Law: The Right Side of the Law
Being alive to the laws that govern marketing and knowing when to seek assistance is vital, writes Jane Bainbridge.
As the regulations governing advertising and marketing proliferate, so a 'chat with the lawyers' is becoming a more frequent occurrence for marketers. Numerous areas of their day-to-day work now require, with some degree of regularity, legal and contractual advice, and a few will inevitably find themselves immersed in court proceedings.
With so many changes taking place, and at such a rapid rate, marketers and advertisers cannot risk being ignorant of the latest regulations and the way in which they apply to their industry. Whatever the area requiring legal attention, the one thing on which all lawyers agree is that the earlier their advice is sought, the less costly it is likely to be in the long run and the smoother the product launch, advertising campaign or design process will be.
Detailed below are the five areas in which marketers are liable to encounter legal problems. Listed in the tables are the top law firms specialising in each, based on the Legal 500 list. This is an annual directory sent to buyers of legal services, either at FTSE listed firms or big privately owned companies, as well as the legal community. The law firms are ranked on the basis of reputation as determined by talking to clients, lawyers themselves (to obtain peer opinions), banks and financial institutions.
The issues surrounding advertising are often attached to comparative campaigns, but one of the most high-profile disputes in recent years centred on unauthorised use of a character. In 2003, the launch campaign for directory enquiries service 118 118 featured a man dressed in the style of a runner from the 70s. David Bedford, a former athlete whose career was at its peak in that decade, complained to Ofcom that the company had caricatured him without his consent.
'Bedford threatened legal proceedings and complained to the regulatory authorities,' recalls Dominic Farnsworth, a rights lawyer at Lewis Silkin, which advised WCRS, the agency behind the campaign, on the case. 'If an ad in the UK features an image or likeness of a living individual, the advertiser needs the consent of that person. Bedford argued that his consent should have been obtained; it hadn't been.'
Ofcom upheld the complaint and ruled that 118 118 had breached the Advertising Standards Code. However, it did not ban the company from
using the character, because Bedford had delayed making his complaint.
'If people aren't happy with the advertising content, they can go to court, but that is the stressful, costly route. Alternatively, they can go to the regulatory bodies (the Advertising Standards Authority or Ofcom),' says Farnsworth. 'No damages are paid on regulatory complaints, so Bedford received none. A regulatory complaint doesn't cost much and you don't get hit with costs if you are unsuccessful, so it's the lower-risk route.'
One of the most oft-cited legal cases within marketing concerns 3's use of rival mobile operator O2's trademark 'bubbles' in a campaign for its ThreePay service. The dispute not only offers a case study in the rules surrounding comparative advertising, but also involves the issue of intellectual property.
'Comparative advertising has a set of regulations and laws that overlaps with trademark law,' explains Simon Chapman, a partner at intellectual property and technology dispute resolution group Field Fisher Waterhouse. 'O2 had registered its brands as well as its bubbles. 3's ads comparing its prices with those of O2 used the bubbles. O2 argued that by using this secondary branding, 3 had gone too far. Comparative advertising is an area where a brand can use a rival's trademark as long as it sticks within the rules. These include ensuring the ads do not cause confusion or discredit the trademark provider.'
In March this year, the High Court rejected O2's complaints after 3 and its lawyers, Lewis Silkin, successfully argued that its advertising would not cause any such confusion. O2 is appealing against the ruling, which should be heard in the Court of Appeal this month.
Trademark portfolio management
The interface between trademark professionals and marketers is unique, according to Darren Olivier, a partner at Field Fisher Waterhouse. 'While marketers tend to create slogans and brands, it is up to the trademark professionals to register and protect them,' he says.
One company facing up to the issues of trademark portfolio management is Google. The brand's enormous success has led to its name becoming synonymous with a generic term used to describe searching the internet. It is not alone; Hoover and Walkman have suffered similar fates before.
'Although arguably a success for its marketers, if Google becomes a dictionary term with a descriptive meaning, it could end up eroding the brand's exclusivity to its very valuable trademark. For example, the public may begin using the expression 'we use Yahoo! to google',' says Olivier.
