Wednesday, 28 March 2018

What is the Law in Your Life?

5 Things you need to know about 3rd Party Rights:

1.    Scots law has always provided for third parties to be able to enforce contractual rights between others. This was called ius quaesitum tertio (“IQT").

2.    IQT was quite complex and difficult to identify and enforce on occasion –especially with regard to IQT created by implication.

3.   This has changed following the coming into force of The Contract (Third Party Rights) (Scotland) Act 2017 on 26 February 2018. This brings Scots law in line with English law.

4.   The new statutory framework replaces IQT and applies to all contracts entered on or after 26 February 2018. The Act does not have retrospective effect and does not affect existing contracts.

5.    There are specific conditions that have to be met for a third party right to be created under the Act. The parties to a contract may exclude third party rights by adding a clause to that effect in relevant contractual documents.

Wednesday, 3 January 2018

What is a distinctive shape?

For some years now it has been possible to apply for registration of 3D shapes as trademarks. The court battle between NestlĂ© and Cadbury over whether the 4-fingered KitKat bar could be registered as a 3D trademark illustrates some of the difficulties. 

The 5 key points:

1.    NestlĂ© applied to register their 4-fingered chocolate bar as a 3D trademark. Cadbury objected claiming that it lacked essential distinctive character.

2.    The case progressed to the Courts with judgment in favour of Cadbury. Nestle appealed.

3.   The Court of Appeal in England held that the shape lacked distinctiveness which would allow a third party to rely on it as an indicator of origin – i.e. that it would clearly be seen as having emanated from Nestle. In other words, it was not a “badge of origin”.

4.   While there have been successful applications for registration e.g. the Coca-Cola bottle shape, the courts have been reluctant to agree that there is essential distinctiveness without the manufacturer’s name or brand being embossed on it - as is the case with the KitKat 4-fingered bar.

5.    This case reinforces the need for care to be taken when creating new product design if reliance is to be had on 3D shapes. Trademark law is there to protect brands and trade names but a monopoly right is only granted if the legislative standards are met.

Monday, 2 October 2017

Cyber fraud in modern conveyancing transactions


There have been a number of recent incidents in which cyber criminals have diverted payments to and from Solicitor’s trust accounts.

The attackers gain access to the firm’s email system. There may be no outward sign of unauthorised access. The attackers wait, monitoring traffic and then when one party is due to deposit funds to a specified account, the request email is intercepted and the account number changed. The diverted funds can be money paid by clients to the Solicitor’s clients’ account, or money being disbursed from the Solicitor. Either way, this can have very serious implications.

This is a particularly dangerous attack as the instructions to transfer the funds is expected by the receiving party, and is genuine except for the changed bank account number.

Communications from the attackers seem credible and use appropriate language. Some of the affected email systems are hosted on the cloud, some on firm servers.

There have been attempts which have been detected – through vigilance or good luck. Others have been successful.

Once the criminals become aware the intrusion has been detected, the final stage can be a mass email to everyone on the firm’s contact list attaching documents containing malware links.

What can you do to minimise the risk? 

1. Avoid email to communicate bank account numbers, either in relation to deposits by clients or remitting funds to third parties.

2. If there is no other choice, confirm email instructions by direct contact with clients to confirm transfer instructions and the account numbers. 

3. Consider setting up an initial transfer of say £1 and advise the other party that if the Bank Account details change in any way they should contact you.

4. Know and follow good password and cybersecurity practices. 

5. The requirements for basic technical protection from cyber attacks are set out in the UK Governments Cyber Essentials Scheme.

Be vigilant!

Monday, 31 July 2017

Court of Session Update - CCHG Limited t/a Vapourized v Vapouriz Limited

This month saw the Court of Session in Edinburgh issue its judgment on the appeal brought by CCHG Limited, in the case of CCHG Limited t/a Vapourized v Vapouriz Limited. Both businesses supply e-cigarette products.

In addition to the importance of the outcome for both sides, the case had the wider significance of being the first appeal hearing to be heard by a Scottish court of a decision by the UK Intellectual Property Office’s Hearing Officer (‘HO’), under section 76 of the Trade Marks Act 1994 (Appeals from the registrar). 

In this case, CCHG, who trade as Vapourized, had sought to appeal the earlier decision by the HO to have the CCHG mark declared invalid, following an application by Vapouriz Limited. CCHG’s mark, the stylised words “VAPORISE INHALE THE FREEDOM” (https://trademarks.ipo.gov.uk/ipo-tmcase/page/Results/1/UK00003085823), was declared invalid by the HO on the grounds that it was similar to that of a rival brand with a previously registered trade mark (Vapouriz having previously registered an earlier mark for the same products https://trademarks.ipo.gov.uk/ipo-tmcase/page/Results/1/UK00002605137). The HO had deemed the CCHG mark to be similar to the earlier mark, for identical goods, and therefore gave rise to the likelihood of confusion.

