Australia: TMC Bulletin: 2006 The Year In Review

The Trade Marks Amendment Act 2006 significantly amends the Trade Marks Act 1995 as set out below. The Intellectual Property Laws Amendment Act 2006 makes some additional amendments to the Act.

The amendments have either already come into effect or will do so early next year.

Trade mark ownership and dealings

The Act previously provided that an owner of a registered trade mark could deal with that trade mark subject to any rights vested in another person. The Act now provides that the power of a registered owner of a trade mark to deal with the trade mark is limited only by any rights appearing in the Trade Marks register. The amendment brings the Act into line with the Patents Act 1990 and Designs Act 2005.

Additionally, the Act now provides that equities in relation to a registered trade mark may be enforced against the trade mark owner except to the prejudice of a purchaser in good faith, mirroring provisions in the Patents Act and Designs Act.

Only a person with a legal personality (and unincorporated associations for collective trade marks) can apply for a trade mark. Although this was the position under the general law (subject to collective trade mark ownership which was dealt with under the Act previously), this was not expressly stated under the Act.

The Act now:

Trade marks may now be removed from the trade marks register if they are likely to deceive or cause confusion to consumers at the time an application to remove them from the register is made. It was not previously clear under the Act that trade marks registered under previous Acts could be removed for grounds of removal not available at the time those trade marks were registered. The amendment is intended to make it clear that any trade marks can be removed if likely to deceive or confuse whether or not registered under the current or a previous Act.

In relation to removal from the trade marks register for non-use:

The Act gives the Registrar the discretion to:

1. Amend applications after publication;
2. Revoke a registration on his or her own initiative if the trade mark should not have been registered and the revocation is reasonable. In doing so, the Registrar must take into account errors leading to the registration, Australia’s international treaty obligations, any use made of the mark, legal proceedings relating to the mark and other ‘special circumstances’. There is also an obligation to revoke registration if an opposition was ignored in the registration process; and
3. Take court action on his or her own initiative where it is desirable in the public interest.

The Act allows:

1. Applications to be made in respect of goods and services in multiple classes (that is, series applications need no longer be in a single class); and
2. Applicants to apply to link series applications made before the commencement of the amendments, provided the applications are for exactly the same series of trade marks and were filed on the same day. The applications will then be dealt with as if they were one application.

The Intellectual Property Laws Amendment Act inserts provisions relating to the administrative aspects of certification trade mark applications, including matters that must be addressed in the rules governing use of a certification trade mark.

The Act:

1. Contains a set of conditions that must be met in order to file a valid divisional application;
2. Confirms that the Registrar is not subject to civil or criminal liability in relation to publishing, communicating, or distributing any material as authorised by the Act or Regulations if that action is undertaken reasonably and in good faith;
3. Provides that the Federal Court may admit any evidence on hearing an appeal against a decision of the Registrar, even if that evidence was not filed with the Registrar. It was previously unclear whether this was the case;
4. Provides that notices of objection under the Customs Act 1901 are valid for 4 years (previously 2);
5. Allows trade mark owners to provide a written security to the Director of Customs in relation to the seizure of infringing goods (previously persons lodging notices of objection were required to give cash security of $10,000);
6. Allows trade mark owners 6 months (rather than the previous 12 months) after expiration to renew their registration before the trade mark is removed from the trade marks register. This brings the Act in line with the Patents Act and Designs Act; and
7. Provides that documents prescribed in the regulations will now be made publicly available (except for certain confidential and sensitive information in those documents). Previously members of the public were required to apply for access under the Freedom of Information Act 1982. This amendment also brings the Act in line with the Patents Act and the Designs Act.

Australian Communications and Media Authority v Clarity1 Pty Ltd

The Clarity1 decision is the first decision under the SPAM Act 2003.

The Act prohibits a person from sending a commercial electronic message (CEM) if it is not a ‘designated CEM’ (that is, it contains only factual information and certain details of the sender) or the recipient has not consented.

The Australian Communications & Media Authority (ACMA) sought orders in the Federal Court for breach of the Act. ACMA alleged that over 213 million CEMs were sent by Clarity1 to over five and a half million unique addresses and almost 57 million CEMs were sent by Clarity1 to over two million unique addresses. The recipient’s electronic addresses were obtained through address harvesting software and the purchase of address lists. Clarity1 argued that the recipients had consented and, accordingly, that there was no breach of the Act.

