Commercially Connected Shorts - 2 July 2025

This week we look at:

• ESG: EU Council agrees negotiating mandate on proposal for simplification of CSRD and CS3D
• Consultation on potential reform of the Procurement Act 2023
• Ofcom Online Safety Act 2023 consultation
• UK Supreme Court tackles viewing angles and post-sale confusion in trade mark infringement case

ESG: EU Council agrees negotiating mandate on proposal for simplification of CSRD and CS3D

On 23 June 2025 the Council of the EU confirmed that it has agreed its negotiating mandate on the EU Commission’s proposal for an Omnibus Directive simplifying the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CS3D).

The aims of this Directive are to boost EU competitiveness, simplify administrative burdens on business and unlock investment capacity. See the February edition of Commercially Connected for detail of the Commission’s proposals and the April edition for details of the Stop the Clock Directive which postponed the transposition dates for CS3D and CSRD.

For CS3D, the Council proposes the following changes to the Commission’s proposals:

• CS3D to apply to businesses with over 5000 employees and €1.5 billion net turnover so that only the largest businesses are impacted, on the basis that “such largest companies can have the biggest influence on their value chain and are best equipped to absorb the costs and burdens of due diligence processes”
• a shift from an “entity-based” approach to due diligence to a risk-based approach, with a focus on areas where actual and potential adverse impacts are most likely
• although the Council agrees with the Commission’s proposal that only “tier 1” entities should be within scope of due diligence (the operations of the company, its subsidiaries and its direct business partners), it also:
• proposes that identification and assessment obligations should be extended where there is objective and verifiable information suggesting adverse impacts that go beyond tier 1; and
• proposes a review clause to allow for a possible extension of due diligence obligations beyond tier 1
• simplification of the provisions on transition plans for climate change mitigation, by aligning them to CSRD, with the requirement to adopt transition plans to be delayed by two years
• postponement of the transposition deadline for CS3D by a further year to 26 July 2028

As for CSRD, the Council proposes introduction of a net turnover threshold of over €450 million in addition to the 1000 employee threshold proposed by the Commission.

Once the European Parliament has adopted its negotiating mandate, trialogue negotiations will start. The proposals must be approved by both the EU Parliament and Council before coming into force. In-scope businesses should monitor progress of these proposals as the changes to the current texts of CS3D and CSRD will directly impact on the scope and nature of compliance.

Consultation on potential reform of the Procurement Act 2023

On 26 June 2025 the Cabinet Office launched a consultation on potential further reforms to UK public procurement regulation to “create a simpler and more transparent regime for public sector procurement that delivers better value for money, drives economic growth, and safeguards national interests”.

Proposals include:

• large contracting authorities with annual spend of over £100m to publish and report against targets for direct spend with SMEs and VCSEs
• suppliers to be excluded from bidding on major contracts (£5m plus) if they can’t demonstrate prompt payment of invoices to their supply chains
• clarity on when it’s appropriate to award contracts for services to vulnerable citizens without a full competitive procedure
• giving Ministers power to designate certain services, works or goods as critical to national security and to direct contracting authorities to take this into account when deciding whether the national security exemption applies to a procurement
• contracting authorities to assess whether service delivery of a major contract should be inhouse or outsourced, via a public interest test, before starting a procurement
• contracting authorities to support local jobs and skills through contract award criteria and KPIs

The policy aims of these proposed reforms are to improve domestic competitiveness, to boost economic growth and security, to provide security for British businesses by protecting supply chain resilience and increasing opportunities for small businesses, and to invest in skills and opportunities for workers, in line with the Industrial Strategy.

Consultation closes on 5 September 2025 and responses are sought from contracting authorities, businesses, civil society and citizens. All contracting authorities and suppliers to them should consider responding to the consultation to shape these reforms which will impact directly on their contracting processes and procedures as well as contract compliance.

Ofcom Online Safety Act 2023 consultation

On 30 June 2025 Ofcom opened a consultation on its proposals to strengthen its first edition Illegal Content and Protection of Children Codes of Practice under the Online Safety Act 2023.

The proposals aim to address the latest emerging risks and the latest developments in tech, as well as evidence obtained by Ofcom in its engagement with stakeholders. The proposals include:

• preventing illegal content going viral, by online service providers having protocols to respond to spikes in illegal content during a crisis; potentially illegal content to be checked by service providers before being recommended to users; enhanced oversight of livestreams through reporting functions and human moderation; taking action against users who share or upload illegal content or content that is harmful to children
• increased use of technology to prevent illegal content from being seen by users, including hash matching to identify intimate image abuse, terrorist content and child sexual abuse material; and automated tools to detect illegal and harmful content
• protecting children through better age assurance; better controls over livestreaming including preventing comments and reactions to children’s livestreams; and banning individuals who share child sexual abuse content

Consultation closes on 20 October 2025 and Ofcom is planning to publish its revised guidance by summer 2026. All in-scope organisations should carefully review the proposals and share their views with Ofcom on how appropriate and feasible these proposals are.

UK Supreme Court tackles viewing angles and post-sale confusion in trade mark infringement case

On 24 June 2025, the UK Supreme Court delivered a its judgment in the case of Iconix Luxembourg Holdings SARL v Dream Pairs Europe Inc and another. This pivotal case, centred on trade marks used on football boots, raises two critical issues of trade mark law: the importance of viewing angles when assessing similarity and the role of post-sale confusion as a basis for infringement. Additionally, the judgment explores the circumstances under which appellate courts can substitute their own decisions for those of trial judges. This article by our IP team delves into the background of the case, the legal arguments presented, and the implications of the Supreme Court's decision for brand owners and the broader legal landscape, read more here.

In light of this judgment, brand owners will need to ensure they consider post-sale circumstances and the wider context in which their marks and other signs will be used when assessing similarity and likelihood of confusion. This will be relevant not only in an infringement context but also in the context of trade mark applications and oppositions. Cases may become more fact-specific, making it (even) harder to predict judicial outcomes. On the other hand, a more contextual assessment of similarity may assist brand owners in demonstrating that a similarity and likelihood of confusion exist. In addition, the confirmation that post-sale confusion alone can be grounds for trade mark infringement and that there is no need for consumers to have been confused into making a purchase for damage to the origin function of a trade mark to occur will be welcomed by brand owners.

With thanks to David Wilkinson, Kate Ellis and Chloe Gastrell