Register .eu before the sun sets forever
As you may be aware, from next week (December 7th), the European Registry of Internet Domain Names ("EURid") will begin to accept domain name applications from those who would like to obtain a web address that ends with '.eu'. Only persons who are established or resident in the EU may register .eu domain names.

To prevent cybersquatting, EURid is introducing a phased "sunrise" registration procedure:

For the first two months until 6th February 2006, only public bodies and owners of registered national or "community" trade marks may apply for a .eu domain name.

From 7th February 2006 and up until 6th April 2006, holders of other prior rights (e.g. company names, unregistered trade marks and trade names) may apply.

From 7th April 2006, registration becomes available to all without proof as to right of ownership.

As with all domain name registrations, EURid will act on a first-come first-served basis within each sunrise period, so it is important to act quickly. For instance, if two companies are each proprietor of the same registered trade mark, but in different EU countries or for different goods/services, the first to apply will obtain the .eu domain name - even if both companies apply during the first period.

We would therefore like to encourage you to consider now if you want to apply for a .eu registration, with a view to submitting an application as soon as possible once the relevant sunrise period has started. You can obtain further information, online at the official EURid website; www.eurid.eu. Applications have to be submitted through accredited .eu registrars, a list of which can be found on the EURid site at http://list.eurid.eu/registrars/ListRegistrars.htm?lang=en.
If you require any further advice please do not hesitate to contact Robin Bynoe or Piers Strickland on Tel 020 7203 5000

There has been exponential growth in on-line and interactive gaming recently. There is certainly gold to be found in this arena. However, legal pitfalls are proving to be hurdles for jurisdictions attempting to regulate the industry. A recent example of a potential pitfall is the European Court of Justice's (the "ECJ") preliminary ruling on the provision of cross-border gaming services within the EU.

In brief, the case involved Italian citizens, namely Mr Gambelli and 137 others who ran data transfer centres in Italy. They collected bets on sporting events on behalf of an English bookmaker Stanley International Betting Limited with which they were linked by the Internet. Stanley International operated under a bookmakers licence granted under English law.

Under Italian law a licence is also required to provide bookmaking services. This is reserved to the State or its Licensees. Breach of these betting rules result in possible criminal penalties. Mr Gambelli and the other defendants were faced with criminal proceedings for unlawfully taking bets and their data transmission centres were placed under sequestration. In response, Mr Gambelli and others claimed that the Italian legislation was contrary to the freedom of establishment and the freedom to provide services as provided for by Articles 43 and 49 of the EC Treaty. The Italian proceedings were stayed and this question was referred to the ECJ.

On 6th November 2003 the ECJ held that the Italian legislation did constitute a restriction on the freedom of establishment against non-Italian operators and the freedom to provide services. However, such restrictions may be justifiable in order to protect consumers and for the preservation of public order. In this regard, the ECJ held that it was for national courts to decide whether the restriction discriminated against non-Italian operators and if the answer was yes, they are illegal. In doing so the Italian court should have regard to specific issues including:

The Italian State was pursuing a policy of expanding betting and gaming at a national level with a view to obtaining funds whilst protecting the licences of the State.

Whether the criminal penalties were proportionate.

There have been other cases regarding cross border gaming. These include Schindler, Läärä, and Zenapti. The Gambelli decision reiterated the ECJ's ruling in these cases that restrictions can be imposed on cross border gaming to safeguard public order. However, the restrictions need to be necessary to reach the intended objective, proportionate to the objective and non-discriminatory.

It is arguable that although the restriction is contrary to the freedoms under the EC Treaty, the justifications for the restrictions will continue to allow Member States to restrict cross border gaming. However, it could equally be suggested that the Gambelli decision indicates a positive shift in the provision of gaming services across the EU. In effect, Member States may now find it hard to rely on public order justifications when they are relaxing gaming laws, particularly if they are doing so to increase state revenues.

Whether it should be construed as a "victory" for the future of cross border gaming is yet to be seen. This will depend how the ECJ's decision is construed by Member States, in particularly Italy.

If you would like further information on the above or general advice relating to Gaming please contact Jason Saiban (0207 203 5192)

OFT crackdown on on-line wine merchant (update)

Since our last email alert about Virgin Wines online, the Office of Fair Trading ("OFT") has been in action again scrutinising the online Terms and Conditions of various companies selling over the Internet. Dabs Direct and Mesh Computers are among a group of 12 sellers who have been forced to revise their Terms and Conditions in favour of consumers.

In addition, e-commerce company Micro Anvika Ltd has been under the OFT spotlight and has had to revise its consumer contracts to stay within the bounds of the Distance Selling Regulations and the Unfair Terms in Consumer Contracts Regulations. In particular, the OFT required Anvika to undertake not to:
i) exclude liability for defective or wrongly described goods by requiring consumers to inspect the goods and notify the company of faults within a very short period;
ii) exclude liability for mistakes or inaccuracies on its website;
iii) exclude or limit liability for defective software;
iv) include provisions allowing them to vary the price and specification of goods;
v ) include confusing information regarding delivery charges;
vi) unfairly restrict the consumer's right to cancel the contract.