In deciding on the appeal, Lady Wolffe, sided with the HO’s decision, indicating that she found no error in the HO’s assessment of the likelihood of confusion, nor was he ‘plainly wrong’ in the conclusion he reached.

CCHG will have the option of appealing the decision to the Inner House.

For the full judgment:

Wednesday, 28 June 2017

400th anniversary of the creation of the Register of Sasines

Today marks the 400th anniversary of the creation of the Register of Sasines - the world's oldest national continuous public Property Register. Here are 5 facts describing the past, present and future of the Sasine Register:


1.  Prior to 1617, there was a system of public registration of instruments of Sasines and prior to that the instruments were recorded in the protocol books of notaries. Transfers of property were originally by symbolic delivery, by handing over earth or stone or some other symbol of the property being sold and then recording the Deed of Conveyance in the local Register of Sasines.

2.  The whole point of having a public register was to provide certainty and to regulate preferences - a job which the Register of Sasines has done very well. It has provided a solid platform on which Registers of Scotland can build for the future.

3. 1979 saw a major step forward with the introduction of registration of title in Operational Areas. Notwithstanding the clear challenges with the legislation, the 1979 Act was a necessary step in the development process.

4. The Land Registration etc. (Scotland) Act 2012 introduced a wholesale revision of registration of title in Scotland. There are those who lament the passing of the 1979 Act. It is suggested that the reforms introduced by the 2912 Act were essential for a progressive Land Register. The old system had its attractions but it needed an overhaul. The Sasine Register is now closed to transfer deeds, leases and standard securities and will be closed completely once the Land Register has been completed

5.  A series of innovations will be introduced in the coming years. The Digital Discharge Service is now operating; the first iteration of ScotLIS will be launched in October this year; and work continues towards completion of the Land Register. The latter is being done through a combination of compulsory registration of title on sale, voluntary registration (with a 25% discount in registration dues) and Keeper Induced Registration in terms of Section 29 of the 2012 Act.

Although some will no doubt disagree, it is a great time to be a property lawyer in Scotland.



Monday, 8 May 2017

What is the Law in Your Life?

Five things to know about consequential loss

Under Scots law, parties to a contract will not always recover all of their losses. The party in breach of contract will not be liable for losses that are considered too remote. This means that even if it is shown that that party's breach caused the loss, if that loss was sufficiently unusual or unlikely then he will not usually be liable for it unless he was aware of some special or unusual circumstances when he entered into the contract.

1.  Consequential loss or indirect loss is one of two types of loss recoverable under a contract.  Consequential loss is loss that does not arise naturally but that which could have reasonably been contemplated by someone with knowledge of special circumstances outside the usual course of things. This is in contrast to direct loss which is loss that arises naturally, according to the usual course of things, from the breach.

2.  The term "consequential loss" is often used in everyday language as shorthand for a broad category of losses including loss of profit, loss of opportunity, loss of goodwill and so on. However, the legal meaning of the term may be quite different.

3.  The default position is that a party to a contract will be liable for both direct and consequential loss.  However, it is not uncommon for both parties to exclude liability for consequential loss.

4.  It is important to be specific when attempting to exclude a category of loss. Consequential loss is a term that is cloaked in ambiguity.  This can make determining what is a consequential loss as opposed to a direct loss a difficult task

5.  Profit is not always classed as consequential loss and is therefore not always excluded by a clause that excludes this type of loss. The Scottish courts have held that loss of profit can sometimes be a direct loss.

Thursday, 13 April 2017

What is the Law in Your Life?

Five things to know about standardisation in Commercial Leasing

1. The concept of standardisation is well-known to all these days and legal precedents or standard documentation is no different. The Property Standardisation Group (PSG) has developed a suite of templates for use in property transactions in Scotland which have been well-received. See www.psglegal.co.uk.

2. The issue of a Model Commercial Lease was first mooted in England and Wales and a template was introduced in 2014 by the British Property Federation. That template met with a muted response initially but and it has proven to be useful. The PSG have now introduced a Model Commercial Lease for use in a larger scale office development.

3.  As with all styles, care must be taken to ensure that it fits the circumstances of a particular letting and a knowledge of the underlying law is essential.

4.  The Model Commercial Lease may be capable of being used "as is" but it is likely to also be of assistance in giving solicitors and their clients examples of different types of clauses which may be adapted to suit individual circumstances.

5.  The aim of templates, of course, is to seek to speed up the process of concluding deals. This may or may not happen but the new Model Commercial Lease is a step in the right direction.