Accepting Website Terms

Accepting Website Terms – The Orvec Case

Accepting website terms is often overlooked by business owners although every serious Internet business owner knows that they must have website terms and conditions of business. here is not much point having well thought out and drafted bespoke website terms without dealing with accepting website terms.

The case of Orvec International Limited v. Linfoots Limited is a very good case in point. Heard on the 06th May 2014, judgment was handed down on the 18 June 2014 by HH Judge Hacon.

The matter concerns an action for passing off and breach of contract brought by Orvec (the “claimants”) against Linfoots’ (the “defendants”).

The dispute illustrates a very important point but one that is often over looked when accepting website terms. Who owns the copyright in the works that make up a website or other media in an advertising and marketing campaign? It is not often that such a routine contractual point is actually decided in the court forum making it a thought provoking legal action.

The facts were: the defendants are an advertising agency. Between 2002 and 2011, Linfoots provided advertising and marketing services to Orvec. Linfoots were responsible for the design and maintenance of Orvecs’ website and created Orvecs’ marketing material.

From about 2006, Linfoots took photographs of Orvecs’ products which Orvec offered to its customers. The photographs were then used on Orvecs’ website and in its advertising material.

There is an express term in Linfoots’ standard terms and conditions that it retains ownership of copyright in photographs supplied to its customers.

Linfoots fell out with Orvec. Later, Linfoots supplied a competitor of Orvecs’, another company called Intex, with the same photographs used for Orvecs’ advertising material.

Orvec complained that (i) the images supplied to Intex by Linfoots, included images created for Orvec, and had been supplied by Linfoots to Intex in breach of contract. Orvec argued that there was an implied term in the contract, that Orvec would have exclusive rights to the photographs, between itself and Linfoots; and (ii) that the appearances of the photographs on Intexs’ website gave rise to an action of passing off on the part of Intex. Except that Intex itself was not a party to the action. The claim was made against Linfoots on the basis that it had procured the passing off.

The Judge was apparently not persuaded by Orvecs’ arguments and submissions on breach of contract as well as intellectual property law. HH Judge Hacon concluded that both of Orvecs’ complaints failed.

My view is that there are many situations in which terms can be implied into a contract, even in intellectual property cases, but based on the facts, this dispute certainly wasn’t one of them.

Conclusion

In conclusion, advice regarding ownership of works in a website is the sort of detailed guidance that is characteristic of a competent solicitor with experience of website copyright and other media. This case is a relevant example of what a client might see as a minor issue suddenly becoming a major issue, resulting in substantial wasted time and expenditure. Although it took 9 years for Orvec and Linfoots to quarrel, any well intentioned relationship can end up in a row. The Orvec case is a pertinent example of why detail in matters that might appear trivial are important, although it may not be apparent at the time of the initial advice.