The undertaking not to exclude liability for inaccuracies on websites is somewhat unusual. When we contacted the OFT for further clarification, we were informed that further guidance would be made available in August.

It appears that, despite the OFT's recent burst of activity, they are not finished yet as they have since announced that they are investigating approximately ten other companies that may be in breach of the various Regulations. It would appear that now is an opportune moment to be reviewing on-line terms and conditions.

If you would like further information on the above or general advice relating to the Unfair Terms in Consumer Contracts Regulations or Distance Selling Regulations please contact Jason Saiban (jasons@cr-law.co.uk).

With e-commerce revenues in the UK during January totalling £1 billion, regulatory authorities are becoming more proactive in their enforcement of the rules affecting companies who sell over the Internet. Only recently, Virgin Wines were forced to change its terms and conditions on its website after the Office of Fair Trading ('OFT') found they failed to comply with both the Distance Selling Regulations and the Unfair Terms in Consumer Contracts Regulations.

The Distance Selling Regulations ('DSR') were brought into force on 31 October 2000 to offer greater protection to consumers purchasing goods online. Various terms on the Virgin Wines website restricted refunds following cancellation or restricted methods of cancellation of the order by the consumer. These were held to breach the DSR.

The Unfair Terms in Consumer Contracts Regulations were brought into force on 1 October 1999 (replacing the 1994 Regulations). These regulations only apply to standard contract terms, such as terms and conditions on a website, and state that a consumer is not bound by such a term if it is unfair. In the case of Virgin Wines, the OFT expressed concern that a number of its standard terms were potentially unfair. These included terms which:
- permitted the supplier to cancel membership of the club without notice;
- required notification of cancellation by the consumer within seven days of placing the order, unless it arose from breakages on delivery;
- attempted to exclude/restrict liability for death or personal injury;
- excluded liability for defective or incorrectly described goods;
- excluded / restricted liability for delay;
- limited time for notification of broken or spoiled goods to 30 days from the date of delivery.

For some of these, Virgin Wines had to delete the terms altogether, although altering them to be more favourable to the consumer proved sufficient for the majority of them.

If you would like further information on compliance with the Unfair Terms in Consumer Contracts Regulations or the Distance Selling Regulations, please contact Jason Saiban (jasons@cr-law.co.uk)

It has recently been announced that one thousand UK websites spanning the public and private sectors will be investigated for their accessibility by the disabled in the first Formal Investigation of the Disability Rights Commission (“DRC”).

The websites of online service providers will be tested for basic compliance with recognised industry accessibility standards in order to see whether they meet the requirements of the Disability Discrimination Act 1995 (the “DDA”). The DDA makes it unlawful for a service provider to discriminate against a disabled person by making it impossible or unreasonably difficult for that person to make use of their service. In order to comply with the DDA the service provider must take “reasonable steps” to change its discriminating practices, policies or procedures.

There is currently no official standard as to what is meant by “reasonable steps” but it is generally accepted that the minimum accessibility guidelines produced by the World Wide Web Consortium (W3C) is the recognised industry standard that the DRC will use when investigating websites.

At this stage, it is not believed that the DRC will take any legal action against websites that do not comply with the requirements of the DDA. However, in a recent high profile case in Australia, the Sydney Olympics Organising Committee was found to have breached Australian legislation by failing to provide a website that was accessible to the blind. The complainant was awarded damages of Au$20,000. As yet, a test case has not been brought before the English Courts but it is just a matter of time.
Perhaps now will be a good time to contact your website developer.

Amazon.co.uk ("Amazon") has provided a timely reminder of a well-known occasion when Argos mistakenly advertised some of its products on-line at a far lower price than it had intended, prompting claims from its customers that it was obliged to sell the products at the lower price to those who had placed an order before the mistake was corrected. The Argos case was dropped before it got to Court but now Amazon has made a similar and potentially very costly blunder. The extremely popular e-commerce site mistakenly offered for sale Hewlett-Packard handheld PCs at a fraction of the usual retail price. Unsurprisingly, offers flooded in for the products as word of the "bargain" spread...

Nevertheless, Amazon, having rectified the mistake, is refusing to honour these orders and faces angry customers and the possibility of legal action in the UK to force it to supply the products at the advertised price.

Amazon's Conditions of Use expressly state that no contract will subsist between the customer and Amazon "unless and until Amazon.co.uk accepts your order by e-mail confirming that it has dispatched your product".