Clarity1 argued that the failure of recipients to use the unsubscribe facilities in the messages received meant that it was entitled to infer that the recipients consented to receiving the CEMs. Clarity1 also argued that consent could also be inferred from the business relationship Clarity1 had with the recipients.

The Court held that failure of a recipient to respond could not lead to the inference that the recipient consented and the number of messages sent made it unlikely that Clarity1 would have been aware of a recipient’s consent one way or the other prior to sending the CEMs.

It was relevant that Clarity1 would have no means of knowing whether a CEM was opened or read. Also, Clarity1 used software which randomly sent the CEMs from different email accounts and generated different subject headings, increasing the likelihood that people would not unsubscribe. There was evidence that it is common practice not to respond to SPAM so as not to confirm the existence of an email address.

In relation to the business relationship argument, the Court noted that there is no business relationship when all communication is one sided. However, in the Court’s view, a contract to purchase a product, for example, would fall within the meaning of a business relationship, in which it could be ‘reasonably inferred’ that the purchaser wishes to be kept informed of products.

The Court ordered Clarity1 to pay a fine of $4.5 million, and ordered Wayne Mansfield (sole director of Clarity1) to pay a fine of $1 million.

The Copyright Amendment Act 2006 (Cth) amends the Copyright Act 1968 (Cth) as set out below. The Amendment Act was passed on 5 December 2006. All of the amendments will be in force by early next year.

Previously, time shifting and format shifting for personal use of copyright material was not permitted under the Act.

The Amendment Act amends the Act to permit certain time shifting (recording for subsequent use), format shifting (changing from one format to another) and space shifting, so that:

1. A film or sound recording of a broadcast can be recorded for private or domestic use at a later time;
2. A work in a book, newspaper or periodical publication can be reproduced in different form from the original for private or domestic use of the copy;
3. A photograph can be transferred from hardcopy to electronic form and vice versa for private or domestic use of the copy;
4. A sound recording can be reproduced for playing on a device (such as an iPod) for private or domestic use; and
5. A film on a video tape can be transferred into electronic form for private or domestic use (although this doesn’t allow copying of DVDs).

The Act contains only a restricted number of ‘fair dealing’ exceptions to infringement, unlike the general ‘fair use’ exception in the United States. The Amendment Act introduces a new fair dealing exception to infringement of a work where the dealing is for the purpose of parody or satire. There was previously no satire/parody exception under Australian law.

The Amendment Act clarifies the existing fair dealing for research or study exception. The Act allows reproduction of a ‘reasonable portion’. The meaning of ‘reasonable portion’ has been clarified by the Amendment Act and is now set out as a percentage of the work.

In addition to the exceptions already contained in the Act, the Amendment Act permits libraries, archives and educational institutions to use a work or other subject matter in limited circumstances where the use does not:

1. Conflict with a normal exploitation of the work or other subject matter; and
2. Unreasonably prejudice the legitimate interests of the copyright owner or a licensee.

The Amendment Act clarifies that a person does not make a ‘communication’ merely by accessing online content or receiving online content. This is intended to avoid an interpretation that such activity amounts to an exercise of the communication right.

The Amendment Act:

1. Introduces a new definition of ‘access control’ TPM and amends the existing definition of TPM (both of which specifically exclude technologies for geographic market segmentation such as regional coding and computer programs that restrict the use of goods or services in relation to a machine or device);
2. The Trade Marks Amendment Act 2006 significantly amends the Trade Marks Act 1995 as set out below. The Intellectual Property Laws Amendment Act 2006 makes some additional amendments to the Act.

3. Introduces new definitions of ‘circumvention device’ and ‘circumvention service’; and
4. Replaces the existing offences with new offences, including:

The offences relating to TPMs are subject to exceptions relating to:

1. Interoperability;
2. Encryption research;
3. Computer security testing;
4. Online privacy;
5. Law enforcement and national security; and
6. Use by libraries, archives and educational institutions.

