Commercial Law International

Call it an occupational hazard of being a lawyer or just a natural thrust for knowledge, call it what you will, I read a lot.

While on business in Jamaica I was perusing a local daily newspaper, The Daily Observer, and I came across a piece about Sir Richard Branson that I just had to share with the readers of Commercial Law International. The piece references two books, Sir Richard’s new book “Screw Business as Usual” – a title, which I don’t know about you pulled me in instantly –  and an older book “Business Stripped Bare”  which outlines his general philosophy and business approach.

Four major points I took away from the Observer piece was Sir Richard’s belief:

1. Business is a gut feeling; so trust your emotion and instincts as they are there  to help you

2. The first law of entrepreneurship is that there is no reverse gear; you are either moving forward or you are dead

3. When starting out learn all areas of your business as it will make you better manager  as get better and have to delegate matters

4. Stay close to the trenches of your business as it grow; it bodes well for business success to know what both you customers and employees want.

To read the full Observer post click here.

By: Ainsley Brown

Owls, Mountains and Trade Secret

I was watching CNN’s Anderson Cooper 360 last night and something thing caught my eye, which at first I believed to be a joke: Hooters was suing another restaurant called Twin Peaks – yes I said Twin Peaks.

In what has been deemed by some commentators as the battle of the breastaurants, for all the obvious reasons, the suit is actually between Hooters and one of its former executives whom it accuses of taking its trade secrets before his departure. Double entendres aside trade secrets and the alleged taking of them are no joke. Trade secrets are the life blood of a company as they represent a major if not the sum total of a business’s competitive advantage.

Trade secrets are defined under US Federal law as: (1) Information; (2) reasonable measures taken to protect the information; and (3) which derives independent economic value from not being publicly known. This definition while not a universal one gives you basic idea – trade secrets are just that secret. They unlike other intellectual property (trade marks, patents, copyrights) which face outward and are by their nature public, trade secrets on the other hand are internal. Given this internal/ secret nature it is therefore critical that employees of business sign non-disclosure and non-compete agreements as part of their employment contracts.

Now back to the story.

The former Hooter’s executive in question, Joseph Hummel, is alleged in the suit filed in Georgia federal court of emailing a substantial volume of sensitive business information to his private account only weeks before his departure to the Twin Peaks development partner La Cima Restaurants. According to Hooters, Mr. Hummel walked off with many of its documents but specifically information relating to management, recruitment, distribution and sales.

Additionally, the suit accuses Twin Peeks which bands itself as “Eats, Drinks, Scenic Views” as coping in effect Hooters style branded as “delightfully tacky yet unrefined.” Specifically, Hooters claims that the iconic white tank top and orange shorts Hooters Girls are the cornerstone of the Hooters concept. As far as Hooters is concerned “Twin Peaks directly competes with [Hooters] in the market of casual dining restaurants with an all female waitstaff.” For it own part has differentiates itself by having its lumberjanes – a word I heard on Anderson Cooper – by having them wear a mountain-themed ensemble of flannel bikini-like tops paired with tan hiker shorts.

I will end by saying that I don’t know what all the fuss is about don’t people just go to these restaurants for their wings? Isn’t that their trade secret?

By Kamau Wanguhu

Ardent twitterzens will have noticed in the past two days two distinct Kenyan topics that have been trending: firstly the passing on of Prof Wangari Maaathai a Nobel peace prize winner, great conservationist and former Member of Parliament. Secondly has been #Things stronger than the Kenyan shilling, a tongue in cheek commentary on the tanking of the Kenyan shilling against the green back. Kenyans have taken to twitter to vent their frustrations in the only way they know how self deprecation.

As this chart shows the steady rise of the dollar against the Kenyan shilling and with it the prices of basic commodities such as fuel and many industries largely dependent on imports have equally been negatively impacted.

The central bank had initially released foreign exchange into the market in order to ease the crunch. However with the shilling slide not abating the Central bank has now opted to sell foreign exchange directly to traders bypassing commercial banks. In a country where price controls have recently been introduced on fuel products and some grain products the latest effort might signify a significant shift in government policy and portrays a move away from market determined mechanisms. While the ultimate beneficiary should be the consumers of imported goods this short term intervention may suffer from skewed market interpretation.

