also be protected but commentaries by barristers involved in the case have suggested they thought it was arguable that such contracts should be protected. Bearing this in mind we suggest a couple of practical tips.

Practical Safeguards:

  1. Be Specific about Income stream: if the contract may generate an income stream be explicit about the intended income and how you are instrumental in generating it and ensure that it is to be paid to an account which will accrue directly for the benefit of the minor.
  2. Include the provision of training/education: consider providing writing classes or media training, set out clear obligations in the contract and importantly go on to provide what you have agreed over the course of the contract.
  3. Obtain rights of representation in respect of merchandising/film deals etc: the negotiation only of publishing deals may not be sufficient to ensure the contract is protected consider all possible income streams which you might introduce to the minor.
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Nicola McCormick and Catherine Fehler

http://www.simkins.co.uk/LegalServices/Publishing.aspx



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