Media brief: April 2011
Welcome to the April 2011 edition of Media Brief, the bi-monthly, media-related newsletter from Fieldfisher. We hope you enjoy it. Please feel free to contact us if you would like to discuss in greater detail any of the issues raised, or indeed any other issues.
In this issue:
Ofcom to review TV airtime trading
Ofcom has announced that it is conducting a review of the television advertising market and the way advertising is traded. In its advertising sales review last year, Ofcom noted that the trading model is complex, the pricing is opaque and that it is possible that some features of the market may interact with market power in such a way that restricts competition in the sector. Ofcom will now consider whether there are reasonable grounds for suspecting that the trading mechanism prevents, restricts or distorts competition in the sale of television advertising airtime. Ofcom has warned that if it finds cause for concern, it will refer the issue to the Competition Commission to conduct a more formal review of competition in the television advertising market.
Tax ruling on payments to "key talent" in film and TV productions
The tax treatment of payments to "key talent" in film and television productions has been called into question by the recent decision in ITV Services Ltd v Commrs for HMRC. There has, since 1998, been a special National Insurance Contribution ("NIC") regime for front of camera talent. Generally, it is only necessary to account for employer's NICs on payments to employees, and as a general rule actors are self-employed. However, since 2003, it has been necessary to account for NICs on payments made to actors where that payment includes any element of "salary", as defined in the relevant legislation. An important element of the definition of "salary" is that a payment is "computed by reference to the amount of time for which work has been performed". HMRC's position had previously been that payments to "key talent", who are generally paid a fee for a production regardless of the amount of time required to be committed, were not intended to be caught.
In the ITV case, HMRC claimed NICs in respect of a number of different categories of front of camera talent across a range of television productions. The tribunal found that all but one of those categories included an element of "salary", so that NICs were payable. The tribunal was particularly influenced by the inclusion in both standard form and bespoke contracts of a filming or production period, during which the actor was required to be available to attend on set. The tribunal contrasted payments to "buy time" with a payment of a "fee" for a particular service or piece of work. A problem with this approach is that virtually all contracts with actors will make reference to a filming schedule during which the actor is required to be available. We are aware that HMRC are raising enquiries into the tax position of actors who would previously have been regarded as "key talent", and are actively engaged in dealing with HMRC on behalf of our clients - we consider that in many cases HMRC have got it wrong. If you have received enquiries from HMRC or if you engage key talent to work in your productions and have historically not accounted for employer's NICs on their remuneration, we would be pleased to share our experience.
EU General Court confirms member states' discretion to determine free to view sporting events
The European General Court has ruled that individual member states have considerable discretion under EU law to decide which sporting events are of major importance for their society and so should be broadcast on free-to-air television (FIFA and UEFA v Commission Cases T-385/07, T-55/08 and T-68/08).
This ruling applied the provisions of the Directive on the pursuit of sporting activities (Directive 89/552/EEC), which allows member states to prohibit the exclusive broadcasting of events they judge to be of major importance for society where such broadcasting would deprive a substantial proportion of the public of the possibility of following those events on free TV. The General Court upheld the Commission's ruling (which had been challenged by FIFA and UEFA) that lists of events drawn up by Belgium and the UK were compatible with EU law. This means that the UK government can take steps to ensure that all 64 World Cup matches and the 31 European Football Championship matches can be broadcast on free-to-air channels in the UK, and all World Cup matches should be available free-to-air for the Belgian public, regardless of whether teams from the relevant member state are involved in the matches.
Brand consultancy blocks Community trade mark registration for DAVE TV channel
A brand consultancy, Dave Soho Ltd, has successfully prevented UK TV channel’s application to register the trade mark DAVE as a Community trade mark.
Dave Soho was set up in 2003 but did not register its trade mark. When TV company UK Gold Services Ltd decided to file a trade mark application for DAVE in 2007, the brand consultancy company were successful in blocking the application on the basis of their earlier use of DAVE in the UK. This raises a number of issues:
- When the TV channel launched, did they conduct a full clearance search to check this mark was available? Clearance searches can help prevent companies from adopting a brand which causes problems later down the line.
- Will Dave Soho now request the TV channel to rebrand? To do so without an earlier trade mark registration will involve relying on a claim of passing off which is far more costly than proving trade mark infringement.
