U.S. Department of Transportation Releases Policy on Automated Vehicle Development

The legal treatment of driverless or autonomous cars remains a fascinating area - so this press release from NHTSA will be of interest, even if it does not directly affect our law. And you can view NHTSA's statement of policy on automated vehicles.

US: Volvo opposition to LOVOL trade mark rejected

My friend John Welch reports in his TTAB Blog that Volvo's opposition to LOVOL, for vehicles, was dismissed by the TTAB. And, I think, quite right too. Likelihood of confusion? I think not. The Board seem to have been impressed by the fact that the junior mark is a palindrome, not something I have seen feature in trade mark cases anywhere else, and that the word "volvo" comes from a dead language. As John asks,
qui cogitat?

IBC's annual conference on competition law challenges in the motor vehicle sector (25 June)

For several years now, IBC Legal Conferences' annual event in Brussels has been almost compulsory for block exemption aficionados (or should that be aficionadi? Evidently not, according to the Bloomsbury Concise English Dictionary, which came most easily to hand when I reached towards my shelf of reference books, as it comes from Spanish rather than Italian. I am however disturbed to find that its original Spanish meaning was a devotee of bull-fighting, so notwithstanding the broader sense it has acquired in English I will use it carefully in future). I have been to the conference several times - once even to speak at it, and last year to blog extensively (here, et seq) - and it is invariably excellent. Not uniformly excellent: the conference organiser who assembles a programme with no duff session is lucky indeed, but IBC maintain a generally high standard across the whole day. Details of this year's edition can be found here.

The cast is pretty consistent, too. Looking over the list of speakers for this year's event, much of it is exactly the same as last year's - and why not? If it works, don't change it. The regular speakers are all excellent, and well-informed about the subject (which is why, apart from the fact that he's a friend, I invited one of them, Joseph Vogel, to speak at this year's Motor Law conference).

This year, the programme ranges a little wider than just the block exemption (as it did last year, too). There will be a session on the global parts cartel (which Alex Haffner of SNR Denton covered at our conference in February), another on information exchanges, and one on telematics, a subject which raises some fascinating competition problems.

I will preview the conference in more detail over the coming weeks, during which the block exemption will be very much in my mind. Of course, the date of this event is close to the long-awaited day on which the new regime comes fully into operation, although dealing with implementation of the legislation isn't a key area for discussion - everyone will have that sorted out by then, one hopes. We'll be presenting our own block exemption seminar in September, but the events will be complementary - no reason not to take in both. In previous years, we have been able to offer Motor Law subscribers a 10 per cent discount, and I hope we can do so again this year.

OFT issues five infringement decisions in the distribution of Mercedes-Benz commercial vehicles investigation

The OFT has issued the decisions that we have been expecting. Press release no 30/13 of 27 March 2013  says:

The OFT today issued decisions finding that Mercedes-Benz and five of its commercial vehicles dealers infringed competition law and has imposed fines totalling over £2.8 million.
Each of the five decisions relates to separate infringements that took place over different periods between March 2007 and January 2010, involving different parties. The nature of the infringements varies but all contain at least some element of market sharing, price co-ordination or the exchange of commercially sensitive information.
These decisions follow settlements with Ciceley, Enza, Mercedes-Benz and Road Range announced in February under which these parties admitted breaching the law and agreed to pay a fine and co-operate with the OFT. Northside, which also admitted infringing competition law, has avoided a fine under the OFT's leniency policy. The remaining dealer, H&L Garages, did not settle with the OFT and the two infringements it was involved in were not therefore part of settlement.
Today's announcement brings the OFT's investigation to a conclusion. The full decisions will be published on the OFT website later this year.

So we still don't get to see the details: this is merely a formality, as far as the outside world is concerned.

Penalty clauses

A common problem in contract drafting is avoiding writing a liquidated damages clause that manages not to be a penalty. I thought the touchstone was whether it was a genuine pre-estimate of loss - an honest attempt to put a value on the damages that would be suffered if there were a breach. Not so. In Cavendish Square Holdings Ltd v El Makdessi [2012] EWHC 3582, a case on a restrictive covenant in a share sale agreement (a breach of which meant that future instalments need not be paid and the seller would have to sell the rest of the shares at a lower valuation) the High Court decided the matter on the alternative "commercial justification" test. The court held that the adjustment of consideration would reflect the loss of goodwill. The provisions were not extravagant or oppressive and the purpose was not to deter breach. The provisions had been negotiated on a level playing field (and yes, those words do appear in the judgment).

So, the commercial justification test is more flexible than the old genuine pre-estimate one, although I have a feeling that the one will often include the other - that the commercial justification for a dodgy clause is that it does represent the loss that might be suffered. But there will be cases that go the other way too: and the key element in deciding what is a penalty and what isn't must be whether it is designed to deter breach or not.

There's another point to watch out for: in the case, the consideration adjustment clause was held to be a penalty because it covered a loss which had already been compensated, by damages for breach of fiduciary duty. So make sure you don't include anything that looks like double counting!

March happenings

On 6 March, the report on the BIS consultation on implementing the consumer rights directive was published.

The deadline for implementing the late payments directive is 16 March. Legislation has already been passed and will come into effect on the day.

The end of March sees the conclusion of the Law Commissions' consultation on unfair terms and the definition of "exempt term" in consumer contracts, and its report and recommendations to government. The government will respond by the end of May. The result will feed into the Consumer Rights Bill, the government's flagship consumer protection measure.

That other block exemption

There is, of course, more than one block exemption, though in the motor industry it is possible to lose sight of all but one of them. To many people, strange as it may seem, the most important one is on technology transfer agreements - the regulation which started off, many years ago, as the patent licensing block exemption and the related (but later) know-how licensing one, which were later merged.

Now the Commission is preparing a new TT block exemption, and guidelines. It won't be very different from the old one, which expires on 30 April, but there will be a change to the key definition which sets the regulation's scope, to include agreements that containg provisions relating to the purchase of products or the assignment of other intellectual property rights, provided that these are "directly and exclusively" related to the production of the contract products.

Also, the 20 per cent market share threshold will apply to agreements between non-competitors where the licensee owns technology which it only uses for inhouse production and which is substitutable for the licensed technology.

The Commission also proposes to revise the current excluded restrictions, to catch all exclusive grant-backs.

There is much more that could be said about this - but I'm working on the assumption that readers will either not be interested enough to read more, or will have found what they need elsewhere. A topic, I think, for my IP blog instead.

Related articles

• EU opens public consultation on revised Technology Transfer Block Exemption Regulation