By Kamau Wanguhu

A World Bank report in  estimates that Kenya in 2010 is expected to earn $1.7 Billion dollars from remittances representing five per cent of Kenya’s GDP. It dwarfs Kenya’s famed tourism industry which brings in $ 1.2 Billion and even its horticulture and coffee/tea industries. As well as net FDI inflows which were a meagre US$0.1 bn

These numbers are only estimates as they only represent formal methods of remittances and with a large number of informal ways of sending money the actual figure could be actually greater. With current estimation of approximately  ½ million Kenyans in foreign lands, and remittances now being the lead foreign exchange earner the Kenyan government would have to devise ways of reengaging with its citizens out in the diaspora. In addition the popular kenyan mobile money transfer platform M-Pesa going international will eventually elad to increased transfers.

As opposed to foreign aid laden with conditions and accessed through bureaucratic channels, remittances have an immediate effect in the standard of living of the recipient and the immediate family.

But before Kenya starts to view immigration as one of its major exports it has to be considered that sectors losing personnel include the health industry which has a direct impact on the health of the nation. Lately workers experience abroad especially mistreatment in the middle east have placed an emphasis on the need for regulation. The Kenyan government may seek to look at the Philippine regulations on relations with diaspora including a right to vote.

By: Ainsley Brown

Data security breaches or in the popular parlance, hacking, has dominated major headlines worldwide.  To say hacking is serious issue, one that affects the online reputations and credibility of a company, is an understatement – just ask Sony.

Considering the economic value of e-commerce/e-economy and the dangers posed by hacking it was only a matter of time before there was some sort of legislative response. The law makers in question here is the European Union (EU). In legislation that is being drawn up for the autumn EU companies will be obligated to inform consumers immediately when ever their computer systems have been hacked.

The proposed legislation is clearly linked to the massive data security breach at Sony. Or better put Sony’s very slow response in announcing that its over 70 million PlayStation users personal data was placed in danger as a result of hacking.

Under the new regime gone would be the days of industry best practice recommendations or voluntary schemes. In its place would be comprehensive system that would see companies conducting serious risk assessments in order to identify weak points in their date security systems and practices. Such assessments will become critical if and when a hacking incident does occur and customers need to be informed.

By Emma Peart

The rules on cookies and ecommerce in the UK changed at the end of May. This is largely due to a 2009 EU Privacy directive which reviewed privacy law. The change is intended to give individuals more of a say over what information is held on them. One way in which information is held is through cookies, small text files which hold information on visitors to websites.

The government has issued guidelines on what changes it expects to cookies. At this stage it suggests firms view whether their current cookies system should receive consent to be used by the site’s users. Some ways this could be achieved would be through a consent button, or through the terms and conditions of the website. This in general can only be a good thing for visitors to any site, relieving them of the fear of any information on them being kept without consent.

The EU directive has also meant there are tighter rules in relating to the release of any information by a security breach. Internet Service providers and telecoms providers providing access to public sites are among groups that will have to make a notification to designated bodies if they are of the view there is a security breach. There are only two bodies that will be responsible for monitoring this: Ofcom and the Information Commissioners Office. The Information Commissioners Office will have the authority to serve notices on a third party to co-operate in providing information during an investigation.

The idea is that privacy laws will be tightened up across Europe. However, although some countries have provided their proposals for reform, not all have. At least in the case of the countries that have, their does seem to be a similarity to those in the UK. However there is going to be uncertainty for not only individuals but ecommerce while the legislation changes across Europe.

The other thought is whether the changes will be enough. It is Internet Service Providers and telecoms providers that are subject to the change in UK legislation. It may be the case that the reform should be more widespread if there is to be a full effect on privacy, by all industries being subject to the reform.

By Emma Peart

Google have faced criticism through suggestions it has held data on users without their knowledge. Brown et al v. Google involves individuals using Google’s mobile phone technology who are bringing an action against Google for storing information on users through this technology without consent.

Mobiles using the Google Android Operating System are recording and storing comprehensive details of all their owners’ movements. The data gathered on the users’ location is hidden from the user. Google or third parties could however access this information as the information is not encripted. The system attaches a unique ID number to the data. It is thought that while that ID number can’t be directly linked to a particular device or user, the use of certain techniques can allow the data to be anayzed and link it to individuals. Users apparently have no way to prevent Google from collecting this information. If users disable the Android GPS, Google’s tracking system remains functional.

The argument of the users is that:
a) They were unaware of Google’s extensive tracking of their locations and did not knowingly consent to such tracking.
b) It violates their statutory and common law privacy rights

Apple is currently facing a similar action.

All in all, this highlights a potential gathering of information, gathered without consent, which is arguably not even secured safely.

As well as causing an issue for the private individual, could this not have an effect on commerce? Information linked to businesses discussed through the mobiles and the software (i.e. the location of business meetings) which could be confidential could be gathered from these systems and may not be securely held. Perhaps at least more detail on what information is being held by these companies and the exact way in which it is held needs to be known before a resolution to this problem can be made.