- Could a co-existence agreement have helped the parties to live together happily? A co-existence agreement would define each party's use of the mark DAVE to ensure there is no overlap.
UK TV has appealed the decision rejecting their trade mark and we wait to see how the story unfolds. The trade mark team at Fieldfisher can assist with checking the availability of new brands, getting appropriate protection in place, and dealing with conflicting rights.
PCC rules that republication of Twitter messages does not infringe privacy
The Press Complaints Commission ("PCC") has considered for the first time complaints about the republication of information originating from Twitter, in dismissing complaints made by Ms Baskerville that articles published in the Daily Mirror and The Independent on Sunday about her tweets infringed her privacy. Both newspapers reported Ms Baskerville's tweets which described her feelings towards her work as a civil servant in the Department for Transport and also included some political comment. Ms Baskerville argued that her activities on Twitter were private as she had the reasonable expectation that only her 700 or so followers would read her messages, even if in practice anybody could view the information she had published online.
The complaint was not upheld since the PCC decided that the material posted by Ms Baskerville was open to public view. Her potential audience was greater than the number of her followers because a notable feature of Twitter is that any message can be re-tweeted to a larger audience. In making its decision, the PCC also took account of the fact that the newspaper articles related directly to Ms Baskerville's professional life as a public servant and that the articles commented on the wisdom of civil servants using social media platforms, which could conflict with their professional duties. The PCC did not consider that the material published by both newspapers constituted an unjustifiable intrusion into Ms Baskerville's privacy.
PCC publishes guidance on online prominence of PCC corrections, apologies and adjudications
The Press Complaints Commission (PCC) has published guidance to the newspaper and magazine industry about the publication of online corrections and apologies. It has been published following the work of the PCC’s online working group, a sub committee of the Commission set up in 2010. This guidance sets out practical steps that editors should take into consideration to ensure that the requirement for "due prominence" is met. In particular, the guidelines include consideration of appropriate placement for an online apology or correction, linking the apology or correction to the original article, highlighting text that has been amended, tagging the apology or correction and changing URLs if necessary. The guidelines also stress the importance of negotiations between the complainant, the editor and the PCC in the placement of online, as well as offline, corrections and apologies. If an article appears in print and online, the correction or apology must appear in both.
Implementation of anti-piracy laws under Digital Economy Act 2010 delayed
When the Digital Economy Act 2010 (DEA) was passed in the final days of the last Parliament with one of its aims being to combat illegal filesharing, the intention was that it would come into force in January 2011. However the government has recently admitted that it cannot implement the legislation until spring 2012 at the earliest due to attacks on the legitimacy of the DEA and a series of unanticipated administrative and regulatory hurdles.
As reported in the December 2010 edition of Media Brief, two of the UK's biggest internet service providers, BT and TalkTalk, have sought judicial review of the DEA. A hearing took place in the High Court last month, with judgment expected shortly.
In light of the ongoing judicial review, the Culture, Media and Sport Committee of Parliament has extended the deadline to 6 May 2011 for making submissions concerning the Committee's review of the DEA to consider whether it is a reasonable and sufficient response to the challenges facing creative industries and individuals in digital markets.
The government has also asked Ofcom to assess the viability of provisions in the DEA enabling courts to order the blocking of websites dedicated to copyright infringement. In parallel with this, the government has established a working group, comprising rights holders, internet service providers and search engines, to discuss issues arising from website blocking and to consider alternative means of preventing websites accused of illegal filesharing.
Newspaper and magazine video on demand content may fall within scope of Authority for Television On-Demand regulation
The Authority for Television On Demand (ATVOD) has issued a determination confirming that some video on demand services offered by newspapers and magazines are subject to regulation by ATVOD. The ruling distinguishes between video content that appears as an integral part of an online newspaper, such as alongside a text based story, which will not fall within ATVOD's remit, and video content that is offered as a discrete catalogue of 'TV like' programmes, which are subject to ATVOD regulation.
In making this determination, ATVOD decided that News Group Newspapers, Times Newspapers and Hachette Filipacchi were in breach of the Communications Act 2003 for failing to notify ATVOD of their video on demand services. The three publishers have already appealed the ruling to Ofcom. If upheld, affected newspapers and magazines will have to pay annual fees to ATVOD and ensure that the regulated video content meets ATVOD rules.