This Directive was implemented in the UK by the Consumer Protection (Distance Selling) Regulations 2000 (the “Distance Selling Regulations”), which came into force on 31 October 2000.  The Regulations were subsequently amended by the Consumer Protection (Distance Selling) (Amendments) Regulations in 2005.

The Distance Selling Regulations apply to most contracts between suppliers and consumers made via a website for the supply of goods and services.  See Distance Selling Regulations: disclosures for the exceptions.

The rules dealing with a consumer’s right to cancel are covered by Regulations 10 to 13.

The right to cancel

Regulation 10 gives the consumer a right to cancel a distance contract, provided the consumer gives a notice of the cancellation in writing to the supplier within the cancellation period.  Once this notice is given, the contract is treated as if it had never been made. Hand delivery, postal delivery, facsimile or email are all acceptable modes of delivering a cancellation notice.

Informational requirements

Pursuant to Regulations 7 and 8, the supplier must “provide to the consumer in writing, or in another durable medium which is available and accessible to the consumer” certain information, which includes “the existence of a right of cancellation except in the cases referred to in Regulation 13” (referred to in this post as the “cancellation information”).

See Distance Selling Regulations: disclosures for full details of the cancellation information.

Factors affecting the length of the cancellation period

The length of the cancellation period is determined by:

whether and when the supplier provides the cancellation information; and
whether the contract is for the supply of goods or the supply of services.

Cancellation period in contracts for the supply of goods

“The cancellation period in case of contracts for the supply of goods begins with the day on which the contract is concluded” (Regulation 11(1)), and the end date depends upon the circumstances.

The cancellation information should be provided “(a) prior to the conclusion of the contract, or (b) thereafter, in good time and in any event … at the latest at the time of delivery where goods not for delivery to third parties are concerned” (Regulation 8(1)).

There are 3 main scenarios.

Scenario 1:

In scenario 1, where the supplier provides the cancellation information in time, then “the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the goods” (Regulation 11(2)).

So, where an e-commerce website has properly drafted T&Cs of sale and accordingly provides the proper information, the consumer will have a 7 working day cancellation period from the time of the delivery of the goods.

Scenario 2:

Scenario 2 covers the situation where the supplier fails to supply the cancellation information in good time (see above), but does provide the cancellation information “within the period of three months beginning with the day after the day on which the consumer receives the goods”.

In this case, “the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information” (Regulation 11(3)).

Scenario 3:

The last scenario applies where the supplier has not provided the consumer with the cancellation information at all.

In this case “the cancellation period ends on the expiry of the period of three months and seven working days beginning with the day after the day on which the consumer receives the goods.” (Regulation 11(4)).

In other words, even if the consumer has not been advised about his or her right to cancel, the cancellation period expires after three months and 7 working days following the receipt of the goods.

Cancellation period in contracts for the supply of services

The applicable cancellation period for contracts for the supply of services is very similar to that for the supply of goods, and is governed by Regulation 12.

Here, the cancellation information should be provided “(a) prior to the conclusion of the contract, or (b) thereafter, in good time and in any event … during the performance of the contract…” (Regulation 8(1)).

The main difference in the calculation of the cancellation period in the case of a contract for services is that the cancellation period may come to an abrupt end if the provision of the services has commenced, or alternatively if the services have been completed.

Scenario 1

In scenario 1, where the supplier provides the cancellation information “on or before the day on which the contract is concluded … the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the contract is concluded” (Regulation 12(2)).

However, “unless the parties have agreed otherwise, the consumer will not have the right to cancel the contract by giving notice of cancellation … in respect of contracts … for the supply of services if the performance of the contract has begun with the the consumer’s agreement – before the end of the cancellation period referred to in Regulation 12(2); and after the supplier has provided … [the cancellation information]” (Regulation 13(1)(a)).

Scenario 2

In scenario 2, where the supplier provides the cancellation information to the consumer “within the period of three months beginning with the day after the day on which the contract is concluded, the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information.” (Regulation 12(3)).

Note that Regulation 13(1)(a) may also apply here, where performance of the contract begins after the provision of the cancellation information.

Alternatively, under Regulation 12(3A), “where the performance of the contract has begun with the consumer’s agreement before the expiry of the period of seven working days beginning with the day after the day on which the contract was concluded and the supplier has not … [supplied the cancellation information] … on or before the day on which performance began, but provides to the consumer … [the cancellation information] … in good time during the performance of the contract, the cancellation period ends - (a) on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information; or (b) if the performance of the contract is completed before the expiry of the period referred to in sub-paragraph (a), on the day when the performance of the contract is completed.”  This means that the consumer has a cancellation period of 7 working days from the time the consumer receives the cancellation information, unless the provision of the services has started with the agreement of the customer.  In that case, the cancellation period ends within 7 days of the consumer receiving the information, or when the contract has been performed.