The above amendments are largely to comply with Australia’s requirements under the Australia-United States Fair Trade Agreement.

Additionally, the Amendment Act:

1. Introduces indictable, summary and strict liability offences, giving courts enhanced powers in relation to activities involving commercial scale infringements. For example, activity in relation to peer to peer infringements would be subject to the more serious offences;
2. Contains amendments allowing a court to take into account likely as well as proved infringements in determining appropriate relief where the infringement was on a commercial scale;
3. Enhances the jurisdiction of the Copyright Tribunal, including by allowing the Copyright Tribunal to be referred an application for a body to be declared a collecting society and allowing the Tribunal to substitute licensing schemes (currently it can only vary or confirm a scheme);
4. Replaces the current provision of the Act dealing with unauthorised access to encoded broadcasts; and
5. Extends the period for which a notice of objection under the Customs Act 1901 (which relates to the seizure of infringing material) remains in force from 2 to 4 years and permits the lodgement of written security rather than the previously required cash security of $10,000.

The Intellectual Property Laws Amendment Act 2006 amends the Patents Act 1990 as set out below.

The amendments have either already come into effect or will do so in the first half of next year.

The Act has been amended to permit the award of exemplary damages. Previously only injunctive relief, compensatory damages and an account of profits were available.

Section 11 9 provides that a person doing an act that exploits a product, method or process that would infringe a patent does not infringe that patent where the person was doing so or had taken definite steps to do so prior to the date of the patent claim. The amendment is intended to clarify the previous wording of the section. The amendment also provides that the person can assign that prior use right (previously there was no ability to assign a prior use right).

The Act has been amended so that ‘springboarding’ is allowed as an exception to infringement of a pharmaceutical patent. The exception is solely in relation to obtaining regulatory approval of a pharmaceutical product. Previously the Act only allowed ‘springboarding’ on pharmaceutical patents after the patent term had been extended.

In addition to the previous grounds on which the court could make a compulsory licensing order, the Act now provides that, if a patentee is contravening the anticompetitive provisions of the Trade Practices Act 1974 in connection with the patent, a compulsory licence is available as a remedy.

In determining the amount of any licence fee, the court is required to now also take into account the desirability of discouraging breaches of the Trade Practices Act anticompetitive provisions.

This is the first moral rights case to be decided in Australia since the Copyright Act 1968 was amended to introduce moral rights in 2000.

Woman’s Day magazine attached a souvenir bonus regarding Princess Mary of Denmark’s visit to Australia. One of the photos featured Princess Mary standing in front of a portrait (which was painted by Mr Vladas Meskenas). The caption incorrectly attributed the painting to another painter. Meskenas sought a correction and apology from Woman’s Day.

Meskenas brought an action for infringement of his moral rights (namely, the right not to have the authorship of the painting wrongly attributed).

The Federal Magistrates Court considered whether ‘false’ for the purpose of ‘falsely attributed’, meant ‘purposely wrong’ or simply ‘incorrect’. The Court held that, as there was no quasi-penal ramification of an infringement of moral rights, the word ‘falsely’ did not require intention and meant ‘objectively incorrect’.

In calculating damages, the Court took into account the extent of the damage to the goodwill or reputation enjoyed by Meskenas and the effect of ACP’s consistent failure to provide Meskenas with an apology and retraction. Damages of $8,000 were awarded.

‘Do Not Call Register’ legislation was passed on 22 June 2006.

The legislation establishes a scheme for individuals to place their names on a register if they do not want to receive certain unsolicited telemarketing calls.

Telemarketers are prohibited from calling a number included on the register, subject to certain exemptions including for government bodies, religious organisations and charities. There are fines payable for breaches of the legislation.

The register is to be established and administered by the Australian Communications & Media Authority and is expected to be operational in May 2007.

The Spam Act 2003 has recently been reviewed by the Department of Communications, Information Technology and the Arts, with its report tabled in Parliament in June.

The Report largely recommended that the Act remain unchanged.

The Privacy Act 1988 is currently being reviewed by the Australian Law Reform Commission. An issues paper was released in October with submissions sought by early next year. Following receipt of submissions, the ALRC will issue a report with its recommendations, if any, for reform.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.