But the difficulty for Amazon is whether or not these Conditions of Use have been incorporated into the agreement with the customer and whether by an automated acknowledgement of the customer's orders, a sales contract had been formed. At the last stage of the on-line ordering process, Amazon displays a sentence stating: "By placing your order, you agree to Amazon.co.uk's privacy policy and conditions of use." Both the Privacy Policy and Conditions of Use provide links accordingly, but there is nothing to stop a customer from placing an order without accessing them first. The customer may be able to argue that it did not see the conditions as they were merely available to see via a link, and therefore it did not have a proper opportunity to read and agree them. In other words, the conditions do not form part of the agreement. The English Courts have not yet been asked to consider this argument in respect of agreements formed over the internet.

All e-commerce companies should ensure that they have adequately protected themselves against similar unfortunate mistakes. Companies should arrange the on-line sale process in a way that prevents the customer from placing an order unless it has indicated that it has read and agreed to the conditions of sale. The most effective method of achieving this is for commercial websites to provide their terms and conditions within a 'scroll-down' box with a button at the bottom stating that the potential customer has 'read, understands and agrees to the conditions of use'. After clicking this button, the customer is then directed to the part of the website where it can place its final order. It would be very difficult for a customer then to argue that it was not aware of the conditions.

Now would be a wise time for companies to review their websites.

If you require further details about the information contained in this email alert please contact Andrew Sharpe or your usual Charles Russell contact on 020 7203 5000.

Intel Corporation v Kourosh Kenneth Hamidi

An 18th century case of pig beating may not immediately spring to mind as being of particular relevance to the online community. However, the principle of 'trespass to goods or property' upon which the Court gave judgment against the abuser of his neighbour's swine in 1768, has resulted in a recent US case which has potentially serious implications for users of bulk email or unsolicited faxes.

The Defendant, Ken Hamidi, was dismissed from his employment as an engineer from Intel (the Claimant). The furious Hamidi sought revenge by unleashing a campaign of mass emailing to Intel's employees thereby disrupting the Claimant's email system. Intel sued Hamidi on the basis that its email system is private property for business purposes and therefore it was entitled to control its email system without interference or disruption. In other words, Hamidi's actions were a 'trespass to property'. The Californian Court of Appeal, in a split decision, agreed with Intel and issued an injunction preventing Hamidi from continuing his campaign.

The decision has been appealed and we await the Supreme Court of California's verdict. Clearly, although US decisions are of only persuasive authority for English Courts, the consequences of an upheld decision are significant and will give rise to some interesting implications depending on how far the principle can be applied. Consent of both employees and employers may need to be obtained by those companies who rely on marketing their business through bulk, unsolicited communications. Failure to do so may result in the sender facing legal proceedings to restrain its activities.

The Charles Russell IT/Comms team will update you with any major developments.

If you require further details about the information contained in this email alert please contact Jason Saiban or your usual Charles Russell contact on 020 7203 5000.

The Nationality, Immigration & Asylum Act received its royal ascent on 7 November 2002.

The Act contains increased obligations on employers in terms of pre-employment checks, as well as increased powers for Home Office officials and Police to require information from employers and also to enforce the immigration rules through the powers of entry, search and arrest.

Under existing immigration rules, employers are already required to see one of a number of prescribed documents (and retain at least a copy) in respect of all employees and workers as part of their pre-employment checks, in order to satisfy themselves that they have the right to live and work in the UK. Under the new Act, employers are likely to be required to see two documents of particular types and to be able to produce copies of these if required.

These additional obligations also place the focus on employers, making sure that new and existing recruits have the right to undertake the work in question in the UK for their business.

In the case of employing non-EEA workers in the IT sector, this has recently become significantly more difficult. In September 2002, the Home Office removed the IT sector from its list of shortage occupations for the purposes of work permits. The effect of this is that whilst previously, obtaining work permits for IT specialists was relatively straightforward, if a work permit is required now, an employer will generally have to conduct a recruitment search in order to be able to show that the vacancy could not be filled from the resident labour market. As with other applications with this requirement, it is still possible to ask the Home Office to waive the recruitment search requirement but this is a matter of discretion and is difficult to persuade the Home Office to do.

A risk area for immigration purposes for employers in the IT sector is the prevalence of contractors, who may be regarded as self-employed, with the prospect that this may avoid the need for a work permit or free the employer up from potential immigration risks. However, this is not the case. In the absence of any other right under the immigration rules to undertake work, such engagements would need a work permit.

With effect from 23 July 2002, the Home Office also changed the rules on asylum seekers working in the UK and from this date, asylum seekers who had not already applied or qualified for the right to work, will not be granted the right to work. The impact of this has not been as significant on the IT sector as it has been for other sectors but it is another avenue being closed off.

These changes, particularly to the occupation shortage list, force IT businesses who use, and in a lot of cases rely upon, skilled overseas workers, to look to other means to bring such individuals to the UK. It is also important for employers and individuals to avoid the temptation to cut corners on matters of immigration, in an attempt to overcome the difficulties in getting a work permit, due to the forthcoming increased powers of enforcement.

For further information, please contact Michael Bradshaw via our immigration enquiry address immigration@cr-law.co.uk