Scenario 3

In scenario 3, where the supplier does not provide the consumer with the cancellation information at all, and the provision of the services has not yet begun, “the cancellation period ends on the expiry of the period of three months and seven working days beginning with the day after the day on which the contract is concluded.” (Regulation 12(4)).

Other exceptions to the right to cancel

The exceptions to the right to cancel are governed by Regulation 13.  (Note that I have dealt with Regulation 13(1)(a) above, and so will ignore this provision for the purposes of this section.)

Under Regulation 13(1), “unless the parties have otherwise agreed”, the consumer will also not have the right to cancel “in respect of contracts:

(b) for the supply of goods or services the price of which is dependent on fluctuations in the financial market which cannot be controlled by the supplier;

(c) for the supply of goods made to the consumer’s specifications or clearly personalised or which by reason of their nature cannot be returned or are liable to deteriorate or expire rapidly;

(d) for the supply of audio or video recordings or computer software if they are unsealed by the consumer;

(e) for the supply of newspapers, periodicals or magazines; or

(f) for gaming, betting or lottery services.”

Other information

Where the right to cancel exists, the supplier must also advise the consumer, if the consumer needs to return the goods to the supplier (Regulation 8(2)(b)(i)), and who is to be responsible for the cost of returning the goods to the consumer (Regulation 8(2)(b)(ii)).

The paid advertisements appear where an advertiser has bid on keywords relating to the search terms - i.e. has agreed to pay Google in respect of user clicks resulting from the appearance of the advertisement in search engine results pages relating to those keywords.  This is a form of “pay-per-click” advertising.

Where an advertiser uses keywords that are identical or similar to another company’s trade marks, there is an obvious risk of conflict.  The question is: can a trade mark owner use its trade marks to prevent this (arguably unfair) form of competition?

European national courts

There have been a number of cases in Europe dealing with the issue of trade marks being used as keywords without authorisation, but the national courts have not yet arrived at a clear  position.

In the words of Mr Justice Arnold, “given that both European trade mark law, and European law with regard to the liability of internet service providers are substantially harmonised … there ought to be a common set of European answers to the issues that arise in such cases.” (Interflora Inc. Interflora British Unit v Marks and Spencer Plc Flowers Direct Online Limited ([2009] EWHC 1095 (Ch)).  Accordingly, several cases have resulted in references to the ECJ.

In the German Bananabay case (I ZR 125/07), both the claimant and defendant were sellers of adult entertainment products. The claimant was the owner of the registered trade mark BANANABAY, and wanted to stop the defendant from using the mark as an AdWords keyword. The German Federal Supreme Court (the Bundesgerichtshof) decided that it needed to be clarified whether “use as a trade mark” includes the use by a Google (not a party to the proceedings) of the trade mark as an Adwords keyword.  Accordingly, the question was referred to the ECJ.

In the UK, Interflora is attempting to stop Marks and Spencer using “Interflora” as a keyword. M&S argues that its use of the keyword is not “use in trade”, and that there is no confusion between the two flower services.  As part of his decision to refer this case to the ECJ, Justice Arnold noted that Google’s policy (and presumably its legal advice) in the UK and Ireland is different to its policy elsewhere in Europe.

In France, three companies are seeking to prevent Google from selling their trade marks as AdWords (C-236/08 Google France, Google Inc. v Louis Vuitton Malletier,  C237/08 Viaticum Luteciel, and C-238/08 CNRRH Pierre Alexis Thonet, Bruno Raboin, Tiger, a franchisee of Unicis). These cases are different from Bananabay and Interflora, in that the defendant is Google, not the advertiser.  In the reference to the ECJ, the three French cases have been combined.

European Court of Justice: the Advocate General’s Opinion

Where questions are referred to the ECJ, the Advocate General provides an opinion on those questions, which the ECJ will consider before its ruling. The Advocate General’s opinion on the questions referred by the French court is the first to become available.

The three references from the French court before the ECJ all pose, in the Advocate General’s  words, the same question: “does the use by Google, in its AdWords advertising system, of keywords corresponding to trade marks constitute an infringement of those trade marks? Although the references are formulated somewhat differently, they all ask for an interpretation of Article 5(1) of Directive 89/104 and therefore concern that basic question of whether Google has committed a trade mark infringement”.

