Out-Law Guide | 09 Nov 2011 | 3:58 pm | 7 min. read
The High Court (Mr Justice Walker) gave judgment in July 2011 in respect of a dispute between Playup Interactive Entertainment UK PTY Limited ("Playup") and Givemefootball Limited ("Givemefootball"). The case involved a claim and counterclaim in relation to alleged breaches of a Sponsorship Agreement (the "Agreement"). The key issue contested related to the electronic dissemination of SMS and e-mail advertising to recipients collated in online IT databases.
Playup is an interactive gaming business providing mobile telephone and internet based betting style gaming during sporting events. Givemefootball is a joint venture between the Professional Footballers' Association ("PFA") and Sports News Media Limited. Each year at the end of the football season the PFA hosts the PFA's Fans Awards (the "Awards"), which names a Player of the Year, based on fans' votes, in each of the four English professional football leagues. Givemefootball hosts a number of websites, including the official website of the PFA.
In February 2008 Playup entered into an Agreement with Givemefootball for the sponsorship of the Awards for a term finishing in June 2010. Under the Agreement, Playup was required to pay £1.034 million in four tranches, in return for a range of "targeted marketing opportunities". This included two streams of multimedia marketing using customer data collected by Playup ("Data Rights"). The first of these Data Rights involved 12 programmes of at least 1 million emails to be sent out monthly throughout the term of the Agreement. The second was a series of 6 SMS message programmes to be sent out to at least 250,000 recipients bi-monthly throughout the term of the Agreement.
In both cases it was specified that the recipients must be "opted-in recipients who are contained in databases owned or controlled by the company." Also contained in the Agreement were Warranties, Representations and Undertakings relating to the Data Rights in which Givemefootball stated that the recipients of the emails and SMS messages "have [a] provided the Company with prior notifications of their consent to receiving direct marketing [b] from the Sponsor".
Disputes about the Data Rights arose towards the end of 2008, when it emerged that Givemefootball had been using customer data collected by third party webhosts ("Bought In Data") as part of their multimedia marketing obligations. Playup said it was not acceptable for Givemefootball to use data supplied by an individual to a company other than Givemefootball as a source for the selection of recipients, asserting that the words 'opted-in' in the Agreement referred only to those opting in through the official PFA website. Givemefootball countered that the programme recipients could comprise of anyone who had indicated to any business entity a willingness to receive marketing from other companies. They conceded in both their written closing and their oral submissions that there had to be some limitation on who could be a programme recipient for the purposes of the agreement, but they argued that the word "targeted" in the Agreement meant that the emails and SMS messages had only to be sent to people with known sporting interests, particularly, but not exclusively, in football.
A secondary dispute over the Data Rights related to the delivery of the SMS messages. Where a number used for the purposes of the programme did not actually correspond to a mobile device of an opted-in recipient, Playup contended that that message could not be described as having been 'sent'. Givemefootball responded that its obligation was merely to send the messages, rather than to deliver them. Playup accepted that 'delivery' could be impaired by numerous factors, but said it remained Givemefootball's contractual responsibility to ensure that the messages were at least sent to actual mobile devices.
In November 2008 Playup gave notice of termination of the Agreement, by which point it had paid £692,000 to Givemefootball. Playup sought repayments under the Agreement and damages for breach. Givemefootball denied any breach, and counterclaimed for the remaining instalment in the sum of £342,000 plus VAT.
The court had to decide whether there had been a repudiatory breach of the Agreement and, if so, what damages could be recovered.
The court had to establish whether the Agreement required the recipients of the messages to have signed up specifically through the PFA website, or whether it was sufficient for them to have been selected from Bought In Data obtained by Givemefootball from a third party web provider.
The court referred to the specific commercial context of the agreement, asserting that the essential purpose of the Agreement was to give Playup access to benefits associated with the PFA Awards. Givemefootball's suggested interpretation of the limitations contained in the Agreement on who might be a programme recipient presented "a substantial and surprising departure from" this essential purpose. Playup entered the Agreement to obtain marketing access to the "avid" football fans involved in voting for the Awards specifically, rather than simply anyone who liked sport.
The court criticized the conduct of Givemefootball in relation to the Data Rights, in particular the "deliberate dishonesty" of two of the company's directors in both their correspondence on the matter with Playup, and their evidence to the court. Evidence presented by Givemefootball about the databases used in performance of the Agreement was thus not to be believed.
Regarding the secondary issue of the sending of the SMS messages, Givemefootball's assertion that they should not be held responsible for the delivery of the messages did not address Playup's contention. Their contractual obligation was to send the messages to actual mobile devices, and the question of whether or not they were then successfully delivered was not relevant. The court could not comment on the proportion of SMS messages sent to actual mobile devices, but accepted that this