By Kamau Wanguhu

Lately, Fuel has been a buzzword in all Kenyan related Social Media .  If not the high cost of it, it’s the effect on the economy and inflation, if not that then lately it has been the lack of it. 

Kenyan drivers have in the last two days been forced to queue for hours on end waiting for the ever so precious commodity. In addition traffic jams caused by cars running out of fuel as well as queues into fuel stations have become common place. A quick assessment of the damage to an economy largely reliant on fuel for; transport, energy needs as well as household needs, would peg the figure at hundreds of millions not counting the lost hours of productivity  spent by staff in jams. 

What is perplexing is the back and forth between all the actors with the energy ministry, Kenya Pipeline Company, Kenya revenue authority, Oil marketers and the Kenya Oil refinery at loggerheads as to who is at fault. What seems to be clear is that it is an artificial shortage, occasioned by who is anyone’s guess. One of the biggest oil marketers in an interview  alludes to some hidden forces.

From unfolding events a picture of cartel like behaviour is discerned with an underlining aim of  exploitation of consumers and hoarding stocks. Some Analysts alude the shortage to a recent government initiative to impose price controls. The current scenario is all too familiar to the 2008 triton scandal which was accompanied by similar shortages.

Corruption is and still remains Kenya’s biggest barrier to Economic Success. The following factors also contribute to the lack of success:  a middle class suffering  rising inflation, and trade unions calling for increase in minimum wage, and a political class who remain far removed from daily realities of the average tax payer,  a yet to be implemented constitution (heavy on administration).

 The lack of a strong regulatory body to protect the consumer interests is a shortcoming that urgently needs to be adressed if these  factors are not come to a head in the upcoming months.

By: Ainsley Brown

Cultural views on failure shape entrepreneurial success

Failure, who wants that? We all want to be winners not losers, right. Who wants to fail?However, for the entrepreneur failure is all part of being just that, an entrepreneur, in fact I would go as far as saying that failure can be an entrepreneur’s best friend.

Think about it for a second. Ok your second is up.

Life is filled with all kinds of successes and failures – that’s just life – but which did you learn the most from, success or failure?

Just think about it for a second; ok your second is up

Be honest, its failure isn’t it.

Yes failure, something we all fear, provides the greatest moment for us to learn. How we manage or better put how we are honed to manage the process of failure provides not only the basis for but is the best indicator of future success.

Starting a business is a difficult task no matter where in the world you are, however, and forgive me for stating the obvious, but some places are more difficult than others.  What accounts for these differences? Why is it that some countries are so good at producing entrepreneurs – churning them out in what can best be described as mechanical – while others have such difficulty?

The answer is the “f” word, no not the expletive but rather the “f” word that stalks every entrepreneur the world over – failure.

Please don’t get me wrong, I am not saying that it is simply the act of failing that explains such differences. No! Rather it is how such failure is treated in a culture. The cultural ‘treatment’ of failure is often an understated factor not only in the number of entrepreneurs a country turns out per year but also is a major factor in their rate of success.

Don’t believe me? Well, stay tuned for Part II.

By Emma Peart

Telecommunication can play a large part in intellectual property, and the European Union has given an acknowledgement of this today.

It has announced it will be looking at the online data traffic management practices of telecommunications operators. Information provided suggests that the investigation will focus on what information telecommunications operators give consumers about the way they manage internet traffic:“traffic management”.  The European Union’s Commissioner for the digital agenda Ms. Neelie Kroes has specifically mentioned that there are concerns that some Internet providers are not transparent about the services they block or the downloading speeds they offer — thus keeping consumers from making informed choices for example.

With many telecoms companies selling television and other video services to customers, she also raised the concerns one operator through traffic management could be disrupting a competitor’s content by slowing down some data traffic or blocking certain software applications: “throttling”.  This would of course be frowned upon as being anti-competitive, and is tied to the principle of what is described as  “net neutrality”- that online services should be treated equally to foster competition and innovation. The investigation has perhaps come about due to new transparency rules on traffic management practices next month.

 How will this effect commerce generally? lf the investigations, to be completed by National bodies, raise concerns there could be tighter measures introduced by the European Union which would be implemented across all member states, and thus be almost Europe-wide. It may also have an effect internationally if there are changes. In America, for example, they do not at present have as many internet service providers. The likelihood is that that number may increase, and that America may look to Europe on how to regulate the industry to cope. Even if not, they may consider any regulations that Europe take as a preventative measure for anti-competitive behaviour with the existing providers.