He adds that while it is possible to put measures in place to reverse the process, it requires constant monitoring and action, often over a number of years and with no guarantee of success. This might include writing to dictionaries to ensure they use it as a proprietary name, proper marking of the product with (R) to communicate to the public that it is the property of the owner, and even ad campaigns explaining it overtly.
When insurance company AIG signed a pounds 56m, four-year shirt-sponsorship deal with Manchester United, it was the biggest such agreement ever struck for a UK football club.
'One of the most important things from a marketing point of view is to see what a particular sponsor is looking to get out of the sponsorship,' says Andrew Price, head of the sport business group at lawyers Addleshaw Goddard, which handled the tie-up. 'AIG wanted to build its brand profile in Asia. Although it is a US company sponsoring an English club, it made sense because Manchester United has strong support in Asia.'
While Price says there are no standard contracts, there are precedents. For example, there are usually issues of exclusivity, as companies want to ensure no competitors can encroach on the territory of the rights being bought.
'Sport is more complex, particularly because sponsors need to be aware of clutter,' adds Price. 'A brand may sponsor a club, but the team will play in a range of tournaments and players will have their own deals.'
Patents are a complex legal area and one most relevant to technology or pharmaceuticals brands. There is, however, no shortage of specialist advisers on hand to assist, with a plethora of firms dealing solely in buying patents and chasing companies to collect royalties if a patent is infringed.
One such case involved Research in Motion and T-Mobile, owners of the Blackberry technology. Inpro, which is based in Luxembourg and holds, licenses and litigates patents, claimed the Blackberry system infringed a patent that it held.
'Inpro sued T-Mobile in Germany and the process was started in the UK,' says Peter Brownlow, a partner at Bird & Bird, which acted for T-Mobile in the UK. 'The patent related to the method of browsing the internet via a handheld device. Research in Motion and T-Mobile counterclaimed to invalidate the patent. The judgment in the UK and Germany was that the patent was invalid, but Inpro is appealing.'
FACT FILE - TOP ADVERTISING AND MARKETING LAW FIRMS Billing yr Yr/yr Profit Prof. per Nat'l fee to Sep 06 % chng (pounds equity earners (pounds m) m) partner (pounds (pounds) m) Lewis Silkin 23.0 13 5.2 236,000 129 Osborne Clarke 74.1 11 22.7 420,000 366 Addleshaw Goddard 161.2 16 51.8 471,000 784 Hammonds 132.6 4 31.2 328,000 535 Macfarlanes 92.0 23 43.3 940,000 274 Swan Turton n/a n/a n/a n/a n/a Taylor Wessing 142.4 12 51.5 387,000 323 Baker & McKenzie n/a n/a n/a n/a 392 CMS Cameron McKenna 181.3 11 62.2 478,000 601 DLA Piper 366.7 14 81.7 605,000 1427 Field Fisher Waterhouse 60.0 15 18.8 482,000 288 Harbottle & Lewis n/a n/a n/a n/a 80* Lovells 396.0 8 132.7 572,000 703 Wragge & Co 101.3 14 41.0 394,000 596 NOTE: There are no figures for Swan Turton or Harbottle & Lewis as they do not appear in Legal Business' top 100 law firms. This is because the tables are based on annual billings and the billings of these firms fall outside the top 100. Baker & McKenzie does not appear as its headquarters is based in the US. *Turnover pounds 15.4m, total profit pounds 4.6m, profits per equity partner pounds 212,124 FACT FILE - TOP INTELLECTUAL PROPERTY LAW FIRMS Billing yr Yr/yr Profit Prof. per Nat'l fee to Sep 06 % chng (pounds equity earners (pounds m) m) partner (pounds (pounds) m) Bird & Bird 96.7 20 22.7 413,00 182 Bristows 20.1 6 6.4 246,000 108 Taylor Wessing 142.4 12 51.5 387,000 323 Rouse Legal (formerly n/a n/a n/a n/a n/a Willoughby & Partners) Ashurst 