The Advocate General states that Google should not be held liable for infringement when allowing advertisers to use another party’s trade mark as an AdWord, because no product is actually being sold to the general public at the time when the keyword is selected.  He argues that “the use is limited to a selection procedure which is internal to AdWords and concerns only Google and the advertisers.” Accordingly, the Advocate General suggests that trade mark owners should not be allowed to prevent the use by Google of their trade marks as keywords.

In answering the question whether the use of a trade mark as a key word affects the essential function of the mark, because of a likelihood of confusion on the part of the public, the Advocate General finds that Google is a tool that establishes a link between keywords corresponding to trade marks and natural results, but this link alone is not sufficient to establish confusion, because “internet users only decide on the origin of the goods or services offered on the sites by reading their description and, ultimately, by leaving Google and entering those sites”. He states that “neither the display of ads nor the display of natural results in response to keywords which correspond to trade marks leads to a risk of confusion as to the origin of goods and services”, and that “neither AdWords nor Google’s search engine affects or is in danger of affecting the essential function of the trade mark”.

The Advocate General also does not think that Google’s use of keywords takes an unfair advantage of, or is detrimental to the distinctive character of a trade mark; because, while trade marks enjoy various types of protection, which are “linked to the promotion and innovation of investment”, this protection is never absolute, and must be balanced against other interests, such as freedom of expression and freedom of commerce. He continues by stating that Google’s uses of key words which correspond to trade marks are “independent of the use of the trade mark in the ads displayed and on the sites advertised in AdWords; they are limited to conveying that information to the consumer”.

He concludes by saying that “if trade mark proprietors were to be allowed to prevent those uses on the basis of trade mark protection, they would establish an absolute right of control over the use of their trade marks as keywords. Such an absolute right of control would cover, de facto, whatever could be shown and said in cyberspace with respect to the good or service associated with the trade mark”.

The Advocate General’s opinion is followed in approximately 80% of cases.

There are two basic documents governing Nominet’s Dispute Resolution Service (DRS): the Policy and the Procedure.  The DRS Policy sets out the substantive grounds upon which a complaint may be made; whereas the DRS Procedure governs the procedural aspects of the Nominet DRS.

This note is a brief summarise the DRS Procedure (and unless otherwise stated, all paragraph references below are to the paragraphs of the DRS Procedure).

If you are the complainant

Any person or legal entity is entitled to make a complaint.

You may make a complaint jointly with other persons, as long as one of you is specified as the ‘lead complainant’.  At the time of making the complaint you must also specify which of the complainants is to become the sole registrant of the disputed domain name.

You must submit your complaint electronically, but it may be necessary to send some information as hard copy.  You need to set up an account with Nominet, in order to file a complaint. See the Nominet website for specific details on e-filing (paragraph 24).

Your complaint musn’t exceed 5000 words, and you must specify the registered domain name that is the subject of the dispute, as well as the similar or identical name you want to assert your rights in.  In preparing the complaint, you should close attention to the DRS Policy, which sets out exactly what you will need to prove.

Once Nominet has received the complaint, it will check that it complies with all the formal requirements, and if it does not, you will have 3 days to make any required corrections (paragraph 4).  Nominet will then forward the complaint to the respondent, who will have 15 days to file a response (paragraph 5).  You then have a right to reply to this response, which must be restricted solely to new matters the respondent has raised, and that you have not raised in the original complaint (paragraph 6).

If the respondent does not file a response, you are entitled to apply for a summary decision (paragraph 5).

If you are the respondent

If you have been notified that a complaint has been filed against your registered domain name, you have 15 days to file a response.  You must submit this response to Nominet electronically, but it may be necessary to send some information as hard copy.  See the Nominet website for specific details on e-filing (paragraph 24).

Your response musn’t exceed 5000 and you must specify the grounds that you rely on in your defence (see, in particular, paragraph 4 of the DRS policy).  The specific formal and procedural  requirements concerning the response are set out in paragraph 5 of the Procedure.

You don’t have to file a response, in which case the complainant is entitled to apply for a summary decision.  If the nominated expert in that case grants the complainant’s application, your registration of the domain name will be transferred to the complainant.

The post-filing procedure

Once the complaint, the response, and reply to the response, if any, have been received, Nominet will commence informal mediation between the complainant and the respondent (paragraph 7).  All information discussed during this mediation is treated as confidential.

If no resolution is reached, the complainant has the option of paying a fee and having an expert nominated by Nominet, who will make a decision in this case.  If the complainant does not pay this fee, Nominet will consider the complaint to be withdrawn, unless the respondent chooses the pay for the expert (paragraph 8).

The expert may request further statements from the complainant or the respondent (paragraph 13).  No in-person hearings will be conducted, unless the expert determines it to be necessary (paragraph 14).  The expert will base his decision on the parties’ submissions, but there may be cases where the expert wishes to rely on other relevant information which is not in the case papers, in which case he will inform the complainant and respondent, and invite them to make additional submissions (paragraph 16).

Once the expert has reached a decision, he will communicate it to the complainant and respondent (paragraph 17), and either party has the right to appeal the decision (paragraph 18).  If the complainant and respondent reach an approved settlement during the proceedings, Nominet will terminate the DRS proceedings (paragraph 19).

See my most on “Dealing with defamatory posts on your website or blog” for background.

Section 1(1) of the Defamation Act 1996 provides:

“In defamation proceedings a person has a defence if he shows that— (a) he was not the author, editor or publisher of the statement complained of, (b) he took reasonable care in relation to its publication, and (c) he did not know, and had no reason to believe, that what he did caused or contributed to the publication of a defamatory statement.”

When the owner of a website hosting user-generated content is accused of publishing a libel contained in such content, Section 1 is usually the first point of call.

Authors, editors and publishers

The first point to check is whether the defendant or potential defendant is an author, editor or publisher.  These terms are given a special meaning in Section 1(2):

• “author” means the originator of the statement, but does not include a person who did not intend that his statement be published at all;

• “editor” means a person having editorial or equivalent responsibility for the content of the statement or the decision to publish it; and

• “publisher” means a commercial publisher, that is, a person whose business is issuing material to the public, or a section of the public, who issues material containing the statement in the course of that business.

Notwithstanding these definitions, there are some categories of person who will never be considered an author, editor or publisher.  Of particular interest to website owners are Sections 1(3)(c) and (1)(3)(e) of the Act:

“A person shall not be considered the author, editor or publisher of a statement if he is only involved— … (c) in processing, making copies of, distributing or selling any electronic medium in or on which the statement is recorded, or in operating or providing any equipment, system or service by means of which the statement is retrieved, copied, distributed or made available in electronic form; … (e) as the operator of or provider of access to a communications system by means of which the statement is transmitted, or made available, by a person over whom he has no effective control.”

In a case not within paragraphs (a) to (e) the court may have regard to those provisions by way of analogy in deciding whether a person is to be considered the author, editor or publisher of a statement.”

Reasonable care and knowledge/belief

In addition to not being an author, editor or publisher, a person wishing to rely upon the Section 1 defence must show that he or she (or it) took reasonable care in relation to the publication, and did not did not know, and had no reason to believe, that what he or she (or it) did caused or contributed to the publication of a defamatory statement.

In this connection, Section 1(5) provides:

“In determining for the purposes of this section whether a person took reasonable care, or had reason to believe that what he did caused or contributed to the publication of a defamatory statement, regard shall be had to— (a) the extent of his responsibility for the content of the statement or the decision to publish it, (b) the nature or circumstances of the publication, and (c) the previous conduct or character of the author, editor or publisher.”

Analysis

Section 1 leaves web publishers in an dilemma.  They must show they took reasonable care in relation to a publication.  However, in some circumstances reasonable care may require prior review: and prior review may lead to the web publisher being considered to be an “editor” and therefore not entitled to take advantage of the defence.

In circumstances where reasonable care does not require prior review etc of user content (assuming there are such circumstances!) a defendant should have a better chance of being able to rely upon this defence in relation to user-generated content if:

• the defendant does not engage in prior review, or prior editing, of the user generated content;

• the website expressly disclaims responsibility for the content on the part of the defendant;

• the website includes a procedure whereby defamatory material can be notified to the defendant ex post facto for deletion where appropriate;

• as the defendant becomes aware of potentially defamatory content, that content is quickly removed.

Private international law (also known as conflict of laws) is the legal subject concerned with jurisdictional questions – i.e. questions of where court proceedings may be brought.

Private international law is international inasmuch as it is concerned with cross-border legal disputes, but – because there are no real private international courts – it must be considered from particular national perspectives.

This post is intended to introduce some of the issues of private international law in the context of internet contracts from the perspective of English law.  It is not intended to be comprehensive: it does not consider the perspectives of other countries’ courts; and it does not consider other causes of action (e.g. tort).  Indeed, because of the complexity of the law in this area, it only touches upon the main issues of English private international law relating to disputes about online contracts.  If you need specific advice on this subject, you should always speak to a suitably qualified lawyer.

The question of where court proceedings are brought is conceptually distinct from the questions of governing law (see Internet contracts and applicable law) and the enforcement of a judgment issuing from court proceedings.  In other words, proceedings may in principle be brought in one jurisdiction and a judgment issuing from those proceedings may be enforced in another.