214.0 6 87.6 701,000 531 Baker & McKenzie n/a n/a n/a n/a 392 DLA Piper 366.7 14 81.7 605,000 1427 Herbert Smith 296.0 12 101.0 842,000 829 Linklaters 935.0 16 350.5 1,062,000 1086 Lovells 396.0 8 132.7 572,000 703 Olswang 77.7 21 23.9 531,000 323 Simmons & Simmons 227.0 16 68.0 466,000 433 NOTE: Rouse Legal does not appear in Legal Business' top 100 law firms. This is because the tables are based on annual billings and the billings of this firm falls outside the top 100. Baker & McKenzie does not appear as its headquarters is based in the US. FACT FILE - TOP TRADEMARK PORTFOLIO MANAGEMENT LAW FIRMS Billing yr Yr/yr Profit Prof. per Nat'l fee to Sep 06 % chng (pounds equity earners (pounds m) m) partner (pounds (pounds) m) Field Fisher Waterhouse 60.0 15 18.8 482,000 288 Baker & McKenzie n/a n/a n/a n/a 392 Bristows 20.1 6 6.4 246,000 108 Clifford Chance 1030.0 13 812.7 810,000 1265 Dechert n/a n/a n/a n/a 174 Linklaters 935.0 16 350.5 1,062,000 1086 Simmons & Simmons 227.0 16 68.0 466,000 433 SJ Berwin 155.0 27 59.0 711,000 447 Rouse Legal (formerly n/a n/a n/a n/a n/a Willoughby & Partners) NOTE: Rouse Legal does not appear in Legal Business' top 100 law firms. This is because the tables are based on annual billings and its billings fall outside the top 100. Baker & McKenzie and Dechart do not appear as their headquarters are based in the US. FACT FILE - TOP SPONSORSHIP LAW FIRMS Billing yr Yr/yr Profit Prof. per Nat'l fee to Sep 06 % chng (pounds equity earners (pounds m) m) partner (pounds (pounds) m) Addleshaw Goddard 161.2 16 51.8 471,000 288 Bird & Bird 96.7 20 22.7 413,000 182 Farrer & Co 30.1 8 6.6 347,000 145 Hammonds 132.6 4 31.2 328,00 535 Osborne Clark 74.1 11 22.7 420,000 366 DLA Piper 366.7 14 81.7 605,000 1427 Harbottle & Lewis n/a n/a n/a n/a 80* Macfarlanes 92.0 23 43.3 940,000 274 NOTE: Harbottle & Lewis does not appear in Legal Business' top 100 law firms. This is because the tables are based on annual billings and its billings fall outside the top 100. Note: The patent attorneys are not included in the Legal Business earnings report as they are not technically law firms. The source for the earning and profits figures is Legal Business magazine and the table rankings and analysis are from The Legal 500. *Turnover pounds 15.4m, total profit pounds 4.6m, profits per equity partner pounds 212,124
The client research undertaken for The Legal 500 has two main threads, involving both qualitative and quantitative analysis. As well as contacting clients referred by law firms to verify submissions, the findings are benchmarked against a representative sample of the UK's leading companies.
In-depth interviews with more than 3000 clients are undertaken and the team has regular contact with commerce and industry throughout the year as part of its research. These interviews are based on a standard-form questionnaire. However, there are also supplementary questions and more wide-ranging conversations about specific law firms and key issues. They are conducted by experienced journalists and researchers.
Each year firms and chambers nationwide are invited to provide information on their specialist areas of practice, and specific details of work undertaken in the preceding year are requested.
Interviews are conducted in person or by telephone with specialist lawyers in each subject area. Chief executives, managing and senior partners of law firms, and senior clerks and practice managers of barristers' chambers are also interviewed on strategy.…
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Publication information: Article title: Law: The Right Side of the Law. Contributors: Not available. Magazine title: Marketing. Publication date: October 4, 2006. Page number: 31. © 2003 Haymarket Business Publications Ltd. COPYRIGHT 2006 Gale Group.
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