Sources of law

The main sources of English law on this subject:

• Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (aka the Brussels Regulation).
• The Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
• English common law.
• The Civil Procedure Rules.

Applicability

The rules that the English courts will apply in considering questions of jurisdiction in relation to a contractual dispute depend upon the domicile of the defendant.

• Contractual disputes involving a defendant domiciled in the EU will be subject to the Brussels Regulation.
• Contractual disputes involving a defendant domiciled in the EFTA (excluding Lichtenstein) will be subject to the Lugano Convention.
• Contractual disputes involving other defendants will be subject to the rules of English common law.

Default jurisdiction under the Regulation and Convention

Where the Brussels Regulation or the Lugano Convention applies, then the defendant may usually only be sued in: (a) the courts of his domicile; or (b) in the courts of the place of performance of the obligation in question (presumed to be the place or intended place of the delivery of goods or the supply of services in a contracting state).

There are however a number of exceptions to this general rule, including where:

• the dispute is subject to a contractual jurisdiction clause;
• the dispute concerns a contract classes as a consumer, insurance or employment contract.

I consider contractual jurisdiction clauses below; such clauses aside, the most important exception relates to consumers.

Under the Regulation and Convention a consumer contract is subject to special rules where:

“(a) it is a contract for the sale of goods on instalment credit terms; or

(b) it is a contract for a loan repayable by instalments, or for any other form of credit, made to finance the sale of goods; or

(c) in all other cases, the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer’s domicile or, by any means, directs such activities to that Member State or to several States including that Member State, and the contract falls within the scope of such activities.” (Article 15(1), Brussels Regulation; there is a parallel provision in the Lugano Convention).

Irrespective of contractual jurisdiction clauses, consumers under such contracts can sue, and can only be sued, in the state of their domicile (generally speaking).

But when does a person pursue “commercial or professional activities” in a particular Member State?  When does a person by “any means” direct “commercial or professional activities” to a Member State or to “several States including that Member State”?  The answers to these questions are not at all clear.

A website published by a UK publisher in Italian and advertised in Italian media selling goods in Euros may obviously be considered to be directed at Italy.  On the other hand, a website published by an Italian publisher in Italian and not marketed in any way in the UK selling goods in Euros would probably not be considered to be directed at the UK.  (Note, however, that there are different interpretations of Article 15.)

Ways to reduce the risk of becoming subject, under the Regulation or Convention, to the jurisdiction of a particular country’s courts, may include: using national flags to indicate to whom a website is directed; limiting the currencies and languages used on a website; and using technical filtering to prevent consumers in the relevant jurisdiction from using the website or purchasing the products and services offered on the website.

Common law

Where an English claimant wants to bring proceedings against a person domiciled overseas in a non-EU, non-EFTA jurisdiction, the usual method is to obtain permission to serve proceedings out of the jurisdiction (there are other ways).

In order to obtain permission to serve out, the claimant wishing to bring proceedings for breach of contract will need show, first, that the claim is permissible under the Civil Procedure Rules.  Rule 6.20(5) provides:

“…a claim form may be served out of the jurisdiction with the permission of the court if … a claim is made in respect of a contract where the contract –

(5) (a) was made within the jurisdiction; (b) was made by or through an agent trading or residing within the jurisdiction; (c) is governed by English law; or (d) contains a term to the effect that the court shall have jurisdiction to determine any claim in respect of the contract.

(6) a claim is made in respect of a breach of contract committed within the jurisdiction.”

Many contractual claims will be able to surmount this hurdle.  In an internet context, of course, the questions of where a contract was made, and where it was breached, may be contentious.

Second, the claimant will have to show that England and Wales is the proper place to bring the claim (i.e. the forum conveniens).  This involves balancing the suitability of England and Wales against the suitability of the other potential forum or forums.  Consequently, the English courts will usually have more discretion to refuse jurisdiction in the case of a defendant domiciled outside Europe.

Choice of jurisdiction

In a contractual dispute it is common for the parties to have elected for disputes to be subject to the jurisdiction of the courts of a particular state.

The parties to a B2B contract are generally free to choose in which jurisdiction a dispute may be litigated (although there are a few exceptions).

Where the Brussels Regulation or Lugano Convention applies, consumer contracts (as defined in the Regulation and the Convention) are different.  Under the Regulation and the Convention, jurisdiction clauses can only add to consumers’ rights to litigate, not subtract from them.  So, if a consumer has a right to bring proceedings against a supplier under the rules discussed above, that right cannot be removed by means of a contractual jurisdiction clause.  Similarly, where a supplier is obliged to bring proceedings against a consumer in the consumer’s jurisdiction of domicile, then that obligation cannot be altered by a choice of jurisdiction clause.